Form N-CSR for iShares Inc.

Copies of the annual reports transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company

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for the iShares MSCI Belgium Investable Market Index Fund, the iShares MSCI EMU Index Fund, the iShares MSCI France Index Fund, the iShares MSCI Germany Index Fund, the iShares MSCI Italy Index Fund, the iShares MSCI Spain Index Fund, the iShares MSCI Sweden Index Fund, the iShares MSCI Switzerland Index Fund and the iShares MSCI United Kingdom Index Fund

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the iShares MSCI Index Funds named above (each a “Fund”).

Effective September 1, 2008, the third and fourth paragraphs under the heading “Management” beginning on page 26 of the Prospectus are hereby deleted in their entirety and replaced with the following:

For its investment advisory services to the Funds, BGFA is entitled to receive a management fee from each Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund and iShares MSCI Singapore Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Prior to September 1, 2008, for its investment advisory services to each Fund, BGFA was entitled to receive management fees from each Fund based on each Fund’s allocable portion of aggregate average daily net assets, as shown in the following table:

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

Effective September 1, 2008, the third and fourth paragraphs under the heading “Management” beginning on page 9 of the Prospectus are hereby deleted in their entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Prior to September 1, 2008, for its investment advisory services to the Fund, BGFA was entitled to receive management fees from the Fund, based on the Fund’s allocable portion of aggregate average daily net assets, at the annual rate of 0.51%.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

for the iShares MSCI Netherlands Investable Market Index Fund (the “Fund”).

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

Effective February 1, 2008, to broaden its coverage of the market, the Fund changed its underlying index from the MSCI Austria Index^SMto the MSCI Austria Investable Market Index^SM. Effective June 25, 2008, the Fund changed its name from the iShares MSCI Austria Index Fund to the iShares MSCI Austria Investable Market Index Fund.

Index performance reflects the performance of the MSCI Austria Index^SMthrough January 31, 2008 and the MSCI Austria Investable Market Index^SMthereafter.

“Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

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 table(s) 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.

Index performance reflects the performance of the MSCI Austria Index^SMthrough January 31, 2008 and the MSCI Austria Investable Market Index^SMthereafter.

Performance figures assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 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. The Fund’s past performance is no guarantee of future results.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Erste Group Bank AG	14.07	%

OMV AG	12.73

Telekom Austria AG	9.02

voestalpine AG	7.27

Raiffeisen International Bank Holding AG	4.91

Oesterreichische Elektrizitaetswirtschafts AG Class A	4.67

Strabag SE	4.39

Atrium European Real Estate Ltd.	4.29

Vienna Insurance Group	3.64

Andritz AG	3.25


TOTAL	68.24	%

The iShares MSCI Austria Investable Market 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 Austrian market, as measured by the MSCI Austria Investable Market Index^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (17.64)%, while the total return for the Index was (18.57)%.

Austria’s equity market experienced a double-digit decline for the reporting period, due largely to slowing global growth and the weak economic environment of its European neighbors. Austria relies on the European Union countries for the vast majority of its exports, making it vulnerable to the economic health of these constituent markets. In particular, softening economic conditions in Germany, Europe’s largest economy and Austria’s leading export market, resulted in slowing demand for Austrian goods. For the second quarter of 2008, annualized Gross Domestic Product (GDP) growth slowed to 2.0% and in July 2008 the business indicator fell to a five-year low. The U.S dollar appreciated against the euro in the final months of the reporting period, further trimming dollar-denominated performance returns.

The Fund’s ten largest holdings as of August 31, 2008 represented more than 68% of Fund net assets. Seven of the Fund’s ten largest holdings overall declined for the reporting period. Steelmaker voestalpine AG experienced the steepest decline among the ten largest holdings. In addition, several financial firms declined, notably Erste Group Bank AG, the Fund’s largest holding, as well as Raiffeisen International Bank Holding AG and Vienna Insurance Group. On the positive side, Atrium European Real Estate Ltd. produced the strongest results for the reporting period, followed by OMV AG and Oesterreichische Elektrizitaetswirtschafts AG.

Effective December 1, 2007, to broaden its coverage of the market, the Fund changed its underlying index from the MSCI Belgium Index^SMto the MSCI Belgium Investable Market Index^SM. Effective June 25, 2008, the Fund changed its name from the iShares MSCI Belgium Index Fund to the iShares MSCI Belgium Investable Market Index Fund.

Index performance reflects the performance of the MSCI Belgium Index^SMthrough November 30, 2007 and the MSCI Belgium Investable Market Index^SMthereafter.

The iShares MSCI Belgium Investable Market 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 Investable Market Index^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (26.21)%, while the total return for the Index was (29.27)%.

Belgium’s equity market experienced a large double-digit decline during the reporting period as inflation for the country soared at its fastest pace in more than 20 years. As accelerating food and energy costs dampened consumers’ purchasing power, consumer confidence fell to its lowest level in three years. Business confidence also declined, following weakening sentiment across Europe. Further hindering economic conditions, Belgium experienced slower export levels with trading partners both within Europe and globally.

Within the Fund, the ten largest holdings as of August 31, 2008 accounted for approximately 72% of the net assets of the Fund. Nine of the ten largest Fund holdings delivered negative performance for the reporting period. All four financial companies among the Fund’s ten largest holdings declined for the reporting period, including Fortis, the Fund’s largest holding, and Dexia SA. Retail food chain Delhaize Group and KBC Group NV also notably declined. Telecommunications company Belgacom SA and metals and mining company Umicore both experienced small declines for the reporting period. On the positive side, retailer Colruyt SA posted a strong return.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 Market 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 8/31/08
Sector	Percentage of Net Assets
Financial	27.04	%

Communications	12.77

Industrial	11.01

Utilities	10.68

Consumer Non-Cyclical	10.47

Basic Materials	8.36

Energy	8.34

Consumer Cyclical	7.40

Technology	2.41

Diversified	1.24

Short-Term and Other Net Assets	0.28


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Total SA (France)	3.87	%

E.ON AG (Germany)	2.78

Banco Santander SA (Spain)	2.68

Telefonica SA (Spain)	2.63

Nokia OYJ (Finland)	2.40

Siemens AG Registered (Germany)	2.35

Eni SpA (Italy)	2.13

Allianz SE Registered (Germany)	1.87

Sanofi-Aventis (France)	1.84

BNP Paribas (France)	1.84


TOTAL	24.39	%

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 EMU markets, as measured by the MSCI EMU Index^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (14.52)%, while the total return for the Index was (14.26)%.

Most European markets declined sharply for the reporting period, driven by a softening global economic environment. Sparked by problems in the subprime mortgage market in the U.S., slowing economic activity spread to European markets and helped contribute to poor market performance. Escalating prices for oil and other key commodities raised inflationary pressures and further weighed on stock prices.

The credit crisis in the U.S. threatened markets in Europe, as many European banks had invested in the U.S. subprime mortgage market. Collaborative efforts between the European Central Bank and the U.S. Federal Reserve to inject liquidity into the market, though, helped to alleviate the threat of a global crisis. Both Germany and France experienced slowing economic production as the period progressed. For the second quarter of 2008, France’s economy shrank 0.3%, while economic activity in Germany contracted 0.5%. In spite of weak economic conditions, inflationary concerns led the European Central Bank to raise short-term rates in July 2008. In the United Kingdom, however, the Bank of England responded to sluggish conditions by reducing its key lending rate three times during the reporting period, bringing the rate from 5.75% down to 5.00% by the end of the period.

The Fund’s ten largest holdings as of August 31, 2008 represented more than 24% of Fund net assets. Eight of the Fund’s ten largest holdings as of August 31, 2008 declined for the reporting period. Mobile phone maker Nokia OYJ (Finland) led the detractors from performance with a double-digit decline. All three financial companies among the Fund’s ten largest holdings also declined, with Allianz SE (Germany) experiencing the largest decline among this group. Europe’s largest engineering company, Siemens AG (Germany), and pharmaceutical company Sanofi-Aventis (France) also detracted notably from Fund performance. In addition, the Fund’s largest holding, oil company Total SA (France), posted a slight decline. Utility company E.ON AG (Germany) and telecommunications company Telefonica SA (Spain) were the bright spots, delivering modest gains for the reporting period.


PORTFOLIO ALLOCATION As of 8/31/08
Sector	Percentage of Net Assets
Financial	18.17	%

Consumer Non-Cyclical	16.34

Energy	13.57

Industrial	12.86

Communications	11.33

Utilities	8.74

Basic Materials	8.17

Consumer Cyclical	6.14

Diversified	2.36

Technology	2.22

Short-Term and Other Net Assets	0.10


TOTAL	100.00	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (11.96)%, while the total return for the Index was (11.81)%.

French equity markets declined during the reporting period amid a backdrop of slowing economic activity and rising inflation. For the second quarter of 2008, in particular, Gross Domestic Product (GDP) declined 0.3% as exports declined and companies cut spending. Adding to the slowing economic conditions, industrial production, which accounts for approximately 15% of the French economy, declined. Rising oil and food prices helped to drive inflation levels to a 12-year high, eroding consumers’ purchasing power and hurting consumer confidence. The U.S dollar appreciated against the euro in the final months of the reporting period, further trimming dollar-denominated performance returns.

The ten largest Fund holdings represented approximately 53% of the net assets of the Fund as of August 31, 2008. Among the Fund’s ten largest holdings, performance was mixed for the reporting period. Natural gas producer GDF SUEZ and steelmaker ArcelorMittal delivered the strongest gains. Telecommunications company France Telecom SA also posted a positive return. On the negative side, financial companies represented some of the larger detractors from performance. Investment bank Societe Generale and insurer AXA in particular, declined notably for the reporting period. Retailer Carrefour SA and pharmaceutical company Sanofi-Aventis also delivered negative returns. The Fund’s largest holding, oil company Total SA, posted a slight decline for the reporting period.


PORTFOLIO ALLOCATION As of 8/31/08
Sector	Percentage of Net Assets
Financial	19.38	%

Consumer Cyclical	17.24

Basic Materials	15.52

Utilities	15.48

Industrial	14.93

Technology	5.32

Consumer Non-Cyclical	5.26

Communications	4.77

Energy	1.01

Diversified	0.46

Short-Term and Other Net Assets	0.63


TOTAL	100.00	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.81)%, while the total return for the Index was (9.66)%.

The German stock market declined for the reporting period against a backdrop of slowing global economic conditions. A contraction in Germany’s Gross Domestic Product (GDP) level for the second quarter of 2008 signaled that the expansion cycle had come to an end. Industrial production fell to its lowest level in more than nine years, and factory orders declined for eight consecutive months through July 2008, extending their longest-ever declining streak. Adding to Germany’s economic concerns, rising prices for food and oil drove the inflation level to its highest level in 12 years.

The ten largest Fund holdings represented approximately 61% of the net assets of the Fund as of August 31, 2008. Among the Fund’s ten largest holdings, performance was mixed for the reporting period. The strongest performer by far was car manufacturer Volkswagen AG. Utility company E.ON AG, the Fund’s largest holding, was also a positive contributor. On the negative side, car manufacturer Daimler AG led the decliners, followed by Allianz SE and Siemens AG.

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^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (19.43)%, while the total return for the Index was (20.40)%.

Italy’s equity market declined sharply for the reporting period against a backdrop of slowing global economic growth. Already one of the slowest economies in the euro zone, Italy’s economic growth declined further during the reporting period as global economic activity cooled. For the fourth quarter of 2007, in particular, Gross Domestic Product (GDP) contracted 0.4% from the previous quarter, and grew by a modest 0.4% for the first quarter of 2008. As prices for oil and food escalated, inflation grew to its highest level in 11 years by early 2008, curbing consumer spending. The U.S dollar appreciated against the euro in the final months of the reporting period, further trimming dollar-denominated performance returns.

The ten largest Fund holdings represented nearly 72% of the net assets of the Fund as of August 31, 2008. For the reporting period, nine of the Fund’s ten largest holdings declined. Telecommunications company Telecom Italia SpA was the largest detractor from performance among the Fund’s ten largest holdings, declining nearly 40%. All six financial companies among the Fund’s ten largest holdings also posted declines, led by UniCredito SpA and Mediobanca SpA. The Fund’s largest holding, energy company Eni SpA also declined modestly. Electric company Terna SpA posted a strong gain for the reporting period, representing the only holding amongst the top ten to produce a positive return.

Effective February 1, 2008, to broaden its coverage of the market, the Fund changed its underlying index from the MSCI Netherlands Index^SMto the MSCI Netherlands Investable Market Index^SM. Effective June 25, 2008, the Fund changed its name from the iShares MSCI Netherlands Index Fund to the iShares MSCI Netherlands Investable Market Index Fund.

Index performance reflects the performance of the MSCI Netherlands Index^SMthrough January 31, 2008 and the MSCI Netherlands Investable Market Index^SMthereafter.

The iShares MSCI Netherlands Investable Market 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 Investable Market Index^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (12.67)%, while the total return for the Index was (11.54)%.

The Dutch stock market declined for the reporting period against a backdrop of slowing global economic growth. Because the Dutch economy relies heavily on its export trade for its livelihood, it is sensitive to the economic health of its trading partners, particularly its neighboring European countries, which account for roughly 75% of its export market. During the reporting period, these European trading partners generally experienced softening economic activity, leading to decreased demand for Dutch products. Further dampening the Netherlands’ economic landscape, rising prices for oil and food drove inflation to its highest level since December 2002 which, in turn, led to reduced consumer spending.

The ten largest Fund holdings accounted for approximately 74% of the net assets of the Fund as of August 31, 2008. Among the ten largest holdings, performance was mostly negative, with nine of the holdings declining for the reporting period. Financial companies Aegon NV and ING Groep NV, the Fund’s largest holding, were among the most significant decliners. Beer producer Heineken NV also delivered negative returns, as did manufacturing conglomerate Akzo Nobel NV and Koninklijke Philips Electronics NV. Telecommunications company Koninklijke KPN NV was the lone positive performer for the reporting period, producing a solid gain.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Telefonica SA	20.43	%

Banco Santander SA	19.99

Banco Bilbao Vizcaya Argentaria SA	9.39

Iberdrola SA	4.71

Repsol YPF SA	4.66

Union Fenosa SA	4.21

Banco Popular Espanol SA	3.80

Gas Natural SDG SA	3.28

Actividades de Construcciones y Servicios SA	2.87

Industria de Diseno Textil SA	2.82


TOTAL	76.16	%

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^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.76)%, while the total return for the Index was (9.43)%.

The Spanish equity market declined for the reporting period, reflecting cooling economic activity. Because Spain’s trade with neighboring European countries accounts for the vast majority of its exports, it was vulnerable to the slowing economic environments in major European countries during the reporting period. Export trade outside of Europe also softened, reflecting sluggish economic conditions in the U.S. and Asia. For the second quarter of 2008, the annualized Gross Domestic Product (GDP) growth rate for Spain was 1.8%, down from an annualized 4.0% rate for the second quarter of 2007. In addition, unemployment and inflation levels rose, contributing to lower household consumption rates.

The ten largest Fund holdings represented more than 76% of the net assets of the Fund as of August 31, 2008. Performance among the ten largest holdings as of August 31, 2008 was mostly negative for the reporting period. Among these holdings, all three financial companies declined, led by Banco Popular Espanol SA and Banco Bilbao Vizcaya Argentaria SA. Industria de Diseno Textil SA and Actividades de Construcciones y Servicios SA also declined notably. On the positive side, utility company Union Fenosa SA was the strongest performer by far, followed by a modest positive return from telecommunications company Telefonica SA.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Telefonaktiebolaget LM Ericsson AB Class B	13.26	%

Nordea Bank AB	10.94

Hennes & Mauritz AB Class B	10.02

TeliaSonera AB	6.20

Sandvik AB	4.82

Volvo AB Class B	4.66

Svenska Handelsbanken AB Class A	4.37

Investor AB Class B	3.81

Atlas Copco AB Class A	3.77

Skandinaviska Enskilda Banken AB Class A	3.30


TOTAL	65.15	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (23.16)%, while the total return for the Index was (23.35)%.

Sweden’s equity market declined sharply for the reporting period against a backdrop of sluggish global economic growth. Because Sweden’s economy is heavily dependent on exports, it is sensitive to the economic health of its export partners. During the reporting period, economic slowdown in neighboring European countries and in the U.S. resulted in reduced export growth levels for Sweden, in turn leading to slowing economic growth. For the first two quarters of 2008, Gross Domestic Product (GDP) grew by an annualized rate of 2.4%, while inflation grew by an annualized 4.4% rate for this 6-month period, its fastest pace in 14 years.

The ten largest Fund holdings represented about 65% of the net assets of the Fund as of August 31, 2008. Performance was negative among the Fund’s ten largest holdings for the reporting period, as all ten holdings declined in value. Among these holdings, four financial companies detracted from performance, with the Class A shares of Skandinaviska Enskilda Banken AB logging the steepest decline. The Class B shares of mobile phone maker Telefonaktiebolaget LM Ericsson AB, the Fund’s largest holding, also declined sharply, as did machinery company Sandvik AB and car manufacturer Volvo AB. Mobile telephone operator TeliaSonera AB fared the best among the ten largest holdings, managing only a modest decline for the reporting period.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Nestle SA Registered	18.58	%

Roche Holding AG Genusschein	13.35

Novartis AG Registered	13.31

UBS AG Registered	4.92

Credit Suisse Group AG Registered	4.89

Zurich Financial Services AG Registered	4.83

ABB Ltd. Registered	4.83

Compagnie Financiere Richemont SA A Units Bearer	4.19

Syngenta AG Registered	3.89

Swiss Reinsurance Co. Registered	3.26


TOTAL	76.05	%

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^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (7.97)%, while the total return for the Index was (9.13)%.

Switzerland’s equity market declined for the reporting period. Because it relies on countries in the euro zone for more than half of its exports, Switzerland was vulnerable to sluggish economic conditions in some of its neighboring countries during the reporting period. As export growth slowed and manufacturing growth fell to its lowest level in three years, economic growth cooled. For the first quarter of 2008, Gross Domestic Product (GDP) increased just 0.3%, compared with a 0.9% increase for each of the previous three quarters. In addition, rising oil prices led to an increased inflation level, which climbed 3.1% in June 2008 compared with a year earlier.

The ten largest Fund holdings accounted for approximately 76% of the net assets of the Fund as of August 31, 2008. Among the ten largest holdings, performance was mixed for the reporting period. The best performer was agriculture company Syngenta AG, which posted a strong double-digit return. Healthcare company Novartis AG also posted a sound gain, as did the Fund’s largest holding, packaged food company Nestle SA. On the negative side of the performance spectrum, financial companies UBS AG, Credit Suisse Group AG, and Swiss Reinsurance Co. were the most significant decliners.


PORTFOLIO ALLOCATION As of 8/31/08
Sector	Percentage of Net Assets
Financial	23.00	%

Consumer Non-Cyclical	22.63

Energy	19.73

Basic Materials	12.36

Communications	8.99

Utilities	4.86

Industrial	3.69

Consumer Cyclical	3.42

Technology	0.36

Diversified	0.10

Short-Term and Other Net Assets	0.86


TOTAL	100.00	%

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^SM(the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (17.16)%, while the total return for the Index was (16.68)%.

The United Kingdom equity market experienced a double-digit decline for the reporting period against a backdrop of sluggish economic conditions. Escalating borrowing costs and sharply declining housing prices combined to weaken the economy, following a decade of expansion. In August 2008, the U.K. economy moved a step closer to recession after official data showed that growth had unexpectedly come to a standstill in the second quarter, marking the weakest performance since the early 1990s. The Bank of England responded to weak conditions by reducing its key lending rate three times during the reporting period, bringing the rate from 5.75% down to 5.00% by the end of the period.

The ten largest Fund holdings represented approximately 47% of the net assets of the Fund as of August 31, 2008. Seven of the Fund’s ten largest holdings declined for the reporting period. Wireless telecommunications company Vodafone Group PLC was the largest detractor from performance among the ten largest holdings. Diversified oil company BP PLC was the largest detractor of the three oil companies to decline among the ten largest holdings. The Fund’s largest holding, HSBC Holdings PLC, also registered a decline. Natural gas company BG Group PLC led positive performance among the ten largest holdings, followed closely by mining company Rio Tinto PLC. Pharmaceutical company AstraZeneca PLC also posted a modest gain.

As a shareholder of a 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 March 1, 2008 to August 31, 2008.

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.

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.


Security	Shares	Value
COMMON STOCKS – 98.94%

AIRLINES – 0.43%
Austrian Airlines AG^a,b	93,672	$	826,073

			826,073

BANKS – 18.98%
Erste Group Bank AG	451,546		27,243,037
Raiffeisen International Bank Holding AG^b	86,163		9,512,742

			36,755,779

BIOTECHNOLOGY – 2.22%
Intercell AG^a	97,175		4,291,977

			4,291,977

BUILDING MATERIALS – 2.77%
Wienerberger AG^b	202,702		5,371,704

			5,371,704

CHEMICALS – 0.39%
Lenzing AG	1,646		754,647

			754,647

COMMERCIAL SERVICES – 0.19%
Kapsch TrafficCom AG	9,216		364,308

			364,308

ELECTRIC – 5.74%
EVN AG	78,599		2,078,284
Oesterreichische Elektrizitaetswirtschafts AG Class A	118,985		9,032,057

			11,110,341

ELECTRICAL COMPONENTS & EQUIPMENT – 0.66%
Zumtobel AG	79,238		1,284,406

			1,284,406

ENGINEERING & CONSTRUCTION – 6.69%
Flughafen Wien AG	37,975		3,096,224
Meinl Airports International AG^a	163,546		1,348,371
Strabag SE	136,939		8,503,844

			12,948,439

ENTERTAINMENT – 0.95%
bwin Interactive Entertainment AG^a	65,792		1,840,383

			1,840,383


Security	Shares	Value
ENVIRONMENTAL CONTROL – 0.58%
BWT AG	27,094	$	813,739
Christ Water Technology AG^a	37,579		300,972

			1,114,711

FOOD – 0.39%
Agrana Beteiligungs AG	9,467		749,435

			749,435

FOREST PRODUCTS & PAPER – 0.98%
Mayr-Melnhof Karton AG	23,948		1,900,376

			1,900,376

INSURANCE – 4.71%
UNIQA Versicherungen AG	71,108		2,071,790
Vienna Insurance Group	112,518		7,056,887

			9,128,677

IRON & STEEL – 7.27%
voestalpine AG	257,870		14,069,796

			14,069,796

LODGING – 0.10%
Warimpex Finanz-und Beteiligungs AG	28,001		200,351

			200,351

MACHINERY – 3.52%
Andritz AG	101,772		6,302,011
A-TEC Industries AG^a	5,574		515,767

			6,817,778

MACHINERY - CONSTRUCTION & MINING – 0.36%
Palfinger AG^b	31,129		700,736

			700,736

MANUFACTURING – 1.56%
RHI AG^a	66,450		3,026,892

			3,026,892

OIL & GAS – 12.73%
OMV AG	382,498		24,642,686

			24,642,686

OIL & GAS SERVICES – 1.18%
Schoeller-Bleckmann Oilfield Equipment AG	27,270		2,276,005

			2,276,005


Security	Shares	Value
REAL ESTATE – 15.55%
Atrium European Real Estate Ltd.^a	811,985	$	8,308,342
CA Immo International AG	55,048		566,501
CA Immobilien Anlagen AG^a	349,064		5,067,147
conwert Immobilien Invest SE^a	254,043		3,740,148
ECO Business-Immobilien AG^a	71,297		709,577
Immoeast AG^a	678,330		4,384,167
IMMOFINANZ AG	651,334		5,945,344
Sparkassen Immobilien AG^a	171,789		1,388,511

			30,109,737

TELECOMMUNICATIONS – 9.02%
Telekom Austria AG	805,923		17,453,711

			17,453,711

TRANSPORTATION – 1.97%
Oesterreichische Post AG	95,899		3,814,881

			3,814,881


TOTAL COMMON STOCKS
(Cost: $256,776,004)			191,553,829

RIGHTS – 0.00%

AIRLINES – 0.00%
Austrian Airlines AG^b,c	99,436		14

			14


TOTAL RIGHTS
(Cost: $0)			14

SHORT-TERM INVESTMENTS – 8.11%

MONEY MARKET FUNDS – 8.11%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^d,e	49,863		49,863
BGI Cash Premier Fund LLC 2.63%^d,e,f	15,647,007		15,647,007

			15,696,870


TOTAL SHORT-TERM INVESTMENTS
(Cost: $15,696,870)			15,696,870


Security	Value
TOTAL INVESTMENTS IN SECURITIES – 107.05%
(Cost: $272,472,874)	$	207,250,713

Other Assets, Less Liabilities – (7.05)%		(13,648,542	)


NET ASSETS – 100.00%	$	193,602,171

^a	Non-income earning security.

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

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

^d	Affiliated issuer. See Note 2.

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

This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.11%

BANKS – 36.17%
Banque Nationale de Belgique	248	$	1,096,095
Dexia SA^a	347,966		4,964,119
Fortis^a	1,707,073		23,825,498
KBC Group NV	140,930		13,500,996

			43,386,708

BEVERAGES – 9.31%
InBev	159,970		11,165,806

			11,165,806

BIOTECHNOLOGY – 0.39%
Devgen NV^b	14,720		234,052
Innogenetics NV^b	24,275		231,230

			465,282

BUILDING MATERIALS – 0.07%
Deceuninck NV	7,474		81,427

			81,427

CHEMICALS – 5.74%
Recticel SA	1,360		16,739
Solvay SA	45,560		5,614,237
Tessenderlo Chemie NV	22,610		1,258,270

			6,889,246

COMPUTERS – 0.02%
Econocom Group SA	1,530		18,921

			18,921

DIVERSIFIED FINANCIAL SERVICES – 1.75%
KBC Ancora SCA	28,730		2,095,007

			2,095,007

ELECTRICAL COMPONENTS & EQUIPMENT – 1.37%
NV Bekaert SA	9,350		1,640,164

			1,640,164

ELECTRONICS – 1.08%
Barco NV	14,450		676,939
EVS Broadcast Equipment SA	7,140		620,200

			1,297,139

ENGINEERING & CONSTRUCTION – 0.19%
Compagnie d’Entreprises CFE	2,210		233,288

			233,288


Security	Shares	Value
ENTERTAINMENT – 0.06%
Kinepolis	2,040	$	72,412

			72,412

FOOD – 8.01%
Colruyt SA	14,110		3,867,601
Delhaize Group	88,740		5,744,569

			9,612,170

HEALTH CARE - PRODUCTS – 0.27%
Ion Beam Applications SA	14,110		321,365

			321,365

HOLDING COMPANIES - DIVERSIFIED – 12.17%
Ackermans & van Haaren NV	19,550		1,948,574
Compagnie Nationale a Portefeuille SA	27,370		2,007,924
Groupe Bruxelles Lambert SA	66,980		7,011,264
Sofina SA	31,960		3,636,264

			14,604,026

INVESTMENT COMPANIES – 0.58%
RHJ International SA^b	68,340		694,234

			694,234

MANUFACTURING – 0.63%
AGFA-Gevaert NV^b	94,860		759,738

			759,738

MEDIA – 0.04%
Roularta Media Group NV	1,419		51,079

			51,079

MINING – 4.38%
Nyrstar NV	63,800		571,092
Umicore	106,080		4,680,603

			5,251,695

PHARMACEUTICALS – 3.93%
Omega Pharma SA	21,420		1,091,762
UCB SA	91,630		3,626,173

			4,717,935

REAL ESTATE INVESTMENT TRUSTS – 2.54%
Befimmo SCA	2,550		285,322
Cofinimmo SA	14,960		2,724,035
Warehouses De Pauw SCA	680		42,248

			3,051,605


Security	Shares	Value
RETAIL – 0.57%
SA D’leteren NV	2,720	$	687,937

			687,937

SEMICONDUCTORS – 0.07%
Melexis NV	5,270		81,157

			81,157

TELECOMMUNICATIONS – 7.49%
Belgacom SA	139,400		5,588,458
Mobistar SA	28,730		2,141,958
Option NV^a,b	39,928		198,102
Telenet Group Holding NV^b	45,900		1,052,838

			8,981,356

TRANSPORTATION – 1.31%
Compagnie Maritime Belge SA	12,920		692,191
Euronav SA	19,380		824,295
Exmar NV	1,870		49,528

			1,566,014

VENTURE CAPITAL – 0.97%
GIMV NV	19,040		1,162,472

			1,162,472


TOTAL COMMON STOCKS
(Cost: $169,472,008)			118,888,183

SHORT-TERM INVESTMENTS – 15.78%

MONEY MARKET FUNDS – 15.78%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	28,337		28,337
BGI Cash Premier Fund LLC 2.63%^c,d,e	18,898,386		18,898,386

			18,926,723


TOTAL SHORT-TERM INVESTMENTS
(Cost: $18,926,723)			18,926,723


TOTAL INVESTMENTS IN SECURITIES – 114.89%
(Cost: $188,398,731)			137,814,906

Other Assets, Less Liabilities – (14.89)%			(17,860,273	)


NET ASSETS – 100.00%		$	119,954,633


Security	Shares	Value
COMMON STOCKS – 97.94%

AUSTRIA – 1.77%
Andritz AG	14,432	$	893,670
Atrium European Real Estate Ltd.^a	101,441		1,037,958
Erste Group Bank AG	61,539		3,712,821
Immoeast AG^a	153,200		990,159
IMMOFINANZ AG	165,962		1,514,893
Oesterreichische Elektrizitaetswirtschafts AG Class A	29,692		2,253,896
OMV AG	53,115		3,421,969
Raiffeisen International Bank Holding AG^b	18,265		2,016,530
Strabag SE	15,174		942,298
Telekom Austria AG	104,117		2,254,841
Vienna Insurance Group	11,579		726,210
voestalpine AG	42,782		2,334,254
Wienerberger AG	28,900		765,864

			22,865,363

BELGIUM – 2.98%
Belgacom SA	48,051		1,926,334
Colruyt SA	6,182		1,694,508
Compagnie Nationale a Portefeuille SA	15,497		1,136,894
Delhaize Group	33,720		2,182,859
Dexia SA	181,526		2,589,669
Fortis^b	704,748		9,836,118
Groupe Bruxelles Lambert SA	26,986		2,824,813
InBev	57,886		4,040,406
KBC Ancora SCA	11,693		852,660
KBC Group NV	52,547		5,033,966
Mobistar SA	8,712		649,521
Solvay SA	20,234		2,493,382
UCB SA	31,880		1,261,622
Umicore	43,836		1,934,190

			38,456,942

FINLAND – 4.50%
Cargotec Corp. Class B	10,898		336,455
Elisa OYJ Class A	36,948		793,104
Fortum OYJ	148,368		6,124,911
Kesko OYJ Class B	17,876		554,519


Security	Shares	Value
Kone OYJ Class B	46,365	$	1,447,130
Metso OYJ	38,425		1,509,886
Neste Oil OYJ	43,099		1,034,276
Nokia OYJ	1,231,489		30,967,059
Nokian Renkaat OYJ	35,406		1,272,929
Orion OYJ Class B	26,107		493,903
Outokumpu OYJ	39,360		951,502
Pohjola Bank PLC Class A^b	38,217		620,603
Rautaruukki OYJ	26,699		914,688
Sampo OYJ Class A	136,566		3,460,230
SanomaWSOY OYJ Class B	27,086		539,541
Stora Enso OYJ Class R^b	191,354		1,932,606
UPM-Kymmene OYJ	177,289		3,053,861
Wartsila OYJ Class B	27,807		1,610,944
YIT OYJ	33,540		526,383

			58,144,530

FRANCE – 30.76%
Accor SA	69,096		4,603,128
Aeroports de Paris	9,274		814,030
Air France-KLM	46,110		1,118,752
Alcatel-Lucent^a	708,682		4,329,932
ALSTOM	69,134		7,088,135
ArcelorMittal	279,314		22,107,189
Atos Origin SA	22,199		1,202,062
AXA	486,130		15,645,309
BNP Paribas	261,892		23,704,874
Bouygues SA	76,996		4,674,858
Bureau Veritas SA	12,648		721,006
Cap Gemini SA	42,712		2,543,607
Carrefour SA	200,072		10,642,308
Casino Guichard-Perrachon SA	14,626		1,442,289
Christian Dior SA	15,455		1,656,464
CNP Assurances SA	10,678		1,288,939
Compagnie de Saint-Gobain	91,887		5,668,259
Compagnie Generale de Geophysique-Veritas^a	40,745		1,686,230
Compagnie Generale des Etablissements Michelin Class B	47,770		3,119,811
Credit Agricole SA	299,546		6,403,416
Dassault Systemes SA	19,108		1,162,404
Eiffage SA	11,240		751,945
Electricite de France	62,663		5,387,727


Security	Shares	Value
Eramet	1,973	$	1,091,053
Essilor International SA	59,853		3,208,397
Eurazeo	8,434		833,799
European Aeronautic Defence and Space Co.	105,094		2,371,929
Eutelsat Communications^a	27,275		760,547
France Telecom SA	579,703		17,184,573
GDF SUEZ	357,199		20,719,917
Gecina SA	5,857		727,865
Groupe Danone	139,980		9,807,612
Hermes International^b	23,353		3,343,940
Icade	6,464		608,398
Imerys SA	10,682		688,824
JCDecaux SA	19,397		432,357
Klepierre	22,763		914,565
Lafarge SA	47,770		5,810,614
Lagardere SCA	39,349		2,212,986
L’Air Liquide SA	81,209		9,924,671
Legrand SA	31,999		824,434
L’Oreal SA	77,837		7,782,182
LVMH Moet Hennessy Louis Vuitton SA	75,027		8,032,542
M6-Metropole Television	20,910		469,467
Natixis	135,112		1,145,771
Neopost SA	10,959		1,151,350
PagesJaunes SA	36,499		526,609
Pernod Ricard SA	51,264		4,830,299
PPR SA	24,166		2,836,310
PSA Peugeot Citroen SA^b	49,753		2,382,053
Publicis Groupe SA	42,331		1,429,039
Renault SA	59,291		4,999,166
Safran SA	62,615		1,119,125
Sanofi-Aventis	332,184		23,773,104
Schneider Electric SA	70,812		7,183,029
SCOR SE	56,359		1,308,508
SES SA	112,565		2,734,443
Societe BIC	7,031		426,788
Societe Generale	149,492		14,547,922
Societe Television Francaise 1	37,614		658,435
Sodexo	35,251		2,400,815
STMicroelectronics NV	207,659		2,736,247
Technip SA	32,596		2,694,608


