iShares Inc. Semi-Annual Report to Shareholders

N-CSRS 1 dncsrs.htm ISHARES INC. SEMI-ANNUAL REPORT TO SHAREHOLDERS iShares Inc. Semi-Annual Report to Shareholders

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09102

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 offices) (Zip code)

Corporation Trust Incorporated

300 East Lombard Street; Baltimore, MD 21202

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-800-474-2737

Date of fiscal year end: August 31, 2006

Date of reporting period: February 28, 2006

Item 1.

Reports to Stockholders.

LOGO

Table of Contents


Fund Performance Overview		1
Shareholder Expenses		12
Schedules of Investments		14
iShares MSCI Austria Index Fund		14
iShares MSCI Belgium Index Fund		18
iShares MSCI EMU Index Fund		22
iShares MSCI France Index Fund		30
iShares MSCI Germany Index Fund		35
iShares MSCI Italy Index Fund		40
iShares MSCI Netherlands Index Fund		44
iShares MSCI Spain Index Fund		48
iShares MSCI Sweden Index Fund		53
iShares MSCI Switzerland Index Fund		58
iShares MSCI United Kingdom Index Fund		60
Financial Statements		64
Financial Highlights		72
Notes to the Financial Statements		83
iShares Family of Funds		94

Fund Performance Overview

iSHARES^® MSCI AUSTRIA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Austria Index Fund (the “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 measured by the MSCI Austria Index (the “Index”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 13.86%, while the Index returned 14.62%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
25.25%	25.03	%	28.36	%	30.22	%	30.01	%	31.10	%	12.31	%	12.35	%	13.53	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
25.25%	25.03	%	28.36	%	274.47	%	271.37	%	287.27	%	218.21	%	219.17	%	254.24	%

Total returns for the periods since inception are calculated from the inception date of the Fund (3/12/96). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

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


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	39.07	%
Energy	17.98
Communications	13.91
Industrial	12.05
Basic Materials	10.20
Utilities	6.60
Short-Term and Other Net Assets	0.19

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
OMV AG	17.98	%
Erste Bank der Oesterreichischen Sparkassen AG	16.25
Telekom Austria AG	13.91
Oesterreichische Elektrizitaetswirtschafts AG Class A	5.10
Wienerberger Baustoffindustrie AG	4.86
Immofinanz Immobilien Anlage AG	4.81
Raiffeisen International Bank Holding AG	4.81
Meinl European Land Ltd.	4.68
Voestalpine AG	4.64
CA Immobilien Anlagen AG	3.94

TOTAL	80.98	%


FUND PERFORMANCE OVERVIEW		1

Fund Performance Overview

iSHARES^® MSCI BELGIUM INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Belgium Index Fund (the “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 invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 13.50%, while the Index returned 14.47%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
12.67%	13.12	%	14.44	%	13.77	%	13.89	%	11.58	%	9.55	%	9.53	%	9.85	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
12.67%	13.12	%	14.44	%	90.57	%	91.57	%	72.95	%	148.22	%	147.75	%	155.14	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	53.18	%
Consumer Non-Cyclical	16.57
Basic Materials	9.46
Diversified	8.41
Communications	6.01
Industrial	4.90
Consumer Cyclical	1.13
Short-Term and Other Net Assets	0.34

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Fortis	23.72	%
KBC Groupe	14.56
Dexia Group	10.23
InBev	5.03
Solvay SA	4.94
Groupe Bruxelles Lambert SA	4.86
Umicore	4.52
Cofinimmo	4.21
Belgacom SA	4.12
Delhaize Group	3.91

TOTAL	80.10	%


2		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI EMU INDEX FUND

Performance as of February 28, 2006

The iShares MSCI EMU Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 13.16%, while the Index returned 13.54%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.63%	14.79	%	14.91	%	6.18	%	6.01	%	6.48	%	1.85	%	1.86	%	2.21	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.63%	14.79	%	14.91	%	34.93	%	33.90	%	36.88	%	10.82	%	10.88	%	13.01	%

Total returns for the periods since inception are calculated from the inception date of the Fund (7/25/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/31/00), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	32.81	%
Communications	12.86
Consumer Non-Cyclical	11.79
Industrial	10.47
Utilities	8.54
Energy	7.53
Consumer Cyclical	6.66
Basic Materials	5.23
Technology	2.89
Diversified	0.90
Short-Term and Other Net Assets	0.32

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Total SA (France)	3.99	%
Sanofi-Aventis (France)	2.53
Banco Santander Central Hispano SA (Spain)	2.48
Nokia OYJ (Finland)	2.18
ENI SpA (Italy)	2.14
Siemens AG (Germany)	2.10
ING Groep NV (Netherlands)	2.02
BNP Paribas SA (France)	2.01
Banco Bilbao Vizcaya Argentaria SA (Spain)	1.98
E.ON AG (Germany)	1.97

TOTAL	23.40	%


FUND PERFORMANCE OVERVIEW		3

Fund Performance Overview

iSHARES ^{^®}MSCI FRANCE INDEX FUND

Performance as of February 28, 2006

The iShares MSCI France Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 10.07%, while the Index returned 10.33%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.51%	13.42	%	13.84	%	5.81	%	5.76	%	6.08	%	10.56	%	10.55	%	10.81	%



*Cumulative Total Returns*
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.51%	13.42	%	13.84	%	32.63	%	32.34	%	34.33	%	171.95	%	171.87	%	178.17	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	21.16	%
Consumer Non-Cyclical	19.94
Energy	14.09
Industrial	11.60
Communications	10.74
Consumer Cyclical	7.27
Utilities	5.96
Basic Materials	3.94
Technology	2.98
Diversified	2.17
Short-Term and Other Net Assets	0.15

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Total SA	13.58	%
Sanofi-Aventis	8.71
BNP Paribas SA	6.83
AXA	5.17
Societe Generale Class A	4.89
Suez SA	3.60
France Telecom	3.59
Vivendi Universal SA	3.40
Carrefour SA	2.74
Groupe Danone	2.69

TOTAL	55.20	%


4		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES ^{^®}MSCI GERMANY INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Germany Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 16.17%, while the Index returned 16.41%.


*Average Annual Total Returns*
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
19.55%	20.07	%	19.82	%	4.59	%	4.68	%	4.66	%	7.60	%	7.63	%	8.04	%



*Cumulative Total Returns*
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
19.55%	20.07	%	19.82	%	25.18	%	25.72	%	25.58	%	107.64	%	108.14	%	116.23	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	26.20	%
Industrial	15.27
Consumer Cyclical	15.13
Utilities	14.08
Basic Materials	9.72
Consumer Non-Cyclical	7.11
Technology	6.99
Communications	5.32
Short-Term and Other Net Assets	0.18

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Siemens AG	9.81	%
E.ON AG	9.22
Allianz AG	8.16
Deutsche Bank AG	7.28
DaimlerChrysler AG	6.67
SAP AG	5.92
BASF AG	4.93
Deutsche Telekom AG	4.89
RWE AG	4.60
Bayer AG	3.55

TOTAL	65.03	%


FUND PERFORMANCE OVERVIEW		5

Fund Performance Overview

iSHARES ^{^®}MSCI ITALY INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Italy Index Fund (the “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 invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 7.55%, while the Index returned 7.91%.


*Average Annual Total Returns*
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.38%	7.62	%	7.33	%	8.14	%	8.18	%	8.07	%	12.05	%	12.05	%	11.94	%



*Cumulative Total Returns*
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.38%	7.62	%	7.33	%	47.89	%	48.16	%	47.41	%	210.83	%	210.85	%	207.81	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	46.99	%
Energy	17.70
Communications	14.66
Utilities	9.30
Consumer Cyclical	4.14
Consumer Non-Cyclical	4.10
Industrial	2.83
Short-Term and Other Net Assets	0.28

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
ENI SpA	17.70	%
UniCredito Italiano SpA	12.44
Enel SpA	7.38
Telecom Italia SpA	6.99
Sanpaolo IMI SpA	4.97
Assicurazioni Generali SpA	4.82
Banca Intesa SpA	4.31
Banche Popolari Unite Scrl	3.48
Telecom Italia SpA RNC	3.42
Capitalia SpA	3.34

TOTAL	68.85	%


6		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI NETHERLANDS INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Netherlands Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 16.30%, while the Index returned 17.17%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.97%	13.74	%	14.46	%	2.10	%	2.09	%	3.05	%	6.50	%	6.48	%	7.80	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.97%	13.74	%	14.46	%	10.96	%	10.90	%	16.21	%	87.32	%	87.00	%	111.41	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	40.12	%
Consumer Non-Cyclical	21.09
Industrial	14.56
Communications	12.72
Basic Materials	6.34
Technology	3.85
Consumer Cyclical	1.30
Short-Term and Other Net Assets	0.02

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
ING Groep NV	17.78	%
ABN AMRO Holding NV	12.76
Koninklijke Philips Electronics NV	10.25
Unilever NV CVA	8.96
AEGON NV	4.97
Koninklijke KPN NV	4.83
TNT NV	4.31
Akzo Nobel NV	4.18
Koninklijke Ahold NV	3.65
Reed Elsevier NV	3.47

TOTAL	75.16	%


FUND PERFORMANCE OVERVIEW		7

Fund Performance Overview

iSHARES^® MSCI SPAIN INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Spain Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 13.79%, while the Index returned 14.34%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.60%	13.77	%	14.28	%	11.59	%	11.57	%	11.29	%	14.65	%	14.63	%	14.98	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
13.60%	13.77	%	14.28	%	73.02	%	72.90	%	70.72	%	290.63	%	290.05	%	302.09	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	42.31	%
Communications	17.80
Utilities	14.96
Consumer Non-Cyclical	7.70
Industrial	6.60
Energy	5.60
Consumer Cyclical	2.88
Basic Materials	1.27
Technology	0.75
Short-Term and Other Net Assets	0.13

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Banco Santander Central Hispano SA	18.88	%
Telefonica SA	15.86
Banco Bilbao Vizcaya Argentaria SA	14.16
Repsol YPF SA	4.89
Endesa SA	4.86
Iberdrola SA	4.74
Banco Popular Espanol SA	4.44
Altadis SA	3.16
Actividades de Construcciones y Servicios SA	2.90
Gas Natural SDG SA	2.35

TOTAL	76.24	%


8		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI SWEDEN INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Sweden Index Fund (the “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 invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 12.15%, while the Index returned 12.45%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.43%	14.69	%	14.56	%	8.30	%	8.40	%	7.86	%	10.94	%	10.93	%	12.16	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.43%	14.69	%	14.56	%	48.99	%	49.69	%	45.98	%	181.54	%	181.37	%	213.87	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Communications	27.30	%
Financial	22.31
Industrial	17.89
Consumer Cyclical	17.51
Consumer Non-Cyclical	7.85
Basic Materials	5.74
Energy	0.75
Technology	0.61
Short-Term and Other Net Assets	0.04

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Telefonaktiebolaget LM Ericsson Class B	20.23	%
Nordea Bank AB	9.80
Hennes & Mauritz AB Class B	6.93
Svenska Handelsbanken AB Class A	5.41
Sandvik AB	4.35
Skandinaviska Enskilda Banken AB Class A	4.18
TeliaSonera AB	3.99
Volvo AB Class B	3.81
Svenska Cellulosa AB Class B	3.27
Electrolux AB Series B	3.16

TOTAL	65.13	%


FUND PERFORMANCE OVERVIEW		9

Fund Performance Overview

iSHARES^{^®}MSCI SWITZERLAND INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Switzerland Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 15.63%, while the Index returned 16.04%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
16.83%	15.88	%	18.89	%	6.02	%	6.01	%	7.57	%	7.24	%	7.24	%	8.67	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
16.83%	15.88	%	18.89	%	33.96	%	33.91	%	44.03	%	100.78	%	100.75	%	129.05	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Consumer Non-Cyclical	45.93	%
Financial	28.33
Industrial	9.30
Basic Materials	7.41
Consumer Cyclical	6.09
Communications	1.92
Technology	0.86
Short-Term and Other Net Assets	0.16

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
Novartis AG	12.96	%
Roche Holding AG Genusschein	12.45
UBS AG Registered	11.87
Nestle SA Registered	11.86
Credit Suisse Group	4.83
Zurich Financial Services AG	4.79
Compagnie Financiere Richemont AG Class A	3.78
Swiss Reinsurance Co.	3.49
Holcim Ltd. Registered	3.44
Syngenta AG	3.30

TOTAL	72.77	%


10		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^{^®}MSCI UNITED KINGDOM INDEX FUND

Performance as of February 28, 2006

The iShares MSCI United Kingdom Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 6.97%, while the Index returned 7.32%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.77%	8.81	%	8.55	%	6.12	%	6.22	%	7.01	%	8.48	%	8.53	%	9.18	%



Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.77%	8.81	%	8.55	%	34.61	%	35.21	%	40.32	%	125.16	%	126.08	%	140.06	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	26.97	%
Consumer Non-Cyclical	21.02
Energy	18.42
Communications	9.28
Consumer Cyclical	7.08
Basic Materials	6.81
Industrial	4.81
Utilities	4.39
Technology	0.53
Diversified	0.17
Short-Term and Other Net Assets	0.52

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
BP PLC	8.86	%
HSBC Holdings PLC	7.45
GlaxoSmithKline PLC	5.71
Royal Dutch Shell PLC Class A	4.61
Vodafone Group PLC	4.55
Royal Bank of Scotland Group PLC	4.11
Royal Dutch Shell PLC Class B	3.35
Barclays PLC	2.92
AstraZeneca PLC	2.84
HBOS PLC	2.77

TOTAL	47.17	%


FUND PERFORMANCE OVERVIEW		11

Shareholder Expenses

iSHARES^{^®}, INC.

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from September 1, 2005 to February 28, 2006.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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


iShares MSCI Index Fund	Beginning Account Value (September 1, 2005)		Ending Account Value (February 28, 2006)		Annualized Expense Ratio		Expenses Paid During Period^a (September 1, 2005 to February 28, 2006)
Austria
Actual	$	1,000.00	$	1,138.60	0.56	%	$	2.97
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Belgium
Actual		1,000.00		1,135.00	0.57			3.02
Hypothetical (5% return before expenses)		1,000.00		1,021.97	0.57			2.86
EMU
Actual		1,000.00		1,131.60	0.56			2.96
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
France
Actual		1,000.00		1,100.70	0.56			2.92
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81


12		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Continued)

iSHARES^®, INC.


iShares MSCI Index Fund	Beginning Account Value (September 1, 2005)		Ending Account Value (February 28, 2006)		Annualized Expense Ratio		Expenses Paid During Period ^a (September 1, 2005 to February 28, 2006)
Germany
Actual	$	1,000.00	$	1,161.70	0.56	%	$	3.00
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Italy
Actual		1,000.00		1,075.50	0.57			2.93
Hypothetical (5% return before expenses)		1,000.00		1,021.97	0.57			2.86
Netherlands
Actual		1,000.00		1,163.00	0.57			3.06
Hypothetical (5% return before expenses)		1,000.00		1,021.97	0.57			2.86
Spain
Actual		1,000.00		1,137.90	0.57			3.02
Hypothetical (5% return before expenses)		1,000.00		1,021.97	0.57			2.86
Sweden
Actual		1,000.00		1,121.50	0.57			3.00
Hypothetical (5% return before expenses)		1,000.00		1,021.97	0.57			2.86
Switzerland
Actual		1,000.00		1,156.30	0.56			2.99
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
United Kingdom
Actual		1,000.00		1,069.70	0.56			2.87
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81

^a	Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (181 days) and divided by the number of days in the year (365 days).


SHAREHOLDER EXPENSES		13

Schedule of Investments (Unaudited)

iSHARES^® MSCI AUSTRIA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.81%
BANKS – 21.06%
Erste Bank der Oesterreichischen Sparkassen AG	809,717	$	49,234,640
Raiffeisen International Bank Holding AG¹	174,528		14,565,671

			63,800,311
BUILDING MATERIALS – 4.86%
Wienerberger Baustoffindustrie AG	317,443		14,718,753

			14,718,753
CHEMICALS – 0.77%
Lenzing AG	10,555		2,327,070

			2,327,070
ELECTRIC – 6.60%
EVN AG	45,854		4,548,497
Oesterreichische Elektrizitaetswirtschafts AG Class A	33,229		15,450,737

			19,999,234
ENGINEERING & CONSTRUCTION – 2.63%
Flughafen Wien AG	98,778		7,968,188

			7,968,188
ENVIRONMENTAL CONTROL – 0.47%
BWT AG²	32,522		977,114
Christ Water Technology AG¹	38,885		435,790

			1,412,904
FOREST PRODUCTS & PAPER – 0.91%
Mayr-Melnhof Karton AG	18,685		2,750,119

			2,750,119
INSURANCE – 4.57%
Generali Holding Vienna AG	60,196		2,870,747
Wiener Staedtische Allgemeine Versicherung AG	172,104		10,977,718

			13,848,465
IRON & STEEL – 8.52%
Boehler-Uddeholm AG	62,519		11,732,325
Voestalpine AG²	120,594		14,062,945

			25,795,270

*Security*	Shares or Principal	*Value*
MACHINERY – 2.67%
Andritz AG	62,620	$	8,101,215

			8,101,215
MACHINERY - CONSTRUCTION & MINING – 0.13%
Palfinger AG	5,252		398,432

			398,432
MANUFACTURING – 1.29%
RHI AG¹	137,057		3,910,311

			3,910,311
OIL & GAS – 17.98%
OMV AG	877,791		54,472,736

			54,472,736
REAL ESTATE – 13.44%
CA Immobilien Anlagen AG¹	471,468		11,944,789
Immofinanz Immobilien Anlage AG ¹	1,428,645		14,580,265
Meinl European Land Ltd.¹	770,125		14,185,905

			40,710,959
TELECOMMUNICATIONS – 13.91%
Telekom Austria AG	1,844,462		42,133,986

			42,133,986

TOTAL COMMON STOCKS (Cost: $233,424,543)			302,347,953
SHORT-TERM INVESTMENTS – 0.26%
CERTIFICATES OF DEPOSIT³– 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	3,614		3,614
Wells Fargo Bank N.A.
4.78%, 12/05/06	5,782		5,782

			9,396
COMMERCIAL PAPER³– 0.01%
Amstel Funding Corp.
4.40%, 05/08/06	3,614		3,584
CC USA Inc.
4.23%, 04/21/06	2,168		2,155
Edison Asset Securitization LLC
4.37%, 05/08/06	3,614		3,584
Galaxy Funding Inc.
4.23%, 04/18/06	2,074		2,063


14		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI AUSTRIA INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
Grampian Funding LLC
4.41%, 05/15/06	$	3,614	$	3,581
Nordea North America Inc.
4.16%, 04/04/06		7,589		7,559
Sigma Finance Inc.
4.16%, 04/06/06		4,337		4,318

				26,844
MEDIUM-TERM NOTES³– 0.01%
Dorada Finance Inc.
3.93%, 07/07/06		2,241		2,240
K2 USA LLC
3.94%, 07/07/06		4,337		4,336
Marshall & Ilsley Bank
5.18%, 12/15/06		7,228		7,247
Toronto-Dominion Bank
3.81%, 06/20/06		9,034		9,035
US Bank N.A.
2.85%, 11/15/06		1,446		1,427

				24,285
MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		18,751		18,751

				18,751
REPURCHASE AGREEMENTS³ – 0.06%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $10,842 (collateralized by non-U.S. Government debt securities, value $11,945, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	10,841		10,841
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $36,143 (collateralized by U.S. Government obligations, value $36,933, 3.69% to 10.00%, 5/1/09 to 1/1/36).		36,138		36,138

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $18,071 (collateralized by non-U.S. Government debt securities, value $19,003, 1.01%, 9/19/35).⁶	$	18,069	$	18,069
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $36,143 (collateralized by U.S. Government obligations, value $36,920, 4.50% to 7.50%, 9/1/09 to 11/1/35).		36,138		36,138
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $36,143 (collateralized by non-U.S. Government debt securities, value $38,006, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		36,138		36,138
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $8,674 (collateralized by U.S. Government obligations, value $8,861, 3.99% to 5.51%, 7/1/32 to 2/1/36).		8,673		8,673
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $7,229 (collateralized by non-U.S. Government debt securities, value $7,457, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		7,228		7,228
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $36,143 (collateralized by non-U.S. Government debt securities, value $37,948, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		36,138		36,138

				189,363
TIME DEPOSITS³– 0.02%
KBC Bank
4.57%, 03/01/06		14,455		14,455


SCHEDULES OF INVESTMENTS		15

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI AUSTRIA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Societe Generale
4.57%, 03/01/06	$	25,296	$	25,296
US Bank N.A.
4.45%, 03/01/06		13,006		13,006

				52,757
VARIABLE& FLOATING RATE NOTES³ - 0.15%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		20,309		20,313
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		16,985		16,985
American Express Centurion Bank
4.57%, 06/29/06		2,891		2,891
American Express Credit Corp.
4.67%, 02/05/07		2,168		2,170
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		23,490		23,496
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		4,698		4,698
Bank of Ireland
4.54%, 03/20/07⁷		7,228		7,228
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		9,324		9,323
BMW US Capital LLC
4.54%, 02/15/07⁷		7,228		7,228
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		19,442		19,441
Commodore CDO Ltd.
4.56%, 12/12/06⁷		1,807		1,807
DEPFA Bank PLC
4.50%, 12/15/06		7,228		7,228
Dorada Finance Inc.
4.52%, 06/26/06⁷		1,807		1,807
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		7,228		7,228
Fifth Third Bancorp.
4.55%, 01/23/07⁷		14,455		14,455
Five Finance Inc.
4.54%, 06/26/06⁷		1,446		1,445
General Electric Capital Corp.
4.67%, 03/09/07		3,252		3,255
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		1,807		1,807
Hartford Life Global Funding Trusts
4.56%, 02/15/07		7,228		7,228
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		7,228		7,228
Holmes Financing PLC
4.54%, 12/15/06⁷		19,876		19,876
HSBC Bank USA N.A.
4.70%, 05/04/06		2,530		2,530
K2 USA LLC
4.53%, 06/02/06⁷		6,505		6,505
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		7,572		7,567
Links Finance LLC
4.56%, 03/15/06⁷		5,782		5,782
Marshall & Ilsley Bank
4.55%, 02/15/07		3,975		3,975
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		21,610		21,619
Mound Financing PLC
4.53%, 11/08/06⁷		14,455		14,455
Natexis Banques Populaires
4.55%, 03/15/07⁷		5,421		5,421
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		19,514		19,516
Nordea Bank AB
4.55%, 02/09/07⁷		12,648		12,648
Northern Rock PLC
4.61%, 02/02/07⁷		8,673		8,673
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		19,659		19,659


16		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI AUSTRIA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷	$	18,069	$	18,069
Principal Life Income Funding Trusts
4.70%, 05/10/06		5,421		5,421
Sedna Finance Inc.
4.54%, 09/20/06⁷		2,168		2,168
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		8,023		8,023
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		7,228		7,228
Societe Generale
4.54%, 03/02/07⁷		5,059		5,059
Strips III LLC
4.62%, 07/24/06^7,8		1,865		1,865
SunTrust Bank
4.62%, 04/28/06		10,841		10,841
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		16,117		16,116
Toyota Motor Credit Corp.
4.57%, 04/10/06		3,252		3,252
UniCredito Italiano SpA
4.43%, 06/14/06		9,396		9,395
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		7,228		7,228
US Bank N.A.
4.54%, 09/29/06		3,252		3,252
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		10,841		10,842
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		13,794		13,794
Wells Fargo & Co.
4.56%, 03/15/07⁷		3,614		3,614
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		3,614		3,614
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		7,589		7,589
Winston Funding Ltd.
4.68%, 04/23/06⁷		5,160		5,160
World Savings Bank
4.52%, 03/09/06		10,841		10,841

				468,858

TOTAL SHORT-TERM INVESTMENTS (Cost: $790,254)				790,254

TOTAL INVESTMENTS IN SECURITIES - 100.07% (Cost: $234,214,797)				303,138,207
Other Assets, Less Liabilities - (0.07)%				(210,335	)

NET ASSETS - 100.00%			$	302,927,872

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		17

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI BELGIUM INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS - 99.66%
BANKS - 48.97%
Banque Nationale de Belgique	96	$	366,259
Dexia Group	326,016		8,100,353
Fortis	526,944		18,784,645
KBC Groupe	110,400		11,530,298

			38,781,555
BEVERAGES - 5.03%
InBev	86,208		3,986,894

			3,986,894
CHEMICALS - 4.94%
Solvay SA	35,328		3,910,824

			3,910,824
ELECTRICAL COMPONENTS & EQUIPMENT - 1.66%
Bekaert NV	12,768		1,311,431

			1,311,431
ELECTRONICS - 0.74%
Barco NV	7,008		588,212

			588,212
FOOD - 6.62%
Colruyt SA	14,880		2,144,848
Delhaize Group	46,368		3,095,806

			5,240,654
HOLDING COMPANIES - DIVERSIFIED - 8.41%
Groupe Bruxelles Lambert SA¹	35,040		3,849,699
Sofina SA	30,528		2,811,669

			6,661,368
MANUFACTURING - 1.51%
AGFA-Gevaert NV	60,000		1,196,065

			1,196,065
MINING - 4.52%
Umicore	25,152		3,577,505

			3,577,505
PHARMACEUTICALS - 4.92%
Omega Pharma SA	15,360		831,592
UCB SA	64,704		3,066,448

			3,898,040
REAL ESTATE INVESTMENT TRUSTS - 4.21%
Cofinimmo	21,024		3,331,253

			3,331,253

*Security*	Shares or Principal	*Value*
RETAIL - 1.13%
SA D’Ieteren NV	2,976	$	893,421

			893,421
TELECOMMUNICATIONS - 6.01%
Belgacom SA	108,480		3,264,423
Mobistar SA	21,312		1,497,874

			4,762,297
TRANSPORTATION - 0.99%
Compagnie Maritime Belge SA	12,288		398,197
Euronav SA	13,440		390,501

			788,698

TOTAL COMMON STOCKS (Cost: $70,536,407)			78,928,217

SHORT-TERM INVESTMENTS - 0.15%
CERTIFICATES OF DEPOSIT² - 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	288		292
Wells Fargo Bank N.A.
4.78%, 12/05/06	460		460

			752
COMMERCIAL PAPER² - 0.00%
Amstel Funding Corp.
4.40%, 05/08/06	288		285
CC USA Inc.
4.23%, 04/21/06	173		172
Edison Asset Securitization LLC
4.37%, 05/08/06	288		285
Galaxy Funding Inc.
4.23%, 04/18/06	165		164
Grampian Funding LLC
4.41%, 05/15/06	288		285
Nordea North America Inc.
4.16%, 04/04/06	604		602
Sigma Finance Inc.
4.16%, 04/06/06	345		344

			2,137
MEDIUM-TERM NOTES² - 0.00%
Dorada Finance Inc.
3.93%, 07/07/06	178		178


18		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI BELGIUM INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
K2 USA LLC
3.94%, 07/07/06	$	345	$	345
Marshall & Ilsley Bank
5.18%, 12/15/06		575		577
Toronto-Dominion Bank
3.81%, 06/20/06		719		719
US Bank N.A.
2.85%, 11/15/06		115		114

				1,933
MONEY MARKET FUNDS – 0.07%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^3,4		52,521		52,521

				52,521
REPURCHASE AGREEMENTS ²– 0.02%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $863 (collateralized by non-U.S. Government debt securities, value $951, 0.00% to 9.40%, 11/15/15 to 6/12/47)⁵	$	863		863
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $2,877 (collateralized by U.S. Government obligations, value $2,941, 3.69% to 10.00%, 5/1/09 to 1/1/36)		2,877		2,877
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $1,439 (collateralized by non-U.S. Government debt securities, value $1,513, 1.01%, 9/19/35)⁵		1,439		1,439
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $2,877 (collateralized by U.S. Government obligations, value $2,940, 4.50% to 7.50%, 9/1/09 to 11/1/35)		2,877		2,877

*Security*	*Principal*		*Value*
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $2,877 (collateralized by non-U.S. Government debt securities, value $3,026, 0.00% to 10.00%, 8/15/07 to 2/1/16)⁵		2,877	$	2,877
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $691 (collateralized by U.S. Government obligations, value $706, 3.99% to 5.51%, 7/1/32 to 2/1/36)		691		691
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $575 (collateralized by non-U.S. Government debt securities, value $594, 0.00% to 7.88%, 5/15/08 to 1/15/16)⁵		575		575
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $2,877 (collateralized by non-U.S. Government debt securities, value $3,021, 0.00% to 7.16%, 3/1/06 to 3/25/35)⁵		2,877		2,877

				15,076
TIME DEPOSITS²– 0.01%
KBC Bank
4.57%, 03/01/06		1,151		1,151
Societe Generale
4.57%, 03/01/06		2,014		2,014
US Bank N.A.
4.45%, 03/01/06		1,036		1,036

				4,201
VARIABLE & FLOATING RATE NOTES²– 0.05%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁶		1,617		1,618
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		1,352		1,353


SCHEDULES OF INVESTMENTS		19

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI BELGIUM INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
American Express Centurion Bank
4.57%, 06/29/06	$	230	$	230
American Express Credit Corp.
4.67%, 02/05/07		173		173
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁶		1,870		1,871
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁶		374		374
Bank of Ireland
4.54%, 03/20/07⁶		575		575
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁶		742		743
BMW US Capital LLC
4.54%, 02/15/07⁶		575		575
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁶		1,548		1,548
Commodore CDO Ltd.
4.56%, 12/12/06⁶		144		144
DEPFA Bank PLC
4.50%, 12/15/06		575		575
Dorada Finance Inc.
4.52%, 06/26/06⁶		144		144
Eli Lilly Services Inc.
4.54%, 09/01/06⁶		575		575
Fifth Third Bancorp.
4.55%, 01/23/07⁶		1,151		1,151
Five Finance Inc.
4.54%, 06/26/06⁶		115		115
General Electric Capital Corp.
4.67%, 03/09/07		259		259
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		144		144
Hartford Life Global Funding Trusts
4.56%, 02/15/07		575		575
HBOS Treasury Services PLC
4.57%, 01/24/07⁶		575		575
Holmes Financing PLC
4.54%, 12/15/06⁶		1,583		1,582
HSBC Bank USA N.A.
4.70%, 05/04/06		201		201
K2 USA LLC
4.53%, 06/02/06⁶		518		518
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁶		603		603
Links Finance LLC
4.56%, 03/15/06⁶		460		460
Marshall & Ilsley Bank
4.55%, 02/15/07		317		316
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁶		1,721		1,721
Mound Financing PLC
4.53%, 11/08/06⁶		1,151		1,151
Natexis Banques Populaires
4.55%, 03/15/07⁶		432		432
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁶		1,554		1,553
Nordea Bank AB
4.55%, 02/09/07⁶		1,007		1,007
Northern Rock PLC
4.61%, 02/02/07⁶		691		691
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁶		1,565		1,566
Pfizer Investment Capital PLC
4.53%, 02/15/07⁶		1,439		1,439
Principal Life Income Funding Trusts
4.70%, 05/10/06		432		432
Sedna Finance Inc.
4.54%, 09/20/06⁶		173		173
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁶		639		639
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁶		575		575
Societe Generale
4.54%, 03/02/07⁶		403		403
Strips III LLC
4.62%, 07/24/06^6,7		148		148


20		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI BELGIUM INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
SunTrust Bank
4.62%, 04/28/06	$	863	$	863
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁶		1,283		1,283
Toyota Motor Credit Corp.
4.57%, 04/10/06		259		259
UniCredito Italiano SpA
4.43%, 06/14/06		748		748
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁶		575		575
US Bank N.A.
4.54%, 09/29/06		259		259
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		863		863
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁶		1,098		1,098
Wells Fargo & Co.
4.56%, 03/15/07⁶		288		288
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁶		288		287
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁶		604		604
Winston Funding Ltd.
4.68%, 04/23/06⁶		411		411
World Savings Bank
4.52%, 03/09/06		863		863

				37,328

TOTAL SHORT-TERM INVESTMENTS (Cost: $113,948)				113,948

TOTAL INVESTMENTS IN SECURITIES – 99.81% (Cost: $70,650,355)				79,042,165
Other Assets, Less Liabilities – 0.19%				153,616

NET ASSETS – 100.00%			$	79,195,781

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

²	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

³	The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁴	The rate quoted is the annualized seven-day yield of the fund at period end.

⁵	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁶	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁷	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		21

Schedule of Investments (Unaudited)

iSHARES^® MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 98.47%
AUSTRIA – 1.57%
Andritz AG	3,696	$	478,155
Boehler-Uddeholm AG	3,168		594,507
Erste Bank der Oesterreichischen Sparkassen AG	53,064		3,226,543
Flughafen Wien AG	530		42,754
Immofinanz Immobilien Anlage AG¹	155,232		1,584,245
Mayr-Melnhof Karton AG	3,180		468,043
Meinl European Land Ltd.¹	34,758		640,251
Oesterreichische Elektrizitaetswirtschafts AG Class A	2,385		1,108,971
OMV AG	53,328		3,309,355
Raiffeisen International Bank Holding AG¹	10,296		859,278
RHI AG¹	11,088		316,347
Telekom Austria AG	105,072		2,400,213
Voestalpine AG	6,600		769,652
Wiener Staedtische Allgemeine Versicherung AG	6,336		404,144
Wienerberger Baustoffindustrie AG	23,320		1,081,269

			17,283,727
BELGIUM – 3.70%
AGFA-Gevaert NV	29,150		581,088
Barco NV	4,505		378,124
Bekaert NV	6,072		623,669
Belgacom SA	48,048		1,445,879
Cofinimmo	2,915		461,882
Colruvt SA	5,300		763,958
Compagnie Maritime Belge SA	5,658		183,349
Delhaize Group	23,055		1,539,290
Dexia Group	174,240		4,329,252
Euronav SA	7,920		230,117
Fortis	372,768		13,288,536
Groupe Bruxelles Lambert SA²	21,912		2,407,380
InBev	56,232		2,600,583
KBC Groupe²	57,552		6,010,794
Mobistar SA	9,022		634,095
Omega Pharma SA	6,890		373,025
SA D’Ieteren NV	822		246,771
Solvay SA	20,670		2,288,178
Suez SA Strips¹	17,520		209
UCB SA	27,192		1,288,682
Umicore	7,950		1,130,772

			40,805,633
FINLAND – 4.42%
Amer Group OYJ	19,875		415,864
Cargotec Corp. Class B	13,829		560,579
Elisa OYJ Class A	48,840		986,408
Fortum OYJ	135,696		3,284,206
KCI Konecranes OYJ	5,565		350,321
Kesko OYJ Class B	20,592		647,405
Kone OYJ	25,970		1,074,407
Metso OYJ	33,528		1,235,189
Neste Oil OYJ¹	40,656		1,245,249
Nokia OYJ	1,281,192		23,981,768
Nokian Renkaat OYJ	36,570		582,068
Orion OYJ Class B	27,456		591,838
Outokumpu OYJ	38,280		695,087
Rautaruukki OYJ	28,776		970,579
Sampo OYJ Class A	126,229		2,531,352
Stora Enso OYJ Class R	201,696		2,880,855
TietoEnator OYJ	23,590		848,818
UPM-Kymmene OYJ	170,280		3,613,691
Uponor OYJ	23,496		614,888
Wartsila OYJ Class B	19,403		707,877
YIT-Yhtyma OYJ	18,020		915,233

			48,733,682
FRANCE – 28.94%
Accor SA	67,958		4,087,607
Air France - KLM	36,696		849,641
Alcatel SA Class A¹	390,192		5,256,832
Alstom¹	34,608		2,962,568
Arcelor	162,096		5,925,320
Atos Origin SA¹	21,384		1,491,462
Autoroutes du Sud de la France	18,815		1,137,312
AXA	462,000		16,326,290
BNP Paribas SA	238,656		22,094,346
Bouygues SA	55,704		2,926,161
Business Objects SA¹	21,730		804,172
Cap Gemini SA¹	38,016		1,878,704


22		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Carrefour SA	178,464	$	8,864,153
Casino Guichard Perrachon SA	12,985		809,675
CNP Assurances	10,600		1,016,083
Compagnie de Saint-Gobain	99,000		6,609,834
Compagnie Generale des Etablissements Michelin Class B	47,553		2,902,787
Compagnie Generale d’Optique Essilor International SA	29,040		2,503,239
Credit Agricole SA	187,440		6,851,754
Dassault Systemes SA	18,550		1,035,040
European Aeronautic Defense and Space Co.	79,471		2,914,488
France Telecom	529,056		11,511,498
Gaz de France¹	47,064		1,628,933
Gecina SA	2,376		297,159
Groupe Danone	73,920		8,548,719
Hermes International	6,072		1,518,814
Imerys SA	11,660		996,052
Klepierre	6,916		798,174
Lafarge SA	56,760		5,938,228
Lagardere S.C.A.	37,100		2,870,688
L’Air Liquide SA	34,584		6,828,147
L’Oreal SA	92,400		8,179,670
LVMH Moet Hennessy Louis Vuitton SA	75,504		6,863,998
Neopost SA	9,275		928,329
PagesJaunes SA	36,835		985,926
Pernod Ricard SA	22,440		3,841,887
PPR SA	21,730		2,505,264
PSA Peugeot Citroen SA	48,840		2,849,169
Publicis Groupe	41,193		1,573,069
Renault SA	58,608		5,635,450
Safran SA	55,846		1,422,200
Sanofi-Aventis	327,096		27,844,587
Schneider Electric SA	71,808		7,341,322
SCOR	269,153		648,213
Societe BIC SA	7,685		468,659
Societe des Autoroutes du Nord et de l’Est de la France¹	6,864		474,649
Societe Des Autoroutes Paris-Rhin-Rhone	10,416		760,632
Societe Generale Class A	110,880		15,718,185
Societe Television Francaise 1	36,708		1,106,382
Sodexho Alliance SA	33,720		1,436,441
STMicroelectronics NV	203,808		3,462,609
Suez SA	311,256		11,463,124
Technip SA	25,705		1,546,130
Thales SA	26,400		1,203,305
Thomson	82,386		1,416,400
Total SA	174,504		43,899,055
Unibail Holding	13,780		2,259,016
Valeo SA	24,107		965,429
Veolia Environnement	106,128		5,543,328
Vinci SA	50,160		4,634,753
Vivendi Universal SA	352,440		10,694,003
Zodiac SA	12,985		815,094

			318,670,158
GERMANY – 20.80%
Adidas-Salomon AG	15,312		2,994,305
Allianz AG	119,064		19,220,579
ALTANA AG	22,525		1,210,374
BASF AG	169,752		12,802,990
Bayer AG	207,504		8,359,533
Beiersdorf AG	5,066		688,613
Celesio AG	11,395		1,058,189
Commerzbank AG	186,384		6,786,487
Continental AG	41,448		4,242,890
DaimlerChrysler AG	287,760		15,953,307
Deutsche Bank AG	156,288		17,226,612
Deutsche Boerse AG	31,416		3,954,576
Deutsche Lufthansa AG	63,888		1,055,723
Deutsche Post AG	223,344		5,834,236
Deutsche Postbank AG	13,728		971,066
Deutsche Telekom AG	855,096		13,498,024
Douglas Holding AG	9,275		426,180
E.ON AG	196,152		21,723,462
EPCOS AG¹	19,800		269,115
Fresenius Medical Care AG	18,239		1,961,439
Heidelberger Druckmaschinen AG	18,020		774,725
Hochtief AG	18,550		996,558
Hypo Real Estate Holding AG	41,988		2,763,323
Infineon Technologies AG¹	204,600		1,888,052


SCHEDULES OF INVESTMENTS		23

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
IVG Immobilien AG	21,465	$	556,106
KarstadtQuelle AG¹	17,952		439,623
Linde AG	27,030		2,141,452
MAN AG	44,616		2,812,868
Merck KGaA	15,840		1,586,360
METRO AG	46,758		2,486,884
MLP AG	21,480		484,020
Muenchener Rueckversicherungs- Gesellschaft AG	59,928		8,127,342
Premiere AG¹	18,216		304,921
Puma AG	3,960		1,424,891
RWE AG	131,472		11,263,875
SAP AG	69,432		14,159,571
Schering AG	51,744		3,721,248
Siemens AG	252,120		23,145,435
Suedzucker AG	20,328		538,283
ThyssenKrupp AG	115,678		2,930,738
TUI AG²	85,008		1,678,369
Volkswagen AG	56,496		3,951,182
Wincor Nixdorf AG	4,505		574,706

			228,988,232
GREECE – 1.55%
Coca-Cola Hellenic Bottling SA ADR	37,060		1,119,212
Hellenic Telecommunications Organization SA ADR¹	468,081		4,952,297
National Bank of Greece SA ADR	1,054,221		10,953,356

			17,024,865
IRELAND – 2.73%
Allied Irish Banks PLC	274,296		6,550,399
Bank of Ireland	315,499		5,623,498
C&C Group PLC	79,728		532,312
CRH PLC	172,128		5,635,330
DCC PLC	27,030		615,527
DEPFA Bank PLC	113,520		1,885,345
Eircom Group PLC	235,224		619,785
Elan Corp. PLC¹	134,376		1,792,748
Fyffes PLC	103,851		260,014
Grafton Group PLC¹	69,018		847,553
Greencore Group PLC	63,983		262,416
IAWS Group PLC	39,072		652,170
Independent News & Media PLC	194,835		620,220
Irish Life & Permanent PLC	90,071		1,985,588
Kerry Group PLC Class A	40,392		893,801
Kingspan Group PLC	39,603		572,266
Paddy Power PLC	30,096		475,436
Ryanair Holdings PLC¹	21,760		198,726

			30,023,134
ITALY – 11.29%
Alleanza Assicurazioni SpA²	132,264		1,638,417
Arnoldo Mondadori Editore SpA	34,450		325,914
Assicurazioni Generali SpA	297,528		10,673,758
Autogrill SpA	56,760		833,044
Autostrade SpA	94,046		2,401,746
Banca Antonveneta SpA	29,304		923,403
Banca Fideuram SpA	105,176		638,266
Banca Intesa SpA	1,153,152		6,819,234
Banca Monte dei Paschi di Siena SpA²	348,480		1,803,163
Banca Nazionale del Lavoro SpA¹	357,192		1,241,388
Banca Popolare di Milano Scrl	130,999		1,657,108
Banca Popolare di Verona e Novara Scrl	119,592		2,870,207
Banche Popolari Unite Scrl	107,031		2,689,971
Benetton Group SpA	11,406		145,507
Bulgari SpA	49,632		589,371
Capitalia SpA	547,623		4,139,408
Enel SpA	1,364,088		11,335,547
ENI SpA	825,000		23,567,206
Fiat SpA^1,2	149,688		1,620,467
Finmeccanica SpA	97,680		2,139,351
Gruppo Editoriale L’Espresso SpA²	54,443		279,598
Italcementi SpA²	30,624		627,267
Lottomatica SpA¹	17,952		717,010
Luxottica Group SpA	38,544		1,084,057
Mediaset SpA	249,480		2,938,732
Mediobanca SpA	148,489		3,106,982
Mediolanum SpA²	91,474		755,785
Pirelli SpA	901,064		851,915
Sanpaolo IMI SpA	352,176		6,218,450
Seat Pagine Gialle SpA¹	1,192,752		585,888
Snam Rete Gas SpA	209,880		922,095
Telecom Italia Media SpA^1,2	302,280		153,528


24		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Telecom Italia SpA	3,266,472	$	8,772,251
Terna SpA	365,967		963,186
Tiscali SpA¹	92,721		273,326
UniCredito Italiano SpA	2,468,928		17,970,552

			124,273,098
NETHERLANDS – 10.65%
ABN AMRO Holding NV	564,960		16,468,874
AEGON NV	444,643		7,342,240
Akzo Nobel NV	86,626		4,399,722
ASML Holding NV¹	149,688		3,107,085
Buhrmann NV	34,715		583,170
Corio NV	9,805		644,704
Euronext NV²	25,608		1,605,938
Getronics NV	38,669		525,576
Hagemeyer NV^1,2	163,977		660,795
Heineken NV	73,920		2,784,943
ING Groep NV	590,568		22,200,421
Koninklijke Ahold NV¹	496,436		4,048,431
Koninklijke DSM NV	45,408		1,889,405
Koninklijke KPN NV	606,672		6,278,285
Koninklijke Numico NV^1,2	54,648		2,367,048
Koninklijke Philips Electronics NV	412,896		13,448,960
Oce NV	24,645		426,641
QIAGEN NV¹	48,878		738,924
Randstad Holdings NV	12,672		709,783
Reed Elsevier NV	200,112		2,705,537
Rodamco Europe NV	11,925		1,093,332
SBM Offshore NV	8,184		806,935
TNT NV	125,929		4,100,292
Unilever NV CVA	178,728		12,412,403
Vedior NV	51,528		973,733
VNU NV	73,523		2,382,539
Wereldhave NV	5,565		593,157
Wolters Kluwer NV CVA	89,011		1,954,792

			117,253,665
PORTUGAL – 0.98%
Banco BPI SA Registered	128,081		691,752
Banco Commercial Portugues SA Class R	616,707		1,830,820
Banco Espirito Santo SA	50,733		835,922
Brisa-Auto Estradas de Portugal SA²	132,615		1,168,435
CIMPOR-Cimentos de Portugal SGPS SA	83,688		511,856
Energias de Portugal SA	551,232		1,925,615
Jeronimo Martins SGPS SA	13,780		224,259
Portugal Telecom SGPS SA	217,800		2,518,819
PT Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA	32,736		396,930
Sonae Industria SGPS SA¹	31,680		278,746
Sonae SGPS SA	282,786		438,297

			10,821,451
SPAIN – 11.84%
Abertis Infraestructuras SA²	71,280		1,847,543
Acciona SA	8,215		1,145,937
Acerinox SA²	64,680		992,467
Actividades de Construcciones y Servicios SA	73,392		2,738,800
Altadis SA	83,160		3,489,992
Antena 3 de Television SA²	22,790		605,107
Banco Bilbao Vizcaya Argentaria SA	1,071,576		21,821,177
Banco Popular Espanol SA	286,761		3,846,272
Banco Santander Central Hispano SA	1,871,232		27,329,460
Cintra Concesiones de Infraestructuras de Transporte SA¹	75,240		999,312
Corporacion Mapfre SA	37,367		720,387
Ebro Puleva SA	20,064		365,518
Endesa SA	296,472		9,939,541
Fomento de Construcciones y Contratas SA	13,780		937,286
Gamesa Corporacion Tecnologica SA	62,832		1,088,463
Gas Natural SDG SA	60,273		1,836,035
Grupo Ferrovial SA	20,140		1,509,149
Iberdrola SA	255,816		8,073,261
Iberia Lineas Aereas de Espana SA	143,189		408,014
Inditex SA	70,752		2,541,588
Indra Sistemas SA	36,040		717,577
Inmobiliaria Colonial SA	10,032		644,679


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMU INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
Metrovacesa SA		18,560	$	1,383,010
NH Hoteles SA		41,448		669,592
Promotora de Informaciones SA		26,235		486,071
Repsol YPF SA		295,416		8,255,796
Sacyr Vallehermoso SA		33,092		931,113
Sociedad General de Aguas de Barcelona SA¹		115		3,058
Sociedad General de Aguas de Barcelona SA Class B		20,879		577,517
Sogecable SA^1,2		12,936		520,216
Telefonica Publicidad e Informacion SA		58,683		618,489
Telefonica SA		1,377,288		21,248,407
Union Fenosa SA		46,464		1,744,996
Zeltia SA²		54,384		377,365

				130,413,195

TOTAL COMMON STOCKS (Cost: $921,423,608)				1,084,290,840
PREFERRED STOCKS – 1.21%
GERMANY – 0.68%
Henkel KGaA		17,952		1,978,304
Porsche AG		2,650		2,232,034
ProSiebenSat.1 Media AG		24,552		578,124
RWE AG		11,352		893,272
Volkswagen AG		35,245		1,816,982

				7,498,716
ITALY – 0.53%
Banca Intesa SpA RNC		311,789		1,716,465
Telecom Italia SpA RNC		1,784,640		4,104,405

				5,820,870

TOTAL PREFERRED STOCKS (Cost: $11,194,832)				13,319,586
SHORT-TERM INVESTMENTS – 0.71%
CERTIFICATES OF DEPOSIT³– 0.01%
Toronto-Dominion Bank
3.94%, 07/10/06	$	32,385		32,385
Wells Fargo Bank N.A.
4.78%, 12/05/06		51,816		51,816

				84,201
COMMERCIAL PAPER³– 0.02%
Amstel Funding Corp.
4.40%, 05/08/06		32,385		32,116
CC USA Inc.
4.23%, 04/21/06		19,431		19,314
Edison Asset Securitization LLC
4.37%, 05/08/06		32,385		32,118
Galaxy Funding Inc.
4.23%, 04/18/06		18,589		18,484
Grampian Funding LLC
4.41%, 05/15/06		32,385		32,087
Nordea North America Inc.
4.16%, 04/04/06		68,008		67,741
Sigma Finance Inc.
4.16%, 04/06/06		38,862		38,700

				240,560
MEDIUM-TERM NOTES³– 0.02%
Dorada Finance Inc.
3.93%, 07/07/06		20,079		20,078
K2 USA LLC
3.94%, 07/07/06		38,862		38,861
Marshall & Ilsley Bank
5.18%, 12/15/06		64,770		64,946
Toronto-Dominion Bank
3.81%, 06/20/06		80,962		80,965
US Bank N.A.
2.85%, 11/15/06		12,954		12,785

				217,635
MONEY MARKET FUNDS – 0.09%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		927,162		927,162

				927,162
REPURCHASE AGREEMENTS³– 0.15%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $97,167 (collateralized by non-U.S. Government debt securities, value $107,045, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	97,154		97,154


26		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $323,890 (collateralized by U.S. Government obligations, value $330,978, 3.69% to 10.00%, 5/1/09 to 1/1/36).	$	323,848	$	323,848
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $161,945 (collateralized by non-U.S. Government debt securities, value $170,293, 1.01%, 9/19/35).⁶		161,924		161,924
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $323,890 (collateralized by U.S. Government obligations, value $330,856, 4.50% to 7.50%, 9/1/09 to 11/1/35).		323,849		323,849
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $323,891 (collateralized by non-U.S. Government debt securities, value $340,587, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		323,849		323,849
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $77,734 (collateralized by U.S. Government obligations, value $79,407, 3.99% to 5.51%, 7/1/32 to 2/1/36).		77,724		77,724
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $64,778 (collateralized by non-U.S. Government debt securities, value $66,822, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		64,770		64,770
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $323,890 (collateralized by non-U.S. Government debt securities, value $340,068, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		323,849		323,849

				1,696,967
TIME DEPOSITS³– 0.04%
KBC Bank
4.57%, 03/01/06		129,539		129,539
Societe Generale
4.57%, 03/01/06		226,694		226,694
US Bank N.A.
4.45%, 03/01/06		116,551		116,551

				472,784
VARIABLE & FLOATING RATE NOTES³– 0.38%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		182,003		182,032
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		152,209		152,207
American Express Centurion Bank
4.57%, 06/29/06		25,908		25,908
American Express Credit Corp.
4.67%, 02/05/07		19,431		19,446
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		210,502		210,556
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		42,100		42,100
Bank of Ireland
4.54%, 03/20/07⁷		64,770		64,770
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		83,553		83,552
BMW US Capital LLC
4.54%, 02/15/07⁷		64,770		64,770
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		174,231		174,227
Commodore CDO Ltd.
4.56%, 12/12/06⁷		16,192		16,192
DEPFA Bank PLC
4.50%, 12/15/06		64,770		64,770
Dorada Finance Inc.
4.52%, 06/26/06⁷		16,192		16,192


