iShares^®

iShares, Inc.

Supplement dated July 31, 2006

to the Statement of Additional Information (“SAI”) dated

January 1, 2006 (as revised March 8, 2006)

for the iShares, Inc. Funds

The information in this Supplement updates information in the SAI, and should be read in conjunction with the Prospectus and the SAI for the iShares, Inc. Funds.

On page 5 of the SAI, the paragraph with the heading, “Investment Companies, REITs” is replaced in full with the following paragraph:

Investment Companies, REITs. Each Fund may invest in the securities of other investment companies (including money market funds) and real estate investment trusts to the extent allowed by law. Under the 1940 Act, a Fund’s investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund’s total assets with respect to any one investment company and (iii) 10% of the Fund’s total assets of investment companies in the aggregate. To the extent allowed by law or regulation, each Fund may invest its assets in securities of investment companies that are money market funds, including those advised by BGFA or otherwise affiliated with BGFA, in excess of the limits discussed above. The iShares MSCI Emerging Markets Index Fund, in order to improve its portfolio liquidity and its ability to track the MSCI Emerging Markets Index, may invest up to 10% of its assets in shares of other iShares Funds that invest in securities in the MSCI Emerging Markets Index. BGFA will not charge advisory fees on that portion of the iShares MSCI Emerging Market Index Fund’s assets invested in shares of other iShares Funds. Other investment companies in which a Fund invests can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, that would be in addition to those incurred by the Fund.

If you have any additional questions, please call 1-800-iShares (1-800-474-2737).

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

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