Security	Shares	Value
Thales SA	30,653	$	1,741,975
Total SA	692,384		49,994,626
Unibail-Rodamco	26,133		5,467,584
Valeo SA	25,864		929,110
Vallourec SA	17,141		4,816,007
Veolia Environnement	117,177		6,322,632
Vinci SA	131,227		7,505,779
Vivendi	368,953		14,361,971
Wendel	8,976		997,198
Zodiac SA	16,688		842,713

			397,376,562

GERMANY – 24.68%
Adidas AG	65,754		3,877,093
Allianz SE Registered	144,153		24,215,358
BASF SE	313,315		18,165,128
Bayer AG	243,346		19,349,955
Bayerische Motoren Werke AG	106,499		4,390,208
Beiersdorf AG	30,069		1,755,269
Bilfinger Berger AG	11,716		829,844
Celesio AG	26,695		1,027,740
Commerzbank AG	205,411		6,075,544
Continental AG	50,592		5,515,546
Daimler AG Registered	285,675		16,781,342
Deutsche Bank AG Registered	164,104		14,061,243
Deutsche Boerse AG	65,473		6,248,170
Deutsche Lufthansa AG Registered	80,100		1,732,941
Deutsche Post AG Registered	267,231		6,294,893
Deutsche Postbank AG	28,943		1,901,744
Deutsche Telekom AG Registered	895,547		14,911,885
E.ON AG	611,175		35,857,125
Fraport AG	11,243		727,483
Fresenius Medical Care AG & Co. KGaA	60,977		3,285,706
Fresenius SE	8,152		686,742
GEA Group AG	49,626		1,570,830
Hamburger Hafen und Logistik AG	8,582		540,266
Hannover Rueckversicherung AG	21,192		910,102
HeidelbergCement AG	8,492		962,681
Henkel AG & Co. KGaA	41,101		1,444,396
Hochtief AG	13,769		1,169,458
Hypo Real Estate Holding AG	53,390		1,311,105
Infineon Technologies AG^a	238,007		2,049,874


Security	Shares	Value
IVG Immobilien AG	35,656	$	659,856
K+S AG	49,094		5,984,672
Linde AG	43,836		5,550,875
MAN AG	33,439		3,291,063
Merck KGaA	21,092		2,429,874
METRO AG	34,844		1,950,904
Muenchener Rueckversicherungs-Gesellschaft
AG Registered	66,597		10,410,676
Puma AG	1,405		444,813
Q-Cells AG^a	19,389		1,960,216
Rheinmetall AG	10,961		702,942
RWE AG	142,748		15,474,136
Salzgitter AG	13,488		2,087,045
SAP AG	277,909		15,629,588
Siemens AG Registered	277,347		30,322,149
SolarWorld AG	27,540		1,444,646
ThyssenKrupp AG	114,086		5,746,018
TUI AG	77,557		1,551,751
United Internet AG Registered	39,017		572,130
Volkswagen AG^b	46,927		14,094,008
Wacker Chemie AG	4,777		884,322

			318,841,355

GREECE – 1.49%
Coca-Cola Hellenic Bottling Co. SA ADR	140,575		3,494,695
Hellenic Telecommunications Organization SA SP ADR	499,509		5,314,776
National Bank of Greece SA ADR	1,179,119		10,388,038

			19,197,509

IRELAND – 1.38%
Allied Irish Banks PLC	305,730		3,915,966
Anglo Irish Bank Corp. PLC	255,436		2,237,591
Bank of Ireland	356,285		2,858,746
CRH PLC	173,096		4,536,162
Elan Corp. PLC^a	148,930		2,141,095
Irish Life & Permanent PLC	80,568		754,399
Kerry Group PLC Class A	43,843		1,194,135
Ryanair Holdings PLC^a	43,520		165,947

			17,804,041


Security	Shares	Value
ITALY – 10.34%
A2A SpA	382,741	$	1,203,052
Alleanza Assicurazioni SpA	107,345		1,024,881
Assicurazioni Generali SpA	334,671		11,219,220
Atlantia SpA	81,941		2,181,128
Autogrill SpA	58,451		732,754
Banca Carige SpA	261,771		879,658
Banca Monte dei Paschi di Siena SpA	597,082		1,580,539
Banca Popolare di Milano Scrl	152,892		1,534,024
Banco Popolare SpA	217,299		4,171,737
Bulgari SpA	46,594		479,500
Enel SpA	1,408,934		13,016,252
Eni SpA	839,066		27,461,051
Fiat SpA	230,420		3,592,508
Finmeccanica SpA	101,998		2,746,546
Fondiaria-Sai SpA	23,182		646,758
IFIL Investments SpA	129,562		850,258
Intesa Sanpaolo SpA	2,534,620		13,704,280
Italcementi SpA	26,413		372,533
Lottomatica SpA	30,712		951,339
Luxottica Group SpA^b	38,551		979,053
Mediaset SpA	223,951		1,638,668
Mediobanca SpA	164,104		2,353,205
Mediolanum SpA	60,223		263,108
Parmalat SpA	534,192		1,482,485
Pirelli & C. SpA	829,788		564,405
Prysmian SpA	28,662		707,232
Saipem SpA	84,019		3,353,425
Snam Rete Gas SpA	269,080		1,690,583
Telecom Italia SpA	3,153,918		5,144,838
Terna SpA	437,798		1,769,285
UniCredito SpA	3,688,406		20,010,492
Unione di Banche Italiane ScpA	211,473		4,757,292
Unipol Gruppo Finanziario SpA	209,071		524,807

			133,586,896

NETHERLANDS – 7.64%
Aegon NV	444,261		5,261,939
Akzo Nobel NV	86,267		5,303,795
ASML Holding NV	136,566		3,243,086
Corio NV	15,733		1,166,021
Fugro NV CVA	19,389		1,506,058
Heineken Holding NV	29,224		1,304,089


Security	Shares	Value
Heineken NV	74,184	$	3,499,325
ING Groep NV	612,018		19,228,268
Koninklijke Ahold NV	378,507		4,753,402
Koninklijke Boskalis Westminster NV	18,655		1,110,952
Koninklijke DSM NV	48,332		2,798,596
Koninklijke KPN NV	591,786		10,106,581
Koninklijke Philips Electronics NV	343,101		11,234,101
Randstad Holding NV	32,041		990,620
Reed Elsevier NV	205,811		3,463,350
SBM Offshore NV	43,274		1,054,403
SNS REAAL NV	44,323		741,944
TNT NV	121,392		4,557,344
TomTom NV^a	20,232		503,691
Unilever NV	520,131		14,430,801
Wolters Kluwer NV	98,161		2,406,217

			98,664,583

PORTUGAL – 0.83%
Banco BPI SA Registered	110,616		373,751
Banco Comercial Portugues SA Registered^b	858,393		1,491,248
Banco Espirito Santo SA Registered	84,934		1,102,889
BRISA - Auto-estradas de Portugal SA	116,615		1,088,492
CIMPOR - Cimentos de Portugal SGPS SA^b	115,246		727,040
Energias de Portugal SA	567,339		2,898,369
Jeronimo Martins SGPS SA	74,620		640,480
Portugal Telecom SGPS SA Registered^b	188,699		1,983,578
Zon Multimedia - Servicos de Telecomunicacoes e Multimedia SGPS SA	51,705		408,018

			10,713,865

SPAIN – 11.57%
Abertis Infraestructuras SA	89,080		1,853,122
Acciona SA	9,273		1,859,426
Acerinox SA	46,651		888,057
Actividades de Construcciones y Servicios SA	64,573		2,885,302
Banco Bilbao Vizcaya Argentaria SA	1,165,026		19,827,822


Security	Shares	Value
Banco Popular Espanol SA^b	277,463	$	2,953,418
Banco Sabadell SA^b	326,244		2,555,264
Banco Santander SA	2,023,200		34,671,558
Bankinter SA^b	86,829		929,353
Cintra Concesiones de Infraestructuras de Transporte SA^b	76,718		895,678
Criteria CaixaCorp SA	277,656		1,418,463
Enagas SA	58,523		1,497,469
Fomento de Construcciones y Contratas SA	14,893		752,289
Gamesa Corporacion Tecnologica SA	62,663		2,986,314
Gas Natural SDG SA	37,935		1,768,205
Gestevision Telecinco SA	31,753		411,386
Grifols SA	40,557		1,212,114
Grupo Ferrovial SA	19,670		991,562
Iberdrola Renovables SA^a	251,214		1,612,545
Iberdrola SA	1,109,669		13,461,772
Iberia Lineas Aereas de Espana SA	172,900		516,741
Indra Sistemas SA	35,024		902,887
Industria de Diseno Textil SA	68,002		3,189,694
Mapfre SA	222,840		1,072,809
Promotora de Informaciones SA	26,100		229,017
Red Electrica Corporacion SA	37,654		2,235,184
Repsol YPF SA	244,470		7,630,324
Sacyr Vallehermoso SA^b	24,339		444,689
Telefonica SA	1,364,255		33,964,148
Union Fenosa SA	121,428		3,101,701
Zardoya Otis SA^b	37,094		755,279

			149,473,592


TOTAL COMMON STOCKS
(Cost: $1,490,005,699)			1,265,125,238

PREFERRED STOCKS – 1.61%

GERMANY – 1.19%
Bayerische Motoren Werke AG	18,279		629,723
Fresenius SE	24,463		2,005,352
Henkel AG & Co. KGaA	57,137		2,251,050
Porsche Automobil Holding SE	28,100		3,978,575
ProSiebenSat.1 Media AG	10,959		112,779


Security	Shares	Value
RWE AG	12,536	$	1,096,848
Volkswagen AG	34,563		5,358,230

			15,432,557

ITALY – 0.42%
Intesa Sanpaolo SpA RNC	328,423		1,601,663
Istituto Finanziario Industriale SpA^a	20,943		454,483
Italcementi SpA RNC	41,880		483,089
Telecom Italia SpA RNC	1,793,848		2,296,343
Unipol Gruppo Finanziario SpA	278,763		523,271

			5,358,849


TOTAL PREFERRED STOCKS
(Cost: $25,051,338)			20,791,406

RIGHTS – 0.17%

FRANCE – 0.17%
Suez Environnement SA^a	77,847		2,244,069

			2,244,069


TOTAL RIGHTS
(Cost: $2,221,549)			2,244,069

SHORT-TERM INVESTMENTS – 2.44%

MONEY MARKET FUNDS – 2.44%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	247,769		247,769
BGI Cash Premier Fund LLC 2.63%^c,d,e	31,256,539		31,256,539

			31,504,308


TOTAL SHORT-TERM INVESTMENTS
(Cost: $31,504,308)			31,504,308


TOTAL INVESTMENTS IN SECURITIES – 102.16%
(Cost: $1,548,782,894)			1,319,665,021

Other Assets, Less Liabilities – (2.16)%			(27,856,992	)


NET ASSETS – 100.00%		$	1,291,808,029

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.27%

ADVERTISING – 0.62%
JCDecaux SA^a	12,509	$	278,824
PagesJaunes SA	24,420		352,333
Publicis Groupe SA	23,199		783,168

			1,414,325

AEROSPACE & DEFENSE – 1.44%
European Aeronautic Defence and Space Co.^a	59,533		1,343,636
Safran SA	33,448		597,820
Thales SA	16,132		916,763
Zodiac SA	7,943		401,107

			3,259,326

AIRLINES – 0.24%
Air France-KLM	22,792		552,995

			552,995

APPAREL – 0.80%
Hermes International	12,691		1,817,237

			1,817,237

AUTO MANUFACTURERS – 1.84%
PSA Peugeot Citroen SA^a	27,898		1,335,688
Renault SA	33,818		2,851,390

			4,187,078

AUTO PARTS & EQUIPMENT – 0.97%
Compagnie Generale des Etablissements Michelin Class B	26,270		1,715,668
Valeo SA	13,695		491,964

			2,207,632

BANKS – 11.37%
BNP Paribas	148,666		13,456,344
Credit Agricole SA	161,431		3,450,922
Natixis	77,515		657,340
Societe Generale	84,841		8,256,363

			25,820,969

BEVERAGES – 1.24%
Pernod Ricard SA	29,859		2,813,434

			2,813,434


Security	Shares	Value
BUILDING MATERIALS – 2.98%
Compagnie de Saint-Gobain	51,726	$	3,190,836
Imerys SA	5,304		342,026
Lafarge SA	26,640		3,240,418

			6,773,280

CHEMICALS – 2.43%
L’Air Liquide SA	45,177		5,521,148

			5,521,148

COMMERCIAL SERVICES – 0.19%
Bureau Veritas SA	7,553		430,563

			430,563

COMPUTERS – 0.95%
Atos Origin SA	12,358		669,178
Cap Gemini SA	24,975		1,487,324

			2,156,502

COSMETICS & PERSONAL CARE – 2.43%
Christian Dior SA	10,115		1,084,124
L’Oreal SA	44,326		4,431,735

			5,515,859

ELECTRIC – 1.37%
Electricite de France	36,260		3,117,613

			3,117,613

ELECTRICAL COMPONENTS & EQUIPMENT – 0.18%
Legrand SA	15,984		411,818

			411,818

ENGINEERING & CONSTRUCTION – 3.50%
Aeroports de Paris	5,513		483,907
Bouygues SA	44,326		2,691,279
Eiffage SA	6,956		465,350
Vinci SA	75,258		4,304,525

			7,945,061

FOOD – 5.49%
Carrefour SA	115,477		6,142,498
Casino Guichard-Perrachon SA	7,992		788,102
Groupe Danone	79,143		5,545,105

			12,475,705

FOOD SERVICE – 0.52%
Sodexo	17,464		1,189,408

			1,189,408


Security	Shares	Value
GAS – 5.11%
GDF SUEZ	200,133	$	11,609,045

			11,609,045

HAND & MACHINE TOOLS – 1.79%
Schneider Electric SA	40,108		4,068,476

			4,068,476

HEALTH CARE - PRODUCTS – 0.86%
Essilor International SA	36,408		1,951,637

			1,951,637

HOLDING COMPANIES - DIVERSIFIED – 2.36%
LVMH Moet Hennessy Louis Vuitton SA	44,696		4,785,244
Wendel	5,173		574,700

			5,359,944

HOUSEHOLD PRODUCTS & WARES – 0.13%
Societe BIC	4,736		287,479

			287,479

INSURANCE – 4.69%
AXA	282,236		9,083,310
CNP Assurances SA	6,934		837,002
SCOR SE	31,693		735,828

			10,656,140

INVESTMENT COMPANIES – 0.21%
Eurazeo	4,795		474,041

			474,041

IRON & STEEL – 5.51%
ArcelorMittal	158,138		12,516,332

			12,516,332

LODGING – 1.04%
Accor SA	35,520		2,366,319

			2,366,319

MACHINERY – 1.78%
ALSTOM	39,518		4,051,681

			4,051,681

MEDIA – 4.46%
Lagardere SCA	21,941		1,233,961
M6-Metropole Television	12,839		288,259
Societe Television Francaise 1	21,238		371,772
Vivendi	211,603		8,236,920

			10,130,912


Security	Shares	Value
METAL FABRICATE & HARDWARE – 1.19%
Vallourec SA	9,620	$	2,702,875

			2,702,875

MINING – 0.23%
Eramet	925		511,517

			511,517

OFFICE & BUSINESS EQUIPMENT – 0.26%
Neopost SA	5,698		598,631

			598,631

OIL & GAS – 12.90%
Compagnie Generale de Geophysique-Veritas^b	23,310		964,683
Total SA	392,570		28,346,106

			29,310,789

OIL & GAS SERVICES – 0.67%
Technip SA	18,537		1,532,395

			1,532,395

PHARMACEUTICALS – 6.00%
Sanofi-Aventis	190,476		13,631,619

			13,631,619

REAL ESTATE – 1.75%
Gecina SA	2,935		364,740
Klepierre	12,284		493,543
Unibail-Rodamco	14,911		3,119,701

			3,977,984

REAL ESTATE INVESTMENT TRUSTS – 0.15%
Icade	3,707		348,906

			348,906

RETAIL – 0.73%
PPR SA	14,134		1,658,876

			1,658,876

SEMICONDUCTORS – 0.72%
STMicroelectronics NV	124,394		1,639,095

			1,639,095

SOFTWARE – 0.29%
Dassault Systemes SA	10,989		668,498

			668,498


Security	Shares	Value
TELECOMMUNICATIONS – 6.25%
Alcatel-Lucent^b	423,650	$	2,588,433
Eutelsat Communications^b	14,985		417,848
France Telecom SA	331,927		9,839,562
SES SA	55,405		1,345,905

			14,191,748

WATER – 1.63%
Veolia Environnement	68,598		3,701,408

			3,701,408

TOTAL COMMON STOCKS
(Cost: $292,263,808)			225,556,300

RIGHTS – 0.63%

WATER – 0.63%
Suez Environnement SA^b	49,321		1,421,759

			1,421,759


TOTAL RIGHTS
(Cost: $1,407,492)			1,421,759

SHORT-TERM INVESTMENTS – 0.43%

MONEY MARKET FUNDS – 0.43%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	27,603		27,603
BGI Cash Premier Fund LLC 2.63%^c,d,e	955,062		955,062

			982,665


TOTAL SHORT-TERM INVESTMENTS
(Cost: $982,665)			982,665


TOTAL INVESTMENTS IN SECURITIES – 100.33%
(Cost: $294,653,965)			227,960,724

Other Assets, Less Liabilities – (0.33)%			(758,197	)


NET ASSETS – 100.00%		$	227,202,527


Security	Shares	Value
COMMON STOCKS – 94.84%

AIRLINES – 0.48%
Deutsche Lufthansa AG Registered	147,177	$	3,184,132

			3,184,132

APPAREL – 1.35%
Adidas AG	130,329		7,684,669
Puma AG	4,212		1,333,488

			9,018,157

AUTO MANUFACTURERS – 10.41%
Bayerische Motoren Werke AG	212,544		8,761,701
Daimler AG Registered	560,115		32,902,709
Volkswagen AG^a	93,231		28,000,905

			69,665,315

AUTO PARTS & EQUIPMENT – 1.61%
Continental AG	98,739		10,764,537

			10,764,537

BANKS – 6.81%
Commerzbank AG	402,894		11,916,598
Deutsche Bank AG Registered^a	322,866		27,664,757
Deutsche Postbank AG	53,217		3,496,704
Hypo Real Estate Holding AG^a	103,702		2,546,623

			45,624,682

BUILDING MATERIALS – 0.28%
HeidelbergCement AG	16,524		1,873,214

			1,873,214

CHEMICALS – 13.17%
BASF SE	616,896		35,765,906
Bayer AG	490,374		38,992,688
K+S AG	94,527		11,523,059
Wacker Chemie AG	10,368		1,919,332

			88,200,985

COMMERCIAL SERVICES – 0.16%
Hamburger Hafen und Logistik AG	16,767		1,055,540

			1,055,540

COSMETICS & PERSONAL CARE – 0.50%
Beiersdorf AG	57,105		3,333,488

			3,333,488


Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 1.83%
Deutsche Boerse AG	128,223	$	12,236,481

			12,236,481

ELECTRIC – 15.25%
E.ON AG	1,225,368		71,891,314
RWE AG	278,721		30,213,849

			102,105,163

ENERGY - ALTERNATE SOURCES – 1.01%
Q-Cells AG^b	38,961		3,938,934
SolarWorld AG	53,703		2,817,059

			6,755,993

ENGINEERING & CONSTRUCTION – 2.44%
Bilfinger Berger AG	24,543		1,738,379
Fraport AG	23,976		1,551,376
Hochtief AG	27,783		2,359,724
Linde AG^a	84,564		10,708,189

			16,357,668

FOOD – 0.61%
METRO AG	73,386		4,108,858

			4,108,858

HEALTH CARE - PRODUCTS – 1.20%
Fresenius Medical Care AG & Co. KGaA	121,500		6,546,949
Fresenius SE	17,901		1,508,019

			8,054,968

HOLDING COMPANIES - DIVERSIFIED – 0.46%
GEA Group AG	97,524		3,086,964

			3,086,964

HOUSEHOLD PRODUCTS & WARES – 0.44%
Henkel AG & Co. KGaA	83,673		2,940,487

			2,940,487

INSURANCE – 10.59%
Allianz SE Registered	288,927		48,535,034

Hannover Rueckversicherung AG	38,070		1,634,936
Muenchener Rueckversicherungs-Gesellschaft
AG Registered	132,597		20,728,028

			70,897,998


Security	Shares	Value
INTERNET – 0.18%
United Internet AG Registered	83,106	$	1,218,634

			1,218,634

IRON & STEEL – 2.35%
Salzgitter AG	26,649		4,123,492
ThyssenKrupp AG	231,093		11,639,154

			15,762,646

LEISURE TIME – 0.41%
TUI AG^a	136,728		2,735,637

			2,735,637

MACHINERY - DIVERSIFIED – 1.22%
MAN AG	67,959		6,688,519
Rheinmetall AG	23,328		1,496,053

			8,184,572

MANUFACTURING – 9.08%
Siemens AG Registered	555,903		60,776,478

			60,776,478

PHARMACEUTICALS – 1.04%
Celesio AG	57,024		2,195,386
Merck KGaA	41,148		4,740,396

			6,935,782

REAL ESTATE – 0.15%
IVG Immobilien AG	53,865		996,836

			996,836

RETAIL – 0.06%
Arcandor AG^b	51,030		406,447

			406,447

SEMICONDUCTORS – 0.62%
Infineon Technologies AG^b	481,707		4,148,780

			4,148,780

SOFTWARE – 4.70%
SAP AG	558,900		31,432,508

			31,432,508

TELECOMMUNICATIONS – 4.52%
Deutsche Telekom AG Registered	1,816,344		30,244,212

			30,244,212


Security	Shares	Value
TRANSPORTATION – 1.91%
Deutsche Post AG Registered	543,591	$	12,804,830

			12,804,830


TOTAL COMMON STOCKS
(Cost: $788,511,493)			634,911,992

PREFERRED STOCKS – 4.53%

AUTO MANUFACTURERS – 2.92%
Bayerische Motoren Werke AG	34,263		1,180,383
Porsche Automobil Holding SE	56,457		7,993,537
Volkswagen AG	67,068		10,397,413

			19,571,333

ELECTRIC – 0.23%
RWE AG	17,334		1,516,652

			1,516,652

HEALTH CARE - SERVICES – 0.63%
Fresenius SE	51,192		4,196,458

			4,196,458

HOUSEHOLD PRODUCTS & WARES – 0.68%
Henkel AG & Co. KGaA	115,830		4,563,402

			4,563,402

MEDIA – 0.07%
ProSiebenSat.1 Media AG	44,226		455,131

			455,131


TOTAL PREFERRED STOCKS
(Cost: $34,986,050)			30,302,976

SHORT-TERM INVESTMENTS – 10.89%

MONEY MARKET FUNDS – 10.89%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	52,953		52,953
BGI Cash Premier Fund LLC 2.63%^c,d,e	72,879,678		72,879,678

			72,932,631

TOTAL SHORT-TERM INVESTMENTS
TOTAL SHORT-TERM INVESTMENTS
(Cost: $72,932,631)			72,932,631


	Value
TOTAL INVESTMENTS IN SECURITIES – 110.26%
(Cost: $896,430,174)	$	738,147,599

Other Assets, Less Liabilities – (10.26)%		(68,695,620	)


NET ASSETS – 100.00%	$	669,451,979

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 96.82%

AEROSPACE & DEFENSE – 2.41%
Finmeccanica SpA	218,769	$	5,890,892

			5,890,892

AUTO MANUFACTURERS – 2.55%
Fiat SpA^a	399,059		6,221,780

			6,221,780

AUTO PARTS & EQUIPMENT – 0.42%
Pirelli & C. SpA	1,524,186		1,036,720

			1,036,720

BANKS – 33.58%
Banca Carige SpA	719,075		2,416,387
Banca Monte dei Paschi di Siena SpA	1,325,549		3,508,868
Banca Popolare di Milano Scrl	296,985		2,979,764
Banco Popolare SpA	444,275		8,529,254
Intesa Sanpaolo SpA	4,113,135		22,239,055
UniCredito SpA	5,813,860		31,541,593
Unione di Banche Italiane ScpA	479,180		10,779,624

			81,994,545

BUILDING MATERIALS – 0.16%
Italcementi SpA	28,062		395,791

			395,791

COMMERCIAL SERVICES – 1.97%
Atlantia SpA	180,871		4,814,475

			4,814,475

DIVERSIFIED FINANCIAL SERVICES – 2.75%
Mediobanca SpA	468,780		6,722,172

			6,722,172

ELECTRIC – 10.97%
A2A SpA	1,221,581		3,839,739
Enel SpA	1,255,345		11,597,340
Terna SpA	2,804,880		11,335,435

			26,772,514

ELECTRICAL COMPONENTS & EQUIPMENT – 0.95%
Prysmian SpA	93,588		2,309,275

			2,309,275


Security	Shares	Value
ENTERTAINMENT – 0.35%
Lottomatica SpA	27,445	$	850,140

			850,140

FOOD – 1.13%
Parmalat SpA	990,732		2,749,471

			2,749,471

HEALTH CARE - PRODUCTS – 1.52%
Luxottica Group SpA	146,097		3,710,325

			3,710,325

HOLDING COMPANIES - DIVERSIFIED – 0.48%
IFIL Investments SpA	176,787		1,160,174

			1,160,174

INSURANCE – 10.14%
Assicurazioni Generali SpA	498,420		16,708,600
Fondiaria-Sai SpA	101,870		2,842,085
Mediolanum SpA^a	556,987		2,433,421
Unipol Gruppo Finanziario SpA	1,109,004		2,783,807

			24,767,913

MEDIA – 1.82%
Mediaset SpA	605,692		4,431,898

			4,431,898

OIL & GAS – 19.45%
Eni SpA	1,451,210		47,495,371

			47,495,371

OIL & GAS SERVICES – 2.60%
Saipem SpA	158,946		6,343,964

			6,343,964

RETAIL – 0.38%
Autogrill SpA	41,046		514,561
Bulgari SpA	40,531		417,106

			931,667

TELECOMMUNICATIONS – 3.19%
Telecom Italia SpA	4,775,030		7,789,282

			7,789,282


TOTAL COMMON STOCKS
(Cost: $294,889,629)			236,388,369


Security	Shares	Value
PREFERRED STOCKS – 3.05%

BANKS – 0.50%
Intesa Sanpaolo SpA RNC	249,015	$	1,214,403

			1,214,403

BUILDING MATERIALS – 0.20%
Italcementi SpA RNC	42,512		490,379

			490,379

HOLDING COMPANIES - DIVERSIFIED – 0.10%
Istituto Finanziario Industriale SpA^b	10,855		235,564

			235,564

INSURANCE – 1.02%
Unipol Gruppo Finanziario SpA	1,332,143		2,500,591

			2,500,591

TELECOMMUNICATIONS – 1.23%
Telecom Italia SpA RNC	2,353,000		3,012,126

			3,012,126


TOTAL PREFERRED STOCKS
(Cost: $11,004,465)			7,453,063

SHORT-TERM INVESTMENTS – 1.18%

MONEY MARKET FUNDS – 1.18%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	21,405		21,405
BGI Cash Premier Fund LLC 2.63%^c,d,e	2,850,983		2,850,983

			2,872,388


TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,872,388)			2,872,388


TOTAL INVESTMENTS IN SECURITIES – 101.05%
(Cost: $308,766,482)			246,713,820

Other Assets, Less Liabilities – (1.05)%			(2,559,369	)


NET ASSETS – 100.00%		$	244,154,451


Security	Shares	Value
COMMON STOCKS – 99.60%

BANKS – 0.70%
SNS REAAL NV	87,720	$	1,468,387

			1,468,387

BEVERAGES – 4.74%
Heineken Holding NV	65,188		2,908,943
Heineken NV	148,952		7,026,198

			9,935,141

BIOTECHNOLOGY – 0.30%
Crucell NV^a	38,506		626,996

			626,996

BUILDING MATERIALS – 0.17%
Wavin NV	44,892		366,812

			366,812

CHEMICALS – 7.22%
Akzo Nobel NV	162,884		10,014,297
Koninklijke DSM NV	88,408		5,119,141

			15,133,438

COMMERCIAL SERVICES – 1.27%
Brunel International NV	5,839		136,082
Randstad Holding NV	61,501		1,901,442
USG People NV	33,973		621,208

			2,658,732

DIVERSIFIED FINANCIAL SERVICES – 0.24%
BinckBank NV	36,292		352,644
KAS Bank NV	4,472		155,643

			508,287

ELECTRICAL COMPONENTS & EQUIPMENT – 0.40%
Draka Holding NV	10,807		326,167
InnoConcepts NV^b	9,671		154,341
TKH Group NV	16,182		366,889

			847,397

ELECTRONICS – 9.84%
Koninklijke Philips Electronics NV	630,036		20,629,168

			20,629,168

ENGINEERING & CONSTRUCTION – 1.84%
Arcadis NV	26,378		562,719
Koninklijke BAM Groep NV	69,488		1,236,852
Koninklijke Boskalis Westminster NV	34,572		2,058,849

			3,858,420


Security	Shares	Value
FOOD – 19.10%
CSM NV	38,872	$	1,046,152
Koninklijke Ahold NV	741,148		9,307,553
Koninklijke Wessanen NV	49,906		480,521
Nutreco Holding NV	18,576		1,152,193
Sligro Food Group NV	10,810		375,595
Super de Boer NV^a	42,151		230,851
Unilever NV	989,516		27,453,677

			40,046,542

HOLDING COMPANIES - DIVERSIFIED – 0.76%
Eriks Group NV	6,364		393,515
Imtech NV	32,474		841,453
Kendrion NV	4,486		106,333
Ordina NV	23,351		251,651

			1,592,952

INSURANCE – 22.26%
Aegon NV	859,828		10,184,019
ING Groep NV	1,161,344		36,486,891

			46,670,910

INVESTMENT COMPANIES – 0.12%
Kardan NV	20,802		244,700

			244,700

MANUFACTURING – 0.72%
Aalberts Industries NV	59,646		924,680
Koninklijke Ten Cate NV	14,475		575,392

			1,500,072

MEDIA – 5.64%
Reed Elsevier NV	400,244		6,735,233
Telegraaf Media Groep NV	15,670		415,724
Wolters Kluwer NV	191,092		4,684,231

			11,835,188

METAL FABRICATE & HARDWARE – 0.37%
Advanced Metallurgical Group NV^a,b	12,675		769,383

			769,383

OFFICE & BUSINESS EQUIPMENT – 0.24%
Oce NV	51,600		505,188

			505,188


Security	Shares	Value
OIL & GAS SERVICES – 2.37%
Fugro NV CVA	35,776	$	2,778,933
SBM Offshore NV	89,956		2,191,844

			4,970,777

PHARMACEUTICALS – 0.26%
OPG Groep NV	32,468		546,844

			546,844

REAL ESTATE – 0.06%
NR Nordic and Russia
Properties Ltd.	135,784		135,937

			135,937

REAL ESTATE INVESTMENT TRUSTS – 2.69%
Corio NV	29,068		2,154,319
Eurocommercial Properties NV	15,308		646,818
VastNed Offices/Industrial NV	12,384		284,425
VastNed Retail NV	10,320		807,845
Wereldhave NV	15,480		1,737,770

			5,631,177

RETAIL – 0.15%
Beter Bed Holding NV	10,153		142,004
Macintosh Retail Group NV	9,119		163,522

			305,526

SEMICONDUCTORS – 3.37%
ASM International NV^a	27,864		695,746
ASML Holding NV	268,303		6,371,497

			7,067,243

SOFTWARE – 0.64%
Exact Holding NV	6,190		189,008
TomTom NV^a	36,636		912,081
Unit 4 Agresso NV	10,693		232,993

			1,334,082

TELECOMMUNICATIONS – 9.03%
Koninklijke KPN NV	1,108,024		18,922,945

			18,922,945

TEXTILES – 0.04%
Gamma Holding NV	2,309		82,946

			82,946


Security	Shares	Value
TRANSPORTATION – 5.06%
Royal Vopak NV	17,285	$	1,024,276
Smit Internationale NV	7,740		600,300
TNT NV	239,596		8,995,003

			10,619,579


TOTAL COMMON STOCKS (Cost: $245,565,011)			208,814,769

SHORT-TERM INVESTMENTS – 0.38%

MONEY MARKET FUNDS – 0.38%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	26,452		26,452
BGI Cash Premier Fund LLC 2.63%^c,d,e	768,475		768,475

			794,927


TOTAL SHORT-TERM INVESTMENTS
(Cost: $794,927)			794,927


TOTAL INVESTMENTS IN SECURITIES – 99.98% (Cost: $246,359,938)			209,609,696

Other Assets, Less Liabilities – 0.02%			42,851


NET ASSETS – 100.00%		$	209,652,547

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.80%

AIRLINES – 0.18%
Iberia Lineas Aereas de Espana SA	191,675	$	572,853

			572,853

BANKS – 36.14%
Banco Bilbao Vizcaya Argentaria SA	1,771,910		30,156,508
Banco Popular Espanol SA^a	1,147,893		12,218,595
Banco Sabadell SA^a	854,165		6,690,136
Banco Santander SA	3,748,670		64,240,920
Bankinter SA^a	264,775		2,833,955

			116,140,114

COMMERCIAL SERVICES – 2.95%
Abertis Infraestructuras SA	363,630		7,564,556
Cintra Concesiones de Infraestructuras de Transporte SA^a	163,289		1,906,390

			9,470,946

COMPUTERS – 1.21%
Indra Sistemas SA	150,948		3,891,303

			3,891,303

DIVERSIFIED FINANCIAL SERVICES – 1.86%
Criteria CaixaCorp SA	1,168,665		5,970,368

			5,970,368

ELECTRIC – 11.41%
Iberdrola SA	1,247,035		15,128,206
Red Electrica Corporacion SA	134,897		8,007,637
Union Fenosa SA	530,147		13,541,830

			36,677,673

ENERGY - ALTERNATE SOURCES – 2.29%
Gamesa Corporacion Tecnologica SA	154,190		7,348,192

			7,348,192

ENGINEERING & CONSTRUCTION – 6.18%
Acciona SA	30,090		6,033,660
Actividades de Construcciones y Servicios SA	206,627		9,232,670
Fomento de Construcciones y Contratas SA^a	34,523		1,743,857


Security	Shares	Value
Grupo Ferrovial SA^a	44,285	$	2,232,400
Sacyr Vallehermoso SA^a	34,510		630,519

			19,873,106

GAS – 4.57%
Enagas SA	161,503		4,132,491
Gas Natural SDG SA	226,185		10,542,807

			14,675,298

INSURANCE – 2.52%
Mapfre SA	1,680,979		8,092,666

			8,092,666

IRON & STEEL – 0.59%
Acerinox SA	100,417		1,911,557

			1,911,557

MACHINERY – 0.58%
Zardoya Otis SA^a	91,602		1,865,128

			1,865,128

MEDIA – 0.43%
Gestevision Telecinco SA	45,900		594,671
Promotora de Informaciones SA^a	91,206		800,297

			1,394,968

OIL & GAS – 4.66%
Repsol YPF SA	480,165		14,986,766

			14,986,766

PHARMACEUTICALS – 0.98%
Grifols SA	104,903		3,135,202

			3,135,202

RETAIL – 2.82%
Industria de Diseno Textil SA	192,950		9,050,491

			9,050,491

TELECOMMUNICATIONS – 20.43%
Telefonica SA	2,637,635		65,665,895

			65,665,895


TOTAL COMMON STOCKS (Cost: $421,883,990)			320,722,526


Security	Shares	Value
SHORT-TERM INVESTMENTS – 7.90%

MONEY MARKET FUNDS – 7.90%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^b,c	25,070	$	25,070
BGI Cash Premier Fund LLC 2.63%^b,c,d	25,354,104		25,354,104

			25,379,174


TOTAL SHORT-TERM INVESTMENTS
(Cost: $25,379,174)			25,379,174


TOTAL INVESTMENTS IN SECURITIES – 107.70% (Cost: $447,263,164)			346,101,700

Other Assets, Less Liabilities – (7.70)%			(24,753,152	)


NET ASSETS – 100.00%		$	321,348,548

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

^b	Affiliated issuer. See Note 2.