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Eli Lilly Services Inc.
4.54%, 09/01/06⁷	$	64,770	$	64,770
Fifth Third Bancorp.
4.55%, 01/23/07⁷		129,539		129,539
Five Finance Inc.
4.54%, 06/26/06⁷		12,954		12,954
General Electric Capital Corp.
4.67%, 03/09/07		29,146		29,168
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		16,192		16,192
Hartford Life Global Funding Trusts
4.56%, 02/15/07		64,770		64,770
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		64,770		64,770
Holmes Financing PLC
4.54%, 12/15/06⁷		178,117		178,117
HSBC Bank USA N.A.
4.70%, 05/04/06		22,669		22,673
K2 USA LLC
4.53%, 06/02/06⁷		58,293		58,291
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		67,861		67,861
Links Finance LLC
4.56%, 03/15/06⁷		51,816		51,816
Marshall & Ilsley Bank
4.55%, 02/15/07		35,623		35,623
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		193,661		193,742
Mound Financing PLC
4.53%, 11/08/06⁷		129,539		129,539
Natexis Banques Populaires
4.55%, 03/15/07⁷		48,577		48,577
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		174,878		174,885
Nordea Bank AB
4.55%, 02/09/07⁷		113,347		113,347
Northern Rock PLC
4.61%, 02/02/07⁷		77,724		77,726
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		176,174		176,173
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		161,924		161,924
Principal Life Income Funding Trusts
4.70%, 05/10/06		48,577		48,578
Sedna Finance Inc.
4.54%, 09/20/06⁷		19,431		19,431
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		71,894		71,893
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		64,770		64,770
Societe Generale
4.54%, 03/02/07⁷		45,339		45,339
Strips III LLC
4.62%, 07/24/06^7,8		16,710		16,710
SunTrust Bank
4.62%, 04/28/06		97,155		97,155
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		144,436		144,430
Toyota Motor Credit Corp.
4.57%, 04/10/06		29,146		29,146
UniCredito Italiano SpA
4.43%, 06/14/06		84,201		84,192
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		64,770		64,770
US Bank N.A.
4.54%, 09/29/06		29,146		29,142
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		97,155		97,155
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		123,613		123,613
Wells Fargo & Co.
4.56%, 03/15/07⁷		32,385		32,387
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		32,385		32,383


28		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMU INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷	$	68,008	$	68,009
Winston Funding Ltd.
4.68%, 04/23/06⁷		46,246		46,246
World Savings Bank
4.52%, 03/09/06		97,155		97,154

				4,201,682

TOTAL SHORT-TERM INVESTMENTS (Cost: $7,840,991)				7,840,991

TOTAL INVESTMENTS IN SECURITIES – 100.39% (Cost: $940,459,431)				1,105,451,417
Other Assets, Less Liabilities – (0.39)%				(4,330,070	)

NET ASSETS – 100.00%			$	1,101,121,347

ADR - American Depositary Receipts

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Unaudited)

iSHARES^® MSCI FRANCE INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.85%
ADVERTISING – 0.84%
PagesJaunes SA	11,492	$	307,595
Publicis Groupe	12,682		484,297

			791,892
AEROSPACE & DEFENSE – 1.87%
European Aeronautic Defense and Space Co.	22,440		822,956
Safran SA	15,317		390,070
Thales SA	7,106		323,889
Zodiac SA	3,519		220,895

			1,757,810
AIRLINES – 0.27%
Air France - KLM	11,203		259,389

			259,389
APPAREL – 0.53%
Hermes International	1,989		497,517

			497,517
AUTO MANUFACTURERS – 2.61%
PSA Peugeot Citroen SA	14,008		817,182
Renault SA	17,000		1,634,634

			2,451,816
AUTO PARTS & EQUIPMENT – 1.13%
Compagnie Generale des Etablissements Michelin Class B	13,141		802,169
Valeo SA	6,392		255,985

			1,058,154
BANKS – 13.84%
BNP Paribas SA	69,309		6,416,503
Credit Agricole SA	54,621		1,996,637
Societe Generale Class A	32,385		4,590,850

			13,003,990
BEVERAGES – 1.24%
Pernod Ricard SA	6,817		1,167,119

			1,167,119
BUILDING MATERIALS – 4.09%
Compagnie de Saint-Gobain	28,543		1,905,702
Imerys SA	2,907		248,330
Lafarge SA	16,133		1,687,833

			3,841,865
CHEMICALS – 2.11%
L’Air Liquide SA	10,030		1,980,289

			1,980,289
COMMERCIAL SERVICES – 0.75%
Autoroutes du Sud de la France	5,372		324,722
Societe des Autoroutes du Nord et de l’Est de la France¹	2,108		145,769
Societe des Autoroutes Paris-Rhin-Rhone	3,196		233,389

			703,880
COMPUTERS – 1.05%
Atos Origin SA¹	6,239		435,149
Cap Gemini SA¹	11,203		553,638

			988,787
COSMETICS & PERSONAL CARE – 2.56%
L’Oreal SA	27,183		2,406,363

			2,406,363
DIVERSIFIED FINANCIAL SERVICES – 0.52%
Euronext NV²	7,786		488,278

			488,278
ENGINEERING & CONSTRUCTION – 2.46%
Bouygues SA	16,830		884,089
Vinci SA	15,436		1,426,277

			2,310,366
FOOD – 5.67%
Carrefour SA	51,850		2,575,345
Casino Guichard Perrachon SA	3,519		219,426
Groupe Danone	21,879		2,530,268

			5,325,039
FOOD SERVICE – 0.40%
Sodexho Alliance SA	8,908		379,473

			379,473
GAS – 0.59%
Gaz de France¹	15,912		550,731

			550,731
HAND & MACHINE TOOLS – 2.26%
Schneider Electric SA	20,757		2,122,101

			2,122,101


30		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
HEALTH CARE - PRODUCTS – 0.83%
Compagnie Generale d’Optique Essilor International SA		9,010	$	776,659

				776,659
HOLDING COMPANIES - DIVERSIFIED – 2.17%
LVMH Moet Hennessy Louis Vuitton SA		22,491		2,044,636

				2,044,636
HOME FURNISHINGS – 0.44%
Thomson		24,072		413,852

				413,852
HOUSEHOLD PRODUCTS & WARES – 0.18%
Societe BIC SA		2,771		168,985

				168,985
INSURANCE – 5.69%
AXA		137,564		4,861,277
CNP Assurances		3,111		298,211
SCOR		77,571		186,818

				5,346,306
IRON & STEEL – 1.83%
Arcelor		46,971		1,716,996

				1,716,996
LODGING – 1.14%
Accor SA		17,816		1,071,615

				1,071,615
MACHINERY – 0.92%
Alstom¹		10,081		862,969

				862,969
MEDIA – 4.67%
Lagardere S.C.A.		11,101		858,962
Societe Television Francaise 1		10,931		329,461
Vivendi Universal SA		105,417		3,198,643

				4,387,066
OFFICE & BUSINESS EQUIPMENT – 0.31%
Neopost SA		2,907		290,960

				290,960
OIL & GAS – 13.58%
Total SA		50,728		12,761,377

				12,761,377

*Security*	*Shares or* *Principal*		*Value*
OIL & GAS SERVICES – 0.51%
Technip SA		8,007	$	481,613

				481,613
PHARMACEUTICALS – 8.71%
Sanofi-Aventis		96,135		8,183,650

				8,183,650
REAL ESTATE – 1.11%
Gecina SA		856		107,057
Klepierre		2,159		249,170
Unibail Holding		4,199		688,360

				1,044,587
RETAIL – 0.75%
PPR SA		6,086		701,658

				701,658
SEMICONDUCTORS – 1.06%
STMicroelectronics NV		58,820		999,326

				999,326
SOFTWARE – 0.56%
Business Objects SA¹		6,392		236,552
Dassault Systemes SA		5,219		291,206

				527,758
TELECOMMUNICATIONS – 5.23%
Alcatel SA Class A¹		113,985		1,535,654
France Telecom		155,176		3,376,407

				4,912,061
WATER – 5.37%
Suez SA		91,919		3,385,248
Veolia Environment		31,722		1,656,918

				5,042,166

TOTAL COMMON STOCKS (Cost: $92,462,091)				93,819,099

SHORT-TERM INVESTMENTS – 0.43%
CERTIFICATES OF DEPOSIT³– 0.01%
Toronto-Dominion Bank
3.94%, 07/10/06	$	1,627		1,627
Wells Fargo Bank N.A.
4.78%, 12/05/06		2,603		2,603

				4,230


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
COMMERCIAL PAPER³– 0.01%
Amstel Funding Corp.
4.40%, 05/08/06	$	1,627	$	1,614
CC USA Inc.
4.23%, 04/21/06		976		970
Edison Asset Securitization LLC
4.37%, 05/08/06		1,627		1,614
Galaxy Funding Inc.
4.23%, 04/18/06		934		929
Grampian Funding LLC
4.41%, 05/15/06		1,627		1,612
Nordea North America Inc.
4.16%, 04/04/06		3,417		3,403
Sigma Finance Inc.
4.16%, 04/06/06		1,953		1,944

				12,086
MEDIUM-TERM NOTES³– 0.01%
Dorada Finance Inc.
3.93%, 07/07/06		1,009		1,009
K2 USA LLC
3.94%, 07/07/06		1,953		1,953
Marshall & Ilsley Bank
5.18%, 12/15/06		3,254		3,263
Toronto-Dominion Bank
3.81%, 06/20/06		4,068		4,068
US Bank N.A.
2.85%, 11/15/06		651		642

				10,935
MONEY MARKET FUNDS – 0.05%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		50,926		50,926

				50,926
REPURCHASE AGREEMENTS³– 0.09%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $4,882 (collateralized by non-U.S. Government debt securities, value $5,378, 0.00% to 9.40%, 11/15/15 to 6/12/47)⁶	$	4,881		4,881

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $16,274 (collateralized by U.S. Government obligations, value $16,630, 3.69% to 10.00%, 5/1/09 to 1/1/36)	$	16,272	$	16,272
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $8,137 (collateralized by non-U.S. Government debt securities, value $8,556, 1.01%, 9/19/35)⁶		8,136		8,136
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $16,274 (collateralized by U.S. Government obligations, value $16,624, 4.50% to 7.50%, 9/1/09 to 11/1/35)		16,272		16,272
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $16,274 (collateralized by non-U.S. Government debt securities, value $17,113, 0.00% to 10.00%, 8/15/07 to 2/1/16)⁶		16,272		16,272
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $3,905 (collateralized by U.S. Government obligations, value $3,990, 3.99% to 5.51%, 7/1/32 to 2/1/36)		3,905		3,905
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $3,254 (collateralized by non-U.S. Government debt securities, value $3,357, 0.00% to 7.88%, 5/15/08 to 1/15/16)⁶		3,254		3,254
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $16,274 (collateralized by non-U.S. Government debt securities, value $17,086, 0.00% to 7.16%, 3/1/06 to 3/25/35)⁶		16,272		16,272

				85,264


32		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
TIME DEPOSITS³– 0.03%
KBC Bank
4.57%, 03/01/06	$	6,509	$	6,509
Societe Generale
4.57%, 03/01/06		11,390		11,390
US Bank N.A.
4.45%, 03/01/06		5,856		5,856

				23,755
VARIABLE & FLOATING RATE NOTES³– 0.23%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		9,145		9,147
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		7,648		7,649
American Express Centurion Bank
4.57%, 06/29/06		1,302		1,302
American Express Credit Corp.
4.67%, 02/05/07		976		977
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		10,576		10,580
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		2,115		2,115
Bank of Ireland
4.54%, 03/20/07⁷		3,254		3,254
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		4,198		4,198
BMW US Capital LLC
4.54%, 02/15/07⁷		3,254		3,254
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		8,754		8,754
Commodore CDO Ltd.
4.56%, 12/12/06⁷		814		814
DEPFA Bank PLC
4.50%, 12/15/06		3,254		3,254
Dorada Finance Inc.
4.52%, 06/26/06⁷		814		814
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		3,254		3,254
Fifth Third Bancorp.
4.55%, 01/23/07⁷		6,509		6,509
Five Finance Inc.
4.54%, 06/26/06⁷		651		651
General Electric Capital Corp.
4.67%, 03/09/07		1,464		1,466
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		814		814
Hartford Life Global Funding Trusts
4.56%, 02/15/07		3,254		3,254
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		3,254		3,254
Holmes Financing PLC
4.54%, 12/15/06⁷		8,949		8,949
HSBC Bank USA N.A.
4.70%, 05/04/06		1,139		1,139
K2 USA LLC
4.53%, 06/02/06⁷		2,929		2,929
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		3,410		3,409
Links Finance LLC
4.56%, 03/15/06⁷		2,603		2,603
Marshall & Ilsley Bank
4.55%, 02/15/07		1,790		1,790
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		9,730		9,734
Mound Financing PLC
4.53%, 11/08/06⁷		6,509		6,509
Natexis Banques Populaires
4.55%, 03/15/07⁷		2,441		2,441
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		8,787		8,787
Nordea Bank AB
4.55%, 02/09/07⁷		5,695		5,695
Northern Rock PLC
4.61%, 02/02/07⁷		3,905		3,905


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI FRANCE INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷	$	8,852	$	8,852
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		8,136		8,136
Principal Life Income Funding Trusts
4.70%, 05/10/06		2,441		2,441
Sedna Finance Inc.
4.54%, 09/20/06⁷		976		976
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		3,612		3,612
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		3,254		3,254
Societe Generale
4.54%, 03/02/07⁷		2,278		2,278
Strips III LLC
4.62%, 07/24/06^7,8		840		840
SunTrust Bank
4.62%, 04/28/06		4,881		4,881
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		7,257		7,257
Toyota Motor Credit Corp.
4.57%, 04/10/06		1,464		1,464
UniCredito Italiano SpA
4.43%, 06/14/06		4,231		4,230
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		3,254		3,254
US Bank N.A.
4.54%, 09/29/06		1,464		1,464
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		4,881		4,881
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		6,211		6,211
Wells Fargo & Co.
4.56%, 03/15/07⁷		1,627		1,627
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		1,627		1,627
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		3,417		3,417
Winston Funding Ltd.
4.68%, 04/23/06⁷		2,324		2,323
World Savings Bank
4.52%, 03/09/06		4,881		4,881

				211,110

TOTAL SHORT-TERM INVESTMENTS (Cost: $398,306)				398,306

TOTAL INVESTMENTS IN SECURITIES – 100.28% (Cost: $92,860,397)				94,217,405
Other Assets, Less Liabilities – (0.28)%				(260,882	)

NET ASSETS – 100.00%			$	93,956,523

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


34		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI GERMANY INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 96.77%
AIRLINES – 0.53%
Deutsche Lufthansa AG	203,808	$	3,367,843

			3,367,843
APPAREL – 1.91%
Adidas-Salomon AG	43,008		8,410,337
Puma AG	10,272		3,696,082

			12,106,419
AUTO MANUFACTURERS – 8.33%
DaimlerChrysler AG	764,160		42,364,744
Volkswagen AG	150,240		10,507,393

			52,872,137
AUTO PARTS & EQUIPMENT – 1.79%
Continental AG	111,072		11,370,061

			11,370,061
BANKS – 12.53%
Commerzbank AG	495,840		18,054,186
DEPFA Bank PLC	303,840		5,046,188
Deutsche Bank AG	419,136		46,198,642
Deutsche Postbank AG	41,088		2,906,409
Hypo Real Estate Holding AG	111,264		7,322,529

			79,527,954
BIOTECHNOLOGY – 0.29%
QIAGEN NV^1,2	121,824		1,841,702

			1,841,702
CHEMICALS – 8.48%
BASF AG	414,624		31,271,661
Bayer AG	559,392		22,535,738

			53,807,399
COMPUTERS – 0.26%
Wincor Nixdorf AG	13,152		1,677,811

			1,677,811
COSMETICS & PERSONAL CARE – 0.36%
Beiersdorf AG	16,992		2,309,696

			2,309,696
DIVERSIFIED FINANCIAL SERVICES – 1.80%
Deutsche Boerse AG	81,024		10,199,119
MLP AG	53,376		1,202,749

			11,401,868
ELECTRIC – 13.82%
E.ON AG	528,480		58,528,157
RWE AG	340,896		29,206,294

			87,734,451
ELECTRONICS – 0.11%
EPCOS AG^1,2	51,456		699,372

			699,372
ENGINEERING & CONSTRUCTION – 1.38%
Hochtief AG	49,536		2,661,212
Linde AG	77,184		6,114,903

			8,776,115
FOOD – 1.34%
METRO AG	132,576		7,051,223
Suedzucker AG	55,693		1,474,744

			8,525,967
HEALTH CARE - PRODUCTS – 0.89%
Fresenius Medical Care AG	52,653		5,662,354

			5,662,354
INSURANCE – 11.64%
Allianz AG	320,736		51,776,621
Muenchener Rueckversicherungs - Gesellschaft AG	163,200		22,132,929

			73,909,550
IRON & STEEL – 1.24%
ThyssenKrupp AG²	311,808		7,899,753

			7,899,753
LEISURE TIME – 0.60%
TUI AG²	192,096		3,792,678

			3,792,678
MACHINERY - DIVERSIFIED – 1.49%
Heidelberger Druckmaschinen AG	45,600		1,960,460
MAN AG	118,848		7,492,912

			9,453,372
MANUFACTURING – 9.81%
Siemens AG	678,528		62,291,076

			62,291,076
MEDIA – 0.16%
Premiere AG¹	59,904		1,002,744

			1,002,744


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI GERMANY INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
PHARMACEUTICALS – 3.31%
ALTANA AG		63,168	$	3,394,314
Celesio AG		34,080		3,164,817
Merck KGaA		41,088		4,114,922
Schering AG		143,328		10,307,651

				20,981,704
REAL ESTATE – 0.23%
IVG Immobilien AG		55,392		1,435,073

				1,435,073
RETAIL – 0.36%
Douglas Holding AG		25,920		1,191,006
KarstadtQuelle AG^1,2		44,064		1,079,075

				2,270,081
SEMICONDUCTORS – 0.81%
Infineon Technologies AG¹		554,496		5,116,897

				5,116,897
SOFTWARE – 5.92%
SAP AG		184,128		37,550,026

				37,550,026
TELECOMMUNICATIONS – 4.90%
Deutsche Telekom AG		1,968,192		31,068,678

				31,068,678
TRANSPORTATION – 2.48%
Deutsche Post AG		603,168		15,756,074

				15,756,074

TOTAL COMMON STOCKS (Cost: $544,903,839)				614,208,855
PREFERRED STOCKS – 3.05%
AUTO MANUFACTURERS – 1.61%
Porsche AG ²		6,624		5,579,242
Volkswagen AG		89,952		4,637,286

				10,216,528
ELECTRIC – 0.26%
RWE AG		20,640		1,624,131

				1,624,131
HOUSEHOLD PRODUCTS & WARES – 0.92%
Henkel KGaA		53,280		5,871,438

				5,871,438

*Security*	Shares or Principal		*Value*
MEDIA – 0.26%
ProSiebenSat.1 Media AG		69,984	$	1,647,909

				1,647,909

TOTAL PREFERRED STOCKS (Cost: $15,856,188)				19,360,006
SHORT-TERM INVESTMENTS – 0.41%
CERTIFICATES OF DEPOSIT³– 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	$	10,626		10,626
Wells Fargo Bank N.A.
4.78%, 12/05/06		17,001		17,001

				27,627
COMMERCIAL PAPER³– 0.01%
Amstel Funding Corp.
4.40%, 05/08/06		10,626		10,537
CC USA Inc.
4.23%, 04/21/06		6,375		6,337
Edison Asset Securitization LLC
4.37%, 05/08/06		10,626		10,538
Galaxy Funding Inc.
4.23%, 04/18/06		6,099		6,065
Grampian Funding LLC
4.41%, 05/15/06		10,626		10,528
Nordea North America Inc.
4.16%, 04/04/06		22,314		22,226
Sigma Finance Inc.
4.16%, 04/06/06		12,751		12,698

				78,929
MEDIUM-TERM NOTES³– 0.01%
Dorada Finance Inc.
3.93%, 07/07/06		6,588		6,588
K2 USA LLC
3.94%, 07/07/06		12,751		12,751
Marshall & Ilsley Bank
5.18%, 12/15/06		21,252		21,310
Toronto-Dominion Bank
3.81%, 06/20/06		26,565		26,565
US Bank N.A.
2.85%, 11/15/06		4,250		4,195

				71,409


36		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
MONEY MARKET FUNDS – 0.05%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		312,078	$	312,078

				312,078

REPURCHASE AGREEMENTS ³– 0.09%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $31,881 (collateralized by non-U.S. Government debt securities, value $35,123, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	31,877		31,877
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $106,271 (collateralized by U.S. Government obligations, value $108,597, 3.69% to 10.00%, 5/1/09 to 1/1/36).		106,258		106,258
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $53,136 (collateralized by non-U.S. Government debt securities, value $55,875, 1.01%, 9/19/35).⁶		53,129		53,129
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $106,271 (collateralized by U.S. Government obligations, value $108,557, 4.50% to 7.50%, 9/1/09 to 11/1/35).		106,258		106,258
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $106,272 (collateralized by non-U.S. Government debt securities, value $111,750, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		106,258		106,258
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $25,505 (collateralized by U.S. Government obligations, value $26,054, 3.99% to 5.51%, 7/1/32 to 2/1/36).		25,502		25,502

*Security*	*Principal*		*Value*
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $21,255 (collateralized by non-U.S. Government debt securities, value $21,925, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶	$	21,252	$	21,252
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $106,272 (collateralized by non-U.S. Government debt securities, value $111,580, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		106,258		106,258

				556,792
TIME DEPOSITS³– 0.03%
KBC Bank
4.57%, 03/01/06		42,503		42,503
Societe Generale
4.57%, 03/01/06		74,381		74,381
US Bank N.A.
4.45%, 03/01/06		38,242		38,242

				155,126
VARIABLE & FLOATING RATE NOTES³– 0.22%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		59,717		59,727
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		49,941		49,942
American Express Centurion Bank
4.57%, 06/29/06		8,501		8,501
American Express Credit Corp.
4.67%, 02/05/07		6,375		6,381
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		69,068		69,085
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		13,814		13,814
Bank of Ireland
4.54%, 03/20/07⁷		21,252		21,252
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		27,415		27,414


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Unaudited) (Continued)

iSHARES ^{^®}MSCI GERMANY INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
BMW US Capital LLC
4.54%, 02/15/07⁷	$	21,252	$	21,252
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		57,167		57,166
Commodore CDO Ltd.
4.56%, 12/12/06⁷		5,313		5,313
DEPFA Bank PLC
4.50%, 12/15/06		21,252		21,252
Dorada Finance Inc.
4.52%, 06/26/06⁷		5,313		5,313
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		21,252		21,252
Fifth Third Bancorp.
4.55%, 01/23/07⁷		42,503		42,503
Five Finance Inc.
4.54%, 06/26/06⁷		4,250		4,250
General Electric Capital Corp.
4.67%, 03/09/07		9,563		9,570
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		5,313		5,313
Hartford Life Global Funding Trusts
4.56%, 02/15/07		21,252		21,252
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		21,252		21,252
Holmes Financing PLC
4.54%, 12/15/06⁷		58,442		58,442
HSBC Bank USA N.A.
4.70%, 05/04/06		7,438		7,439
K2 USA LLC
4.53%, 06/02/06⁷		19,126		19,126
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		22,266		22,265
Links Finance LLC
4.56%, 03/15/06⁷		17,001		17,001
Marshall & Ilsley Bank
4.55%, 02/15/07		11,688		11,688
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		63,542		63,568
Mound Financing PLC
4.53%, 11/08/06⁷		42,503		42,503
Natexis Banques Populaires
4.55%, 03/15/07⁷		15,939		15,939
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		57,379		57,382
Nordea Bank AB
4.55%, 02/09/07⁷		37,190		37,190
Northern Rock PLC
4.61%, 02/02/07⁷		25,502		25,503
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		57,804		57,805
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		53,129		53,129
Principal Life Income Funding Trusts
4.70%, 05/10/06		15,939		15,939
Sedna Finance Inc.
4.54%, 09/20/06⁷		6,375		6,375
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		23,589		23,589
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		21,252		21,252
Societe Generale
4.54%, 03/02/07⁷		14,876		14,876
Strips III LLC
4.62%, 07/24/06^7,8		5,483		5,483
SunTrust Bank
4.62%, 04/28/06		31,877		31,877
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		47,391		47,389
Toyota Motor Credit Corp.
4.57%, 04/10/06		9,563		9,563
UniCredito Italiano SpA
4.43%, 06/14/06		27,627		27,624
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		21,252		21,252
US Bank N.A.
4.54%, 09/29/06		9,563		9,562


38		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES ^{^®}MSCI GERMANY INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06	$	31,877	$	31,878
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		40,559		40,558
Wells Fargo & Co.
4.56%, 03/15/07⁷		10,626		10,627
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		10,626		10,625
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		22,314		22,314
Winston Funding Ltd.
4.68%, 04/23/06⁷		15,174		15,174
World Savings Bank
4.52%, 03/09/06		31,877		31,877

				1,378,618

TOTAL SHORT-TERM INVESTMENTS (Cost: $2,580,579)				2,580,579

TOTAL INVESTMENTS IN SECURITIES – 100.23% (Cost: $563,340,606)				636,149,440
Other Assets, Less Liabilities – (0.23)%				(1,433,074	)

NET ASSETS – 100.00%			$	634,716,366

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Unaudited)

iSHARES^® MSCI ITALY INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 95.69%
AEROSPACE & DEFENSE – 2.03%
Finmeccanica SpA	79,443	$	1,739,931

			1,739,931
APPAREL – 0.34%
Benetton Group SpA	22,701		289,598

			289,598
AUTO MANUFACTURERS – 1.38%
Fiat SpA^1,2	109,032		1,180,340

			1,180,340
AUTO PARTS & EQUIPMENT – 0.74%
Pirelli SpA	668,556		632,089

			632,089
BANKS – 37.45%
Banca Antonveneta SpA	35,721		1,125,610
Banca Intesa SpA	623,511		3,687,170
Banca Monte dei Paschi di Siena SpA²	274,050		1,418,035
Banca Nazionale del Lavoro SpA¹	306,432		1,064,977
Banca Popolare di Milano Scrl	109,809		1,389,059
Banca Popolare di Verona e Novara Scrl	109,872		2,636,927
Banche Popolari Unite Scrl	118,587		2,980,403
Capitalia SpA	378,588		2,861,696
Sanpaolo IMI SpA	240,828		4,252,354
UniCredito Italiano SpA	1,463,154		10,649,839

			32,066,070
BUILDING MATERIALS – 0.80%
Italcementi SpA	33,642		689,084

			689,084
COMMERCIAL SERVICES – 2.63%
Autostrade SpA	88,263		2,254,060

			2,254,060
DIVERSIFIED FINANCIAL SERVICES – 3.51%
Banca Fideuram SpA	75,852		460,312
Mediobanca SpA	121,653		2,545,466

			3,005,778
ELECTRIC – 8.69%
Enel SpA	760,347		6,318,470
Terna SpA	428,463		1,127,668

			7,446,138
ENTERTAINMENT – 0.52%
Lottomatica SpA¹	11,130		444,536

			444,536
GAS – 0.61%
Snam Rete Gas SpA	118,482		520,544

			520,544
HEALTH CARE – PRODUCTS – 1.47%
Luxottica Group SpA	44,646		1,255,677

			1,255,677
INSURANCE – 5.42%
Assicurazioni Generali SpA	115,080		4,128,472
Mediolanum SpA²	62,349		515,146

			4,643,618
MEDIA – 4.11%
Arnoldo Mondadori Editore SpA	41,685		394,361
Gruppo Editoriale L’Espresso SpA	31,857		163,605
Mediaset SpA	199,437		2,349,254
Seat Pagine Gialle SpA¹	903,487		443,799
Telecom Italia Media SpA^1,2	325,045		165,090

			3,516,109
OIL & GAS – 17.70%
ENI SpA	530,523		15,155,084

			15,155,084
RETAIL – 1.16%
Autogrill SpA	39,753		583,439
Bulgari SpA	34,482		409,467

			992,906
TELECOMMUNICATIONS – 7.13%
Telecom Italia SpA	2,229,318		5,986,930
Tiscali SpA¹	40,677		119,909

			6,106,839

TOTAL COMMON STOCKS (Cost: $68,626,951)			81,938,401
PREFERRED STOCKS – 4.03%
BANKS – 0.61%
Banca Intesa SpA RNC	94,395		519,665

			519,665


40		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI ITALY INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
TELECOMMUNICATIONS – 3.42%
Telecom Italia SpA RNC		1,272,705	$	2,927,031

				2,927,031

TOTAL PREFERRED STOCKS (Cost: $2,949,582)				3,446,696
SHORT-TERM INVESTMENTS – 1.22%
CERTIFICATES OF DEPOSIT³– 0.01%
Toronto-Dominion Bank
3.94%, 07/10/06	$	4,816		4,816
Wells Fargo Bank N.A.
4.78%, 12/05/06		7,706		7,706

				12,522
COMMERCIAL PAPER³– 0.04%
Amstel Funding Corp.
4.40%, 05/08/06		4,816		4,778
CC USA Inc.
4.23%, 04/21/06		2,890		2,872
Edison Asset Securitization LLC
4.37%, 05/08/06		4,816		4,777
Galaxy Funding Inc.
4.23%, 04/18/06		2,765		2,749
Grampian Funding LLC
4.41%, 05/15/06		4,816		4,772
Nordea North America Inc.
4.16%, 04/04/06		10,114		10,074
Sigma Finance Inc.
4.16%, 04/06/06		5,780		5,756

				35,778
MEDIUM-TERM NOTES³– 0.04%
Dorada Finance Inc.
3.93%, 07/07/06		2,986		2,986
K2 USA LLC
3.94%, 07/07/06		5,780		5,779
Marshall & Ilsley Bank
5.18%, 12/15/06		9,633		9,659
Toronto-Dominion Bank
3.81%, 06/20/06		12,041		12,041
US Bank N.A.
2.85%, 11/15/06		1,927		1,901

				32,366
MONEY MARKET FUNDS – 0.02%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		20,183		20,183

				20,183
REPURCHASE AGREEMENTS³– 0.30%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $14,451 (collateralized by non-U.S. Government debt securities, value $15,920, 0.00% to 9.40%, 11/15/15 to 6/12/47)^.6	$	14,449		14,449
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $48,169 (collateralized by U.S. Government obligations, value $49,223, 3.69% to 10.00%, 5/1/09 to 1/1/36).		48,163		48,163
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $24,085 (collateralized by non-U.S. Government debt securities, value $25,326, 1.01%, 9/19/35)^.6		24,082		24,082
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $48,169 (collateralized by U.S. Government obligations, value $49,205, 4.50% to 7.50%, 9/1/09 to 11/1/35).		48,163		48,163
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $48,169 (collateralized by non-U.S. Government debt securities, value $50,652, 0.00% to 10.00%, 8/15/07 to 2/1/16)^.6		48,163		48,163
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $11,560 (collateralized by U.S. Government obligations, value $11,809, 3.99% to 5.51%, 7/1/32 to 2/1/36).		11,559		11,559


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI ITALY INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $9,634 (collateralized by non-U.S. Government debt securities, value $9,938, 0.00% to 7.88%, 5/15/08 to 1/15/16)^.6	$	9,633	$	9,633
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $48,169 (collateralized by non-U.S. Government debt securities, value $50,575, 0.00% to 7.16%, 3/1/06 to 3/25/35)^.6		48,163		48,163

				252,375
TIME DEPOSITS³– 0.08%
KBC Bank
4.57%, 03/01/06		19,265		19,265
Societe Generale
4.57%, 03/01/06		33,714		33,714
US Bank N.A.
4.45%, 03/01/06		17,334		17,334

				70,313
VARIABLE & FLOATING RATE NOTES³– 0.73%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		27,068		27,072
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		22,637		22,635
American Express Centurion Bank
4.57%, 06/29/06		3,853		3,853
American Express Credit Corp.
4.67%, 02/05/07		2,890		2,892
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		31,306		31,314
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		6,261		6,261
Bank of Ireland
4.54%, 03/20/07⁷		9,633		9,633
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		12,426		12,426
BMW US Capital LLC
4.54%, 02/15/07⁷		9,633		9,633
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		25,912		25,911
Commodore CDO Ltd.
4.56%, 12/12/06⁷		2,408		2,408
DEPFA Bank PLC
4.50%, 12/15/06		9,633		9,633
Dorada Finance Inc.
4.52%, 06/26/06⁷		2,408		2,408
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		9,633		9,633
Fifth Third Bancorp.
4.55%, 01/23/07⁷		19,265		19,265
Five Finance Inc.
4.54%, 06/26/06⁷		1,927		1,926
General Electric Capital Corp.
4.67%, 03/09/07		4,335		4,338
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		2,408		2,408
Hartford Life Global Funding Trusts
4.56%, 02/15/07		9,633		9,633
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		9,633		9,633
Holmes Financing PLC
4.54%, 12/15/06⁷		26,490		26,490
HSBC Bank USA N.A.
4.70%, 05/04/06		3,371		3,372
K2 USA LLC
4.53%, 06/02/06⁷		8,669		8,669
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		10,092		10,092
Links Finance LLC
4.56%, 03/15/06⁷		7,706		7,706
Marshall & Ilsley Bank
4.55%, 02/15/07		5,298		5,298


42		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI ITALY INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷	$	28,802	$	28,813
Mound Financing PLC
4.53%, 11/08/06⁷		19,265		19,265
Natexis Banques Populaires
4.55%, 03/15/07⁷		7,224		7,224
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		26,008		26,009
Nordea Bank AB
4.55%, 02/09/07⁷		16,857		16,857
Northern Rock PLC
4.61%, 02/02/07⁷		11,559		11,559
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		26,201		26,200
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		24,082		24,082
Principal Life Income Funding Trusts
4.70%, 05/10/06		7,224		7,224
Sedna Finance Inc.
4.54%, 09/20/06⁷		2,890		2,890
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		10,692		10,692
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		9,633		9,633
Societe Generale
4.54%, 03/02/07⁷		6,743		6,743
Strips III LLC
4.62%, 07/24/06^7,8		2,485		2,485
SunTrust Bank
4.62%, 04/28/06		14,449		14,449
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		21,481		21,480
Toyota Motor Credit Corp.
4.57%, 04/10/06		4,335		4,335
UniCredito Italiano SpA
4.43%, 06/14/06		12,522		12,521
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		9,633		9,633
US Bank N.A.
4.54%, 09/29/06		4,335		4,334
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		14,449		14,449
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		18,384		18,384
Wells Fargo & Co.
4.56%, 03/15/07⁷		4,816		4,817
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		4,816		4,816
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		10,114		10,114
Winston Funding Ltd.
4.68%, 04/23/06⁷		6,878		6,878
World Savings Bank
4.52%, 03/09/06		14,449		14,449

				624,877

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,048,414)				1,048,414

TOTAL INVESTMENTS IN SECURITIES – 100.94% (Cost: $72,624,947)				86,433,511
Other Assets, Less Liabilities – (0.94)%				(808,144	)

NET ASSETS – 100.00%			$	85,625,367

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI NETHERLANDS INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
COMMON STOCKS – 99.98%
BANKS – 12.76%
ABN AMRO Holding NV		370,500	$	10,800,265

				10,800,265
BEVERAGES – 3.44%
Heineken NV		77,376		2,915,148

				2,915,148
CHEMICALS – 6.34%
Akzo Nobel NV		69,654		3,537,716
Koninklijke DSM NV		43,836		1,823,995

				5,361,711
COMMERCIAL SERVICES – 1.85%
Randstad Holdings NV		13,806		773,300
Vedior NV		41,886		791,527

				1,564,827
COMPUTERS – 0.49%
Getronics NV		30,264		411,338

				411,338
DISTRIBUTION & WHOLESALE – 1.30%
Buhrmann NV		32,994		554,260
Hagemeyer NV^1,2		135,798		547,239

				1,101,499
ELECTRONICS – 10.25%
Koninklijke Philips Electronics NV		266,292		8,673,735

				8,673,735
FOOD – 14.68%
Koninklijke Ahold NV¹		379,080		3,091,394
Koninklijke Numico NV¹		40,482		1,753,455
Unilever NV CVA		109,122		7,578,366

				12,423,215
INSURANCE – 22.75%
AEGON NV		254,826		4,207,856
ING Groep NV		400,123		15,041,281

				19,249,137
MEDIA – 7.90%
Reed Elsevier NV		217,074		2,934,865
VNU NV		65,676		2,128,254
Wolters Kluwer NV CVA		73,866		1,622,189

				6,685,308

*Security*	Shares or Principal		*Value*
OFFICE & BUSINESS EQUIPMENT – 0.44%
Oce NV		21,450	$	371,331

				371,331
OIL & GAS SERVICES – 1.12%
SBM Offshore NV		9,594		945,959

				945,959
REAL ESTATE INVESTMENT TRUSTS – 4.61%
Corio NV		18,096		1,189,859
Rodamco Europe NV		20,436		1,873,655
Wereldhave NV		7,878		839,694

				3,903,208
SEMICONDUCTORS – 2.92%
ASML Holding NV¹		118,872		2,467,435

				2,467,435
TELECOMMUNICATIONS – 4.82%
Koninklijke KPN NV		394,602		4,083,629

				4,083,629
TRANSPORTATION – 4.31%
TNT NV		111,930		3,644,480

				3,644,480

TOTAL COMMON STOCKS (Cost: $71,953,663)				84,602,225
SHORT-TERM INVESTMENTS – 0.01%
CERTIFICATES OF DEPOSIT³– 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	$	19		19
Wells Fargo Bank N.A.
4.78%, 12/05/06		31		31

				50
COMMERCIAL PAPER³– 0.00%
Amstel Funding Corp.
4.40%, 05/08/06		19		19
CC USA Inc.
4.23%, 04/21/06		12		12
Edison Asset Securitization LLC
4.37%, 05/08/06		19		19
Galaxy Funding Inc.
4.23%, 04/18/06		11		11


44		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

i SHARES ^{^®}MSCI NETHERLANDS INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
Grampian Funding LLC
4.41%, 05/15/06	$	19	$	19
Nordea North America Inc.
4.16%, 04/04/06		41		41
Sigma Finance Inc.
4.16%, 04/06/06		23		23

				144
MEDIUM-TERM NOTES³– 0.00%
Dorada Finance Inc.
3.93%, 07/07/06		12		12
K2 USA LLC
3.94%, 07/07/06		23		23
Marshall & Ilsley Bank
5.18%, 12/15/06		39		39
Toronto-Dominion Bank
3.81%, 06/20/06		49		49
US Bank N.A.
2.85%, 11/15/06		8		8

				131
MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		3,716		3,716

				3,716
REPURCHASE AGREEMENTS³– 0.00%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $58 (collateralized by non-U.S. Government debt securities, value $64, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	58		58
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $194 (collateralized by U.S. Government obligations, value $198, 3.69% to 10.00%, 5/1/09 to 1/1/36).		194		194

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $97 (collateralized by non-U.S. Government debt securities, value $102, 1.01%, 9/19/35).⁶	$	97	$	97
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $194 (collateralized by U.S. Government obligations, value $198, 4.50% to 7.50%, 9/1/09 to 11/1/35).		194		194
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $194 (collateralized by non-U.S. Government debt securities, value $204, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		194		194
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $47 (collateralized by U.S. Government obligations, value $48, 3.99% to 5.51%, 7/1/32 to 2/1/36).		47		47
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $39 (collateralized by non-U.S. Government debt securities, value $40, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		39		39
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $194 (collateralized by non-U.S. Government debt securities, value $204, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		194		194

				1,017
TIME DEPOSITS³– 0.00%
KBC Bank
4.57%, 03/01/06		78		78


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI NETHERLANDS INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Societe Generale
4.57%, 03/01/06	$	136	$	136
US Bank N.A.
4.45%, 03/01/06		70		70

				284
VARIABLE & FLOATING RATE NOTES³– 0.00%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		109		109
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		91		91
American Express Centurion Bank
4.57%, 06/29/06		16		16
American Express Credit Corp.
4.67%, 02/05/07		12		12
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		126		126
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		25		25
Bank of Ireland
4.54%, 03/20/07⁷		39		39
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		50		50
BMW US Capital LLC
4.54%, 02/15/07⁷		39		39
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		104		103
Commodore CDO Ltd.
4.56%, 12/12/06⁷		10		10
DEPFA Bank PLC
4.50%, 12/15/06		39		39
Dorada Finance Inc.
4.52%, 06/26/06⁷		10		10
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		39		39
Fifth Third Bancorp.
4.55%, 01/23/07⁷		78		78
Five Finance Inc.
4.54%, 06/26/06⁷		8		8
General Electric Capital Corp.
4.67%, 03/09/07		17		17
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		10		10
Hartford Life Global Funding Trusts
4.56%, 02/15/07		39		39
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		39		39
Holmes Financing PLC
4.54%, 12/15/06⁷		107		107
HSBC Bank USA N.A.
4.70%, 05/04/06		14		14
K2 USA LLC
4.53%, 06/02/06⁷		35		35
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		41		41
Links Finance LLC
4.56%, 03/15/06⁷		31		31
Marshall & Ilsley Bank
4.55%, 02/15/07		21		21
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		116		116
Mound Financing PLC
4.53%, 11/08/06⁷		78		78
Natexis Banques Populaires
4.55%, 03/15/07⁷		29		29
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		105		105
Nordea Bank AB
4.55%, 02/09/07⁷		68		68
Northern Rock PLC
4.61%, 02/02/07⁷		47		47
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		106		106


46		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI NETHERLANDS INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷	$	97	$	97
Principal Life Income Funding Trusts
4.70%, 05/10/06		29		29
Sedna Finance Inc.
4.54%, 09/20/06⁷		12		12
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		43		43
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		39		39
Societe Generale
4.54%, 03/02/07⁷		27		27
Strips III LLC
4.62%, 07/24/06^7,8		10		10
SunTrust Bank
4.62%, 04/28/06		58		58
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		87		86
Toyota Motor Credit Corp.
4.57%, 04/10/06		17		17
UniCredito Italiano SpA
4.43%, 06/14/06		50		50
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		39		39
US Bank N.A.
4.54%, 09/29/06		17		17
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		58		58
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		74		74
Wells Fargo & Co.
4.56%, 03/15/07⁷		19		19
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		19		20
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		41		41
Winston Funding Ltd.
4.68%, 04/23/06⁷		28		28
World Savings Bank
4.52%, 03/09/06		58		58

				2,519

TOTAL SHORT-TERM INVESTMENTS (Cost: $7,861)				7,861

TOTAL INVESTMENTS IN SECURITIES – 99.99% (Cost: $71,961,524)				84,610,086
Other Assets, Less Liabilities – 0.01%				8,995

NET ASSETS – 100.00%			$	84,619,081

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Unaudited)

iSHARES^® MSCI SPAIN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.87%
ADVERTISING – 0.56%
Telefonica Publicidad e Informacion SA	46,197	$	486,893

			486,893
AGRICULTURE – 3.16%
Altadis SA	65,221		2,737,143

			2,737,143
AIRLINES – 0.32%
Iberia Lineas Aereas de Espana SA	98,455		280,545

			280,545
BANKS – 38.37%
Banco Bilbao Vizcaya Argentaria SA	602,098		12,260,901
Banco Popular Espanol SA	286,752		3,846,151
Banco Santander Central Hispano SA	1,119,487		16,350,178
Bankinter SA	12,064		762,315

			33,219,545
BIOTECHNOLOGY – 0.28%
Zeltia SA¹	35,090		243,486

			243,486
BUILDING MATERIALS – 0.11%
Uralita SA	18,270		92,575

			92,575
COMMERCIAL SERVICES – 2.67%
Abertis Infraestructuras SA¹	68,569		1,777,275
Cintra Concesiones de Infraestructuras de Transporte SA²	40,020		531,532

			2,308,807
COMPUTERS – 0.75%
Indra Sistemas SA	32,799		653,047

			653,047
ELECTRIC – 11.58%
Endesa SA	125,454		4,205,980
Iberdrola SA	129,978		4,101,957
Union Fenosa SA	45,791		1,719,721

			10,027,658
ENERGY - ALTERNATE SOURCES – 0.71%
Gamesa Corporacion Tecnologica SA	35,293		611,394

			611,394
ENGINEERING & CONSTRUCTION – 6.49%
Acciona SA	7,453		1,039,643
Actividades de Construcciones y Servicios SA	67,222		2,508,552
Fomento de Construcciones y Contratas SA	15,573		1,059,242
Grupo Ferrovial SA	13,485		1,010,470

			5,617,907
FOOD – 0.94%
Ebro Puleva SA	39,440		718,501
Viscofan SA	7,250		98,107

			816,608
FOREST PRODUCTS & PAPER – 0.34%
Grupo Empresarial ENCE SA	8,555		295,791

			295,791
GAS – 2.35%
Gas Natural SDG SA	66,874		2,037,115

			2,037,115
INSURANCE – 0.94%
Corporacion Mapfre SA	41,992		809,550

			809,550
IRON & STEEL – 0.93%
Acerinox SA¹	52,664		808,090

			808,090
LODGING – 0.34%
NH Hoteles SA	18,038		291,404

			291,404
MEDIA – 1.38%
Antena 3 de Television SA¹	20,271		538,224
Promotora de Informaciones SA	19,778		366,438
Sogecable SA^1,2	7,156		287,776

			1,192,438
OIL & GAS – 4.89%
Repsol YPF SA	151,641		4,237,811

			4,237,811
PHARMACEUTICALS – 0.65%
FAES FARMA SA¹	25,143		559,366

			559,366


48		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
REAL ESTATE – 3.00%
Inmobiliaria Colonial SA		10,556	$	678,353
Metrovacesa SA		14,297		1,065,350
Sacyr Vallehermoso SA		30,334		853,511

				2,597,214
RETAIL – 2.22%
Inditex SA		53,563		1,924,116

				1,924,116
TELECOMMUNICATIONS – 15.86%
Telefonica SA		890,387		13,736,637

				13,736,637
WATER – 1.03%
Sociedad General de Aguas de Barcelona SA²		276		7,338
Sociedad General de Aguas de Barcelona SA Class B		31,958		883,965

				891,303

TOTAL COMMON STOCKS (Cost: $63,191,884)				86,476,443

SHORT-TERM INVESTMENTS – 2.79%

CERTIFICATES OF DEPOSIT³– 0.03%
Toronto-Dominion Bank
3.94%, 07/10/06	$	11,326		11,326
Wells Fargo Bank N.A.
4.78%, 12/05/06		18,121		18,121

				29,447
COMMERCIAL PAPER³– 0.10%
Amstel Funding Corp.
4.40%, 05/08/06		11,326		11,229
CC USA Inc.
4.23%, 04/21/06		6,796		6,755
Edison Asset Securitization LLC
4.37%, 05/08/06		11,326		11,232
Galaxy Funding Inc.
4.23%, 04/18/06		6,501		6,464
Grampian Funding LLC
4.41%, 05/15/06		11,326		11,222
Nordea North America Inc.
4.16%, 04/04/06		23,784		23,691
Sigma Finance Inc.
4.16%, 04/06/06		13,591		13,534

				84,127
MEDIUM-TERM NOTES³– 0.09%
Dorada Finance Inc.
3.93%, 07/07/06		7,022		7,022
K2 USA LLC
3.94%, 07/07/06		13,591		13,591
Marshall & Ilsley Bank
5.18%, 12/15/06		22,652		22,713
Toronto-Dominion Bank
3.81%, 06/20/06		28,315		28,315
US Bank N.A.
2.85%, 11/15/06		4,530		4,471

				76,112
MONEY MARKET FUNDS – 0.00%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		368		368

				368
REPURCHASE AGREEMENTS³– 0.68%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $33,982 (collateralized by non-U.S. Government debt securities, value $37,436, 0.00% to 9.40%, 11/15/15 to 6/12/47)⁶	$	33,978		33,978
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $113,273 (collateralized by U.S. Government obligations, value $115,752, 3.69% to 10.00%, 5/1/09 to 1/1/36)		113,259		113,259
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $56,636 (collateralized by non-U.S. Government debt securities, value $59,556, 1.01%, 9/19/35)⁶		56,629		56,629


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $113,273 (collateralized by U.S. Government obligations, value $115,709, 4.50% to 7.50%, 9/1/09 to 11/1/35).	$	113,259	$	113,259
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $113,274 (collateralized by non-U.S. Government debt securities, value $119,112, 0.00% to 10.00%, 8/15/07 to 2/1/16)^.6		113,259		113,259
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $27,185 (collateralized by U.S. Government obligations, value $27,771, 3.99% to 5.51%, 7/1/32 to 2/1/36).		27,182		27,182
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $22,655 (collateralized by non-U.S. Government debt securities, value $23,370, 0.00% to 7.88%, 5/15/08 to 1/15/16)^.6		22,652		22,652
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $113,274 (collateralized by non-U.S. Government debt securities, value $118,931, 0.00% to 7.16%, 3/1/06 to 3/25/35)^.6		113,259		113,259

				593,477
TIME DEPOSITS³– 0.19%
KBC Bank
4.57%, 03/01/06		45,303		45,303
Societe Generale
4.57%, 03/01/06		79,281		79,281
US Bank N.A.
4.45%, 03/01/06		40,761		40,761

				165,345
VARIABLE & FLOATING RATE NOTES³ – 1.70%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		63,651		63,661
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		53,232		53,232
American Express Centurion Bank
4.57%, 06/29/06		9,061		9,061
American Express Credit Corp.
4.67%, 02/05/07		6,796		6,801
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		73,618		73,637
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		14,724		14,724
Bank of Ireland
4.54%, 03/20/07⁷		22,652		22,652
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		29,221		29,220
BMW US Capital LLC
4.54%, 02/15/07⁷		22,652		22,652
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		60,933		60,932
Commodore CDO Ltd.
4.56%, 12/12/06⁷		5,663		5,663
DEPFA Bank PLC
4.50%, 12/15/06		22,652		22,652
Dorada Finance Inc.
4.52%, 06/26/06⁷		5,663		5,663
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		22,652		22,652
Fifth Third Bancorp.
4.55%, 01/23/07⁷		45,303		45,303
Five Finance Inc.
4.54%, 06/26/06⁷		4,530		4,530


50		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
General Electric Capital Corp.
4.67%, 03/09/07	$	10,193	$	10,201
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		5,663		5,663
Hartford Life Global Funding Trusts
4.56%, 02/15/07		22,652		22,652
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		22,652		22,652
Holmes Financing PLC
4.54%, 12/15/06⁷		62,292		62,292
HSBC Bank USA N.A.
4.70%, 05/04/06		7,928		7,929
K2 USA LLC
4.53%, 06/02/06⁷		20,387		20,386
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		23,733		23,733
Links Finance LLC
4.56%, 03/15/06⁷		18,121		18,121
Marshall & Ilsley Bank
4.55%, 02/15/07		12,458		12,458
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		67,729		67,757
Mound Financing PLC
4.53%, 11/08/06⁷		45,303		45,303
Natexis Banques Populaires
4.55%, 03/15/07⁷		16,989		16,989
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		61,160		61,162
Nordea Bank AB
4.55%, 02/09/07⁷		39,641		39,641
Northern Rock PLC
4.61%, 02/02/07⁷		27,182		27,183
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		61,613		61,613
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		56,629		56,629
Principal Life Income Funding Trusts
4.70%, 05/10/06		16,989		16,989
Sedna Finance Inc.
4.54%, 09/20/06⁷		6,796		6,796
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		25,143		25,143
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		22,652		22,652
Societe Generale
4.54%, 03/02/07⁷		15,856		15,856
Strips III LLC
4.62%, 07/24/06^7,8		5,844		5,844
SunTrust Bank
4.62%, 04/28/06		33,978		33,978
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		50,513		50,511
Toyota Motor Credit Corp.
4.57%, 04/10/06		10,193		10,193
UniCredito Italiano SpA
4.43%, 06/14/06		29,447		29,444
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		22,652		22,652
US Bank N.A.
4.54%, 09/29/06		10,193		10,192
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		33,978		33,978
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		43,231		43,231
Wells Fargo & Co.
4.56%, 03/15/07⁷		11,326		11,327
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		11,326		11,325
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		23,784		23,784
Winston Funding Ltd.
4.68%, 04/23/06⁷		16,173		16,173