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

This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.90%

AGRICULTURE – 1.99%
Swedish Match AB	228,036	$	4,527,095

			4,527,095

AUTO MANUFACTURERS – 2.07%
Scania AB Class B	326,740		4,718,699

			4,718,699

BANKS – 21.14%
Nordea Bank AB	1,861,612		24,899,370
Skandinaviska Enskilda Banken AB Class A	417,508		7,524,746
Svenska Handelsbanken AB Class A	411,184		9,955,719
Swedbank AB Class A^a	324,880		5,754,140

			48,133,975

COMMERCIAL SERVICES – 1.68%
Securitas AB Class B	280,860		3,826,520

			3,826,520

ENGINEERING & CONSTRUCTION – 1.89%
Skanska AB Class B	338,892		4,300,559

			4,300,559

FOREST PRODUCTS & PAPER – 3.24%
Holmen AB Class B	48,484		1,558,923
Svenska Cellulosa AB Class B	508,772		5,822,595

			7,381,518

HAND & MACHINE TOOLS – 4.82%
Sandvik AB	875,564		10,974,628

			10,974,628

HEALTH CARE - PRODUCTS – 1.61%
Getinge AB Class B	159,712		3,668,053

			3,668,053

HOME FURNISHINGS – 1.31%
Electrolux AB Class B	230,268		2,975,896

			2,975,896

HOUSEHOLD PRODUCTS & WARES – 0.88%
Husqvarna AB Class B^a	246,388		2,004,527

			2,004,527

INVESTMENT COMPANIES – 3.81%
Investor AB Class B	408,456		8,665,384

			8,665,384


Security	Shares	Value
IRON & STEEL – 2.49%
SSAB Svenskt Stal AB Class A	162,812	$	4,005,433
SSAB Svenskt Stal AB Class B	76,012		1,662,894

			5,668,327

MACHINERY – 10.46%
Atlas Copco AB Class A	608,964		8,581,165
Atlas Copco AB Class B	357,368		4,618,488
Volvo AB Class B	926,404		10,602,146

			23,801,799

MANUFACTURING – 2.07%
Alfa Laval AB	342,488		4,719,486

			4,719,486

MEDIA – 1.09%
Modern Times Group MTG AB Class B	46,500		2,479,817

			2,479,817

METAL FABRICATE & HARDWARE – 4.15%
Assa Abloy AB Class B	282,720		4,071,967
SKF AB Class B	351,788		5,368,008

			9,439,975

MINING – 0.72%
Boliden AB	260,400		1,650,218

			1,650,218

OIL & GAS – 0.95%
Lundin Petroleum AB^b	196,416		2,156,115

			2,156,115

RETAIL – 10.02%
Hennes & Mauritz AB Class B	457,932		22,816,919

			22,816,919

TELECOMMUNICATIONS – 23.51%
Millicom International Cellular SA SDR	62,868		5,002,148
Tele2 AB Class B	272,800		4,226,428
Telefonaktiebolaget LM Ericsson AB Class B	2,655,337		30,182,036
TeliaSonera AB	2,009,792		14,113,466

			53,524,078


TOTAL COMMON STOCKS (Cost: $306,453,559)			227,433,588


Security	Shares	Value
SHORT-TERM INVESTMENTS – 2.86%

MONEY MARKET FUNDS – 2.86%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	63,018	$	63,018
BGI Cash Premier Fund LLC 2.63%^c,d,e	6,438,507		6,438,507

			6,501,525


TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,501,525)			6,501,525


TOTAL INVESTMENTS IN SECURITIES – 102.76% (Cost: $312,955,084)			233,935,113

Other Assets, Less Liabilities – (2.76)%			(6,281,317	)


NET ASSETS – 100.00%		$	227,653,796

SDR – Swedish Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See

Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.46%

BANKS – 7.96%
Baloise Holding Registered	19,449	$	1,673,356
Banque Cantonale Vaudoise Registered	1,288		391,671
Credit Suisse Group AG Registered	384,876		17,923,619
EFG International AG	46,568		1,420,338
Julius Baer Holding AG Registered	111,202		6,813,761
Vontobel Holding AG Registered	28,706		961,789

			29,184,534

BUILDING MATERIALS – 2.80%
Geberit AG Registered	17,949		2,622,857
Holcim Ltd. Registered	105,746		7,639,591

			10,262,448

CHEMICALS – 6.01%
Givaudan SA Registered	4,955		4,141,385
Lonza Group AG Registered	25,582		3,628,785
Syngenta AG Registered	52,959		14,272,194

			22,042,364

COMMERCIAL SERVICES – 1.80%
Adecco SA Registered	58,601		2,769,055
SGS SA Registered	2,974		3,831,393

			6,600,448

COMPUTERS – 0.56%
Logitech International SA Registered^a	76,147		2,045,192

			2,045,192

DIVERSIFIED FINANCIAL SERVICES – 4.92%
UBS AG Registered^a	820,420		18,031,537

			18,031,537

ENGINEERING & CONSTRUCTION – 4.83%
ABB Ltd. Registered^a	715,899		17,689,715

			17,689,715

FOOD – 19.47%
Aryzta AG^a	359		18,729
Aryzta AG Dublin^a	30,379		1,484,886
Lindt & Sprungli AG Participation Certificates	686		1,764,419
Nestle SA Registered	1,539,367		68,114,204

			71,382,238


Security	Shares	Value
HAND & MACHINE TOOLS – 0.63%
Schindler Holding AG Participation Certificates	27,178	$	1,880,574
Schindler Holding AG Registered	5,842		420,192

			2,300,766

HEALTH CARE - PRODUCTS – 4.39%
Nobel Biocare Holding AG Registered	101,861		3,436,945
Sonova Holding AG Registered	36,742		2,676,160
Straumann Holding AG Registered	8,524		2,291,356
Synthes Inc.	55,257		7,672,138

			16,076,599

INSURANCE – 8.93%
Swiss Life Holding AG Registered^a	16,797		3,073,881
Swiss Reinsurance Co. Registered	193,389		11,964,112
Zurich Financial Services AG Registered	67,377		17,697,696

			32,735,689

INVESTMENT COMPANIES – 0.64%
Pargesa Holding SA Bearer	22,763		2,362,618

			2,362,618

MANUFACTURING – 0.42%
Sulzer AG Registered	12,466		1,543,566

			1,543,566

PHARMACEUTICALS – 27.45%
Actelion Ltd. Registered^a	50,038		2,883,785
Novartis AG Registered	870,839		48,800,601
Roche Holding AG Genusschein	288,925		48,927,983

			100,612,369

RETAIL – 5.90%
Compagnie Financiere Richemont SA Class A Bearer Units	262,084		15,354,946
Swatch Group AG (The) Bearer	18,384		4,351,837
Swatch Group AG (The) Registered	42,447		1,920,714

			21,627,497

SEMICONDUCTORS – 0.21%
OC Oerlikon Corp. AG Registered^a	3,218		757,366

			757,366


Security	Shares	Value
TELECOMMUNICATIONS – 1.92%
Swisscom AG Registered	21,811	$	7,024,756

			7,024,756

TRANSPORTATION – 0.62%
Kuehne & Nagel International AG Registered	28,466		2,267,743

			2,267,743


TOTAL COMMON STOCKS (Cost: $398,727,743)			364,547,445

SHORT-TERM INVESTMENTS – 0.01%

MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^b,c	18,762		18,762

			18,762


TOTAL SHORT-TERM INVESTMENTS
(Cost: $18,762)			18,762


TOTAL INVESTMENTS IN SECURITIES – 99.47% (Cost: $398,746,505)			364,566,207

Other Assets, Less Liabilities – 0.53%			1,958,706


NET ASSETS – 100.00%		$	366,524,913

^a	Non-income earning security.

^b	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.14%

ADVERTISING – 0.45%
WPP Group PLC	402,420	$	3,945,218

			3,945,218

AEROSPACE & DEFENSE – 2.08%
BAE Systems PLC	1,236,421		10,824,816
Cobham PLC	404,140		1,697,244
Meggitt PLC	250,572		1,052,313
Rolls-Royce Group PLC^a	654,816		4,750,534

			18,324,907

AGRICULTURE – 3.38%
British American Tobacco PLC	531,240		18,032,256
Imperial Tobacco Group PLC	357,048		11,800,427

			29,832,683

AIRLINES – 0.11%
British Airways PLC	212,518		972,932

			972,932

APPAREL – 0.15%
Burberry Group PLC	159,190		1,303,692

			1,303,692

AUTO PARTS & EQUIPMENT – 0.13%
GKN PLC	253,093		1,134,453

			1,134,453

BANKS – 16.52%
Alliance & Leicester PLC	111,492		665,482
Barclays PLC^b	2,878,075		18,530,611
HBOS PLC	1,859,882		10,711,287
HSBC Holdings PLC	4,228,032		66,744,928
Lloyds TSB Group PLC	2,017,393		11,176,858
Royal Bank of Scotland Group PLC	5,723,582		24,506,791
Standard Chartered PLC	494,988		13,461,245

			145,797,202

BEVERAGES – 2.68%
Diageo PLC	904,411		16,776,436
SABMiller PLC	320,463		6,903,045

			23,679,481

CHEMICALS – 0.26%
Johnson Matthey PLC	76,780		2,279,898

			2,279,898


Security	Shares	Value
COMMERCIAL SERVICES – 1.37%
Bunzl PLC	115,283	$	1,503,434
Capita Group PLC	215,305		2,780,355
Experian PLC	366,794		2,771,390
G4S PLC	458,167		1,951,298
Hays PLC	509,478		887,446
Rentokil Initial PLC	646,155		857,398
Serco Group PLC	172,509		1,353,772

			12,105,093

COMPUTERS – 0.15%
Logica PLC	524,172		1,283,515

			1,283,515

DISTRIBUTION & WHOLESALE – 0.28%
Inchcape PLC	161,439		761,907
Wolseley PLC	215,688		1,750,648

			2,512,555

DIVERSIFIED FINANCIAL SERVICES – 1.56%
ICAP PLC	184,980		1,604,310
Investec PLC	145,197		1,067,273
London Stock Exchange Group PLC	54,720		791,466
Man Group PLC	604,530		6,273,979
Old Mutual PLC	1,821,720		3,242,981
Schroders PLC	43,820		811,244

			13,791,253

ELECTRIC – 3.38%
British Energy Group PLC	364,800		4,900,501
Drax Group PLC	113,544		1,545,991
International Power PLC	533,770		3,848,035
National Grid PLC	883,500		11,513,880
Scottish & Southern Energy PLC	303,012		7,997,261

			29,805,668

ENGINEERING & CONSTRUCTION – 0.36%
AMEC PLC	121,980		1,880,002
Balfour Beatty PLC	172,631		1,298,840

			3,178,842

ENTERTAINMENT – 0.10%
Ladbrokes PLC	224,124		925,912

			925,912

FOOD – 5.11%
Cadbury PLC	478,267		5,508,796
J Sainsbury PLC	372,842		2,364,857


Security	Shares	Value
Tate & Lyle PLC	160,512	$	1,296,953
Tesco PLC	2,765,942		19,246,446
Unilever PLC	456,456		12,296,807
Wm Morrison Supermarkets PLC	855,656		4,408,903

			45,122,762

FOOD SERVICE – 0.71%
Associated British Foods PLC	128,136		1,884,901
Compass Group PLC	658,405		4,401,290

			6,286,191

FOREST PRODUCTS & PAPER – 0.09%
Mondi PLC	132,184		787,784

			787,784

GAS – 0.89%
Centrica PLC	1,309,411		7,815,712

			7,815,712

HEALTH CARE - PRODUCTS – 0.44%
Smith & Nephew PLC	319,200		3,857,107

			3,857,107

HOLDING COMPANIES - DIVERSIFIED – 0.10%
Tomkins PLC	313,341		850,133

			850,133

HOME BUILDERS – 0.13%
Berkeley Group Holdings PLC (The) Units^a	31,197		484,234
Persimmon PLC	94,777		645,664

			1,129,898

HOUSEHOLD PRODUCTS & WARES – 1.21%
Reckitt Benckiser PLC	211,356		10,713,122

			10,713,122

INSURANCE – 3.36%
Aviva PLC	928,599		8,714,180
Friends Provident PLC	838,128		1,513,417
Legal & General Group PLC	2,190,271		4,014,920
Prudential PLC	868,714		8,683,010
RSA Insurance Group PLC	1,144,981		3,149,289
Standard Life PLC	782,128		3,580,671

			29,655,487


Security	Shares	Value
LEISURE TIME – 0.40%
Carnival PLC	59,321	$	2,036,296
Thomas Cook Group PLC	174,491		728,822
TUI Travel PLC	194,856		749,022

			3,514,140

LODGING – 0.15%
InterContinental Hotels Group PLC	94,848		1,287,105

			1,287,105

MANUFACTURING – 0.62%
IMI PLC	119,016		1,087,567
Invensys PLC^a	284,772		1,462,139
Smiths Group PLC	140,717		2,938,766

			5,488,472

MEDIA – 1.79%
British Sky Broadcasting Group PLC	409,951		3,484,422
Daily Mail & General Trust PLC Class A NVS	84,588		573,166
ITV PLC	938,448		766,834
Pearson PLC	293,899		3,639,828
Reed Elsevier PLC	397,529		4,528,081
Thomson Reuters PLC	67,034		1,879,239
United Business Media Ltd.	87,009		944,265

			15,815,835

MINING – 12.01%
Anglo American PLC	465,348		24,885,980
Antofagasta PLC	141,816		1,602,431
BHP Billiton PLC	776,514		24,332,424
Eurasian Natural Resources Corp.^a	115,368		2,114,776
Kazakhmys PLC	73,416		1,730,080
Lonmin PLC	56,088		3,559,076
Rio Tinto PLC	351,804		33,553,076
Vedanta Resources PLC	51,756		1,719,030
Xstrata PLC	223,668		12,508,031

			106,004,904

OIL & GAS – 19.73%
BG Group PLC	1,174,428		26,112,174
BP PLC	6,654,408		64,176,013
Cairn Energy PLC^a	47,196		2,563,556
Royal Dutch Shell PLC Class A	1,254,228		43,945,740


Security	Shares	Value
Royal Dutch Shell PLC Class B	971,052	$	33,510,164
Tullow Oil PLC	252,852		3,804,813

			174,112,460

PACKAGING & CONTAINERS – 0.19%
Rexam PLC	232,009		1,718,082

			1,718,082

PHARMACEUTICALS – 8.44%
AstraZeneca PLC	514,721		25,282,567
GlaxoSmithKline PLC	1,930,020		45,640,171
Shire Ltd.	201,096		3,550,518

			74,473,256

REAL ESTATE – 1.15%
British Land Co. PLC	183,996		2,569,014
Hammerson PLC	104,451		1,813,688
Land Securities Group PLC	165,121		4,095,945
Liberty International PLC	91,237		1,638,323

			10,116,970

REAL ESTATE INVESTMENT TRUSTS – 0.14%
SEGRO PLC	157,583		1,261,789

			1,261,789

RETAIL – 1.26%
Carphone Warehouse Group PLC (The)	145,960		528,987
Enterprise Inns PLC	186,431		1,032,024
Home Retail Group PLC	307,026		1,421,000
Kingfisher PLC	852,614		2,076,092
Marks & Spencer Group PLC	561,792		2,687,225
Mitchells & Butlers PLC	144,921		756,641
Next PLC	70,680		1,367,807
Whitbread PLC	62,700		1,292,287

			11,162,063

SOFTWARE – 0.21%
Sage Group PLC	477,483		1,828,901

			1,828,901

TELECOMMUNICATIONS – 6.75%
BT Group PLC	2,756,064		8,666,415
Cable & Wireless PLC	872,967		2,826,241
Vodafone Group PLC	18,693,492		48,092,401

			59,585,057


Security	Shares	Value
TRANSPORTATION – 0.44%
FirstGroup PLC	173,120	$	1,916,677
National Express Group PLC	46,512		882,290
Stagecoach Group PLC	188,660		1,100,280

			3,899,247

VENTURE CAPITAL – 0.27%
3i Group PLC	139,541		2,340,274

			2,340,274

WATER – 0.59%
Severn Trent PLC	83,986		2,089,461
United Utilities Group PLC	237,849		3,101,847

			5,191,308


TOTAL COMMON STOCKS
(Cost: $991,051,716)			874,891,363

SHORT-TERM INVESTMENTS – 0.01%

MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^b,c	126,329		126,329

			126,329


TOTAL SHORT-TERM INVESTMENTS
(Cost: $126,329)			126,329


TOTAL INVESTMENTS IN SECURITIES – 99.15% (Cost: $991,178,045)			875,017,692

Other Assets, Less Liabilities – 0.85%			7,484,375


NET ASSETS – 100.00%		$	882,502,067

NVS – Non-Voting Shares

^a	Non-income earning security.

^b	Affiliated issuer. See Note 2.

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

See notes to financial statements.

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.

These financial statements relate only to the iShares MSCI Austria Investable Market (formerly iShares MSCI Austria Index Fund), iShares MSCI Belgium Investable Market (formerly iShares MSCI Belgium Index Fund), iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands Investable Market (formerly iShares MSCI Netherlands Index Fund), 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 that market’s equity securities index compiled by MSCI 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.

Pursuant to 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.

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”). 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.

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”).

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

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

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.

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 rate different 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 dates 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.

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2008, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

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.

As of August 31, 2008, the tax year-end of the Funds, the components of net accumulated losses on a tax basis were as follows:

For the years ended August 31, 2008 and August 31, 2007, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

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 ordinary income and any net capital 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 year ended August 31, 2008.

From November 1, 2007 to August 31, 2008, certain Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2009, as follows:

The Funds had tax basis net capital loss carryforwards as of August 31, 2008, the tax year-end of the Funds, as follows:

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 marked-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 August 31, 2008, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for uncertainty in a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and disclosures of tax positions, along with accounting for the related interest and penalties. Management has reviewed the tax positions as of August 31, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

Pursuant to an Investment Advisory Agreement with the Company, Barclays Global Fund 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 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.

For its investment advisory services to the iShares MSCI Austria Investable Market, iShares MSCI Belgium Investable Market, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands Investable Market, iShares MSCI Spain, iShares MSCI Sweden, iShares MSCI Switzerland and iShares MSCI United Kingdom Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares Funds, as follows:

The Board approved a change to the investment advisory fee structure for the iShares MSCI Austria Investable Market, iShares MSCI Belgium Investable Market, iShares MSCI EMU, iShares MSCI France, iShares MSCI Germany, iShares MSCI Italy, iShares MSCI Netherlands Investable Market, iShares MSCI Spain, iShares MSCI Sweden, iShares MSCI Switzerland and iShares MSCI United Kingdom Index Funds effective September 1, 2008. For its investment advisory services to each Fund, BGFA will be entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares Funds, as follows:

State Street Bank and Trust Company (“State Street”) serves as administrator, custodian and transfer agent for the Company. As compensation for its services, State Street 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 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 Funds. 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 year ended August 31, 2008, BGI earned securities lending agent fees as follows:

Cross trades for the year ended August 31, 2008, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. 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.

Each Fund may invest in the Institutional Shares of certain money market funds managed by BGFA, the Funds’ investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, PMMF and TMMF 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, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

Each Fund may invest its securities lending cash collateral, if any, in the BGI Cash Premier Fund LLC (“Premier Fund”), an affiliated private money market fund managed by BGFA. Although the Premier Fund is not registered as an investment company under the 1940 Act, it intends to operate as a money market fund in compliance with Rule 2a-7 under the 1940 Act. See Note 5 for additional information regarding the Premier Fund.

For the year ended August 31, 2008, the iShares MSCI United Kingdom Index Fund had direct investments (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:

Certain directors and officers of the Company are also officers of BGI and/or BGFA.

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2008, were as follows:

In-kind transactions (see Note 4) for the year ended August 31, 2008, were as follows:

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.

From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the Statements of Assets and Liabilities.

The Board authorized a two-for-one stock split for the iShares MSCI EMU Index Fund, effective July 24, 2008, for the shareholders of record on July 21, 2008. The impact of the stock split was to increase the number of shares outstanding by a factor of two, while decreasing the net asset value per share by a factor of two, resulting in no effect to total net assets of the Fund. The financial statements for the Fund have been adjusted to reflect the stock split.

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 August 31, 2008, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in the Premier Fund. The Premier Fund seeks to achieve its investment objective by investing in a portfolio of high-quality, short-term fixed-income instruments, including money market funds (which may be managed by BGFA or its affiliate) and other instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition.

The market value of the securities on loan as of August 31, 2008 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

In September 2006, FASB issued Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. Management does not believe that the adoption of this standard will have a material impact on the Funds’ financial statements.

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Austria Investable Market Index Fund (formerly iShares MSCI Austria Index Fund), iShares MSCI Belgium Investable Market Index Fund (formerly iShares MSCI Belgium Index Fund), iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Netherlands Investable Market Index Fund (formerly iShares MSCI Netherlands Index Fund), iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund (the “Funds”) at August 31, 2008, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

For the fiscal year ended August 31, 2008, certain Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:

Under Section 854(b)(2) of the Code, the Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2008:

In January 2009, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2008. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Funds. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 18-19, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

The Board anticipated that there would be no diminution in the scope of services required of or provided by BGFA under the Advisory Contract for the coming year as compared to the scope of services provided by BGFA over the past year. In reviewing the scope of these services, the Board considered BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including over the past year, including investment in technology and increasing the number of their employees supporting the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as any of the Funds; therefore, comparative performance information was generally not available. However, the Board also noted that the Funds had met their investment objectives consistently since their respective inception dates. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contract were appropriate and mitigated in favor of the Board’s approval of the Advisory Contract for the coming year.

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such Fund’s applicable peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Funds, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five- and ten-year periods, as applicable, and the “last quarter” period ended March 31, 2008, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison

of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expense components of the funds in their respective Lipper Groups. The Board also reviewed statistical information from Lipper displaying the effects of the proposed extension of breakpoints in the investment advisory fee rates for the Funds (as discussed below) at various assets levels of such Funds as compared to their Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO FUNDS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Funds based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BGFA and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Company (including any securities lending by the Funds). The Board also discussed BGFA’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BGFA and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate.

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board was also presented with materials regarding the proposed extension of breakpoints in the investment advisory fee rates at certain asset levels for the Funds (effective September 1, 2008). The Board noted that the Advisory Contract already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board also discussed the substantial growth in assets of certain iShares funds, including the iShares funds in the group with which the Funds’ assets are aggregated for the purpose of applying breakpoints in the investment advisory fee rates, over the last few years. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. In light of this history, the Board determined that the current and proposed breakpoints were appropriate and warranted at this juncture for the Funds. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, with the current and proposed breakpoints for the Funds, reflects appropriate sharing of economies of scale with the Funds’ shareholders.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA, such as any payment of revenue to BGI, the Company’s securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to BGFA and BGI in connection with any investments by the Funds in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA does not use soft dollars or consider the value of research or other services that may be provided to BGFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BGFA affiliate or purchased from an underwriting syndicate in which a BGFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates, is fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract, with the fee schedule to the Advisory Contract as proposed to be amended to reflect the extension of breakpoints, for the coming year.

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

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

The following information shows the frequency distributions of premiums and discounts for each of the Funds included in this report. The information shown for each Fund is for five calendar years (or for each full calendar quarter completed after the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.

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

The Board of Directors has responsibility for the overall management and operations of the Company, including general supervision of the duties performed by BGFA and other service providers. Each Director serves until his or her successor is duly elected or appointed and qualified.

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 161 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

Unless otherwise noted in the tables below, the address of each Director and Officer is c/o Barclays Global Investors, N.A., 400 Howard Street, San Francisco, California 94105. The Board has designated George G.C. Parker as its Lead Independent Director. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-474-2737.

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 S&P North American Natural Resources Sector (IGE)

iShares S&P North American

Technology-Multimedia Networking (IGN)

iShares S&P North American

Technology-Semiconductors (IGW)

iShares S&P North American

Technology-Software (IGV)

iShares S&P North American Technology Sector (IGM)

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. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment & Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares FTSE NAREIT Retail (RTL)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

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 Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

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 China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (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 Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM (KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares S&P World ex-U.S. Property (WPS)

iShares^® is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., KLD Research & Analytics, Inc., MSCI Inc., Morningstar Inc., The NASDAQ Stock Market, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), 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. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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.

The iShares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. BGFA is a subsidiary of Barclays Global Investors, NA., neither of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company 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 company listed above.

©2008 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.

request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’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 Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website.

Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1 -800-474-2737.

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Would you prefer to receive materials like this electronically? See inside cover for details.

iShares MSCI Israel Capped Investable Market Index Fund iShares MSCI Japan Small Cap Index Fund

4. Fill out the appropriate information and provide the e-mail address where you would like your information sent.

for the iShares MSCI Australia Index Fund, the iShares MSCI Canada Index Fund,

the iShares MSCI Malaysia Index Fund, the iShares MSCI Mexico Investable Market Index Fund,

the iShares MSCI Pacific ex-Japan Index Fund, the iShares MSCI South Africa Index Fund and the

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the iShares MSCI Index Funds named above (each, a “Fund”).

Effective September 1, 2008, the third and fourth paragraphs under the heading “Management” beginning on page 25 of the Prospectus are hereby deleted in their entirety and replaced with the following:

For its investment advisory services to the iShares MSCI South Africa Index Fund and the iShares MSCI South Korea Index Fund, BGFA is entitled to receive a management fee from each Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion. For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is paid a management fee equal to the Fund’s average daily net assets at an annual rate of 0.50% per year. For its investment advisory services to each of the other Funds included in this Prospectus, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

In addition, all references in the Prospectus to MSCI South Korea Index are replaced with MSCI Korea Index.

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

Effective September 1, 2008, the third and fourth paragraphs under the heading “Management” beginning on page 10 of the Prospectus are hereby deleted in their entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

to the Prospectus dated November 9, 2007 and the Statement of Additional Information (“SAI”) dated November 9, 2007

(as revised December 19, 2007) for the iShares MSCI BRIC Index Fund and the iShares MSCI Chile Investable Market

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus and SAI for the iShares MSCI Index Funds named above (each, a “Fund”).

Effective September 1, 2008, under the heading “Management” beginning on page 12 of the Prospectus, the second paragraph is hereby deleted in its entirety and replaced with the following with the fourth paragraph deleted in its entirety as well.

Effective August 12, 2008, for its investment advisory services to the iShares MSCI BRIC Index Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI All Country Asia ex Japan Index Fund and iShares MSCI Emerging Markets Index Fund, which are offered in separate prospectuses) as follows: 0.75% per annum of the aggregate net assets less than or equal to $14.0 billion, plus 0.68% per annum of the aggregate net assets over $14.0 billion, up to and including $28.0 billion, plus 0.61% per annum of the aggregate net assets in excess of $28.0 billion. Effective September 1, 2008, for its investment advisory services to the iShares MSCI Chile Investable Market Index Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets between $2.0 billion and $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

In addition, effective the same date, the fourth paragraph on page 25 under the “Investment Adviser” heading of the SAI is hereby deleted in its entirety and replaced with the following:

For its investment advisory services to the iShares MSCI BRIC Index Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI All Country Asia ex Japan Index Fund and iShares MSCI Emerging Markets Index Fund, which are offered in separate SAIs) as follows: 0.75% per annum of the aggregate net assets less than or equal to $14.0 billion, plus 0.68% per annum of the aggregate net assets over $14.0 billion, up to and including $28.0 billion, plus 0.61% per annum of the aggregate net assets in excess of $28.0 billion. For its investment advisory services to the iShares MSCI Chile Investable Market Index Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate SAIs) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion. For its investment advisory services to the iShares MSCI Japan Small Cap Index Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate SAIs) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Also, all references to 45 Fremont Street in both the Prospectus and the SAI are changed to 400 Howard Street.

to the Prospectus dated March 26, 2008 and the Statement of Additional Information (“SAI”) dated March 26, 2008

for the iShares MSCI Israel Capped Investable Market Index Fund (the “Fund”)

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

Effective September 1, 2008, the third and fourth paragraphs under the heading “Management” beginning on page 6 of the Prospectus are hereby deleted in their entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

In addition, effective the same date, the first sentence of the third paragraph under the heading “Investment Advisory, Administrative and Distribution Services” on page 23 of the SAI is hereby deleted in its entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate SAIs) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

Also, all references to 45 Fremont Street in both the Prospectus and the SAI are changed to 400 Howard Street.

to the Prospectus dated December 19, 2007 and the Statement of Additional Information (“SAI”) dated November 9, 2007

(as revised December 19, 2007) for the iShares MSCI Japan Small Cap Index Fund (the “Fund”)

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

The following information replaces the second and fourth paragraph under the heading “Management” beginning on page 8 of the Prospectus are hereby deleted in their entirety and replaced with the following:

Effective September 1, 2008, for its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate Prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

In addition, effective the same date, the fourth paragraph on page 25 under the “Investment Adviser” heading of the SAI is hereby deleted in its entirety and replaced with the following:

Also, all references to 45 Fremont Street in both the Prospectus and the SAI are changed to 400 Howard Street.

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

to the Prospectus dated March 26, 2008 and the Statement of Additional Information (“SAI”) dated March 26, 2008

for the iShares MSCI Thailand Investable Market Index Fund (the “Fund”).

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

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

In addition, effective the same date, the first sentence of the third paragraph under the “Investment Advisory, Administrative and Distribution Services” heading on page 23 of the SAI is hereby deleted in its entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Turkey Investable Market Index Fund, which are offered in separate SAIs) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

Also, all references to 45 Fremont Street in both the Prospectus and the SAI are changed to 400 Howard Street.

to the Prospectus dated March 26, 2008 and the Statement of Additional Information (“SAI”) dated March 26, 2008

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

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Thailand Investable Market Index Fund, which are offered in separate prospectuses) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

In addition, effective the same date, the first sentence of the third paragraph under the heading “Investment Advisory, Administrative and Distribution Services” beginning on page 22 of the SAI is hereby deleted in its entirety and replaced with the following:

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Brazil Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Thailand Investable Market Index Fund, which are offered in separate SAIs) as follows: 0.74% per annum of the aggregate net assets less than or equal to $2.0 billion, plus 0.69% per annum of the aggregate net assets over $2.0 billion, up to and including $4.0 billion, plus 0.64% per annum of the aggregate net assets over $4.0 billion, up to and including $8.0 billion, plus 0.57% per annum of the aggregate net assets over $8.0 billion, up to and including $16.0 billion, plus 0.51% per annum of the aggregate net assets in excess of $16.0 billion.

Also, all references to 45 Fremont Street in both the Prospectus and the SAI are changed to 400 Howard Street.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
BHP Billiton Ltd.	15.83	%

Commonwealth Bank of Australia	6.40

Westpac Banking Corp.	5.04

National Australia Bank Ltd.	4.56

Rio Tinto Ltd.	4.15

Woolworths Ltd.	3.93

Australia and New Zealand Banking Group Ltd.	3.64

Woodside Petroleum Ltd.	3.46

Westfield Group	3.45

CSL Ltd.	2.80


TOTAL	53.26	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.25)%, while the total return for the Index was (10.09)%.

The Australian stock market declined during the reporting period as the credit crunch and economic slowdown that began in the U.S. spread to Australia and other regions of the world. The Australian economy grew by 2.7% for the 12 months ended June 30, 2008. Although this extended the economy’s current expansion to 17 years, it was lower than the 4.3% growth rate from the prior 12-month period, and evidence of slowing economic activity had become increasingly apparent. Economic growth was just 0.3% in the second quarter of 2008, the weakest quarterly growth rate in more than three years, as consumer spending declined for the first time since 1993.

Despite the slowing economic environment, inflation increased significantly during the reporting period. The Australian consumer price index rose by 4.5% for the 12 months ended June 30, 2008, more than double the 2.1% inflation rate for the previous 12 months. As a result, the Reserve Bank of Australia raised interest rates three times during the reporting period, boosting its cash rate target to a 12-year high of 7.25%.

The combination of weaker economic growth and rising inflation weighed on Australian stock market performance, particularly during the last six months of the reporting period. A substantial portion of Australia’s economy is in commodity-based industries, such as mining and metals, and these industries struggled as global economic growth slowed and commodity prices eased late in the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, the best performer was energy producer Woodside Petroleum Ltd., which benefited from a 56% increase in the price of crude oil. Mining firm Rio Tinto Ltd. and biotechnology firm CSL Ltd. also generated robust results for the reporting period. On the downside, the weakest performers among the top ten holdings were commercial banks – Australia and New Zealand Banking Group Ltd., National Australia Bank Ltd., and Commonwealth Bank of Australia. Like many global financial stocks, these three companies were hampered by concerns about credit conditions and exposure to mortgage-related investments, particularly in the U.S.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 Market 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.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Petroleo Brasileiro SA Preferred	12.90	%

Petroleo Brasileiro SA	11.49

Companhia Vale do Rio Doce Class A Preferred	9.60

Companhia Vale do Rio Doce ADR	7.60

Banco Bradesco SA Preferred	4.81

Banco Itau Holding Financeira SA Preferred	4.32

Unibanco - Uniao de Bancos Brasileiros SA Units	3.46

Companhia Siderurgica Nacional	3.12

Gerdau SA Preferred	2.67

Companhia de Bebidas das Americas Preferred	2.67


TOTAL	62.64	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was 21.58%, while the total return for the Index was 23.37%.

The Brazilian stock market continued to advance, generating strong results for the reporting period. Brazil’s economy grew by 6.1% for the 12 months ended June 30, 2008 – among the fastest growth rates in the world. While commodity exports such as oil and metals contributed notably to economic growth, particularly in the last half of 2007, robust domestic consumption was also a driving force behind the rapid growth in the Brazilian economy. However, the increase in domestic demand boosted the Brazilian inflation rate to 6.0%, well above the government’s 4.5% target. This led to a change in monetary policy – after 18 interest rate cuts between November 2005 and September 2007, the Brazilian central bank raised interest rates three times in the first eight months of 2008, lifting its benchmark interest rate to 13.0%.

Despite a strong overall return, the Brazilian stock market declined sharply in the last few months of the reporting period. Global economic activity began to weaken as an economic slowdown in the U.S. spread to other regions of the world, dampening demand for Brazil’s raw materials exports. In addition, prices for oil and other commodities eased after peaking in mid-2008, crimping profits for Brazilian energy and mining companies.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was largely positive for the reporting period. Top performers included steelmakers Companhia Siderurgica Nacional and Gerdau SA, both of which benefited from healthy global demand for steel and rising prices. The Fund’s largest holding, energy producer Petroleo Brasileiro SA, also performed well as the price of oil surged by 56% for the reporting period. In addition, Petroleo Brasileiro SA discovered a sizable offshore oil field that could make Brazil one of the largest oil exporters in the world. The only stock among the Fund’s top ten holdings to decline for the reporting period was beverage company Companhia de Bebidas das Americas.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 11/12/07.

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 primary 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 (11/16/07), the NAV of the Fund is used as a proxy for Market 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 table 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 8/31/08
Sector	Percentage of Net Assets
Energy	31.27	%

Financial	22.98

Basic Materials	14.28

Communications	11.71

Technology	5.10

Consumer Non-Cyclical	4.61

Industrial	3.89

Utilities	2.37

Diversified	2.13

Consumer Cyclical	1.35

Short-Term and Other Net Assets	0.31


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
OAO Gazprom SP ADR (Russia)	6.68	%

China Mobile Ltd. (China)	5.20

Petroleo Brasileiro SA Preferred (Brazil)	4.94

Petroleo Brasileiro SA (Brazil)	4.26

Reliance Industries Ltd. GDR (India)	3.46

Companhia Vale do Rio Doce Class A Preferred (Brazil)	3.38

Companhia Vale do Rio Doce (Brazil)	2.78

LUKOIL SP ADR (Russia)	2.64

Infosys Technologies Ltd. SP ADR (India)	2.42

Banco Bradesco SA Preferred (Brazil)	2.11


TOTAL	37.87	%

The iShares MSCI BRIC 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 BRIC Index^SM (the “Index”). The Index is designed to measure the combined equity market performance in Brazil, Russia, India and China (“BRIC”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from November 12, 2007 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return for the Fund was (21.65)%, while the total return for the Index was (22.37)%.

The total return for the Fund declined sharply for the reporting period as the four markets comprising the Fund – Brazil, Russia, India, and China – declined along with equity markets worldwide. Much of the decline occurred in the last few months of the reporting period as a global economic slowdown that began in the U.S. spread to other regions of the world, leading to a broad decline in the global equity indexes.

The Brazilian stock market declined modestly for the reporting period despite solid economic growth. Brazil’s economy grew by 6.1% for the 12 months ended June 30, 2008, led by robust domestic consumption and commodity exports. However, weaker global economic activity late in the reporting period dampened demand for Brazil’s raw materials exports. In addition, prices for oil and other commodities eased after peaking in mid-2008, crimping profits for Brazilian energy and mining companies.

In Russia, the economy grew at an 8.0% annualized rate in the first half of 2008, in line with its growth rate in 2007. Meanwhile, inflation reached a five-year high of 15.1% for the 12 months ended June 30, 2008, brought on by surging domestic demand as consumer spending and construction activity increased significantly. Soaring inflation, along with falling oil prices – Russia is one of the largest oil exporters in the world – and geopolitical tensions toward the end of the period, put downward pressure on the Russian stock market.

The economies in India and China, both of which generated strong growth in 2007, slowed somewhat in 2008. India’s economy grew at a 7.9% annualized rate in the second quarter of 2008, down from 9.2% a year earlier. The Chinese economy grew by 11.4% in 2007 – the fifth straight year of double-digit growth and its fastest growth rate since 1994 – but slowed to 10.1% for the 12 months ended June 30, 2008. Nonetheless, growth remained robust in both countries, leading to accelerating inflation rates. The combination of slowing economic growth, double-digit inflation, and weaker export demand from developed nations led to stock market declines in India and China.

Looking at the Fund’s ten largest holdings as of August 31, 2008, the only firm to advance for the reporting period was Brazilian energy producer Petroleo Brasileiro SA, whose shares benefited from strong demand and the discovery of a sizable offshore oil field. Among the decliners, Indian information technology services company Infosys Technologies Ltd. and Brazilian commercial bank Banco Bradesco SA held up the best. The weakest performers among the Fund’s ten largest holdings included the Fund’s two largest holdings, Russian energy producer OAO Gazprom and wireless services provider China Mobile Ltd.


PORTFOLIO ALLOCATION As of 8/31/08
Sector	Percentage of Net Assets
Energy	29.94	%

Financial	28.69

Basic Materials	18.15

Technology	5.69

Communications	5.38

Industrial	5.25

Consumer Cyclical	2.11

Diversified	1.80

Consumer Non-Cyclical	1.58

Utilities	1.13

Short-Term and Other Net Assets	0.28


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Research In Motion Ltd.	5.42	%

Royal Bank of Canada	5.20

EnCana Corp.	4.94

Potash Corp. of Saskatchewan Inc.	4.76

Manulife Financial Corp.	4.71

Suncor Energy Inc.	4.64

Toronto-Dominion Bank (The)	4.12

Canadian Natural Resources Ltd.	4.05

Bank of Nova Scotia	4.00

Barrick Gold Corp.	2.66


TOTAL	44.50	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was 3.88%, while the total return for the Index was 4.11%.

The Canadian market posted modest gains for the reporting period. Canada’s market is driven largely by the production of energy and materials, which are exported primarily to the United States. Underlying the slight gains for the reporting period, a surge in demand for energy, agricultural products, and other commodities led to increased share prices for energy and materials-related companies. These gains were mitigated, though, as economic growth slowed in the United States, Canada’s key export partner. As the U.S. economy slowed, its demand for Canadian exports shrank. Real gross domestic product (GDP) edged up 0.1% in the second quarter of 2008, following a 0.2% decline in the first quarter of 2008. Domestic demand outpaced GDP, growing by 0.5% during the second quarter of 2008, while foreign demand for Canadian goods and services declined in the second quarter of 2008 for the fourth consecutive quarter.

The Fund’s ten largest holdings as of August 31, 2008 represented more than 44% of Fund net assets. Among the Fund’s ten largest holdings, performance was mixed for the reporting period. Potash Corp. of Saskatchewan Inc. delivered the strongest gain, as rising food prices led to increasing demand for fertilizer. The Fund’s largest holding, Research In Motion Ltd., which produces the Blackberry^® handheld device, also logged a large return. Two oil and gas exploration companies, Canadian Natural Resources Ltd. and EnCana Corp., were also strong performers, as was integrated oil and gas company Suncor Energy Inc. Leading the detractors from performance, Toronto-Dominion Bank was one of three financial companies among the Fund’s ten largest holdings to decline for the reporting period.

Effective June 25, 2008, the Fund changed its name from the iShares MSCI Chile Index Fund to the iShares MSCI Chile Investable Market Index Fund.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 11/12/07.

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 primary 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 (11/16/07), the NAV of the Fund is used as a proxy for the Market 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.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Empresa Nacional de Electricidad SA	11.76	%

Empresas Copec SA	11.30

Enersis SA	10.47

Sociedad Quimica y Minera de Chile SA Class B Preferred	8.38

Empresas CMPC SA	7.22

Centros Comerciales Sudamericanos SA	4.97

CAP SA	4.88

Banco Santander Chile SA	4.78

LAN Airlines SA	3.92

Empresa Nacional de Telecomunicaciones SA	3.13


TOTAL	70.81	%

The iShares MSCI Chile Investable Market 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 Chile Investable Market Index^SM (the “Index”). The Index is designed to measure broad based equity market performance in Chile. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from November 12, 2007 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return for the Fund was (7.15)%, while the total return for the Index was (7.02)%.

The Chilean stock market fell for the reporting period, mirroring the broad decline in global equity markets. Chile’s economy grew by 5.1% in 2007, but slowed to a 3.8% annualized growth rate in the first half of 2008. The decelerating economic activity in Chile reflected a global economic slowdown that began in the U.S. and spread to other regions of the world. Weaker global growth dampened demand for exports, which slowed markedly in Chile during the first half of 2008. On the positive side, however, domestic demand surged, as evidenced by a 5.9% increase in private consumption and a 23% increase in fixed capital for the 12 months ended June 30, 2008.

Another challenge facing the Chilean economy was inflation, which increased substantially during the reporting period. Inflation rose by 9.5% for the 12 months ended July 31, 2008, a 13-year high and well above the 3% target of Banco Central de Chile, the country’s central bank. As a result, the central bank raised short-term interest rates five times during the reporting period, lifting its target rate to 7.75% – its highest level since December 1998.

The combination of weaker economic conditions, rising inflation, and global challenges to export growth put downward pressure on Chile’s stock market, particularly over the last three months of the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, just three advanced during the reporting period. The leading performer by far was chemicals producer Sociedad Quimica y Minera de Chile SA, which posted a triple-digit return thanks to robust global demand for agricultural chemicals. The other positive performers were steel producer CAP SA and electric utility Empresa Nacional de Electricidad SA, the Fund’s largest holding. On the downside, the biggest decliners among the Fund’s ten largest holdings included retailer Centros Comerciales Sudamericanos SA and industrial conglomerate Empresas Copec SA.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Cheung Kong (Holdings) Ltd.	8.45	%

Hutchison Whampoa Ltd.	8.16

Sun Hung Kai Properties Ltd.	7.94

CLP Holdings Ltd.	6.83

Hang Seng Bank Ltd.	6.01

Hong Kong Exchanges and Clearing Ltd.	5.41

Hongkong Electric Holdings Ltd.	3.75

Hong Kong and China Gas Co. Ltd. (The)	3.74

Esprit Holdings Ltd.	3.50

Swire Pacific Ltd. Class A	3.38


TOTAL	57.17	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (10.54)%, while the total return for the Index was (10.22)%.

The Hong Kong stock market fell for the reporting period, mirroring the general decline in equity markets worldwide. The Hong Kong economy grew by 4.2% for the 12 months ended June 30, 2008, below the 6.8% growth rate for all of 2007. The weaker growth rate resulted primarily from a 4.6% decline in exports, reflecting a global economic slowdown that curtailed demand for exported goods. In addition, Hong Kong’s close relationship and trade partnership with mainland China weighed on growth as China’s export-fueled economy slowed markedly in the first eight months of 2008 after growing by more than 11% in 2007.

The inflation rate in Hong Kong picked up notably during the reporting period, rising by 6.1% for the 12 months ended June 30, 2008 – well above the 1.3% inflation rate for the previous 12 months. Higher inflation had a further dampening impact on economic activity in Hong Kong, and it also crimped profit margins for many companies.

The combination of weaker economic growth – both domestically and in China, as well as elsewhere in the world – and rising inflation weighed on the performance of the Hong Kong stock market, particularly during the last six months of the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was mixed for the reporting period. The leading performers included electric utilities Hongkong Electric Holdings Ltd. and CLP Holdings Ltd., where international expansion and sales growth helped offset weaker domestic energy revenues. Commercial bank Hang Seng Bank Ltd. also performed well as it largely avoided the U.S. mortgage crisis. On the downside, the largest decliners among the Fund’s top ten holdings were apparel maker Esprit Holdings Ltd. and stock exchange Hong Kong Exchanges and Clearing Ltd.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 3/26/08.

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 primary 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 (3/28/08), the NAV of the Fund is used as a proxy for the Market 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.

As of 8/31/08, the Fund did not have six months of performance and therefore line graphs are not presented.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Teva Pharmaceutical Industries Ltd.	24.64	%

Israel Chemicals Ltd.	12.81

Bank Leumi le-Israel	5.47

Check Point Software Technologies Ltd.	4.96

Bank Hapoalim Ltd.	4.61

Makhteshim-Agan Industries Ltd.	3.64

Bezeq Israeli Telecommunication Corp. Ltd.	3.62

Israel Corp. Ltd. (The)	3.24

Partner Communications Co. Ltd.	3.06

NICE Systems Ltd.	2.88


TOTAL	68.93	%

The iShares MSCI Israel Capped Investable Market 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 Israel Capped Investable Market Index^SM (the “Index”). The Index is a custom, free float adjusted market capitalization index designed to measure broad based equity market performance in Israel. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from March 26, 2008 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return for the Fund was (3.40)%, while the total return for the Index was (1.44)%.

The Israel stock market declined modestly for the reporting period. Despite a global economic slowdown that began in the U.S. and spread to other regions of the world, Israel’s economy maintained solid economic growth. After growing by 5.4% in 2007, the Israeli economy grew

at a 5.2% annualized rate in the first half of 2008. Although domestic demand declined in the second quarter of 2008, export growth remained healthy even as weaker economic activity in the U.S. – Israel’s largest trading partner – and other developed nations, dampened demand for exports.

Another challenge facing the Israeli economy was inflation, which increased significantly during the reporting period. Inflation rose by 4.4% for the first eight months of 2008 – an annualized rate of 6.5% – compared with a 2.8% increase for all of 2007. As a result, the Israeli central bank raised short-term interest rates four times in the last four months of the reporting period, lifting its target rate to 4.25%.

After rising sharply during the first half of the reporting period, the Israeli stock market reversed course as the combination of weaker economic conditions, rising inflation, and global challenges to export growth put downward pressure on equities.

Among the Fund’s ten largest holdings as of August 31, 2008, the leading performer was chemicals producer Israel Chemicals Ltd., which benefited from robust global demand for agricultural chemicals. Other positive performers included generic drug manufacturer Teva Pharmaceutical Industries Ltd., the Fund’s largest holding, and technology company NICE Systems Ltd. On the downside, the largest decliners among the Fund’s top ten holdings included chemicals maker Makhteshim-Agan Industries Ltd. and two commercial banks, Bank Leumi le-Israel and Bank Hapoalim Ltd.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 12/20/07.

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 primary 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 after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/21/07), the NAV of the Fund is used as a proxy for the Market 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 table 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.

The iShares MSCI Japan Small Cap 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 Japan Small Cap Index^SM (the “Index”). The Index targets 40% of the eligible small cap universe within each industry group in the MSCI Japan Index^SM. The small cap universe is defined as all listed securities that have a market capitalization in the range of $200 million to $1,500 million. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from December 20, 2007 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return for the Fund was (11.19)%, while the total return for the Index was (10.92)%.

The Japanese equity markets declined for the reporting period amid signs of a slowing domestic economy. Industrial production fell for the first two quarters of 2008 and Gross Domestic Product (GDP) contracted, bringing an end to the longest period of growth for Japan since World War II. Inflation topped 2% for the first time in a decade, unemployment crept to a two-year high of 4.1%, and export levels fell during the period. Retail sales suffered their sharpest decline in more than two years in July 2008, underlining the weakness of household spending. In response to the public’s discontent over the economy, the Japanese government announced a stimulus package worth US$105.7 billion, including an income tax cut, fuel subsidies, and government loans to companies.

The ten largest Fund holdings represented approximately 5% of the net assets of the Fund as of August 31, 2008. For the reporting period, eight of the Fund’s ten largest holdings delivered positive returns. Leading the positive contributors to performance, battery manufacturer GS Yuasa Corp. posted triple-digit gains for the reporting period. Pharmaceutical company Tsumura & Co. also delivered strong returns. Air conditioner manufacturer Air Water Inc. and Tokai Carbon Co. Ltd. both performed well. Hamamatsu Photonics K.K., which manufactures optical products, was the largest detractor from performance among the ten largest holdings.

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 primary 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 iShares MSCI Malaysia Index Fund, which has a NAV determined prior to the opening of the regular trading day on the primary 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. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.86)%, while the total return for the Index was (9.64)%.

The Malaysian stock market fell for the reporting period, mirroring the general decline in equity markets worldwide. Malaysian equities declined despite a 6.3% annualized growth rate for the Malaysian economy in the second quarter of 2008, matching the 6.3% growth rate for all of 2007. Much of the economic strength derived from robust export growth – Malaysia is the world’s leading producer and exporter of palm oil, whose prices soared to record highs in March 2008, as well as energy and metals. However, healthy domestic consumption also contributed to the strength in the Malaysian economy, which led to an increase in the inflation rate during the reporting period. Malaysian inflation rose by 7.7% for the 12 months ended June 30, 2008 – well above the 1.7% inflation rate for the previous 12 months.

The strong economy helped the Malaysian stock market advance for much of the reporting period, but the market fell sharply in the last few months, leading to the overall decline. Global economic activity began to weaken as an economic slowdown in the U.S. spread to other regions of the world, dampening demand for Malaysian exports. In addition, prices for oil and other commodities eased after peaking in mid-2008, crimping profits for Malaysian energy and mining companies, as well as palm oil producers – the price of palm oil plunged by more than 40% from its all-time high in March through the end of the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, just three posted positive returns for the reporting period. The leading performer was commercial bank Public Bank Bhd, which performed well as it largely avoided the U.S. mortgage crisis. The other two positive performers were palm oil producer IOI Corp. Bhd and energy and industrial conglomerate MISC Bhd. On the downside, the two largest decliners among the top ten holdings were resort owner Resorts World Bhd and commercial bank Bumiputra-Commerce Holdings Bhd, the Fund’s largest holding as of August 31, 2008. Energy producer Tenaga Nasional Bhd and conglomerate Genting Bhd also declined notably during the reporting period.

Effective December 1, 2007, to broaden its coverage of the market, the Fund changed its underlying index from the MSCI Mexico Index^SM to the MSCI Mexico Investable Market Index^SM. Effective June 25, 2008, the Fund changed its name from the iShares MSCI Mexico Index Fund to the iShares MSCI Mexico Investable Market Index Fund.

Index performance reflects the performance of the MSCI Mexico Index^SM through November 30, 2007 and the MSCI Mexico Investable Market Index^SM thereafter.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
America Movil SAB de CV Series L	25.28	%

Cemex SAB de CV Series CPO	9.59

Telefonos de Mexico SAB de CV Series L	6.20

Fomento Economico Mexicano SAB de CV BD Units	5.59

Grupo Televisa SA Series CPO	5.58

Wal-Mart de Mexico SAB de CV Series V	4.87

Carso Global Telecom SAB de CV Class A1	4.02

Grupo Mexico SA de CV Series B	3.88

Grupo Financiero Banorte SAB de CV Series O	3.74

Telmex Internacional SAB de CV Class L	3.58


TOTAL	72.33	%

The iShares MSCI Mexico Investable Market 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 Investable Market Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (8.44)%, while the total return for the Index was (9.10)%.

The Mexican stock market fell for the reporting period, mirroring the general decline in equity markets worldwide. The Mexican economy grew at a 2.7% annualized rate in the first half of 2008, down from 3.3% in 2007 and 4.8% in 2006. The decelerating economic activity reflected the sharp economic slowdown in the U.S., which consumes 80% of Mexico’s exports. In particular, declining output at Mexico’s state-owned oil company – the third-largest oil producer by volume in the world – was a notable drag on economic growth in the first half of 2008.

Inflation in Mexico also picked up, reaching its highest level in five years. Consumer prices rose by 5.6% for the reporting period, up from 4.0% for the previous 12 months. The increase was driven largely by surging energy and grain prices. In response, the Mexican central bank raised short-term interest rates four times during the reporting period, boosting rates from 7.25% to 8.25%.

Despite the challenging economic and inflationary environment, the Mexican stock market advanced for much of the reporting period. The overall decline in Mexican stocks resulted from a sharp drop in the last few months of the reporting period as the U.S. economy slowed, dampening demand for exports, and the prices of oil and other commodities eased, crimping profits for Mexico’s mining companies.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was mixed during the reporting period. The leading performer was beverage maker Fomento Economico Mexicano SAB de CV, which benefited from growing demand domestically and increased market share internationally, most notably in the U.S. Other positive performers included telecommunication services providers Telefonos de Mexico SAB de CV and Carso Global Telecom SAB de CV. On the downside, the two largest decliners among the ten largest holdings were cement manufacturer Cemex SAB de CV and international telecommunications company Telmex Internacional SAB de CV. Wireless telecom provider America Movil SAB de CV, the Fund’s largest holding as of August 31, 2008, also declined for the reporting period.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 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 Market 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.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
BHP Billiton Ltd. (Australia)	10.43	%

Commonwealth Bank of Australia (Australia)	4.20

Westpac Banking Corp. (Australia)	3.32

National Australia Bank Ltd. (Australia)	3.01

Rio Tinto Ltd. (Australia)	2.74

Woolworths Ltd. (Australia)	2.58

Australia and New Zealand Banking Group Ltd. (Australia)	2.38

Westfield Group (Australia)	2.30

Woodside Petroleum Ltd. (Australia)	2.28

CSL Ltd. (Australia)	1.85


TOTAL	35.09	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.87)%, while the total return for the Index was (10.28)%.

The Fund declined for the reporting period as the four markets comprising the Fund – Australia, Hong Kong, New Zealand, and Singapore – mirrored the equity markets worldwide. Much of the decline occurred in the last few months of the reporting period as a global economic slowdown that began in the U.S. spread to other regions of the world, leading to a broad decline in the global equity indexes.

The Australian economy grew by 2.7% for the 12 months ended June 30, 2008, lower than the 4.3% growth rate from the prior 12-month period. In particular, economic growth was just 0.3% in the second quarter of 2008, the weakest quarterly growth rate in more than three years, as consumer spending declined for the first time since 1993. A substantial portion of Australia’s economy is tied to commodity-based industries, such as mining and metals, and these industries struggled as global economic growth slowed and commodity prices eased late in the reporting period.

In Hong Kong, the economy grew by 4.2% for the 12 months ended June 30, 2008, below the 6.8% growth rate for all of 2007. The weaker growth resulted primarily from a 4.6% decline in exports, reflecting the global economic weakness that dampened demand for exported goods. In addition, Hong Kong’s close relationship and trade partnership with mainland China weighed on the market as China’s export-fueled economy slowed markedly in the first half of 2008 after growing by more than 11% in 2007.

The Singapore economy grew by 7.7% in 2007, but slowed to a 4.5% annualized growth rate in the first half of 2008. Exports comprise a significant part of Singapore’s economy, particularly electronics and chemicals, and the deceleration in economic activity worldwide hurt Singapore’s exports. At the same time, inflation increased notably, putting additional downward pressure on domestic consumption. These factors ultimately led to the overall decline in the Singapore stock market.

The New Zealand equity market was the weakest performer among the four markets represented in the Fund. Weakness in many of the country’s trading partners, led by China and other emerging Asian economies, curtailed profit growth and led to a recession in the New Zealand economy. In addition, the “carry trade” – where investors borrowed at low interest rates in Japan and invested in the relatively high interest rates in New Zealand – collapsed as the New Zealand central bank lowered interest rates for the first time in five years in order to stimulate economic activity. The central bank’s actions sent the New Zealand dollar to a 17-month low against the U.S. dollar by the end of the period, further eroding New Zealand stock market returns.

The Fund’s ten largest holdings as of August 31, 2008, consisted of all Australian companies. The best performer was energy producer Woodside Petroleum Ltd., which benefited from a 56% increase in the price of crude oil. Mining company Rio Tinto Ltd. and biotechnology firm CSL Ltd. also generated robust results for the reporting period. On the downside, the weakest performers among the ten largest holdings were commercial banks – Australia and New Zealand Banking Group Ltd., National Australia Bank Ltd., and Commonwealth Bank of Australia. Like many global financial stocks, these three companies were hampered by concerns about credit conditions and exposure to mortgage-related investments, particularly in the U.S.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Singapore Telecommunications Ltd.	14.62	%

United Overseas Bank Ltd.	12.92

DBS Group Holdings Ltd.	10.69

Oversea-Chinese Banking Corp.	10.50

Keppel Corp. Ltd.	4.75

Singapore Airlines Ltd.	4.30

Capital and Ltd.	3.85

Singapore Press Holdings Ltd.	3.31

Singapore Exchange Ltd.	2.78

City Developments Ltd.	2.72


TOTAL	70.44	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (9.55)%, while the total return for the Index was (9.38)%.

The Singapore stock market fell for the reporting period, mirroring the general decline in equity markets worldwide. The Singapore economy grew by 7.7% in 2007, but slowed to a 4.5% annualized growth rate in the first half of 2008. The decelerating economic activity in Singapore reflected a global economic slowdown that began in the U.S. and spread to other regions of the world. Weaker global growth dampened demand for exports, which comprise a significant part of Singapore’s economy, particularly exports of electronics and chemicals.

At the same time, inflation increased notably in Singapore during the reporting period, putting additional downward pressure on domestic consumption. Consumer prices rose by 6.5% for the 12 months ended July 31, 2008, well above the 2.6% increase for the 12 months ended July 31, 2007. Much of the increase was driven by higher energy prices, rising housing costs, and an increase in electricity tariffs.

The performance of the Singapore stock market tracked the changing economic environment. Stocks advanced in late 2007 and early 2008 amid robust economic growth, then fell sharply over the last few months of the reporting period as economic activity waned, producing the overall decline in the Singapore market.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was mixed for the reporting period. The top performers included telecommunication services company Singapore Telecommunications Ltd., the Fund’s largest holding, and Singapore Press Holdings Ltd., the largest newspaper publisher in Southeast Asia. The remaining positive performers were commercial banks – Oversea-Chinese Banking Corp., United Overseas Bank Ltd., and DBS Group Holdings Ltd., all of which produced modest gains. On the downside, the largest decliners included property developers CapitaLand Ltd. and City Developments Ltd., as well as stock exchange Singapore Exchange Ltd., each of which declined sharply.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 Market 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.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Sasol Ltd.	15.29	%

MTN Group Ltd.	11.28

Impala Platinum Holdings Ltd.	7.01

Standard Bank Group Ltd.	6.18

Remgro Ltd.	5.15

Naspers Ltd.	4.45

Anglo Platinum Ltd.	4.17

Anglo Gold Ashanti Ltd.	3.47

FirstRand Ltd.	2.78

Gold Fields Ltd.	2.64


TOTAL	62.42	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (6.18)%, while the total return for the Index was (5.74)%.

The South African stock market fell for the reporting period, mirroring the general decline in equity markets worldwide. The South African economy grew by 5.1% in 2007, but slowed to a 3.5% annualized growth rate in the first half of 2008. Part of the slowdown resulted from an electricity shortage that crimped manufacturing and mining activity – the major drivers of the South African economy – early in the year. However, the decelerating economic activity also reflected a global economic slowdown that began in the U.S. and spread to other regions of the world, curtailing exports in many developed nations.

Another dampening factor for economic growth in South Africa was inflation, which increased markedly during the reporting period. Consumer prices rose by 11.6% for the 12 months ended June 30, 2008, up from 6.4% for the previous 12 months. Soaring food and energy prices accounted for the bulk of the increase in the inflation rate. To combat inflation, the South African central bank raised short-term interest rates four times during the reporting period, boosting rates from 10% to 12%.

The performance of the South African stock market tracked the changing economic environment. Stocks advanced in late 2007 and early 2008 amid solid economic growth, then fell sharply over the last few months of the reporting period as economic activity waned, producing the overall decline in the South African market.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was mostly negative for the reporting period. The top performer by a wide margin was energy producer Sasol Ltd., the Fund’s largest holding. Sasol benefited from a 56% increase in the price of crude oil, which provided a strong lift to the company’s profits. Wireless telecommunication services provider MTN Group Ltd. and electronic media company Naspers Ltd. also produced modest positive returns. On the downside, the largest decliners among the Fund’s top ten holdings included gold producers Gold Fields Ltd. and AngloGold Ashanti Ltd., as well as financial services company FirstRand Ltd.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 iShares MSCI South Korea Index Fund, the NAV of which is determined prior to the opening of the regular trading day on the primary 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 Market 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 8/31/08
Sector	Percentage of Net Assets
Financial	19.71	%

Technology	18.46

Industrial	18.02

Consumer Cyclical	13.33

Basic Materials	11.83

Communications	6.15

Consumer Non-Cyclical	4.85

Energy	3.04

Utilities	2.65

Diversified	1.87

Short-Term and Other Net Assets	0.09


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Samsung Electronics Co. Ltd.	14.58	%

POSCO	7.36

Kookmin Bank	5.15

Shinhan Financial Group Ltd.	4.29

Hyundai Motor Co. Ltd.	2.81

KT&G Corp.	2.63

Hyundai Heavy Industries Co. Ltd.	2.52

LG Electronics Inc.	2.44

Korea Electric Power Corp.	2.18

Shinsegae Co. Ltd.	2.07


TOTAL	46.03	%

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 Korea Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (30.35)%, while the total return for the Index was (30.22)%.

The South Korean stock market fell sharply for the reporting period. The South Korean economy grew by 5.0% in 2007, but slowed to a 3.2% annualized growth rate in the first half of 2008. The main culprit was a slump in domestic demand as a 10-year high inflation rate crimped consumer spending, leading to the first decline in private consumption in more than four years. Inflation rose by 5.9% for the 12 months ended July 31, 2008, its highest 12-month increase in 10 years and well above the South Korean central bank’s target of 2.5% to 3.5%. As a result, the Bank of Korea, South Korea’s central bank, raised short-term interest rates to 5.25% in August 2008, its highest level since February 2001.

One of the few bright spots in the South Korean economy was exports, which experienced positive growth during the reporting period. However, decelerating economic activity in South Korea also reflected a global economic slowdown that began in the U.S. and spread to other regions of the world. Weaker global growth late in the reporting period dampened demand for exports, which comprise 40% of South Korea’s Gross Domestic Product. In particular, economic activity grew increasingly sluggish in China and the U.S., two of South Korea’s biggest trading partners.

The combination of slower economic growth and rising inflation put significant downward pressure on South Korea’s stock market, particularly over the last six months. Hampering returns further was weakness in the South Korean currency, which fell by 15% versus the U.S. dollar during the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, just two advanced for the reporting period – LG Electronics Inc., which manufactures appliances and consumer electronics, and KT&G Corp., a tobacco company. Among the remaining top ten holdings, some of the larger decliners came from the manufacturing sector, including shipbuilder Hyundai Heavy Industries Co. Ltd. and steelmaker POSCO, as well as electric utility Korea Electric Power Corp. Financial stocks Kookmin Bank and Shinhan Financial Group Ltd. also declined sharply during the reporting period.

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 iShares MSCI Taiwan Index Fund, the NAV of which is determined prior to the opening of the regular trading day on the primary 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 Market 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.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd.	12.23	%

Hon Hai Precision Industry Co. Ltd.	8.11

HTC Corp.	3.72

Chunghwa Telecom Co. Ltd.	3.71

Cathay Financial Holding Co. Ltd.	3.60

China Steel Corp.	3.47

MediaTek Inc.	3.24

ASUSTeK Computer Inc.	2.72

AU Optronics Corp.	2.71

Formosa Plastics Corp.	2.46


TOTAL	45.97	%

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (15.69)%, while the total return for the Index was (15.07)%.

The Taiwanese stock market fell for the reporting period. The Taiwan economy grew by 5.7% in 2007, but slowed to a 4.3% annualized growth rate in the second quarter of 2008. The main culprit was a decline in domestic demand as rising inflation crimped consumer spending and private investment. Inflation rose by 5.9% for the 12 months ended July 31, 2008, prompting Taiwan’s central bank to raise its discount rate four times during the reporting period. The central bank has enacted 16 rate hikes in the past four years, lifting the discount rate to a seven-year high of 3.625% as of the end of the reporting period.

One of the few bright spots in the Taiwanese economy was exports, which continued to exhibit robust growth during the reporting period. However, a global economic slowdown that began in the U.S. and spread to other regions of the world dampened demand for exports late in the reporting period. In particular, economic activity grew increasingly sluggish in China, Taiwan’s biggest trading partner.

The combination of slower economic growth, rising inflation, and global challenges to export growth put downward pressure on Taiwan’s stock market, particularly over the last six months of the reporting period.

Among the Fund’s ten largest holdings as of August 31, 2008, performance was mixed for the reporting period. The leading positive performer by far was wireless devices manufacturer HTC Corp., which benefited from an emphasis on high-end mobile devices and international expansion. Other positive performers included Chunghwa Telecom Co. Ltd. and chipmaker Taiwan Semiconductor Manufacturing Co. Ltd., the Fund’s largest holding. On the downside, the biggest decliners among the Fund’s top ten holdings included electronics manufacturer Hon Hai Precision Industry Co. Ltd. and fabless semiconductor manufacturer MediaTek Inc.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 3/26/08.

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 primary 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 (3/28/08), the NAV of the Fund is used as a proxy for the Market 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.

As of 8/31/08, the Fund did not have six months of performance and therefore line graphs are not presented.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
PTT PCL NVDR	12.07	%

Bangkok Bank PCL NVDR	10.80

PTT Exploration & Production PCL NVDR	9.77

Kasikornbank PCL NVDR	7.70

Advanced Info Service PCL NVDR	4.67

Siam Commercial Bank PCL NVDR	4.26

Banpu PCL NVDR	4.05

Siam Cement PCL NVDR	3.87

Bank of Ayudhya PCL NVDR	3.67

Thai Oil PCL NVDR	3.20


TOTAL	64.06	%

The iShares MSCI Thailand Investable Market 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 Thailand Investable Market Index^SM (the “Index”). The Index is a free float adjusted market capitalization index designed to measure broad based equity market performance in Thailand. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from March 26, 2008 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return of the Fund was (22.39)%, while the total return of the Index was (22.43)%.

The Thailand stock market fell sharply for the reporting period despite some improving economic conditions. The Thai economy grew at a 5.7% annualized rate in the first half of 2008, up from a 4.8% growth rate in 2007. The increase was driven by strength in agriculture and

manufacturing, as well as robust growth in exports, particularly to Japan and emerging Asian economies. Consumer spending also increased sharply in the first half of 2008.

However, the difficulty facing the Thai stock market was the inflation rate, which increased substantially during the reporting period. Consumer prices in Thailand rose by 9.2% for the 12 months ended July 31, 2008, its highest 12-month increase in a decade. As a result, Thailand’s central bank raised short-term interest rates in July and August 2008, boosting rates to an 18-month high of 3.75%.