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Unaudited) (Continued)

i SHARES ^{^®}MSCI SPAIN INDEX FUND

February 28, 2006


Security	Principal		Value
World Savings Bank 4.52%, 03/09/06	$	33,978	$	33,978

				1,469,445
TOTAL SHORT-TERM INVESTMENTS (Cost: $2,418,321)				2,418,321

TOTAL INVESTMENTS IN SECURITIES – 102.66% (Cost: $65,610,205)				88,894,764
Other Assets, Less Liabilities – (2.66)%				(2,305,091	)

NET ASSETS – 100.00%			$	86,589,673

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


52		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES ^{^®}MSCI SWEDEN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.96%
AGRICULTURE – 1.74%
Swedish Match AB	134,618	$	1,802,104

			1,802,104
AIRLINES – 0.40%
SAS AB¹	31,146		411,045

			411,045
AUTO MANUFACTURERS – 7.02%
Scania AB Class B	39,498		1,651,102
Volvo AB Class A	39,440		1,671,091
Volvo AB Class B	90,190		3,935,294

			7,257,487
BANKS – 19.39%
Nordea Bank AB	896,158		10,129,276
Skandinaviska Enskilda Banken AB Class A	195,460		4,319,831
Svenska Handelsbanken AB Class A	215,064		5,595,073

			20,044,180
COMMERCIAL SERVICES – 2.18%
Securitas AB Class B	122,786		2,256,226

			2,256,226
COMPUTERS – 0.37%
WM-Data AB Class B	131,544		387,077

			387,077
COSMETICS & PERSONAL CARE – 0.39%
Oriflame Cosmetics SA SDR	12,528		407,408

			407,408
DIVERSIFIED FINANCIAL SERVICES – 0.83%
D Carnegie AB	18,328		310,163
OMHEX AB¹	32,074		546,837

			857,000
ENGINEERING & CONSTRUCTION – 2.43%
Skanska AB Class B	156,194		2,515,042

			2,515,042
FOOD – 0.31% Axfood AB	12,238		316,064

			316,064
FOREST PRODUCTS & PAPER – 4.41%
Billerud AB	21,924		312,874
Holmen AB Class B	22,098		856,766
Svenska Cellulosa AB Class B	80,678		3,382,704

			4,552,344
HAND & MACHINE TOOLS – 4.35% Sandvik AB	83,578		4,496,477

			4,496,477
HEALTH CARE - PRODUCTS – 2.67%
Elekta AB Class B	36,250		535,630
Gambro AB Class A	72,848		742,901
Gambro AB Class B	39,440		405,943
Getinge AB Class B	74,588		1,078,562

			2,763,036
HEALTH CARE - SERVICES – 0.56%
Capio AB¹	33,698		583,036

			583,036
HOME FURNISHINGS – 3.16%
Electrolux AB Series B	117,972		3,262,825

			3,262,825
IRON & STEEL – 1.33%
Svenskt Stal AB Class A	21,112		949,183
Svenskt Stal AB Class B	9,976		421,428

			1,370,611
MACHINERY – 4.92%
Atlas Copco AB Class A	132,356		3,259,485
Atlas Copco AB Class B	80,446		1,828,722

			5,088,207
MANUFACTURING – 1.63%
Alfa Laval AB	39,672		1,002,040
Trelleborg AB Class B²	32,654		680,442

			1,682,482
MEDIA – 1.72%
Eniro AB	71,978		797,660
Modern Times Group AB Class B¹	21,228		983,889

			1,781,549
METAL FABRICATE & HARDWARE – 4.56%
Assa Abloy AB Class B	122,380		2,078,756
Hoganas AB Class B²	11,542		244,156


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Unaudited) (Continued)

i SHARES ^{^®}MSCI SWEDEN INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
SKF AB		164,198	$	2,384,715

				4,707,627
OIL & GAS – 0.75%
Lundin Petroleum AB¹		69,658		769,750

				769,750
REAL ESTATE – 2.09%
Castellum AB		16,240		679,893
Fabege AB		32,306		640,551
Kungsleden AB		18,908		661,449
Wihlborgs Fastigheter AB¹		6,322		174,452

				2,156,345
RETAIL – 6.93%
Hennes & Mauritz AB Class B		196,562		7,161,701

				7,161,701
SOFTWARE – 0.24%
Telelogic AB¹		99,470		242,449

				242,449
TELECOMMUNICATIONS – 25.58%
Tele2 AB Class B²		130,790		1,412,250
Telefonaktiebolaget LM EricssonClass B		6,130,774		20,904,985
TeliaSonera AB		772,966		4,119,492

				26,436,727
TOTAL COMMON STOCKS (Cost: $83,337,160)				103,308,799
SHORT-TERM INVESTMENTS – 0.17%
CERTIFICATES OF DEPOSIT³– 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	$	782		782
Wells Fargo Bank N.A.
4.78%, 12/05/06		1,252		1,252

				2,034
COMMERCIAL PAPER³– 0.01%
Amstel Funding Corp.
4.40%, 05/08/06		782		777
CC USA Inc.
4.23%, 04/21/06		469		467
Edison Asset Securitization LLC
4.37%, 05/08/06		782		776
Galaxy Funding Inc.
4.23%, 04/18/06		449		447
Grampian Funding LLC
4.41%, 05/15/06		782		775
Nordea North America Inc.
4.16%, 04/04/06		1,643		1,637
Sigma Finance Inc.
4.16%, 04/06/06		939		935

				5,814
MEDIUM-TERM NOTES³– 0.00%
Dorada Finance Inc.
3.93%, 07/07/06		485		485
K2 USA LLC
3.94%, 07/07/06		939		939
Marshall & Ilsley Bank
5.18%, 12/15/06		1,565		1,569
Toronto-Dominion Bank
3.81%, 06/20/06		1,956		1,956
US Bank N.A.
2.85%, 11/15/06		313		309

				5,258
MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		10,113		10,113

				10,113
REPURCHASE AGREEMENTS ³– 0.04%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $2,347 (collateralized by non-U.S. Government debt securities, value $2,586, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	2,347		2,347
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $ 7,826 (collateralized by U.S. Government obligations, value $7,997, 3.69% to 10.00%, 5/1/09 to 1/1/36).		7,825		7,825


54		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI SWEDEN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $3,913 (collateralized by non-U.S. Government debt securities, value $4,115, 1.01%, 9/19/35).⁶	$	3,912	$	3,912
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $7,826 (collateralized by U.S. Government obligations, value $7,994, 4.50% to 7.50%, 9/1/09 to 11/1/35).		7,825		7,825
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $7,826 (collateralized by non-U.S. Government debt securities, value $8,229, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		7,825		7,825
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $1,878 (collateralized by U.S. Government obligations, value $1,919, 3.99% to 5.51%, 7/1/32 to 2/1/36).		1,878		1,878
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $1,565 (collateralized by non-U.S. Government debt securities, value $1,615, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		1,565		1,565
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $7,826 (collateralized by non-U.S. Government debt securities, value $8,217, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		7,825		7,825

				41,002
TIME DEPOSITS³– 0.01%
KBC Bank
4.57%, 03/01/06		3,130		3,130
Societe Generale
4.57%, 03/01/06		5,477		5,477
US Bank N.A.
4.45%, 03/01/06		2,816		2,816

				11,423
VARIABLE & FLOATING RATE NOTES³– 0.10%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		4,398		4,398
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		3,678		3,678
American Express Centurion Bank
4.57%, 06/29/06		626		626
American Express Credit Corp.
4.67%, 02/05/07		469		470
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		5,086		5,088
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		1,017		1,017
Bank of Ireland
4.54%, 03/20/07⁷		1,565		1,565
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		2,019		2,018
BMW US Capital LLC
4.54%, 02/15/07⁷		1,565		1,565
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		4,210		4,210
Commodore CDO Ltd.
4.56%, 12/12/06⁷		391		391
DEPFA Bank PLC
4.50%, 12/15/06		1,565		1,565
Dorada Finance Inc.
4.52%, 06/26/06⁷		391		391
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		1,565		1,565


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI SWEDEN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Fifth Third Bancorp.
4.55%, 01/23/07⁷	$	3,130	$	3,130
Five Finance Inc.
4.54%, 06/26/06⁷		313		313
General Electric Capital Corp.
4.67%, 03/09/07		704		705
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		391		391
Hartford Life Global Funding Trusts
4.56%, 02/15/07		1,565		1,565
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		1,565		1,565
Holmes Financing PLC
4.54%, 12/15/06⁷		4,304		4,304
HSBC Bank USA N.A.
4.70%, 05/04/06		548		548
K2 USA LLC
4.53%, 06/02/06⁷		1,408		1,408
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		1,640		1,639
Links Finance LLC
4.56%, 03/15/06⁷		1,252		1,252
Marshall & Ilsley Bank
4.55%, 02/15/07		861		861
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		4,679		4,681
Mound Financing PLC
4.53%, 11/08/06⁷		3,130		3,130
Natexis Banques Populaires
4.55%, 03/15/07⁷		1,174		1,174
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		4,225		4,226
Nordea Bank AB
4.55%, 02/09/07⁷		2,739		2,739
Northern Rock PLC
4.61%, 02/02/07⁷		1,878		1,878
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		4,257		4,257
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		3,912		3,912
Principal Life Income Funding Trusts
4.70%, 05/10/06		1,174		1,174
Sedna Finance Inc.
4.54%, 09/20/06⁷		469		469
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		1,737		1,737
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		1,565		1,565
Societe Generale
4.54%, 03/02/07⁷		1,095		1,095
Strips III LLC
4.62%, 07/24/06^7,8		404		404
SunTrust Bank
4.62%, 04/28/06		2,347		2,347
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		3,490		3,490
Toyota Motor Credit Corp.
4.57%, 04/10/06		704		704
UniCredito Italiano SpA
4.43%, 06/14/06		2,034		2,034
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		1,565		1,565
US Bank N.A.
4.54%, 09/29/06		704		704
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		2,347		2,347
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		2,987		2,987
Wells Fargo & Co.
4.56%, 03/15/07⁷		782		783
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		782		783
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		1,643		1,643
Winston Funding Ltd.
4.68%, 04/23/06⁷		1,117		1,117


56		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI SWEDEN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
World Savings Bank
4.52%, 03/09/06	$	2,347	$	2,347

				101,520

TOTAL SHORT-TERM INVESTMENTS (Cost: $177,164)				177,164

TOTAL INVESTMENTS IN SECURITIES – 100.13% (Cost: $83,514,324)				103,485,963
Other Assets, Less Liabilities – (0.13)%				(132,615	)

NET ASSETS – 100.00%			$	103,353,348

SDR - Swedish Depositary Receipts

¹	Non-income earning security.

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

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI SWITZERLAND INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.84%
BANKS – 19.29%
Banque Cantonale Vaudoise	2,646	$	847,269
Credit Suisse Group	138,978		7,703,046
Julius Baer Holding AG	22,239		1,912,522
UBS AG Registered	178,353		18,941,465
Vontobel Holding AG Registered	34,902		1,381,019

			30,785,321
BUILDING MATERIALS – 3.73%
Geberit AG Registered	512		464,904
Holcim Ltd. Registered	69,615		5,487,890

			5,952,794
CHEMICALS – 7.41%
Ciba Specialty Chemicals AG Registered	25,872		1,601,652
Clariant AG Registered¹	37,926		579,740
Givaudan SA Registered	5,229		3,745,394
Lonza Group AG Registered	9,830		638,146
Syngenta AG¹	37,254		5,260,123

			11,825,055
COMMERCIAL SERVICES – 1.95%
Adecco SA Registered	26,918		1,477,602
SGS SA	1,764		1,629,984

			3,107,586
COMPUTERS – 0.47%
Logitech International SA¹	18,400		743,491

			743,491
ENGINEERING & CONSTRUCTION – 3.20%
ABB Ltd.¹	426,510		5,105,178

			5,105,178
FOOD – 11.86%
Nestle SA Registered	64,323		18,917,087

			18,917,087
HAND & MACHINE TOOLS – 1.10%
Schindler Holding AG Participation Certificates	2,835		1,344,391
Schindler Holding AG Registered	882		414,893

			1,759,284
HEALTH CARE—PRODUCTS – 5.09%
Nobel Biocare Holding AG	12,285		2,744,257
Phonak Holding AG Registered	20,727		1,001,862
Straumann Holding AG Registered	3,358		791,721
Synthes Inc.	32,760		3,579,086

			8,116,926
INSURANCE – 8.28%
Swiss Reinsurance Co.	78,144		5,567,458
Zurich Financial Services AG¹	32,319		7,638,387

			13,205,845
LEISURE TIME – 0.02%
Kuoni Reisen Holding AG Registered¹	64		27,373

			27,373
MACHINERY – 0.22%
Rieter Holding AG	899		348,867

			348,867
MANUFACTURING – 0.44%
Sulzer AG Registered	1,134		709,371

			709,371
PHARMACEUTICALS – 27.03%
Novartis AG	384,111		20,674,903
Roche Holding AG Genusschein	134,379		19,865,123
Serono SA	3,682		2,596,615

			43,136,641
REAL ESTATE – 0.76%
PSP Swiss Property AG¹	25,578		1,209,039

			1,209,039
RETAIL – 6.07%
Compagnie Financiere Richemont AG Class A	138,474		6,033,461
Swatch Group (The) AG Class B	13,680		2,221,507
Swatch Group (The) AG Registered	43,298		1,426,046

			9,681,014
SEMICONDUCTORS – 0.39%
Micronas Semiconductor Holding AG¹	3,315		106,781
Unaxis Holding AG Class R¹	2,457		515,602

			622,383


58		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI SWITZERLAND INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
TELECOMMUNICATIONS – 1.92%
Swisscom AG Registered	10,218	$	3,071,282

			3,071,282
TRANSPORTATION – 0.61%
Kuehne & Nagel International AG Registered	3,213		970,036

			970,036

TOTAL COMMON STOCKS (Cost: $131,911,587)			159,294,573
SHORT-TERM INVESTMENTS – 0.09%
MONEY MARKET FUNDS – 0.09%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^2,3	140,279		140,279

			140,279

TOTAL SHORT-TERM INVESTMENTS (Cost: $140,279)			140,279

TOTAL INVESTMENTS IN SECURITIES — 99.93% (Cost: $132,051,866)			159,434,852
Other Assets, Less Liabilities – 0.07%			118,282

NET ASSETS – 100.00%		$	159,553,134

¹	Non-income earning security.

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

³	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		59

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI UNITED KINGDOM INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.48%
ADVERTISING – 0.62%
Aegis Group PLC	229,416	$	531,334
WPP Group PLC	283,926		3,294,118

			3,825,452
AEROSPACE & DEFENSE – 1.62%
BAE Systems PLC	763,140		5,613,085
Cobham PLC	261,648		778,959
Meggitt PLC	101,594		664,073
Rolls-Royce Group PLC¹	376,040		2,889,344

			9,945,461
AGRICULTURE – 2.67%
British American Tobacco PLC	374,776		8,919,477
Gallaher Group PLC	155,630		2,409,316
Imperial Tobacco Group PLC	168,270		5,053,811

			16,382,604
AIRLINES – 0.13%
British Airways PLC¹	136,986		788,661

			788,661
APPAREL – 0.14%
Burberry Group PLC	110,284		885,523

			885,523
AUTO PARTS & EQUIPMENT – 0.17%
GKN PLC	173,168		1,030,328
TI Automotive Ltd. Class A^1,2	52,283		—

			1,030,328
BANKS – 19.36%
Barclays PLC³	1,534,338		17,962,658
HBOS PLC	916,558		17,046,398
HSBC Holdings PLC	2,684,262		45,785,927
Lloyds TSB Group PLC	1,330,202		12,899,696
Royal Bank of Scotland Group PLC	756,188		25,280,395

			118,975,074
BEVERAGES – 2.68%
Diageo PLC	691,250		10,604,432
SABMiller PLC	213,300		4,235,962
Scottish & Newcastle PLC	180,594		1,620,069

			16,460,463
BUILDING MATERIALS – 0.58%
Hanson PLC	173,326		2,114,136
Pilkington PLC	259,278		735,578
Travis Perkins PLC	26,386		685,734

			3,535,448
CHEMICALS – 0.99%
BOC Group PLC	118,816		3,141,955
Imperial Chemical Industries PLC	283,136		1,662,310
Johnson Matthey PLC	51,982		1,301,779

			6,106,044
COMMERCIAL SERVICES – 1.57%
Aggreko PLC	69,362		361,070
Brambles Industries PLC	179,014		1,292,397
Bunzl PLC	81,844		915,874
Capita Group PLC	156,262		1,299,856
Davis Service Group PLC	42,660		368,312
De La Rue PLC	40,658		395,885
Group 4 Securicor PLC	279,186		870,286
Hays PLC	378,410		980,782
Intertek Group PLC	39,500		518,808
Rank Group PLC	152,312		694,848
Rentokil Initial PLC	448,246		1,234,398
Serco Group PLC	115,340		701,407

			9,633,923
COMPUTERS – 0.07%
LogicaCMG PLC	128,928		453,828

			453,828
DISTRIBUTION & WHOLESALE – 0.69%
Inchcape PLC	18,486		780,528
Wolseley PLC	140,620		3,487,052

			4,267,580
DIVERSIFIED FINANCIAL SERVICES – 1.40%
AMVESCAP PLC	172,694		1,629,344
Cattles PLC	79,948		485,831
Close Brothers Group PLC	30,336		549,588
ICAP PLC	119,764		932,280
London Stock Exchange PLC	62,726		939,208
Man Group PLC	69,836		2,826,360
Provident Financial PLC	59,882		631,307
Schroders PLC	30,020		604,847

			8,598,765


60		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI UNITED KINGDOM INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
ELECTRIC – 2.79%
International Power PLC¹	349,970	$	1,751,319
National Grid PLC	643,850		6,765,254
Scottish & Southern Energy PLC	204,136		4,107,596
Scottish Power PLC	443,032		4,531,021

			17,155,190
ELECTRONICS – 0.15%
Electrocomponents PLC	111,548		563,580
Premier Farnell PLC	94,484		338,790

			902,370
ENGINEERING & CONSTRUCTION – 0.78%
AMEC PLC	77,262		537,161
BAA PLC	255,644		3,581,572
Balfour Beatty PLC	104,122		683,333

			4,802,066
ENTERTAINMENT – 0.69%
EMI Group PLC	197,500		849,115
Ladbrokes PLC	379,832		2,454,517
William Hill PLC	92,904		946,090

			4,249,722
FOOD – 4.20%
Cadbury Schweppes PLC	494,224		5,019,957
J Sainsbury PLC	323,268		1,813,009
Tate & Lyle PLC	115,498		1,209,550
Tesco PLC	1,867,560		11,054,508
Unilever PLC	651,592		6,703,965

			25,800,989
FOOD SERVICE – 0.32%
Compass Group PLC	510,656		1,942,837

			1,942,837
GAS – 0.72%
Centrica PLC	874,214		4,447,460

			4,447,460
HEALTH CARE–PRODUCTS – 0.36%
Smith & Nephew PLC	223,096		1,984,740
SSL International PLC	45,030		257,671

			2,242,411
HOLDING COMPANIES–DIVERSIFIED – 0.17%
Tomkins PLC	182,332		1,063,299

			1,063,299
HOME BUILDERS – 0.97%
Barratt Developments PLC	57,196		1,034,699
Bellway PLC	25,754		528,592
Berkeley Group Holdings (The) PLC¹	24,490		477,774
Bovis Homes Group PLC	26,702		373,627
Persimmon PLC	65,886		1,610,745
Taylor Woodrow PLC	142,042		1,034,804
Wimpey (George) PLC	95,274		922,673

			5,982,914
HOME FURNISHINGS – 0.04%
MFI Furniture Group PLC	159,296		255,952

			255,952
HOUSEHOLD PRODUCTS & WARES – 0.84%
Reckitt Benckiser PLC	144,886		5,150,752

			5,150,752
INSURANCE – 4.15%
Aviva PLC	568,326		7,852,766
Friends Provident PLC	456,936		1,654,432
Legal & General Group PLC	1,545,556		3,525,418
Old Mutual PLC	1,292,440		4,249,506
Prudential PLC	574,488		6,066,615
Resolution PLC	49,138		573,973
Royal & Sun Alliance Insurance Group PLC	692,830		1,577,314

			25,500,024
IRON & STEEL – 0.22%
Corus Group PLC	1,054,492		1,329,609

			1,329,609
LEISURE TIME – 0.43%
Carnival PLC	40,448		2,215,705
First Choice Holidays PLC	113,286		447,870

			2,663,575
LODGING – 0.26%
InterContinental Hotels Group PLC	103,806		1,594,300

			1,594,300
MANUFACTURING – 0.77%
BBA Group PLC	114,076		534,899
Cookson Group PLC¹	47,874		396,560
FKI PLC	151,364		322,068
IMI PLC	80,106		733,694


SCHEDULES OF INVESTMENTS		61

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI UNITED KINGDOM INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Invensys PLC¹	1,412,362	$	519,414
Smiths Group PLC	133,984		2,203,265

			4,709,900
MEDIA – 2.71%
British Sky Broadcasting Group PLC	286,612		2,534,743
Daily Mail & General Trust PLC Class A	70,468		802,146
EMAP PLC	60,830		1,012,554
ITV PLC	975,966		1,854,439
Pearson PLC	190,864		2,369,837
Reed Elsevier PLC	303,044		2,733,135
Reuters Group PLC	339,384		2,258,516
Trinity Mirror PLC	67,782		685,511
United Business Media PLC	64,306		756,216
Yell Group PLC	167,954		1,633,154


			16,640,251

MINING – 5.60%
Anglo American PLC	337,330		12,565,235
BHP Billiton PLC	586,970		9,868,140
Rio Tinto PLC	254,538		11,946,359

			34,379,734
OIL & GAS – 18.42%
BG Group PLC	841,982		9,842,427
BP PLC	4,933,076		54,426,011
Royal Dutch Shell PLC Class A	942,154		28,329,593
Royal Dutch Shell PLC Class B	654,910		20,587,055

			113,185,086
PACKAGING & CONTAINERS – 0.19%
Rexam PLC	131,140		1,164,371

			1,164,371
PHARMACEUTICALS – 8.70%
Alliance Unichem PLC	59,577		913,968
AstraZeneca PLC	378,252		17,454,604
GlaxoSmithKline PLC	1,385,344		35,081,170

			53,449,742
REAL ESTATE – 1.70%
British Land Co. PLC	123,398		2,614,819
Brixton PLC	59,724		486,874
Great Portland Estates PLC	36,656		297,217
Hammerson PLC	66,518		1,327,982
Land Securities Group PLC	111,390		3,591,271
Liberty International PLC	56,564		1,098,550
Slough Estates PLC	98,592		1,052,358

			10,469,071
RETAIL – 3.24%
Boots Group PLC	114,420		1,421,682
DSG International PLC	432,920		1,304,020
Enterprise Inns PLC	82,950		1,302,311
GUS PLC	207,928		3,823,406
HMV Group PLC	95,590		310,112
Kesa Electricals PLC	123,872		577,036
Kingfisher PLC	556,792		2,225,625
Marks & Spencer Group PLC	394,052		3,578,083
Mitchells & Butlers PLC	121,186		840,949
Next PLC	59,882		1,730,328
Punch Taverns PLC	62,252		932,656
Signet Group PLC	406,534		735,081
Whitbread PLC	60,830		1,128,670

			19,909,959
SEMICONDUCTORS – 0.10%
ARM Holdings PLC	262,912		633,084

			633,084
SOFTWARE – 0.36%
iSOFT Group PLC	54,826		178,586
Misys PLC	115,340		474,675
Sage Group PLC	315,842		1,533,521

			2,186,782
TELECOMMUNICATIONS – 5.95%
BT Group PLC	1,998,384		7,200,571
Cable & Wireless PLC	551,894		1,031,743
Telent PLC¹	50,560		349,303
Vodafone Group PLC	14,647,864		27,960,758

			36,542,375
TRANSPORTATION – 0.72%
Arriva PLC	47,400		500,961
Associated British Ports Holdings PLC	72,522		784,886
FirstGroup PLC	92,588		680,603
National Express Group PLC	33,970		528,568
Peninsular & Oriental Steam Navigation Co. (The)	172,172		1,555,070
Stagecoach Group PLC	204,251		401,512

			4,451,600


62		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI UNITED KINGDOM INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
VENTURE CAPITAL – 0.36%
3i Group PLC	133,352	$	2,192,872

			2,192,872
WATER – 0.88%
Kelda Group PLC	89,428		1,247,405
Severn Trent PLC	82,476		1,666,792
United Utilities PLC	206,190		2,466,246

			5,380,443

TOTAL COMMON STOCKS (Cost: $539,484,298)			611,267,894
SHORT-TERM INVESTMENTS – 0.13%
MONEY MARKET FUNDS – 0.13%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^3,4	768,877		768,877

			768,877

TOTAL SHORT-TERM INVESTMENTS (Cost: $768,877)			768,877

TOTAL INVESTMENTS IN SECURITIES – 99.61% (Cost: $540,253,175)			612,036,771
Other Assets, Less Liabilities – 0.39%			2,413,742

NET ASSETS – 100.00%		$	614,450,513

¹	Non-income earning security.

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

³	The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁴	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		63

Statements of Assets and Liabilities (Unaudited)

iSHARES^{^®}, INC.

February 28, 2006


	*iShares MSCI*
	Austria Index Fund			Belgium Index Fund			EMU Index Fund			France Index Fund			Germany Index Fund			Italy Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	234,196,046		$	70,597,834		$	939,532,269		$	92,809,471		$	563,028,528		$	72,604,764

Affiliated issuers^a	$	18,751		$	52,521		$	927,162		$	50,926		$	312,078		$	20,183

Foreign currencies, at cost	$	410,149		$	34,065		$	716,095		$	14,406		$	319,694		$	58,688

Investments in securities, at value (including securities on loan^b) (Note 1):
Unaffiliated issuers	$	303,119,456		$	78,989,644		$	1,104,524,255		$	94,166,479		$	635,837,362		$	86,413,328
Affiliated issuers^a		18,751			52,521			927,162			50,926			312,078			20,183
Foreign currencies, at value		410,012			33,865			707,148			14,209			315,734			59,071
Receivables:
Investment securities sold		25,916,755			2,567,907			8,824,129			988,339			15,212,410			2,669,675
Dividends and interest		282,668			148,614			233,790			57,142			184,436			62,662
Capital shares sold		—			—			480,755			—			54,349			—

Total Assets		329,747,642			81,792,551			1,115,697,239			95,277,095			651,916,369			89,224,919

LIABILITIES
Payables:
Investment securities purchased		25,913,000			2,499,794			7,253,188			923,174			14,671,295			2,532,947
Collateral for securities on loan (Note 5)		771,503			61,427			6,913,829			347,380			2,268,501			1,028,231
Investment advisory fees (Note 2)		135,267			35,549			408,875			50,018			260,207			38,374

Total Liabilities		26,819,770			2,596,770			14,575,892			1,320,572			17,200,003			3,599,552

NET ASSETS	$	302,927,872		$	79,195,781		$	1,101,121,347		$	93,956,523		$	634,716,366		$	85,625,367

Net assets consist of:
Paid-in capital	$	235,673,872		$	73,682,351		$	959,185,820		$	84,161,771		$	593,023,405		$	77,537,623
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		(1,036,526	)		(460,640	)		(1,100,222	)		(40,098	)		(409,418	)		301,630
Undistributed net realized gain (accumulated net realized loss)		(617,009	)		(2,410,732	)		(21,939,095	)		8,480,474			(30,694,947	)		(6,036,908	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		68,907,535			8,384,802			164,974,844			1,354,376			72,797,326			13,823,022

NET ASSETS	$	302,927,872		$	79,195,781		$	1,101,121,347		$	93,956,523		$	634,716,366		$	85,625,367

Shares outstanding		10,100,000			3,840,000			13,200,000			3,400,000			28,800,000			3,150,000

Net asset value per share	$	29.99		$	20.62		$	83.42		$	27.63		$	22.04		$	27.18

^a	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

^b	Securities on loan with market values of $720,703, $58,229, $6,514,145, $326,857, $2,116,782 and $959,828, respectively. See Note 5.

See notes to the financial statements.


64		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^{^®}, INC.

February 28, 2006


	*iShares MSCI*
	Netherlands Index Fund			Spain Index Fund			Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	71,957,808		$	65,609,837		$	83,504,211		$	131,911,587		$	524,896,636

Affiliated issuers^a	$	3,716		$	368		$	10,113		$	140,279		$	15,356,539

Foreign currencies, at cost	$	48,791		$	75,228		$	80,786		$	14,640		$	729,124

Investments in securities, at value (including securities on loan^b) (Note 1):
Unaffiliated issuers	$	84,606,370		$	88,894,396		$	103,475,850		$	159,294,573		$	593,305,236
Affiliated issuers^a		3,716			368			10,113			140,279			18,731,535
Foreign currencies, at value		48,820			74,747			80,147			14,517			732,628
Receivables:
Investment securities sold		674,011			1,831,454			—			3,244,090			2,320,391
Dividends and interest		119			2,878			1,013			119,391			2,041,489
Capital shares sold		—			—			—			1,062,904			—

Total Assets		85,333,036			90,803,843			103,567,123			163,875,754			617,131,279

LIABILITIES
Payables:
Investment securities purchased		671,685			1,758,022			—			4,257,627			2,416,239
Collateral for securities on loan (Note 5)		4,145			2,417,953			167,051			—			—
Investment advisory fees (Note 2)		38,125			38,195			46,724			64,993			264,527

Total Liabilities		713,955			4,214,170			213,775			4,322,620			2,680,766

NET ASSETS	$	84,619,081		$	86,589,673		$	103,353,348		$	159,553,134		$	614,450,513

Net assets consist of:
Paid-in capital	$	81,674,378		$	66,859,802		$	90,694,954		$	139,832,099		$	579,176,400
Undistributed net investment income (accumulated net investment loss)		(230,882	)		217,469			(187,485	)		(217,431	)		2,166,072
Accumulated net realized loss		(9,473,017	)		(3,772,076	)		(7,125,106	)		(7,432,529	)		(38,686,565	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		12,648,602			23,284,478			19,970,985			27,370,995			71,794,606

NET ASSETS	$	84,619,081		$	86,589,673		$	103,353,348		$	159,553,134		$	614,450,513

Shares outstanding		3,900,000			2,175,000			4,350,000			7,875,000			31,600,000

Net asset value per share	$	21.70		$	39.81		$	23.76		$	20.26		$	19.44

^a	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

^b	Securities on loan with market values of $3,977, $2,302,104, $156,629, $– and $–, respectively. See Note 5.

See notes to the financial statements.


FINANCIAL STATEMENTS		65

Statements of Operations (Unaudited)

iSHARES^{^®}, INC.

Six months ended February 28, 2006


	*iShares MSCI*
	Austria Index Fund			Belgium Index Fund			EMU Index Fund			France Index Fund			Germany Index Fund			Italy Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	60,298		$	53,499		$	2,591,383		$	200,674		$	1,092,718		$	447,180
Interest from affiliated issuers^b		1,212			654			4,909			1,002			4,537			554
Securities lending income^c		13,871			9,393			104,784			19,762			46,460			18,575

Total investment income		75,381			63,546			2,701,076			221,438			1,143,715			466,309

EXPENSES
Investment advisory fees (Note 2)		648,904			158,164			1,811,964			257,076			1,347,962			160,271
Proxy fees		9,121			4,737			23,188			3,804			7,967			3,368

Total expenses		658,025			162,901			1,835,152			260,880			1,355,929			163,639

Net investment income (loss)		(582,644	)		(99,355	)		865,924			(39,442	)		(212,214	)		302,670

NET REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(466,599	)		339,316			(832,579	)		(650,078	)		(15,457,371	)		(51,673	)
In-kind redemptions		5,075,264			—			—			16,411,564			23,034,873			—
Foreign currency transactions		73,103			(3,319	)		9,419			(759	)		(25,919	)		1,719

Net realized gain (loss)		4,681,768			335,997			(823,160	)		15,760,727			7,551,583			(49,954	)

Net change in unrealized appreciation (depreciation) on:
Investments		26,111,390			7,449,696			87,377,692			(6,387,405	)		64,320,460			5,441,728
Translation of assets and liabilities in foreign currencies		(77,719	)		(4,927	)		(26,605	)		(3,694	)		(10,953	)		(1,861	)

Net change in unrealized appreciation (depreciation)		26,033,671			7,444,769			87,351,087			(6,391,099	)		64,309,507			5,439,867

Net realized and unrealized gain		30,715,439			7,780,766			86,527,927			9,369,628			71,861,090			5,389,913

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	30,132,795		$	7,681,411		$	87,393,851		$	9,330,186		$	71,648,876		$	5,692,583

^a	Net of foreign withholding tax of $10,628, $5,499, $226,173, $3,776, $180,185 and $24,373, respectively.

^b	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

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

See notes to the financial statements.


66		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

i SHARES ^{^®}, INC .

Six months ended February 28, 2006


	*iShares MSCI*
	Netherlands Index Fund			Spain Index Fund			Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	122,607		$	914,415		$	5,883		$	86,240		$	6,584,238
Interest from affiliated issuers^b		157			198			182			1,140			3,042
Securities lending income^c		4,686			12,655			6,472			2,837			2,520

Total investment income		127,450			927,268			12,537			90,217			6,589,800

EXPENSES
Investment advisory fees (Note 2)		190,446			203,568			196,566			301,864			1,373,395
Proxy fees		3,950			4,339			4,272			4,248			21,875

Total expenses		194,396			207,907			200,838			306,112			1,395,270

Net investment income (loss)		(66,946	)		719,361			(188,301	)		(215,895	)		5,194,530

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(743,349	)		331,112			96,843			(424,233	)		(4,318,838	)
Investments in affiliated issuers^b		—			—			—			—			54,171
In-kind redemptions		—			—			—			—			2,331,020
Foreign currency transactions		1,412			(224	)		331			5,075			(49,031	)

Net realized gain (loss)		(741,937	)		330,888			97,174			(419,158	)		(1,982,678	)

Net change in unrealized appreciation (depreciation) on:
Investments		11,369,774			9,198,776			7,736,754			16,452,828			30,659,284
Translation of assets and liabilities in foreign currencies		(1,340	)		(140	)		136			(13,303	)		3,653

Net change in unrealized appreciation (depreciation)		11,368,434			9,198,636			7,736,890			16,439,525			30,662,937

Net realized and unrealized gain		10,626,497			9,529,524			7,834,064			16,020,367			28,680,259

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	10,559,551		$	10,248,885		$	7,645,763		$	15,804,472		$	33,874,789

^a	Net of foreign withholding tax of $20,508, $108,504, $128, $5,764 and $69,036, respectively.

^b	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

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

See notes to the financial statements.


FINANCIAL STATEMENTS		67

Statements of Changes in Net Assets

iSHARES ^{^®}, INC .

February 28, 2006


	*iShares MSCI* *Austria* *Index Fund*						*iShares MSCI* *Belgium* *Index Fund*						*iShares MSCI* *EMU* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(582,644	)	$	1,963,799		$	(99,355	)	$	2,019,162		$	865,924		$	11,759,160
Net realized gain (loss)		4,681,768			22,454,551			335,997			6,943,446			(823,160	)		11,776,485
Net change in unrealized appreciation (depreciation)		26,033,671			30,930,253			7,444,769			(4,222	)		87,351,087			76,359,243

Net increase in net assets resulting from operations		30,132,795			55,348,603			7,681,411			8,958,386			87,393,851			99,894,888

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,357,719	)		(642,119	)		(2,145,588	)		(821,720	)		(12,287,252	)		(7,926,598	)

Total distributions to shareholders		(2,357,719	)		(642,119	)		(2,145,588	)		(821,720	)		(12,287,252	)		(7,926,598	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		88,366,659			143,898,493			26,700,399			45,733,499			478,730,571			174,100,562
Cost of shares redeemed		(10,166,037	)		(59,573,023	)		—			(31,723,211	)		—			(45,390,429	)

Net increase in net assets from capital share transactions		78,200,622			84,325,470			26,700,399			14,010,288			478,730,571			128,710,133

INCREASE IN NET ASSETS		105,975,698			139,031,954			32,236,222			22,146,954			553,837,170			220,678,423
NET ASSETS:
Beginning of period		196,952,174			57,920,220			46,959,559			24,812,605			547,284,177			326,605,754

End of period	$	302,927,872		$	196,952,174		$	79,195,781		$	46,959,559		$	1,101,121,347		$	547,284,177

Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period	$	(1,036,526	)	$	1,903,837		$	(460,640	)	$	1,784,303		$	(1,100,222	)	$	10,321,106

SHARES ISSUED AND REDEEMED:
Shares sold		3,100,000			6,600,000			1,360,000			2,560,000			5,900,000			2,450,000
Shares redeemed		(400,000	)		(2,600,000	)		—			(1,760,000	)		—			(650,000	)

Net increase in shares outstanding		2,700,000			4,000,000			1,360,000			800,000			5,900,000			1,800,000

See notes to the financial statements.


68		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES ^{^®}, INC .

February 28, 2006


	*iShares MSCI* *France* *Index Fund*						*iShares MSCI* *Germany* *Index Fund*						*iShares MSCI* *Italy* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(39,442	)	$	1,242,600		$	(212,214	)	$	2,593,698		$	302,670		$	1,168,264
Net realized gain (loss)		15,760,727			5,071,907			7,551,583			(4,797,168	)		(49,954	)		(764,798	)
Net change in unrealized appreciation (depreciation)		(6,391,099	)		9,136,196			64,309,507			40,534,750			5,439,867			7,988,683

Net increase in net assets resulting from operations		9,330,186			15,450,703			71,648,876			38,331,280			5,692,583			8,392,149

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(1,093,386	)		(838,342	)		(2,745,191	)		(1,573,473	)		(1,062,571	)		(869,122	)

Total distributions to shareholders		(1,093,386	)		(838,342	)		(2,745,191	)		(1,573,473	)		(1,062,571	)		(869,122	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		52,895,509			23,987,143			340,117,867			179,271,889			38,469,313			7,723,603
Cost of shares redeemed		(48,501,578	)		(18,474,473	)		(89,098,617	)		—			—			—

Net increase in net assets from capital share transactions		4,393,931			5,512,670			251,019,250			179,271,889			38,469,313			7,723,603

INCREASE IN NET ASSETS		12,630,731			20,125,031			319,922,935			216,029,696			43,099,325			15,246,630
NET ASSETS:
Beginning of period		81,325,792			61,200,761			314,793,431			98,763,735			42,526,042			27,279,412

End of period	$	93,956,523		$	81,325,792		$	634,716,366		$	314,793,431		$	85,625,367		$	42,526,042

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(40,098	)	$	1,092,730		$	(409,418	)	$	2,547,987		$	301,630		$	1,061,531

SHARES ISSUED AND REDEEMED:
Shares sold		2,000,000			1,000,000			16,800,000			9,900,000			1,500,000			300,000
Shares redeemed		(1,800,000	)		(800,000	)		(4,500,000	)		—			—			—

Net increase in shares outstanding		200,000			200,000			12,300,000			9,900,000			1,500,000			300,000

See notes to the financial statements.


FINANCIAL STATEMENTS		69

Statements of Changes in Net Assets (Continued)

iSHARES^{^®}, INC.

February 28, 2006


	*iShares MSCI* *Netherlands* *Index Fund*						*iShares MSCI* *Spain* *Index Fund*						*iShares MSCI* *Sweden* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(66,946	)	$	1,468,147		$	719,361		$	1,393,949		$	(188,301	)	$	1,249,124
Net realized gain (loss)		(741,937	)		1,088,579			330,888			7,090,342			97,174			1,298,242
Net change in unrealized appreciation (depreciation)		11,368,434			4,968,136			9,198,636			5,676,241			7,736,890			7,896,047

Net increase in net assets resulting from operations		10,559,551			7,524,862			10,248,885			14,160,532			7,645,763			10,443,413


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(1,617,341	)		(561,271	)		(1,611,053	)		(1,053,358	)		(1,227,638	)		(420,504	)

Total distributions to shareholders		(1,617,341	)		(561,271	)		(1,611,053	)		(1,053,358	)		(1,227,638	)		(420,504	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		11,702,861			29,691,702			11,006,783			23,479,415			35,422,717			26,763,849
Cost of shares redeemed		—			(946,288	)		—			(15,097,858	)		—			(3,032,449	)

Net increase in net assets from capital share transactions		11,702,861			28,745,414			11,006,783			8,381,557			35,422,717			23,731,400

INCREASE IN NET ASSETS		20,645,071			35,709,005			19,644,615			21,488,731			41,840,842			33,754,309

NET ASSETS:
Beginning of period		63,974,010			28,265,005			66,945,058			45,456,327			61,512,506			27,758,197

End of period	$	84,619,081		$	63,974,010		$	86,589,673		$	66,945,058		$	103,353,348		$	61,512,506

Undistributed net investment income (accumulated net investment loss)included in net assets at end of period	$	(230,882	)	$	1,453,405		$	217,469		$	1,109,161		$	(187,485	)	$	1,228,454


SHARES ISSUED AND REDEEMED:
Shares sold		550,000			1,600,000			300,000			675,000			1,500,000			1,350,000
Shares redeemed		—			(50,000	)		—			(450,000	)		—			(150,000	)

Net increase in shares outstanding		550,000			1,550,000			300,000			225,000			1,500,000			1,200,000

See notes to the financial statements.


70		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^{^®}, INC.

February 28, 2006


	*iShares MSCI* *Switzerland* *Index Fund*						*iShares MSCI* *United Kingdom* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	(215,895	)	$	773,878		$	5,194,530		$	17,268,103
Net realized gain (loss)		(419,158	)		1,299,897			(1,982,678	)		37,482,537
Net change in unrealized appreciation (depreciation)		16,439,525			7,731,463			30,662,937			44,274,754

Net increase in net assets resulting from operations		15,804,472			9,805,238			33,874,789			99,025,394


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(773,209	)		(269,799	)		(16,085,262	)		(10,962,863	)

Total distributions to shareholders		(773,209	)		(269,799	)		(16,085,262	)		(10,962,863	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		65,197,703			31,861,760			142,919,498			96,935,420
Cost of shares redeemed		—			(3,993,200	)		(11,108,841	)		(173,017,720	)

Net increase (decrease) in net assets from capital share transactions		65,197,703			27,868,560			131,810,657			(76,082,300	)

INCREASE IN NET ASSETS		80,228,966			37,403,999			149,600,184			11,980,231

NET ASSETS:
Beginning of period		79,324,168			41,920,169			464,850,329			452,870,098

End of period	$	159,553,134		$	79,324,168		$	614,450,513		$	464,850,329

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	(217,431	)	$	771,673		$	2,166,072		$	13,056,804


SHARES ISSUED AND REDEEMED:
Shares sold		3,375,000			1,875,000			7,400,000			5,600,000
Shares redeemed		–			(250,000	)		(600,000	)		(9,600,000	)

Net increase (decrease) in shares outstanding		3,375,000			1,625,000			6,800,000			(4,000,000	)

See notes to the financial statements.


FINANCIAL STATEMENTS		71

Financial Highlights

iSHARES^{^®}, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Austria Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	26.62		$	17.04		$	10.61		$	8.19		$	8.18		$	7.67


Income from investment operations:
Net investment income (loss)^a		(0.07	)		0.29			0.21			0.09			0.13			0.13
Net realized and unrealized gain (loss)		3.73			9.38			6.39			2.43			(0.12	)		0.52

Total from investment operations		3.66			9.67			6.60			2.52			0.01			0.65

Less distributions from:
Net investment income		(0.29	)		(0.09	)		(0.17	)		(0.10	)		—			(0.14	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.29	)		(0.09	)		(0.17	)		(0.10	)		—			(0.14	)

Net asset value, end of period	$	29.99		$	26.62		$	17.04		$	10.61		$	8.19		$	8.18


Total return		13.86	%^c		56.82	%		62.70	%		31.15	%		0.12	%		8.41	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	302,928		$	196,952		$	57,920		$	22,288		$	14,740		$	11,447
Ratio of expenses to average net assets^d		0.56	%^e		0.57	%		0.77	%		0.84	%		0.84	%		0.84	%^f
Ratio of net investment income (loss) to average net assets^d		(0.50	)%		1.26	%		1.37	%		0.98	%		1.57	%		1.69	%^g
Portfolio turnover rate^h		15	%		21	%		11	%		26	%		32	%		66	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

^g	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%.

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

See notes to the financial statements.


72		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, I N C .

(For a share outstanding throughout each period)


	*iShares MSCI Belgium Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	18.94		$	14.77		$	11.16		$	10.43		$	11.81		$	13.23

Income from investment operations:
Net investment income (loss)^a		(0.03	)		0.71			0.37			0.41			0.25			0.19
Net realized and unrealized gain (loss)		2.52			3.75			4.25			0.43			(1.56	)		(1.34	)

Total from investment operations		2.49			4.46			4.62			0.84			(1.31	)		(1.15	)

Less distributions from:
Net investment income		(0.81	)		(0.29	)		(1.01	)		(0.11	)		(0.07	)		(0.27	)

Total distributions		(0.81	)		(0.29	)		(1.01	)		(0.11	)		(0.07	)		(0.27	)

Net asset value, end of period	$	20.62		$	18.94		$	14.77		$	11.16		$	10.43		$	11.81

Total return		13.50	%^b		30.22	%		42.88	%		8.25	%		(11.10	)%		(8.72	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	79,196		$	46,960		$	24,813		$	21,871		$	10,427		$	9,918
Ratio of expenses to average net assets^c		0.57	%^d		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%^e
Ratio of net investment income (loss) to average net assets^c		(0.35	)%		3.89	%		2.79	%		4.10	%		2.26	%		1.60	%^f
Portfolio turnover rate^g		9	%		10	%		21	%		8	%		18	%		36	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.56%.

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

^f	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%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		73

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI EMU Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	74.97		$	59.38		$	50.12		$	46.02		$	56.74		$	76.02

Income from investment operations:
Net investment income^a		0.10			1.76			1.36			0.93			0.75			0.72
Net realized and unrealized gain (loss)		9.67			15.13			8.69			3.62			(11.47	)		(19.32	)

Total from investment operations		9.77			16.89			10.05			4.55			(10.72	)		(18.60	)

Less distributions from:
Net investment income		(1.32	)		(1.30	)		(0.79	)		(0.45	)		—			(0.42	)
Return of capital		—			—			—			—			—			(0.26	)

Total distributions		(1.32	)		(1.30	)		(0.79	)		(0.45	)		—			(0.68	)

Net asset value, end of period	$	83.42		$	74.97		$	59.38		$	50.12		$	46.02		$	56.74

Total return		13.16	%^b		28.54	%		20.07	%		10.05	%		(18.89	)%		(24.51	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,101,121		$	547,284		$	326,606		$	165,388		$	131,168		$	90,779
Ratio of expenses to average net assets^c		0.56	%^d		0.58	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes^c		n/a			0.57	%		0.79	%		n/a			n/a			n/a
Ratio of net investment income to average net assets^c		0.27	%		2.50	%		2.29	%		2.08	%		1.44	%		1.13	%
Portfolio turnover rate^e		2	%		8	%		11	%		7	%		3	%		24	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

See notes to the financial statements.


74		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI France Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	25.41		$	20.40		$	16.90		$	15.52		$	19.53		$	26.41

Income from investment operations:
Net investment income (loss)^a		(0.01	)		0.47			0.24			0.23			0.18			0.06
Net realized and unrealized gain (loss)		2.55			4.84			3.54			1.33			(4.19	)		(6.89	)

Total from investment operations		2.54			5.31			3.78			1.56			(4.01	)		(6.83	)

Less distributions from:
Net investment income		(0.32	)		(0.30	)		(0.28	)		(0.18	)		—			(0.04	)
Net realized gain		—			—			—			—			—			(0.00	)^b
Return of capital		—			—			—			—			—			(0.01	)

Total distributions		(0.32	)		(0.30	)		(0.28	)		(0.18	)		—			(0.05	)

Net asset value, end of period	$	27.63		$	25.41		$	20.40		$	16.90		$	15.52		$	19.53

Total return		10.07	%^c		26.13	%		22.44	%		10.22	%		(20.53	)%		(25.86	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	93,957		$	81,326		$	61,201		$	54,075		$	49,674		$	58,602
Ratio of expenses to average net assets^d		0.56	%^e		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets^d		(0.09	)%		1.98	%		1.23	%		1.56	%		1.00	%		0.28	%
Portfolio turnover rate^f		5	%		7	%		9	%		9	%		3	%		14	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		75

Financial Highlights (Continued)

iSHARES^{^®}, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Germany Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	19.08		$	14.96		$	12.57		$	12.07		$	15.19		$	20.46

Income from investment operations:
Net investment income (loss)^a		(0.01	)		0.28			0.19			0.21			0.11			0.18
Net realized and unrealized gain (loss)		3.09			4.03			2.40			0.41			(3.23	)		(5.26	)

Total from investment operations		3.08			4.31			2.59			0.62			(3.12	)		(5.08	)

Less distributions from:
Net investment income		(0.12	)		(0.19	)		(0.20	)		(0.12	)		—			(0.19	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.12	)		(0.19	)		(0.20	)		(0.12	)		—			(0.19	)

Net asset value, end of period	$	22.04		$	19.08		$	14.96		$	12.57		$	12.07		$	15.19

Total return		16.17	%^c		28.89	%		20.55	%		5.39	%		(20.54	)%		(24.87	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	634,716		$	314,793		$	98,764		$	101,800		$	94,160		$	118,525
Ratio of expenses to average net assets^d		0.56	%^e		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets^d		(0.09	)%		1.54	%		1.27	%		1.98	%		0.77	%		0.99	%
Portfolio turnover rate^f		7	%		9	%		9	%		11	%		9	%		20	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


76		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^{^®}, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Italy Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	25.77		$	20.21		$	16.67		$	15.15		$	17.79		$	22.23

Income from investment operations:
Net investment income^a		0.14			0.78			0.56			0.43			0.37			0.24
Net realized and unrealized gain (loss)		1.78			5.42			3.59			1.47			(3.01	)		(4.37	)

Total from investment operations		1.92			6.20			4.15			1.90			(2.64	)		(4.13	)

Less distributions from:
Net investment income		(0.51	)		(0.64	)		(0.61	)		(0.38	)		—			(0.24	)
Net realized gain		—			—			—			—			—			(0.07	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.51	)		(0.64	)		(0.61	)		(0.38	)		—			(0.31	)

Net asset value, end of period	$	27.18		$	25.77		$	20.21		$	16.67		$	15.15		$	17.79

Total return		7.55	%^c		30.74	%		25.09	%		12.79	%		(14.84	)%		(18.61	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	85,625		$	42,526		$	27,279		$	29,997		$	29,538		$	34,682
Ratio of expenses to average net assets^d		0.57	%^e		0.57	%		0.83	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes^d		n/a			n/a			0.79	%		n/a			n/a			n/a
Ratio of net investment income to average net assets^d		1.05	%		3.18	%		2.85	%		2.84	%		2.34	%		1.16	%
Portfolio turnover rate^f		11	%		18	%		9	%		22	%		10	%		20	%

^a	Based on average shares outstanding throughout the period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.56%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		77

Financial Highlights (Continued)

iSHARES^{^®}, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Netherlands Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	19.10		$	15.70		$	14.31		$	14.69		$	18.59		$	23.53

Income from investment operations:
Net investment income (loss)^a		(0.02	)		0.57			0.39			0.30			0.25			0.28
Net realized and unrealized gain (loss)		3.10			3.09			1.37			(0.43	)		(4.11	)		(4.94	)

Total from investment operations		3.08			3.66			1.76			(0.13	)		(3.86	)		(4.66	)

Less distributions from:
Net investment income		(0.48	)		(0.26	)		(0.37	)		(0.25	)		(0.04	)		(0.28	)

Total distributions		(0.48	)		(0.26	)		(0.37	)		(0.25	)		(0.04	)		(0.28	)

Net asset value, end of period	$	21.70		$	19.10		$	15.70		$	14.31		$	14.69		$	18.59

Total return		16.30	%^b		23.40	%		12.28	%		(0.78	)%		(20.79	)%		(19.83	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	84,619		$	63,974		$	28,265		$	18,599		$	19,103		$	24,184
Ratio of expenses to average net assets^c		0.57	%^d		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets^c		(0.20	)%		3.13	%		2.45	%		2.37	%		1.48	%		1.34	%
Portfolio turnover rate^e		2	%		6	%		9	%		18	%		15	%		35	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.56%.