The rapid inflation increase put downward pressure on the Thai stock market, which slid by more than 20% for the reporting period. The Thai currency also declined notably versus the U.S. dollar, further hurting returns for U.S. investors. However, stocks in Thailand recovered a little ground in August 2008 as declining oil and commodity prices eased the 12-month inflation rate back to 6.4%. Unfortunately, this rate remained well above the central bank’s target of 3.5% or less.

Each of the Fund’s ten largest holdings as of August 31, 2008 declined for the reporting period. The weaker performers included several banks – Kasikornbank PCL, Siam Commercial Bank PCL and Bangkok Bank PCL – as well as Thailand’s major refiner Thai Oil PCL and oil and gas company PTT PCL (the Fund’s largest holding). The only stock among the Fund’s ten largest holdings to decline by less than 10% for the reporting period was oil exploration firm PTT Exploration & Production PCL.

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 3/26/08.

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 primary 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 (3/28/08), the NAV of the Fund is used as a proxy for the Market 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.

As of 8/31/08, the Fund did not have six months of performance and therefore line graphs are not presented.


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
Turkiye Garanti Bankasi AS	10.61	%

Akbank TAS	7.84

Turkiye Is Bankasi AS	7.74

Turkcell Iletisim Hizmetleri AS	7.57

Eregli Demir ve Celik Fabrikalari TAS	6.32

Tupras-Turkiye Petrol Rafinerileri AS	4.61

Anadolu Efes Biracilik ve Malt Sanayii AS	3.96

Enka Insaat ve Sanayi AS	3.48

Yapi ve Kredi Bankasi AS	3.38

Turk Telekomunikasyon AS	3.25


TOTAL	58.76	%

The iShares MSCI Turkey Investable Market 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 Turkey Investable Market Index^SM (the “Index”). The Index is a free float adjusted market capitalization index designed to measure broad based equity market performance in Turkey. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from March 26, 2008 (inception date of the Fund) through August 31, 2008 (the “reporting period”), the total return for the Fund was 4.22%, while the total return for the Index was 4.51%.

The Turkish stock market advanced for the reporting period despite significantly weaker economic conditions. The Turkish economy grew by 1.9% for the 12 months ended June 30, 2008, its slowest growth rate in six years. Despite continued strength in exports, economic

activity decelerated as agriculture, manufacturing, and construction experienced slowdowns. Turkey’s inflation rate reached 12.1% for the 12 months ended July 31, 2008, up from a 37-year low of 6.9% a year earlier and Turkey’s central bank raised its overnight lending rate three times during reporting period. Cumulatively, these increases boosted the overnight lending rate from 15.25% to 16.75%.

Turkey’s political environment may also have had a significant impact on its securities market. Turkey’s ruling Justice and Development Party was the subject of a lawsuit seeking to disban the party for promoting an Islamic agenda, violating the Turkish Republic’s secular principles. However, in its July 2008 ruling, the country’s Constitutional Court declined to close the party, and the Turkish stock market then advanced, rallying into early August, which may reflect a perception that the court’s ruling averted a potential constitutional crisis. Although, some of these gains were reversed by the end of the reporting period, the Turkish market posted positive results overall.

Seven of the Fund’s ten largest holdings as of August 31, 2008 advanced for the reporting period. The leading performers included metals producer Eregli Demir ve Celik Fabrikalari TAS and oil producer Tupras-Turkiye Petrol Rafinerileri AS, both of which benefited from generally higher commodity prices during the reporting period. Two banking stocks - Yapi ve Kredi Bankasi AS and Turkiye Is Bankasi AS - also generated strong returns. The three decliners among the Fund’s ten largest holdings were wireless services provider Turkcell Iletisim Hizmetleri AS, construction company Enka Insaat ve Sanayi AS, and telecom services provider Turk Telekomunikasyon AS.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2008 to August 31, 2008.


Security	Shares	Value
COMMON STOCKS – 98.83%

AIRLINES – 0.36%
Qantas Airways Ltd.	1,300,453	$	3,785,431

			3,785,431

APPAREL – 0.24%
Billabong International Ltd.	234,768		2,589,954

			2,589,954

BANKS – 23.18%
Australia and New Zealand Banking Group Ltd.	2,694,462		38,543,018
Bendigo and Adelaide Bank Ltd.	377,468		3,761,123
Commonwealth Bank of Australia	1,855,936		67,769,280
National Australia Bank Ltd.	2,287,523		48,265,363
St. George Bank Ltd.	786,006		20,564,476
Suncorp-Metway Ltd.	1,338,582		13,164,826
Westpac Banking Corp.	2,633,356		53,407,778

			245,475,864

BEVERAGES – 2.06%
Coca-Cola Amatil Ltd.	775,503		5,710,230
Foster’s Group Ltd.	2,688,262		12,941,584
Lion Nathan Ltd.	411,639		3,165,716

			21,817,530

BIOTECHNOLOGY – 0.52%
Sonic Healthcare Ltd.	442,621		5,519,562

			5,519,562

BUILDING MATERIALS – 0.96%
Boral Ltd.	812,893		4,515,409
CSR Ltd.	1,389,460		3,182,964
James Hardie Industries NV	607,130		2,441,758

			10,140,131

CHEMICALS – 1.10%
Incitec Pivot Ltd.	84,840		11,662,509

			11,662,509

COMMERCIAL SERVICES – 1.93%
Brambles Ltd.	1,941,454		12,874,247
Transurban Group	1,623,687		7,592,874

			20,467,121

COMPUTERS – 0.48%
Computershare Ltd.	659,337		5,138,780

			5,138,780


Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 2.34%
ASX Ltd.	240,075	$	7,310,772
Babcock & Brown Ltd.	373,531		797,779
Macquarie Group Ltd.^a	385,164		14,608,211
Perpetual Ltd.^a	53,071		2,049,401

			24,766,163

ELECTRIC – 0.77%
AGL Energy Ltd.	621,087		8,210,410

			8,210,410

ENGINEERING & CONSTRUCTION – 1.76%
Boart Longyear Group	2,013,885		3,408,013
Leighton Holdings Ltd.^a	208,102		8,335,403
Leighton Holdings Ltd. Entitlement^b	14,450		138,879
WorleyParsons Ltd.	211,070		6,736,525

			18,618,820

ENTERTAINMENT – 1.07%
Aristocrat Leisure Ltd.	450,171		2,287,355
Tabcorp Holdings Ltd.	733,135		5,404,577
Tatts Group Ltd.	1,590,133		3,601,581

			11,293,513

FOOD – 4.50%
Goodman Fielder Ltd.	1,861,045		2,372,043
Metcash Ltd.	1,078,187		3,658,427
Woolworths Ltd.	1,704,606		41,632,670

			47,663,140

HEALTH CARE - PRODUCTS – 0.35%
Cochlear Ltd.	78,455		3,719,478

			3,719,478

INSURANCE – 5.26%
AMP Ltd.	2,629,119		15,758,813
AXA Asia Pacific Holdings Ltd.	1,183,680		5,290,609
Insurance Australia Group Ltd.	2,631,305		8,996,337
QBE Insurance Group Ltd.	1,243,980		25,658,008

			55,703,767

INVESTMENT COMPANIES – 0.85%
Macquarie Airports	972,900		2,681,157
Macquarie Infrastructure Group	3,349,868		6,317,945

			8,999,102


Security	Shares	Value
IRON & STEEL – 1.45%
BlueScope Steel Ltd.	1,064,591	$	8,462,302
OneSteel Ltd.	1,174,319		6,917,453

			15,379,755

LODGING – 0.47%
Crown Ltd.	630,843		4,971,030

			4,971,030

MANUFACTURING – 3.80%
Orica Ltd.	496,832		10,662,563
Wesfarmers Ltd.	906,620		24,048,059
Wesfarmers Ltd. Partially Protected	202,248		5,502,219

			40,212,841

MEDIA – 0.44%
John Fairfax Holdings Ltd.	1,919,943		4,662,743

			4,662,743

METAL FABRICATE & HARDWARE – 0.60%
Sims Group Ltd.	214,932		6,367,421

			6,367,421

MINING – 24.02%
Alumina Ltd.	1,591,757		5,963,072
BHP Billiton Ltd.	4,701,612		167,629,770
Fortescue Metals Group Ltd.^c	1,770,525		11,664,537
Newcrest Mining Ltd.	635,053		14,985,269
OZ Minerals Ltd.	4,148,776		6,252,620
Paladin Energy Ltd.^c	778,015		3,906,255
Rio Tinto Ltd.	400,399		43,965,011

			254,366,534

OIL & GAS – 6.63%
Caltex Australia Ltd.	190,828		2,062,480
Origin Energy Ltd.	1,230,724		17,117,377
Santos Ltd.	834,144		14,439,133
Woodside Petroleum Ltd.	675,057		36,654,690

			70,273,680

PACKAGING & CONTAINERS – 0.53%
Amcor Ltd.	1,176,003		5,570,256

			5,570,256

PHARMACEUTICALS – 2.80%
CSL Ltd.	837,814		29,618,618

			29,618,618

REAL ESTATE – 6.94%
CFS Retail Property Trust^a	2,059,459		3,830,989
Dexus Property Group	4,133,381		5,268,308


Security	Shares	Value
Goodman Group	2,162,976	$	5,923,561
GPT Group	3,080,726		4,616,431
Lend Lease Corp. Ltd.	508,962		4,229,769
Mirvac Group	1,472,750		3,665,480
Stockland Corp. Ltd.	2,054,103		9,322,596
Westfield Group	2,457,860		36,597,899

			73,455,033

REAL ESTATE INVESTMENT TRUSTS – 0.24%
Macquarie Office Trust	2,852,616		2,554,940

			2,554,940

RETAIL – 0.22%
Harvey Norman Holdings Ltd.	745,911		2,383,224

			2,383,224

TELECOMMUNICATIONS – 2.16%
Telstra Corp. Ltd.	6,102,783		22,862,368

			22,862,368

TRANSPORTATION – 0.80%
Asciano Group	782,735		3,303,048
Toll Holdings Ltd.	859,828		5,153,768

			8,456,816


TOTAL COMMON STOCKS (Cost: $1,243,314,855)			1,046,706,534

SHORT-TERM INVESTMENTS – 1.82%

MONEY MARKET FUNDS – 1.82%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^d,e	35,568		35,568
BGI Cash Premier Fund LLC 2.63%^d,e,f	19,242,020		19,242,020

			19,277,588


TOTAL SHORT-TERM INVESTMENTS
(Cost: $19,277,588)			19,277,588


TOTAL INVESTMENTS IN SECURITIES – 100.65% (Cost: $1,262,592,443)			1,065,984,122

Other Assets, Less Liabilities – (0.65)%			(6,891,876	)


NET ASSETS – 100.00%		$	1,059,092,246

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

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

^c	Non-income earning security.

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.


Security	Shares	Value
COMMON STOCKS – 43.10%

AEROSPACE & DEFENSE – 0.93%
Empresa Brasileira de Aeronautica SA	7,908,032	$	67,014,756

			67,014,756

AGRICULTURE – 0.64%
Souza Cruz SA	1,779,300		46,477,671

			46,477,671

BANKS – 4.63%
Banco do Brasil SA	5,833,760		85,039,921
Unibanco - Uniao de Bancos Brasileiros SA Units	21,153,920		250,295,463

			335,335,384

COMMERCIAL SERVICES – 0.77%
Companhia de Concessoes Rodoviarias	2,174,700		39,736,246
Localiza Rent A Car SA	1,581,600		15,893,529

			55,629,775

COSMETICS & PERSONAL CARE – 0.44%
Natura Cosmeticos SA	2,767,800		32,189,243

			32,189,243

DIVERSIFIED FINANCIAL SERVICES – 2.45%
BM&F Bovespa SA	12,652,800		96,446,588
Redecard SA	4,547,100		80,883,770

			177,330,358

ELECTRIC – 2.58%
Centrais Eletricas Brasileiras SA	3,954,099		71,474,216
CPFL Energia SA	2,965,550		61,782,292
EDP Energias do Brasil SA	1,383,900		24,150,412
Tractebel Energia SA	2,372,400		29,291,581

			186,698,501

FOOD – 1.33%
Cosan SA Industria e Comercio^a	1,186,290		18,877,421
JBS SA	6,919,587		28,110,822
Perdigao SA	1,977,075		49,438,989

			96,427,232

HOME BUILDERS – 0.38%
MRV Engenharia e Participacoes SA	1,383,949		27,305,856

			27,305,856


Security	Shares	Value
INTERNET – 0.39%
B2W - Companhia Global do Varejo	790,830	$	28,178,165

			28,178,165

IRON & STEEL – 5.02%
Anglo Ferrous Brazil SA^a	2,174,700		36,778,015
Companhia Siderurgica Nacional	6,524,127		225,865,916
Gerdau SA	2,863,000		44,664,203
MMX Mineracao e Metalicos SA^a	2,174,700		21,307,263
Usinas Siderurgicas de Minas Gerais SA	1,013,100		34,825,313

			363,440,710

MINING – 7.60%
Companhia Vale do Rio Doce ADR^b	20,732,903		550,458,575

			550,458,575

OIL & GAS – 11.49%
Petroleo Brasileiro SA	31,829,744		832,020,146

			832,020,146

REAL ESTATE – 0.96%
Cyrela Brazil Realty SA	3,360,900		42,196,594
Gafisa SA	1,929,485		27,594,473

			69,791,067

RETAIL – 0.59%
Lojas Renner SA	2,372,400		42,883,456

			42,883,456

TELECOMMUNICATIONS – 1.24%
Brasil Telecom Participacoes SA	1,046,482		34,433,875
GVT (Holding) SA^a	1,186,203		27,111,135
Tele Norte Leste Participacoes SA	1,165,538		28,588,533

			90,133,543

TRANSPORTATION – 1.04%
ALL - America Latina Logistica SA	6,128,700		70,787,987
LLX Logistica SA^a	2,174,700		4,543,950

			75,331,937

WATER – 0.62%
Companhia de Saneamento Basico do Estado de Sao Paulo	1,977,000		44,688,438

			44,688,438


TOTAL COMMON STOCKS (Cost: $2,115,798,631)			3,121,334,813


Security	Shares	Value
PREFERRED STOCKS – 56.40%

AIRLINES – 0.29%
Gol Linhas Aereas Inteligentes SA	593,100	$	5,327,724
Tam SA	790,825		15,661,436

			20,989,160

BANKS – 9.31%
Banco Bradesco SA	18,979,240		348,301,616
Banco do Estado do Rio Grande do Sul SA	2,570,110		12,740,312
Banco Itau Holding Financeira SA	16,606,825		312,904,331

			673,946,259

BEVERAGES – 2.67%
Companhia de Bebidas das Americas	3,144,091		193,269,123

			193,269,123

BUILDING MATERIALS – 0.28%
Duratex SA	1,186,200		20,286,055

			20,286,055

CHEMICALS – 1.54%
Braskem SA Class A	2,767,836		19,809,022
Fertilizantes Fosfatados SA	737,420		42,473,946
Ultrapar Participacoes SA	1,383,900		49,640,629

			111,923,597

ELECTRIC – 3.83%
Centrais Eletricas Brasileiras SA Class B	3,749,000		57,521,422
Companhia Energetica de Minas Gerais	5,034,586		108,558,261
Companhia Energetica de Sao Paulo Class B	2,570,170		41,135,319
Companhia Paranaense de Energia Class B	1,977,000		33,919,118
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B	1,977,020		36,584,561

			277,718,681

FOOD – 1.00%
Companhia Brasileira de Distribuicao Grupo Pao de Acucar	988,928		20,554,190


Security	Shares	Value
Sadia SA	7,908,000	$	52,186,985

			72,741,175

FOREST PRODUCTS & PAPER – 2.03%
Aracruz Celulose SA Class B	8,501,100		46,724,796
Klabin SA	9,885,000		30,345,496
Suzano Bahia Sul Papel e Celulose SA	2,174,785		27,584,589
Votorantim Celulose e Papel SA	1,977,100		42,316,240

			146,971,121

HOLDING COMPANIES - DIVERSIFIED – 1.46%
Itausa - Investimentos Itau SA	18,103,597		105,715,245

			105,715,245

INVESTMENT COMPANIES – 0.86%
Bradespar SA	3,115,600		62,235,637

			62,235,637

IRON & STEEL – 6.07%
Gerdau SA	10,280,546		193,390,173
Metalurgica Gerdau SA	3,954,190		100,550,787
Usinas Siderurgicas de Minas Gerais SA Class A	4,151,700		145,513,015

			439,453,975

MEDIA – 0.41%
Net Servicos de Comunicacao SA^a	2,570,192		29,607,604

			29,607,604

MINING – 9.60%
Companhia Vale do Rio Doce Class A	29,852,700		695,099,633

			695,099,633

OIL & GAS – 12.90%
Petroleo Brasileiro SA	43,691,750		934,339,507

			934,339,507

RETAIL – 0.43%
Lojas Americanas SA	4,942,500		31,284,329

			31,284,329

TELECOMMUNICATIONS – 3.72%
Brasil Telecom Participacoes SA	3,321,630		42,761,916
Brasil Telecom SA	2,749,559		28,236,893
Tele Norte Leste Participacoes SA	4,151,739		96,543,195
Telemar Norte Leste SA Class A	790,880		41,191,667


Security	Shares	Value
TIM Participacoes SA	8,105,700	$	17,830,553
Vivo Participacoes SA^a	8,303,483		42,840,274

			269,404,498


TOTAL PREFERRED STOCKS (Cost: $2,744,967,416)			4,084,985,599

SHORT-TERM INVESTMENTS – 0.18%

MONEY MARKET FUNDS – 0.18%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	9,354,357		9,354,357
BGI Cash Premier Fund LLC 2.63%^c,d,e	3,430,000		3,430,000

			12,784,357


TOTAL SHORT-TERM INVESTMENTS
(Cost: $12,784,357)			12,784,357


TOTAL INVESTMENTS IN SECURITIES – 99.68% (Cost: $4,873,550,404)			7,219,104,769

Other Assets, Less Liabilities – 0.32%			23,155,233


NET ASSETS – 100.00%		$	7,242,260,002

ADR – American Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 79.85%

BRAZIL – 14.64%
ALL - America Latina Logistica SA	51,100	$	590,217
Anglo Ferrous Brazil SA^a	14,600		246,912
B2W - Companhia Global do Varejo	7,300		260,107
Banco do Brasil SA	43,800		638,482
BM&F Bovespa SA	117,669		896,938
Brasil Telecom Participacoes SA	7,300		240,202
Centrais Eletricas Brasileiras SA	36,500		659,773
Companhia de Concessoes Rodoviarias	21,900		400,158
Companhia Siderurgica Nacional	43,800		1,516,360
Companhia Vale do Rio Doce	167,900		4,472,189
Cosan SA Industria e Comercio^a	14,600		232,330
CPFL Energia SA	14,600		304,167
Cyrela Brazil Realty SA	29,200		366,610
Empresa Brasileira de Aeronautica SA	43,800		371,173
Gafisa SA	14,600		208,801
Gerdau SA	29,200		455,534
GVT (Holding) SA^a	7,300		166,844
JBS SA	17,252		70,086
LLX Logistica SA^a	14,600		30,506
Lojas Renner SA	7,300		131,955
MMX Mineracao e Metalicos SA^a	14,600		143,048
MRV Engenharia e Participacoes SA	7,300		144,032
OGX Petroleo e Gas Participacoes SA^a	1,300		459,063
Perdigao SA	21,900		547,634
Petroleo Brasileiro SA	262,800		6,869,515
Redecard SA	29,200		519,409
Souza Cruz SA	14,600		381,371
Tele Norte Leste Participacoes SA	7,300		179,056
Tractebel Energia SA	21,900		270,395
Unibanco - Uniao de Bancos Brasileiros SA Units	131,400		1,554,739
Usinas Siderurgicas de Minas Gerais SA	7,300		250,938

			23,578,544

CHINA – 32.18%
Agile Property Holdings Ltd.	292,000		217,744
Air China Ltd. Class H^b	438,000		226,723
Aluminum Corp. of China Ltd. Class H^b	438,000		393,960
Angang New Steel Co. Ltd. Class H	146,000		200,534


Security	Shares	Value
Anhui Conch Cement Co. Ltd. Class H^a,b	38,000	$	198,648
Bank of China Ltd. Class H^b	2,555,000		1,109,766
Bank of Communications Co. Ltd. Class H	803,000		933,177
Beijing Capital International Airport Co. Ltd. Class H	146,000		115,981
Belle International Holdings Ltd.^b	365,000		369,455
BYD Co. Ltd. Class H^b	109,500		126,410
Chaoda Modern Agriculture (Holdings) Ltd.	292,150		311,437
China Agri-Industries Holdings Ltd.^a	292,000		198,290
China CITIC Bank Class H	584,000		337,466
China Coal Energy Co. Class H	438,000		743,024
China Communications Construction Co. Ltd. Class H	584,000		999,678
China Construction Bank Class H	3,431,000		2,813,466
China COSCO Holdings Co. Ltd. Class H	365,000		703,367
China Everbright Ltd.^b	146,000		265,633
China High Speed Transmission Equipment Group Co. Ltd.	73,000		143,292
China Life Insurance Co. Ltd. Class H	876,000		3,350,344
China Mengniu Dairy Co. Ltd.	146,000		444,281
China Merchants Bank Co. Ltd. Class H	365,000		1,234,633
China Merchants Holdings (International) Co. Ltd.	146,000		544,361
China Mobile Ltd.	730,000		8,380,538
China National Building Material Co. Ltd. Class H	146,000		228,594
China Netcom Group Corp. (Hong Kong) Ltd.	161,000		379,976
China Oilfield Services Ltd. Class H	292,000		392,838
China Overseas Land & Investment Ltd.	584,000		980,224
China Petroleum & Chemical Corp. Class H	1,898,000		1,828,753
China Railway Construction Corp. Class H^a	182,500		252,539
China Railway Group Ltd. Class H^a	438,000		339,524
China Resources Enterprises Ltd.	146,000		399,385


Security	Shares	Value
China Resources Land Ltd.	292,000	$	345,697
China Resources Power Holdings Co. Ltd.	146,000		362,907
China Shenhua Energy Co. Ltd. Class H	401,500		1,388,962
China Shipping Container Lines Co. Ltd. Class H	365,000		90,259
China Shipping Development Co. Ltd. Class H	146,000		349,439
China Telecom Corp. Ltd. Class H	1,180,000		603,248
China Unicom Ltd.	376,000		594,489
China Yurun Food Group Ltd.	146,000		250,668
CITIC Pacific Ltd.^b	73,000		255,812
CITIC Resources Holdings Ltd.^a	293,800		70,394
CNOOC Ltd.	1,898,000		2,932,814
Country Garden Holdings Co.^b	438,000		196,980
Datang International Power Generation Co. Ltd. Class H	438,000		291,822
Denway Motors Ltd.	730,000		261,892
Dongfeng Motor Group Co. Ltd. Class H	438,000		186,879
Fosun International Ltd.	255,500		144,040
GOME Electrical Appliances Holdings Ltd.	876,000		362,533
Guangdong Investment Ltd.	438,000		149,840
Guangshen Railway Co. Ltd. Class H	146,000		66,034
Guangzhou Investment Co. Ltd.	876,000		117,851
Guangzhou R&F Properties Co. Ltd. Class H^b	146,000		256,280
Harbin Power Equipment Co. Ltd. Class H	146,000		182,202
Hengan International Group Co. Ltd. Class H^b	146,000		490,112
Hidili Industry International Development Ltd.	146,000		170,978
Huaneng Power International Inc. Class H	292,000		217,744
Industrial and Commercial Bank of China Class H	4,453,000		3,086,675
Jiangsu Expressway Co. Ltd. Class H	292,000		225,227
Jiangxi Copper Co. Ltd. Class H	219,000		351,870
KWG Property Holding Ltd.	146,000		67,344


Security	Shares	Value
Lenovo Group Ltd.	438,000	$	297,434
Li Ning Co. Ltd.^b	146,000		365,152
Maanshan Iron & Steel Co. Ltd. Class H	292,000		132,442
PetroChina Co. Ltd. Class H	2,336,000		3,005,021
PICC Property & Casualty Co. Ltd. Class H^b	438,000		250,855
Ping An Insurance (Group) Co. of China Ltd. Class H	182,500		1,349,210
Shanghai Electric Group Corp. Class H^a	438,000		182,389
Shanghai Industrial Holdings Ltd.	73,000		198,289
Shimao Property Holdings Ltd.	219,000		248,049
Shui On Land Ltd.	365,000		278,728
Sinofert Holdings Ltd.	292,000		191,181
Sino-Ocean Land Holdings Ltd.	474,500		235,890
Soho China Ltd.	109,500		57,523
Tencent Holdings Ltd.	73,000		626,670
Tingyi (Cayman Islands) Holding Corp.	146,000		175,280
Yanzhou Coal Mining Co. Ltd. Class H	292,000		511,811
Zhejiang Expressway Co. Ltd. Class H	292,000		197,167
Zijin Mining Group Co. Ltd. Class H	438,000		299,679

			51,837,803

INDIA – 13.90%
Ambuja Cements Ltd. SP GDR^c	269,662		469,212
Dr. Reddy’s Laboratories Ltd. ADR	99,937		1,365,139
HDFC Bank Ltd. ADR	24,528		2,219,539
Hindalco Industries Ltd. GDR^a,d	332,004		966,132
ICICI Bank Ltd. SP ADR	81,395		2,524,873
Infosys Technologies Ltd. SP ADR	94,462		3,899,391
Mahanagar Telephone Nigam Ltd. ADR^b	173,229		807,247
Reliance Industries Ltd. GDR^d	57,889		5,574,711
Satyam Computer Services Ltd. ADR^b	104,171		2,318,846
Tata Communications Ltd. ADR^b	28,835		536,619
Wipro Ltd. ADR^b	147,752		1,710,968

			22,392,677

RUSSIA – 19.13%
Comstar United Telesystems GDR^c	33,434		230,695
JSC MMC Norilsk Nickel ADR	98,477		1,945,906
LUKOIL SP ADR	57,232		4,252,338
Mechel OAO ADR	19,199		524,901


Security	Shares	Value
Mobile TeleSystems SP ADR	21,900	$	1,489,200
Novolipetsk Steel GDR^c	10,658		410,013
OAO Gazprom SP ADR	275,794		10,755,966
OAO NOVATEK SP GDR^c	11,169		804,168
OAO Rosneft Oil Co. GDR^c	156,439		1,334,425
OAO Tatneft SP ADR^c	7,957		823,550
OAO TMK GDR^c	7,227		191,516
Pharmstandard GDR^a,c	4,672		113,062
PIK Group GDR^c	11,388		227,077
Polyus Gold SP ADR	16,060		255,996
Rostelecom SP ADR	7,300		501,875
Sberbank GDR^c	10,512		2,901,805
Severstal GDR^c	24,163		408,355
Sistema JSFC SP GDR^c	12,775		318,992
Surgutneftegaz SP ADR	78,110		562,392
Uralkali SP GDR	20,294		872,642
Vimpel-Communications SP ADR	56,502		1,357,743
VTB Bank OJSC GDR^c	72,197		400,693
Wimm-Bill-Dann Foods OJSC ADR^a	1,898		131,949

			30,815,259


TOTAL COMMON STOCKS (Cost: $162,066,164)			128,624,283

PREFERRED STOCKS – 19.84%

BRAZIL – 19.84%
Aracruz Celulose SA Class B	36,500		200,616
Banco Bradesco SA	184,907		3,393,361
Banco do Estado do Rio Grande do Sul SA	7,300		36,187
Banco Itau Holding Financeira SA	146,000		2,750,919
Bradespar SA	36,500		729,105
Brasil Telecom Participacoes SA	24,421		314,390
Brasil Telecom SA	11,753		120,699
Braskem SA Class A	21,900		156,735
Centrais Eletricas Brasileiras SA Class B	21,900		336,015
Companhia de Bebidas das Americas	21,900		1,346,206
Companhia Energetica de Minas Gerais	29,523		636,590
Companhia Energetica de Sao Paulo Class B	21,900		350,507


Security	Shares	Value
Companhia Paranaense de Energia Class B	14,600	$	250,490
Companhia Vale do Rio Doce Class A	233,600		5,439,216
Duratex SA	7,300		124,843
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B	7,300		135,086
Fertilizantes Fosfatados SA	1,680		96,765
Gerdau SA	73,000		1,373,223
Gol Linhas Aereas Inteligentes SA	7,300		65,575
Itausa - Investimentos Itau SA	242,051		1,413,447
Klabin SA	73,000		224,099
Lojas Americanas SA	43,800		277,239
Metalurgica Gerdau SA	21,900		556,893
Net Servicos de Comunicacao SA^a	21,900		252,279
Petroleo Brasileiro SA	372,300		7,961,563
Sadia SA	73,000		481,746
Tam SA	7,300		144,569
Tele Norte Leste Participacoes SA	29,200		679,007
Telemar Norte Leste SA Class A	7,300		380,208
TIM Participacoes SA	65,700		144,524
Usinas Siderurgicas de Minas Gerais SA Class A	31,350		1,098,787
Vivo Participacoes SA^a	65,700		338,967
Votorantim Celulose e Papel SA	7,300		156,243

			31,966,099


TOTAL PREFERRED STOCKS (Cost: $37,084,988)			31,966,099

SHORT-TERM INVESTMENTS – 2.58%

MONEY MARKET FUNDS – 2.58%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^e,f	101,802		101,802
BGI Cash Premier Fund LLC 2.63%^e,f,g	4,059,736		4,059,736

			4,161,538


TOTAL SHORT-TERM INVESTMENTS (Cost: $4,161,538)			4,161,538


	Value

TOTAL INVESTMENTS IN SECURITIES – 102.27% (Cost: $203,312,690)	$	164,751,920

Other Assets, Less Liabilities – (2.27)%		(3,660,373	)


NET ASSETS – 100.00%	$	161,091,547

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

^a	Non-income earning security.

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

^c	This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^d	This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^e	Affiliated issuer. See Note 2.

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

^g	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.72%

ADVERTISING – 0.27%
Groupe Aeroplan Inc.	361,388	$	5,660,273

			5,660,273

AEROSPACE & DEFENSE – 0.23%
CAE Inc.	460,362		4,864,891

			4,864,891

AIRLINES – 0.01%
Jazz Air Income Fund^a	20,078		112,339

			112,339

APPAREL – 0.24%
Gildan Activewear Inc.^b	208,146		4,894,087

			4,894,087

AUTO PARTS & EQUIPMENT – 0.43%
Magna International Inc. Class A	153,228		8,816,194

			8,816,194

BANKS – 17.91%
Bank of Montreal	911,232		40,005,307
Bank of Nova Scotia	1,787,208		82,712,226
Canadian Imperial Bank of Commerce	687,492		41,625,099
National Bank of Canada	286,794		13,535,346
Royal Bank of Canada	2,341,134		107,685,316
Toronto-Dominion Bank (The)	1,455,666		85,333,329

			370,896,623

CHEMICALS – 6.36%
Agrium Inc.	285,438		24,187,561
Methanex Corp.	176,284		4,487,562
NOVA Chemicals Corp.	150,516		4,374,103
Potash Corp. of Saskatchewan Inc.	566,130		98,691,493

			131,740,719

COAL – 1.16%
Fording Canadian Coal Trust	269,166		23,987,101

			23,987,101

COMMERCIAL SERVICES – 0.23%
Ritchie Bros. Auctioneers Inc.	179,670		4,797,529

			4,797,529

COMPUTERS – 5.69%
CGI Group Inc.^b	524,094		5,731,235
Research In Motion Ltd.^b	919,368		112,222,143

			117,953,378


Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 0.79%
CI Financial Income Fund	113,420	$	2,488,102
IGM Financial Inc.	215,604		9,030,204
TMX Group Inc.	147,126		4,807,259

			16,325,565

ELECTRIC – 0.96%
Fortis Inc.	284,760		7,007,162
TransAlta Corp.	364,764		12,785,755

			19,792,917

ENGINEERING & CONSTRUCTION – 0.66%
SNC-Lavalin Group Inc.	273,234		13,663,634

			13,663,634

FOOD – 1.05%
George Weston Ltd.	94,242		4,190,806
Loblaw Companies Ltd.	199,332		5,696,812
Metro Inc. Class A	184,416		5,133,058
Saputo Inc.	259,674		6,752,480

			21,773,156

FOREST PRODUCTS & PAPER – 0.26%
Sino-Forest Corp.^b	282,048		5,322,414

			5,322,414

GAS – 0.17%
Canadian Utilities Ltd. Class A	88,818		3,611,885

			3,611,885

HAND & MACHINE TOOLS – 0.35%
Finning International Inc.	317,982		7,248,616

			7,248,616

HEALTH CARE - SERVICES – 0.16%
MDS Inc.^b	222,384		3,413,868

			3,413,868

HOLDING COMPANIES - DIVERSIFIED – 1.80%
Brookfield Asset Management Inc. Class A	894,282		27,802,606
Onex Corp.	180,348		4,858,174
Sherritt International Corp.	520,704		4,691,912

			37,352,692

INSURANCE – 9.41%
Fairfax Financial Holdings Ltd.	31,648		6,957,573
Great-West Lifeco Inc.	486,804		14,743,981
ING Canada Inc.	56,274		2,123,848
Manulife Financial Corp.	2,716,068		97,664,152


Security	Shares	Value
Power Corp. of Canada	627,150	$	19,456,236
Power Financial Corp.	447,480		14,621,156
Sun Life Financial Inc.	1,019,712		39,399,166

			194,966,112

IRON & STEEL – 0.19%
Gerdau Ameristeel Corp.	275,268		3,895,853

			3,895,853

MANUFACTURING – 0.98%
Bombardier Inc. Class B	2,596,740		20,213,337

			20,213,337

MEDIA – 3.26%
Astral Media Inc. Class A	94,242		2,955,705
Rogers Communications Inc. Class B	905,130		32,862,577
Shaw Communications Inc. Class B	630,540		13,623,971
Thomson Reuters Corp.	406,800		13,721,847
Yellow Pages Income Fund	465,786		4,421,198

			67,585,298

MINING – 11.34%
Agnico-Eagle Mines Ltd.	258,996		14,894,378
Barrick Gold Corp.	1,581,774		55,146,058
Cameco Corp.	623,760		18,797,844
Eldorado Gold Corp.^b	625,794		4,983,442
First Quantum Minerals Ltd.	123,396		7,975,304
Goldcorp Inc.	1,289,556		43,948,448
Inmet Mining Corp.	78,648		4,745,520
Ivanhoe Mines Ltd.^b	442,734		4,991,906
Kinross Gold Corp.	1,110,564		18,337,378
Lundin Mining Corp.^b	603,420		2,892,271
Pan American Silver Corp.^b	139,668		3,755,756
SilverWheaton Corp.^b	404,088		4,689,609
Teck Cominco Ltd. Class B	797,328		33,372,147
Uranium One Inc.^b	849,534		3,647,101
Yamana Gold Inc.	1,168,194		12,708,663

			234,885,825

OIL & GAS – 25.37%
Addax Petroleum Corp.	155,262		5,943,274
ARC Energy Trust	186,450		5,314,577
Canadian Natural Resources Ltd.	980,388		83,844,288


Security	Shares	Value
Canadian Oil Sands Trust	425,784	$	20,673,534
EnCana Corp.	1,358,034		102,264,182
Enerplus Resources Fund	297,642		12,929,601
Ensign Resource Service Group	235,944		5,322,849
Harvest Energy Trust	259,182		5,318,874
Husky Energy Inc.	463,752		20,539,245
Imperial Oil Ltd.	569,520		29,345,178
Nexen Inc.	860,382		27,016,571
Niko Resources Ltd.	80,032		5,822,019
OPTI Canada Inc.^b	352,996		6,411,448
Penn West Energy Trust	678,000		19,939,859
Petro-Canada	873,942		38,714,513
Precision Drilling Trust	113,425		2,412,228
Provident Energy Trust	459,006		4,911,193
Suncor Energy Inc.	1,676,016		96,147,354
Talisman Energy Inc.	1,840,092		32,588,127

			525,458,914

OIL & GAS SERVICES – 0.22%
Trican Well Service Ltd.	223,062		4,512,383

			4,512,383

PHARMACEUTICALS – 0.14%
Biovail Corp.	262,386		2,871,800

			2,871,800

PIPELINES – 3.19%
Enbridge Inc.	638,676		26,834,215
TransCanada Corp.	1,030,560		39,157,099

			65,991,314

REAL ESTATE – 0.40%
Brookfield Properties Corp.	393,240		8,285,181

			8,285,181

REAL ESTATE INVESTMENT TRUSTS – 0.18%
RioCan Real Estate Investment Trust	187,128		3,803,120

			3,803,120

RETAIL – 1.43%
Alimentation Couche-Tard Inc. Class B	249,504		3,060,388
Canadian Tire Corp. Ltd. Class A	141,702		7,215,792
Shoppers Drug Mart Corp.	369,510		19,314,860

			29,591,040


Security	Shares	Value
TELECOMMUNICATIONS – 1.85%
BCE Inc.	481,380	$	18,272,319
Nortel Networks Corp.^b	838,686		5,080,308
TELUS Corp.	111,158		4,473,170
TELUS Corp. NVS	265,776		10,529,730

			38,355,527

TRANSPORTATION – 3.03%
Canadian National Railway Co.	867,840		45,617,178
Canadian Pacific Railway Ltd.	279,336		17,073,535

			62,690,713


TOTAL COMMON STOCKS (Cost: $2,123,185,356)			2,065,334,298

SHORT-TERM INVESTMENTS – 0.01%

MONEY MARKET FUNDS – 0.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	198,232		198,232

			198,232


TOTAL SHORT-TERM INVESTMENTS
(Cost: $198,232)			198,232


TOTAL INVESTMENTS IN SECURITIES – 99.73% (Cost: $2,123,383,588)			2,065,532,530

Other Assets, Less Liabilities – 0.27%			5,528,365


NET ASSETS – 100.00%		$	2,071,060,895

NVS – Non-Voting Shares

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 91.51%

AIRLINES – 3.92%
LAN Airlines SA	250,751	$	2,984,059

			2,984,059

BANKS – 8.21%
Banco de Credito e Inversiones	59,070		1,727,726
Banco Santander Chile SA	85,818,238		3,642,042
CorpBanca SA	160,956,765		879,373

			6,249,141

BEVERAGES – 4.63%
Coca-Cola Embonor SA Class B	41,212		43,021
Compania Cervecerias Unidas SA	248,478		1,730,861
Vina Concha y Toro SA	877,362		1,754,724

			3,528,606

BUILDING MATERIALS – 0.24%
SalfaCorp SA	124,111		179,204

			179,204

COMPUTERS – 0.82%
Sonda SA	445,982		626,550

			626,550

ELECTRIC – 26.97%
Almendral SA	14,406,375		1,321,170
Colbun SA^a	10,890,124		2,284,270
Empresa Nacional de Electricidad SA	5,811,353		8,957,988
Enersis SA	23,157,480		7,975,210

			20,538,638

ENGINEERING & CONSTRUCTION – 0.16%
Socovesa SA	423,751		118,237

			118,237

FOOD – 7.93%
Centros Comerciales Sudamericanos SA	1,296,688		3,782,534
Distribucion y Servicio D&S SA	5,135,881		1,964,161
Empresas Iansa SA	4,126,907		157,024
Multiexport Foods SA	492,475		133,569

			6,037,288

FOREST PRODUCTS & PAPER – 8.62%
Empresas CMPC SA	177,335		5,501,710
Masisa SA	6,575,688		1,065,069

			6,566,779


Security	Shares	Value
HEALTH CARE - SERVICES – 0.67%
Banmedica SA	510,258	$	512,747

			512,747

HOLDING COMPANIES - DIVERSIFIED – 11.74%
Empresas Copec SA	701,394		8,608,328
Sigdo Koppers SA	419,777		331,734

			8,940,062

IRON & STEEL – 4.88%
CAP SA	102,482		3,719,147

			3,719,147

METAL FABRICATE & HARDWARE – 0.90%
Cintac SA	38,676		19,244
Madeco SA	7,238,358		668,189

			687,433

REAL ESTATE – 0.94%
Parque Arauco SA	798,450		716,658

			716,658

RETAIL – 3.14%
Farmacias Ahumada SA	102,375		239,707
SACI Falabella SA	555,037		2,154,085

			2,393,792

TELECOMMUNICATIONS – 5.08%
Compania de Telecomunicaciones de Chile SA Class A	1,058,342		1,486,842
Empresa Nacional de Telecomunicaciones SA	179,710		2,384,445

			3,871,287

TRANSPORTATION – 1.40%
Compania SudAmericana de Vapores SA	792,605		1,067,117

			1,067,117

WATER – 1.26%
Inversiones Aguas Metropolitanas SA^a	923,669		955,209

			955,209


TOTAL COMMON STOCKS (Cost: $80,225,982)			69,691,954


Security	Shares	Value
PREFERRED STOCKS – 8.38%

CHEMICALS – 8.38%
Sociedad Quimica y Minera de Chile SA Class B	166,159	$	6,386,341

			6,386,341


TOTAL PREFERRED STOCKS
(Cost: $3,391,634)			6,386,341

RIGHTS – 0.01%

FOOD – 0.00%
Centros Comerciales Sudamericanos SA	21,563		42

			42

TRANSPORTATION – 0.01%
Compania SudAmericana de Vapores SA^b	31,704		6,805

			6,805


TOTAL RIGHTS
(Cost: $0)			6,847

SHORT-TERM INVESTMENTS – 0.16%

MONEY MARKET FUNDS – 0.16%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	119,715		119,715

			119,715


TOTAL SHORT-TERM INVESTMENTS
(Cost: $119,715)			119,715


TOTAL INVESTMENTS IN SECURITIES – 100.06% (Cost: $83,737,331)			76,204,857

Other Assets, Less Liabilities – (0.06)%			(46,678	)


NET ASSETS – 100.00%		$	76,158,179


Security	Shares	Value
COMMON STOCKS – 99.63%

AIRLINES – 0.94%
Cathay Pacific Airways Ltd.^a	8,442,000	$	15,748,809

			15,748,809

APPAREL – 0.72%
Yue Yuen Industrial Holdings Ltd.^a	4,341,000		12,097,345

			12,097,345

BANKS – 13.48%
Bank of East Asia Ltd.^a	9,286,300		37,063,102
BOC Hong Kong (Holdings) Ltd.	23,919,000		53,631,763
CITIC International Financial Holdings Ltd.^b	12,663,000		10,221,583
Hang Seng Bank Ltd.^a	5,065,200		100,658,255
Wing Hang Bank Ltd.	1,407,000		16,062,488
Wing Lung Bank Ltd.^a	422,600		8,067,831

			225,705,022

CHEMICALS – 0.95%
Kingboard Chemical Holdings Co. Ltd.	3,517,500		15,931,788

			15,931,788

DISTRIBUTION & WHOLESALE – 6.60%
Esprit Holdings Ltd.^a	7,035,000		58,589,321
Li & Fung Ltd.^a	16,885,000		52,030,398

			110,619,719

DIVERSIFIED FINANCIAL SERVICES – 5.41%
Hong Kong Exchanges and Clearing Ltd.^a	6,927,500		90,535,251

			90,535,251

ELECTRIC – 10.58%
CLP Holdings Ltd.	14,070,200		114,476,146
Hongkong Electric Holdings Ltd.	9,849,000		62,780,710

			177,256,856

ENGINEERING & CONSTRUCTION – 2.66%
Cheung Kong Infrastructure Holdings Ltd.^a	2,814,000		12,258,689
Hong Kong Aircraft Engineering Co. Ltd.	562,800		6,298,803
New World Development Co. Ltd.	16,884,800		25,960,806

			44,518,298


Security	Shares	Value
FOREST PRODUCTS & PAPER – 0.17%
Lee & Man Paper Manufacturing Ltd.	2,814,000	$	2,830,315

			2,830,315

GAS – 3.74%
Hong Kong and China Gas Co. Ltd. (The)^a	27,758,712		62,668,055

			62,668,055

HOLDING COMPANIES - DIVERSIFIED – 14.62%
C C Land Holdings Ltd.^a	7,035,000		3,001,576
Hutchison Whampoa Ltd.	14,632,800		136,770,910
NWS Holdings Ltd.	5,628,000		12,489,440
Swire Pacific Ltd. Class A	5,628,000		56,606,297
Wharf Holdings Ltd. (The)	9,849,500		35,966,655

			244,834,878

LODGING – 0.97%
Shangri-La Asia Ltd.	8,444,000		16,293,493

			16,293,493

MEDIA – 0.47%
Television Broadcasts Ltd.	1,407,000		7,887,024

			7,887,024

MINING – 1.17%
Mongolia Energy Corp. Ltd.^b	21,105,000		19,604,888

			19,604,888

REAL ESTATE – 28.83%
Cheung Kong (Holdings) Ltd.	9,849,000		141,587,855
Chinese Estates Holdings Ltd.^a	7,035,000		9,897,088
Hang Lung Development Co. Ltd.	5,628,000		24,156,828
Hang Lung Properties Ltd.	14,070,000		45,068,708
Henderson Land Development Co. Ltd.	7,035,332		42,817,293
Hopewell Holdings Ltd.	4,221,000		16,197,694
Hysan Development Co. Ltd.	4,221,000		11,627,727
Kerry Properties Ltd.	4,221,000		20,335,001
Shun Tak Holdings Ltd.	8,443,000		4,932,904
Sino Land Co. Ltd.	11,256,000		19,931,185
Sun Hung Kai Properties Ltd.	9,648,000		133,011,922
Wheelock and Co. Ltd.^a	5,628,000		13,441,292

			483,005,497


Security	Shares	Value
REAL ESTATE INVESTMENT TRUSTS – 2.08%
Link REIT (The)^a	14,773,500	$	34,866,955

			34,866,955

RETAIL – 0.32%
Lifestyle International Holdings Ltd.	4,221,000		5,408,245

			5,408,245

SEMICONDUCTORS – 0.57%
ASM Pacific Technology Ltd.	1,407,000		9,554,566

			9,554,566

TELECOMMUNICATIONS – 2.37%
Foxconn International Holdings Ltd.^a,b	14,070,000		10,564,105
Hutchison Telecommunications International Ltd.^b	11,256,000		14,061,437
PCCW Ltd.	23,919,576		15,017,255

			39,642,797

TRANSPORTATION – 2.98%
MTR Corp. Ltd.^a	9,145,583		29,646,465
Orient Overseas International Ltd.^a	1,407,200		4,859,097
Pacific Basin Shipping Ltd.	11,256,000		15,431,526

			49,937,088


TOTAL COMMON STOCKS (Cost: $2,018,674,887)			1,668,946,889

SHORT-TERM INVESTMENTS – 19.81%

MONEY MARKET FUNDS – 19.81%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	984,713		984,713
BGI Cash Premier Fund LLC 2.63%^c,d,e	330,869,554		330,869,554

			331,854,267


TOTAL SHORT-TERM INVESTMENTS
(Cost: $331,854,267)			331,854,267


	Value
TOTAL INVESTMENTS IN SECURITIES – 119.44% (Cost: $2,350,529,154)	$	2,000,801,156

Other Assets, Less Liabilities – (19.44)%		(325,616,758	)


NET ASSETS – 100.00%	$	1,675,184,398

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See

Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.79%

AEROSPACE & DEFENSE – 2.59%
Elbit Systems Ltd.	95,116	$	5,297,770

			5,297,770

AIRLINES – 0.03%
El Al Israel Airlines Ltd.	127,930		54,819

			54,819

BANKS – 14.47%
Bank Hapoalim Ltd.	2,381,277		9,425,818
Bank Leumi le-Israel^a	2,668,242		11,163,092
First International Bank of Israel Ltd.^b	108,378		1,141,335
Israel Discount Bank Ltd. Class A^a,b	2,191,735		3,650,525
Mizrahi Tefahot Bank Ltd.	645,662		4,165,561

			29,546,331

CHEMICALS – 17.07%
Frutarom Industries Ltd.	128,102		1,262,073
Israel Chemicals Ltd.^a	1,547,135		26,152,444
Makhteshim-Agan Industries Ltd.	1,085,963		7,434,540

			34,849,057

COMMERCIAL SERVICES – 0.16%
AL-ROV Israel Ltd.	13,100		252,773
Nitsba Holdings 1995 Ltd.^b	9,352		74,405

			327,178

DIVERSIFIED FINANCIAL SERVICES – 0.36%
FIBI Holdings Ltd.^b	43,528		708,564
Mivtach Shamir Holdings Ltd.	774		23,834

			732,398

ELECTRICAL COMPONENTS & EQUIPMENT – 0.20%
Electra (Israel) Ltd.^b	3,576		407,822

			407,822

ELECTRONICS – 1.00%
Elron Electronic Industries Ltd.^b	32,812		217,976
Ituran Location and Control Ltd.	57,206		680,179
Orbotech Ltd.^b	105,230		1,136,484

			2,034,639

ENGINEERING & CONSTRUCTION – 0.38%
Housing & Construction Holdings Ltd.^b	658,072		780,528

			780,528


Security	Shares	Value
FOOD – 1.69%
Blue Square-Israel Ltd.	29,076	$	287,360
Osem Investment Ltd.^a	138,806		1,779,313
Super-Sol Ltd.	298,356		1,393,645

			3,460,318

FOREST PRODUCTS & PAPER – 0.02%
American Israeli Paper Mills Ltd.^b	516		34,540

			34,540

HEALTH CARE - PRODUCTS – 1.22%
Given Imaging Ltd.^b	65,120		1,024,338
Syneron Medical Ltd.^b	89,590		1,479,131

			2,503,469

HOLDING COMPANIES - DIVERSIFIED – 0.58%
Clal Industries and Investments Ltd.	196,356		776,684
Elco Holdings Ltd.^b	30,268		400,361

			1,177,045

HOME BUILDERS – 0.28%
Bayside Land Corp. Ltd.	86		16,650
Property & Building Corp. Ltd.	7,828		553,551

			570,201

INSURANCE – 1.58%
Clal Insurance Enterprise Holdings Ltd.^a	37,580		657,478
Harel Insurance Investments & Finances Ltd.^a	36,388		1,605,398
Menorah Mivtachim Holdings Ltd. Class L	57,980		425,519
Phoenix Holdings Ltd.	202,390		531,249

			3,219,644

INTERNET – 5.63%
Aladdin Knowledge Systems Ltd.^b	30,063		379,094
Check Point Software Technologies Ltd.^b	413,544		10,127,693
RADVision Ltd.^b	46,155		318,931
Radware Ltd.^b	68,770		670,507

			11,496,225

INVESTMENT COMPANIES – 6.88%
Delek Group Ltd. (The)^a	18,876		2,309,578
Discount Investment Corp. Ltd.	66,472		1,507,348
Elbit Imaging Ltd.	20,576		597,078
IDB Development Corp. Ltd.	40,972		904,974


Security	Shares	Value
IDB Holding Corp. Ltd.^a	35,454	$	684,209
Israel Corp. Ltd. (The)^b	6,444		6,608,300
Koor Industries Ltd.	32,308		1,442,687

			14,054,174

MACHINERY – 1.73%
Ormat Industries Ltd.	312,894		3,526,063

			3,526,063

MANUFACTURING – 0.14%
FMS Enterprises Migun Ltd.^b	10,458		296,401

			296,401

MEDIA – 0.76%
Hot Telecommunication System Ltd.^b	144,250		1,547,553

			1,547,553

OIL & GAS – 0.96%
Oil Refineries Ltd.^a	3,095,029		1,970,634

			1,970,634

PHARMACEUTICALS – 24.64%
Teva Pharmaceutical Industries Ltd.	1,051,055		50,309,690

			50,309,690

REAL ESTATE – 3.18%
Africa Israel Investments Ltd.^a	42,422		1,631,386
Africa Israel Properties Ltd.^b	19,896		618,825
Alony Hetz Properties & Investments Ltd.	164,908		479,927
Amot Investments Ltd.	5,358		17,420
Azorim-Investment Development & Construction Co. Ltd.	49,648		374,021
Delek Real Estate Ltd.	88,236		213,412
Gazit Globe Ltd.	248,373		2,024,350
Industrial Buildings Corp. Ltd.	321,472		625,736
Jerusalem Economy Ltd.^b	57,120		510,290

			6,495,367

RETAIL – 0.83%
Delek Automotive Systems Ltd.^a	129,889		1,693,186

			1,693,186

SOFTWARE – 0.41%
Fundtech Ltd.^b	24,148		324,308
Retalix Ltd.^b	43,012		519,973

			844,281


Security	Shares	Value
TELECOMMUNICATION EQUIPMENT – 0.16%
AudioCodes Ltd.^b	77,180	$	320,297

			320,297

TELECOMMUNICATIONS – 12.84%
Alvarion Ltd.^b	176,035		1,140,707
Bezeq Israeli Telecommunication Corp. Ltd.	4,084,764		7,388,135
Cellcom Israel Ltd.	106,912		3,362,382
Ceragon Networks Ltd.^b	89,760		795,274
Gilat Satellite Networks Ltd.^b	131,665		994,071
NICE Systems Ltd.^b	191,850		5,891,435
Partner Communications Co. Ltd.	286,460		6,254,585
RRSat Global Communications Network Ltd.	27,884		385,078

			26,211,667


TOTAL COMMON STOCKS (Cost: $228,160,996)			203,761,297

SHORT-TERM INVESTMENTS – 5.03%

MONEY MARKET FUNDS – 5.03%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	184,442		184,442
BGI Cash Premier Fund LLC 2.63%^c,d,e	10,089,250		10,089,250

			10,273,692


TOTAL SHORT-TERM INVESTMENTS
(Cost: $10,273,692)			10,273,692


TOTAL INVESTMENTS IN SECURITIES – 104.82% (Cost: $238,434,688)			214,034,989

Other Assets, Less Liabilities – (4.82)%			(9,833,957	)


NET ASSETS – 100.00%		$	204,201,032

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.83%

ADVERTISING – 0.43%
Asatsu-DK Inc.	3,200	$	83,741
Moshi Moshi Hotline Inc.	2,400		65,238

			148,979

AEROSPACE & DEFENSE – 0.15%
Japan Aviation Electronics Industry Ltd.	8,000		50,422

			50,422

AGRICULTURE – 0.42%
Hokuto Corp.	1,600		36,416
Sakata Seed Corp.	7,200		108,075

			144,491

APPAREL – 1.28%
Descente Ltd.	8,000		44,745
Gunze Ltd.	16,000		68,408
Japan Wool Textile Co. Ltd. (The)	8,000		66,639
Katakura Industries Co. Ltd.	3,200		40,337
Sanei-International Co. Ltd.	1,600		20,994
Sanyo Shokai Ltd.	8,000		38,553
Tokyo Style Co. Ltd.	8,000		67,081
Wacoal Holdings Corp.	8,000		94,946

			441,703

AUTO MANUFACTURERS – 0.64%
Kanto Auto Works Ltd.	4,800		62,540
Nissan Shatai Co. Ltd.	8,000		60,299
Shinmaywa Industries Ltd.	8,000		26,759
Toyota Auto Body Co. Ltd.	4,000		70,841

			220,439

AUTO PARTS & EQUIPMENT – 3.97%
Aisan Industry Co. Ltd.	2,400		18,112
Akebono Brake Industry Co. Ltd.^a	7,200		48,896
Calsonic Kansei Corp.	16,000		53,960
Exedy Corp.	3,200		73,273
FCC Co. Ltd.	4,000		66,307
Futaba Industrial Co. Ltd.	4,800		78,021
Kayaba Industry Co. Ltd.	16,000		59,267
Keihin Corp.	4,000		67,081
Koito Manufacturing Co. Ltd.	8,000		97,526
Musashi Seimitsu Industry Co. Ltd.	2,400		53,739
Nifco Inc.	4,000		87,537
Nissin Kogyo Co. Ltd.	3,200		57,911


Security	Shares	Value
Press Kogyo Co. Ltd.	8,000	$	31,329
Riken Corp.	16,000		55,139
Sanden Corp.	16,000		62,806
Showa Corp.	6,400		45,999
T. RAD Co. Ltd.	8,000		39,806
Takata Corp.	3,200		55,700
Topre Corp.	6,400		53,606
Toyo Tire & Rubber Co. Ltd.	16,000		41,871
TS Tech Co. Ltd.	4,800		71,032
Unipres Corp.	2,400		25,719
Yokohama Rubber Co. Ltd. (The)	24,000		127,823

			1,372,460

BANKS – 10.53%
Aichi Bank Ltd. (The)	800		55,729
Akita Bank Ltd. (The)	24,000		93,545
Awa Bank Ltd. (The)	24,000		128,265
Bank of Ikeda Ltd. (The)^b	2,400		83,815
Bank of Iwate Ltd. (The)	1,600		91,408
Bank of Nagoya Ltd. (The)	16,000		88,311
Bank of Okinawa Ltd. (The)	2,400		85,142
Bank of Saga Ltd. (The)	16,000		46,588
Bank of the Ryukyus Ltd.	4,800		38,789
Chiba Kogyo Bank Ltd. (The)^b	4,000		48,800
Chukyo Bank Ltd. (The)	16,000		44,672
Daishi Bank Ltd. (The)	32,000		128,855
Ehime Bank Ltd. (The)	24,000		70,767
Eighteenth Bank Ltd. (The)	24,000		64,354
Fukui Bank Ltd. (The)	32,000		101,433
Higashi-Nippon Bank Ltd. (The)	16,000		52,191
Higo Bank Ltd. (The)	16,000		93,472
Hokkoku Bank Ltd. (The)	32,000		118,830
Hokuetsu Bank Ltd. (The)	32,000		69,588
Hyakugo Bank Ltd. (The)	24,000		136,890
Hyakujushi Bank Ltd. (The)	24,000		128,265
Juroku Bank Ltd. (The)	32,000		134,163
Kagoshima Bank Ltd. (The)	16,000		107,183
Kansai Urban Banking Corp.	16,000		22,262
Kanto Tsukuba Bank Ltd. (The)	6,400		28,307
Keiyo Bank Ltd. (The)	24,000		113,448
Kiyo Holdings Inc.	64,000		100,253
Michinoku Bank Ltd. (The)	24,000		58,604
Mie Bank Ltd. (The)	8,000		35,015


Security	Shares	Value
Minato Bank Ltd. (The)	16,000	$	24,031
Miyazaki Bank Ltd. (The)	24,000		62,142
Musashino Bank Ltd. (The)	3,200		94,356
Nanto Bank Ltd. (The)	16,000		87,279
Ogaki Kyoritsu Bank Ltd. (The)	24,000		124,727
Oita Bank Ltd. (The)	16,000		85,068
San-in Godo Bank Ltd. (The)	16,000		125,022
Shiga Bank Ltd.	24,000		159,668
Shikoku Bank Ltd. (The)	16,000		56,761
Shonai Bank Ltd. (The)	8,000		17,618
Tochigi Bank Ltd. (The)	8,000		44,229
Toho Bank Ltd. (The)	24,000		97,084
Tokushima Bank Ltd. (The)	8,000		33,688
Tokyo Tomin Bank Ltd. (The)	3,200		52,338
Yachiyo Bank Ltd. (The)	16		39,349
Yamagata Bank Ltd. (The)	16,000		85,363
Yamanashi Chuo Bank Ltd. (The)	16,000		85,658

			3,643,325

BEVERAGES – 0.62%
Kagome Co. Ltd.	6,400		103,202
Takara Holdings Inc.	16,000		111,311

			214,513

BIOTECHNOLOGY – 0.17%
AnGes MG Inc.^b	8		22,336
Takara Bio Inc.^b	16		36,637

			58,973

BUILDING MATERIALS – 1.54%
Central Glass Co. Ltd.	24,000		94,872
Chofu Seisakusho Co. Ltd.	1,600		29,118
Nichias Corp.^b	8,000		22,852
Rinnai Corp.	4,000		145,957
Sanwa Holdings Corp.	24,000		90,228
Sumitomo Osaka Cement Co. Ltd.	40,000		68,187
Takara Standard Co. Ltd.	16,000		80,350

			531,564

CHEMICALS – 5.80%
Adeka Corp.	9,600		70,325
Aica Kogyo Co. Ltd.	8,000		71,283
Air Water Inc.	16,000		200,212
C Uyemura & Co. Ltd.	800		27,422
Chugoku Marine Paints Ltd.	8,000		59,120


Security	Shares	Value
Dainichiseika Color & Chemicals Manufacturing Co. Ltd.	8,000	$	27,717
Earth Chemical Co. Ltd.	1,600		41,133
Fujimi Inc.	1,600		23,014
Ishihara Sangyo Kaisha Ltd.^b	32,000		53,960
Lintec Corp.	4,000		71,947
Nihon Nohyaku Co. Ltd.^a	8,000		73,568
Nihon Parkerizing Co. Ltd.	8,000		112,638
Nippon Carbon Co. Ltd.	8,000		38,037
Nippon Kayaku Co. Ltd.	16,000		103,055
Nippon Paint Co. Ltd.	24,000		87,353
Nippon Shokubai Co. Ltd.	8,000		51,822
Nippon Soda Co. Ltd.	16,000		79,023
Nippon Synthetic Chemical Industry Co. Ltd. (The)	8,000		31,550
NOF Corp.	16,000		67,229
Sakai Chemical Industry Co. Ltd.	8,000		24,768
Sumitomo Bakelite Co. Ltd.	24,000		125,169
Taiyo Ink Manufacturing Co. Ltd.	1,600		31,255
Takasago International Corp.	8,000		44,893
Toagosei Co. Ltd.	24,000		91,776
Tokai Carbon Co. Ltd.	16,000		167,187
Tokyo Ohka Kogyo Co. Ltd.	4,800		87,928
Toyo Ink Manufacturing Co. Ltd.	24,000		79,392
Zeon Corp.	16,000		65,165

			2,007,941

COMMERCIAL SERVICES – 2.02%
Aeon Delight Co. Ltd.	1,600		33,983
Daiseki Co. Ltd.	2,460		80,470
Intelligence Ltd.	16		8,993
Meitec Corp.	4,000		111,311
Nichii Gakkan Co.	2,400		30,916
Nishio Rent All Co. Ltd.	2,400		24,348
Nissha Printing Co. Ltd.	2,400		131,140
Park 24 Co. Ltd.	8,800		46,220
Pasona Group Inc.	32		22,881
Sohgo Security Services Co. Ltd.	5,600		64,243
So-Net M3 Inc.	8		29,707
TKC Corp.	800		14,360
Toppan Forms Co. Ltd.	6,400		77,608
Zenrin Co. Ltd.	1,600		23,663

			699,843


Security	Shares	Value
COMPUTERS – 0.62%
DTS Corp.	3,200	$	45,291
Hitachi Information Systems Ltd.	2,400		52,854
Net One Systems Co. Ltd.	56		75,647
NS Solutions Corp.	2,400		39,099

			212,891

COSMETICS & PERSONAL CARE – 1.18%
Aderans Holdings Co. Ltd.	4,000		63,948
Fancl Corp.	4,000		47,620
Kose Corp.	3,200		88,017
Lion Corp.	16,000		78,286
Mandom Corp.	4,800		129,592

			407,463

DISTRIBUTION & WHOLESALE – 1.87%
Doshisha Co. Ltd.	2,400		34,256
Hanwa Co. Ltd.	24,000		108,804
Inaba Denki Sangyo Co. Ltd.	3,200		81,677
Itochu Enex Co. Ltd.	4,000		24,953
Iwatani Corp.	32,000		88,459
Japan Pulp & Paper Co. Ltd.	8,000		27,791
Japan Wind Development Co. Ltd.	8		23,958
JFE Shoji Holdings Inc.	8,000		46,662
Kanematsu Corp.^b	40,000		45,704
Matsuda Sangyo Co. Ltd.	1,760		39,490
Nagase & Co. Ltd.	8,000		76,664
Sumikin Bussan Corp.	8,000		26,538
Trusco Nakayama Corp.	1,600		22,070

			647,026

DIVERSIFIED FINANCIAL SERVICES – 2.81%
Aizawa Securities Co. Ltd.	4,800		16,674
Century Leasing System Inc.	2,400		25,034
Fuyo General Lease Co. Ltd.	1,600		48,063
Hitachi Credit Corp.	4,000		61,184
IBJ Leasing Co. Ltd.	3,200		59,710
Ichiyoshi Securities Co. Ltd.	4,800		47,679
Jaccs Co. Ltd.^b	16,000		39,659
Japan Securities Finance Co. Ltd.	8,800		62,032
Marusan Securities Co. Ltd.	7,200		41,598
Mizuho Investors Securities Co. Ltd.	32,000		33,909
NIS Group Co. Ltd.^b	11,200		13,932
Okasan Holdings Inc.	16,000		80,792
OMC Card Inc.^b	12,800		33,614


Security	Shares	Value
Orient Corp.^b	24,000	$	34,941
Osaka Securities Exchange Co. Ltd.	24		86,247
Ricoh Leasing Co. Ltd.	2,400		48,542
Risa Partners Inc.	32		28,749
Secured Capital Japan Co. Ltd.	16		13,195
SFCG Co. Ltd.	400		32,988
SPARX Group Co. Ltd.	88		19,696
Tokai Tokyo Securities Co. Ltd.	24,000		86,690
Tokyo Leasing Co. Ltd.	3,200		30,518
Toyo Securities Co. Ltd.	8,000		25,284

			970,730

ELECTRIC – 0.25%
Okinawa Electric Power Co. Inc. (The)	1,600		85,658

			85,658

ELECTRICAL COMPONENTS & EQUIPMENT – 1.71%
Fujikura Ltd.	32,000		150,970
Funai Electric Co. Ltd.	2,400		52,412
GS Yuasa Corp.^a	40,000		207,141
Hitachi Cable Ltd.	16,000		58,383
Shinko Electric Co. Ltd.^a	16,000		41,281
Toshiba Tec Corp.	16,000		81,530

			591,717

ELECTRONICS – 5.60%
A&D Co. Ltd.	2,400		17,891
Anritsu Corp.	16,000		44,377
Chiyoda Integre Co. Ltd.	2,400		33,725
CMK Corp.	5,600		34,985
Cosel Co. Ltd.	4,000		36,305
Dainippon Screen Manufacturing Co. Ltd.	24,000		103,055
Eizo Nanao Corp.	3,200		65,902
Fujitsu General Ltd.	8,000		24,695
Furuno Electric Co. Ltd.	3,200		37,507
Futaba Corp.	4,000		67,929
Hamamatsu Photonics K.K.	6,400		160,111
HORIBA Ltd.	3,200		64,133
Hosiden Corp.	5,600		94,688
JEOL Ltd.	8,000		29,118
Kaga Electronics Co. Ltd.	4,000		49,942
Koa Corp.	6,400		37,330
Kuroda Electric Co. Ltd.	4,000		46,809
Macnica Inc.	3,200		40,632
Meiko Electronics Co. Ltd.	800		20,788


Security	Shares	Value
Micronics Japan Co. Ltd.	1,600	$	33,836
NEC Tokin Corp.^b	8,000		27,349
Nichicon Corp.	7,200		59,179
Nihon Dempa Kogyo Co. Ltd.	800		17,102
Nippon Chemi-Con Corp.	16,000		57,498
Nitto Kogyo Corp.	2,400		22,601
Ryosan Co. Ltd.	4,800		104,160
Sanyo Denki Co. Ltd.	8,000		30,445
Sodick Co. Ltd.	7,200		29,324
Star Micronics Co. Ltd.	4,000		50,532
Taiyo Yuden Co. Ltd.	8,000		89,565
Tamura Corp.	8,000		21,894
Tokyo Seimitsu Co. Ltd.	4,000		52,670
Toyo Corp.	4,800		51,837
ULVAC Inc.	3,200		112,048
Wacom Co. Ltd.	32		58,825
Yamatake Corp.	5,600		110,168

			1,938,955

ENGINEERING & CONSTRUCTION – 4.22%
Chiyoda Corp.	16,000		135,342
Chudenko Corp.	2,400		34,897
COMSYS Holdings Corp.	16,000		143,598
Japan Airport Terminal Co. Ltd.	6,400		82,444
Kandenko Co. Ltd.	8,000		48,579
Kyowa Exeo Corp.	8,000		79,244
Maeda Corp.	24,000		73,863
Maeda Road Construction Co. Ltd.	8,000		51,675
Nippo Corp.	8,000		42,755
Nishimatsu Construction Co. Ltd.	32,000		71,357
Okumura Corp.	16,000		58,088
Penta-Ocean Construction Co. Ltd.^b	28,000		32,509
Shinko Plantech Co. Ltd.	4,000		41,318
SHO-BOND Holdings Co. Ltd.	3,200		56,466
Taihei Kogyo Co. Ltd.	8,000		26,464
Taikisha Ltd.	4,800		66,079
Takasago Thermal Engineering Co. Ltd.	8,000		79,171
Takuma Co. Ltd.	16,000		49,684
Toda Corp.	24,000		87,353
Tokyu Construction Co. Ltd.	8,960		26,420
Toshiba Plant Systems & Services Corp.	8,000		73,716
Toyo Construction Co. Ltd.^b	32,000		13,859
Toyo Engineering Corp.	16,000		84,773

			1,459,654


Security	Shares	Value
ENTERTAINMENT – 0.91%
Avex Group Holdings Inc.	3,200	$	33,261
Resorttrust Inc.	4,000		43,492
Shochiku Co. Ltd.	8,000		44,598
Toei Co. Ltd.	8,000		44,156
Tokyotokeiba Co. Ltd.	16,000		26,095
USJ Co. Ltd.	96		57,852
Yomiuri Land Co. Ltd.	8,000		24,621
Yoshimoto Kogyo Co. Ltd.	4,000		40,028