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

See notes to the financial statements.


78		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Spain Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	35.70		$	27.55		$	22.39		$	17.95		$	21.33		$	24.19

Income from investment operations:
Net investment income^a		0.36			0.79			0.44			0.24			0.17			0.19
Net realized and unrealized gain (loss)		4.49			7.97			4.99			4.36			(3.55	)		(2.89	)

Total from investment operations		4.85			8.76			5.43			4.60			(3.38	)		(2.70	)

Less distributions from:
Net investment income		(0.74	)		(0.61	)		(0.27	)		(0.16	)		—			(0.16	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.74	)		(0.61	)		(0.27	)		(0.16	)		—			(0.16	)

Net asset value, end of period	$	39.81		$	35.70		$	27.55		$	22.39		$	17.95		$	21.33

Total return		13.79	%^c		31.85	%		24.28	%		25.81	%		(15.85	)%		(11.17	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	86,590		$	66,945		$	45,456		$	50,372		$	18,850		$	27,198
Ratio of expenses to average net assets^d		0.57	%^e		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^d		1.96	%		2.33	%		1.64	%		1.22	%		0.85	%		0.82	%
Portfolio turnover rate^f		4	%		8	%		6	%		17	%		14	%		26	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		79

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Sweden Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	21.58		$	16.82		$	12.59		$	9.88		$	12.88		$	24.38

Income from investment operations:
Net investment income (loss)^a		(0.06	)		0.46			0.28			0.25			0.12			0.07
Net realized and unrealized gain (loss)		2.66			4.45			4.20			2.58			(3.12	)		(11.52	)

Total from investment operations		2.60			4.91			4.48			2.83			(3.00	)		(11.45	)

Less distributions from:
Net investment income		(0.42	)		(0.15	)		(0.25	)		(0.12	)		—			(0.05	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.42	)		(0.15	)		(0.25	)		(0.12	)		—			(0.05	)

Net asset value, end of period	$	23.76		$	21.58		$	16.82		$	12.59		$	9.88		$	12.88

Total return		12.15	%^c		29.21	%		35.81	%		29.04	%		(23.29	)%		(46.99	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	103,353		$	61,513		$	27,758		$	16,992		$	8,154		$	10,630
Ratio of expenses to average net assets^d		0.57	%^e		0.58	%		0.92	%		0.84	%		0.84	%		0.84	%
Ratio of expenses to average net assets exclusive of foreign taxes^d		n/a			0.57	%		0.79	%		n/a			n/a			n/a
Ratio of net investment income (loss) to average net assets^d		(0.53	)%		2.28	%		1.74	%		2.44	%		0.98	%		0.40	%
Portfolio turnover rate^f		5	%		6	%		9	%		12	%		31	%		43	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.56%.

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

See notes to the financial statements.


80		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Switzerland Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	17.63		$	14.58		$	12.23		$	11.59		$	12.95		$	15.54

Income from investment operations:
Net investment income (loss)^a		(0.04	)		0.22			0.09			0.05			0.03			0.04
Net realized and unrealized gain (loss)		2.79			2.92			2.31			0.62			(1.38	)		(2.54	)

Total from investment operations		2.75			3.14			2.40			0.67			(1.35	)		(2.50	)

Less distributions from:
Net investment income		(0.12	)		(0.09	)		(0.05	)		(0.03	)		(0.01	)		(0.05	)
Net realized gain		—			—			—			—			—			(0.04	)

Total distributions		(0.12	)		(0.09	)		(0.05	)		(0.03	)		(0.01	)		(0.09	)

Net asset value, end of period	$	20.26		$	17.63		$	14.58		$	12.23		$	11.59		$	12.95

Total return		15.63	%^b		21.54	%		19.56	%		5.89	%		(10.47	)%		(16.08	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	159,553		$	79,324		$	41,920		$	33,643		$	31,883		$	32,384
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets^c		(0.40	)%		1.34	%		0.64	%		0.43	%		0.20	%		0.29	%
Portfolio turnover rate^e		5	%		5	%		4	%		10	%		12	%		34	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		81

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI United Kingdom Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	18.74		$	15.72		$	13.00		$	12.77		$	15.11		$	18.35

Income from investment operations:
Net investment income^a		0.20			0.60			0.48			0.39			0.48			0.26
Net realized and unrealized gain (loss)		1.08			2.76			2.72			0.12			(2.60	)		(3.23	)

Total from investment operations		1.28			3.36			3.20			0.51			(2.12	)		(2.97	)

Less distributions from:
Net investment income		(0.58	)		(0.34	)		(0.48	)		(0.28	)		(0.22	)		(0.25	)
Net realized gain		—			—			—			—			—			(0.02	)

Total distributions		(0.58	)		(0.34	)		(0.48	)		(0.28	)		(0.22	)		(0.27	)

Net asset value, end of period	$	19.44		$	18.74		$	15.72		$	13.00		$	12.77		$	15.11

Total return		6.97	%^b		21.53	%		24.77	%		4.20	%		(14.19	)%		(16.20	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	614,451		$	464,850		$	452,870		$	150,809		$	120,067		$	117,883
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.77	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		2.10	%		3.39	%		3.11	%		3.23	%		3.39	%		1.57	%
Portfolio turnover rate^e		3	%		11	%		6	%		6	%		14	%		30	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

See notes to the financial statements.


82		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited)

iSHARES^®, INC.

iShares, Inc. (the “Company”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994 pursuant to amended and restated Articles of Incorporation. As of February 28, 2006, the Company offered 24 investment portfolios or funds.

These financial statements relate only to the iShares MSCI Austria, iShares MSCI Belgium, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands, iShares MSCI Spain, iShares MSCI Sweden, iShares MSCI Switzerland and iShares MSCI United Kingdom Index Funds (each, a “Fund,” collectively, the “Funds”).

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded equity securities in the aggregate in a particular market, as measured by a particular equity securities index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment adviser uses a “passive” or index approach to achieve each Fund’s investment objective. Each of the Funds is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by the Company in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The preparation of the financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

SECURITY VALUATION

The securities and other assets of each Fund are generally valued using market valuations. 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. The investment adviser 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. 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 of the Company (the “Board”).


NOTES TO THE FINANCIAL STATEMENTS		83

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the 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. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective date of such transactions.

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

FOREIGN TAXES

Italy and Greece may levy taxes on stock dividends at rates of 27.0% and 3.0%, respectively, based on the par value of stock dividends received by the iShares MSCI Italy and iShares MSCI EMU Index Funds. These taxes are paid by the Funds receiving the stock dividends and, if any, are disclosed in their respective Statements of Operations.

The iShares MSCI EMU Index Fund and iShares MSCI Sweden Index Fund may pay foreign taxes on certain taxable corporate events (i.e., spin-offs and tender offers) by Swedish companies whose securities are held by the Funds. The foreign taxes paid by the Funds, if any, are disclosed in their respective Statements of Operations.

DISTRIBUTIONS TO SHAREHOLDERS

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

The tax character of current year distributions will be determined at the end of the current fiscal year.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended February 28, 2006.


84		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC .

The Funds had tax basis net capital loss carryforwards as of August 31, 2005, the tax year-end of the Funds, as follows:


*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
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

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

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

Each Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.

As of February 28, 2006, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


*iShares MSCI Index Fund*	*Tax* *Cost*		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation
Austria	$	235,194,221	$	68,146,334	$	(202,348	)	$	67,943,986
Belgium		71,095,574		9,525,978		(1,579,387	)		7,946,591
EMU		951,692,708		161,627,504		(7,868,795	)		153,758,709
France		93,492,525		8,930,613		(8,205,733	)		724,880
Germany		569,485,318		75,775,537		(9,111,415	)		66,664,122
Italy		72,866,830		14,390,056		(823,375	)		13,566,681
Netherlands		72,890,984		11,777,797		(58,695	)		11,719,102
Spain		65,756,525		23,145,084		(6,845	)		23,138,239
Sweden		84,464,461		19,081,714		(60,212	)		19,021,502
Switzerland		132,687,630		27,325,233		(578,011	)		26,747,222
United Kingdom		547,733,313		80,136,103		(15,832,645	)		64,303,458


NOTES TO THE FINANCIAL STATEMENTS		85

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Fund’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

For its investment advisory services to each Fund, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds) as follows:


*Investment Advisory Fee*		*Aggregate Net Assets*
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital, Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Company. BarCap and BGI are affiliates of BGFA, the Funds’ investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 28, 2006, BGI earned securities lending agent fees as follows:


*iShares MSCI Index Fund*	Securities Lending Agent Fees
Austria	$	13,871
Belgium		9,393
EMU		104,784
France		19,762
Germany		46,460
Italy		18,575
Netherlands		4,686
Spain		12,655
Sweden		6,472
Switzerland		2,837
United Kingdom		2,520


86		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

As defined under Section 2(a)(3) of the 1940 Act, certain broker-dealers may be deemed to be an “affiliated person” of a Fund by virtue of being a DTC Participant that owned of record 5% or more of the outstanding shares of such Fund. The broker-dealers identified to be an “affiliated person” of a Fund did not execute any portfolio transactions with or on behalf of such Fund during the six months ended February 28, 2006.

Pursuant to Rule 17a-7 under the 1940 Act, certain Funds executed cross trades for the six months ended February 28, 2006. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter, for compliance with the requirements and restrictions set forth by Rule 17a-7.

Pursuant to an exemptive order issued by the SEC, each Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Funds’ investment adviser. The GMMF, IMMF and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, IMMF and PMMF do not directly charge an investment advisory fee, the Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments or from investment of securities lending collateral are recorded as either interest from affiliated issuers or securities lending income, respectively, in the accompanying Statements of Operations.

The following table provides information about the investment by each Fund in shares of issuers of which BGFA is an affiliate for the six months ended February 28, 2006, including income earned from these affiliated issuers and net realized gains from sales of these affiliated issuers.


*iShares MSCI Index Fund and Name of Affiliated Issuer*	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period *(in 000s)*	Value at End of Period		Dividend and Interest Income		Net Realized Gain
Austria
IMMF	2	6,944	6,927	19	$	18,751	$	1,212	$	—
Belgium
IMMF	3	3,770	3,720	53		52,521		654		—
EMU
IMMF	12	28,371	27,456	927		927,162		4,909		—
France
IMMF	150	5,862	5,961	51		50,926		1,002		—
Germany
IMMF	34	27,382	27,104	312		312,078		4,537		—
Italy
IMMF	4	3,341	3,325	20		20,183		554		—


NOTES TO THE FINANCIAL STATEMENTS		87

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.


*iShares MSCI Index Fund and Name of Affiliated Issuer*	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period *(in 000s)*	*Value at* *End of Period*		Dividend and Interest Income		Net Realized Gain
Netherlands
IMMF	2	983	981	4	$	3,716	$	157	$	—
Spain
IMMF	6	1,216	1,222	0^a		368		198		—
Sweden
IMMF	7	1,145	1,142	10		10,113		182		—
Switzerland
IMMF	42	6,649	6,551	140		140,279		1,140		—
United Kingdom
Barclays PLC	1,224	390	80	1,534		17,962,658		—		54,171
IMMF	28	17,682	16,941	769		768,877		3,042		—

^a	Rounds to less than 1,000 shares.

During the six months ended February 28, 2006, the Funds invested cash collateral from securities on loan in a joint investment account with other investment funds managed by BGFA (see Note 5). The joint account invested in the GMMF, IMMF and PMMF. Due to the nature of the structure of the joint account, the information needed to isolate the activity at the Fund level is not available. As such, the information reported above for each Fund does not include the Fund’s holdings of the GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.

As of February 28, 2006, certain directors and officers of the Company are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 28, 2006, were as follows:


*iShares MSCI Index Fund*	*Purchases*		*Sales*
Austria	$	34,359,731	$	35,631,912
Belgium		5,421,844		7,410,809
EMU		15,987,505		27,970,068
France		4,150,208		4,530,747
Germany		32,982,185		36,387,332
Italy		6,498,669		7,240,334
Netherlands		1,645,905		3,047,369
Spain		3,202,170		4,159,420
Sweden		3,568,461		4,988,711
Switzerland		8,564,881		5,991,233
United Kingdom		14,815,541		24,661,970


88		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

In-kind transactions (see Note 4) for the six months ended February 28, 2006, were as follows:


*iShares MSCI Index Fund*	In-kind Purchases		*In-kind Sales*
Austria	$	94,468,225	$	17,084,300
Belgium		26,547,663		—
EMU		476,692,600		—
France		51,027,214		47,372,480
Germany		339,011,639		88,546,759
Italy		38,298,514		—
Netherlands		11,694,630		—
Spain		11,001,645		—
Sweden		35,403,524		—
Switzerland		61,596,111		—
United Kingdom		142,109,263		11,012,904

4. CAPITAL SHARE TRANSACTIONS

The Company has authorized 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:


*iShares MSCI Index Fund*		*Authorized Shares*
Austria		19,800,000
Belgium		136,200,000
EMU		500,000,000
France		340,200,000
Germany		382,200,000
Italy		63,600,000
Netherlands		255,000,000
Spain		127,800,000
Sweden		63,600,000
Switzerland		318,625,000
United Kingdom		943,200,000

The Company issues and redeems capital shares of each Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.


NOTES TO THE FINANCIAL STATEMENTS		89

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending are that the borrower may not provide additional collateral when required or may not return the securities when due.

As of February 28, 2006, certain Funds had loaned securities which were collateralized by cash. Pursuant to an exemptive order issued by the SEC, the cash collateral received was invested in a joint account with other funds managed by BGFA. The joint account invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds, including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities and non-U.S. Government debt securities. Income from the joint account is allocated daily to each Fund, based on each Fund’s portion of the total cash collateral received. The market value of the securities on loan as of February 28, 2006 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, which is disclosed in the Funds’ Statements of Operations, is presented net of rebates paid to, or fees paid by, borrowers.


90		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES		91

Notes:


92		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES		93

The iShares^® Family of Funds

The following is a list of iShares Funds being offered, along with their respective exchange trading symbols. Please call 1-800-iShares (1-800-474-2737) to obtain a prospectus for any iShares Fund. The prospectus contains more complete information, including charges, expenses, investment objectives and risk factors that should be carefully considered to determine if the Fund(s) are an appropriate investment for you. Read the prospectus(es) carefully before investing. Investing involves risk, including possible loss of principal.

iShares S&P Domestic Index Funds

iShares S&P 1500 (ISI)

iShares S&P 100 (OEF)

iShares S&P 500 (IVV)

iShares S&P 500 Growth (IVW)

iShares S&P 500 Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400 Growth (IJK)

iShares S&P MidCap 400 Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600 Growth (IJT)

iShares S&P SmallCap 600 Value (IJS)

iShares Domestic Sector Index Funds

iShares Cohen & Steers Realty Majors (ICF)

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

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

iShares Dow Jones U.S. Consumer Goods Sector (IYK)

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

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

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

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

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

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

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

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

iShares Dow Jones Transportation Average (IYT)

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

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

iShares Goldman Sachs Natural Resources (IGE)

iShares Goldman Sachs Networking (IGN)

iShares Goldman Sachs Semiconductor (IGW)

iShares Goldman Sachs Software (IGV)

iShares Goldman Sachs Technology (IGM)

iShares Nasdaq Biotechnology (IBB)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares Russell Microcap™ (IWC)

iShares International Country Index Funds

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria (EWO)

iShares MSCI Belgium (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico (EWW)

iShares MSCI Netherlands (EWN)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman TIPS (TIP)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 20+ Year Treasury (TLT)

iShares GS $ InvesTop™ Corporate (LQD)

iShares Specialty Index Funds

iShares KLD Select Social^SM(KLD)

iShares Dow Jones Select Dividend (DVY)

iShares International Index Funds

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

iShares NYSE Index Funds

iShares NYSE Composite (NYC)

iShares NYSE 100 (NY)

iShares^® is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Goldman, Sachs & Co. or Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., FTSE/Xinhua Index Limited, KLD Research & Analytics, Inc., Morgan Stanley Capital International, Morningstar, Inc., The Nasdaq Stock Market, Inc., New York Stock Exchange, Inc., Frank Russell Company, or Standard & Poor’s. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above. “GS $ InvesTop™” and “Goldman Sachs^®” are trademarks of Goldman, Sachs & Co.

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

This advertising section does not constitute part of the 2006 Semi-Annual Report.

2461-iS-1205


94		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

LOGO

Table of Contents


Fund Performance Overview		1
Shareholder Expenses		13
Schedules of Investments		15
iShares MSCI Australia Index Fund		15
iShares MSCI Brazil Index Fund		20
iShares MSCI Canada Index Fund		22
iShares MSCI Emerging Markets Index Fund		25
iShares MSCI Hong Kong Index Fund		34
iShares MSCI Malaysia Index Fund		36
iShares MSCI Mexico Index Fund		39
iShares MSCI Pacific ex-Japan Index Fund		43
iShares MSCI Singapore Index Fund		49
iShares MSCI South Africa Index Fund		54
iShares MSCI South Korea Index Fund		56
iShares MSCI Taiwan Index Fund		62
Financial Statements		65
Financial Highlights		73
Notes to the Financial Statements		85
iShares Family of Funds		94

Fund Performance Overview

iSHARES^® MSCI AUSTRALIA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Australia Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 12.60%, while the Index returned 12.30%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
15.83	%	15.70	%	15.27	%	19.98	%	19.79	%	19.47	%	10.39	%	10.35	%	10.55	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
15.83	%	15.70	%	15.27	%	148.64	%	146.67	%	143.39	%	167.85	%	167.05	%	171.87	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	49.76	%
Basic Materials	17.25
Consumer Non-Cyclical	9.97
Industrial	9.02
Energy	4.35
Consumer Cyclical	4.27
Communications	2.03
Utilities	1.52
Diversified	0.59
Technology	0.34
Short-Term and Other Net Assets	0.90

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
BHP Billiton Ltd.	11.33	%
National Australia Bank Ltd.	7.61
Commonwealth Bank of Australia	7.53
Australia & New Zealand Banking Group Ltd.	6.12
Westpac Banking Corp. Ltd.	5.64
Westfield Group	3.45
Woolworths Ltd.	2.77
Rio Tinto Ltd.	2.64
Woodside Petroleum Ltd.	2.46
Rinker Group Ltd.	2.15

TOTAL	51.70	%


FUND PERFORMANCE OVERVIEW		1

Fund Performance Overview

iSHARES^® MSCI BRAZIL INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Brazil Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 52.04%, while the Index returned 53.80%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
70.22	%	67.25	%	73.88	%	23.50	%	23.03	%	26.08	%	16.80	%	16.34	%	19.61	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
70.22	%	67.25	%	73.88	%	187.26	%	181.83	%	218.59	%	140.14	%	134.85	%	174.57	%

Total returns for the periods since inception are calculated from the inception date of the Fund (7/10/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/14/00), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Basic Materials	26.28	%
Energy	24.79
Financial	19.45
Consumer Non-Cyclical	8.77
Communications	7.63
Utilities	7.00
Industrial	3.01
Consumer Cyclical	2.01
Diversified	0.30
Short-Term and Other Net Assets	0.76

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Petroleo Brasileiro SA Preferred	14.02	%
Petroleo Brasileiro SA	10.77
Companhia Vale do Rio Doce Class A Preferred	8.29
Banco Itau Holding Financeira SA Preferred	7.39
Companhia Vale do Rio Doce ADR	7.23
Banco Bradesco SA Preferred	6.12
Unibanco Uniao de Bancos Brasileiros SA	5.11
Companhia de Bebidas das Americas Preferred	4.03
Tele Norte Leste Participacoes SA Preferred	2.45
Companhia Energetica de Minas Gerais Preferred	2.44

TOTAL	67.85	%


2		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI CANADA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Canada Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 15.37%, while the Index returned 15.54%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
33.52	%	33.50	%	34.09	%	15.22	%	15.54	%	15.64	%	13.74	%	13.76	%	14.37	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
33.52	%	33.50	%	34.09	%	103.06	%	105.87	%	106.80	%	261.03	%	261.61	%	281.46	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	33.88	%
Energy	25.28
Basic Materials	16.67
Communications	6.36
Industrial	5.94
Consumer Cyclical	4.02
Technology	2.67
Consumer Non-Cyclical	2.53
Diversified	1.84
Utilities	0.51
Short-Term and Other Net Assets	0.30

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Royal Bank of Canada	6.59	%
Manulife Financial Corp.	6.20
Bank of Nova Scotia	5.08
EnCana Corp.	4.33
Suncor Energy Inc.	4.17
Bank of Montreal	3.69
Canadian Natural Resources Ltd.	3.58
Canadian National Railway Co.	3.14
Sun Life Financial Inc.	3.11
Petro-Canada	2.90

TOTAL	42.79	%


FUND PERFORMANCE OVERVIEW		3

Fund Performance Overview

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Emerging Markets Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index (the “Index”). The Index is designed to measure equity market performance in the global emerging markets. The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 26.67%, while the Index returned 30.09%.


Average Annual Total Returns												Cumulative Total Returns
*Year Ended 2/28/06*						*Inception to 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
34.51	%	33.46	%	36.50	%	45.67	%	45.30	%	44.88	%	197.55	%	195.34	%	193.05	%

Total returns for the periods since inception are calculated from the inception date of the Fund (4/7/03). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (4/11/03), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	19.57	%
Communications	14.55
Energy	14.14
Basic Materials	12.15
Industrial	11.83
Technology	9.80
Consumer Non-Cyclical	5.46
Utilities	4.81
Consumer Cyclical	4.51
Diversified	2.37
Funds	0.56
Short-Term and Other Net Assets	0.25

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Samsung Electronics Co. Ltd. GDR (South Korea)	6.36	%
Taiwan Semiconductor Manufacturing Co. Ltd. ADR (Taiwan)	3.34
Kookmin Bank ADR (South Korea)	3.31
LUKOIL ADR (Russia)	2.69
POSCO ADR (South Korea)	2.57
Korea Electric Power Corp. ADR (South Korea)	2.25
America Movil SA de CV Series L (Mexico)	2.08
United Microelectronics Corp. ADR (Taiwan)	1.87
Banco Bradesco SA ADR (Brazil)	1.87
Siliconware Precision Industries Co. ADR (Taiwan)	1.85

TOTAL	28.19	%


4		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI HONG KONG INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Hong Kong Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 5.33%, while the Index returned 5.71%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.77	%	14.77	%	15.60	%	4.43	%	4.56	%	5.39	%	3.24	%	3.22	%	5.15	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
14.77	%	14.77	%	15.60	%	24.18	%	24.96	%	30.02	%	37.44	%	37.18	%	64.97	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	43.37	%
Diversified	18.99
Utilities	14.66
Consumer Cyclical	10.01
Industrial	6.82
Communications	4.05
Technology	1.03
Basic Materials	0.95
Short-Term and Other Net Assets	0.12

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Hutchison Whampoa Ltd.	11.45	%
Cheung Kong Holdings Ltd.	8.56
Sun Hung Kai Properties Ltd.	7.31
CLP Holdings Ltd.	5.92
Hang Seng Bank Ltd.	5.76
Hong Kong & China Gas Co. Ltd.	5.04
Swire Pacific Ltd. Class A	4.95
BOC Hong Kong Holdings Ltd.	4.24
Esprit Holdings Ltd.	4.23
Hongkong Electric Holdings Ltd.	3.70

TOTAL	61.16	%


FUND PERFORMANCE OVERVIEW		5

Fund Performance Overview

iSHARES^® MSCI MALAYSIA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Malaysia Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 6.26%, while the Index returned 6.72%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.46	%	6.51	%	8.19	%	9.07	%	9.77	%	10.27	%	(3.51	)%	(3.54	)%	(2.38	)%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
7.46	%	6.51	%	8.19	%	54.34	%	59.38	%	63.04	%	(30.00	)%	(30.21	)%	(21.37	)%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Malaysia Fund, which has a NAV determined prior to the opening of the regular trading day on the stock exchange on which it is listed, the market return will use the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/18/96), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	28.46	%
Consumer Cyclical	15.93
Consumer Non-Cyclical	14.19
Industrial	13.85
Communications	11.03
Utilities	9.10
Diversified	4.48
Energy	1.68
Technology	0.67
Basic Materials	0.49
Short-Term and Other Net Assets	0.12

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Malayan Banking Bhd	9.89	%
Bumiputra-Commerce Holdings Bhd	6.48
Genting Bhd	4.91
Malaysia International Shipping Corp. Bhd	4.79
Tenaga Nasional Bhd	4.71
IOI Corp. Bhd	4.59
Telekom Malaysia Bhd	4.46
Maxis Communications Bhd	4.00
Sime Darby Bhd	3.94
Public Bank Bhd	3.61

TOTAL	51.38	%


6		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI MEXICO INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Mexico Index Fund (the “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 invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 33.75%, while the Index returned 34.08%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
45.25	%	44.34	%	47.50	%	24.08	%	24.11	%	24.51	%	16.82	%	16.80	%	18.73	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
45.25	%	44.34	%	47.50	%	194.10	%	194.47	%	199.24	%	371.28	%	370.45	%	453.89	%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Communications	45.55	%
Industrial	16.47
Consumer Cyclical	11.26
Consumer Non-Cyclical	10.33
Basic Materials	5.94
Financial	5.62
Diversified	4.69
Short-Term and Other Net Assets	0.14

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
America Movil SA de CV Series L	24.65	%
Cemex SA de CV Series CPO	15.41
Telefonos de Mexico SA de CV Series L	9.07
Fomento Economico Mexicano SA de CV Class UBD	5.21
Wal-Mart de Mexico SA de CV Series V	4.81
Grupo Televisa SA Series CPO	4.78
America Telecom SA de CV Series A1	3.89
Grupo Financiero Banorte SA de CV Series O	3.86
Grupo Carso SA de CV Series A1	3.08
Grupo Mexico SA de CV Series B	2.58

TOTAL	77.34	%


FUND PERFORMANCE OVERVIEW		7

Fund Performance Overview

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Pacific ex-Japan Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 10.68%, while the Index returned 10.62%.


Average Annual Total Returns												Cumulative Total Returns
*Year Ended 2/28/06*						*Inception to 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
15.41	%	14.93	%	15.30	%	21.50	%	21.36	%	21.42	%	133.22	%	132.03	%	132.61	%

Total returns for the periods since inception are calculated from the inception date of the Fund (10/25/01). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/26/01), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	47.54	%
Basic Materials	11.58
Industrial	9.08
Consumer Non-Cyclical	6.75
Consumer Cyclical	5.97
Communications	5.45
Diversified	5.11
Utilities	4.15
Energy	2.94
Technology	0.79
Short-Term and Other Net Assets	0.64

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
BHP Billiton Ltd. (Australia)	7.56	%
National Australia Bank Ltd. (Australia)	4.99
Commonwealth Bank of Australia (Australia)	4.97
Australia & New Zealand Banking Group Ltd.
(Australia)	4.07
Westpac Banking Corp. Ltd. (Australia)	3.74
Hutchison Whampoa Ltd. (Hong Kong)	2.38
Westfield Group (Australia)	2.28
Woolworths Ltd. (Australia)	1.84
Cheung Kong Holdings Ltd. (Hong Kong)	1.83
Rio Tinto Ltd. (Australia)	1.77

TOTAL	35.43	%


8		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI SINGAPORE INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Singapore Index Fund (the “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 market, as measured by the MSCI Singapore Index (the “Index”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 14.40%, while the Index returned 14.27%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
21.76	%	20.83	%	21.05	%	8.24	%	8.48	%	7.72	%	(1.38	)%	(1.42	)%	(1.00	)%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
21.76	%	20.83	%	21.05	%	48.57	%	50.21	%	45.04	%	(12.90	)%	(13.25	)%	(9.58	)%


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	*% of* *Net Assets*
Financial	50.22	%
Communications	16.60
Industrial	12.67
Consumer Cyclical	6.52
Diversified	6.10
Consumer Non-Cyclical	5.01
Technology	2.36
Energy	0.37
Short-Term and Other Net Assets	0.15

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	*% of* *Net Assets*
DBS Group Holdings Ltd.	12.26	%
Singapore Telecommunications Ltd.	11.65
United Overseas Bank Ltd.	11.62
Oversea-Chinese Banking Corp.	11.26
Singapore Airlines Ltd.	4.92
Keppel Corp. Ltd.	4.90
Singapore Press Holdings Ltd.	4.68
City Developments Ltd.	3.08
Capitaland Ltd.	3.02
Fraser & Neave Ltd.	2.75

TOTAL	70.14	%


FUND PERFORMANCE OVERVIEW		9

Fund Performance Overview

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI South Africa Index Fund (the “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 invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 31.71%, while the Index returned 32.91%.


Average Annual Total Returns												Cumulative Total Returns
*Year Ended 2/28/06*						*Inception to 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
35.32	%	35.56	%	37.30	%	42.06	%	42.04	%	43.95	%	193.95	%	193.85	%	205.97	%

Total returns for the periods since inception are calculated from the inception date of the Fund (2/3/03). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/7/03), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Financial	23.47	%
Basic Materials	23.02
Communications	14.07
Energy	10.94
Consumer Cyclical	10.22
Diversified	8.21
Consumer Non-Cyclical	5.15
Industrial	4.84
Short-Term and Other Net Assets	0.08

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Sasol Ltd.	10.94	%
Standard Bank Group Ltd.	8.66
MTN Group Ltd.	7.18
Impala Platinum Holdings Ltd.	6.00
Gold Fields Ltd.	4.75
FirstRand Ltd.	4.72
AngloGold Ashanti Ltd.	3.79
Telkom South Africa Ltd.	3.59
Naspers Ltd.	3.29
Sanlam Ltd.	3.22

TOTAL	56.14	%


10		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® MSCI SOUTH KOREA INDEX FUND

Performance as of February 28, 2006

The iShares MSCI South Korea Index Fund (the “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 South Korea Index (the “Index”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 35.36%, while the Index returned 36.55%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
37.62	%	38.58	%	40.31	%	27.76	%	28.80	%	29.97	%	15.91	%	16.24	%	16.68	%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
37.62	%	38.58	%	40.31	%	240.35	%	254.45	%	270.86	%	135.88	%	139.72	%	145.02	%

Total returns for the periods since inception are calculated from the inception date of the Fund (5/9/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the South Korea Fund, the NAV of which is determined prior to the opening of the regular trading day on the stock exchange on which it is listed, the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (5/12/00), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Industrial	39.18	%
Financial	19.19
Consumer Cyclical	15.45
Basic Materials	7.22
Communications	6.19
Consumer Non-Cyclical	5.06
Utilities	3.60
Energy	3.07
Short-Term and Other Net Assets	1.04

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Samsung Electronics Co. Ltd.	22.69	%
Kookmin Bank	8.02
POSCO	5.31
Hyundai Motor Co. Ltd.	4.50
Korea Electric Power Corp.	3.60
LG Electronics Inc.	2.98
Shinhan Financial Group Ltd.	2.95
Shinsegae Co. Ltd.	2.24
SK Corp.	2.02
KT&G Corp.	2.00

TOTAL	56.31	%


FUND PERFORMANCE OVERVIEW		11

Fund Performance Overview

iSHARES^® MSCI TAIWAN INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Taiwan Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 11.24%, while the Index returned 12.34%.


Average Annual Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
4.55	%	1.98	%	6.17	%	1.24	%	1.53	%	2.48	%	(6.18	)%	(6.16	)%	(5.20	)%

Cumulative Total Returns
*Year Ended 2/28/06*						*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
4.55	%	1.98	%	6.17	%	6.34	%	7.90	%	13.03	%	(30.45	)%	(30.39	)%	(26.26	)%

Total returns for the periods since inception are calculated from the inception date of the Fund (6/20/00). “Average annual total returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative total returns” represent the total change in value of an investment over the periods indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. In the case of the Taiwan Fund, the NAV of which is determined prior to the opening of the regular trading day on the stock exchange on which it is listed, the market return is calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/23/00), the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Technology	36.00	%
Industrial	23.90
Financial	19.84
Basic Materials	10.93
Communications	4.35
Consumer Cyclical	3.91
Consumer Non-Cyclical	0.98
Short-Term and Other Net Assets	0.09

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd.	15.34	%
Hon Hai Precision Industry Co. Ltd.	7.98
United Microelectronics Corp.	4.08
Cathay Financial Holding Co. Ltd.	3.94
AU Optronics Corp.	3.34
MediaTek Inc.	3.25
China Steel Corp.	3.01
Chunghwa Telecom Co. Ltd.	2.87
Mega Financial Holding Co. Ltd.	2.75
Formosa Plastic Co.	2.74

TOTAL	49.30	%


12		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses

iSHARES^®, INC.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from September 1, 2005 to February 28, 2006.

ACTUAL EXPENSES

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES


*iShares MSCI Index Fund*	Beginning Account Value (September 1, 2005)		Ending Account Value (February 28, 2006)		Annualized Expense Ratio		Expenses Paid During Period ^a(September 1, 2005 to February 28, 2006)
Australia
Actual	$	1,000.00	$	1,126.00	0.56	%	$	2.95
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Brazil
Actual		1,000.00		1,520.40	0.73			4.56
Hypothetical (5% return before expenses)		1,000.00		1,021.17	0.73			3.66
Canada
Actual		1,000.00		1,153.70	0.56			2.99
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Emerging Markets
Actual		1,000.00		1,266.70	0.79			4.44
Hypothetical (5% return before expenses)		1,000.00		1,020.88	0.79			3.96
Hong Kong
Actual		1,000.00		1,053.30	0.56			2.85
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81


SHAREHOLDER EXPENSES		13

Shareholder Expenses (Continued)

iSHARES^®, INC.


*iShares MSCI Index Fund*	Beginning Account Value (September 1, 2005)		Ending Account Value (February 28, 2006)		Annualized Expense Ratio		Expenses Paid During Period ^a(September 1, 2005 to February 28, 2006)
Malaysia
Actual	$	1,000.00	$	1,062.60	0.56	%	$	2.86
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Mexico
Actual		1,000.00		1,337.50	0.56			3.25
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
Pacific ex-Japan
Actual		1,000.00		1,106.80	0.51			2.66
Hypothetical (5% return before expenses)		1,000.00		1,022.27	0.51			2.56
Singapore
Actual		1,000.00		1,144.00	0.56			2.98
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81
South Africa
Actual		1,000.00		1,317.10	0.73			4.19
Hypothetical (5% return before expenses)		1,000.00		1,021.17	0.73			3.66
South Korea
Actual		1,000.00		1,353.60	0.73			4.26
Hypothetical (5% return before expenses)		1,000.00		1,021.17	0.73			3.66
Taiwan
Actual		1,000.00		1,112.40	0.75			3.93
Hypothetical (5% return before expenses)		1,000.00		1,021.08	0.75			3.76

^a	Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (181 days) and divided by the number of days in the year (365 days).


14		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MSCI AUSTRALIA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.10%
AIRLINES – 0.50%
Qantas Airways Ltd.	842,886	$	2,567,165

			2,567,165
APPAREL – 0.27%
Billabong International Ltd.	120,357		1,387,600

			1,387,600
BANKS – 28.69%
Australia & New Zealand Banking Group Ltd.	1,642,815		31,387,791
Commonwealth Bank of Australia	1,159,194		38,620,661
Macquarie Office Trust	1,621,788		1,632,430
National Australia Bank Ltd.	1,432,416		39,030,096
Suncorp-Metway Ltd.	494,844		7,520,991
Westpac Banking Corp. Ltd.	1,648,233		28,907,845

			147,099,814
BEVERAGES – 2.22%
Coca-Cola Amatil Ltd.	474,075		2,482,775
Foster’s Group Ltd.	1,812,579		7,324,820
Lion Nathan Ltd.	264,450		1,571,573

			11,379,168
BIOTECHNOLOGY – 0.53%
Sonic Healthcare Ltd.	236,844		2,732,341

			2,732,341
BUILDING MATERIALS – 3.81%
Boral Ltd.	524,643		3,425,736
CSR Ltd.	825,729		2,343,161
James Hardie Industries NV	418,605		2,761,331
Rinker Group Ltd.	829,470		11,023,313

			19,553,541
COMMERCIAL SERVICES – 2.01%
Brambles Industries Ltd.¹	872,427		6,513,228
Transurban Group	717,498		3,805,573

			10,318,801
COMPUTERS – 0.34%
Computershare Ltd.	349,203		1,756,175
			1,756,175
DIVERSIFIED FINANCIAL SERVICES – 3.51%
Australian Stock Exchange Ltd.	93,396		2,252,049
Babcock & Brown Ltd.	136,095		1,752,031
Challenger Financial Services Group Ltd.	358,878		1,037,045
Macquarie Bank Ltd.	208,593		9,952,651
Perpetual Ltd.	37,023		1,870,172
SFE Corp. Ltd.	119,712		1,137,390

			18,001,338
ENGINEERING & CONSTRUCTION – 0.87%
Downer EDI Ltd.	248,841		1,451,085
Leighton Holdings Ltd.	123,066		1,665,665
Multiplex Group	563,472		1,322,698

			4,439,448
ENTERTAINMENT – 1.74%
Aristocrat Leisure Ltd.	275,415		2,465,334
TABCORP Holdings Ltd.	475,365		5,363,967
UNiTAB Ltd.	106,554		1,089,946

			8,919,247
FOOD – 2.77%
Woolworths Ltd.	1,038,837		14,199,281

			14,199,281
FOREST PRODUCTS & PAPER – 0.20%
PaperlinX Ltd.	398,481		1,006,440

			1,006,440
GAS – 1.52%
Alinta Ltd.	228,717		1,889,315
Australian Gas Light Co. Ltd.	413,445		5,881,494

			7,770,809
HEALTH CARE - PRODUCTS – 0.35%
Cochlear Ltd.	49,020		1,784,311

			1,784,311
HEALTH CARE - SERVICES – 0.19%
DCA Group Ltd.	373,326		973,412

			973,412
HOLDING COMPANIES - DIVERSIFIED – 0.59%
Patrick Corp. Ltd.	592,110		3,012,965

			3,012,965
HOUSEHOLD PRODUCTS & WARES – 0.15%
Pacific Brands Ltd.	445,308		750,909

			750,909


SCHEDULES OF INVESTMENTS		15

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
INSURANCE – 5.97%
AMP Ltd.		1,684,224	$	10,759,682
AXA Asia Pacific Holdings Ltd.		788,835		3,428,019
Insurance Australia Group Ltd.		1,433,190		5,738,438
QBE Insurance Group Ltd.		695,955		10,701,697

				30,627,836
INVESTMENT COMPANIES – 1.60%
Macquarie Airports		579,855		1,391,307
Macquarie Communications Infrastructure Group		303,408		1,277,942
Macquarie Infrastructure Group		2,135,208		5,551,487

				8,220,736
IRON & STEEL – 0.89%
BlueScope Steel Ltd.		637,647		3,126,262
OneSteel Ltd.		505,164		1,448,508

				4,574,770
MANUFACTURING – 3.10%
Ansell Ltd.		129,387		1,057,266
Futuris Corp. Ltd.		494,457		866,845
Orica Ltd.		275,673		4,707,977
Wesfarmers Ltd.		340,818		9,266,265

				15,898,353
MEDIA – 0.96%
APN News & Media Ltd.		259,419		915,370
John Fairfax Holdings Ltd.		838,629		2,473,213
Publishing & Broadcasting Ltd.		121,131		1,533,296

				4,921,879
MINING – 16.16%
Alumina Ltd.		1,046,835		5,396,831
BHP Billiton Ltd.		3,225,645		58,107,132
Iluka Resources Ltd.		208,335		1,104,998
Newcrest Mining Ltd.		299,409		4,715,219
Rio Tinto Ltd.		255,549		13,516,222

				82,840,402
OIL & GAS – 4.35%
Caltex Australia Ltd.		122,163		1,560,879
Origin Energy Ltd.		707,694		3,627,402
Santos Ltd.		535,866		4,506,130
Woodside Petroleum Ltd.		419,250		12,610,200

				22,304,611

*Security*	Shares or Principal		*Value*
PACKAGING & CONTAINERS – 0.86%
Amcor Ltd.		796,059	$	4,399,662

				4,399,662
PHARMACEUTICALS – 1.75%
CSL Ltd.		162,540		6,363,148
Mayne Pharma Ltd.²		571,599		1,176,176
Symbion Health Ltd.		585,660		1,457,443

				8,996,767
REAL ESTATE – 9.99%
Centro Properties Group		728,979		3,682,350
Commonwealth Property Office Fund		1,390,491		1,394,451
DB RREEF Trust		2,354,895		2,466,561
Gandel Retail Trust		1,370,754		1,985,616
GPT Group		1,642,944		5,064,913
ING Industrial Fund		673,380		1,145,505
Investa Property Group		1,393,329		2,080,419
Lend Lease Corp. Ltd.		325,080		3,219,004
Macquarie Goodman Group		1,093,662		4,102,755
Mirvac Group		775,032		2,423,834
Stockland Trust Group		1,197,378		5,986,148
Westfield Group		1,338,117		17,693,560

				51,245,116
RETAIL – 1.76%
Coles Myer Ltd.		1,065,540		7,772,887
Harvey Norman Holdings Ltd.		473,172		1,230,235

				9,003,122
TELECOMMUNICATIONS – 1.07%
Telstra Corp. Ltd.		1,913,586		5,472,803

				5,472,803
TRANSPORTATION – 0.38%
Toll Holdings Ltd.		224,847		1,950,882

				1,950,882

TOTAL COMMON STOCKS (Cost: $420,953,247)				508,109,704
SHORT-TERM INVESTMENTS – 0.08%
CERTIFICATES OF DEPOSIT³ – 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06	$	1,498		1,496
Wells Fargo Bank N.A.
4.78%, 12/05/06		2,397		2,397

				3,893


16		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

February 28, 2006


*Security*	*Shares or* *Principal*		*Value*
COMMERCIAL PAPER³ – 0.00%
Amstel Funding Corp.
4.40%, 05/08/06	$	1,498	$	1,486
CC USA Inc.
4.23%, 04/21/06		899		894
Edison Asset Securitization LLC
4.37%, 05/08/06		1,498		1,486
Galaxy Funding Inc.
4.23%, 04/18/06		860		855
Grampian Funding LLC
4.41%, 05/15/06		1,498		1,485
Nordea North America Inc.
4.16%, 04/04/06		3,146		3,134
Sigma Finance Inc.
4.16%, 04/06/06		1,798		1,790

				11,130
MEDIUM-TERM NOTES³ – 0.00%
Dorada Finance Inc.
3.93%, 07/07/06		929		929
K2 USA LLC
3.94%, 07/07/06		1,798		1,798
Marshall & Ilsley Bank
5.18%, 12/15/06		2,997		3,005
Toronto-Dominion Bank
3.81%, 06/20/06		3,746		3,746
US Bank N.A.
2.85%, 11/15/06		599		591

				10,069
MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		72,364		72,364

				72,364
REPURCHASE AGREEMENTS³ – 0.02%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $4,496 (collateralized by non-U.S. Government debt securities, value $4,952, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	4,495		4,495

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $14,985 (collateralized by U.S. Government obligations, value $15,313, 3.69% to 10.00%, 5/1/09 to 1/1/36).	$	14,983	$	14,983
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $7,493 (collateralized by non-U.S. Government debt securities, value $7,879, 1.01%, 9/19/35).⁶		7,492		7,492
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $14,985 (collateralized by U.S. Government obligations, value $15,307, 4.50% to 7.50%, 9/1/09 to 11/1/35).		14,983		14,983
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $14,985 (collateralized by non-U.S. Government debt securities, value $15,757, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		14,983		14,983
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $3,596 (collateralized by U.S. Government obligations, value $3,674, 3.99% to 5.51%, 7/1/32 to 2/1/36).		3,596		3,596
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $2,997 (collateralized by non-U.S. Government debt securities, value $3,092, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		2,997		2,997


SCHEDULES OF INVESTMENTS		17

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $14,985 (collateralized by non-U.S. Government debt securities, value $15,733, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶	$	14,983	$	14,983

				78,512
TIME DEPOSITS³ – 0.01%
KBC Bank
4.57%, 03/01/06		5,993		5,993
Societe Generale
4.57%, 03/01/06		10,488		10,488
US Bank N.A.
4.45%, 03/01/06		5,392		5,392

				21,873
VARIABLE & FLOATING RATE NOTES³ – 0.04%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		8,418		8,421
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		7,042		7,041
American Express Centurion Bank
4.57%, 06/29/06		1,199		1,199
American Express Credit Corp.
4.67%, 02/05/07		899		900
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		9,739		9,742
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		1,948		1,948
Bank of Ireland
4.54%, 03/20/07⁷		2,997		2,997
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		3,866		3,866
BMW US Capital LLC
4.54%, 02/15/07⁷		2,997		2,997
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		8,061		8,061
Commodore CDO Ltd.
4.56%, 12/12/06⁷		749		749
DEPFA Bank PLC
4.50%, 12/15/06		2,997		2,997
Dorada Finance Inc.
4.52%, 06/26/06⁷		749		749
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		2,997		2,997
Fifth Third Bancorp.
4.55%, 01/23/07⁷		5,993		5,993
Five Finance Inc.
4.54%, 06/26/06⁷		599		599
General Electric Capital Corp.
4.67%, 03/09/07		1,348		1,349
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		749		749
Hartford Life Global Funding Trusts
4.56%, 02/15/07		2,997		2,997
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		2,997		2,997
Holmes Financing PLC
4.54%, 12/15/06⁷		8,241		8,241
HSBC Bank USA N.A.
4.70%, 05/04/06		1,049		1,049
K2 USA LLC
4.53%, 06/02/06⁷		2,697		2,697
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		3,140		3,140
Links Finance LLC
4.56%, 03/15/06⁷		2,397		2,397
Marshall & Ilsley Bank
4.55%, 02/15/07		1,648		1,648
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		8,960		8,964
Mound Financing PLC
4.53%, 11/08/06⁷		5,993		5,993
Natexis Banques Populaires
4.55%, 03/15/07⁷		2,247		2,247
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		8,091		8,091


18		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Nordea Bank AB
4.55%, 02/09/07⁷	$	5,244	$	5,244
Northern Rock PLC
4.61%, 02/02/07⁷		3,596		3,596
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		8,151		8,151
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		7,492		7,492
Principal Life Income Funding Trusts
4.70%, 05/10/06		2,247		2,247
Sedna Finance Inc.
4.54%, 09/20/06⁷		899		899
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		3,326		3,326
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		2,997		2,997
Societe Generale
4.54%, 03/02/07⁷		2,098		2,098
Strips III LLC
4.62%, 07/24/06^7,8		773		773
SunTrust Bank
4.62%, 04/28/06		4,495		4,495
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		6,682		6,683
Toyota Motor Credit Corp.
4.57%, 04/10/06		1,348		1,348
UniCredito Italiano SpA
4.43%, 06/14/06		3,896		3,895
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		2,997		2,997
US Bank N.A.
4.54%, 09/29/06		1,348		1,348
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		4,495		4,495
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		5,719		5,719
Wells Fargo & Co.
4.56%, 03/15/07⁷		1,498		1,498
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		1,498		1,498
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		3,146		3,146
Winston Funding Ltd.
4.68%, 04/23/06⁷		2,140		2,140
World Savings Bank
4.52%, 03/09/06		4,495		4,495

				194,395

TOTAL SHORT-TERM INVESTMENTS (Cost: $392,236)				392,236

TOTAL INVESTMENTS IN SECURITIES – 99.18% (Cost: $421,345,483)				508,501,940
Other Assets, Less Liabilities – 0.82%				4,193,860

NET ASSETS – 100.00%			$	512,695,800

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		19

Schedule of Investments (Unaudited)

iSHARES^® MSCI BRAZIL INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 33.52%
AGRICULTURE – 0.78%
Souza Cruz SA	929,000	$	15,335,942

			15,335,942
BANKS – 5.33%
Banco Nossa Caixa SA	186,500		4,260,848
Unibanco Uniao de Bancos Brasileiros SA	5,704,610		100,005,416

			104,266,264
CHEMICALS – 0.65%
Braskem SA Class A	1,486,436		12,776,905

			12,776,905
COMMERCIAL SERVICES – 0.90%
Cia de Concessoes Rodoviarias	1,858,000		17,555,561

			17,555,561
COSMETICS& PERSONAL CARE – 0.83%
Natura Cosmeticos SA	278,700		16,285,957

			16,285,957
ELECTRIC – 1.65%
Centrais Eletricas Brasileiras SA	1,114,800,000		23,635,655
EDP - Energias do Brasil SA	557,400		8,534,367

			32,170,022
HEALTH CARE - SERVICES – 0.59%
Diagnosticos da America SA¹	464,500		11,590,610

			11,590,610
IRON & STEEL – 2.15%
Companhia Siderurgica Nacional SA	1,393,584		41,991,405

			41,991,405
MINING – 7.23%
Companhia Vale do Rio Doce ADR	3,044,333		141,348,380

			141,348,380
OIL & GAS – 10.77%
Petroleo Brasileiro SA	9,197,100		210,640,462

			210,640,462
REAL ESTATE – 0.61%
Cyrela Brazil Realty SA	650,300		11,954,855

			11,954,855
TELECOMMUNICATIONS – 1.42%
Brasil Telecom Participacoes SA	650,300,000		8,151,732
Tele Norte Leste Participacoes SA	745,738		19,609,887

			27,761,619
WATER – 0.61%
Companhia de Saneamento Basico do Estado de Sao Paulo	148,640,000		11,985,063

			11,985,063

TOTAL COMMON STOCKS (Cost: $429,637,617)			655,663,045
PREFERRED STOCKS – 65.72%
AEROSPACE & DEFENSE – 1.73%
Empresa Brasileira de Aeronautica SA	3,344,443		33,885,733

			33,885,733
AIRLINES – 0.78%
Gol Linhas Aereas Inteligentes SA	464,500		15,338,132

			15,338,132
BANKS – 13.51%
Banco Bradesco SA	2,898,200		119,642,941
Banco Itau Holding Financeira SA	4,467,970		144,651,055

			264,293,996
BEVERAGES – 4.03%
Companhia de Bebidas das Americas	185,800,000		78,890,574

			78,890,574
BUILDING MATERIALS – 0.78%
Duratex SA	836,110		15,169,762

			15,169,762
ELECTRIC – 4.49%
Centrais Eletricas Brasileiras SA Class B	836,100,000		18,380,806
Companhia Energetica de Minas Gerais	929,000,000		47,719,609
Companhia Paranaense de Energia Class B	1,486,400,000		16,320,984
Eletropaulo Metropolitana de Sao Paulo SA¹	111,480,000		5,500,976

			87,922,375


20		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
FOOD – 1.64%
Companhia Brasileira de Distribuicao Grupo Pao de Acucar	334,440,000	$	14,184,543
Sadia SA	5,574,000		17,862,017

			32,046,560
FOREST PRODUCTS & PAPER – 2.37%
Aracruz Celulose SA Class B	4,552,100		22,524,529
Klabin SA	5,574,000		13,133,836
Votorantim Celulose e Papel SA	703,000		10,766,965

			46,425,330
GAS – 0.25%
Cia de Gas de Sao Paulo Class A	37,160,000		4,850,763

			4,850,763
HOLDING COMPANIES - DIVERSIFIED – 0.30%
Contax Participacoes SA	4,135,539		5,807,684

			5,807,684
IRON & STEEL – 4.03%
Gerdau SA	1,950,916		45,049,427
Usinas Siderurgicas de Minas Gerais SA Class A	1,021,900		33,710,179

			78,759,606
MACHINERY – 0.50%
Weg SA	2,694,100		9,712,472

			9,712,472
MINING – 9.85%
Caemi Mineracao e Metalurgica SA	17,651,000		30,444,232
Companhia Vale do Rio Doce Class A	3,808,900		162,264,166

			192,708,398
OIL & GAS – 14.02%
Petroleo Brasileiro SA	13,006,000		274,278,275

			274,278,275
RETAIL – 1.02%
Lojas Americanas SA	464,500,000		20,007,209

			20,007,209
TELECOMMUNICATIONS – 6.21%
Brasil Telecom Participacoes SA	2,136,700,000		16,946,595
Celular CRT Participacoes SA Class A	95,160		3,318,492
Embratel Participacoes SA¹	4,180,500,000		10,677,791
Tele Centro Oeste Celular Participacoes SA	557,412		8,537,177
Tele Norte Leste Participacoes SA	2,508,339		47,873,577
Telemig Celular Participacoes SA	1,950,900,000		5,516,209
Telesp Celular Participacoes SA¹	1,852,597		9,472,515
TIM Participacoes SA	4,923,700,000		19,119,367

			121,461,723
TEXTILES – 0.21%
Companhia de Tecidos Norte de Minas	37,160,400		4,150,337

			4,150,337

TOTAL PREFERRED STOCKS (Cost: $830,367,371)			1,285,708,929
SHORT-TERM INVESTMENTS – 0.13%
MONEY MARKET FUNDS – 0.13%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^2,3	2,525,013		2,525,013

			2,525,013

TOTAL SHORT-TERM INVESTMENTS (Cost: $2,525,013)			2,525,013

TOTAL INVESTMENTS IN SECURITIES – 99.37% (Cost: $1,262,530,001)			1,943,896,987
Other Assets, Less Liabilities – 0.63%			12,317,860

NET ASSETS – 100.00%		$	1,956,214,847

ADR - American Depositary Receipts

¹	Non-income earning security.