			314,103

ENVIRONMENTAL CONTROL – 0.18%
Asahi Pretec Corp.	2,400		61,590

			61,590

FOOD – 4.41%
Ariake Japan Co. Ltd.	2,400		45,999
Ezaki Glico Co. Ltd.^a	8,000		81,014
Fuji Oil Co. Ltd.	12,000		129,150
House Foods Corp.	7,200		118,093
Itoham Foods Inc.	16,000		84,036
J-Oil Mills Inc.	8,000		38,553
Maruha Nichiro Holdings Inc.	40,000		74,084
Meiji Seika Kaisha Ltd.	32,000		151,854
Mitsui Sugar Co. Ltd.	8,000		30,961
Morinaga & Co. Ltd.	40,000		76,664
Morinaga Milk Industry Co. Ltd.	24,000		71,209
Nichirei Corp.	24,000		138,217
Nippon Beet Sugar Manufacturing Co. Ltd.	8,000		19,240
Nippon Flour Mills Co. Ltd.	24,000		115,660
Nippon Suisan Kaisha Ltd.	23,200		81,449
Nisshin OilliO Group Ltd. (The)	16,000		89,196
Q.P. Corp.	9,600		91,466
Snow Brand Milk Products Co. Ltd.^a	20,000		61,368
Unicharm Petcare Corp.	800		25,801

			1,524,014

FOREST PRODUCTS & PAPER – 1.41%
Daio Paper Corp.	8,000		69,514
Hokuetsu Paper Mills Ltd.	12,000		52,744
Mitsubishi Paper Mills Ltd.	32,000		76,959
Rengo Co. Ltd.	24,000		174,706
Sumitomo Forestry Co. Ltd.	16,000		114,997

			488,920


Security	Shares	Value
GAS – 0.33%
Saibu Gas Co. Ltd.	48,000	$	112,785

			112,785

HAND & MACHINE TOOLS – 1.20%
DISCO Corp.	2,400		90,449
Hitachi Koki Co. Ltd.	5,600		66,927
Meidensha Corp.	16,000		43,050
Mori Seiki Co. Ltd.	8,000		105,192
OSG Corp.^a	8,000		69,293
Union Tool Co.	1,600		38,922

			413,833

HEALTH CARE - PRODUCTS – 1.58%
Hogy Medical Co. Ltd.	1,600		77,549
Nakanishi Inc.	800		73,642
Nihon Kohden Corp.	3,200		70,620
Nipro Corp.	8,000		147,137
Sysmex Corp.	3,200		140,944
Topcon Corp.	5,600		37,824

			547,716

HOME BUILDERS – 0.28%
Misawa Homes Co. Ltd.^b	4,000		18,355
PanaHome Corp.	8,000		47,104
Token Corp.	960		32,995

			98,454

HOME FURNISHINGS – 1.17%
Alpine Electronics Inc.	4,800		49,006
Canon Electronics Inc.	1,600		29,560
Daiwa Industries Ltd.	8,000		28,233
Foster Electric Co. Ltd.	2,400		48,321
France Bed Holdings Co. Ltd.	16,000		23,589
Hitachi Maxell Ltd.	4,800		54,270
Juki Corp.	8,000		14,964
Kenwood Corp.	40,000		35,384
Nidec Sankyo Corp.	8,000		42,976
Noritz Corp.	4,000		37,779
Victor Co. of Japan Ltd.^b	24,000		40,691

			404,773

HOUSEHOLD PRODUCTS & WARES – 0.26%
Pilot Corp.	40		89,933

			89,933


Security	Shares	Value
HOUSEWARES – 0.39%
Noritake Co. Ltd.	16,000	$	60,889
Sangetsu Co. Ltd.	4,000		75,190

			136,079

INSURANCE – 0.31%
Fuji Fire & Marine Insurance Co. Ltd. (The)	8,000		22,041
Nissay Dowa General Insurance Co. Ltd.	16,000		84,626

			106,667

INTERNET – 1.73%
Access Co. Ltd.^b	24		47,326
CyberAgent Inc.^a	48		46,397
Dwango Co. Ltd.	8		12,679
eAccess Ltd.	128		75,603
En-Japan Inc.	24		25,498
GMO Internet Inc.^b	5,600		25,233
Gourmet Navigator Inc.	16		41,133
Index Holdings	104		13,033
Internet Initiative Japan Inc.	8		20,670
kabu.com Securities Co. Ltd.	40		37,042
Kakaku.com Inc.	16		47,178
Matsui Securities Co. Ltd.	10,400		74,460
Monex Group Inc.	128		64,162
Opt Inc.	16		29,177
So-Net Entertainment Corp.	8		22,926
VeriSign Japan K.K.	32		14,891

			597,408

IRON & STEEL – 1.66%
Aichi Steel Corp.	16,000		66,344
Godo Steel Ltd.	16,000		48,652
Kyoei Steel Ltd.	1,600		33,614
Mitsubishi Steel Manufacturing Co. Ltd.	16,000		60,594
Nakayama Steel Works Ltd.	8,000		26,095
Nippon Metal Industry Co. Ltd.	16,000		38,627
Nippon Yakin Kogyo Co. Ltd.	12,000		59,931
Sanyo Special Steel Co. Ltd.	16,000		89,638
TOPY Industries Ltd.	24,000		68,998
Yodogawa Steel Works Ltd.	16,000		82,562

			575,055


Security	Shares	Value
LEISURE TIME – 1.71%
Accordia Golf Co. Ltd.	64	$	66,049
Aruze Corp.	2,400		62,695
Daiichikosho Co. Ltd.	4,800		49,581
Fields Corp.	24		49,758
Heiwa Corp.	4,000		36,010
HIS Co. Ltd.	4,000		49,795
Mars Engineering Corp.	1,600		33,541
Mizuno Corp.	8,000		40,396
Pacific Golf Group International Holdings K.K.	48		44,981
Roland Corp.	2,400		39,541
Round One Corp.	56		46,441
Tokyo Dome Corp.	16,000		74,158

			592,946

LODGING – 0.17%
Fujita Kanko Inc.	8,000		59,415

			59,415

MACHINERY – 3.70%
Aida Engineering Ltd.	8,000		36,268
Chugai Ro Co. Ltd.	8,000		38,701
CKD Corp.	7,200		35,760
Daifuku Co. Ltd.	8,000		66,492
Daihen Corp.	16,000		63,101
Fuji Machine Manufacturing Co. Ltd.	4,000		57,867
Furukawa Co. Ltd.	32,000		55,139
Harmonic Drive Systems Inc.	8		26,169
Iseki & Co. Ltd.^a,b	24,000		64,354
Komori Corp.	5,600		82,871
Makino Milling Machine Co. Ltd.	8,000		37,226
Max Co. Ltd.	8,000		77,328
Miura Co. Ltd.	3,200		71,357
Modec Inc.	1,600		51,306
Nabtesco Corp.	8,000		83,962
Nippon Thompson Co. Ltd.	8,000		42,829
Obara Corp.	1,600		18,974
Produce Co. Ltd.^b	8		27,865
Shima Seiki Manufacturing Ltd.	1,600		37,742
Sintokogio Ltd.	6,400		51,188
Tadano Ltd.	8,000		62,732
Takeuchi Manufacturing Co. Ltd.	1,600		29,177
Toshiba Machine Co. Ltd.	8,000		35,605


Security	Shares	Value
Toyo Kanetsu K.K.	24,000	$	44,893
Tsubakimoto Chain Co.	16,000		82,856

			1,281,762

MACHINERY - DIVERSIFIED – 0.27%
Ebara Corp.	40,000		94,725

			94,725

MANUFACTURING – 1.84%
Amano Corp.	8,000		69,661
ARRK Corp.^b	8,000		16,660
Glory Ltd.	5,600		121,004
Kimoto Co. Ltd.	2,400		17,869
Kureha Corp.	24,000		136,227
Nikkiso Co. Ltd.	8,000		49,684
Nitta Corp.	3,200		49,419
Tamron Co. Ltd.	1,600		29,707
Tenma Corp.	4,000		61,037
Tokai Rubber Industries Ltd.	3,200		36,062
Toyo Tanso Co. Ltd.^a	800		49,021

			636,351

MEDIA – 0.44%
Gakken Co. Ltd.	8,000		21,672
Kadokawa Group Holdings Inc.	2,400		56,945
SKY Perfect JSAT Holdings Inc.	152		57,915
Usen Corp.^b	5,360		14,718

			151,250

METAL FABRICATE & HARDWARE – 1.65%
Ahresty Corp.	2,400		17,515
Kitz Corp.	8,000		36,563
Misumi Group Inc.	8,000		139,986
Nachi-Fujikoshi Corp.	24,000		77,623
Neturen Co. Ltd.	5,600		41,797
Oiles Corp.	2,400		41,952
Onoken Co. Ltd.	1,600		24,076
Ryobi Ltd.	24,000		80,276
Tocalo Co. Ltd.	2,400		36,932
Toho Zinc Co. Ltd.	16,000		54,107
Yamezen Corp.	5,600		19,557

			570,384

MINING – 1.10%
Mitsui Mining Co. Ltd.	16,000		55,287
Nippon Denko Co. Ltd.	8,000		69,809


Security	Shares	Value
Nippon Light Metal Co. Ltd.	56,000	$	85,658
Nittetsu Mining Co. Ltd.	8,000		29,634
Pacific Metals Co. Ltd.	16,000		104,087
Sumitomo Light Metal Industries Ltd.	32,000		34,794

			379,269

OFFICE & BUSINESS EQUIPMENT – 0.11%
Canon Finetech Inc.	3,200		39,158

			39,158

OFFICE FURNISHINGS – 0.43%
Itoki Corp.	5,600		20,589
Kokuyo Co. Ltd.	9,600		78,198
Okamura Corp.	8,000		51,527

			150,314

OIL & GAS – 0.12%
AOC Holdings Inc.	4,000		42,055

			42,055

PACKAGING & CONTAINERS – 0.21%
FP Corp.	1,600		43,787
Fuji Seal International Inc.	1,600		29,486

			73,273

PHARMACEUTICALS – 2.98%
EPS Co. Ltd.	8		30,371
Kaken Pharmaceutical Co. Ltd.	8,000		72,094
Kobayashi Pharmaceutical Co. Ltd.	2,400		82,046
Miraca Holdings Inc.	4,800		108,362
Mochida Pharmaceutical Co. Ltd.	8,000		97,894
Nichi-Iko Pharmaceutical Co. Ltd.	2,400		65,238
Nippon Shinyaku Co. Ltd.	8,000		100,548
Rohto Pharmaceutical Co. Ltd.	8,000		96,052
Sawai Pharmaceutical Co. Ltd.^a	1,600		70,915
Seikagaku Corp.	4,000		42,092
Shin Nippon Biomedical Laboratories Ltd.	1,600		22,144
Toho Pharmaceutical Co. Ltd.	3,200		56,614
Towa Pharmaceutical Co. Ltd.	800		30,739
Tsumura & Co.	5,600		157,383

			1,032,492

REAL ESTATE – 1.02%
Arnest One Corp.	6,400		17,633
Atrium Co. Ltd.	1,600		8,581
Cosmos Initia Co. Ltd.	8,000		9,141


Security	Shares	Value
Creed Corp.	16	$	15,230
Daibiru Corp.	4,000		38,148
Daikyo Inc.	32,000		45,999
Goldcrest Co. Ltd.	1,680		27,803
Heiwa Real Estate Co. Ltd.	16,000		65,017
Japan General Estate Co. Ltd. (The)^a	4,000		8,809
Sankei Building Co. Ltd. (The)	3,200		15,480
Shoei Co. Ltd.	3,200		31,963
Sumitomo Real Estate Sales Co. Ltd.	800		23,884
TOC Co. Ltd.	8,000		31,255
Tokyu Livable Inc.	2,400		15,591

			354,534

REAL ESTATE INVESTMENT TRUSTS – 4.17%
Creed Office Investment Corp.	8		13,564
DA Office Investment Corp.	24		103,497
Frontier Real Estate Investment Corp.	8		46,441
Fukuoka REIT Corp.	8		40,175
Global One Real Estate Investment Corp.	8		84,773
Hankyu REIT Inc.	8		33,172
Japan Excellent Inc.	16		75,927
Japan Hotel and Resort Inc.	16		35,384
Japan Logistics Fund Inc.	16		88,017
Kenedix Realty Investment Corp.	16		72,536
LaSalle Japan REIT Inc.	8		14,728
MID REIT Inc.	16		32,288
Mori Hills REIT Investment Corp.	8		31,108
MORI TRUST Sogo REIT Inc.	16		139,175
Nippon Accommodations Fund Inc.	16		72,979
Nippon Commercial Investment Corp.	24		49,338
Nippon Residential Investment Corp.	24		64,022
ORIX JREIT Inc.	24		131,361
Premier Investment Co.	16		70,472
TOKYU REIT Inc.	16		117,208
Top REIT Inc.	16		58,973
United Urban Investment Corp.	16		67,818

			1,442,956

RETAIL – 9.25%
ABC-Mart Inc.	2,400		60,373
Aoki Holdings Inc.	2,400		31,889
Aoyama Trading Co. Ltd.	6,400		117,002
Arcs Co. Ltd.	3,200		45,085


Security	Shares	Value
Askul Corp.	2,400	$	36,047
Autobacs Seven Co. Ltd.	4,000		112,048
Best Denki Co. Ltd.	8,000		38,553
BIC Camera Inc.	24		12,583
Cawachi Ltd.	1,600		34,278
Chiyoda Co. Ltd.	3,200		47,296
Circle K Sunkus Co. Ltd.	4,800		79,480
Culture Convenience Club Co. Ltd.	9,600		60,771
Daiei Inc. (The)^b	6,000		48,100
DCM Japan Holdings Co. Ltd.	7,200		53,208
Don Quijote Co. Ltd.	4,800		85,186
Doutor Nichires Holdings Co. Ltd.	4,800		79,701
Duskin Co. Ltd.	5,600		91,179
EDION Corp.	7,200		57,255
GEO Corp.	32		31,373
H2O Retailing Corp.	16,000		99,516
Heiwado Co. Ltd.	4,000		64,317
Izumi Co. Ltd.	5,600		82,149
Izumiya Co. Ltd.	16,000		91,260
Joshin Denki Co. Ltd.	8,000		64,870
Keiyo Co. Ltd.	4,000		20,124
Kisoji Co. Ltd.	1,600		32,140
Kohnan Shoji Co. Ltd.	2,400		32,487
Komeri Co. Ltd.	3,200		94,356
K’s Holdings Corp.	4,000		73,495
Link Theory Holdings Co. Ltd.^b	8		13,121
Maruetsu Inc. (The)^b	8,000		71,431
Matsumotokiyoshi Co. Ltd.	4,800		101,949
Matsuya Co. Ltd.	3,200		57,852
McDonald’s Holdings Co. (Japan) Ltd.	4,800		66,565
Nishimatsuya Chain Co. Ltd.	5,600		50,414
Nissen Holdings Co. Ltd.	5,600		22,395
Parco Co. Ltd.	7,200		82,798
Paris Miki Inc.	4,000		33,946
Plenus Co. Ltd.	3,200		47,738
Point Inc.	1,440		48,697
Right On Co. Ltd.	2,400		26,759
Ryohin Keikaku Co. Ltd.	2,400		130,256
Saizeriya Co. Ltd.	1,600		16,070
San-A & Co. Ltd.	800		24,179


Security	Shares	Value
Sankyo-Tateyama Holdings Inc.	40,000	$	44,967
Seiko Corp.	8,000		30,150
Senshukai Co. Ltd.	4,800		28,793
Shimachu Co. Ltd.	4,000		97,120
St. Marc Holdings Co. Ltd.	800		28,675
Sugi Pharmacy Co. Ltd.	2,400		69,883
Sundrug Co. Ltd.	3,200		66,934
Tsuruha Holdings Inc.	1,600		53,370
Valor Co. Ltd.	4,000		35,826
Watami Co. Ltd.	3,200		52,957
Xebio Co. Ltd.	2,400		44,782
Yoshinoya Holdings Co. Ltd.	48		51,395
Zensho Co. Ltd.	6,400		23,943

			3,199,086

SEMICONDUCTORS – 0.49%
Epson Toyocom Corp.	8,000		26,022
Megachips Corp.	1,600		24,179
Mimasu Semiconductor Industry Co. Ltd.	2,400		35,207
Sanken Electric Co. Ltd.	8,000		41,649
Shindengen Electric Manufacturing Co. Ltd.	16,000		34,204
United Technology Holdings Co. Ltd.	16		6,811

			168,072

SHIPBUILDING – 0.39%
Hitachi Zosen Corp.^a,b	84,000		91,334
Namura Shipbuilding Co. Ltd.	2,400		9,399
Sasebo Heavy Industries Co. Ltd.	16,000		33,320

			134,053

SOFTWARE – 1.68%
Capcom Co. Ltd.	4,800		148,611
Fuji Soft ABC Inc.	3,200		57,852
Hitachi Software Engineering Co. Ltd.	3,200		65,902
Koei Co. Ltd.	2,400		34,035
Nihon Unisys Ltd.	5,600		88,651
NSD Co. Ltd.	4,000		44,782
Obic Business Consultants Co. Ltd.	800		30,002
Sumisho Computer Systems Corp.	2,400		43,190
Trans Cosmos Inc.	3,200		23,560
Works Applications Co. Ltd.	40		45,667

			582,252


Security	Shares	Value
STORAGE & WAREHOUSING – 0.53%
Mitsui-Soko Co. Ltd.	16,000	$	79,613
Shibusawa Warehouse Co. Ltd. (The)	8,000		43,935
Sumitomo Warehouse Co. Ltd. (The)	16,000		59,562

			183,110

TELECOMMUNICATIONS – 1.24%
Denki Kogyo Co. Ltd.	8,000		47,104
Hitachi Kokusai Electric Inc.	8,000		55,803
IT Holdings Corp.^b	7,348		117,473
Japan Radio Co. Ltd.	8,000		18,503
Oki Electric Industry Co. Ltd.^a,b	64,000		87,869
Okinawa Cellular Telephone Co.	16		27,570
Telepark Corp.	32		39,187
Uniden Corp.	8,000		35,162

			428,671

TEXTILES – 1.00%
Daiwabo Co. Ltd.	16,000		39,954
Kurabo Industries Ltd.	24,000		41,133
Nitto Boseki Co. Ltd.	40,000		79,982
Seiren Co. Ltd.	6,400		34,204
Toyobo Co. Ltd.	64,000		107,920
Unitika Ltd.^a	48,000		44,229

			347,422

TOYS, GAMES & HOBBIES – 0.31%
Sanrio Co. Ltd.	4,800		55,198
Tomy Co. Ltd.	8,000		53,075

			108,273

TRANSPORTATION – 3.29%
Daiichi Chuo Kisen Kaisha	16,000		96,862
Fukuyama Transporting Co. Ltd.	16,000		54,845
Hitachi Transport System Ltd.	4,000		54,734
Iino Kaiun Kaisha Ltd.	8,000		62,142
Inui Steamship Co. Ltd.	1,600		20,758
Keihan Electric Railway Co. Ltd.	48,000		205,225
Kintetsu World Express Inc.	1,600		29,383
Nippon Konpo Unyu Soko Co. Ltd.	8,000		81,603
Nishi-Nippon Railroad Co. Ltd.	32,000		112,048
Sagami Railway Co. Ltd.	40,000		149,643
Sankyu Inc.	24,000		115,218


Security	Shares	Value
Seino Holdings Co. Ltd.	16,000	$	94,651
Shinwa Kaiun Kaisha Ltd.	8,000		40,175
Yusen Air & Sea Service Co. Ltd.	1,600		19,771

			1,137,058

VENTURE CAPITAL – 0.08%
Japan Asia Investment Co. Ltd.	8,000		27,496

			27,496


TOTAL COMMON STOCKS
(Cost: $36,533,026)			34,536,454

SHORT-TERM INVESTMENTS – 1.62%

MONEY MARKET FUNDS – 1.62%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	2,594		2,594
BGI Cash Premier Fund LLC 2.63%^c,d,e	556,373		556,373

			558,967


TOTAL SHORT-TERM INVESTMENTS (Cost: $558,967)			558,967


TOTAL INVESTMENTS IN SECURITIES – 101.45% (Cost: $37,091,993)			35,095,421

Other Assets, Less Liabilities – (1.45)%			(501,489	)


NET ASSETS – 100.00%		$	34,593,932

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.71%

AGRICULTURE – 12.83%
Asiatic Development Bhd	1,545,600	$	2,550,570
British American Tobacco (Malaysia) Bhd	1,008,000		11,733,019
IOI Corp. Bhd	23,184,030		34,842,656
Kuala Lumpur Kepong Bhd	3,292,800		11,546,875

			60,673,120

AIRLINES – 1.10%
AirAsia Bhd^a	7,324,800		2,331,158
Malaysian Airline System Bhd	2,889,600		2,878,105

			5,209,263

AUTO PARTS & EQUIPMENT – 1.55%
UMW Holdings Bhd	4,032,000		7,307,146

			7,307,146

BANKS – 27.03%
Alliance Financial Group Bhd	5,846,400		4,668,850
AMMB Holdings Bhd	12,096,037		10,907,285
Bumiputra-Commerce Holdings Bhd	17,337,632		42,660,742
Hong Leong Bank Bhd	3,225,600		5,465,508
Malayan Banking Bhd	16,732,800		38,707,081
Public Bank Bhd	7,257,600		21,814,504
RHB Capital Bhd	2,956,800		3,642,088

			127,866,058

BUILDING MATERIALS – 0.67%
Lafarge Malayan Cement Bhd	2,352,060		3,188,294

			3,188,294

COMMERCIAL SERVICES – 1.83%
PLUS Expressways Bhd	10,281,600		8,634,908

			8,634,908

DIVERSIFIED FINANCIAL SERVICES – 1.47%
Bursa Malaysia Bhd	2,150,400		4,372,406
Hong Leong Credit Bhd	1,814,400		2,598,492

			6,970,898

ELECTRIC – 5.90%
Tenaga Nasional Bhd	8,937,650		20,806,670
YTL Power International Bhd	12,835,213		7,110,712

			27,917,382


Security	Shares	Value
ENGINEERING & CONSTRUCTION – 6.47%
Gamuda Bhd	10,953,600	$	8,327,770
IJM Corp. Bhd^a	5,308,800		7,900,233
MMC Corp. Bhd	6,249,600		3,867,441
YTL Corp. Bhd	5,577,688		10,519,288

			30,614,732

ENTERTAINMENT – 2.61%
Berjaya Sports Toto Bhd	5,107,200		6,862,776
Tanjong PLC	1,411,200		5,489,271

			12,352,047

FOOD – 2.13%
PPB Group Bhd	3,628,866		10,051,964

			10,051,964

GAS – 2.09%
Petronas Gas Bhd	3,360,000		9,901,282

			9,901,282

HOLDING COMPANIES - DIVERSIFIED – 7.72%
Sime Darby Bhd	16,464,025		32,991,121
UEM World Bhd^a	4,771,200		3,514,955

			36,506,076

IRON & STEEL – 0.63%
Parkson Holdings Bhd	2,150,400		2,965,632

			2,965,632

LODGING – 8.94%
Genting Bhd	15,254,400		26,296,815
Resorts World Bhd	20,025,600		15,992,154

			42,288,969

MEDIA – 0.55%
Astro All Asia Networks PLC	2,620,800		2,610,374

			2,610,374

METAL FABRICATE & HARDWARE – 1.75%
KNM Group Bhd	18,883,224		8,291,146

			8,291,146

OIL & GAS – 0.70%
Petronas Dagangan Bhd	1,680,000		3,316,929

			3,316,929

REAL ESTATE – 2.23%
IGB Corp. Bhd	6,115,200		2,432,745
KLCC Property Holdings Bhd	3,225,600		2,575,917
SP Setia Bhd	5,577,600		5,555,411

			10,564,073


Security	Shares	Value
TELECOMMUNICATIONS – 7.41%
DiGi.Com Bhd	2,083,200	$	14,119,228
Telekom Malaysia Bhd	7,056,000		7,443,784
TM International Sdn Bhd^a	7,324,800		13,490,497

			35,053,509

TRANSPORTATION – 4.10%
MISC Bhd	7,660,800		19,414,433

			19,414,433


TOTAL COMMON STOCKS (Cost: $313,156,408)			471,698,235

WARRANTS – 0.00%

HOLDING COMPANIES - DIVERSIFIED – 0.00%
IJM Land Bhd^b	571,960		17

			17


TOTAL WARRANTS (Cost: $0)			17

SHORT-TERM INVESTMENTS – 0.00%

MONEY MARKET FUNDS – 0.00%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	318		318

			318


TOTAL SHORT-TERM INVESTMENTS (Cost: $318)			318


TOTAL INVESTMENTS IN SECURITIES – 99.71% (Cost: $313,156,726)			471,698,570

Other Assets, Less Liabilities – 0.29%			1,392,196


NET ASSETS – 100.00%		$	473,090,766

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.88%

BANKS – 0.41%
Banco Compartamos SA de CV	1,214,400	$	3,945,122

			3,945,122

BEVERAGES – 8.48%
Coca-Cola FEMSA SAB de CV SP ADR^a	198,354		11,254,606
Fomento Economico Mexicano SAB de CV BD Units	12,070,408		53,467,914
Grupo Continental SAB de CV	220,800		536,576
Grupo Modelo SAB de CV Series C	3,259,200		15,745,616

			81,004,712

BUILDING MATERIALS – 9.59%
Cemex SAB de CV Series CPO^b	45,558,440		91,670,891

			91,670,891

DIVERSIFIED FINANCIAL SERVICES – 5.81%
Financiera Independencia SAB de CV	202,400		252,423
Grupo Financiero Banorte SAB de CV Series O	8,868,800		35,716,760
Grupo Financiero Inbursa SA Class O	5,648,800		19,580,772

			55,549,955

ENGINEERING & CONSTRUCTION – 4.32%
Carso Infraestructura y Construccion SAB de CV Series B1^a,b	6,219,200		5,434,836
Empresas ICA SAB de CV^b	2,852,974		12,895,644
Grupo Aeroportuario del Centro Norte SAB de CV	349,600		659,953
Grupo Aeroportuario del Pacifico SAB de CV Series B	3,294,400		9,392,488
Grupo Aeroportuario del Sureste SA de CV Series B ADR	244,125		11,605,703
Promotora y Operadora de Infraestructura SAB de CV^a,b	460,000		1,273,921

			41,262,545

ENVIRONMENTAL CONTROL – 0.01%
Promotora Ambiental SAB de CV^a,b	36,800		80,129

			80,129


Security	Shares	Value
FOOD – 2.73%
Alsea SAB de CV^b	993,745	$	1,087,691
Gruma SAB de CV Class B^b	178,569		504,248
Grupo Bimbo SAB de CV Series A^a	3,680,000		24,521,529

			26,113,468

FOREST PRODUCTS & PAPER – 1.98%
Kimberly-Clark de Mexico SAB de CV Series A^a	4,305,600		18,942,639

			18,942,639

HOLDING COMPANIES - DIVERSIFIED – 4.18%
Alfa SAB de CV Series A	2,318,400		12,090,670
Grupo Carso SA de CV Series A1^a	7,102,430		27,823,020
Grupo Kuo SAB de CV Class B^b	5,100		3,322

			39,917,012

HOME BUILDERS – 3.33%
Consorcio ARA SAB de CV	4,802,400		3,785,920
Corporacion Geo SAB de CV Series B^b	2,650,200		7,741,327
Desarrolladora Homex SAB de CV^b	1,288,930		10,897,854
Sare Holding SAB de CV Class B^b	233,200		180,667
Urbi Desarrollos Urbanos SA de CV^a,b	3,312,000		9,223,744

			31,829,512

HOUSEWARES – 0.04%
Vitro SAB de CV Series A	331,200		407,905

			407,905

IRON & STEEL – 0.17%
Cia Minera Autlan SAB de CV	220,800		1,571,953
Grupo Industrial Saltillo SAB de CV	22,800		31,693

			1,603,646

MACHINERY – 0.18%
Industrias CH SA de CV Class B^b	368,000		1,706,312

			1,706,312

MEDIA – 6.03%
Grupo Televisa SA Series CPO	11,538,899		53,379,234
Megacable Holdings SAB de CV^b	662,400		1,307,099
TV Azteca SAB de CV Series CPO^a	4,544,800		2,955,515

			57,641,848


Security	Shares	Value
MINING – 5.06%
Grupo Mexico SA de CV Series B	22,505,110	$	37,080,289
Industrias Penoles SAB de CV^a	680,800		11,217,786

			48,298,075

RETAIL – 7.55%
Controladora Comercial Mexicana SA de CV BC Units^a	3,477,600		8,677,563
Grupo Elektra SA de CV^a	418,830		15,509,101
Grupo Famsa SAB de CV Class A^a,b	570,400		1,464,889
Wal-Mart de Mexico SAB de CV Series V^a	12,751,200		46,518,091

			72,169,644

TELECOMMUNICATIONS – 40.01%
America Movil SAB de CV Series L	94,293,440		241,612,360
Axtel SAB de CV Series CPO^b	3,845,600		4,710,065
Carso Global Telecom SAB de CV Class A1^a,b	7,544,031		38,426,162
Grupo Iusacell SA de CV^b	372,800		3,623,833
Maxcom Telecomunicaciones SAB de CV^b	478,400		556,179
Telefonos de Mexico SAB de CV Series L	48,134,400		59,282,217
Telmex Internacional SAB de CV Class L^a	48,134,400		34,156,290

			382,367,106


TOTAL COMMON STOCKS (Cost: $1,174,769,257)			954,510,521

SHORT-TERM INVESTMENTS – 3.23%

MONEY MARKET FUNDS – 3.23%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	173,735		173,735
BGI Cash Premier Fund LLC 2.63%^c,d,e	30,750,881		30,750,881

			30,924,616


TOTAL SHORT-TERM INVESTMENTS (Cost: $30,924,616)			30,924,616


	Value
TOTAL INVESTMENTS IN SECURITIES – 103.11% (Cost: $1,205,693,873)	$	985,435,137
Other Assets, Less Liabilities – (3.11)%		(29,750,801	)


NET ASSETS – 100.00%	$	955,684,336

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.17%

AUSTRALIA – 65.08%
AGL Energy Ltd.	1,275,287	$	16,858,555
Alumina Ltd.	3,175,462		11,895,979
Amcor Ltd.	2,463,521		11,668,714
AMP Ltd.	5,395,708		32,341,615
Aristocrat Leisure Ltd.	1,002,293		5,092,731
Asciano Group	1,661,634		7,011,896
ASX Ltd.	502,067		15,288,960
Australia and New Zealand Banking Group Ltd.	5,430,950		77,687,198
AXA Asia Pacific Holdings Ltd.	2,422,756		10,828,818
Bendigo and Adelaide Bank Ltd.	753,232		7,505,267
BHP Billiton Ltd.	9,545,059		340,316,479
Billabong International Ltd.	498,911		5,503,972
BlueScope Steel Ltd.	2,130,037		16,931,400
Boart Longyear Group	3,992,866		6,756,959
Boral Ltd.	1,764,730		9,802,616
Brambles Ltd.	4,049,937		26,856,104
Caltex Australia Ltd.	420,011		4,539,504
CFS Retail Property Trust	4,180,911		7,777,297
Coca-Cola Amatil Ltd.	1,558,012		11,472,047
Cochlear Ltd.	159,904		7,580,898
Commonwealth Bank of Australia	3,758,270		137,232,778
Computershare Ltd.	1,384,432		10,790,069
Crown Ltd.	1,337,547		10,539,844
CSL Ltd.	1,703,451		60,220,843
CSR Ltd.^a	2,650,251		6,071,174
Dexus Property Group	8,391,804		10,695,992
Fortescue Metals Group Ltd.^b	3,580,482		23,588,860
Foster’s Group Ltd.	5,464,614		26,307,242
Goodman Fielder Ltd.	3,713,034		4,732,544
Goodman Group	4,493,618		12,306,294
GPT Group	6,220,476		9,321,309
Harvey Norman Holdings Ltd.	1,646,117		5,259,429
Incitec Pivot Ltd.	168,583		23,174,219
Insurance Australia Group Ltd.	5,272,361		18,026,012
James Hardie Industries NV	1,386,799		5,577,434
John Fairfax Holdings Ltd.	3,569,962		8,669,953
Leighton Holdings Ltd.	402,916		16,138,563


Security	Shares	Value
Leighton Holdings Ltd. Entitlement^c	29,108	$	279,757
Lend Lease Corp. Ltd.	1,050,948		8,733,987
Lion Nathan Ltd.	749,813		5,766,449
Macquarie Airports	1,919,637		5,290,212
Macquarie Group Ltd.^a	785,581		29,794,925
Macquarie Infrastructure Group^a	6,965,818		13,137,728
Macquarie Office Trust	7,048,926		6,313,356
Metcash Ltd.	2,170,687		7,365,419
Mirvac Group	3,042,910		7,573,401
National Australia Bank Ltd.	4,651,155		98,136,580
Newcrest Mining Ltd.	1,284,229		30,303,798
OneSteel Ltd.	2,328,602		13,716,882
Orica Ltd.	1,005,481		21,578,732
Origin Energy Ltd.	2,483,772		34,545,245
OZ Minerals Ltd.	8,636,951		13,016,749
Paladin Energy Ltd.^a,b	1,574,844		7,906,970
Perpetual Ltd.^a	116,509		4,499,136
Qantas Airways Ltd.	2,698,906		7,856,127
QBE Insurance Group Ltd.	2,512,702		51,826,338
Rio Tinto Ltd.	814,057		89,385,901
Santos Ltd.	1,673,469		28,967,949
Sims Group Ltd.	435,002		12,887,056
Sonic Healthcare Ltd.	911,821		11,370,568
St. George Bank Ltd.	1,570,636		41,092,952
Stockland Corp. Ltd.	4,157,504		18,868,932
Suncorp-Metway Ltd.	2,634,208		25,907,183
Tabcorp Holdings Ltd.	1,473,852		10,865,048
Tatts Group Ltd.	3,270,142		7,406,728
Telstra Corp. Ltd.	12,319,447		46,151,359
Toll Holdings Ltd.	1,777,880		10,656,528
Transurban Group^a	3,296,968		15,417,664
Wesfarmers Ltd.	1,804,969		47,876,731
Wesfarmers Ltd. Partially Protected	420,800		11,447,994
Westfield Group	5,030,927		74,911,248
Westpac Banking Corp.	5,337,059		108,242,281
Woodside Petroleum Ltd.	1,373,123		74,558,739
Woolworths Ltd.	3,453,979		84,358,712
WorleyParsons Ltd.	436,054		13,917,131