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

³	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		21

Schedule of Investments (Unaudited)

iSHARES^® MSCI CANADA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.70%
AEROSPACE & DEFENSE – 0.25%
CAE Inc.	295,809	$	2,453,920

			2,453,920
APPAREL – 0.36%
Gildan Activewear Inc.¹	69,472		3,464,595

			3,464,595
AUTO PARTS & EQUIPMENT – 0.98%
Magna International Inc. Class A	126,059		9,388,374

			9,388,374
BANKS – 19.37%
Bank of Montreal	586,626		35,554,809
Bank of Nova Scotia	1,166,607		48,901,229
Canadian Imperial Bank of Commerce	391,916		27,535,203
National Bank of Canada	195,126		11,111,354
Royal Bank of Canada	760,104		63,429,391

			186,531,986
BEVERAGES – 0.09%
Cott Corp.¹	68,640		838,434

			838,434
CHEMICALS – 2.29%
Agrium Inc.	158,923		3,952,301
Methanex Corp.	136,043		2,697,069
NOVA Chemicals Corp.	96,939		3,152,786
Potash Corp. of Saskatchewan Inc.	128,139		12,272,832

			22,074,988
COMMERCIAL SERVICES – 0.10%
Quebecor World Inc.	96,107		975,470

			975,470
COMPUTERS – 1.66%
CGI Group Inc.¹	335,349		2,513,754
Research In Motion Ltd.¹	190,550		13,466,348

			15,980,102
DIVERSIFIED FINANCIAL SERVICES – 1.41%
C.I. Financial Inc.	182,646		4,494,124
IGM Financial Inc.	140,203		5,704,468
TSX Group Inc.	79,456		3,365,507

			13,564,099
ELECTRIC – 0.51%
TransAlta Corp.	230,486		4,875,256

			4,875,256
ELECTRONICS – 0.26%
Celestica Inc.¹	234,646		2,540,392

			2,540,392
ENGINEERING & CONSTRUCTION – 0.51%
SNC-Lavalin Group Inc.	59,488		4,946,922

			4,946,922
ENTERTAINMENT – 0.18%
Intrawest Corp.	55,328		1,759,586

			1,759,586
FOOD – 1.33%
George Weston Ltd.	59,904		4,587,753
Loblaw Companies Ltd.	130,219		6,591,339
Saputo Inc.	54,912		1,613,171

			12,792,263
FOREST PRODUCTS & PAPER – 0.43%
Abitibi-Consolidated Inc.	461,815		1,607,089
Canfor Corp.¹	109,835		1,303,021
Domtar Inc.	227,574		1,229,914

			4,140,024
HAND & MACHINE TOOLS – 0.35%
Finning International Inc.	101,931		3,359,930

			3,359,930
HEALTH CARE - SERVICES – 0.35%
MDS Inc.	167,670		3,388,910

			3,388,910
HOLDING COMPANIES - DIVERSIFIED – 1.84%
Brookfield Asset Management Inc. Class A	275,009		15,068,159
Onex Corp.	147,691		2,616,504

			17,684,663
INSURANCE – 12.41%
Fairfax Financial Holdings Ltd.	19,968		2,864,604
Great-West Lifeco Inc.	314,529		8,070,870
Manulife Financial Corp.	936,121		59,715,298
Power Corp. of Canada	376,940		10,401,086


22		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI CANADA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Power Financial Corp.	291,649	$	8,547,383
Sun Life Financial Inc.	684,824		29,939,799

			119,539,040
IRON & STEEL – 0.69%
Algoma Steel Inc.	47,008		1,243,412
IPSCO Inc.	55,918		5,380,747

			6,624,159
LODGING – 0.57%
Fairmont Hotels & Resorts Inc.	86,539		3,826,743
Four Seasons Hotels Inc.	29,952		1,695,600

			5,522,343
MANUFACTURING – 0.44%
Bombardier Inc. Class B¹	1,665,873		4,274,660

			4,274,660
MEDIA – 2.74%
Rogers Communications Inc. Class B	254,610		10,180,373
Shaw Communications Inc. Class B	222,582		5,819,073
Thomson Corp.	270,849		10,348,886

			26,348,332
MINING – 13.26%
Aber Diamond Corp.	56,160		2,117,197
Agnico-Eagle Mines Ltd.	114,827		2,929,327
Alcan Inc.	435,607		18,986,869
Barrick Gold Corp.	1,000,224		27,292,021
Cameco Corp.	408,556		15,168,936
Falconbridge Ltd.	345,740		11,165,644
Glamis Gold Ltd.¹	155,664		4,232,386
Goldcorp Inc.	399,510		10,163,728
Inco Ltd.	222,166		10,749,558
Ivanhoe Mines Ltd.¹	255,158		2,040,457
Kinross Gold Corp.¹	404,812		3,731,691
Meridian Gold Inc.¹	118,571		2,990,454
Novelis Inc.	88,285		1,611,388
Teck Cominco Ltd. Class B	232,982		14,546,659

			127,726,315
OIL & GAS – 22.19%
Canadian Natural Resources Ltd.	631,764		34,470,958
EnCana Corp.	1,009,348		41,688,436
Husky Energy Inc.	149,771		9,155,122
Imperial Oil Ltd.	140,203		13,503,448
Nexen Inc.	306,774		16,018,728
Petro-Canada	609,517		27,884,753
Shell Canada Ltd.	242,966		8,156,159
Suncor Energy Inc.	537,786		40,170,315
Talisman Energy Inc.	430,615		22,595,036

			213,642,955
PHARMACEUTICALS – 0.66%
Angiotech Pharmaceuticals Inc.¹	100,683		1,558,089
Biovail Corp.¹	158,091		3,973,288
QLT Inc.¹	110,667		787,735

			6,319,112
PIPELINES – 3.09%
Enbridge Inc.	389,004		12,238,098
TransCanada Corp.	569,570		17,513,295

			29,751,393
REAL ESTATE – 0.69%
Brookfield Properties Corp.	159,755		4,693,185
MI Developments Inc. Class A	57,058		1,939,957

			6,633,142
RETAIL – 1.93%
Canadian Tire Corp. Class A	93,195		5,446,168
Jean Coutu Group Inc. Class A	166,827		1,946,889
RONA Inc.¹	131,051		2,471,422
Shoppers Drug Mart Corp.	223,414		8,709,210

			18,573,689
SEMICONDUCTORS – 0.49%
ATI Technologies Inc.¹	293,729		4,669,412

			4,669,412
SOFTWARE – 0.52%
Cognos Inc.¹	106,507		4,087,316
Open Text Corp.¹	50,752		883,962

			4,971,278
TELECOMMUNICATIONS – 3.62%
Aliant Inc.	48,256		1,164,895
BCE Inc.	359,884		8,735,003
Nortel Networks Corp.¹	5,098,824		14,741,536
TELUS Corp.	72,800		2,860,308
TELUS Corp. NVS	188,886		7,336,668

			34,838,410


SCHEDULES OF INVESTMENTS		23

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI CANADA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
TRANSPORTATION – 4.13%
Canadian National Railway Co.	646,530	$	30,225,753
Canadian Pacific Railway Ltd.	187,222		9,575,395

			39,801,148

TOTAL COMMON STOCKS (Cost: $792,361,852)			959,995,302
SHORT-TERM INVESTMENTS – 0.04%
MONEY MARKET FUNDS – 0.04%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^2,3	394,916		394,916

			394,916

TOTAL SHORT-TERM INVESTMENTS (Cost: $394,916)			394,916

TOTAL INVESTMENTS IN SECURITIES – 99.74% (Cost: $792,756,768)			960,390,218
Other Assets, Less Liabilities – 0.26%			2,501,107

NET ASSETS – 100.00%		$	962,891,325

NVS – Non-Voting Shares

¹	Non-income earning security.

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

³	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


24		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 97.50%
ARGENTINA – 1.03%
Petrobras Energia Participaciones SA ADR^1,2	1,728,413	$	20,827,377
Tenaris SA ADR	668,224		107,016,074

			127,843,451
BRAZIL – 9.39%
Aracruz Celulose SA ADR²	563,100		27,676,365
Banco Bradesco SA ADR²	5,598,496		232,113,638
Banco Itau Holding Financiera SA ADR²	5,782,512		188,972,492
Brasil Telecom Participacoes SA ADR	677,715		26,939,171
Companhia Brasileira de Distribuicao Grupo Pao de Acucar ADR²	825,229		35,072,232
Companhia Vale do Rio Doce ADR	3,715,936		172,530,908
Companhia Vale do Rio Doce Sponsored ADR	4,440,976		180,747,723
Empresa Brasileira de Aeronautica SA ADR²	1,158,368		46,045,128
Petroleo Brasileiro SA ADR	2,194,624		192,117,385
Tele Norte Leste Participacoes SA ADR²	2,799,277		51,870,603
Votorantim Celulose e Papel ADR²	781,856		11,540,195

			1,165,625,840
CHILE – 2.07%
Banco Santander Chile SA ADR	1,679,961		79,781,348
Enersis SA Chile ADR	5,121,920		62,845,958
LAN Airlines SA Sponsored ADR	113,632		4,641,867
Sociedad Quimica y Minera de Chile SA ADR	896,336		109,532,259

			256,801,432
CHINA – 5.41%
Aluminum Corp. of China Ltd. Class H	16,960,000		17,378,281
Angang New Steel Co. Ltd. Class H²	15,264,000		12,394,321
AviChina Industry & Technology Co.¹	10,176,000		800,057
Bank of Communications Co. Ltd. Class H^1,2	39,962,000		24,208,000
Beijing Capital International Airport Co. Ltd. Class H	13,572,000		7,740,535
China Construction Bank Class H¹	170,448,000		79,636,793
China Eastern Airlines Corp. Ltd. Class H²	59,360,000		9,946,060
China Life Insurance Co. Ltd. Class H¹	51,728,000		59,004,182
China Petroleum and Chemical Corp. Class H	139,072,000		83,798,290
China Shipping Development Co. Ltd. Class H	15,282,000		12,605,904
China Southern Airlines Co. Ltd.^1,2	37,312,000		11,060,893
China Telecom Corp. Ltd. Class H	94,976,000		34,887,720
Cofco International Ltd.	5,094,000		2,724,713
Cosco Pacific Ltd.	6,784,000		14,383,534
Datang International Power Generation Co. Ltd. Class H	6,792,000		4,902,296
Guangshen Railway Co. Ltd. Class H	54,342,363		20,311,891
Huadian Power International Corp. Ltd.	28,866,000		7,813,034
Huaneng Power International Inc. Class H	20,376,000		13,656,397
Jiangsu Expressway Co. Ltd. Class H	5,094,000		3,315,616
Jiangxi Copper Co. Ltd.	16,978,000		10,066,030
Maanshan Iron & Steel Co. Ltd. Class H²	18,656,000		6,552,377
PetroChina Co. Ltd. Class H	145,856,000		142,873,516
Ping An Insurance (Group) Co. of China Ltd. Class H	9,752,000		22,750,246
Qingling Motors Co. Ltd.	25,440,474		4,229,887
Shanghai Forte Land Co. Class H	5,088,000		2,196,877


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Sinopec Shanghai Petrochemical Co. Ltd. Class H	20,376,000	$	11,555,413
Sinotrans Ltd.	20,352,000		8,787,508
Travelsky Technology Ltd. Class H	1,698,000		1,652,336
Tsingtao Brewery Co. Ltd. Class H²	3,396,000		4,464,591
Weichai Power Co. Ltd. Class H	2,544,000		4,164,230
Yanzhou Coal Mining Co. Ltd. Class H	20,352,800		16,657,573
Zhejiang Expressway Co. Ltd. Class H	20,376,000		14,575,577

			671,094,678
CZECH REPUBLIC – 2.52%
CEZ AS	4,591,472		160,234,829
Komercni Banka AS	242,733		34,660,524
Philip Morris CR AS	81,408		61,909,244
Unipetrol AS¹	4,324,800		51,668,859
Zentiva NV	87,344		4,305,667

			312,779,123
HONG KONG – 4.16%
Air China Ltd.¹	25,440,000		9,262,952
Beijing Enterprises Holdings Ltd.	3,396,000		6,762,543
Brilliance China Automotive Holdings Ltd.	27,136,000		4,721,646
Chaoda Modern Agriculture	1,696,000		1,021,930
China Everbright Pacific Ltd.^1,2	18,884,000		10,039,956
China Mengniu Dairy Co. Ltd.	3,392,000		3,541,235
China Merchants Holdings International Co. Ltd.	6,784,000		19,323,774
China Mobile Ltd.	37,312,000		182,264,286
China Overseas Land & Investment Ltd.	27,136,000		14,864,442
China Pharmaceutical Group Ltd.¹	3,392,000		629,553
China Resources Enterprises Ltd.	11,886,000		26,196,645
China Resources Land Ltd.	27,168,000		14,706,888
China Resources Power Holdings Co.	5,088,000		3,410,078
China Travel International Investment Hong Kong Ltd.	59,646,951		16,144,380
Citic Pacific Ltd.	9,339,000		27,925,580
CNOOC Ltd.	113,632,000		95,930,297
Denway Motors Ltd.	32,224,000		12,875,230
Global Bio-Chem Technology Group Co. Ltd.	20,352,000		11,541,802
GOME Electrical Appliances Holdings Ltd.	7,632,000		7,230,021
Guangdong Investment Ltd.	11,876,110		5,433,960
Guangzhou Investment Co. Ltd.	28,832,000		4,979,588
Lenovo Group Ltd.	35,616,000		14,689,566
Shanghai Industrial Holdings Ltd.	3,396,000		7,309,674
Shenzhen Investment Ltd.	8,490,000		1,455,369
TCL International Holdings Ltd.	10,176,000		1,495,188
TPV Technology Ltd.	11,872,000		13,082,895

			516,839,478
HUNGARY – 2.25%
BorsodChem Rt	717,825		8,488,097
Gedeon Richter Rt	404,496		82,703,138
Magyar Telekom Rt	3,019,728		13,870,448
Mol Magyar Olaj-es Gazipari Rt	602,080		62,401,483
OTP Bank Rt	2,969,696		111,307,595

			278,770,761
INDIA – 4.98%
HDFC Bank Ltd. ADR	2,149,680		114,341,479
ICICI Bank Ltd. ADR	3,159,940		97,041,757
Infosys Technologies Ltd. ADR	1,707,219		120,871,105
Mahanagar Telephone Nigam Ltd. ADR²	5,081,391		34,197,761
Satyam Computer Services Ltd. ADR	2,488,060		102,383,669
Videsh Sanchar Nigam Ltd. ADR²	5,082,064		82,126,154
Wipro Ltd. ADR²	4,828,872		67,073,032

			618,034,957
INDONESIA – 2.32%
PT Aneka Tambang Tbk	58,936,455		25,833,840
PT Astra International Inc. Tbk	23,350,230		24,920,474
PT Bank Central Asia Tbk	42,450,000		16,642,527
PT Bank Danamon Indonesia Tbk	13,154,987		6,124,429
PT Bank Mandiri Tbk	44,572,500		7,863,594
PT Bank Pan Indonesia Tbk	172,630,918		8,177,996


26		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
PT Bank Rakyat Indonesia Tbk	39,039,061	$	13,817,256
PT Bumi Resources Tbk	123,384,000		11,286,966
PT Indosat Tbk	18,232,000		10,423,959
PT Kalbe Farma Tbk	257,893,156		38,195,990
PT Matahari Putra Prima Tbk	74,296,194		6,391,941
PT Perusahaan Gas Negara Tbk	23,758,500		24,968,094
PT Ramayana Lestari Sentosa Tbk	84,909,870		6,750,255
PT Semen Gresik (Persero) Tbk	440,000		1,114,076
PT Telekomunikasi Indonesia Tbk	115,752,186		78,155,574
PT Tempo Scan Pacific Tbk	899,376		666,023
PT United Tractors Tbk	16,599,771		7,185,853

			288,518,847
ISRAEL – 4.39%
Alvarion Ltd.¹	932,800		8,712,352
AudioCodes Ltd.^1,2	727,594		8,352,779
Bank Hapoalim Ltd.	9,849,687		45,085,230
Bank Leumi Le-Israel	12,895,691		46,651,433
Check Point Software Technologies Ltd.¹	1,372,912		29,188,109
Clal Industries and Investments Ltd.	462,160		2,142,994
Clal Insurance Co. Ltd.	83,952		1,481,007
ECI Telecom Ltd.¹	416,368		3,630,729
Elbit Systems Ltd.	649,568		15,025,385
Elite Industries Ltd.	190,800		1,702,857
Given Imaging Ltd.¹	168,752		3,888,046
Israel Chemicals Ltd.	6,935,792		26,079,788
Israel Corp. Ltd. (The)	9,328		3,138,281
Israel Discount Bank Class A¹	14,783,233		28,001,395
Koor Industries Ltd.¹	274,809		12,871,301
Makhteshim-Agan Industries Ltd.	2,981,692		14,841,044
Mizrahi Tefahot Bank Ltd.¹	4,640,428		26,039,919
M-Systems Flash Disk Pioneers Ltd.¹	669,072		18,064,944
NICE Systems Ltd.¹	84,900		4,341,431
Orbotech Ltd.¹	652,112		15,539,829
Supersol Ltd.	1,666,463		4,503,715
Syneron Medical Ltd.^1,2	1,017,600		27,882,240
Teva Pharmaceutical Industries Ltd.	4,703,008		198,158,341

			545,323,149
MEXICO – 7.55%
Alfa SA de CV Class A	3,646,400		19,454,067
America Movil SA de CV Series L²	148,908,800		258,836,880
Cemex SA de CV Series CPO	19,843,200		123,131,259
Consorcio Ara SA de CV²	5,943,000		25,382,454
Controladora Comercial Mexicana SA de CV²	9,497,600		17,217,263
Corporacion GEO SA de CV Series B^1,2	4,324,800		17,007,350
Fomento Economico Mexicano SA de CV Class UBD	5,178,900		44,748,009
Grupo Carso SA de CV Series A¹	764,841		1,936,427
Grupo Financiero Banorte SA de CV Series O	10,192,456		24,957,457
Grupo Mexico SA de CV Series B	11,461,500		29,412,767
Grupo Modelo SA de CV Series C	11,136,098		38,341,410
Grupo Televisa SA Series CPO	17,553,600		69,919,349
Industrias Penoles SA de CV Series CP²	765,088		4,884,326
Kimberly-Clark de Mexico SA de CV Class A	6,275,200		21,485,418
Telefonos de Mexico SA de CV Series L²	120,924,894		136,083,068
TV Azteca SA de CV Series CPO	10,600,000		6,719,413
Wal-Mart de Mexico SA de CV Series V	33,920,000		97,229,798

			936,746,715
PERU – 0.24%
Companhia de Minas Buenaventura SA ADR	1,143,180		29,974,180

			29,974,180
PHILIPPINE ISLANDS – 1.40%
Ayala Corp.	2,569,440		16,164,692
Ayala Land Inc. Class B	31,376,000		6,832,752
Bank of the Philippine Islands	16,790,400		19,176,028
Equitable PCI Bank	10,091,200		12,599,349


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Filinvest Land Inc.¹	263,940,500	$	6,233,206
Globe Telecom Inc.	491,840		8,378,227
Jollibee Foods Corp.	33,326,400		23,223,972
Manila Electric Co. Class B¹	9,412,800		3,370,825
Megaworld Corp.¹	173,973,600		4,647,378
Metropolitan Bank & Trust Co.	40		27
Petron Corp.	170,448,000		15,012,358
Philippine Long Distance Telephone Co.	1,060,000		36,626,016
SM Investments Corp.	1,619,680		7,054,356
SM Prime Holdings Inc.	94,976,000		14,707,859

			174,027,045
RUSSIA - 5.77%
JSC MMC Norilsk Nickel ADR	529,152		47,094,528
LUKOIL ADR	4,177,248		333,762,115
Mobile Telesystems OJSC ADR	763,200		27,528,624
Polyus Gold Co. ADR^1,3	486,720		5,110,560
Rostelecom ADR²	616,601		12,399,846
Surgutneftegaz ADR²	3,124,037		227,742,297
Tatneft ADR²	223,024		25,368,980
Vimpel-Communications Sponsored ADR¹	848,000		37,312,000

			716,318,950
SOUTH AFRICA – 11.83%
African Bank Investments Ltd.	8,254,527		38,815,712
Alexander Forbes Ltd.¹	8,202,844		20,875,253
Anglo Platinum Ltd.	461,432		36,836,773
AngloGold Ashanti Ltd.	934,538		48,173,186
AVI Ltd.	3,419,536		9,278,767
Barloworld Ltd.	1,791,180		34,623,044
Bidvest Group Ltd.	2,115,954		35,670,335
Consol Ltd.	3,419,536		7,427,448
Edgars Consolidated Stores Ltd.	3,587,040		19,611,924
FirstRand Ltd.	22,411,804		67,933,822
Foschini Ltd.	6,341,344		58,692,830
Gold Fields Ltd.	2,794,206		61,144,841
Impala Platinum Holdings Ltd.	401,153		68,275,828
Imperial Holdings Ltd.¹	2,039,073		51,230,914
Investec Ltd.	743,725		37,311,325
JD Group Ltd.	2,411,800		35,962,472
Liberty Group Ltd.	1,336,708		18,330,510
Metropolitan Holdings Ltd.	7,512,599		16,232,596
Mittal Steel South Africa Ltd.	3,045,367		30,067,399
MTN Group Ltd.	8,849,776		86,069,872
Nampak Ltd.	5,872,673		15,706,789
Naspers Ltd.	3,321,717		65,984,750
Nedbank Group Ltd.	2,672,897		51,774,720
Network Healthcare Holdings Ltd.¹	14,672,240		19,145,201
Pick’n Pay Stores Ltd.	3,887,246		19,092,037
Reunert Ltd.	1,345,776		13,895,681
Sanlam Ltd.	20,804,944		54,126,410
Sappi Ltd.	347,326		4,396,995
Sasol Ltd.	4,743,712		162,243,908
Shoprite Holdings Ltd.	9,883,441		32,073,022
SPAR Group Ltd. (The)	1,363,708		8,178,822
Standard Bank Group Ltd.	7,555,909		96,769,035
Steinhoff International Holdings Ltd.	1,425,488		4,679,034
Telkom South Africa Ltd.	1,027,079		27,136,828
Tiger Brands Ltd.	1,309,036		32,464,644
Tongaat-Hulett Group Ltd.	1,234,029		18,402,669
Truworths International Ltd.	7,578,579		32,062,392
Woolworths Holdings Ltd.	11,016,532		28,089,322

			1,468,787,110
SOUTH KOREA – 17.29%
Kookmin Bank ADR¹	5,430,592		411,367,344
Korea Electric Power Corp. ADR²	12,576,635		279,327,063
KT Corp. ADR	5,999,600		122,511,832
LG.Philips LCD Co. Ltd. ADR^1,2	4,999,808		110,895,741
POSCO ADR	5,452,640		318,652,282
Samsung Electronics Co. Ltd. GDR⁴	2,232,784		789,847,340
SK Telecom Co. Ltd. ADR²	4,744,694		114,584,360

			2,147,185,962
TAIWAN – 10.18%
AU Optronics Corp. ADR²	13,198,625		209,990,124
Chunghwa Telecom Co. Ltd. ADR	9,353,440		176,780,016
Siliconware Precision Industries Co. ADR²	36,023,896		230,192,695
Taiwan Semiconductor Manufacturing Co. Ltd. ADR	42,599,280		414,490,994
United Microelectronics Corp. ADR²	73,863,344		232,669,533

			1,264,123,362


28		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
THAILAND – 2.70%
Advanced Info Service PCL		6,537,300	$	15,776,466
Aromatics Thailand PCL		8,564,800		6,124,276
Bangkok Bank PCL		7,978,400		25,876,112
Bangkok Expressway PCL		15,791,400		8,952,680
Banpu PCL		2,547,000		9,366,362
Charoen Pokphand Foods PCL		28,000		3,861
Electricity Generating PCL		3,478,800		7,240,467
Kasikornbank PCL		12,140,700		21,393,031
Kiatnakin Bank PCL		6,363,100		6,093,678
Krung Thai Bank PCL		14,514,300		4,596,183
National Finance PCL		15,276,500		5,812,857
PTT Chemical PCL¹		5,182,468		11,249,548
PTT Exploration & Production PCL		2,716,800		36,077,839
PTT PCL		11,532,800		73,629,910
Ratchaburi Electricity Generating Holding PCL		27,995,800		28,419,047
Shin Corp. PCL		10,018,200		12,408,262
Siam Cement PCL		2,547,000		17,301,752
Siam City Cement PCL		509,400		4,188,846
Siam Makro PCL		11,461,500		20,488,917
Thai Airways International PCL		2,374,400		2,577,047
Thai Union Frozen Products PCL		10,188,000		7,935,390
Tisco Bank PCL		6,532,400		4,712,710
United Broadcasting Corp. PCL¹		7,213,300		4,835,516

				335,060,757
TURKEY – 2.02%
Adana Cimento TAS Class A		2,819,784		26,385,196
Akbank TAS		5,414,789		55,198,305
Akcansa Cimento AS		411,476		3,380,708
Arcelik AS		801,492		7,499,697
Dogan Yayin Holding AS¹		2,299,230		11,019,512
Eregli Demir ve Celik Fabrikalari TAS		1,482,828		10,039,687
Hurriyet Gazetecilik ve Matbaacilik AS		1,833,709		7,742,172
Ihlas Holding		8,610,592		5,502,394
Tofas Turk Otomobil Fabrik		5,945,392		19,810,435
Trakya Cam Sanayii AS		1,002,448		4,384,995
Tupras-Turkiye Petrol Rafinerileri AS		731,078		14,043,149

*Security*	Shares or Principal		*Value*
Turk Hava Yollari Anonim Ortakligi¹		2,839,155	$	18,466,927
Turk Sise ve Cam Fabrikalari AS		2,755,152		13,099,810
Turkiye Garanti Bankasi AS¹		6,080,170		27,521,500
Vestel Elektronik Sanayi ve Ticaret AS¹		1,515,629		6,629,796
Yapi ve Kredi Bankasi AS¹		3,449,393		20,205,649

				250,929,932

TOTAL COMMON STOCKS (Cost: $9,201,206,901)				12,104,785,729

PREFERRED STOCKS – 1.69%
BRAZIL – 1.69%
Petroleo Brasileiro SA ADR		2,620,320		209,546,990

				209,546,990

TOTAL PREFERRED STOCKS (Cost: $120,130,211)				209,546,990
EXCHANGE-TRADED FUNDS – 0.56%
iShares MSCI Malaysia Index Fund^2,5		1,214,359		8,901,252
iShares MSCI South Korea Index Fund^2,5		564,961		26,219,840
iShares MSCI Taiwan Index Fund ^2,5		2,713,600		34,299,904

TOTAL EXCHANGE-TRADED FUNDS (Cost: $58,801,342)				69,420,996
SHORT-TERM INVESTMENTS – 6.24%
CERTIFICATES OF DEPOSIT⁶ – 0.08%
Toronto-Dominion Bank
3.94%, 07/10/06	$	3,562,993		3,562,993
Wells Fargo Bank N.A.
4.78%, 12/05/06		5,700,788		5,700,788

				9,263,781
COMMERCIAL PAPER⁶ – 0.21%
Amstel Funding Corp.
4.40%, 05/08/06		3,562,993		3,533,381
CC USA Inc.
4.23%, 04/21/06		2,137,796		2,124,985


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
Edison Asset Securitization LLC
4.37%, 05/08/06	$	3,562,993	$	3,533,582
Galaxy Funding Inc.
4.23%, 04/18/06		2,045,158		2,033,623
Grampian Funding LLC
4.41%, 05/15/06		3,562,993		3,530,258
Nordea North America Inc.
4.16%, 04/04/06		7,482,284		7,452,887
Sigma Finance Inc.
4.16%, 04/06/06		4,275,591		4,257,805

				26,466,521
MEDIUM-TERM NOTES⁶ – 0.19%
Dorada Finance Inc.
3.93%, 07/07/06		2,209,055		2,208,978
K2 USA LLC
3.94%, 07/07/06		4,275,591		4,275,516
Marshall & Ilsley Bank
5.18%, 12/15/06		7,125,985		7,145,402
Toronto-Dominion Bank
3.81%, 06/20/06		8,907,481		8,907,746
US Bank N.A.
2.85%, 11/15/06		1,425,197		1,406,587

				23,944,229
MONEY MARKET FUNDS – 0.12%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^5,7		14,485,808		14,485,808

				14,485,808
REPURCHASE AGREEMENTS⁶ – 1.50%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $10,690,350 (collateralized by non-U.S. Government debt securities, value $11,777,093, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁸	$	10,688,978		10,688,978

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $35,634,448 (collateralized by U.S. Government obligations, value $36,414,252, 3.69% to 10.00%, 5/1/09 to 1/1/36).	$	35,629,925	$	35,629,925
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $17,817,244 (collateralized by non-U.S. Government debt securities, value $18,735,737, 1.01%, 9/19/35). ⁸		17,814,963		17,814,963
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $35,634,438 (collateralized by U.S. Government obligations, value $36,400,860, 4.50% to 7.50%, 9/1/09 to 11/1/35).		35,629,925		35,629,925
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $35,634,587 (collateralized by non-U.S. Government debt securities, value $37,471,473, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁸		35,629,925		35,629,925
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $8,552,258 (collateralized by U.S. Government obligations, value $8,736,386, 3.99% to 5.51%, 7/1/32 to 2/1/36).		8,551,182		8,551,182


30		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $7,126,907 (collateralized by non-U.S. Government debt securities, value $7,351,804, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁸	$	7,125,985	$	7,125,985
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $35,634,488 (collateralized by non-U.S. Government debt securities, value $37,414,435, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁸		35,629,925		35,629,925

				186,700,808
TIME DEPOSITS⁶– 0.42%
KBC Bank
4.57%, 03/01/06		14,251,970		14,251,970
Societe Generale
4.57%, 03/01/06		24,940,948		24,940,948
US Bank N.A.
4.45%, 03/01/06		12,822,996		12,822,996

				52,015,914
VARIABLE & FLOATING RATE NOTES⁶ – 3.72%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁴		20,024,018		20,027,200
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		16,746,065		16,745,965
American Express Centurion Bank
4.57%, 06/29/06		2,850,394		2,850,394
American Express Credit Corp.
4.67%, 02/05/07		2,137,796		2,139,508
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁴		23,159,452		23,165,437
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁴		4,631,890		4,631,890
Bank of Ireland
4.54%, 03/20/07⁴		7,125,985		7,125,985
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁴		9,192,521		9,192,337
BMW US Capital LLC
4.54%, 02/15/07⁴		7,125,985		7,125,985
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁴		19,168,900		19,168,642
Commodore CDO Ltd.
4.56%, 12/12/06⁴		1,781,496		1,781,496
DEPFA Bank PLC
4.50%, 12/15/06		7,125,985		7,125,985
Dorada Finance Inc.
4.52%, 06/26/06⁴		1,781,496		1,781,439
Eli Lilly Services Inc.
4.54%, 09/01/06⁴		7,125,985		7,125,985
Fifth Third Bancorp.
4.55%, 01/23/07⁴		14,251,970		14,251,970
Five Finance Inc.
4.54%, 06/26/06⁴		1,425,197		1,425,151
General Electric Capital Corp.
4.67%, 03/09/07		3,206,693		3,209,107
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		1,781,496		1,781,496
Hartford Life Global Funding Trusts
4.56%, 02/15/07		7,125,985		7,125,985
HBOS Treasury Services PLC
4.57%, 01/24/07⁴		7,125,985		7,125,985
Holmes Financing PLC
4.54%, 12/15/06⁴		19,596,459		19,596,459
HSBC Bank USA N.A.
4.70%, 05/04/06		2,494,095		2,494,451
K2 USA LLC
4.53%, 06/02/06⁴		6,413,387		6,413,223
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁴		7,466,037		7,466,038


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Links Finance LLC
4.56%, 03/15/06⁴	$	5,700,788	$	5,700,816
Marshall & Ilsley Bank
4.55%, 02/15/07		3,919,292		3,919,292
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁴		21,306,695		21,315,465
Mound Financing PLC
4.53%, 11/08/06⁴		14,251,970		14,251,970
Natexis Banques Populaires
4.55%, 03/15/07⁴		5,344,489		5,344,489
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁴		19,240,160		19,240,825
Nordea Bank AB
4.55%, 02/09/07⁴		12,470,474		12,470,474
Northern Rock PLC
4.61%, 02/02/07⁴		8,551,182		8,551,450
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁴		19,382,679		19,382,682
Pfizer Investment Capital PLC
4.53%, 02/15/07⁴		17,814,963		17,814,963
Principal Life Income Funding Trusts
4.70%, 05/10/06		5,344,489		5,344,525
Sedna Finance Inc.
4.54%, 09/20/06⁴		2,137,796		2,137,796
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁴		7,909,843		7,909,698
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁴		7,125,985		7,125,985
Societe Generale
4.54%, 03/02/07⁴		4,988,190		4,988,190
Strips III LLC
4.62%, 07/24/06^4,9		1,838,475		1,838,475
SunTrust Bank
4.62%, 04/28/06		10,688,978		10,688,978
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁴		15,890,947		15,890,183
Toyota Motor Credit Corp.
4.57%, 04/10/06		3,206,693		3,206,688
UniCredito Italiano SpA
4.43%, 06/14/06		9,263,781		9,262,836
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁴		7,125,985		7,125,985
US Bank N.A.
4.54%, 09/29/06		3,206,693		3,206,205
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		10,688,978		10,688,978
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁴		13,599,927		13,599,927
Wells Fargo & Co.
4.56%, 03/15/07⁴		3,562,993		3,563,263
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁴		3,562,993		3,562,807
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁴		7,482,284		7,482,294
Winston Funding Ltd.
4.68%, 04/23/06⁴		5,087,953		5,087,953
World Savings Bank
4.52%, 03/09/06		10,688,978		10,688,965

				462,270,270

TOTAL SHORT-TERM INVESTMENTS (Cost: $775,147,331)				775,147,331

TOTAL INVESTMENTS IN SECURITIES – 105.99% (Cost: $10,155,285,785)				13,158,901,046
Other Assets, Less Liabilities – (5.99)%				(743,184,198	)

NET ASSETS – 100.00%			$	12,415,716,848

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

¹	Non-income earning security.

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

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


32		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI EMERGING MARKETS INDEX FUND

February 28, 2006

⁴	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

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

⁶	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

⁷	The rate quoted is the annualized seven-day yield of the fund at period end.

⁸	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁹	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI HONGKONG INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.88%
AIRLINES – 1.12%
Cathay Pacific Airways Ltd.	4,812,000	$	8,962,049

			8,962,049
APPAREL – 0.93%
Yue Yuen Industrial Holdings Ltd.	2,406,000		7,458,037

			7,458,037
BANKS – 13.51%
Bank of East Asia Ltd.	6,416,100		22,038,507
BOC Hong Kong Holdings Ltd.	16,842,000		33,972,057
Hang Seng Bank Ltd.	3,448,600		46,181,944
Wing Hang Bank Ltd.	802,000		6,186,605

			108,379,113
CHEMICALS – 0.95%
Kingboard Chemical Holdings Co. Ltd.	2,406,000		7,597,585

			7,597,585
DISTRIBUTION & WHOLESALE – 6.26%
Esprit Holdings Ltd.	4,411,000		33,912,620
Li & Fung Ltd.	8,020,000		16,280,538

			50,193,158
DIVERSIFIED FINANCIAL SERVICES – 3.08%
Hong Kong Exchanges & Clearing Ltd.	4,812,000		24,715,408

			24,715,408
ELECTRIC – 9.62%
CLP Holdings Ltd.	8,292,700		47,509,620
Hongkong Electric Holdings Ltd.	6,416,000		29,646,085

			77,155,705
ELECTRICAL COMPONENTS& EQUIPMENT – 0.83%
Johnson Electric Holdings Ltd.	6,817,000		6,677,605

			6,677,605
ENGINEERING & CONSTRUCTION – 2.87%
Cheung Kong Infrastructure Holdings Ltd.	1,604,000		5,054,720
New World Development Co. Ltd.	11,228,800		17,946,050

			23,000,770
GAS – 5.04%
Hong Kong & China Gas Co. Ltd.	16,842,663		40,377,325

			40,377,325
HAND & MACHINE TOOLS – 1.04%
Techtronic Industries Co. Ltd.	4,812,000		8,341,838

			8,341,838
HOLDING COMPANIES - DIVERSIFIED – 18.99%
Hutchison Whampoa Ltd.	9,624,800		91,798,857
Swire Pacific Ltd. Class A	4,133,500		39,663,998
Wharf Holdings Ltd. (The)	5,614,000		20,839,089

			152,301,944
LODGING – 0.96%
Shangri-La Asia Ltd.	4,812,000		7,721,627

			7,721,627
MEDIA – 1.27%
SCMP Group Ltd.	3,208,000		1,188,738
Television Broadcasts Ltd.	1,604,000		9,024,070

			10,212,808
REAL ESTATE – 24.15%
Cheung Kong Holdings Ltd.	6,506,000		68,677,076
Hang Lung Properties Ltd.	8,822,000		15,918,749
Henderson Land Development Co. Ltd.	3,208,000		17,179,844
Hopewell Holdings Ltd.	2,866,000		8,034,323
Hysan Development Co. Ltd.	3,208,000		7,856,006
Kerry Properties Ltd.	2,406,000		7,752,637
Sino Land Co. Ltd.	6,416,000		9,633,944
Sun Hung Kai Properties Ltd.	5,614,000		58,609,939

			193,662,518
REITS – 2.63%
Link REIT (The)¹	9,624,000		21,087,174

			21,087,174
RETAIL – 0.43%
Giordano International Ltd.	6,416,000		3,411,160

			3,411,160
SEMICONDUCTORS – 1.03%
ASM Pacific Technology Ltd.	802,000		4,481,024
Solomon Systech International Ltd.	8,020,000		3,772,950

			8,253,974
TELECOMMUNICATIONS – 2.78%
Hutchinson Telecommunications International Ltd.¹	6,416,000		9,882,028
PCCW Ltd.	16,060,576		11,074,618
SmarTone Telecommunications Holdings Ltd.	1,205,000		1,366,733

			22,323,379


34		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI HONG KONG INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
TEXTILES – 0.31%
Texwinca Holdings Ltd.	3,208,000	$	2,522,191

			2,522,191
TRANSPORTATION – 2.08%
MTR Corp. Ltd.	6,015,083		13,683,594
Orient Overseas International Ltd.	802,200		2,957,076

			16,640,670

TOTAL COMMON STOCKS (Cost: $ 682,065,993)			800,996,038
SHORT-TERM INVESTMENTS – 0.09%
MONEY MARKET FUNDS – 0.09%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^2,3	696,030		696,030

			696,030

TOTAL SHORT-TERM INVESTMENTS (Cost: $ 696,030)			696,030

TOTAL INVESTMENTS IN SECURITIES – 99.97% (Cost: $ 682,762,023)			801,692,068
Other Assets, Less Liabilities – 0.03%			225,268

NET ASSETS – 100.00%		$	801,917,336

¹	Non-income earning security.

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

³	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI MALAYSIA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.88%
AGRICULTURE – 10.04%
British American Tobacco (Malaysia) Bhd	1,005,200	$	11,567,241
Golden Hope Plantations Bhd	3,302,800		3,787,329
Highlands & Lowlands Bhd	1,148,800		1,304,963
IOI Corp. Bhd	4,882,400		18,136,506
Kuala Lumpur Kepong Bhd	1,938,600		4,853,023

			39,649,062
AIRLINES – 1.02%
AirAsia Bhd¹	5,385,000		2,478,695
Malaysian Airline System Bhd	1,938,600		1,565,491

			4,044,186
AUTO MANUFACTURERS – 1.63%
DRB-Hicom Bhd	3,015,600		1,120,196
Oriental Holdings Bhd	1,220,600		1,353,667
Proton Holdings Bhd	1,938,600		2,896,159
Tan Chong Motor Holdings Bhd	2,584,800		1,050,619

			6,420,641
AUTO PARTS & EQUIPMENT – 0.88%
UMW Holdings Bhd	1,795,000		3,478,870

			3,478,870
BANKS – 23.87%
AMMB Holdings Bhd	9,908,400		7,094,575
Bumiputra-Commerce Holdings Bhd	16,381,032		25,574,693
Hong Leong Bank Bhd	3,661,800		5,026,966
Malayan Banking Bhd	13,067,600		39,044,511
Public Bank Bhd	7,898,000		14,244,038
RHB Capital Bhd	4,954,200		3,280,574

			94,265,357
BEVERAGES – 0.38%
Guinness Anchor Bhd	1,005,200		1,501,712

			1,501,712
BUILDING MATERIALS – 2.14%
Lafarge Malayan Cement Bhd	8,831,400		1,771,034
OYL Industries Bhd	5,385,030		6,146,037
WTK Holdings Bhd	502,600		533,040

			8,450,111
CHEMICALS – 0.49%
Malaysian Oxygen Bhd	574,400		1,932,705

			1,932,705
COMMERCIAL SERVICES – 1.77%
PLUS Expressways Bhd	9,693,000		6,992,528

			6,992,528
DIVERSIFIED FINANCIAL SERVICES – 1.61%
Bursa Malaysia Bhd	2,369,400		2,895,579
Hong Leong Credit Bhd	1,579,600		1,777,316
OSK Holdings Bhd	2,297,633		816,386
TA Enterprise Bhd	5,241,400		888,851

			6,378,132
ELECTRIC – 7.21%
Malakoff Bhd	4,164,400		9,864,528
Tenaga Nasional Bhd	7,808,250		18,601,080

			28,465,608
ELECTRONICS – 0.16%
Hong Leong Industries Bhd	718,000		614,600

			614,600
ENGINEERING & CONSTRUCTION – 5.54%
Gamuda Bhd	4,379,800		4,173,484
IJM Corp. Bhd	2,584,800		3,186,645
Malaysia Airports Holdings Bhd	2,154,000		1,188,614
Malaysian Resources Corp. Bhd¹	4,451,600		683,018
MMC Corp. Bhd	2,297,600		1,348,255
Road Builder (Malaysia) Holdings Bhd	2,943,800		1,513,502
Transmile Group Bhd	933,400		3,140,646
YTL Corp. Bhd	4,738,888		6,633,168

			21,867,332
ENTERTAINMENT – 7.37%
Berjaya Sports Toto Bhd	5,241,400		6,433,589
Magnum Corp. Bhd	6,605,600		3,325,026
Resorts World Bhd	3,805,400		13,316,339
Tanjong PLC	1,579,600		6,037,771

			29,112,725
ENVIRONMENTAL CONTROL – 0.19%
Puncak Niaga Holding Bhd	1,077,000		762,452

			762,452


36		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®} MSCI MALAYSIA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
FOOD – 2.00%
Nestle (Malaysia) Bhd	574,400	$	3,834,487
PPB Group Bhd	3,661,866		4,061,074

			7,895,561
GAS – 1.89%
Petronas Gas Bhd	3,087,400		7,479,569

			7,479,569
HOLDING COMPANIES—DIVERSIFIED – 4.48%
Mulpha International Bhd¹	5,959,400		1,130,922
Multi-Purpose Holdings Bhd¹	4,523,400		974,083
Sime Darby Bhd	9,334,000		15,577,604

			17,682,609
INSURANCE – 0.56%
Kurnia Asia Bhd	4,595,200		1,546,164
MAA Holdings Bhd	789,800		676,060

			2,222,224
LODGING – 4.91%
Genting Bhd	3,015,600		19,400,495

			19,400,495
MEDIA – 2.57%
Astro All Asia Networks PLC	3,733,600		4,763,732
Media Prima Bhd¹	3,518,200		1,837,230
New Straits Times Press Bhd	933,400		567,829
Star Publications (Malaysia) Bhd	1,507,800		2,983,131

			10,151,922
METAL FABRICATE & HARDWARE – 0.05%
KrisAssets Holdings Bhd^1,2	282,362		195,837

			195,837
OIL & GAS – 1.33%
Petronas Dagangan Bhd	1,938,600		2,202,124
Shell Refining Co.	1,148,800		3,061,405

			5,263,529
OIL & GAS SERVICES – 0.35%
Scomi Group Bhd	4,236,200		1,391,161

			1,391,161
REAL ESTATE – 2.42%
Bandar Raya Developments Bhd	1,651,400		444,522
IGB Corp. Bhd	5,744,000		1,762,627
IOI Properties Bhd	646,250		1,443,842
KLCC Property Holdings Bhd	3,590,000		2,096,985
MK Land Holdings Bhd	2,800,200		478,635
SP Setia Bhd	3,661,800		3,331,597

			9,558,208
RETAIL – 0.12%
Edaran Otomobil Nasional Bhd	574,400		463,849
			463,849
SEMICONDUCTORS – 0.67%
Malaysian Pacific Industries Bhd	646,200		1,739,435
Unisem (Malaysia) Bhd	1,938,600		918,422

			2,657,857
TELECOMMUNICATIONS – 8.46%
Maxis Communications Bhd	6,749,200		15,805,664
Telekom Malaysia Bhd	6,605,600		17,603,079

			33,408,743
TRANSPORTATION – 5.77%
Malaysia International Shipping Corp. Bhd	7,251,800		18,934,713
Malaysian Bulk Carriers Bhd	1,866,800		1,145,708
POS Malaysia & Services Holdings Bhd	2,369,400		2,716,997

			22,797,418

TOTAL COMMON STOCKS (Cost: $308,621,908)			394,505,003
SHORT-TERM INVESTMENTS – 0.06%
MONEY MARKET FUNDS – 0.06%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^3,4	222,045		222,045

			222,045

TOTAL SHORT-TERM INVESTMENTS (Cost: $222,045)			222,045

TOTAL INVESTMENTS IN SECURITIES – 99.94% (Cost: $308,843,953)			394,727,048
Other Assets, Less Liabilities – 0.06%			235,879

NET ASSETS – 100.00%		$	394,962,927


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI MALAYSIA INDEX FUND

February 28, 2006

¹	Non-income earning security.

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

³	The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁴	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


38		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI MEXICO INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
COMMON STOCKS – 99.86%
BEVERAGES – 8.61%
Coca-Cola Femsa SA de CV ADR		147,600	$	4,513,608
Fomento Economico Mexicano SA de CV Class UBD		2,841,300		24,550,101
Grupo Modelo SA de CV Series C		3,345,600		11,518,848

				40,582,557
BUILDING MATERIALS – 15.41%
Cemex SA de CV Series CPO		11,709,600		72,660,548

				72,660,548
DIVERSIFIED FINANCIAL SERVICES – 3.86%
Grupo Financiero Banorte SA de CV Series O¹		7,441,500		18,221,410

				18,221,410
ENGINEERING & CONSTRUCTION – 1.64%
Carso Infraestructura y Construccion SA²		3,185,700		2,738,271
Grupo Aeroportuario del Sureste SA de CV ADR		147,600		4,980,024

				7,718,295
FOOD – 1.72%
Grupo Bimbo SA Series A¹		2,287,800		8,117,474

				8,117,474
FOREST PRODUCTS & PAPER – 2.19%
Kimberly-Clark de Mexico SA de CV Class A		3,013,500		10,317,808

				10,317,808
HOLDING COMPANIES - DIVERSIFIED – 4.69%
Alfa SA de CV Class A		1,414,500		7,546,561
Grupo Carso SA de CV Series A1		5,744,100		14,542,929

				22,089,490
HOME BUILDERS – 3.48%
Corporacion GEO SA de CV Series B²		2,361,600		9,287,032
Urbi Desarrollos Urbanos SA de CV²		934,800		7,135,939

				16,422,971
HOUSEWARES – 0.33%
Vitro SA de CV Series A¹		1,414,569		1,577,011

				1,577,011

*Security*	Shares or Principal		*Value*
MEDIA – 5.68%
Grupo Televisa SA Series CPO		5,658,000	$	22,536,897
TV Azteca SA de CV Series CPO¹		6,678,900		4,233,801

				26,770,698
MINING – 3.17%
Grupo Mexico SA de CV Series B		4,747,800		12,183,914
Industrias Penoles SA de CV Series CP		430,500		2,748,315

				14,932,229
REAL ESTATE – 1.76%
Consorcio Ara SA de CV		1,943,400		8,300,229

				8,300,229
RETAIL – 7.45%
Controladora Comercial Mexicana SA de CV		2,681,400		4,860,846
Grupo Sanborns SA Series B1^1,2		1,236,193		2,683,021
Organizacion Soriana SA de CV Series B²		1,114,626		4,932,129
Wal-Mart de Mexico SA de CV Series V¹		7,908,900		22,670,423

				35,146,419
TELECOMMUNICATIONS – 39.87%
America Movil SA de CV Series L		66,862,800		116,222,537
America Telecom SA de CV Series A1^1,2		3,148,800		18,331,710
Carso Global Telecom SA de CV Class A1^1,2		4,458,873		10,662,295
Telefonos de Mexico SA de CV Series L¹		38,019,300		42,785,094

				188,001,636

TOTAL COMMON STOCKS (Cost: $386,304,062)				470,858,775
SHORT-TERM INVESTMENTS – 6.72%
CERTIFICATES OF DEPOSIT³ – 0.08%
Toronto-Dominion Bank
3.94%, 07/10/06	$	146,682		146,682
Wells Fargo Bank N.A.
4.78%, 12/05/06		234,689		234,689

				381,371


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI MEXICO INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
COMMERCIAL PAPER³– 0.23%
Amstel Funding Corp.
4.40%, 05/08/06	$	146,681	$	145,462
CC USA Inc.
4.23%, 04/21/06		88,008		87,481
Edison Asset Securitization LLC
4.37%, 05/08/06		146,681		145,470
Galaxy Funding Inc.
4.23%, 04/18/06		84,195		83,720
Grampian Funding LLC
4.41%, 05/15/06		146,681		145,333
Nordea North America Inc.
4.16%, 04/04/06		308,030		306,820
Sigma Finance Inc.
4.16%, 04/06/06		176,017		175,285

				1,089,571
MEDIUM-TERM NOTES³– 0.21%
Dorada Finance Inc.
3.93%, 07/07/06		90,942		90,939
K2 USA LLC
3.94%, 07/07/06		176,017		176,014
Marshall & Ilsley Bank
5.18%, 12/15/06		293,361		294,161
Toronto-Dominion Bank
3.81%, 06/20/06		366,702		366,713
US Bank N.A.
2.85%, 11/15/06		58,672		57,906

				985,733
MONEY MARKET FUNDS – 0.08%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		367,620		367,620

				367,620
REPURCHASE AGREEMENTS³– 1.63%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $440,098 (collateralized by non-U.S. Government debt securities, value $484,838, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	440,042		440,042

*Security*	*Principal*		*Value*
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $1,466,993 (collateralized by U.S. Government obligations, value $1,499,096, 3.69% to 10.00%, 5/1/09 to 1/1/36).	$	1,466,807	$	1,466,807
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $733,498 (collateralized by non-U.S. Government debt securities, value $771,310, 1.01%, 9/19/35). ⁶		733,404		733,404
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $1,466,993 (collateralized by U.S. Government obligations, value $1,498,545, 4.50% to 7.50%, 9/1/09 to 11/1/35).		1,466,807		1,466,807
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $1,466,999 (collateralized by non-U.S. Government debt securities, value $1,542,620, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		1,466,807		1,466,807
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $352,078 (collateralized by U.S. Government obligations, value $359,658, 3.99% to 5.51%, 7/1/32 to 2/1/36).		352,034		352,034
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $293,399 (collateralized by non-U.S. Government debt securities, value $302,658, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		293,361		293,361


40		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI MEXICO INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $ 1,466,995 (collateralized by non-U.S. Government debt securities, value $1,540,272, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶	$	1,466,807	$	1,466,807

				7,686,069
TIME DEPOSITS³– 0.45%
KBC Bank
4.57%, 03/01/06		586,723		586,723
Societe Generale
4.57%, 03/01/06		1,026,765		1,026,765
US Bank N.A.
4.45%, 03/01/06		527,895		527,895

				2,141,383
VARIABLE & FLOATING RATE NOTES³– 4.04%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		824,346		824,477
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		689,399		689,395
American Express Centurion Bank
4.57%, 06/29/06		117,345		117,345
American Express Credit Corp.
4.67%, 02/05/07		88,008		88,079
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		953,425		953,672
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/077		190,685		190,685
Bank of Ireland
4.54%, 03/20/07⁷		293,361		293,361
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		378,436		378,429
BMW US Capital LLC
4.54%, 02/15/07⁷		293,361		293,361
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		789,142		789,131
Commodore CDO Ltd.
4.56%, 12/12/06⁷		73,340		73,340
DEPFA Bank PLC
4.50%, 12/15/06		293,361		293,361
Dorada Finance Inc.
4.52%, 06/26/06⁷		73,340		73,338
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		293,361		293,361
Fifth Third Bancorp.
4.55%, 01/23/07⁷		586,723		586,723
Five Finance Inc.
4.54%, 06/26/06⁷		58,672		58,670
General Electric Capital Corp.
4.67%, 03/09/07		132,013		132,112
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		73,340		73,340
Hartford Life Global Funding Trusts
4.56%, 02/15/07		293,361		293,361
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		293,361		293,361
Holmes Financing PLC
4.54%, 12/15/06⁷		806,744		806,744
HSBC Bank USA N.A.
4.70%, 05/04/06		102,677		102,691
K2 USA LLC
4.53%, 06/02/06⁷		264,025		264,019
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		307,361		307,360
Links Finance LLC
4.56%, 03/15/06⁷		234,689		234,690
Marshall & Ilsley Bank
4.55%, 02/15/07		161,349		161,349
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		877,151		877,512
Mound Financing PLC
4.53%, 11/08/06⁷		586,723		586,723


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI MEXICO INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Natexis Banques Populaires
4.55%, 03/15/07⁷	$	220,021	$	220,021
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		792,076		792,103
Nordea Bank AB
4.55%, 02/09/07⁷		513,383		513,383
Northern Rock PLC
4.61%, 02/02/07⁷		352,034		352,045
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		797,943		797,943
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		733,404		733,404
Principal Life Income Funding Trusts
4.70%, 05/10/06		220,021		220,023
Sedna Finance Inc.
4.54%, 09/20/06⁷		88,008		88,008
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		325,631		325,625
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		293,361		293,361
Societe Generale
4.54%, 03/02/07⁷		205,353		205,353
Strips III LLC
4.62%, 07/24/06^7,8		75,686		75,686
SunTrust Bank
4.62%, 04/28/06		440,042		440,042
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		654,196		654,165
Toyota Motor Credit Corp.
4.57%, 04/10/06		132,013		132,012
UniCredito Italiano SpA
4.43%, 06/14/06		381,370		381,331
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		293,361		293,361
US Bank N.A.
4.54%, 09/29/06		132,013		131,993
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		440,042		440,042
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		559,880		559,879
Wells Fargo & Co.
4.56%, 03/15/07⁷		146,681		146,692
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		146,681		146,673
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		308,030		308,031
Winston Funding Ltd.
4.68%, 04/23/06⁷		209,460		209,460
World Savings Bank
4.52%, 03/09/06		440,042		440,042

				19,030,668

TOTAL SHORT-TERM INVESTMENTS (Cost: $31,682,415)				31,682,415

TOTAL INVESTMENTS IN SECURITIES – 106.58% (Cost: $417,986,477)				502,541,190
Other Assets, Less Liabilities – (6.58)%				(31,025,132	)

NET ASSETS – 100.00%			$	471,516,058

ADR – American Depositary Receipts

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


42		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.36%
AUSTRALIA – 65.73%
Alinta Ltd.	525,186	$	4,338,295
Alumina Ltd.	2,624,856		13,532,128
Amcor Ltd.	1,823,115		10,075,999
AMP Ltd.	4,061,868		25,949,284
Ansell Ltd.	325,780		2,662,062
APN News & Media Ltd.	719,938		2,540,328
Aristocrat Leisure Ltd.¹	671,787		6,013,396
Australia & New Zealand Banking Group Ltd.	3,968,251		75,817,808
Australian Gas Light Co. Ltd.	981,636		13,964,339
Australian Stock Exchange Ltd.	211,578		5,101,761
AXA Asia Pacific Holdings Ltd.	1,912,615		8,311,598
Babcock & Brown Ltd.	323,990		4,170,915
BHP Billiton Ltd.	7,811,202		140,711,871
Billabong International Ltd.	287,653		3,316,361
BlueScope Steel Ltd.	825,418		4,046,868
Boral Ltd.	1,297,929		8,475,024
Brambles Industries Ltd.¹	2,121,866		15,841,093
Caltex Australia Ltd.	295,708		3,778,267
Centro Properties Group	1,709,271		8,634,177
Challenger Financial Services Group Ltd.	921,134		2,661,789
Coca-Cola Amatil Ltd.	1,154,192		6,044,610
Cochlear Ltd.	115,097		4,189,490
Coles Myer Ltd.	2,603,913		18,994,991
Commonwealth Bank of Australia	2,780,049		92,622,399
Commonwealth Property Office Fund	3,973,621		3,984,936
Computershare Ltd.	869,224		4,371,410
CSL Ltd.	401,139		15,703,868
CSR Ltd.	2,043,464		5,798,711
DB RREEF Trust	5,754,850		6,027,736
DCA Group Ltd.¹	910,752		2,374,698
Downer EDI Ltd.	610,390		3,559,411
Foster’s Group Ltd.	4,348,805		17,573,973
Futuris Corp. Ltd.	1,263,024		2,214,240
Gandel Retail Trust	3,296,643		4,775,377
GPT Group	3,987,583		12,293,031
Harvey Norman Holdings Ltd.	901,623		2,344,197
Iluka Resources Ltd.	513,372		2,722,899
ING Industrial Fund	1,869,476		3,180,215
Insurance Australia Group Ltd.	3,543,126		14,186,540
Investa Property Group	3,671,469		5,481,975
James Hardie Industries NV	1,018,331		6,717,429
John Fairfax Holdings Ltd.	2,124,551		6,265,544
Leighton Holdings Ltd.	286,937		3,883,614
Lend Lease Corp. Ltd.	789,927		7,822,008
Lion Nathan Ltd.	668,028		3,969,957
Macquarie Airports	1,381,164		3,313,972
Macquarie Bank Ltd.	499,231		23,819,936
Macquarie Communications Infrastructure Group	708,874		2,985,749
Macquarie Goodman Group	2,560,058		9,603,782
Macquarie Infrastructure Group	5,180,081		13,468,081
Macquarie Office Trust	2,400,032		2,415,780
Mayne Pharma Ltd.²	1,442,112		2,967,426
Mirvac Group	1,995,313		6,240,139
Multiplex Group	1,506,106		3,535,442
National Australia Bank Ltd.	3,407,802		92,854,896
Newcrest Mining Ltd.	718,685		11,318,153
OneSteel Ltd.	1,313,681		3,766,850
Orica Ltd.	684,459		11,689,274
Origin Energy Ltd.	1,784,272		9,145,581
Pacific Brands Ltd.	1,274,480		2,149,117
PaperlinX Ltd.	1,056,458		2,668,285
Patrick Corp. Ltd.	1,457,776		7,417,926
Perpetual Ltd.	86,994		4,394,398
Publishing & Broadcasting Ltd.	299,467		3,790,703
Qantas Airways Ltd.	1,917,985		5,841,578
QBE Insurance Group Ltd.	1,674,724		25,752,223
Rinker Group Ltd.	2,026,459		26,930,802
Rio Tinto Ltd.	623,994		33,003,617
Santos Ltd.	1,305,268		10,976,079
SFE Corp. Ltd.	288,906		2,744,911
Sonic Healthcare Ltd.	554,005		6,391,257
Stockland Trust Group	2,907,318		14,534,789
Suncorp-Metway Ltd.	1,189,813		18,083,624
Symbion Health Ltd.	1,375,257		3,422,392
TABCORP Holdings Ltd.	1,184,801		13,369,166
Telstra Corp. Ltd.	4,360,619		12,471,250
Toll Holdings Ltd.	547,919		4,754,013


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Transurban Group	1,756,885	$	9,318,428
UNiTAB Ltd.	254,717		2,605,512
Wesfarmers Ltd.	830,202		22,571,789
Westfield Group	3,214,303		42,501,861
Westpac Banking Corp. Ltd.	3,966,640		69,569,663
Woodside Petroleum Ltd.	1,011,529		30,424,766
Woolworths Ltd.	2,506,358		34,258,004

			1,224,117,836
HONG KONG – 20.86%
ASM Pacific Technology Ltd.	447,500		2,500,322
Bank of East Asia Ltd.	3,186,200		10,944,202
BOC Hong Kong Holdings Ltd.	8,144,500		16,428,299
Cathay Pacific Airways Ltd.	2,506,000		4,667,268
Cheung Kong Holdings Ltd.	3,222,000		34,011,303
Cheung Kong Infrastructure Holdings Ltd.¹	895,000		2,820,433
CLP Holdings Ltd.	3,938,000		22,561,154
Esprit Holdings Ltd.	2,148,000		16,514,239
Giordano International Ltd.	3,580,000		1,903,359
Hang Lung Properties Ltd.	4,117,736		7,430,198
Hang Seng Bank Ltd.	1,682,600		22,532,546
Henderson Land Development Co. Ltd.	1,611,000		8,627,409
Hong Kong & China Gas Co. Ltd.	7,876,836		18,883,330
Hong Kong Exchanges & Clearing Ltd.	2,148,000		11,032,564
Hongkong Electric Holdings Ltd.	3,043,000		14,060,636
Hopewell Holdings Ltd.	1,432,000		4,014,358
Hutchinson Telecommunications International Ltd.²	3,043,000		4,686,879
Hutchison Whampoa Ltd.	4,654,000		44,388,650
Hysan Development Co. Ltd.	1,432,000		3,506,796
Johnson Electric Holdings Ltd.	2,506,000		2,454,757
Kerry Properties Ltd.¹	1,074,000		3,460,654
Kingboard Chemical Holdings Co. Ltd.	1,163,500		3,674,061
Li & Fung Ltd.	3,938,000		7,994,110
Link REIT (The)²	4,654,000		10,197,393
MTR Corp. Ltd.	2,864,000		6,515,257
New World Development Co. Ltd.	5,012,941		8,011,763
Noble Group Ltd.	2,148,000		1,616,482
Orient Overseas International Ltd.	537,000		1,979,494
PCCW Ltd.	8,413,845		5,801,792
SCMP Group Ltd.	2,148,000		795,950
Shangri-La Asia Ltd.	2,506,000		4,021,280
Sino Land Co. Ltd.¹	3,222,000		4,837,994
SmarTone Telecommunications Holdings Ltd.	716,000		812,100
Solomon Systech International Ltd.	5,012,000		2,357,859
Sun Hung Kai Properties Ltd.	2,864,000		29,900,047
Swire Pacific Ltd. Class A	2,058,500		19,752,834
Techtronic Industries Co. Ltd.	984,000		1,705,812
Television Broadcasts Ltd.	716,000		4,028,201
Texwinca Holdings Ltd.	1,432,000		1,125,866
Wharf Holdings Ltd. (The)	2,685,000		9,966,683
Wing Hang Bank Ltd.	358,000		2,761,602
Yue Yuen Industrial Holdings Ltd.	1,074,000		3,329,149

			388,615,085
NEW ZEALAND – 2.14%
Auckland International Airport Ltd.	2,329,864		2,884,232
Contact Energy Ltd.	604,662		2,878,058
Fisher & Paykel Appliances Holdings Ltd.	483,121		1,253,718
Fisher & Paykel Healthcare Corp. Ltd.	1,024,059		2,562,564
Fletcher Building Ltd.	1,015,825		5,299,112
Kiwi Income Property Trust	1,564,160		1,315,052
Sky City Entertainment Group Ltd.	926,146		3,065,543
Sky Network Television Ltd. New²	424,236		1,774,935
Telecom Corp. of New Zealand Ltd.	4,296,000		15,044,506
Tower Ltd.²	702,396		995,070
Vector Ltd.²	549,943		939,281
Warehouse Group Ltd. (The)	360,685		916,890
Waste Management NZ Ltd.	232,879		994,370

			39,923,331
SINGAPORE – 10.63%
Allgreen Properties Ltd.	1,074,000		907,615
Ascendas Real Estate Investment Trust	1,969,000		2,623,471
Capitaland Ltd.	2,327,000		6,028,684
CapitaMall Trust Management Ltd.	1,432,000		2,058,144
Chartered Semiconductor Manufacturing Ltd.²	2,148,000		1,788,730
City Developments Ltd.	1,074,000		6,293,681


44		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*		*Value*
ComfortDelGro Corp. Ltd.		3,938,000	$	4,008,081
COSCO Corp. (Singapore) Ltd.		1,790,000		1,313,944
Creative Technology Ltd.		170,050		1,332,162
Datacraft Asia Ltd.²		537,000		622,920
DBS Group Holdings Ltd.		2,506,000		25,351,386
Fraser & Neave Ltd.		358,830		4,227,649
Haw Par Corp. Ltd.		358,397		1,260,132
Jardine Cycle & Carriage Ltd.		179,000		1,137,279
Keppel Corp. Ltd.		1,253,000		10,820,713
Keppel Land Ltd.		716,000		1,952,145
Neptune Orient Lines Ltd.		509,000		791,216
Olam International Ltd.		1,432,000		1,625,315
Oversea-Chinese Banking Corp.		5,562,600		23,332,622
Overseas Union Enterprise Ltd.		179,000		1,313,944
Parkway Holdings Ltd.		1,315,000		1,987,324
SembCorp Industries Ltd.		1,969,240		3,789,920
SembCorp Marine Ltd.		1,074,000		1,941,104
Singapore Airlines Ltd.		1,253,000		11,439,040
Singapore Exchange Ltd.		1,611,000		3,796,083
Singapore Land Ltd.		358,000		1,347,068
Singapore Petroleum Co. Ltd.		179,000		557,598
Singapore Post Ltd.		3,222,000		2,404,848
Singapore Press Holdings Ltd.		3,580,517		9,806,308
Singapore Technologies Engineering Ltd.		2,864,000		5,370,607
Singapore Telecommunications Ltd.		14,678,871		23,632,516
SMRT Corp. Ltd.		1,432,000		971,656
STATS ChipPAC Ltd.²		3,043,000		2,139,851
Suntec REIT		716,000		525,578
United Overseas Bank Ltd.		2,506,000		23,187,243
United Overseas Land Ltd.		1,146,000		1,887,438
Venture Corp. Ltd.		358,000		2,892,885
Want Want Holdings Ltd.		358,000		451,080
Wing Tai Holdings Ltd.		1,074,333		994,047

				197,912,027

TOTAL COMMON STOCKS (Cost: $1,432,759,855)				1,850,568,279

*Security*	Shares or Principal		*Value*
SHORT-TERM INVESTMENTS – 0.46%
CERTIFICATES OF DEPOSIT³– 0.01%
Toronto-Dominion Bank
3.94%, 07/10/06	$	39,772	$	39,772
Wells Fargo Bank N.A.
4.78%, 12/05/06		63,627		63,627

				103,399
COMMERCIAL PAPER³– 0.02%
Amstel Funding Corp.
4.40%, 05/08/06		39,767		39,437
CC USA Inc.
4.23%, 04/21/06		23,860		23,717
Edison Asset Securitization LLC
4.37%, 05/08/06		39,767		39,439
Galaxy Funding Inc.
4.23%, 04/18/06		22,826		22,698
Grampian Funding LLC
4.41%, 05/15/06		39,767		39,402
Nordea North America Inc.
4.16%, 04/04/06		83,511		83,183
Sigma Finance Inc.
4.16%, 04/06/06		47,721		47,522

				295,398
MEDIUM-TERM NOTES³– 0.01%
Dorada Finance Inc.
3.93%, 07/07/06		24,656		24,655
K2 USA LLC
3.94%, 07/07/06		47,721		47,720
Marshall & Ilsley Bank
5.18%, 12/15/06		79,534		79,751
Toronto-Dominion Bank
3.81%, 06/20/06		99,418		99,421
US Bank N.A.
2.85%, 11/15/06		15,907		15,699

				267,246
MONEY MARKET FUNDS – 0.00%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		18,881		18,881

				18,881


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
REPURCHASE AGREEMENTS³– 0.11%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $119,316 (collateralized by non-U.S. Government debt securities, value $131,446, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	119,301	$	119,301
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $397,721 (collateralized by U.S. Government obligations, value $ 406,425, 3.69% to 10.00%, 5/1/09 to 1/1/36).		397,671		397,671
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $198,861 (collateralized by non-U.S. Government debt securities, value $209,113, 1.01%, 9/19/35).⁶		198,836		198,836
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $397,721 (collateralized by U.S. Government obligations, value $ 406,276, 4.50% to 7.50%, 9/1/09 to 11/1/35).		397,671		397,671
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $397,723 (collateralized by non-U.S. Government debt securities, value $418,225, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		397,671		397,671
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $95,453 (collateralized by U.S. Government obligations, value $97,508, 3.99% to 5.51%, 7/1/32 to 2/1/36).		95,441		95,441
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $79,544 (collateralized by non-U.S. Government debt securities, value $82,055, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		79,534		79,534
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $ 397,722 (collateralized by non-U.S. Government debt securities, value $417,589, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		397,671		397,671

				2,083,796
TIME DEPOSITS³– 0.03%
KBC Bank
4.57%, 03/01/06		159,069		159,069
Societe Generale
4.57%, 03/01/06		278,370		278,370
US Bank N.A.
4.45%, 03/01/06		143,120		143,120

				580,559
VARIABLE & FLOATING RATE NOTES³– 0.28%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		223,491		223,527
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		186,906		186,905
American Express Centurion Bank
4.57%, 06/29/06		31,814		31,814
American Express Credit Corp.
4.67%, 02/05/07		23,860		23,879


46		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷	$	258,486	$	258,553
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		51,697		51,697
Bank of Ireland
4.54%, 03/20/07⁷		79,534		79,534
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		102,599		102,598
BMW US Capital LLC
4.54%, 02/15/07⁷		79,534		79,534
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		213,947		213,945
Commodore CDO Ltd.
4.56%, 12/12/06⁷		19,884		19,884
DEPFA Bank PLC
4.50%, 12/15/06		79,534		79,534
Dorada Finance Inc.
4.52%, 06/26/06⁷		19,884		19,883
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		79,534		79,534
Fifth Third Bancorp.
4.55%, 01/23/07⁷		159,069		159,069
Five Finance Inc.
4.54%, 06/26/06⁷		15,907		15,906
General Electric Capital Corp.
4.67%, 03/09/07		35,790		35,817
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		19,884		19,884
Hartford Life Global Funding Trusts
4.56%, 02/15/07		79,534		79,534
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		79,534		79,534
Holmes Financing PLC
4.54%, 12/15/06⁷		218,719		218,719
HSBC Bank USA N.A.
4.70%, 05/04/06		27,837		27,841
K2 USA LLC
4.53%, 06/02/06⁷		71,581		71,579
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		83,330		83,329
Links Finance LLC
4.56%, 03/15/06⁷		63,627		63,628
Marshall & Ilsley Bank
4.55%, 02/15/07		43,744		43,744
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		237,808		237,905
Mound Financing PLC
4.53%, 11/08/06⁷		159,069		159,069
Natexis Banques Populaires
4.55%, 03/15/07⁷		59,651		59,651
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		214,743		214,750
Nordea Bank AB
4.55%, 02/09/07⁷		139,185		139,185
Northern Rock PLC
4.61%, 02/02/07⁷		95,441		95,444
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		216,333		216,333
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		198,836		198,836
Principal Life Income Funding Trusts
4.70%, 05/10/06		59,651		59,651
Sedna Finance Inc.
4.54%, 09/20/06⁷		23,860		23,860
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		88,283		88,281
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		79,534		79,534
Societe Generale
4.54%, 03/02/07⁷		55,674		55,674
Strips III LLC
4.62%, 07/24/06^7,8		20,520		20,520
SunTrust Bank
4.62%, 04/28/06		119,301		119,301


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷	$	177,361	$	177,353
Toyota Motor Credit Corp.
4.57%, 04/10/06		35,790		35,790
UniCredito Italiano SpA
4.43%, 06/14/06		103,395		103,384
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		79,534		79,534
US Bank N.A.
4.54%, 09/29/06		35,790		35,785
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		119,301		119,301
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		151,791		151,791
Wells Fargo & Co.
4.56%, 03/15/07⁷		39,767		39,770
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		39,767		39,765
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		83,511		83,511
Winston Funding Ltd.
4.68%, 04/23/06⁷		56,787		56,787
World Savings Bank
4.52%, 03/09/06		119,301		119,301

				5,159,471

TOTAL SHORT-TERM INVESTMENTS (Cost: $8,508,750)				8,508,750

TOTAL INVESTMENTS IN SECURITIES – 99.82% (Cost: $1,441,268,605)				1,859,077,029
Other Assets, Less Liabilities – 0.18%				3,331,107

NET ASSETS – 100.00%			$	1,862,408,136

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


48		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^{^®}MSCI SINGAPORE INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.85%
AIRLINES – 4.92%
Singapore Airlines Ltd.	2,635,000	$	24,055,763

			24,055,763
BANKS – 35.14%
DBS Group Holdings Ltd.	5,930,000		59,989,513
Oversea-Chinese Banking Corp.	13,133,000		55,087,068
United Overseas Bank Ltd.	6,143,000		56,839,281

			171,915,862
BEVERAGES – 2.75%
Fraser & Neave Ltd.	1,142,000		13,454,770

			13,454,770
COMPUTERS – 0.50%
Creative Technology Ltd.	314,050		2,460,251

			2,460,251
DISTRIBUTION & WHOLESALE – 0.74%
Jardine Cycle & Carriage Ltd.	571,000		3,627,857

			3,627,857
DIVERSIFIED FINANCIAL SERVICES – 1.93%
Singapore Exchange Ltd.	3,997,000		9,418,339

			9,418,339
ELECTRONICS – 1.89%
Venture Corp. Ltd.	1,142,000		9,228,140

			9,228,140
ENGINEERING & CONSTRUCTION – 4.42%
SembCorp Industries Ltd.	4,568,000		8,791,389
Singapore Technologies Engineering Ltd.	6,852,000		12,848,953

			21,640,342
FOOD – 1.38%
Olam International Ltd.	3,426,000		3,888,499
Want Want Holdings Ltd.	2,284,000		2,877,840

			6,766,339
HEALTH CARE – SERVICES – 0.88%
Parkway Holdings Ltd.	2,855,000		4,314,684

			4,314,684
HOLDING COMPANIES – DIVERSIFIED – 6.10%
Haw Par Corp. Ltd.	571,000		2,007,649
Keppel Corp. Ltd.	2,775,000		23,964,470
Noble Group Ltd.¹	5,139,000		3,867,366

			29,839,485
LODGING – 0.86%
Overseas Union Enterprise Ltd.	571,000		4,191,407

			4,191,407
MEDIA – 4.68%
Singapore Press Holdings Ltd.	8,364,000		22,907,294

			22,907,294
OIL & GAS – 0.37%
Singapore Petroleum Co. Ltd.	571,000		1,778,707

			1,778,707
REAL ESTATE – 9.72%
Allgreen Properties Ltd.	2,284,000		1,930,161
Capitaland Ltd.	5,710,000		14,793,202
City Developments Ltd.	2,569,000		15,054,437
Keppel Land Ltd.	1,713,000		4,670,425
Singapore Land Ltd.	1,142,000		4,297,073
United Overseas Land Ltd.	2,855,000		4,702,125
Wing Tai Holdings Ltd.	2,284,000		2,113,315

			47,560,738
REAL ESTATE INVESTMENT TRUSTS – 3.43%
Ascendas Real Estate Investment Trust	5,139,000		6,847,139
CapitaMall Trust Management Ltd.	4,568,000		6,565,364
Suntec REIT	4,568,000		3,353,126

			16,765,629
SEMICONDUCTORS – 1.86%
Chartered Semiconductor Manufacturing Ltd.^1,2	5,139,000		4,279,462
STATS ChipPAC Ltd.²	6,852,000		4,818,357

			9,097,819
SHIPBUILDING – 1.06%
SembCorp Marine Ltd.	2,855,000		5,160,010

			5,160,010
TELECOMMUNICATIONS – 11.92%
Datacraft Asia Ltd.²	1,142,000		1,324,720
Singapore Telecommunications Ltd.	35,402,650		56,997,142

			58,321,862


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Unaudited) (Continued)

iSHARES^{^®}MSCI SINGAPORE INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
TRANSPORTATION – 5.30%
ComfortDelGro Corp. Ltd.		9,136,000	$	9,298,584
COSCO Corp. (Singapore) Ltd.		3,997,000		2,933,985
Neptune Orient Lines Ltd.		2,855,000		4,437,961
SembCorp Logistics Ltd.		1,713,660		1,828,721
Singapore Post Ltd.		6,852,000		5,114,221
SMRT Corp. Ltd.		3,426,000		2,324,646

				25,938,118

TOTAL COMMON STOCKS (Cost: $396,979,530)				488,443,416
SHORT-TERM INVESTMENTS – 0.31%
CERTIFICATES OF DEPOSIT³– 0.00%
Toronto-Dominion Bank
3.94%, 07/10/06		6,139		6,139
Wells Fargo Bank N.A.
4.78%, 12/05/06		9,822		9,822

				15,961
COMMERCIAL PAPER³– 0.01%
Amstel Funding Corp.
4.40%, 05/08/06		6,139		6,088
CC USA Inc.
4.23%, 04/21/06		3,683		3,661
Edison Asset Securitization LLC
4.37%, 05/08/06		6,139		6,088
Galaxy Funding Inc.
4.23%, 04/18/06		3,524		3,504
Grampian Funding LLC
4.41%, 05/15/06		6,139		6,082
Nordea North America Inc.
4.16%, 04/04/06		12,891		12,841
Sigma Finance Inc.
4.16%, 04/06/06		7,367		7,336

				45,600
MEDIUM-TERM NOTES³– 0.01%
Dorada Finance Inc.
3.93%, 07/07/06		3,806		3,806
K2 USA LLC
3.94%, 07/07/06		7,367		7,366
Marshall & Ilsley Bank
5.18%, 12/15/06		12,278		12,311
Toronto-Dominion Bank
3.81%, 06/20/06		15,347		15,347
US Bank N.A.
2.85%, 11/15/06		2,456		2,423

				41,253
MONEY MARKET FUNDS – 0.04%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		220,334		220,334

				220,334
REPURCHASE AGREEMENTS³– 0.07%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $18,418 (collateralized by non-U.S. Government debt securities, value $20,291, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	18,416		18,416
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $61,396 (collateralized by U.S. Government obligations, value $ 62,739, 3.69% to 10.00%, 5/1/09 to 1/1/36).		61,388		61,388
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $30,698 (collateralized by non-U.S. Government debt securities, value $32,280, 1.01%, 9/19/35).⁶		30,694		30,694
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $61,396 (collateralized by U.S. Government obligations, value $62,716, 4.50% to 7.50%, 9/1/09 to 11/1/35).		61,388		61,388


50		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $61,396 (collateralized by non-U.S. Government debt securities, value $64,561, 0.00% to 10.00%, 8/15/07 to 2/1/16).6	$	61,388	$	61,388
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $14,735 (collateralized by U.S. Government obligations, value $ 15,052, 3.99% to 5.51%, 7/1/32 to 2/1/36).		14,733		14,733
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $12,280 (collateralized by non-U.S. Government debt securities, value $12,667, 0.00% to 7.88%, 5/15/08 to 1/15/16).6		12,278		12,278
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $ 61,396 (collateralized by non-U.S. Government debt securities, value $64,462, 0.00% to 7.16%, 3/1/06 to 3/25/35).6		61,388		61,388

				321,673
TIME DEPOSITS³ – 0.02%
KBC Bank
4.57%, 03/01/06		24,555		24,555
Societe Generale
4.57%, 03/01/06		42,971		42,971
US Bank N.A.
4.45%, 03/01/06		22,093		22,093

				89,619
VARIABLE & FLOATING RATE NOTES³ – 0.16%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		34,500		34,506
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		28,852		28,851
American Express Centurion Bank
4.57%, 06/29/06		4,911		4,911
American Express Credit Corp.
4.67%, 02/05/07		3,683		3,686
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		39,902		39,913
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		7,980		7,980
Bank of Ireland
4.54%, 03/20/07⁷		12,278		12,278
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		15,838		15,838
BMW US Capital LLC
4.54%, 02/15/07⁷		12,278		12,278
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		33,027		33,025
Commodore CDO Ltd.
4.56%, 12/12/06⁷		3,069		3,069
DEPFA Bank PLC
4.50%, 12/15/06		12,278		12,278
Dorada Finance Inc.
4.52%, 06/26/06⁷		3,069		3,069
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		12,278		12,278
Fifth Third Bancorp.
4.55%, 01/23/07⁷		24,555		24,555
Five Finance Inc.
4.54%, 06/26/06⁷		2,456		2,455
General Electric Capital Corp.
4.67%, 03/09/07		5,525		5,529
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		3,069		3,069
Hartford Life Global Funding Trusts
4.56%, 02/15/07		12,278		12,278
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		12,278		12,278


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Holmes Financing PLC
4.54%, 12/15/06⁷	$	33,763	$	33,763
HSBC Bank USA N.A.
4.70%, 05/04/06		4,297		4,298
K2 USA LLC
4.53%, 06/02/06⁷		11,050		11,049
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷		12,863		12,863
Links Finance LLC
4.56%, 03/15/06⁷		9,822		9,822
Marshall & Ilsley Bank
4.55%, 02/15/07		6,753		6,753
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		36,710		36,725
Mound Financing PLC
4.53%, 11/08/06⁷		24,555		24,555
Natexis Banques Populaires
4.55%, 03/15/07⁷		9,208		9,208
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		33,149		33,151
Nordea Bank AB
4.55%, 02/09/07⁷		21,486		21,486
Northern Rock PLC
4.61%, 02/02/07⁷		14,733		14,733
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		33,395		33,394
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		30,694		30,694
Principal Life Income Funding Trusts
4.70%, 05/10/06		9,208		9,208
Sedna Finance Inc.
4.54%, 09/20/06⁷		3,683		3,683
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		13,628		13,627
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		12,278		12,278
Societe Generale
4.54%, 03/02/07⁷		8,594		8,594
Strips III LLC
4.62%, 07/24/06^7,8		3,168		3,168
SunTrust Bank
4.62%, 04/28/06		18,416		18,416
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		27,379		27,378
Toyota Motor Credit Corp.
4.57%, 04/10/06		5,525		5,525
UniCredito Italiano SpA
4.43%, 06/14/06		15,961		15,959
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		12,278		12,278
US Bank N.A.
4.54%, 09/29/06		5,525		5,524
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		18,416		18,417
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		23,432		23,432
Wells Fargo & Co.
4.56%, 03/15/07⁷		6,139		6,139
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		6,139		6,138
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		12,891		12,892
Winston Funding Ltd.
4.68%, 04/23/06⁷		8,766		8,766
World Savings Bank
4.52%, 03/09/06		18,416		18,416

				796,456

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,530,896)				1,530,896

TOTAL INVESTMENTS IN SECURITIES – 100.16% (Cost: $398,510,426)				489,974,312
Other Assets, Less Liabilities – (0.16)%				(763,005	)

NET ASSETS – 100.00%			$	489,211,307


52		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

February 28, 2006

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Unaudited)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.92%
BANKS – 15.53%
FirstRand Ltd.	6,429,962	$	19,490,261
Nedbank Group Ltd.	456,471		8,841,964
Standard Bank Group Ltd.	2,790,317		35,735,778

			64,068,003
BUILDING MATERIALS – 0.48%
Pretoria Portland Cement Co. Ltd.	32,304		1,994,609

			1,994,609
DIVERSIFIED FINANCIAL SERVICES – 2.57%
African Bank Investments Ltd.	1,030,985		4,848,057
Alexander Forbes Ltd.¹	777,388		1,978,359
Investec Ltd.	75,462		3,785,791

			10,612,207
ELECTRONICS – 1.02%
Reunert Ltd.	406,820		4,200,581

			4,200,581
ENGINEERING & CONSTRUCTION – 1.47%
Aveng Ltd.	908,338		3,511,588
Murray & Roberts Holdings Ltd.	694,446		2,567,624

			6,079,212
FOOD – 3.53%
Shoprite Holdings Ltd.	945,082		3,066,911
SPAR Group Ltd. (The)	388,243		2,328,482
Tiger Brands Ltd.	369,994		9,176,007

			14,571,400
FOREST PRODUCTS & PAPER – 1.38%
Sappi Ltd.	449,680		5,692,752

			5,692,752
HEALTH CARE – PRODUCTS – 0.74%
Aspen Pharmacare Holdings Ltd.¹	467,650		3,032,135

			3,032,135
HEALTH CARE – SERVICES – 0.88%
Network Healthcare Holdings Ltd.¹	2,781,164		3,629,026

			3,629,026
HOLDING COMPANIES - DIVERSIFIED – 8.21%
AVI Ltd.	726,594		1,971,582
Barloworld Ltd.	494,802		9,564,394
Bidvest Group Ltd.	587,944		9,911,444
Imperial Holdings Ltd.¹	424,987		10,677,633
Tongaat-Hulett Group Ltd.	117,712		1,755,400

			33,880,453
HOME FURNISHINGS – 1.54%
Steinhoff International Holdings Ltd.	1,934,394		6,349,472

			6,349,472
INSURANCE – 4.82%
Liberty Group Ltd.	270,856		3,714,296
Metropolitan Holdings Ltd.	1,331,531		2,877,061
Sanlam Ltd.	5,105,116		13,281,535

			19,872,892
IRON & STEEL – 1.07%
Mittal Steel South Africa Ltd.	448,910		4,432,161

			4,432,161
MEDIA – 3.29%
Naspers Ltd.	683,103		13,569,603

			13,569,603
MINING – 20.57%
Anglo Platinum Ltd.	149,854		11,963,058
AngloGold Ashanti Ltd.	303,280		15,633,354
Gold Fields Ltd.	895,741		19,601,254
Harmony Gold Mining Co. Ltd.¹	768,347		10,517,795
Impala Platinum Holdings Ltd.	145,393		24,745,739
Kumba Resources Ltd.	141,634		2,378,455

			84,839,655
OIL & GAS – 10.94%
Sasol Ltd.	1,319,270		45,121,525

			45,121,525
PACKAGING & CONTAINERS – 1.14%
Consol Ltd.	723,464		1,571,409
Nampak Ltd.	1,169,041		3,126,665

			4,698,074
REAL ESTATE – 0.55%
Allan Gray Property Trust	2,296,022		2,288,858

			2,288,858
RETAIL – 8.68%
Edgars Consolidated Stores Ltd.	1,118,777		6,116,845
Ellerine Holdings Ltd.	254,909		3,518,337
Foschini Ltd.	471,841		4,367,163


54		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
JD Group Ltd.	385,528	$	5,748,628
Massmart Holdings Ltd.	442,249		4,351,341
Pick’n Pay Stores Ltd.	516,068		2,534,645
Truworths International Ltd.	1,064,607		4,503,990
Woolworths Holdings Ltd.	1,829,009		4,663,502

			35,804,451
TELECOMMUNICATIONS – 10.78%
MTN Group Ltd.	3,047,416		29,638,118
Telkom South Africa Ltd.	561,176		14,827,035

			44,465,153
TRANSPORTATION – 0.73%
Grindrod Ltd.	755,771		1,684,459
Super Group Ltd.	659,164		1,333,447

			3,017,906

TOTAL COMMON STOCKS (Cost: $320,929,425)			412,220,128
SHORT-TERM INVESTMENTS – 0.09%

MONEY MARKET FUNDS – 0.09%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^2,3	365,084		365,084

			365,084

TOTAL SHORT-TERM INVESTMENTS (Cost: $365,084)			365,084

TOTAL INVESTMENTS IN SECURITIES – 100.01% (Cost: $321,294,509)			412,585,212
Other Assets, Less Liabilities – (0.01)%			(51,504	)

NET ASSETS – 100.00%		$	412,533,708

¹	Non-income earning security.

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

³	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Unaudited)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 97.34%
ADVERTISING – 0.37%
Cheil Communications Inc.	31,520	$	6,849,351

			6,849,351
AEROSPACE & DEFENSE – 0.23%
Hanjin Heavy Industries & Construction
Co. Ltd.	165,480		4,192,387

			4,192,387
AGRICULTURE – 2.00%
KT&G Corp.	622,520		36,863,955

			36,863,955
AIRLINES – 0.43%
Korean Air Co. Ltd.	236,400		7,912,461

			7,912,461
AUTO MANUFACTURERS – 5.77%
Hyundai Motor Co. Ltd.	969,240		82,949,376
Kia Motors Corp.	1,071,680		23,287,794

			106,237,170
AUTO PARTS & EQUIPMENT – 1.97%
Hankook Tire Co. Ltd.	577,834		7,379,137
Hyundai Mobis	342,036		28,849,380

			36,228,517
BANKS – 9.29%
Daegu Bank	701,320		10,978,439
Kookmin Bank	1,922,729		147,719,447
Korea Exchange Bank¹	661,920		9,543,646
Pusan Bank	220,640		2,942,624

			171,184,156
BEVERAGES – 0.37%
Hite Brewery Co. Ltd.²	47,280		6,865,582

			6,865,582
CHEMICALS – 1.70%
Hanwha Chemical Corp.	267,920		3,711,147
Honam Petrochemical Corp.	77,860		4,594,622
KCC Corp.	29,159		5,810,779
LG Chem Ltd.	275,800		13,960,422
LG Petrochemical Co. Ltd.	82,724		1,891,321
Samsung Fine Chemicals Co. Ltd.	39,400		1,284,253

			31,252,544
COMMERCIAL SERVICES – 0.45%
S1 Corp.	198,289		8,270,550

			8,270,550
COMPUTERS – 0.00%
Trigem Computer Inc.^1,3	7		—

			—
COSMETICS & PERSONAL CARE – 0.60%
Amorepacific Corp.	31,520		11,020,639

			11,020,639
DISTRIBUTION & WHOLESALE – 1.54%
Hyosung Corp.¹	5		77
LG International Corp.	260,040		6,159,547
Samsung Corp.	858,920		22,291,230

			28,450,854
DIVERSIFIED FINANCIAL SERVICES – 8.20%
Daewoo Securities Co. Ltd.^1,2	567,360		10,079,259
Daishin Securities Co. Ltd.	204,880		4,726,377
Hana Financial Group Inc.	654,041		27,953,349
Hyundai Securities Co. Ltd.^1,2	724,960		11,647,143
Korea Investment Holdings Co. Ltd.	189,125		7,362,436
Samsung Securities Co.	330,960		19,768,980
Shinhan Financial Group Ltd.	1,379,000		54,322,091
Woori Investment & Securities Co.²	630,400		15,224,387

			151,084,022
ELECTRIC – 3.60%
Korea Electric Power Corp.	1,536,600		66,385,551

			66,385,551
ELECTRICAL COMPONENTS & EQUIPMENT – 25.88%
LG Electronics Inc.	661,926		54,876,460
LS Cable Ltd.	112,350		3,806,710
Samsung Electronics Co. Ltd.	591,000		418,143,151

			476,826,321
ELECTRONICS – 5.09%
Daeduck Electronics Co. Ltd.	858,921		7,448,110
LG.Philips LCD Co. Ltd.¹	693,440		31,422,616
Samsung Electro-Mechanics Co. Ltd.^1,2	732,840		30,453,238
Samsung SDI Co. Ltd.	275,800		24,540,803

			93,864,767


56		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
ENGINEERING & CONSTRUCTION – 2.18%
Daelim Industrial Co. Ltd.	149,720	$	10,053,289
Daewoo Engineering & Construction Co. Ltd.	732,840		9,585,034
GS Engineering & Construction Corp.	181,240		9,836,610
Hyundai Engineering & Construction Co. Inc.^1,2	220,640		10,736,601

			40,211,534
FOOD – 1.01%
CJ Corp.	110,320		13,974,624
Nong Shim Co. Ltd.	15,762		4,650,683

			18,625,307
HOLDING COMPANIES - DIVERSIFIED – 0.00%
GS Holdings Corp.	2		54
LG Corp.	3		105

			159
HOME BUILDERS – 0.74%
Hyundai Development Co.	299,440		13,661,372

			13,661,372
HOUSEHOLD PRODUCTS & WARES – 0.25%
LG Household & Health Care Ltd.	70,920		4,564,882

			4,564,882
INSURANCE – 1.70%
Samsung Fire & Marine Insurance Co. Ltd.	244,280		31,321,174

			31,321,174
INTERNET – 1.77%
Daum Communications Corp.¹	78,804		3,327,460
NCsoft Corp.¹	94,564		6,388,670
NHN Corp.¹	80,376		22,945,651

			32,661,781
IRON & STEEL – 5.46%
Dongkuk Steel Mill Co. Ltd.	141,840		2,797,360
POSCO	412,854		97,792,400

			100,589,760
LODGING – 0.74%
Kangwon Land Inc.	685,562		13,697,119

			13,697,119
MACHINERY - DIVERSIFIED – 0.38%
Doosan Infracore Co. Ltd.	409,760		6,941,866

			6,941,866
MANUFACTURING – 0.53%
Cheil Industries Inc.	252,160		9,777,368

			9,777,368
MINING – 0.06%
Poongsan Corp.²	55,160		1,195,796

			1,195,796
OIL & GAS – 3.07%
SK Corp.	603,589		37,296,952
S-Oil Corp.	267,920		19,259,337

			56,556,289
PHARMACEUTICALS – 0.38%
Dong-A Pharmaceutical Co. Ltd.	9		640
YuHan Corp.	39,409		7,041,670

			7,042,310
RETAIL – 3.62%
Hyundai Department Store Co. Ltd.	94,560		10,176,642
Lotte Shopping Co. Ltd.	35,200		15,225,541
Shinsegae Co. Ltd.	86,680		41,242,183

			66,644,366
SHIPBUILDING – 3.55%
Daewoo Shipbuilding & Marine Engineering Co. Ltd.	591,000		16,037,951
Hyundai Heavy Industries Co. Ltd.	291,560		23,210,698
Hyundai Mipo Dockyard	78,800		6,329,969
Samsung Heavy Industries Co. Ltd.	1,134,720		19,749,504

			65,328,122
TELECOMMUNICATIONS – 4.05%
KT Corp.	496,440		19,709,333
KT Corp. ADR	472,800		9,654,576
SK Telecom Co. Ltd.	126,380		26,356,282
SK Telecom Co. Ltd. ADR	781,696		18,877,958

			74,598,149
TRANSPORTATION – 0.36%
Hanjin Shipping Co. Ltd.²	277,060		6,548,431

			6,548,431

TOTAL COMMON STOCKS (Cost: $1,274,929,448)			1,793,454,612


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006


*Security*	Shares or Principal		*Value*
PREFERRED STOCKS – 1.62%
AUTO MANUFACTURERS – 0.64%
Hyundai Motor Co. Ltd.		220,640	$	11,861,388

				11,861,388
ELECTRICAL COMPONENTS & EQUIPMENT – 0.98%
LG Electronics Inc.		267,920		13,796,087
Samsung Electronics Co. Ltd.		7,880		4,219,979

				18,016,066

TOTAL PREFERRED STOCKS (Cost: $ 23,832,700)				29,877,454
SHORT-TERM INVESTMENTS – 2.19%
CERTIFICATES OF DEPOSIT⁴ – 0.02%
Toronto-Dominion Bank
3.94%, 07/10/06	$	172,015		172,015
Wells Fargo Bank N.A.
4.78%, 12/05/06		275,223		275,223

				447,238
COMMERCIAL PAPER⁴ – 0.07%
Amstel Funding Corp.
4.40%, 05/08/06		172,015		170,583
CC USA Inc.
4.23%, 04/21/06		103,209		102,590
Edison Asset Securitization LLC
4.37%, 05/08/06		172,015		170,595
Galaxy Funding Inc.
4.23%, 04/18/06		98,736		98,179
Grampian Funding LLC
4.41%, 05/15/06		172,015		170,434
Nordea North America Inc.
4.16%, 04/04/06		361,231		359,811
Sigma Finance Inc.
4.16%, 04/06/06		206,417		205,559

				1,277,751
MEDIUM-TERM NOTES⁴ – 0.06%
Dorada Finance Inc.
3.93%, 07/07/06		106,649		106,645
K2 USA LLC
3.94%, 07/07/06		206,417		206,414
Marshall & Ilsley Bank
5.18%, 12/15/06		344,029		344,966
Toronto-Dominion Bank
3.81%, 06/20/06		430,036		430,049
US Bank N.A.
2.85%, 11/15/06		68,806		67,907

				1,155,981
MONEY MARKET FUNDS – 0.20%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^5,6		3,678,378		3,678,378

				3,678,378
REPURCHASE AGREEMENTS4– 0.49%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $516,110 (collateralized by non-U.S. Government debt securities, value $568,576, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁷	$	516,044		516,044
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $1,720,363 (collateralized by U.S. Government obligations, value $1,758,011, 3.69% to 10.00%, 5/1/09 to 1/1/36).		1,720,145		1,720,145
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $860,183 (collateralized by non-U.S. Government debt securities, value $904,526, 1.01%, 9/19/35). ⁷		860,073		860,073
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $1,720,363 (collateralized by U.S. Government obligations, value $1,757,365, 4.50% to 7.50%, 9/1/09 to 11/1/35).		1,720,145		1,720,145


58		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $1,720,370 (collateralized by non-U.S. Government debt securities, value $1,809,052, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁷	$	1,720,145	$	1,720,145
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $412,887 (collateralized by U.S. Government obligations, value $ 421,776, 3.99% to 5.51%, 7/1/32 to 2/1/36).		412,835		412,835
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $344,074 (collateralized by non-U.S. Government debt securities, value $354,931, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁷		344,029		344,029
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $ 1,720,365 (collateralized by non-U.S. Government debt securities, value $1,806,298, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁷		1,720,145		1,720,145

				9,013,561
TIME DEPOSITS⁴ – 0.14%
KBC Bank
4.57%, 03/01/06		688,058		688,058
Societe Generale
4.57%, 03/01/06		1,204,102		1,204,102
US Bank N.A.
4.45%, 03/01/06		619,070		619,070

				2,511,230
VARIABLE & FLOATING RATE NOTES ⁴ – 1.21%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁸		966,722		966,876
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		808,468		808,464
American Express Centurion Bank
4.57%, 06/29/06		137,612		137,612
American Express Credit Corp.
4.67%, 02/05/07		103,209		103,291
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁸		1,118,095		1,118,383
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁸		223,619		223,619
Bank of Ireland
4.54%, 03/20/07⁸		344,029		344,029
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁸		443,798		443,789
BMW US Capital LLC
4.54%, 02/15/078		344,029		344,029
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁸		925,438		925,424
Commodore CDO Ltd.
4.56%, 12/12/06⁸		86,007		86,007
DEPFA Bank PLC
4.50%, 12/15/06		344,029		344,029
Dorada Finance Inc.
4.52%, 06/26/06⁸		86,007		86,005
Eli Lilly Services Inc.
4.54%, 09/01/068		344,029		344,029
Fifth Third Bancorp.
4.55%, 01/23/07⁸		688,058		688,058
Five Finance Inc.
4.54%, 06/26/06⁸		68,806		68,804
General Electric Capital Corp.
4.67%, 03/09/07		154,813		154,930
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		86,007		86,007
Hartford Life Global Funding Trusts
4.56%, 02/15/07		344,029		344,029


SCHEDULES OF INVESTMENTS		59

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
HBOS Treasury Services PLC
4.57%, 01/24/07⁸	$	344,029	$	344,029
Holmes Financing PLC
4.54%, 12/15/06⁸		946,080		946,080
HSBC Bank USA N.A.
4.70%, 05/04/06		120,410		120,427
K2 USA LLC
4.53%, 06/02/06⁸		309,626		309,618
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁸		360,446		360,446
Links Finance LLC
4.56%, 03/15/06⁸		275,223		275,225
Marshall & Ilsley Bank
4.55%, 02/15/07		189,216		189,216
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁸		1,028,647		1,029,071
Mound Financing PLC
4.53%, 11/08/06⁸		688,058		688,058
Natexis Banques Populaires
4.55%, 03/15/07⁸		258,022		258,022
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁸		928,879		928,911
Nordea Bank AB
4.55%, 02/09/07⁸		602,051		602,051
Northern Rock PLC
4.61%, 02/02/07⁸		412,835		412,848
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁸		935,759		935,760
Pfizer Investment Capital PLC
4.53%, 02/15/07⁸		860,073		860,073
Principal Life Income Funding Trusts
4.70%, 05/10/06		258,022		258,024
Sedna Finance Inc.
4.54%, 09/20/06⁸		103,209		103,209
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁸		381,872		381,866
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁸		344,029		344,029
Societe Generale
4.54%, 03/02/07⁸		240,820		240,820
Strips III LLC
4.62%, 07/24/06^8,9		88,758		88,758
SunTrust Bank
4.62%, 04/28/06		516,044		516,044
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁸		767,185		767,148
Toyota Motor Credit Corp.
4.57%, 04/10/06		154,813		154,813
UniCredito Italiano SpA
4.43%, 06/14/06		447,238		447,192
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁸		344,029		344,029
US Bank N.A.
4.54%, 09/29/06		154,813		154,790
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		516,044		516,044
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁸		656,579		656,579
Wells Fargo & Co.
4.56%, 03/15/07⁸		172,015		172,028
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁸		172,015		172,005
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁸		361,231		361,232
Winston Funding Ltd.
4.68%, 04/23/06⁸		245,637		245,637
World Savings Bank
4.52%, 03/09/06		516,044		516,043

				22,317,539

TOTAL SHORT-TERM INVESTMENTS (Cost: $40,401,678)				40,401,678

TOTAL INVESTMENTS IN SECURITIES – 101.15% (Cost: $1,339,163,826)				1,863,733,744
Other Assets, Less Liabilities – (1.15)%				(21,276,930	)

NET ASSETS – 100.00%			$	1,842,456,814


60		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

February 28, 2006

ADR – American Depositary Receipts

¹	Non-income earning security.

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

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

⁴	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁶	The rate quoted is the annualized seven-day yield of the fund at period end.

⁷	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁸	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁹	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


SCHEDULES OF INVESTMENTS		61

Schedule of Investments (Unaudited)

iSHARES^® MSCI TAIWAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.91%
AIRLINES – 0.40%
China Airlines	9,666,319	$	4,319,244
EVA Airways Corp.	9,704,557		3,872,791

			8,192,035
APPAREL – 0.45%
Pou Chen Corp.	12,888,243		9,234,115

			9,234,115
AUTO MANUFACTURERS – 0.51%
China Motor Co. Ltd.	3,235,423		3,649,142
Yulon Motor Co. Ltd.	6,506,447		6,706,850

			10,355,992
AUTO PARTS & EQUIPMENT – 0.12%
Cheng Shin Rubber Industry Co. Ltd.	3,412,102		2,528,807

			2,528,807
BANKS – 9.45%
Chang Hwa Commercial Bank Ltd.	32,220,446		18,567,429
Chinatrust Financial Holding Co. Ltd.	45,108,470		37,948,914
E.Sun Financial Holding Co. Ltd.	19,566,253		13,174,608
First Financial Holding Co. Ltd.	35,442,602		27,468,959
Hua Nan Financial Holdings Co. Ltd.	28,998,965		20,553,649
Mega Financial Holding Co. Ltd.	74,106,136		56,406,575
Taishin Financial Holdings Co. Ltd.	32,220,439		19,709,272

			193,829,406
BUILDING MATERIALS – 1.04%
Asia Cement Corp.	9,666,649		6,419,509
Taiwan Cement Corp.	12,888,738		9,730,947
Taiwan Glass Industrial Corp.	6,444,341		5,083,901

			21,234,357
CHEMICALS – 7.74%
Eternal Chemical Co. Ltd.	3,353,010		4,034,916
Formosa Chemicals & Fibre Co.	20,117,401		31,678,994
Formosa Plastic Co.	35,442,497		56,248,397
Nan Ya Plastic Corp.	38,664,085		54,927,176
Oriental Union Chemical Corp.	3,569,382		2,309,888
Taiwan Fertilizer Co. Ltd.	6,444,000		7,883,601
Taiwan Styrene Monomer Corp.	3,300,696		1,500,293

			158,583,265
COMMERCIAL SERVICES – 0.26%
Taiwan Secom Co. Ltd.	3,248,515		5,305,659

			5,305,659
COMPUTERS – 9.75%
Acer Inc.	19,332,533		42,894,328
Advantech Co. Ltd.	3,222,731		8,808,993
Benq Corp.	16,110,019		15,911,191
CMC Magnetics Corp.¹	22,554,400		7,193,665
Compal Electronics Inc.	25,776,214		24,147,452
Foxconn Technology Co. Ltd.	3,222,100		15,737,904
High Tech Computer Corp.	716,000		15,599,513
Inventec Co. Ltd.	9,666,620		5,942,869
Lite-On Technology Corp.	16,110,011		21,843,746
Mitac International	6,548,407		9,282,653
Quanta Computer Inc.	16,110,381		24,649,248
Ritek Corp.¹	19,332,389		6,166,014
Systex Corp.¹	6,520,887		1,804,520

			199,982,096
DIVERSIFIED FINANCIAL SERVICES – 3.83%
Fubon Financial Holding Co. Ltd.	32,220,000		28,893,299
Fuhwa Financial Holdings Co. Ltd.	16,110,821		6,106,627
Polaris Securities Co. Ltd.	9,666,372		3,902,235
SinoPac Financial Holdings Co. Ltd.	45,108,193		23,978,562
Waterland Financial Holdings	12,888,000		4,209,883
Yuanta Core Pacific Securities Co. Ltd.	19,533,644		11,437,088

			78,527,694
ELECTRICAL COMPONENTS & EQUIPMENT – 1.98%
Delta Electronics Inc.	9,666,414		23,175,206
Pacific Electric Wire & Cable Co. Ltd.^1,2	986		—
Phoenixtec Power Co. Ltd.	3,224,438		3,129,992
Tatung Co. Ltd.¹	32,220,120		7,982,921
Walsin Lihwa Corp.	19,332,069		6,314,847

			40,602,966
ELECTRONICS – 19.51%
Asustek Computer Inc.	19,332,688		54,869,434
AU Optronics Corp.	41,886,716		68,540,843
Chi Mei Optoelectronics Corp.	25,784,428		39,490,488
Chunghwa Picture Tubes Ltd.	48,330,105		12,689,250


62		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Compeq Manufacturing Co. Ltd.¹	6,444,200	$	2,929,137
Elitegroup Computer Systems Co. Ltd.¹	3,259,215		2,089,080
Gigabyte Technology Co. Ltd.	3,288,017		2,786,412
HannStar Display Corp.¹	41,990,218		7,841,504
Hon Hai Precision Industry Co. Ltd.	25,776,814		163,634,570
Micro-Star International Co. Ltd.	3,338,396		1,908,360
Optimax Technology Corp.	3,222,157		4,006,534
Quanta Display Inc.	25,776,541		8,697,959
Synnex Technology International Corp.	6,444,679		7,993,662
Wintek Corp.	6,444,359		9,155,019
Ya Hsin Industrial Co. Ltd.	6,444,270		5,977,490
Yageo Corp.¹	19,332,100		7,416,978

			400,026,720
FOOD – 0.72%
Uni-President Enterprises Co.	25,776,637		14,695,237

			14,695,237
FOREST PRODUCTS & PAPER – 0.18%
Yuen Foong Yu Paper Manufacturing Co. Ltd.	9,666,322		3,708,593

			3,708,593
HAND & MACHINE TOOLS – 0.12%
Shihlin Electric & Engineering Corp.	3,222,080		2,447,552

			2,447,552
HOME FURNISHINGS – 0.44%
Nien Made Enterprise Co. Ltd.	3,222,733		4,101,597
Teco Electric and Machinery Co. Ltd.¹	16,110,092		4,989,335

			9,090,932
INSURANCE – 4.76%
Cathay Financial Holding Co. Ltd.	41,887,055		80,803,983
Shin Kong Financial Holding Co. Ltd.	19,332,837		16,830,330

			97,634,313
INVESTMENT COMPANIES – 1.57%
China Development Financial Holding Co.¹	83,772,338		32,269,279

			32,269,279
IRON & STEEL – 3.01%
China Steel Corp.	67,662,742		61,614,891

			61,614,891
LEISURE TIME – 0.30%
Giant Manufacturing Co. Ltd.	3,222,914		6,058,389

			6,058,389
MANUFACTURING – 0.20%
Premier Image Technology Corp.	3,300,262		4,149,418

			4,149,418
METAL FABRICATE & HARDWARE – 0.19%
Yieh Phui Enterprise	9,666,078		3,976,584

			3,976,584
MULTIPLE UTILITIES – 0.39%
Fu Sheng Industrial Co. Ltd.	6,444,320		7,883,993

			7,883,993
OFFICE& BUSINESS EQUIPMENT – 0.18%
Kinpo Electronics Inc.	9,666,119		3,738,303

			3,738,303
REAL ESTATE – 0.23%
Cathay Real Estate Development Co. Ltd.¹	9,666,493		4,706,571

			4,706,571
RETAIL – 0.34%
President Chain Store Corp.	3,222,640		7,031,106

			7,031,106
SEMICONDUCTORS – 26.07%
Advanced Semiconductor Engineering Inc.	28,998,690		24,127,968
Macronix International Co. Ltd.¹	38,664,200		5,004,226
MediaTek Inc.	6,444,239		66,625,851
Realtek Semiconductor Corp.	6,444,003		7,129,003
Siliconware Precision Industries Co. Ltd.	16,110,151		20,801,385
Taiwan Semiconductor Manufacturing Co. Ltd.	167,544,475		314,431,474
United Microelectronics Corp.	141,768,640		83,661,868
Via Technologies Inc.¹	6,578,861		3,831,697
Winbond Electronics Corp.¹	28,998,280		8,927,222

			534,540,694


SCHEDULES OF INVESTMENTS		63

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
TELECOMMUNICATIONS – 4.35%
Accton Technology Corp.¹	6,444,259	$	3,405,773
Chunghwa Telecom Co. Ltd.	32,220,000		58,878,785
D-Link Corp.	3,395,638		3,892,628
Taiwan Cellular Corp.	19,332,920		17,872,994
Zyxel Communications Corp.	3,222,071		5,143,319

			89,193,499
TEXTILES – 0.96%
Far Eastern Textile Ltd.	19,332,351		14,327,762
Formosa Taffeta Co. Ltd.	6,444,152		3,326,283
Nien Hsing Textile Co. Ltd.	3,222,800		2,090,567

			19,744,612
TRANSPORTATION – 0.86%
Evergreen Marine Corp. Ltd.	6,801,194		4,422,280
U-Ming Marine Transport Corp.	3,222,800		3,257,510
Wan Hai Lines Ltd.	6,444,177		3,961,767
Yang Ming Marine Transport Corp.	9,666,667		5,942,898

			17,584,455

TOTAL COMMON STOCKS (Cost: $1,846,612,194)			2,048,471,533
SHORT-TERM INVESTMENTS – 0.06%
MONEY MARKET FUNDS – 0.06%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^3,4	1,270,794		1,270,794

			1,270,794

TOTAL SHORT-TERM INVESTMENTS (Cost: $1,270,794)			1,270,794

TOTAL INVESTMENTS IN SECURITIES – 99.97% (Cost: $1,847,882,988)			2,049,742,327
Other Assets, Less Liabilities – 0.03%			665,957

NET ASSETS – 100.00%		$	2,050,408,284

¹	Non-income earning security.

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

³	The Fund’s investment adviser is an affiliate of the issuer. See Note 2.

⁴	The rate quoted is the annualized seven-day yield of the fund at period end.

See notes to the financial statements.


64		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited)

iSHARES^®, INC.

February 28, 2006


	*iShares MSCI*
	Australia Index Fund			Brazil Index Fund			Canada Index Fund		Emerging Markets Index Fund			Hong Kong Index Fund			Malaysia Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	421,273,119		$	1,260,004,988		$	792,361,852	$	10,081,998,635		$	682,065,993		$	308,621,908

Affiliated issuers^a	$	72,364		$	2,525,013		$	394,916	$	73,287,150		$	696,030		$	222,045

Foreign currencies, at cost	$	1,393,993		$	—		$	1,162,188	$	1,368,191		$	261,045		$	126,302

Investments in securities, at value (including securities on loan^b) (Note 1):
Unaffiliated issuers	$	508,429,576		$	1,941,371,974		$	959,995,302	$	13,074,994,242		$	800,996,038		$	394,505,003
Affiliated issuers^a		72,364			2,525,013			394,916		83,906,804			696,030			222,045
Foreign currencies, at value		1,402,602			—			1,176,018		1,382,966			260,943			126,507
Receivables:
Investment securities sold		2,013,745			26,234,358			970,039		—			—			652,458
Dividends and interest		3,350,859			8,350,837			764,177		23,345,406			148,553			263,174
Capital shares sold		—			45,843,673			—		—			162,849			—

Total Assets		515,269,146			2,024,325,855			963,300,452		13,183,629,418			802,264,413			395,769,187

LIABILITIES
Payables:
Investment securities purchased		2,028,272			67,093,116			—		—			—			634,217
Collateral for securities on loan (Note 5)		319,872			—			—		760,661,523			—			—
Capital shares redeemed		—			—			—		115,297			—			—
Foreign taxes		—			—			—		4,234			—			—
Investment advisory fees (Note 2)		225,202			1,017,892			409,127		7,131,516			347,077			172,043

Total Liabilities		2,573,346			68,111,008			409,127		767,912,570			347,077			806,260

NET ASSETS	$	512,695,800		$	1,956,214,847		$	962,891,325	$	12,415,716,848		$	801,917,336		$	394,962,927

Net assets consist of:
Paid-in capital	$	436,515,795		$	1,322,553,268		$	778,296,094	$	9,146,610,069		$	701,680,275		$	358,556,851
Undistributed (distributions in excess of) net investment income		(46,978	)		6,897,497			186,932		(2,513,541	)		(1,290,398	)		(1,714,162	)
Undistributed net realized gain (accumulated net realized loss)		(10,957,262	)		(55,217,123	)		16,751,231		267,990,004			(17,402,493	)		(47,763,199	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		87,184,245			681,981,205			167,657,068		3,003,630,316			118,929,952			85,883,437

NET ASSETS	$	512,695,800		$	1,956,214,847		$	962,891,325	$	12,415,716,848		$	801,917,336		$	394,962,927

Shares outstanding		25,800,000			46,450,000			41,400,000		127,200,000			60,150,000			53,850,000

Net asset value per share	$	19.87		$	42.11		$	23.26	$	97.61		$	13.33		$	7.33

^a	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

^b	Securities on loan with market values of $303,043, $–, $–, $699,930,752, $– and $–, respectively. See Note 5.

See notes to the financial statements.


FINANCIAL STATEMENTS		65

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^®, INC.

February 28, 2006


	*iShares MSCI*
	Mexico Index Fund			Pacific ex-Japan Index Fund			Singapore Index Fund			South Africa Index Fund			South Korea Index Fund			Taiwan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	417,618,857		$	1,441,249,724		$	398,290,092		$	320,929,425		$	1,335,485,448		$	1,846,612,194

Affiliated issuers^a	$	367,620		$	18,881		$	220,334		$	365,084		$	3,678,378		$	1,270,794

Foreign currencies, at cost	$	311,903		$	5,125,250		$	212,382		$	72,369		$	—		$	1,788,776

Investments in securities, at value (including securities on loan^b) (Note 1):
Unaffiliated issuers	$	502,173,570		$	1,859,058,148		$	489,753,978		$	412,220,128		$	1,860,055,366		$	2,048,471,533
Affiliated issuers^a		367,620			18,881			220,334			365,084			3,678,378			1,270,794
Foreign currencies, at value		313,404			5,161,583			212,745			71,071			—			1,788,776
Receivables:
Investment securities sold		10,225,385			7,548,202			2,649,057			483,347			15,219,459			—
Dividends and interest		97,583			8,674,771			102,931			31,327			16,406,809			5,368
Capital shares sold		—			—			—			7,520			110,400			—

Total Assets		513,177,562			1,880,461,585			492,939,045			413,178,477			1,895,470,412			2,051,536,471

LIABILITIES
Payables:
Investment securities purchased		10,121,664			8,860,658			2,202,025			410,189			15,294,692			—
Collateral for securities on loan (Note 5)		31,314,795			8,489,869			1,310,562			—			36,723,300			—
Investment advisory fees (Note 2)		225,045			702,922			215,151			234,580			995,606			1,128,187

Total Liabilities		41,661,504			18,053,449			3,727,738			644,769			53,013,598			1,128,187

NET ASSETS	$	471,516,058		$	1,862,408,136		$	489,211,307		$	412,533,708		$	1,842,456,814		$	2,050,408,284

Net assets consist of:
Paid-in capital	$	346,593,973		$	1,449,192,626		$	413,634,152		$	312,850,599		$	1,340,643,180		$	1,939,297,421
Undistributed (distributions in excess of) net investment income (accumulated net investment loss)		(37,775	)		(8,423,393	)		(1,860,651	)		(158,701	)		11,948,874			(2,933,097	)
Undistributed net realized gain (accumulated net realized loss)		40,401,046			3,746,409			(14,027,252	)		8,552,611			(35,376,426	)		(87,815,379	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		84,558,814			417,892,494			91,465,058			91,289,199			525,241,186			201,859,339

NET ASSETS	$	471,516,058		$	1,862,408,136		$	489,211,307		$	412,533,708		$	1,842,456,814		$	2,050,408,284

Shares outstanding		12,300,000			17,900,000			57,100,000			3,850,000			39,400,000			161,100,000

Net asset value per share	$	38.33		$	104.05		$	8.57		$	107.15		$	46.76		$	12.73

^a	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

^b	Securities on loan with market values of $25,681,791, $8,017,351, $1,211,670, $–, $34,728,115 and $–, respectively. See Note 5.

See notes to the financial statements.


66		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited)

iSHARES ^®, INC .

Six months ended February 28, 2006


	*iShares MSCI*
	Australia Index Fund			Brazil Index Fund			Canada Index Fund		Emerging Markets Index Fund			Hong Kong Index Fund			Malaysia Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	9,443,482		$	19,093,238		$	4,151,085	$	65,052,499		$	7,692,693		$	8,203,146
Dividends from affiliated issuers^b		—			—			—		731,077			—			—
Interest from affiliated issuers^b		2,830			50,404			7,383		182,501			6,375			5,420
Securities lending income^c		39,225			1,515			—		3,086,710			98,186			—

Total investment income		9,485,537			19,145,157			4,158,468		69,052,787			7,797,254			8,208,566

EXPENSES
Investment advisory fees (Note 2)		1,224,082			4,073,581			1,707,986		35,382,728			1,844,316			1,038,380
Proxy fees		16,687			17,643			14,588		174,862			26,612			13,719
Foreign taxes (Note 1)		—			—			—		1,875,370			—			—

Total expenses		1,240,769			4,091,224			1,722,574		37,432,960			1,870,928			1,052,099
Less investment advisory fees waived		—			—			—		(134,578	)		—			—

Net expenses		1,240,769			4,091,224			1,722,574		37,298,382			1,870,928			1,052,099

Net investment income		8,244,768			15,053,933			2,435,894		31,754,405			5,926,326			7,156,467

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(1,412,659	)		(709,181	)		3,656,112		155,653			(4,150,821	)		(6,774,209	)
Investments in affiliated issuers^b		—			—			—		976,028			—			—
In-kind redemptions		1,153,522			—			28,336,866		303,829,753			2,840,925			—
Foreign currency transactions		(51,565	)		74,642			58,412		354,954			4,899			10,702

Net realized gain (loss)		(310,702	)		(634,539	)		32,051,390		305,316,388			(1,304,997	)		(6,763,507	)

Net change in unrealized appreciation (depreciation) on:
Investments		43,003,921			464,691,559			49,299,883		1,893,199,492			31,516,375			20,825,150
Translation of assets and liabilities in foreign currencies		72,646			564,062			2,425		39,028			7			2,796

Net change in unrealized appreciation (depreciation)		43,076,567			465,255,621			49,302,308		1,893,238,520			31,516,382			20,827,946

Net realized and unrealized gain		42,765,865			464,621,082			81,353,698		2,198,554,908			30,211,385			14,064,439

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	51,010,633		$	479,675,015		$	83,789,592	$	2,230,309,313		$	36,137,711		$	21,220,906

^a	Net of foreign withholding tax of $491,149, $2,043,148, $732,544, $4,071,175, $– and $–, respectively.

^b	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

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

See notes to the financial statements.


FINANCIAL STATEMENTS		67

Statements of Operations (Unaudited) (Continued)

iSHARES^®, INC.

Six months ended February 28, 2006


	*iShares MSCI*
	Mexico Index Fund		Pacific ex-Japan Index Fund			Singapore Index Fund		South Africa Index Fund			South Korea Index Fund			Taiwan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	4,425,643	$	30,222,509		$	4,017,364	$	2,649,904		$	15,777,256		$	1,805,976
Interest from affiliated issuers^b		6,955		10,652			4,817		2,861			49,367			25,365
Securities lending income^c		54,278		232,018			84,220		—			336,974			—

Total investment income		4,486,876		30,465,179			4,106,401		2,652,765			16,163,597			1,831,341

EXPENSES
Investment advisory fees (Note 2)		1,088,561		4,138,909			1,095,295		832,156			4,189,707			4,396,715
Proxy fees		9,395		53,661			13,072		6,679			24,989			33,056
Foreign taxes (Note 1)		—		—			—		—			27			139,094

Total expenses		1,097,956		4,192,570			1,108,367		838,835			4,214,723			4,568,865

Net investment income (loss)		3,388,920		26,272,609			2,998,034		1,813,930			11,948,874			(2,737,524	)

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		284,467		(5,313,746	)		377,907		468,283			(3,274,047	)		(5,114,791	)
In-kind redemptions		48,325,910		18,913,997			4,230,974		10,700,708			—			—
Foreign currency transactions		9,870		(118,089	)		7,094		6,443			13,461			(287,419	)

Net realized gain (loss)		48,620,247		13,482,162			4,615,975		11,175,434			(3,260,586	)		(5,402,210	)

Net change in unrealized appreciation (depreciation) on:
Investments		49,797,703		129,435,138			47,617,899		39,291,841			306,694,728			144,232,095
Translation of assets and liabilities in foreign currencies		2,756		230,034			35,591		(4,539	)		671,268			264,972

Net change in unrealized appreciation (depreciation)		49,800,459		129,665,172			47,653,490		39,287,302			307,365,996			144,497,067

Net realized and unrealized gain		98,420,706		143,147,334			52,269,465		50,462,736			304,105,410			139,094,857

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	101,809,626	$	169,419,943		$	55,267,499	$	52,276,666		$	316,054,284		$	136,357,333

^a.	Net of foreign withholding tax of $–, $2,814,306, $–, $–, $2,928,059 and $379,534, respectively.

^b.	The Funds’ investment adviser is an affiliate of the issuers. See Note 2.

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

See notes to the financial statements.


68		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^®, INC.


	*iShares MSCI* *Australia* *Index Fund*						*iShares MSCI* *Brazil* *Index Fund*						*iShares MSCI* *Canada* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	8,244,768		$	12,124,245		$	15,053,933		$	15,454,311		$	2,435,894		$	3,368,699
Net realized gain (loss)		(310,702	)		41,358,189			(634,539	)		5,767,383			32,051,390			65,992,553
Net change in unrealized appreciation (depreciation)		43,076,567			25,410,296			465,255,621			178,499,755			49,302,308			56,852,456

Net increase in net assets resulting from operations		51,010,633			78,892,730			479,675,015			199,721,449			83,789,592			126,213,708

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(16,397,050	)		(9,320,851	)		(20,219,476	)		(8,052,116	)		(4,108,502	)		(3,453,495	)

Total distributions to shareholders		(16,397,050	)		(9,320,851	)		(20,219,476	)		(8,052,116	)		(4,108,502	)		(3,453,495	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		112,436,481			231,751,585			946,109,927			274,248,148			523,427,611			141,711,605
Cost of shares redeemed		(3,709,532	)		(110,966,622	)		(1,636,057	)		(123,135,627	)		(60,518,151	)		(169,468,858	)

Net increase (decrease) in net assets from capital share transactions		108,726,949			120,784,963			944,473,870			151,112,521			462,909,460			(27,757,253	)

INCREASE IN NET ASSETS		143,340,532			190,356,842			1,403,929,409			342,781,854			542,590,550			95,002,960
NET ASSETS:
Beginning of period		369,355,268			178,998,426			552,285,438			209,503,584			420,300,775			325,297,815

End of period	$	512,695,800		$	369,355,268		$	1,956,214,847		$	552,285,438		$	962,891,325		$	420,300,775

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(46,978	)	$	8,105,304		$	6,897,497		$	12,063,040		$	186,932		$	1,859,540

SHARES ISSUED AND REDEEMED:
Shares sold		5,800,000			13,800,000			26,900,000			12,300,000			23,500,000			7,900,000
Shares redeemed		(200,000	)		(6,800,000	)		(50,000	)		(5,050,000	)		(2,800,000	)		(9,900,000	)

Net increase (decrease) in shares outstanding		5,600,000			7,000,000			26,850,000			7,250,000			20,700,000			(2,000,000	)

See notes to the financial statements.


FINANCIAL STATEMENTS		69

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.


	*iShares MSCI* *Emerging Markets* *Index Fund*						*iShares MSCI* *Hong Kong* *Index Fund*						*iShares MSCI* *Malaysia* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	31,754,405		$	101,750,954		$	5,926,326		$	15,897,761		$	7,156,467		$	8,621,591
Net realized gain (loss)		305,316,388			270,957,406			(1,304,997	)		41,822,193			(6,763,507	)		(5,786,512	)
Net change in unrealized appreciation (depreciation)		1,893,238,520			1,082,325,240			31,516,382			51,243,020			20,827,946			24,392,465

Net increase in net assets resulting from operations		2,230,309,313			1,455,033,600			36,137,711			108,962,974			21,220,906			27,227,544

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(113,762,995	)		(45,604,575	)		(17,872,090	)		(14,195,028	)		(14,088,338	)		(6,156,574	)

Total distributions to shareholders		(113,762,995	)		(45,604,575	)		(17,872,090	)		(14,195,028	)		(14,088,338	)		(6,156,574	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		4,061,151,874			4,407,630,562			155,526,412			251,633,472			67,081,681			155,029,612
Cost of shares redeemed		(762,839,394	)		(774,797,887	)		(9,859,535	)		(158,339,373	)		(66,826,302	)		(12,743,715	)

Net increase in net assets from capital share transactions		3,298,312,480			3,632,832,675			145,666,877			93,294,099			255,379			142,285,897

INCREASE IN NET ASSETS		5,414,858,798			5,042,261,700			163,932,498			188,062,045			7,387,947			163,356,867
NET ASSETS:
Beginning of period		7,000,858,050			1,958,596,350			637,984,838			449,922,793			387,574,980			224,218,113

End of period	$	12,415,716,848		$	7,000,858,050		$	801,917,336		$	637,984,838		$	394,962,927		$	387,574,980

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(2,513,541	)	$	79,495,049		$	(1,290,398	)	$	10,655,366		$	(1,714,162	)	$	5,217,709

SHARES ISSUED AND REDEEMED:
Shares sold		46,350,000			64,200,000			11,850,000			21,225,000			9,300,000			21,525,000
Shares redeemed		(9,000,000	)		(10,650,000	)		(750,000	)		(13,425,000	)		(9,375,000	)		(1,875,000	)

Net increase (decrease) in shares outstanding		37,350,000			53,550,000			11,100,000			7,800,000			(75,000	)		19,650,000

See notes to the financial statements.


70		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.


	*iShares MSCI* *Mexico* *Index Fund*						*iShares MSCI* *Pacific ex-Japan* *Index Fund*						*iShares MSCI* *Singapore* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,388,920		$	3,735,218		$	26,272,609		$	45,282,099		$	2,998,034		$	12,623,106
Net realized gain (loss)		48,620,247			37,753,990			13,482,162			(1,734,816	)		4,615,975			9,360,636
Net change in unrealized appreciation (depreciation)		49,800,459			42,547,925			129,665,172			222,348,152			47,653,490			23,676,470

Net increase in net assets resulting from operations		101,809,626			84,037,133			169,419,943			265,895,435			55,267,499			45,660,212

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(6,377,728	)		(2,048,280	)		(62,872,256	)		(31,933,222	)		(14,378,298	)		(7,420,067	)

Total distributions to shareholders		(6,377,728	)		(2,048,280	)		(62,872,256	)		(31,933,222	)		(14,378,298	)		(7,420,067	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		269,998,910			229,047,163			274,272,250			636,895,214			118,659,276			156,094,475
Cost of shares redeemed		(149,472,199	)		(185,101,346	)		(40,519,278	)		—			(11,474,006	)		(23,244,294	)

Net increase in net assets from capital share transactions		120,526,711			43,945,817			233,752,972			636,895,214			107,185,270			132,850,181

INCREASE IN NET ASSETS		215,958,609			125,934,670			340,300,659			870,857,427			148,074,471			171,090,326
NET ASSETS:
Beginning of period		255,557,449			129,622,779			1,522,107,477			651,250,050			341,136,836			170,046,510

End of period	$	471,516,058		$	255,557,449		$	1,862,408,136		$	1,522,107,477		$	489,211,307		$	341,136,836

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(37,775	)	$	2,951,033		$	(8,423,393	)	$	28,176,254		$	(1,860,651	)	$	9,519,613

SHARES ISSUED AND REDEEMED:
Shares sold		7,800,000			9,500,000			2,700,000			7,000,000			14,700,000			21,000,000
Shares redeemed		(4,300,000	)		(7,400,000	)		(400,000	)		—			(1,500,000	)		(3,200,000	)

Net increase in shares outstanding		3,500,000			2,100,000			2,300,000			7,000,000			13,200,000			17,800,000

See notes to the financial statements.


FINANCIAL STATEMENTS		71

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.


	*iShares MSCI* *South Africa* *Index Fund*						*iShares MSCI* *South Korea* *Index Fund*						*iShares MSCI* *Taiwan* *Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005			Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)	$	1,813,930		$	3,396,007		$	11,948,874		$	7,696,168		$	(2,737,524	)	$	15,942,474
Net realized gain (loss)		11,175,434			11,282,685			(3,260,586	)		(9,230,908	)		(5,402,210	)		(22,426,083	)
Net change in unrealized appreciation (depreciation)		39,287,302			25,755,064			307,365,996			167,580,084			144,497,067			48,276,152

Net increase in net assets resulting from operations		52,276,666			40,433,756			316,054,284			166,045,344			136,357,333			41,792,543

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,618,354	)		(2,053,497	)		(7,841,332	)		(1,677,739	)		(16,050,567	)		(4,632,113	)

Total distributions to shareholders		(4,618,354	)		(2,053,497	)		(7,841,332	)		(1,677,739	)		(16,050,567	)		(4,632,113	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		247,721,179			37,191,402			876,606,613			331,095,006			1,194,143,683			391,736,531
Cost of shares redeemed		(36,375,942	)		(14,923,708	)		(40,818,036	)		(112,471,028	)		(16,682,536	)		(66,484,667	)

Net increase in net assets from capital share transactions		211,345,237			22,267,694			835,788,577			218,623,978			1,177,461,147			325,251,864

INCREASE IN NET ASSETS		259,003,549			60,647,953			1,144,001,529			382,991,583			1,297,767,913			362,412,294
NET ASSETS:
Beginning of period		153,530,159			92,882,206			698,455,285			315,463,702			752,640,371			390,228,077

End of period	$	412,533,708		$	153,530,159		$	1,842,456,814		$	698,455,285		$	2,050,408,284		$	752,640,371

Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period	$	(158,701	)	$	2,645,723		$	11,948,874		$	7,841,332		$	(2,933,097	)	$	15,854,994

SHARES ISSUED AND REDEEMED:
Shares sold		2,350,000			500,000			20,350,000			10,700,000			97,450,000			34,150,000
Shares redeemed		(350,000	)		(200,000	)		(1,050,000	)		(3,650,000	)		(1,400,000	)		(5,700,000	)

Net increase in shares outstanding		2,000,000			300,000			19,300,000			7,050,000			96,050,000			28,450,000

See notes to the financial statements


72		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Australia Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	18.28		$	13.56		$	11.22		$	9.36		$	9.24		$	9.93

Income from investment operations:
Net investment income^a		0.35			0.70			0.45			0.32			0.23			0.24
Net realized and unrealized gain (loss)		1.91			4.60			2.32			1.81			(0.07	)		(0.71	)

Total from investment operations		2.26			5.30			2.77			2.13			0.16			(0.47	)

Less distributions from:
Net investment income		(0.67	)		(0.58	)		(0.43	)		(0.27	)		(0.04	)		(0.20	)
Return of capital		—			—			—			—			—			(0.02	)

Total distributions		(0.67	)		(0.58	)		(0.43	)		(0.27	)		(0.04	)		(0.22	)

Net asset value, end of period	$	19.87		$	18.28		$	13.56		$	11.22		$	9.36		$	9.24

Total return		12.60	%^b		39.58	%		24.95	%		23.33	%		1.74	%		(4.77	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	512,696		$	369,355		$	178,998		$	87,541		$	76,731		$	57,312
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		3.74	%		4.13	%		3.37	%		3.21	%		2.47	%		2.54	%
Portfolio turnover rate^e		2	%		17	%		9	%		8	%		5	%		23	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		73

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Brazil Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	28.18		$	16.96		$	12.19		$	8.30		$	11.20		$	19.25

Income from investment operations:
Net investment income^a		0.47			0.89			0.55			0.32			0.38			0.68
Net realized and unrealized gain (loss)		14.04			10.79			4.49			3.68			(3.28	)		(8.09	)

Total from investment operations		14.51			11.68			5.04			4.00			(2.90	)		(7.41	)

Less distributions from:
Net investment income		(0.58	)		(0.46	)		(0.27	)		(0.11	)		—			(0.56	)
Return of capital		—			—			—			—			—			(0.08	)

Total distributions		(0.58	)		(0.46	)		(0.27	)		(0.11	)		—			(0.64	)

Net asset value, end of period	$	42.11		$	28.18		$	16.96		$	12.19		$	8.30		$	11.20

Total return		52.04	%^b		69.72	%		41.42	%		48.85	%		(25.89	)%		(38.52	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,956,215		$	552,285		$	209,504		$	103,035		$	83,788		$	14,004
Ratio of expenses to average net assets^c		0.73	%^d		0.74	%		0.96	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income to average net assets^c		2.67	%		3.94	%		3.59	%		3.59	%		3.50	%		4.44	%
Portfolio turnover rate^e		6	%		48	%		106	%		85	%		103	%		43	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.72%.

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 six months ended February 28, 2006 and the year ended August 31, 2005 would have been 1% and 9%, respectively. See Note 4.

See notes to the financial statements.


74		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Canada Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	20.30		$	14.33		$	12.25		$	9.49		$	10.70		$	16.94

Income from investment operations:
Net investment income^a		0.09			0.17			0.11			0.10			0.07			0.05
Net realized and unrealized gain (loss)		3.02			6.00			2.17			2.69			(1.27	)		(5.92	)

Total from investment operations		3.11			6.17			2.28			2.79			(1.20	)		(5.87	)

Less distributions from:
Net investment income		(0.15	)		(0.20	)		(0.20	)		(0.03	)		(0.01	)		(0.02	)
Net realized gain		—			—			—			—			—			(0.31	)
Return of capital		—			—			—			—			—			(0.04	)

Total distributions		(0.15	)		(0.20	)		(0.20	)		(0.03	)		(0.01	)		(0.37	)

Net asset value, end of period	$	23.26		$	20.30		$	14.33		$	12.25		$	9.49		$	10.70

Total return		15.37	%^b		43.35	%		18.70	%		29.47	%		(11.23	)%		(34.95	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	962,891		$	420,301		$	325,298		$	503,407		$	66,420		$	28,889
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.70	%^e		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		0.79	%		1.00	%		0.81	%^f		0.98	%		0.70	%		0.44	%
Portfolio turnover rate^g		3	%		9	%		10	%		10	%		5	%		63	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

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

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		75

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Emerging Markets Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			Year ended Aug. 31, 2005^b			Year ended Aug. 31, 2004^b			Period from Apr. 7, 2003^a to Aug. 31, 2003^b
Net asset value, beginning of period	$	77.92		$	53.96		$	45.13		$	33.75

Income from investment operations:
Net investment income^c		0.29			1.65			1.13			0.26
Net realized and unrealized gain		20.39			24.72			7.97			11.12

Total from investment operations		20.68			26.37			9.10			11.38

Less distributions from:
Net investment income		(0.99	)		(2.41	)		(0.27	)		—

Total distributions		(0.99	)		(2.41	)		(0.27	)		—

Net asset value, end of period	$	97.61		$	77.92		$	53.96		$	45.13

Total return		26.67	%^d		46.17	%		20.21	%		33.72	%^d

Ratios/Supplemental data:
Net assets, end of period (000s)	$	12,415,717		$	7,000,858		$	1,958,596		$	297,846
Ratio of expenses to average net assets prior to waived fees^e		0.79	%		0.78	%		0.77	%		0.78	%
Ratio of expenses to average net assets after waived fees^e		0.79	%		0.77	%		0.76	%		0.78	%
Ratio of expenses to average net assets after waived fees and exclusive of foreign taxes and extraordinary expenses, if applicable^e		0.75	% ^f		0.74	%		0.74	%		0.72	%
Ratio of net investment income to average net assets^e		0.67	%		2.40	%		2.10	%		1.58	%
Portfolio turnover rate^g		3	%		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	Not annualized.

^e	Annualized for periods of less than one year.

^f	Excludes foreign taxes and proxy fees.

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

See notes to the financial statements.


76		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Hong Kong Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	13.01		$	10.91		$	9.03		$	7.99		$	8.93		$	13.24

Income from investment operations:
Net investment income^a		0.11			0.33			0.28			0.23			0.23			0.23
Net realized and unrealized gain (loss)		0.57			2.04			1.75			0.95			(1.11	)		(4.30	)

Total from investment operations		0.68			2.37			2.03			1.18			(0.88	)		(4.07	)

Less distributions from:
Net investment income		(0.36	)		(0.27	)		(0.15	)		(0.14	)		(0.06	)		(0.23	)
Return of capital		—			—			—			—			—			(0.01	)

Total distributions		(0.36	)		(0.27	)		(0.15	)		(0.14	)		(0.06	)		(0.24	)

Net asset value, end of period	$	13.33		$	13.01		$	10.91		$	9.03		$	7.99		$	8.93

Total return		5.33	%^b		21.96	%		22.69	%		15.14	%		(9.94	)%		(30.88	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	801,917		$	637,985		$	449,923		$	250,627		$	99,502		$	52,946
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.80	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		1.78	%		2.75	%		2.78	%		3.06	%		2.56	%		2.11	%
Portfolio turnover rate^e		3	%		6	%		5	%		10	%		15	%		43	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		77

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Malaysia Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	7.19		$	6.54		$	5.99		$	5.68		$	5.11		$	5.96

Income from investment operations:
Net investment income^a		0.14			0.20			0.13			0.10			0.08			0.06
Net realized and unrealized gain (loss)		0.29			0.61			0.52			0.30			0.52			(0.85	)

Total from investment operations		0.43			0.81			0.65			0.40			0.60			(0.79	)

Less distributions from:
Net investment income		(0.29	)		(0.16	)		(0.10	)		(0.09	)		(0.03	)		(0.06	)
Return of capital		—			—			—			—			—			(0.00	)^b

Total distributions		(0.29	)		(0.16	)		(0.10	)		(0.09	)		(0.03	)		(0.06	)

Net asset value, end of period	$	7.33		$	7.19		$	6.54		$	5.99		$	5.68		$	5.11

Total return		6.26	%^c		12.39	%		11.01	%		7.39	%		11.82	%		(13.22	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	394,963		$	387,575		$	224,218		$	99,730		$	93,262		$	80,877
Ratio of expenses to average net assets^d		0.56	%^e		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^d		3.82	%		2.85	%		1.97	%		1.91	%		1.53	%		1.19	%
Portfolio turnover rate^f		20	%		15	%		39	%		35	%		37	%		37	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

See notes to the financial statements.


78		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Mexico Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	29.04		$	19.35		$	15.04		$	13.65		$	15.35		$	16.72

Income from investment operations:
Net investment income^a		0.30			0.42			0.26			0.19			0.32			0.17
Net realized and unrealized gain (loss)		9.47			9.55			4.26			1.72			(1.95	)		(1.36	)

Total from investment operations		9.77			9.97			4.52			1.91			(1.63	)		(1.19	)

Less distributions from:
Net investment income		(0.48	)		(0.28	)		(0.21	)		(0.52	)		(0.07	)		(0.15	)
Net realized gain		—			—			—			—			—			(0.03	)

Total distributions		(0.48	)		(0.28	)		(0.21	)		(0.52	)		(0.07	)		(0.18	)

Net asset value, end of period	$	38.33		$	29.04		$	19.35		$	15.04		$	13.65		$	15.35

Total return		33.75	%^b		51.77	%		30.28	%		14.60	%		(10.67	)%		(7.02	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	471,516		$	255,557		$	129,623		$	60,155		$	70,994		$	46,056
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.78	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		1.73	%		1.70	%		1.40	%		1.43	%		2.05	%		1.12	%
Portfolio turnover rate^e		8	%		9	%		12	%		13	%		8	%		34	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		79

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Pacific ex-Japan Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Year ended Aug. 31, 2003			Period from Oct. 25, 2001^a to Aug. 31, 2002
Net asset value, beginning of period	$	97.57		$	75.73		$	62.03		$	52.51		$	50.03

Income from investment operations:
Net investment income^b		1.58			3.70			2.68			1.87			1.35
Net realized and unrealized gain		8.60			21.15			12.53			8.53			1.40

Total from investment operations		10.18			24.85			15.21			10.40			2.75

Less distributions from:
Net investment income		(3.70	)		(3.01	)		(1.51	)		(0.88	)		(0.27	)

Total distributions		(3.70	)		(3.01	)		(1.51	)		(0.88	)		(0.27	)

Net asset value, end of period	$	104.05		$	97.57		$	75.73		$	62.03		$	52.51

Total return		10.68	%^c		33.27	%		24.74	%		20.15	%		5.51	%^c

Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,862,408		$	1,522,107		$	651,250		$	223,298		$	105,029
Ratio of expenses to average net assets^d		0.51	%^e		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment income to average net assets^d		3.17	%		4.09	%		3.68	%		3.47	%		2.87	%
Portfolio turnover rate^f		3	%		16	%		8	%		8	%		5	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.50%.

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

See notes to the financial statements.


80		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Singapore Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	7.77		$	6.52		$	5.38		$	5.01		$	5.34		$	7.58

Income from investment operations:
Net investment income^a		0.06			0.38			0.22			0.12			0.07			0.07
Net realized and unrealized gain (loss)		1.03			1.15			1.04			0.33			(0.36	)		(2.16	)

Total from investment operations		1.09			1.53			1.26			0.45			(0.29	)		(2.09	)

Less distributions from:
Net investment income		(0.29	)		(0.28	)		(0.12	)		(0.08	)		(0.04	)		(0.07	)
Net realized gain		—			—			—			—			—			(0.06	)
Return of capital		—			—			—			—			—			(0.02	)

Total distributions		(0.29	)		(0.28	)		(0.12	)		(0.08	)		(0.04	)		(0.15	)

Net asset value, end of period	$	8.57		$	7.77		$	6.52		$	5.38		$	5.01		$	5.34

Total return		14.40	%^b		24.06	%		23.47	%		9.30	%		(5.42	)%		(27.89	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	489,211		$	341,137		$	170,047		$	108,202		$	88,126		$	73,704
Ratio of expenses to average net assets^c		0.56	%^d		0.57	%		0.79	%		0.84	%		0.84	%		0.84	%
Ratio of net investment income to average net assets^c		1.52	%		5.19	%		3.50	%		2.67	%		1.44	%		1.15	%
Portfolio turnover rate^e		3	%		8	%		9	%		14	%		9	%		32	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

^d	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets remains unchanged.

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

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		81

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI South Africa Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004			Period from Feb. 3, 2003^a to Aug. 31, 2003
Net asset value, beginning of period	$	82.99		$	59.92		$	46.81		$	38.72

Income from investment operations:
Net investment income^b		0.77			1.92			1.23			0.89
Net realized and unrealized gain		25.36			22.36			13.24			7.20

Total from investment operations		26.13			24.28			14.47			8.09

Less distributions from:
Net investment income		(1.97	)		(1.21	)		(1.36	)		—

Total distributions		(1.97	)		(1.21	)		(1.36	)		—

Net asset value, end of period	$	107.15		$	82.99		$	59.92		$	46.81

Total return		31.71	%^c		40.62	%		31.30	%		20.89	%^c

Ratios/Supplemental data:
Net assets, end of period (000s)	$	412,534		$	153,530		$	92,882		$	81,914
Ratio of expenses to average net assets^d		0.73	%^e		0.74	%		0.95	%		0.99	%
Ratio of net investment income to average net assets^d		1.58	%		2.62	%		2.23	%		3.86	%
Portfolio turnover rate^f		3	%		32	%		13	%		17	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.72%.

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

See notes to the financial statements.


82		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI South Korea Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	34.75		$	24.17		$	23.06		$	21.17		$	13.25		$	18.16

Income from investment operations:
Net investment income (loss)^a		0.43			0.46			0.22			0.19			(0.00	)^b		0.09
Net realized and unrealized gain (loss)		11.84			10.22			1.13			1.70			7.92			(4.90	)

Total from investment operations		12.27			10.68			1.35			1.89			7.92			(4.81	)

Less distributions from:
Net investment income		(0.26	)		(0.10	)		(0.24	)		—			—			(0.03	)
Return of capital		—			—			—			—			—			(0.07	)

Total distributions		(0.26	)		(0.10	)		(0.24	)		—			—			(0.10	)

Net asset value, end of period	$	46.76		$	34.75		$	24.17		$	23.06		$	21.17		$	13.25

Total return		35.36	%^c		44.29	%		5.83	%		8.93	%		59.77	%		(26.49	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,842,457		$	698,455		$	315,464		$	154,486		$	96,336		$	37,767
Ratio of expenses to average net assets^d		0.73	%		0.74	%		0.94	%		0.99	%		1.00	%		1.01	%
Ratio of expenses to average net assets exclusive of foreign taxes and extraordinary expenses, if applicable^d		0.72	%^e		0.74	%		0.94	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets^d		2.06	%		1.49	%		0.87	%		0.98	%		(0.01	)%		0.64	%
Portfolio turnover rate^f		7	%		30	%		29	%		39	%		25	%		39	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Excludes foreign taxes and proxy fees.

See notes to the financial statements.


FINANCIAL HIGHLIGHTS		83

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Taiwan Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	11.57		$	10.66		$	10.79		$	8.82		$	9.01		$	16.41

Income from investment operations:
Net investment income (loss)^a		(0.03	)		0.27			0.14			0.04			(0.03	)		(0.03	)
Net realized and unrealized gain (loss)		1.33			0.72			(0.25	)		1.93			(0.16	)		(7.37	)

Total from investment operations		1.30			0.99			(0.11	)		1.97			(0.19	)		(7.40	)

Less distributions from:
Net investment income		(0.14	)		(0.08	)		(0.02	)		—			—			—

Total distributions		(0.14	)		(0.08	)		(0.02	)		—			—			—

Net asset value, end of period	$	12.73		$	11.57		$	10.66		$	10.79		$	8.82		$	9.01

Total return		11.24	%^b		9.28	%		(1.10	)%		22.45	%		(2.11	)%		(45.09	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,050,408		$	752,640		$	390,228		$	234,727		$	142,043		$	110,786
Ratio of expenses to average net assets^c		0.75	%		1.03	%		1.19	%^d		1.31	%		1.33	%		1.60	%
Ratio of expenses to average net assets exclusive of foreign taxes and extraordinary expenses, if applicable^c		0.72	%^e		0.74	%		0.92	%		0.99	%		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets^c		(0.45	)%		2.34	%		1.23	%^f		0.43	%		(0.28	)%		(0.23	)%
Portfolio turnover rate^g		3	%		20	%		19	%		15	%		11	%		30	%

^a	Based on average shares outstanding throughout each period.

^b	Not annualized.

^c	Annualized for periods of less than one year.

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

^e	Excludes foreign taxes and proxy fees.

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

See notes to the financial statements.


84		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited)

iSHARES^®, INC.

These financial statements relate only to the iShares MSCI Australia, iShares MSCI Brazil, iShares MSCI Canada, iShares MSCI Emerging Markets, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds (each, a “Fund,” collectively, the “Funds”).

1. SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATION


NOTES TO THE FINANCIAL STATEMENTS		85

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

FOREIGN CURRENCY TRANSLATION

FOREIGN TAXES

South Korea and Taiwan may levy taxes on stock dividends at rates of 16.50% and up to 20.00%, respectively, based on the par value of stock dividends received by the iShares MSCI Emerging Markets, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds. These taxes are paid by the Funds receiving the stock dividends and, if any, are disclosed in their respective Statements of Operations.

DISTRIBUTIONS TO SHAREHOLDERS

The tax character of current year distributions will be determined at the end of the current fiscal year.

FEDERAL INCOME TAXES


86		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

The Funds had tax basis net capital loss carryforwards as of August 31, 2005, the tax year-end of the Funds, as follows:


*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

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

As of February 28, 2006, the aggregate unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:


*iShares MSCI Index Fund*	*Tax Cost*		Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation
Australia	$	425,830,767	$	87,728,808	$	(5,057,635	)	$	82,671,173
Brazil		1,270,127,639		673,769,348		—			673,769,348
Canada		798,210,297		170,236,950		(8,057,029	)		162,179,921
Emerging Markets		10,163,302,891		3,060,101,204		(64,503,049	)		2,995,598,155
Hong Kong		683,834,099		121,515,220		(3,657,251	)		117,857,969
Malaysia		321,105,574		79,654,312		(6,032,838	)		73,621,474
Mexico		418,155,062		85,251,199		(865,071	)		84,386,128
Pacific ex-Japan		1,461,546,433		402,967,713		(5,437,117	)		397,530,596
Singapore		403,481,182		89,967,802		(3,474,672	)		86,493,130
South Africa		322,791,429		89,793,783		—			89,793,783
South Korea		1,351,115,537		513,166,039		(547,832	)		512,618,207
Taiwan		1,875,169,277		204,208,266		(29,635,216	)		174,573,050


NOTES TO THE FINANCIAL STATEMENTS		87

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

REPURCHASE AGREEMENTS

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

For its investment advisory services to the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Hong Kong, iShares MSCI Malaysia, iShares MSCI Mexico and iShares MSCI Singapore Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds) as follows:


*Investment Advisory Fee*		*Aggregate Net Assets*
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion

For its investment advisory services to the iShares MSCI Brazil, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate net assets of these four Funds as follows:


*Investment Advisory Fee*		*Aggregate Net Assets*
0.74%		First $2 billion
0.69		Over $2 billion, up to and including $4 billion
0.64		Over $4 billion

For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is entitled to an annual investment advisory fee based on the average daily net assets of the Fund of 0.50%. For its investment advisory services to the iShares MSCI Emerging Markets Index Fund, BGFA is entitled to an annual investment advisory fee based on the average daily net assets of the Fund excluding any investments in other iShares Funds, of 0.75%. BGFA voluntarily waives its advisory fees for the iShares MSCI Emerging Markets Index Fund in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds.


88		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.


*iShares MSCI Index Fund*	Securities Lending Agent Fees
Australia	$	39,225
Brazil		1,515
Emerging Markets		3,086,710
Hong Kong		98,186
Mexico		54,278
Pacific ex-Japan		232,018
Singapore		84,220
South Korea		336,974

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 in shares of other iShares Funds that invest in securities in the Fund’s benchmark index. As of February 28, 2006, the iShares MSCI Emerging Markets Index Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.


NOTES TO THE FINANCIAL STATEMENTS		89

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.


iShares MSCI Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	*Value at* *End of Period*		Dividend and Interest Income		Net Realized Gain
Australia
IMMF	108	17,435	17,471	72	$	72,364	$	2,830	$	—
Brazil
IMMF	1,112	313,723	312,310	2,525		2,525,013		50,404		—
Canada
IMMF	39	43,356	43,000	395		394,916		7,383		—
Emerging Markets
IMMF	4,035	1,126,135	1,115,684	14,486		14,485,808		182,501		—
iShares MSCI Malaysia Index Fund	1,180	34	—	1,214		8,901,252		350,401		—
iShares MSCI South Korea Index Fund	402	203	40	565		26,219,840		169,452		748,462
iShares MSCI Taiwan Index Fund	1,516	1,263	65	2,714		34,299,904		211,224		227,566
Hong Kong
IMMF	23	36,788	36,115	696		696,030		6,375		—
Malaysia
IMMF	401	40,408	40,587	222		222,045		5,420		—
Mexico
IMMF	17	39,290	38,939	368		367,620		6,955		—
Pacific ex-Japan
IMMF	816	64,539	65,336	19		18,881		10,652		—
Singapore
IMMF	52	28,326	28,158	220		220,334		4,817		—
South Africa
IMMF	5	16,319	15,959	365		365,084		2,861		—
South Korea
IMMF	1,393	295,994	293,709	3,678		3,678,378		49,367		—
Taiwan
IMMF	70	157,471	156,270	1,271		1,270,794		25,365		—

During the six months ended February 28, 2006, certain Funds invested cash collateral from securities on loan in a joint investment account with other investment funds managed by BGFA (see Note 5). The joint account invested in the GMMF, IMMF and PMMF. Due to the nature of the structure of the joint account, the information needed to isolate the activity at the Fund level is not available. The information reported above for each Fund does not include the Fund’s holdings of the GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.


90		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

As of February 28, 2006, certain directors and officers of the Company are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 28, 2006, were as follows:


*iShares MSCI Index Fund*	*Purchases*		*Sales*
Australia	$	9,534,267	$	18,560,881
Brazil		999,554,484		71,006,849
Canada		21,955,797		23,666,262
Emerging Markets		297,180,024		343,583,628
Hong Kong		23,256,462		33,374,181
Malaysia		75,065,297		81,668,865
Mexico		31,478,006		34,738,403
Pacific ex-Japan		50,598,488		83,873,090
Singapore		11,101,089		18,215,805
South Africa		6,509,970		8,078,213
South Korea		904,126,985		81,880,740
Taiwan		1,195,445,794		32,868,058

In-kind transactions (see Note 4) for the six months ended February 28, 2006, were as follows:


*iShares MSCI Index Fund*	*In-kind Purchases*		*In-kind Sales*
Australia	$	111,651,523	$	3,689,037
Canada		521,592,513		60,536,184
Emerging Markets		4,024,144,838		757,309,170
Hong Kong		153,931,979		9,796,199
Mexico		269,547,121		149,192,100
Pacific ex-Japan		270,695,876		39,835,451
Singapore		116,826,331		11,370,406
South Africa		245,143,639		35,097,607


NOTES TO THE FINANCIAL STATEMENTS		91

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

4. CAPITAL SHARE TRANSACTIONS

The Company has authorized 10.9 billion shares of $.001 par value capital stock. The number of shares authorized to each Fund are as follows:


*iShares MSCI Index Fund*		*Authorized Shares*
Australia		127,800,000
Brazil		500,000,000
Canada		340,200,000
Emerging Markets		500,000,000
Hong Kong		191,400,000
Malaysia		127,800,000
Mexico		255,000,000
Pacific ex-Japan		500,000,000
Singapore		191,400,000
South Africa		200,000,000
South Korea		200,000,000
Taiwan		200,000,000

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a portfolio sampling representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds which are offered in Creation Units solely for cash in U.S. dollars). A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash.

5. LOANS OF PORTFOLIO SECURITIES


92		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES:		93

The iShares^® Family of Funds

iShares S&P Domestic Index Funds

iShares S&P 1500 (ISI)

iShares S&P 100 (OEF)

iShares S&P 500 (IVV)

iShares S&P 500 Growth (IVW)

iShares S&P 500 Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400 Growth (IJK)

iShares S&P MidCap 400 Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600 Growth (IJT)

iShares S&P SmallCap 600 Value (IJS)

iShares Domestic Sector Index Funds

iShares Cohen & Steers Realty Majors (ICF)

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

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

iShares Dow Jones U.S. Consumer Goods Sector (IYK)

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

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

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

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

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

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

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

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

iShares Dow Jones Transportation Average (IYT)

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

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

iShares Goldman Sachs Natural Resources (IGE)

iShares Goldman Sachs Networking (IGN)

iShares Goldman Sachs Semiconductor (IGW)

iShares Goldman Sachs Software (IGV)

iShares Goldman Sachs Technology (IGM)

iShares Nasdaq Biotechnology (IBB)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares Russell Microcap™ (IWC)

iShares International Country Index Funds

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria (EWO)

iShares MSCI Belgium (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico (EWW)

iShares MSCI Netherlands (EWN)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman TIPS (TIP)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 20+ Year Treasury (TLT)

iShares GS $ InvesTop™ Corporate (LQD)

iShares Specialty Index Funds

iShares KLD Select Social SM (KLD)

iShares Dow Jones Select Dividend (DVY)

iShares International Index Funds

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

iShares NYSE Index Funds

iShares NYSE Composite (NYC)

iShares NYSE 100 (NY)

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

This advertising section does not constitute part of the 2006 Semi-Annual Report.

2461-iS-1205


94		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

LOGO

iShares®

2006 ANNUAL REPORT TO SHAREHOLDERS | FEBRUARY 28, 2006

iSHARES MSCI SERIES

iSHARES MSCI JAPAN INDEX FUND

Table of Contents


Fund Performance Overview		1
Shareholder Expenses		2
Schedule of Investments		3
Financial Statements		11
Financial Highlights		14
Notes to the Financial Statements		15
iShares Family of Funds		22

Fund Performance Overview

iSHARES^® MSCI JAPAN INDEX FUND

Performance as of February 28, 2006

The iShares MSCI Japan Index Fund (the “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”). The Fund invests in a representative sample of the securities in the Index, which have a similar investment profile as the Index. For the six-month period ended February 28, 2006, the Fund returned 28.02%, while the Index returned 28.53%.


Average Annual Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
30.15%	28.20	%	31.14	%	6.14	%	5.74	%	6.65	%	(0.01	)%	(0.16	)%	0.75	%

Cumulative Total Returns
*Year Ended 2/28/06*					*Five Years Ended 2/28/06*						*Inception to 2/28/06*
*NAV*	*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*		*NAV*		*MARKET*		*INDEX*
30.15%	28.20	%	31.14	%	34.70	%	32.16	%	37.98	%	(0.09	)%	(1.62	)%	7.78	%

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


PORTFOLIO ALLOCATION As of 2/28/06
*Sector*	% of Net Assets
Consumer Cyclical	24.93	%
Financial	23.20
Industrial	19.95
Consumer Non-Cyclical	9.46
Basic Materials	8.26
Communications	4.77
Technology	4.35
Utilities	4.09
Energy	0.98
Short-Term and Other Net Assets	0.01

TOTAL	100.00	%


TOP TEN FUND HOLDINGS As of 2/28/06
*Security*	% of Net Assets
Toyota Motor Corp.	5.65	%
Mitsubishi UFJ Financial Group	4.67
Mizuho Financial Group Inc.	2.79
Sumitomo Mitsui Financial Group Inc.	2.37
Takeda Pharmaceutical Co. Ltd.	1.80
Sony Corp.	1.76
Canon Inc.	1.73
Honda Motor Co. Ltd.	1.70
Matsushita Electric Industrial Co. Ltd.	1.53
Seven & I Holdings Co. Ltd.	1.24

TOTAL	25.24	%


FUND PERFORMANCE OVERVIEW		1

Shareholder Expenses

iSHARES^® MSCI JAPAN INDEX FUND

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from September 1, 2005 to February 28, 2006.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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


	Beginning Account Value (September 1, 2005)		Ending Account Value (February 28, 2006)		Annualized Expense Ratio		Expenses Paid During Period ^a (September 1, 2005 to February 28, 2006)
Actual	$	1,000.00	$	1,280.20	0.56	%	$	3.17
Hypothetical (5% return before expenses)		1,000.00		1,022.02	0.56			2.81

^a	Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (181 days) and divided by the number of days in the year (365 days).


2		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
COMMON STOCKS – 99.99%
ADVERTISING – 0.34%
Asatsu-DK Inc.	163,600	$	5,890,024
Dentsu Inc.	8,180		27,613,900
Hakuhodo DY Holdings Inc.	163,600		13,319,646

			46,823,570
AGRICULTURE – 0.62%
Japan Tobacco Inc.	4,908		84,748,543

			84,748,543
AIRLINES – 0.15%
All Nippon Airways Co. Ltd.¹	3,272,000		12,034,292
Japan Airlines System Corp.¹	3,272,000		8,785,599

			20,819,891
APPAREL – 0.28%
Gunze Ltd.	1,636,000		10,537,069
Onward Kashiyama Co. Ltd.	1,636,000		27,981,144

			38,518,213
AUTO MANUFACTURERS – 8.40%
Hino Motors Ltd.	1,636,000		10,438,196
Honda Motor Co. Ltd.	3,926,400		233,905,979
Nissan Motors Co. Ltd.	11,615,600		134,382,939
Toyota Motor Corp.	14,396,800		776,861,645

			1,155,588,759
AUTO PARTS & EQUIPMENT – 1.67%
Aisin Seiki Co. Ltd.	981,600		35,170,645
Bridgestone Corp.	3,272,000		64,408,893
Denso Corp.	2,944,800		108,817,129
NOK Corp.¹	490,800		14,492,001
Toyoda Gosei Co. Ltd.	327,200		7,034,129

			229,922,797
BANKS – 13.41%
Bank of Fukuoka Ltd.	3,272,000		28,023,518
Bank of Yokohama Ltd. (The)	6,544,000		53,561,080
Chiba Bank Ltd. (The)	3,272,000		27,797,522
Gunma Bank Ltd.	1,636,000		12,316,789
Hokuhoku Financial Group Inc.	4,908,000		21,399,007
Joyo Bank Ltd.	4,908,000		31,738,329
Mitsubishi UFJ Financial Group	42,517		642,389,380
Mitsubishi UFJ Securities Co. Ltd.	1,629,000		24,120,311
Mitsui Trust Holdings Inc.	3,272,000		48,532,665
Mizuho Financial Group Inc.	47,448		383,434,733
Nishi-Nippon City Bank Ltd. (The)	3,265,000		16,913,447
Resona Holdings Inc.²	22,904		82,064,839
77 Bank Ltd. (The)	1,636,000		12,429,786
Shinsei Bank Ltd.	4,908,000		33,263,803
Shizuoka Bank Ltd. (The)	3,272,000		32,345,694
Sumitomo Mitsui Financial Group Inc.	29,448		325,434,405
Sumitomo Trust & Banking Co. Ltd. (The)	6,544,000		67,403,341

			1,843,168,649
BEVERAGES – 0.83%
Asahi Breweries Ltd.	1,636,000		22,218,243
Coca-Cola West Japan Co. Ltd.	327,200		7,853,366
Ito En Ltd.	327,200		10,198,074
Kirin Brewery Co. Ltd.	4,908,000		65,171,630
Sapporo Breweries Ltd.¹	1,636,000		8,545,478

			113,986,791
BUILDING MATERIALS – 1.38%
Asahi Glass Co. Ltd.	4,908,000		69,917,548
Daikin Industries Ltd.	1,145,200		38,362,841
JS Group Corp.	1,472,400		28,984,002
Matsushita Electric Works Ltd.	1,636,000		19,252,044
Nippon Sheet Glass Co. Ltd.	1,636,000		6,949,381
Sumitomo Osaka Cement Co. Ltd.	1,636,000		5,169,661
Taiheiyo Cement Corp.	4,908,000		21,356,633

			189,992,110
CHEMICALS – 4.08%
Asahi Kasei Corp.	6,544,000		43,673,749
Daicel Chemical Industries Ltd.	1,636,000		13,319,646
Dainippon Ink & Chemical Inc.	3,272,000		13,418,520
Denki Kagaku Kogyo Kabushiki Kaisha	3,272,000		13,898,762
Ishihara Sangyo Kaisha Ltd.	1,636,000		3,262,819
JSR Corp.	1,308,800		38,984,330
Kaneka Corp.	1,636,000		21,653,252
Mitsubishi Chemical Holdings Corp.²	5,307,000		32,439,940
Mitsubishi Gas Chemical Co. Inc.	1,636,000		19,506,290
Mitsui Chemicals Inc.	3,272,000		26,385,047
Nippon Kayaku Co. Ltd.	1,636,000		13,743,388


SCHEDULE OF INVESTMENTS		3

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Nissan Chemical Industries Ltd.	1,636,000	$	27,246,657
Nitto Denko Corp.	818,000		71,047,528
Shin-Etsu Chemical Co. Ltd.	1,963,200		105,596,685
Showa Denko K.K.	4,908,000		21,314,259
Sumitomo Chemical Co. Ltd.	6,544,000		51,414,116
Taiyo Nippon Sanso Corp.	1,636,000		11,511,677
Tosoh Corp.	3,272,000		17,401,701
Ube Industries Ltd.	4,908,000		14,619,123

			560,437,489
COMMERCIAL SERVICES – 0.97%
Benesse Corp.	327,200		11,328,056
Dai Nippon Printing Co. Ltd.	3,272,000		58,193,999
Kamigumi Co. Ltd.	1,636,000		12,599,283
TIS Inc.	327,200		8,785,599
Toppan Printing Co. Ltd.	3,272,000		42,035,277

			132,942,214
COMPUTERS – 1.14%
CSK Corp.	327,200		15,085,241
Fujitsu Ltd.	9,816,000		79,409,385
Meitec Corp.¹	163,600		5,649,903
Net One Systems Co. Ltd.¹	4,908		9,957,954
TDK Corp.	654,400		46,103,207

			156,205,690
COSMETICS & PERSONAL CARE – 0.89%
Aderans Co. Ltd.	163,600		4,548,172
Kao Corp.	3,272,000		89,268,466
Shiseido Co. Ltd.	1,636,000		29,026,376

			122,843,014
DISTRIBUTION & WHOLESALE – 3.18%
Itochu Corp.	8,180,000		68,999,439
Marubeni Corp.	6,548,000		32,846,000
Mitsubishi Corp.	6,216,800		145,993,490
Mitsui & Co. Ltd.	8,180,000		112,998,057
Sojitz Corp.²	1,636,000		9,096,344
Sumitomo Corp.	4,908,000		67,375,092

			437,308,422
DIVERSIFIED FINANCIAL SERVICES – 4.30%
ACOM Co. Ltd.	376,280		23,195,676
Aeon Credit Service Co. Ltd.	491,070		14,118,395
AIFUL Corp.	409,000		27,507,965
Credit Saison Co. Ltd.	818,000		38,984,329
Daiwa Securities Group Inc.	6,544,000		79,098,640
Nikko Cordial Corp.	4,090,000		65,750,745
Nomura Holdings Inc.	8,672,400		168,094,436
ORIX Corp.	409,000		109,819,987
Promise Co. Ltd.	490,800		29,789,113
Takefuji Corp.	539,880		34,865,551

			591,224,837
ELECTRIC – 3.33%
Chubu Electric Power Co. Inc.¹	3,272,000		87,008,504
Electric Power Development Co. Ltd.	981,600		31,526,458
Kansai Electric Power Co. Inc. (The)	3,763,600		87,895,861
Kyushu Electric Power Co. Inc.	1,963,200		47,459,184
Tohoku Electric Power Co. Inc.	2,126,800		48,292,545
Tokyo Electric Power Co. Inc. (The)	5,726,400		155,241,925

			457,424,477
ELECTRICAL COMPONENTS & EQUIPMENT – 3.71%
Casio Computer Co. Ltd.	1,636,000		26,695,791
Fujikura Ltd.	1,636,000		18,475,183
Furukawa Electric Co. Ltd.²	3,272,000		26,017,802
Hitachi Cable Ltd.	1,636,000		9,308,215
Hitachi Ltd.	16,360,000		115,964,256
Mitsubishi Electric Corp.	9,816,000		79,239,888
Sharp Corp.	4,908,000		87,714,742
Stanley Electric Co. Ltd.	655,600		12,735,592
Sumitomo Electric Industries Ltd.	3,272,000		49,775,644
Toshiba Corp.	14,724,000		84,663,795

			510,590,908
ELECTRONICS – 4.55%
Advantest Corp.	327,300		37,668,111
Alps Electric Co. Ltd.	818,000		12,924,153
Fanuc Ltd.	818,000		69,917,548
Hirose Electric Co. Ltd.	163,600		22,345,366
IBIDEN Co. Ltd.	654,400		31,187,464
Keyence Corp.	163,620		45,275,381
Kyocera Corp.	818,000		73,448,737
Mabuchi Motor Co. Ltd.	163,600		8,432,480
Minebea Co. Ltd.	1,636,000		9,957,954
Murata Manufacturing Co. Ltd.	981,600		61,696,939
NEC Corp.	9,816,000		61,103,700
NGK Insulators Ltd.	1,636,000		22,345,366


4		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
Nippon Electric Glass Co. Ltd.	1,636,000	$	40,043,687
Omron Corp.	1,145,200		32,034,949
Secom Co. Ltd.	1,153,000		57,737,104
Yaskawa Electric Corp.²	1,636,000		18,079,689
Yokogawa Electric Corp.¹	1,145,600		21,265,185

			625,463,813
ENGINEERING & CONSTRUCTION – 1.17%
JGC Corp.	1,636,000		35,311,893
Kajima Corp.¹	4,908,000		29,068,750
Nishimatsu Construction Co. Ltd.¹	1,636,000		6,991,755
Obayashi Corp.	3,272,000		24,633,577
Okumura Corp.	1,636,000		8,870,347
Shimizu Corp.	3,272,000		23,221,101
Taisei Corp.	4,908,000		23,983,838
Toda Corp.	1,636,000		8,432,480

			160,513,741
ENTERTAINMENT – 0.25%
Oriental Land Co. Ltd.	327,200		19,322,667
Toho Co. Ltd.	821,400		15,495,437

			34,818,104
FOOD – 0.96%
Ajinomoto Co. Inc.	3,272,000		35,029,397
Ariake Japan Co. Ltd.¹	170,330		4,794,092
Katokichi Co. Ltd.	999,600		6,895,579
Kikkoman Corp.	1,636,000		16,130,472
Meiji Dairies Corp.	1,636,000		8,898,597
Meiji Seika Kaisha Ltd.	1,636,000		8,418,355
Nichirei Corp.	1,636,000		7,556,745
Nippon Meat Packers Inc.	1,636,000		16,314,094
Nisshin Seifun Group Inc.	1,198,600		12,252,471
Nissin Food Products Co. Ltd.	490,800		15,042,867

			131,332,669
FOREST PRODUCTS & PAPER – 0.41%
Nippon Paper Group Inc.	4,908		22,797,359
OJI Paper Co. Ltd.	4,908,000		34,153,663

			56,951,022
GAS – 0.76%
Osaka Gas Co. Ltd.	11,452,000		43,998,618
Tokyo Gas Co. Ltd.	13,088,000		60,227,965

			104,226,583
HAND & MACHINE TOOLS – 0.90%
Fuji Electric Holdings Co. Ltd.	3,272,000		15,508,984
Nidec Corp.	539,600		43,326,397
SMC Corp.	327,200		46,752,947
THK Co. Ltd.	654,400		18,644,679

			124,233,007
HEALTH CARE-PRODUCTS – 0.85%
Hoya Corp.	2,159,800		86,522,529
Terumo Corp.	981,600		30,170,481

			116,693,010
HOME BUILDERS – 0.94%
Daiwa House Industry Co. Ltd.	3,272,000		52,911,341
Sekisui Chemical Co. Ltd.	3,272,000		26,582,793
Sekisui House Ltd.	3,272,000		50,142,888

			129,637,022
HOME FURNISHINGS – 3.56%
Matsushita Electric Industrial Co. Ltd.	9,816,015		210,176,708
Pioneer Corp.	1,308,800		20,712,544
Sony Corp.	5,071,600		242,140,712
Yamaha Corp.	981,600		16,992,083

			490,022,047
HOUSEWARES – 0.10%
Toto Ltd.	1,636,000		13,927,011

			13,927,011
INSURANCE – 3.06%
Millea Holdings Inc.	8,180		168,790,848
Mitsui Sumitomo Insurance Co. Ltd.	6,544,000		87,573,494
Sompo Japan Insurance Inc.	4,908,000		71,993,887
T&D Holdings Inc.	1,227,000		92,905,590

			421,263,819
INTERNET – 1.72%
Index Corp.¹	5,710		10,500,583
Rakuten Inc.	21,268		18,545,806
SBI Holdings Inc.¹	31,084		16,692,638
Softbank Corp.	3,762,800		116,952,989
Trend Micro Inc.	818,000		25,424,563
Yahoo! Japan Corp.	40,900		48,730,412

			236,846,991


SCHEDULE OF INVESTMENTS		5

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
IRON & STEEL – 2.97%
JFE Holdings Inc.	2,781,250	$	103,734,081
Kobe Steel Ltd.	13,088,000		50,397,134
Nippon Steel Corp.	31,084,000		125,328,970
Nisshin Steel Co. Ltd.	4,908,000		16,610,715
Sumitomo Metal Industries Ltd.	21,268,000		95,666,981
Tokyo Steel Manufacturing Co. Ltd.	818,000		15,925,664

			407,663,545
LEISURE TIME – 0.85%
Namco Bandai Holdings Inc.²	1,318,898		16,374,491
Sankyo Co. Ltd.	327,200		20,141,904
Sega Sammy Holdings Inc.	756,400		31,215,989
Shimano Inc.	490,800		14,195,381
Yamaha Motor Co. Ltd.	1,472,400		34,196,037

			116,123,802
MACHINERY – CONSTRUCTION & MINING – 0.64%
Komatsu Ltd.	4,908,000		88,350,357

			88,350,357
MACHINERY - DIVERSIFIED – 0.97%
Amada Co. Ltd.	1,636,000		15,621,982
Kubota Corp.	4,908,000		48,730,413
Sumitomo Heavy Industries Ltd.	3,272,000		29,661,990
Toyota Industries Corp.	982,000		39,678,481

			133,692,866
MANUFACTURING – 2.17%
Fuji Photo Film Co. Ltd.	2,454,000		79,451,759
Ishikawajima-Harima Heavy Industries Co. Ltd.^1,2	6,544,000		20,226,653
Kawasaki Heavy Industries Ltd.¹	8,180,000		28,461,387
Konica Minolta Holdings Inc.	1,328,000		16,739,737
Mitsubishi Heavy Industries Ltd.	16,360,000		77,686,164
Nikon Corp.	1,636,000		28,178,890
Olympus Corp.	1,636,000		47,600,432

			298,345,022
MEDIA – 0.02%
Fuji Television Network Inc.	1,154		2,809,653

			2,809,653
METAL FABRICATE & HARDWARE – 0.27%
NSK Ltd.	3,272,000		25,339,814
NTN Corp.	1,636,000		12,232,040

			37,571,854
MINING – 0.80%
Dowa Mining Co. Ltd.	1,636,000		18,291,560
Mitsubishi Materials Corp.¹	4,908,000		25,805,931
Mitsui Mining & Smelting Co. Ltd.	3,272,000		22,458,364
Sumitomo Metal Mining Co. Ltd.	3,272,000		44,040,993

			110,596,848
OFFICE & BUSINESS EQUIPMENT – 2.29%
Canon Inc.	3,762,800		237,804,412
Ricoh Co. Ltd.	3,272,000		61,160,198
Seiko Epson Corp.	654,400		15,706,730

			314,671,340
OIL & GAS – 0.98%
INPEX Corp.	1,636		15,819,728
Nippon Mining Holdings Inc.	4,090,000		30,756,659
Nippon Oil Corp.	6,544,500		49,892,454
Teikoku Oil Co. Ltd.	1,636,000		22,331,241
TonenGeneral Sekiyu K.K.¹	1,636,000		16,356,468

			135,156,550
PACKAGING & CONTAINERS – 0.15%
Toyo Seikan Kaisha Ltd.	1,145,200		19,873,534

			19,873,534
PHARMACEUTICALS – 4.34%
Astellas Pharma Inc.	2,781,230		108,055,558
Chugai Pharmaceutical Co. Ltd.	1,636,000		30,156,356
Daiichi Sankyo Co. Ltd.²	2,978,169		61,453,261
Eisai Co. Ltd.	1,308,800		61,131,949
Kyowa Hakko Kogyo Co. Ltd.	1,636,000		12,486,285
Shionogi & Co. Ltd.	1,636,000		22,684,360
Taisho Pharmaceutical Co. Ltd.	1,636,000		34,888,151
Takeda Pharmaceutical Co. Ltd.	4,417,200		247,889,489
Tanabe Seiyaku Co. Ltd.	1,636,000		18,164,438

			596,909,847
REAL ESTATE – 2.24%
Daito Trust Construction Co. Ltd.	490,800		23,093,978
Leopalace21 Corp.	654,400		23,786,091
Mitsubishi Estate Co. Ltd.	4,908,000		104,452,580
Mitsui Fudosan Co. Ltd.	4,908,000		102,969,480
Sumitomo Realty & Development Co. Ltd.	1,636,000		38,560,587
Tokyu Land Corp.	1,636,000		14,506,126

			307,368,842


6		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares*	*Value*
REAL ESTATE INVESTMENT TRUSTS – 0.11%
Japan Real Estate Investment Corp.	1,636	$	14,689,747

			14,689,747
RETAIL – 3.87%
Aeon Co. Ltd.	3,435,600		82,756,952
Aoyama Trading Co. Ltd.	327,200		10,169,825
Autobacs Seven Co. Ltd.	163,600		8,305,357
Citizen Watch Co. Ltd.¹	1,963,200		17,661,596
Daimaru Inc. (The)	1,636,000		22,260,617
FamilyMart Co. Ltd.	327,200		10,311,073
Fast Retailing Co. Ltd.	327,200		28,701,507
Isetan Co. Ltd.	1,308,800		24,012,087
Lawson Inc.	327,200		12,288,539
Marui Co. Ltd.	1,636,000		31,356,961
Mitsukoshi Ltd.¹	1,636,000		9,392,963
Seven & I Holdings Co. Ltd.	4,123,880		170,189,047
Shimachu Co. Ltd.	327,200		9,689,584
Takashimaya Co. Ltd.	1,636,000		24,012,086
UNY Co. Ltd.	1,636,000		25,071,444
USS Co. Ltd.	147,240		9,750,320
Yamada Denki Co. Ltd.	327,200		35,481,390

			531,411,348
SEMICONDUCTORS – 0.83%
NEC Electronics Corp.	327,200		11,045,560
Rohm Co. Ltd.	491,200		47,667,498
Tokyo Electron Ltd.	818,052		55,301,939

			114,014,997
SHIPBUILDING – 0.11%
Mitsui Engineering & Shipbuilding Co. Ltd.	4,908,000		15,593,731

			15,593,731
SOFTWARE – 0.09%
Konami Corp.	490,800		12,224,977

			12,224,977
TELECOMMUNICATIONS – 2.69%
Hikari Tsushin Inc.¹	163,600		11,441,053
KDDI Corp.	13,088		67,685,836
Nippon Telegraph & Telephone Corp.	26,176		114,354,034
NTT Data Corp.¹	8,180		38,348,716
NTT DoCoMo Inc.	85,075		127,805,310
Oki Electric Industry Co. Ltd.	3,272,000		10,593,568

			370,228,517
TEXTILES – 1.15%
Kuraray Co. Ltd.	1,636,000		19,774,660
Mitsubishi Rayon Co. Ltd.	3,272,000		26,639,292
Nisshinbo Industries Inc.	1,636,000		17,274,578
Teijin Ltd.	4,908,000		33,433,300
Toray Industries Inc.	6,544,000		50,905,625
Toyobo Co. Ltd.	3,272,000		10,254,574

			158,282,029
TOYS, GAMES & HOBBIES – 0.53%
Nintendo Co. Ltd.	491,500		73,242,305

			73,242,305
TRANSPORTATION – 3.93%
Central Japan Railway Co.	8,180		80,511,116
East Japan Railway Co.	17,996		128,648,288
Kawasaki Kisen Kaisha Ltd.¹	3,272,000		20,622,145
Keihin Electric Express Railway Co. Ltd.¹	2,439,000		20,425,901
Keio Corp.	3,272,000		20,311,401
Kintetsu Corp.¹	8,180,000		31,851,328
Mitsui O.S.K. Lines Ltd.	4,908,000		36,314,751
Nippon Express Co. Ltd.	4,908,000		26,314,422
Nippon Yusen Kabushiki Kaisha	4,908,000		32,289,195
Seino Holdings Co. Ltd.	1,636,000		16,059,849
Tobu Railway Co. Ltd.	4,908,000		24,873,697
Tokyu Corp.	4,908,000		30,975,593
West Japan Railway Co.	9,816		40,001,312
Yamato Holdings Co. Ltd.	1,636,000		31,498,208

			540,697,206
VENTURE CAPITAL – 0.08%
JAFCO Co. Ltd.	163,600		11,356,305

			11,356,305

TOTAL COMMON STOCKS (Cost: $10,480,810,687)			13,749,350,435


SCHEDULE OF INVESTMENTS		7

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Shares or* *Principal*		*Value*
SHORT-TERM INVESTMENTS – 0.65%
CERTIFICATES OF DEPOSIT³ – 0.01%
Toronto-Dominion Bank
3.94%, 07/10/06	$	413,475	$	413,475
Wells Fargo Bank N.A.
4.78%, 12/05/06		661,559		661,559

				1,075,034
COMMERCIAL PAPER³– 0.02%
Amstel Funding Corp.
4.40%, 05/08/06		413,475		410,038
CC USA Inc.
4.23%, 04/21/06		248,085		246,598
Edison Asset Securitization LLC
4.37%, 05/08/06		413,475		410,062
Galaxy Funding Inc.
4.23%, 04/18/06		237,334		235,996
Grampian Funding LLC
4.41%, 05/15/06		413,475		409,676
Nordea North America Inc.
4.16%, 04/04/06		868,297		864,885
Sigma Finance Inc.
4.16%, 04/06/06		496,170		494,105

				3,071,360
MEDIUM-TERM NOTES³– 0.02%
Dorada Finance Inc.
3.93%, 07/07/06		256,354		256,345
K2 USA LLC
3.94%, 07/07/06		496,170		496,161
Marshall & Ilsley Bank
5.18%, 12/15/06		826,949		829,202
Toronto-Dominion Bank
3.81%, 06/20/06		1,033,687		1,033,717
US Bank N.A.
2.85%, 11/15/06		165,390		163,230

				2,778,655
MONEY MARKET FUNDS – 0.00%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
4.51%^4,5		474,647		474,647

				474,647


*Security*	*Principal*		*Value*
REPURCHASE AGREEMENTS³ – 0.16%
Bear Stearns Companies Inc. (The) Repurchase Agreement, 4.62%, due 3/1/06, maturity value $1,240,583 (collateralized by non-U.S. Government debt securities, value $1,366,696, 0.00% to 9.40%, 11/15/15 to 6/12/47).⁶	$	1,240,424	$	1,240,424
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.57%, due 3/1/06, maturity value $4,135,271 (collateralized by U.S. Government obligations, value $4,225,765, 3.69% to 10.00%, 5/1/09 to 1/1/36).		4,134,746		4,134,746
Citigroup Global Markets Holdings Inc. Repurchase Agreement, 4.61%, due 3/1/06, maturity value $2,067,638 (collateralized by non-U.S. Government debt securities, value $2,174,226, 1.01%, 9/19/35).⁶		2,067,373		2,067,373
Goldman Sachs Group Inc. Repurchase Agreement, 4.56%, due 3/1/06, maturity value $4,135,270 (collateralized by U.S. Government obligations, value $4,224,211, 4.50% to 7.50%, 9/1/09 to 11/1/35).		4,134,746		4,134,746
Goldman Sachs Group Inc. Repurchase Agreement, 4.71%, due 3/1/06, maturity value $4,135,287 (collateralized by non-U.S. Government debt securities, value $4,348,452, 0.00% to 10.00%, 8/15/07 to 2/1/16).⁶		4,134,746		4,134,746


8		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.53%, due 3/1/06, maturity value $992,464 (collateralized by U.S. Government obligations, value $1,013,831, 3.99% to 5.51%, 7/1/32 to 2/1/36).	$	992,339	$	992,339
Merrill Lynch & Co. Inc. Repurchase Agreement, 4.66%, due 3/1/06, maturity value $827,056 (collateralized by non-U.S. Government debt securities, value $853,155, 0.00% to 7.88%, 5/15/08 to 1/15/16).⁶		826,949		826,949
Morgan Stanley Repurchase Agreement, 4.61%, due 3/1/06, maturity value $4,135,275 (collateralized by non-U.S. Government debt securities, value $4,341,833, 0.00% to 7.16%, 3/1/06 to 3/25/35).⁶		4,134,746		4,134,746

				21,666,069
TIME DEPOSITS³– 0.05%
KBC Bank
4.57%, 03/01/06		1,653,898		1,653,898
Societe Generale
4.57%, 03/01/06		2,894,322		2,894,322
US Bank N.A.
4.45%, 03/01/06		1,488,070		1,488,070

				6,036,290
VARIABLE & FLOATING RATE NOTES³– 0.39%
Allstate Life Global Funding II
4.57% - 4.63%, 02/08/07 - 03/27/07⁷		2,323,727		2,324,097
American Express Bank
4.53% - 4.57%, 06/29/06 - 10/25/06		1,943,331		1,943,319
American Express Centurion Bank
4.57%, 06/29/06		330,780		330,780
American Express Credit Corp.
4.67%, 02/05/07		248,085		248,283
ASIF Global Financing
4.75% - 4.95%, 05/30/06 - 08/11/06⁷		2,687,585		2,688,288
Australia & New Zealand Banking Group Ltd.
4.55%, 02/23/07⁷		537,517		537,517
Bank of Ireland
4.54%, 03/20/07⁷		826,949		826,949
Beta Finance Inc.
4.53% - 4.54%, 04/25/06 - 05/25/06⁷		1,066,765		1,066,744
BMW US Capital LLC
4.54%, 02/15/07⁷		826,949		826,949
CC USA Inc.
4.52% - 4.56%, 03/23/06 - 07/14/06⁷		2,224,493		2,224,463
Commodore CDO Ltd.
4.56%, 12/12/06⁷		206,737		206,737
DEPFA Bank PLC
4.50%, 12/15/06		826,949		826,949
Dorada Finance Inc.
4.52%, 06/26/06⁷		206,737		206,731
Eli Lilly Services Inc.
4.54%, 09/01/06⁷		826,949		826,949
Fifth Third Bancorp.
4.55%, 01/23/07⁷		1,653,898		1,653,898
Five Finance Inc.
4.54%, 06/26/06⁷		165,390		165,385
General Electric Capital Corp.
4.67%, 03/09/07		372,127		372,407
Greenwich Capital Holdings Inc.
4.53%, 03/02/06		206,737		206,737
Hartford Life Global Funding Trusts
4.56%, 02/15/07		826,949		826,949
HBOS Treasury Services PLC
4.57%, 01/24/07⁷		826,949		826,949
Holmes Financing PLC
4.54%, 12/15/06⁷		2,274,110		2,274,110
HSBC Bank USA N.A.
4.70%, 05/04/06		289,432		289,474
K2 USA LLC
4.53%, 06/02/06⁷		744,254		744,235


SCHEDULE OF INVESTMENTS		9

Schedule of Investments (Unaudited) (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

February 28, 2006


*Security*	*Principal*		*Value*
Leafs LLC
4.57%, 01/22/07 - 02/20/07⁷	$	866,411	$	866,411
Links Finance LLC
4.56%, 03/15/06⁷		661,559		661,563
Marshall & Ilsley Bank
4.55%, 02/15/07		454,822		454,822
Metropolitan Life Global Funding I
4.56% - 4.96%, 08/28/06 - 03/06/07⁷		2,472,578		2,473,596
Mound Financing PLC
4.53%, 11/08/06⁷		1,653,898		1,653,898
Natexis Banques Populaires
4.55%, 03/15/07⁷		620,212		620,212
Nationwide Building Society
4.58% - 4.60%, 01/05/07 - 01/26/07⁷		2,232,763		2,232,840
Nordea Bank AB
4.55%, 02/09/07⁷		1,447,161		1,447,161
Northern Rock PLC
4.61%, 02/02/07⁷		992,339		992,370
Permanent Financing PLC
4.53%, 03/10/06 - 06/12/06⁷		2,249,302		2,249,302
Pfizer Investment Capital PLC
4.53%, 02/15/07⁷		2,067,373		2,067,373
Principal Life Income Funding Trusts
4.70%, 05/10/06		620,212		620,216
Sedna Finance Inc.
4.54%, 09/20/06⁷		248,085		248,085
Sigma Finance Inc.
4.53% - 4.55%, 03/20/06 - 08/15/06⁷		917,914		917,897
Skandinaviska Enskilda Bank NY
4.56%, 03/19/07⁷		826,949		826,949
Societe Generale
4.54%, 03/02/07⁷		578,864		578,864
Strips III LLC
4.62%, 07/24/06^7,8		213,349		213,349
SunTrust Bank
4.62%, 04/28/06		1,240,424		1,240,424
Tango Finance Corp.
4.53% - 4.54%, 05/25/06 - 09/27/06⁷		1,844,097		1,844,008
Toyota Motor Credit Corp.
4.57%, 04/10/06		372,127		372,127
UniCredito Italiano SpA
4.43%, 06/14/06		1,075,034		1,074,924
Union Hamilton Special Funding LLC
4.52%, 03/28/06⁷		826,949		826,949
US Bank N.A.
4.54%, 09/29/06		372,127		372,070
Variable Funding Capital Corp.
4.52%, 03/09/06 - 03/13/06		1,240,424		1,240,424
Wachovia Asset Securitization Inc.
4.57%, 03/26/06⁷		1,578,231		1,578,231
Wells Fargo & Co.
4.56%, 03/15/07⁷		413,475		413,506
WhistleJacket Capital Ltd.
4.53% - 4.56%, 06/22/06 - 07/28/06⁷		413,475		413,453
White Pine Finance LLC
4.53% - 4.57%, 03/27/06 - 06/20/06⁷		868,297		868,297
Winston Funding Ltd.
4.68%, 04/23/06⁷		590,442		590,442
World Savings Bank
4.52%, 03/09/06		1,240,424		1,240,422

				53,645,084

TOTAL SHORT-TERM INVESTMENTS (Cost: $88,747,139)				88,747,139

TOTAL INVESTMENTS IN SECURITIES – 100.64% (Cost: $10,569,557,826)				13,838,097,574
Other Assets, Less Liabilities – (0.64)%				(87,902,158	)

NET ASSETS – 100.00%			$	13,750,195,416

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

²	Non-income earning security.

³	All or a portion of this security (these securities) represent(s) an investment of securities lending collateral. See Note 5.

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

⁵	The rate quoted is the annualized seven-day yield of the fund at period end.

⁶	The credit exposure of the collateral is viewed as unsecured debt of the counterparty.

⁷	This security or a portion of these securities is exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

⁸	The investment adviser has determined that this security or a portion of these securities is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Fund.

See notes to the financial statements.


10		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statement of Assets and Liabilities (Unaudited)

iSHARES^®, INC.

February 28, 2006


	iShares MSCI Japan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	10,569,083,179

Affiliated issuers^a	$	474,647

Foreign currency, at cost	$	13,333,365

Investments in securities, at value (including securities on loan^b) (Note 1):
Unaffiliated issuers	$	13,837,622,927
Affiliated issuers^a		474,647
Foreign currency, at value		13,356,392
Receivables:
Investment securities sold		123,537,714
Dividends and interest		7,495,390
Capital shares sold		325,794

Total Assets		13,982,812,864

LIABILITIES
Payables:
Investment securities purchased		138,347,435
Collateral for securities on loan (Note 5)		88,272,492
Investment advisory fees (Note 2)		5,997,521

Total Liabilities		232,617,448

NET ASSETS	$	13,750,195,416

Net assets consist of:
Paid-in capital	$	10,484,405,229
Distributions in excess of net investment income		(21,422,500	)
Undistributed net realized gain		18,569,814
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		3,268,642,873

NET ASSETS	$	13,750,195,416

Shares outstanding		981,600,000

Net asset value per share	$	14.01

^a	The Fund’s invesment adviser is an affiliate of the issuers. See Note 2.

^b	Securities on loan with market value of $84,208,392. See Note 5.

See notes to the financial statements.


FINANCIAL STATEMENTS		11

Statement of Operations (Unaudited)

iSHARES^®, INC.

Six months ended February 28, 2006


	iShares MSCI Japan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	42,516,513
Interest from affiliated issuers^b		157,717
Securities lending income^c		1,162,097

Total investment income		43,836,327

EXPENSES
Investment advisory fees (Note 2)		30,914,105
Proxy fees		267,453

Total expenses		31,181,558

Net investment income		12,654,769

NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(12,699,300	)
In-kind redemptions		225,381,002
Foreign currency transactions		(1,654,260	)

Net realized gain		211,027,442

Net change in unrealized appreciation (depreciation) on:
Investments		2,419,758,488
Translation of assets and liabilities in foreign currencies		137,303

Net change in unrealized appreciation (depreciation)		2,419,895,791

Net realized and unrealized gain		2,630,923,233

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,643,578,002

^a	Net of foreign withholding tax of $1,963,617.

^b	The Fund’s investment adviser is an affiliate of the issuers. See Note 2.

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

See notes to the financial statements.


12		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^®, INC.

February 28, 2006


	*iShares MSCI* *Japan Index Fund*
	Six months ended February 28, 2006 (Unaudited)			Year ended August 31, 2005
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	12,654,769		$	37,668,587
Net realized gain		211,027,442			63,663,962
Net change in unrealized appreciation (depreciation)		2,419,895,791			584,158,197

Net increase in net assets resulting from operations		2,643,578,002			685,490,746

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(55,636,178	)		(26,096,423	)

Total distributions to shareholders		(55,636,178	)		(26,096,423	)

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		4,446,951,157			1,159,930,120
Cost of shares redeemed		(532,804,961	)		(434,548,691	)

Net increase in net assets from capital share transactions		3,914,146,196			725,381,429

INCREASE IN NET ASSETS		6,502,088,020			1,384,775,752
NET ASSETS:
Beginning of period		7,248,107,396			5,863,331,644

End of period	$	13,750,195,416		$	7,248,107,396

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	(21,422,500	)	$	21,558,909

SHARES ISSUED AND REDEEMED:
Shares sold		361,800,000			109,200,000
Shares redeemed		(39,600,000	)		(42,600,000	)

Net increase in shares outstanding		322,200,000			66,600,000

See notes to the financial statements.


FINANCIAL STATEMENTS		13

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)


	*iShares MSCI Japan Index Fund*
	Six months ended Feb. 28, 2006 (Unaudited)			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 period	$	10.99		$	9.89		$	8.29		$	7.77		$	9.07		$	13.82

Income from investment operations:
Net investment income (loss)^a		0.01			0.06			0.03			0.00^b			(0.01	)		(0.01	)
Net realized and unrealized gain (loss)		3.07			1.08			1.57			0.52			(1.29	)		(4.74	)

Total from investment operations		3.08			1.14			1.60			0.52			(1.30	)		(4.75	)

Less distributions from:
Net investment income		(0.06	)		(0.04	)		(0.00	)^b		—			—			—

Total distributions		(0.06	)		(0.04	)		(0.00	)^b		—			—			—

Net asset value, end of period	$	14.01		$	10.99		$	9.89		$	8.29		$	7.77		$	9.07

Total return		28.02	%^c		11.58	%		19.32	%		6.69	%		(14.33	)%		(34.37	)%

Ratios/Supplemental data:
Net assets, end of period (000s)	$	13,750,195		$	7,248,107		$	5,863,332		$	1,726,855		$	666,376		$	527,899
Ratio of expenses to average net assets^d		0.56	%^e		0.57	%		0.64	%^f		0.84	%		0.84	%		0.84	%
Ratio of net investment income (loss) to average net assets^d		0.23	%		0.59	%		0.28	%^g		0.03	%		(0.12	)%		(0.11	)%
Portfolio turnover rate^h		3	%		6	%		5	%		2	%		2	%		21	%

^a	Based on average shares outstanding throughout each period.

^b	Rounds to less than $0.01.

^c	Not annualized.

^d	Annualized for periods of less than one year.

^e	Includes proxy fees. Excluding proxy fees, the ratio of expenses to average net assets would have been 0.55%.

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

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

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

See notes to the financial statements.


14		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited)

iSHARES^®, INC.

iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994 pursuant to amended and restated Articles of Incorporation. As of February 28, 2006, the Company offered 24 investment portfolios or funds.

These financial statements relate only to the iShares MSCI Japan Index Fund (the “Fund”).

The Fund’s investment objective is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded equity securities in the aggregate in the Japanese equity market, as measured by the MSCI Japan Index compiled by Morgan Stanley Capital International Inc. (“MSCI”). The investment adviser uses a “passive” or index approach to achieve the Fund’s investment objective. The Fund is classified as a non-diversified fund under the 1940 Act. Non-diversified funds generally hold securities of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATION

The securities and other assets of the Fund are generally valued using market valuations. 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. The investment adviser 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. 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 of the Company (the “Board”).


NOTES TO THE FINANCIAL STATEMENTS		15

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

FOREIGN CURRENCY TRANSLATION

The accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a different rate from the rates used by MSCI may adversely affect the Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective date of such transactions.

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

DISTRIBUTIONS TO SHAREHOLDERS

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

The tax character of current year distributions will be determined at the end of the current fiscal year.

FEDERAL INCOME TAXES

The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its net income and any net gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended February 28, 2006.

As of August 31, 2005, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $2,959,030, $62,572,173, $3,621,148, $5,594,562 and $8,733,802 expiring in 2009, 2010, 2011, 2012 and 2013, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration date, whichever occurs first.

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


16		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

The Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset value per share.

As of February 28, 2006, the cost of investments for federal income tax purposes was $10,625,773,380. Net unrealized appreciation aggregated $3,212,324,194, of which $3,300,071,743 represented gross unrealized appreciation on securities and $87,747,549 represented gross unrealized depreciation on securities.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Fund, collateralized by securities, which are delivered to the Fund’s custodian, or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

For its investment advisory services to the Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate net assets of all the funds offered by the Company (except for the iShares MSCI Brazil, iShares MSCI Emerging Markets, iShares MSCI Pacific ex-Japan, iShares MSCI South Africa, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds) as follows:


*Investment Advisory Fee*		*Aggregate Net Assets*
0.59%		First $7 billion
0.54		Over $7 billion, up to and including $11 billion
0.49		Over $11 billion

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund is permitted to lend portfolio securities to Barclays Capital, Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Company. BarCap and BGI are affiliates of BGFA, the Fund’s investment adviser. As securities lending agent, BGI receives, as fees, a share of the


NOTES TO THE FINANCIAL STATEMENTS		17

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

income earned on investment of the cash collateral received for the loan of securities. For the six months ended February 28, 2006, BGI earned securities lending agent fees of $1,162,097.

Pursuant to Rule 17a-7 under the 1940 Act, the Fund executed cross trades for the six months ended February 28, 2006. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter, for compliance with the requirements and restrictions set forth by Rule 17a-7.

Pursuant to an exemptive order issued by the SEC, the Fund may invest in the Institutional Shares of the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”) and Prime Money Market Fund (“PMMF”) of Barclays Global Investors Funds. The GMMF, IMMF and PMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio and Prime Money Market Master Portfolio (collectively, the “Master Portfolios”), respectively, which are managed by BGFA, the Fund’s investment adviser. The GMMF, IMMF and PMMF are open-end money market funds available to institutional and accredited investors, including other investment companies managed by BGFA. The GMMF, IMMF and PMMF seek a high level of income consistent with liquidity and the preservation of capital. While the GMMF, IMMF and PMMF do not directly charge an investment advisory fee, the Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF and PMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments or from investment of securities lending collateral are recorded as either interest from affiliated issuers or securities lending income, respectively, in the accompanying Statement of Operations.

The following table provides information about the investment by the Fund in shares of issuers of which BGFA is an affiliate for the six months ended February 28, 2006, including income earned from these affiliated issuers.


*Name of Affiliated Issuer*	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	Value at End of Period		Interest Income
IMMF	694	981,838	982,057	475	$	474,647	$	157,717

During the six months ended February 28, 2006, the Fund invested cash collateral from securities on loan in a joint investment account with other investment funds managed by BGFA (see Note 5). The joint account invested in the GMMF, IMMF and PMMF. Due to the nature of the structure of the joint account, the information needed to isolate the activity at the Fund level is not available. As such, the information reported above for the Fund does not include the Fund’s holdings of the GMMF, IMMF and PMMF in connection with the investment of collateral for securities on loan.

As of February 28, 2006, certain directors and officers of the Company are also officers of BGI.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended February 28, 2006, aggregated $364,873,219 and $345,744,136, respectively.

In-kind purchases and sales (see Note 4) for the six months ended February 28, 2006, aggregated $4,383,409,646 and $531,065,688, respectively.


18		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to the Financial Statements (Unaudited) (Continued)

iSHARES^®, INC.

4. CAPITAL SHARE TRANSACTIONS

The Company has authorized 10.9 billion shares of $.001 par value capital stock. As of February 28, 2006, 2,124,600,000 shares were authorized to the Fund.

The Company issues and redeems capital shares of the Fund only in aggregations of a specified number of shares (each, a “Creation Unit”) at net asset value. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for the purchase of Creation Units of the Fund generally consists of the in-kind contribution of a designated portfolio of equity securities constituting a portfolio sampling representation of the securities involved in the MSCI Japan Index and an amount of cash. A purchase transaction fee and a redemption transaction fee are charged to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

The Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending are that the borrower may not provide additional collateral when required or may not return the securities when due.

As of February 28, 2006, the Fund had loaned securities which were collateralized by cash. Pursuant to an exemptive order issued by the SEC, the cash collateral received was invested in a joint account with other investment funds managed by BGFA. The joint account invests in securities with remaining maturities of 397 days or less, repurchase agreements and money market mutual funds, including money market funds managed by BGFA. Repurchase agreements held in the joint account are fully collateralized by U.S. Government securities and non-U.S. Government debt securities. Income from the joint account is allocated daily to the Fund, based on the Fund’s portion of the total cash collateral received. The market value of the securities on loan as of February 28, 2006 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, which is disclosed in the Fund’s Statement of Operations, is presented net of rebates paid to, or fees paid by, borrowers.


NOTES TO THE FINANCIAL STATEMENTS		19

Notes:


20		NOTES

Notes:


NOTES		21

The iShares^{^®}Family of Funds

iShares S&P Domestic Index Funds

iShares S&P 1500 (ISI)

iShares S&P 100 (OEF)

iShares S&P 500 (IVV)

iShares S&P 500 Growth (IVW)

iShares S&P 500 Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400 Growth (IJK)

iShares S&P MidCap 400 Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600 Growth (IJT)

iShares S&P SmallCap 600 Value (IJS)

iShares Domestic Sector Index Funds

iShares Cohen & Steers Realty Majors (ICF)

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

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

iShares Dow Jones U.S. Consumer Goods Sector (IYK)

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

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

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

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

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

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

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

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

iShares Dow Jones Transportation Average (IYT)

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

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

iShares Goldman Sachs Natural Resources (IGE)

iShares Goldman Sachs Networking (IGN)

iShares Goldman Sachs Semiconductor (IGW)

iShares Goldman Sachs Software (IGV)

iShares Goldman Sachs Technology (IGM)

iShares Nasdaq Biotechnology (IBB)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares Russell Microcap™ (IWC)

iShares International Country Index Funds

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria (EWO)

iShares MSCI Belgium (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico (EWW)

iShares MSCI Netherlands (EWN)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman TIPS (TIP)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 20+ Year Treasury (TLT)

iShares GS $ InvesTop™ Corporate (LQD)

iShares Specialty Index Funds

iShares KLD Select Social SM (KLD)

iShares Dow Jones Select Dividend (DVY)

iShares International Index Funds

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

iShares NYSE Index Funds

iShares NYSE Composite (NYC)

iShares NYSE 100 (NY)

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

This advertising section does not constitute part of the 2006 Semi-Annual Report.

2461-iS-1205


22		2006 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

LOGO

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser to the iShares Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., a majority owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Morgan Stanley Capital International, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds.

©2006 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

Investing involves risk, including possible loss of principal.

A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, 2005 is available without charge, upon request, by calling toll-free 1 800 474 2737; on the Fund’s website at www.iShares.com; and on the Securities and Exchange Commission’s website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the Commission’s website at www.sec.gov. The Fund’s Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1 800 SEC 0330. The Fund also discloses its complete schedule of portfolio holdings on a daily and monthly basis on the Fund’s website at www.iShares.com. This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Item 2.

Code of Ethics.

Not applicable to this semi-annual filing.

Item 3.

Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4.

Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5.

Audit Committee of Listed Registrants.

Not applicable to this semi-annual filing.

Item 6.

Schedule of Investments.

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

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8.

Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 10.

Submission of Matters to a Vote of Security Holders.

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

Item 11.

Controls and Procedures.

(a) The President and Principal Financial Officer have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12.

Exhibits.

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

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

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

(b) Section 906 Certifications are attached.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


iShares, Inc.

By:		/s/ Lee T. Kranefuss
		Lee T. Kranefuss, President
		Date: May 2, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By:		/s/ Lee T. Kranefuss
		Lee T. Kranefuss, President
		Date: May 2, 2006

By:		/s/ Michael A. Latham
		Michael A. Latham, Principal Financial Officer
		Date: May 2, 2006