			2,124,302,063


Security	Shares	Value
HONG KONG – 21.79%
ASM Pacific Technology Ltd.	657,500	$	4,464,909
Bank of East Asia Ltd.	4,208,000		16,794,798
BOC Hong Kong (Holdings) Ltd.	10,914,500		24,472,757
C C Land Holdings Ltd.	1,841,000		785,487
Cathay Pacific Airways Ltd.^a	3,419,000		6,378,249
Cheung Kong (Holdings) Ltd.^a	3,945,000		56,712,771
Cheung Kong Infrastructure Holdings Ltd.^a	1,315,000		5,728,563
Chinese Estates Holdings Ltd.	2,630,000		3,699,978
CITIC International Financial Holdings Ltd.^a,b	6,575,000		5,307,345
CLP Holdings Ltd.	5,654,500		46,005,413
Esprit Holdings Ltd.^a	3,024,500		25,188,827
Foxconn International Holdings Ltd.^b	5,260,000		3,949,339
Genting International PLC^a,b	8,679,000		3,129,779
Hang Lung Development Co. Ltd.	2,367,000		10,159,774
Hang Lung Properties Ltd.	6,049,736		19,378,378
Hang Seng Bank Ltd.^a	2,182,900		43,379,710
Henderson Land Development Co. Ltd.	2,893,056		17,607,247
Hong Kong Aircraft Engineering Co. Ltd.	105,200		1,177,388
Hong Kong and China Gas Co. Ltd. (The)^a	11,598,661		26,185,132
Hong Kong Exchanges and Clearing Ltd.^a	2,923,500		38,207,117
Hongkong Electric Holdings Ltd.	3,945,000		25,146,705
Hopewell Holdings Ltd.^a	1,841,000		7,064,666
Hutchison Telecommunications International Ltd.^b	5,260,000		6,570,999
Hutchison Whampoa Ltd.	6,343,000		59,287,210
Hysan Development Co. Ltd.	1,841,000		5,071,463
Kerry Properties Ltd.	1,841,000		8,869,163
Kingboard Chemical Holdings Co. Ltd.	1,709,500		7,742,826
Lee & Man Paper Manufacturing Ltd.	1,052,000		1,058,099
Li & Fung Ltd.^a	6,313,600		19,455,086


Security	Shares	Value
Link REIT (The)^a	6,312,000	$	14,896,959
Mongolia Energy Corp. Ltd.^a,b	9,205,000		8,550,722
MTR Corp. Ltd.^a	4,208,000		13,640,719
New World Development Co. Ltd.	7,101,941		10,919,413
Noble Group Ltd.^a	4,261,400		5,845,583
NWS Holdings Ltd.^a	2,367,000		5,252,755
Orient Overseas International Ltd.^a	597,000		2,061,456
Pacific Basin Shipping Ltd.	4,471,000		6,129,562
PCCW Ltd.^a	11,835,845		7,430,813
Shangri-La Asia Ltd.	3,682,000		7,104,766
Shun Tak Holdings Ltd.^a	3,156,000		1,843,923
Sino Land Co. Ltd.	4,734,000		8,382,572
Sun Hung Kai Properties Ltd.	3,945,000		54,387,649
Swire Pacific Ltd. Class A^a	2,367,000		23,807,233
Television Broadcasts Ltd.^a	1,052,000		5,897,050
Wharf Holdings Ltd. (The)	3,945,000		14,405,650
Wheelock and Co. Ltd.^a	2,367,000		5,653,080
Wing Hang Bank Ltd.	526,000		6,004,882
Wing Lung Bank Ltd.^a	236,700		4,518,825
Yue Yuen Industrial Holdings Ltd.^a	1,972,500		5,496,893

			711,209,683

NEW ZEALAND – 0.96%
Auckland International Airport Ltd.	2,816,993		4,201,021
Contact Energy Ltd.	749,550		4,407,985
Fletcher Building Ltd.	1,390,218		7,315,057
Sky City Entertainment Group Ltd.	1,349,716		3,418,048
Telecom Corp. of New Zealand Ltd.	5,142,439		11,829,057

			31,171,168

SINGAPORE – 11.34%
Ascendas Real Estate Investment Trust^a	2,894,000		4,706,523
CapitaCommercial Trust^a	2,630,000		3,161,393
CapitaLand Ltd.	4,997,000		15,475,948
CapitaMall Trust Management Ltd.	3,156,622		6,138,031
City Developments Ltd.	1,330,000		9,780,449


Security	Shares	Value
ComfortDelGro Corp. Ltd.	5,523,000	$	5,896,928
COSCO Corp. (Singapore) Ltd.	2,631,104		4,278,974
DBS Group Holdings Ltd.	3,156,000		40,346,813
Fraser and Neave Ltd.	2,630,150		8,164,298
Golden Agri-Resources Ltd.	14,202,000		6,426,926
Jardine Cycle & Carriage Ltd.	369,000		4,654,736
Keppel Corp. Ltd.	3,419,000		24,030,306
Keppel Land Ltd.^a	1,053,000		2,888,909
Neptune Orient Lines Ltd.^a	1,340,000		2,141,347
Olam International Ltd.^a	3,419,600		5,101,896
Oversea-Chinese Banking Corp.	7,364,600		42,128,064
Parkway Holdings Ltd.^a	2,564,968		4,062,598
SembCorp Industries Ltd.	2,893,240		8,510,432
SembCorp Marine Ltd.	2,421,200		6,505,611
Singapore Airlines Ltd.	1,578,800		16,990,869
Singapore Exchange Ltd.^a	2,367,000		10,627,859
Singapore Press Holdings Ltd.	4,471,517		13,026,445
Singapore Technologies Engineering Ltd.	3,682,000		7,341,870
Singapore Telecommunications Ltd.	22,881,328		57,112,313
United Overseas Bank Ltd.	3,419,000		45,933,180
UOL Group Ltd.	1,315,000		2,696,482
Venture Corp. Ltd.^a	789,695		5,606,179
Wilmar International Ltd.^a	2,367,000		6,359,979

			370,095,358

TOTAL COMMON STOCKS (Cost: $2,879,248,079)			3,236,778,272

SHORT-TERM INVESTMENTS – 6.89%

MONEY MARKET FUNDS – 6.89%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^d,e	148,137		148,137
BGI Cash Premier Fund LLC 2.63%^d,e,f	224,812,783		224,812,783

			224,960,920


TOTAL SHORT-TERM INVESTMENTS
(Cost: $224,960,920)			224,960,920


	Value
TOTAL INVESTMENTS IN SECURITIES – 106.06% (Cost: $3,104,208,999)	$	3,461,739,192

Other Assets, Less Liabilities – (6.06)%		(197,768,039	)

NET ASSETS – 100.00%	$	3,263,971,153

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

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.31%

AGRICULTURE – 3.35%
Golden Agri-Resources Ltd.	55,513,000	$	25,121,669
Wilmar International Ltd.^a	9,037,000		24,281,846

			49,403,515

AIRLINES – 4.30%
Singapore Airlines Ltd.^a	5,904,467		63,543,212

			63,543,212

BANKS – 34.11%
DBS Group Holdings Ltd.	12,345,000		157,820,470
Oversea-Chinese Banking Corp.	27,111,000		155,084,313
United Overseas Bank Ltd.	14,206,000		190,853,102

			503,757,885

BEVERAGES – 2.71%
Fraser and Neave Ltd.	12,910,000		40,074,173

			40,074,173

DISTRIBUTION & WHOLESALE – 1.33%
Jardine Cycle & Carriage Ltd.	1,551,000		19,565,027

			19,565,027

DIVERSIFIED FINANCIAL SERVICES – 2.78%
Singapore Exchange Ltd.^a	9,136,000		41,020,753

			41,020,753

ELECTRONICS – 1.24%
Venture Corp. Ltd.	2,582,522		18,333,761

			18,333,761

ENGINEERING & CONSTRUCTION – 4.58%
SembCorp Industries Ltd.	11,619,000		34,177,154
Singapore Technologies Engineering Ltd.^a	16,783,000		33,465,130

			67,642,284

FOOD – 1.30%
Olam International Ltd.^a	12,913,000		19,265,639

			19,265,639

HEALTH CARE - SERVICES – 1.11%
Parkway Holdings Ltd.	10,349,533		16,392,402

			16,392,402


Security	Shares	Value
HOLDING COMPANIES - DIVERSIFIED – 6.43%
Keppel Corp. Ltd.	9,989,000	$	70,207,290
Noble Group Ltd.^a	18,074,000		24,793,042

			95,000,332

MEDIA – 3.31%
Singapore Press Holdings Ltd.^a	16,783,000		48,892,317

			48,892,317

REAL ESTATE – 9.40%
CapitaLand Ltd.	18,344,000		56,812,247
City Developments Ltd.	5,464,000		40,180,732
Genting International PLC^a,b	32,275,000		11,638,855
Keppel Land Ltd.^a	4,052,000		11,116,677
UOL Group Ltd.	6,455,000		13,236,344
Yanlord Land Group Ltd.	5,164,000		5,842,249

			138,827,104

REAL ESTATE INVESTMENT TRUSTS – 3.82%
Ascendas Real Estate Investment Trust	11,619,000		18,896,023
CapitaCommercial Trust^a	10,328,000		12,414,778
CapitaMall Trust Management Ltd.	12,910,000		25,103,412

			56,414,213

SHIPBUILDING – 1.64%
SembCorp Marine Ltd.^a	9,037,000		24,281,845

			24,281,845

TELECOMMUNICATIONS – 14.62%
Singapore Telecommunications Ltd.	86,497,568		215,899,887

			215,899,887

TRANSPORTATION – 3.28%
ComfortDelGro Corp. Ltd.^a	21,947,000		23,432,894
COSCO Corp. (Singapore) Ltd.	10,328,000		16,796,464
Neptune Orient Lines Ltd.^a	5,164,000		8,252,176

			48,481,534

TOTAL COMMON STOCKS (Cost: $1,650,731,042)			1,466,795,883


Security	Shares	Value
SHORT-TERM INVESTMENTS – 10.16%

MONEY MARKET FUNDS – 10.16%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	168,843	$	168,843
BGI Cash Premier Fund LLC 2.63%^c,d,e	149,885,088		149,885,088

			150,053,931


TOTAL SHORT-TERM INVESTMENTS
(Cost: $150,053,931)			150,053,931


TOTAL INVESTMENTS IN SECURITIES – 109.47% (Cost: $1,800,784,973)			1,616,849,814

Other Assets, Less Liabilities – (9.47)%			(139,881,323	)


NET ASSETS – 100.00%		$	1,476,968,491

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.82%

BANKS – 12.26%
Absa Group Ltd.	602,756	$	8,540,269
FirstRand Ltd.	5,583,732		11,929,980
Nedbank Group Ltd.	414,337		5,617,763
Standard Bank Group Ltd.	2,268,651		26,567,592

			52,655,604

BUILDING MATERIALS – 1.09%
Pretoria Portland Cement Co. Ltd.	1,061,060		4,691,431

			4,691,431

DIVERSIFIED FINANCIAL SERVICES – 3.03%
African Bank Investments Ltd.	1,486,331		5,366,863
Investec Ltd.	369,985		2,768,178
RMB Holdings Ltd.	1,432,123		4,876,700

			13,011,741

ELECTRONICS – 0.61%
Reunert Ltd.	348,733		2,636,399

			2,636,399

ENGINEERING & CONSTRUCTION – 3.46%
Aveng Ltd.	796,873		6,864,187
Murray & Roberts Holdings Ltd.	589,589		7,978,564

			14,842,751

FOOD – 2.52%
Shoprite Holdings Ltd.	858,473		5,138,383
Tiger Brands Ltd.	323,400		5,703,606

			10,841,989

FOREST PRODUCTS & PAPER – 1.04%
Sappi Ltd.	426,965		4,486,181

			4,486,181

HEALTH CARE - PRODUCTS – 0.71%
Aspen Pharmacare Holdings Ltd.^a	501,655		3,051,608

			3,051,608

HEALTH CARE - SERVICES – 0.57%
Network Healthcare Holdings Ltd.^a	2,199,351		2,461,133

			2,461,133

HOLDING COMPANIES - DIVERSIFIED – 8.31%
Barloworld Ltd.	403,711		3,587,316
Bidvest Group Ltd.	516,054		7,654,944


Security	Shares	Value
Imperial Holdings Ltd.^a	328,328	$	2,306,979
Remgro Ltd.	910,217		22,141,774

			35,691,013

HOME FURNISHINGS – 1.19%
Steinhoff International Holdings Ltd.	2,131,514		5,117,131

			5,117,131

INSURANCE – 2.76%
Liberty Group Ltd.^a	228,305		2,094,337
Sanlam Ltd.	4,224,913		9,763,437

			11,857,774

IRON & STEEL – 3.39%
ArcelorMittal South Africa Ltd.	397,628		9,416,518
Kumba Iron Ore Ltd.	156,464		5,130,468

			14,546,986

MEDIA – 4.45%
Naspers Ltd.	759,143		19,138,474

			19,138,474

MINING – 21.72%
African Rainbow Minerals Ltd.	229,999		7,781,105
Anglo Platinum Ltd.	141,295		17,907,203
AngloGold Ashanti Ltd.	548,779		14,888,315
Exxaro Resources Ltd.	243,859		3,649,040
Gold Fields Ltd.	1,229,613		11,359,751
Harmony Gold Mining Co. Ltd.^a	679,756		5,970,337
Impala Platinum Holdings Ltd.	1,062,446		30,130,458
Northam Platinum Ltd.	235,312		1,644,222

			93,330,431

OIL & GAS – 15.29%
Sasol Ltd.	1,188,418		65,712,661

			65,712,661

PHARMACEUTICALS – 0.37%
Adcock Ingram Holdings Ltd.^a	323,400		1,578,023

			1,578,023

RETAIL – 3.37%
Foschini Ltd.	427,504		2,364,129
Massmart Holdings Ltd.	397,166		4,299,692
Pick’n Pay Stores Ltd.	456,456		1,751,522
Truworths International Ltd.	848,617		3,442,943
Woolworths Holdings Ltd.	1,597,904		2,613,533

			14,471,819


Security	Shares	Value
TELECOMMUNICATIONS – 13.68%
MTN Group Ltd.	3,138,289	$	48,446,909
Telkom South Africa Ltd.	568,491		10,312,394

			58,759,303

TOTAL COMMON STOCKS (Cost: $510,944,403)			428,882,452

SHORT-TERM INVESTMENTS – 0.00%

MONEY MARKET FUNDS – 0.00%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^b,c	5,654		5,654

			5,654


TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,654)			5,654


TOTAL INVESTMENTS IN SECURITIES – 99.82% (Cost: $510,950,057)			428,888,106

Other Assets, Less Liabilities – 0.18%			766,470


NET ASSETS – 100.00%		$	429,654,576

^a	Non-income earning security.

^b	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 97.57%

AGRICULTURE – 2.63%
KT&G Corp.	620,166	$	52,283,257

			52,283,257

AIRLINES – 0.36%
Korean Air Co. Ltd.	200,642		7,149,334

			7,149,334

AUTO MANUFACTURERS – 3.45%
Hyundai Motor Co. Ltd.^a	848,160		55,848,170
Kia Motors Corp.^a,b	1,057,920		12,727,295

			68,575,465

AUTO PARTS & EQUIPMENT – 1.72%
Hankook Tire Co. Ltd.^a	510,720		7,504,381
Hyundai Mobis	319,206		26,676,229

			34,180,610

BANKS – 7.57%
Daegu Bank	702,240		7,835,629
Industrial Bank of Korea	1,012,320		14,502,886
Kookmin Bank	1,860,489		102,344,835
Korea Exchange Bank	1,431,840		18,014,701
Pusan Bank	684,000		7,663,514

			150,361,565

BEVERAGES – 0.28%
Hite Brewery Co. Ltd.^b	29,184		5,601,484

			5,601,484

CHEMICALS – 3.38%
DC Chemical Co. Ltd.^a	67,840		18,534,668
Hanwha Chemical Corp.^a	410,400		3,900,854
Honam Petrochemical Corp.	82,080		4,899,623
KCC Corp.^a	27,360		9,020,332
Korea Zinc Co. Ltd.^a	45,600		5,318,395
LG Chem Ltd.	291,845		25,488,529

			67,162,401

COMMERCIAL SERVICES – 0.25%
S1 Corp.	91,200		5,025,255

			5,025,255

COSMETICS & PERSONAL CARE – 0.55%
AmorePacific Corp.^a	18,240		10,888,052

			10,888,052


Security	Shares	Value
DISTRIBUTION & WHOLESALE – 3.20%
Daewoo International Corp.^a	264,480	$	7,918,127
Hanwha Corp.	246,240		8,423,584
Hyosung Corp.^a	127,685		8,642,102
Samsung C&T Corp.^a	738,720		32,394,048
SK Networks Co. Ltd.^a,b	401,280		6,191,114

			63,568,975

DIVERSIFIED FINANCIAL SERVICES – 9.94%
Daewoo Securities Co. Ltd.^a	684,000		10,364,588
Hana Financial Group Inc.	702,241		25,022,455
Hyundai Securities Co. Ltd.^a	756,967		7,751,108
Korea Investment Holdings Co. Ltd.	218,885		7,236,532
Mirae Asset Securities Co. Ltd.^a	118,564		9,799,578
Samsung Card Co. Ltd.^a	200,645		7,370,558
Samsung Securities Co.^a	273,600		15,000,386
Shinhan Financial Group Ltd.	1,860,480		85,173,044
Tong Yang Securities Inc.^a	392,164		3,558,252
Woori Finance Holdings Co. Ltd.^a	1,323,150		17,558,561
Woori Investment & Securities Co. Ltd.^a	483,360		8,478,442

			197,313,504

ELECTRIC – 2.18%
Korea Electric Power Corp.^a	1,422,720		43,247,343

			43,247,343

ELECTRICAL COMPONENTS & EQUIPMENT – 3.01%
LG Electronics Inc.^a	519,846		48,456,579
LS Corp.^a	100,320		7,351,948
Taihan Electric Wire Co. Ltd.^a	136,800		4,001,359

			59,809,886

ELECTRONICS – 2.46%
LG Display Co. Ltd.^a	983,510		24,431,945
Samsung Electro-Mechanics Co. Ltd.^a	328,320		9,829,399
Samsung SDI Co. Ltd.^a,b	191,520		14,651,131

			48,912,475

ENGINEERING & CONSTRUCTION – 3.98%
Daelim Industrial Co. Ltd.	155,040		9,696,229
Daewoo Engineering & Construction Co. Ltd.	995,034		10,691,430
Doosan Heavy Industries & Construction Co. Ltd.^a	173,280		12,476,033


Security	Shares	Value
GS Engineering & Construction Corp.^a	182,400	$	14,238,222
Hanjin Heavy Industries & Construction Co. Ltd.^a	173,296		4,822,177
Hyundai Engineering & Construction Co. Inc.^a	273,608		14,171,633
Kumho Industrial Co. Ltd.^a	127,680		1,735,388
Samsung Engineering Co. Ltd.	173,280		11,123,402

			78,954,514

ENVIRONMENTAL CONTROL – 0.41%
Woongjin Coway Co. Ltd.^a	264,480		8,088,148

			8,088,148

FOOD – 0.66%
CJ CheilJedang Corp.^a,b	41,040		8,970,080
Lotte Confectionery Co. Ltd.^a	3,500		4,210,671

			13,180,751

GAS – 0.47%
Korea Gas Corp.	127,680		9,228,043

			9,228,043

HOLDING COMPANIES - DIVERSIFIED – 1.87%
GS Holdings Corp.	282,720		7,178,995
LG Corp.	519,841		29,932,988

			37,111,983

HOME BUILDERS – 0.65%
Hyundai Development Co.^a	337,447		12,907,216

			12,907,216

HOUSEHOLD PRODUCTS & WARES – 0.48%
LG Household & Health Care Ltd.^a	54,720		9,497,732

			9,497,732

INSURANCE – 2.20%
Dongbu Insurance Co. Ltd.	191,520		5,417,225
Samsung Fire & Marine Insurance Co. Ltd.	209,535		38,293,200

			43,710,425

INTERNET – 1.68%
LG Dacom Corp.	228,000		4,302,875
NHN Corp.^b	211,584		29,146,478

			33,449,353


Security	Shares	Value
IRON & STEEL – 8.45%
Dongkuk Steel Mill Co. Ltd.	200,641	$	7,223,002
Hyundai Steel Co.^a	309,575		14,470,904
POSCO^a	337,440		146,113,472

			167,807,378

LODGING – 0.53%
Kangwon Land Inc.^a	592,802		10,452,565

			10,452,565

MACHINERY – 0.41%
Doosan Infracore Co. Ltd.^a	419,520		8,186,978

			8,186,978

MANUFACTURING – 0.93%
Cheil Industries Inc.^a	255,360		12,194,618
Doosan Corp.^a,b	54,720		6,206,190

			18,400,808

MULTIPLE UTILITIES – 0.57%
KT Freetel Co. Ltd.^b	428,640		11,277,928

			11,277,928

OIL & GAS – 3.04%
SK Corp.	191,524		19,259,691
SK Energy Co. Ltd.^a	333,522		26,341,163
S-Oil Corp.^a	246,240		14,676,257

			60,277,111

RETAIL – 3.16%
Hyundai Department Store Co. Ltd.	82,080		6,731,329
Lotte Shopping Co. Ltd.	54,725		14,976,628
Shinsegae Co. Ltd.^a	82,080		41,006,080

			62,714,037

SEMICONDUCTORS – 16.61%
Hynix Semiconductor Inc.^a,b	1,778,400		31,684,232
Samsung Electronics Co. Ltd.	611,040		289,555,184
Samsung Techwin Co. Ltd.^a	300,960		8,678,615

			329,918,031

SHIPBUILDING – 5.36%
Daewoo Shipbuilding & Marine Engineering Co. Ltd.^a	528,960		16,977,823
Hyundai Heavy Industries Co. Ltd.^a	228,000		50,147,856
Hyundai Mipo Dockyard Co. Ltd.	63,840		9,263,220


Security	Shares	Value
Samsung Heavy Industries Co. Ltd.^a	893,760	$	25,731,817
STX Shipbuilding Co. Ltd.^a	255,360		4,361,921

			106,482,637

TELECOMMUNICATIONS – 3.90%
KT Corp.	528,291		21,735,179
KT Corp. SP ADR	456,000		9,284,160
LG Telecom Ltd.	738,723		6,492,404
SKTelecom Co. Ltd.	116,500		21,451,235
SKTelecom Co. Ltd. ADR	902,916		18,419,486

			77,382,464

TRANSPORTATION – 1.23%
Hanjin Shipping Co. Ltd.^a	335,660		8,631,169
Korea Line Corp.^a	36,500		5,933,052
STX Pan Ocean Co. Ltd.^a	5,745,600		9,893,470

			24,457,691


TOTAL COMMON STOCKS (Cost: $1,672,604,892)			1,937,565,399

PREFERRED STOCKS – 2.34%

AUTO MANUFACTURERS – 0.26%
Hyundai Motor Co. Ltd.	209,760		5,201,139

			5,201,139

ELECTRICAL COMPONENTS & EQUIPMENT – 0.23%
LG Electronics Inc.	100,326		4,597,546

			4,597,546

SEMICONDUCTORS – 1.85%
Samsung Electronics Co. Ltd.	109,440		36,684,360

			36,684,360


TOTAL PREFERRED STOCKS (Cost: $61,296,309)			46,483,045


Security	Shares	Value
SHORT-TERM INVESTMENTS – 22.01%

MONEY MARKET FUNDS – 22.01%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	4,327,407	$	4,327,407
BGI Cash Premier Fund LLC 2.63%^c,d,e	432,708,302		432,708,302

			437,035,709


TOTAL SHORT-TERM INVESTMENTS
(Cost: $437,035,709)			437,035,709


TOTAL INVESTMENTS IN SECURITIES – 121.92% (Cost: $2,170,936,910)			2,421,084,153

Other Assets, Less Liabilities – (21.92)%			(435,321,011	)


NET ASSETS – 100.00%		$	1,985,763,142

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 98.62%

AIRLINES – 0.38%
China Airlines^a	13,332,588	$	4,544,528
EVA Airways Corp.^a	17,776,396		6,566,523

			11,111,051

APPAREL – 0.50%
Pou Chen Corp.	18,887,594		14,492,985

			14,492,985

AUTO MANUFACTURERS – 0.30%
China Motor Co. Ltd.	5,555,287		3,258,698
Yulon Motor Co. Ltd.	6,767,362		5,471,740

			8,730,438

AUTO PARTS & EQUIPMENT – 0.30%
Cheng Shin Rubber
Industry Co. Ltd.	6,666,084		8,919,676

			8,919,676

BANKS – 7.43%
Chang Hwa Commercial Bank Ltd.	35,552,446		21,193,036
Chinatrust Financial Holding Co. Ltd.	69,993,566		45,385,516
E.Sun Financial Holding Co. Ltd.	28,886,913		11,174,467
First Financial Holding Co. Ltd.	39,361,187		29,953,342
Hua Nan Financial Holdings Co. Ltd.	27,775,824		20,784,750
Mega Financial Holding Co. Ltd.	76,659,136		48,492,287
Taishin Financial Holdings Co. Ltd.	37,774,439		11,678,001
Taiwan Business Bank^a	18,887,000		5,988,649
Taiwan Cooperative Bank Ltd.	29,997,650		22,209,561

			216,859,609

BUILDING MATERIALS – 1.69%
Asia Cement Corp.	15,554,618		17,311,405
Taiwan Cement Corp.	25,553,558		25,198,670
Taiwan Glass Industrial Corp.	8,888,196		6,679,252

			49,189,327

CHEMICALS – 7.25%
Eternal Chemical Co. Ltd.	6,666,066		5,146,766
Formosa Chemicals & Fibre Co.	25,553,393		44,158,156
Formosa Plastics Corp.	36,663,111		71,959,115
Nan Ya Plastic Corp.	45,551,447		71,711,248
Taiwan Fertilizer Co. Ltd.	5,996,000		18,574,710

			211,549,995


Security	Shares	Value
COMMERCIAL SERVICES – 0.13%
Taiwan Secom Co. Ltd.	2,222,610	$	3,876,072

			3,876,072

COMPUTER SYSTEMS – 0.20%
Mosel Vitelic Inc.^a	8,888,750		5,805,956

			5,805,956

COMPUTERS – 11.54%
Acer Inc.	23,331,516		46,976,701
Advantech Co. Ltd.	3,156,293		7,155,652
CMC Magnetics Corp.^a	24,442,400		6,362,867
Compal Electronics Inc.	33,498,348		30,271,511
Firich Enterprises Co. Ltd.^a	1,111,000		4,984,669
Foxconn Technology Co. Ltd.^a	3,729,824		18,626,650
HTC Corp.	5,786,788		108,440,348
Innolux Display Corp.	17,116,912		28,222,444
Inotera Memories Inc.^a	7,777,000		3,020,745
Inventec Co. Ltd.	13,332,652		7,884,265
Lite-On Technology Corp.	18,887,893		18,685,467
MiTAC International Corp.	10,404,584		5,888,827
Qisda Corp.	12,221,211		6,219,495
Quanta Computer Inc.	17,776,387		26,942,460
Wistron Corp.	11,659,396		17,005,904

			336,688,005

DIVERSIFIED FINANCIAL SERVICES – 3.75%
Fubon Financial Holding Co. Ltd.	38,885,000		32,981,602
KGI Securities Co. Ltd.	19,998,000		10,082,066
Polaris Securities Co. Ltd.	19,651,991		9,097,567
SinoPac Financial Holdings Co. Ltd.	55,550,193		19,463,176
Yuanta Financial Holding Co. Ltd.	65,549,076		37,827,167

			109,451,578

ELECTRICAL COMPONENTS & EQUIPMENT – 1.97%
Delta Electronics Inc.	13,609,648		36,809,658
Pacific Electric Wire & Cable Co. Ltd.^b	986		–
Tatung Co. Ltd.^a	33,330,120		12,259,160
Walsin Lihwa Corp.	24,442,069		8,525,042

			57,593,860

ELECTRONICS – 17.82%
Asia Optical Co. Inc.	1,123,048		2,047,538
ASUSTeK Computer Inc.	34,210,243		79,293,829
AU Optronics Corp.	65,549,884		79,084,694


Security	Shares	Value
Cheng Uei Precision Industry Co. Ltd.	2,336,325	$	4,941,115
Chi Mei Optoelectronics Corp.	39,996,629		33,924,466
Chunghwa Picture Tubes Ltd.	65,549,105		13,800,687
HannStar Display Corp.	39,996,675		10,589,519
Hon Hai Precision Industry Co. Ltd.^a	46,662,860		236,732,120
Kinsus Interconnect Technology Corp.	2,234,043		4,342,280
Nan Ya Printed Circuit Board Corp.	1,111,739		5,217,115
Pan-International Industrial Corp.^a	3,333,000		6,129,558
Synnex Technology International Corp.	7,777,502		15,191,012
Tripod Technology Corp.	3,539,682		7,901,376
Unimicron Technology Corp.	7,856,794		8,818,901
Wintek Corp.	8,888,537		5,594,440
Ya Hsin Industrial Co. Ltd.^b	6,845,461		22
Yageo Corp.	21,109,100		6,291,634

			519,900,306

ENERGY - ALTERNATE SOURCES – 0.26%
Motech Industries Inc.	1,338,408		7,638,831

			7,638,831

FOOD – 1.00%
Uni-President Enterprises Co.	26,833,908		29,183,938

			29,183,938

HOME FURNISHINGS – 0.25%
Teco Electric and Machinery Co. Ltd.	16,665,092		7,371,363

			7,371,363

INSURANCE – 4.31%
Cathay Financial Holding Co. Ltd.	54,439,200		104,949,691
Shin Kong Financial Holding Co. Ltd.	37,334,490		20,716,392

			125,666,083

INVESTMENT COMPANIES – 0.90%
China Development Financial Holding Co.	83,141,496		26,362,323

			26,362,323


Security	Shares	Value
IRON & STEEL – 4.00%
China Steel Corp.	82,214,484	$	101,145,348
Feng Hsin Iron & Steel Co.	3,436,050		6,645,921
Tung Ho Steel Enterprise Corp.	6,666,000		8,835,018

			116,626,287

MANUFACTURING – 0.53%
Largan Precision Co. Ltd.	1,134,210		15,464,212

			15,464,212

METAL FABRICATE & HARDWARE – 0.52%
CatcherTechnology Co. Ltd.	4,444,119		15,077,707

			15,077,707

OIL & GAS – 0.92%
Formosa Petrochemical Corp.	11,110,000		26,808,009

			26,808,009

REAL ESTATE – 0.18%
Cathay Real Estate Development Co. Ltd.	7,777,493		3,316,865
Farglory Developers Co. Ltd.	1,112,000		2,073,232

			5,390,097

RETAIL – 0.63%
Far Eastern Department Stores Co. Ltd.	7,006,500		5,176,341
President Chain Store Corp.	4,449,640		13,163,530

			18,339,871

SEMICONDUCTORS – 23.80%
Advanced Semiconductor Engineering Inc.	38,885,371		28,481,580
Epistar Corp.	4,490,047		8,115,057
Everlight Electronics Co. Ltd.	2,271,592		5,438,049
Macronix International Co. Ltd.	25,809,636		10,352,334
MediaTek Inc.	8,137,970		94,570,550
Nanya Technology Corp.^a	23,331,690		7,915,819
Novatek Microelectronics Corp. Ltd.	4,487,980		9,733,586
Powerchip Semiconductor Corp.^a	67,771,901		12,012,332
Powertech Technology Inc.	4,899,915		15,381,178
ProMOS Technologies Inc.^a	49,995,000		6,864,048
Realtek Semiconductor Corp.	3,400,595		6,954,733
RichtekTechnology Corp.	1,224,700		10,212,953


Security	Shares	Value
Siliconware Precision Industries Co. Ltd.	25,553,214	$	35,447,812
Sino-American Silicon Products Inc.	1,489,045		6,775,254
Taiwan Semiconductor Manufacturing Co. Ltd.	191,092,323		356,881,789
Transcend Information Inc.	2,226,000		5,872,382
United Microelectronics Corp.	121,099,501		51,069,293
Vanguard International Semiconductor Corp.	7,817,416		4,189,052
Via Technologies Inc.^a	7,777,861		5,400,950
WaferWorks Corp.	2,289,152		7,766,481
Winbond Electronics Corp.^a	27,775,280		5,037,561

			694,472,793

TELECOMMUNICATIONS – 6.06%
Chunghwa Telecom Co. Ltd.^a	43,329,709		108,125,059
Compal Communications Inc.	2,333,810		3,218,997
D-Link Corp.	4,535,743		5,515,434
Far EasTone Telecommunications Co. Ltd.	14,443,259		21,066,330
Inventec Appliances Corp.	2,455,080		3,884,472
Taiwan Cellular Corp.	16,665,677		29,962,074
Zinwell Corp.	2,635,740		5,014,408

			176,786,774

TEXTILES – 1.02%
Far Eastern Textile Ltd.	24,934,195		23,085,754
Formosa Taffeta Co. Ltd.	8,888,515		6,764,042

			29,849,796

TRANSPORTATION – 0.98%
Evergreen Marine Corp. Ltd.	9,999,467		5,707,096
U-Ming Marine Transport Corp.	4,444,800		11,810,332
Wan Hai Lines Ltd.	10,507,433		5,730,479
Yang Ming Marine Transport Corp.	10,999,305		5,370,959

			28,618,866

TOTAL COMMON STOCKS (Cost: $2,735,551,224)			2,877,825,808


Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.29%

MONEY MARKET FUNDS – 0.29%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	8,301,828	$	8,301,828

			8,301,828


TOTAL SHORT-TERM INVESTMENTS
(Cost: $8,301,828)			8,301,828


TOTAL INVESTMENTS IN SECURITIES – 98.91% (Cost: $2,743,853,052)			2,886,127,636

Other Assets, Less Liabilities – 1.09%			31,880,160


NET ASSETS – 100.00%		$	2,918,007,796

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.35%

AGRICULTURE – 0.80%
Charoen Pokphand Foods PCL NVDR	4,104,000	$	467,453

			467,453

AUTO PARTS & EQUIPMENT – 0.17%
Thai Stanley Electric PCL NVDR	28,500		99,883

			99,883

BANKS – 30.15%
Bangkok Bank PCL NVDR	1,842,000		6,294,217
Bank of Ayudhya PCL NVDR^a	3,573,000		2,139,209
Kasikornbank PCL NVDR	2,133,000		4,485,280
Kiatnakin Bank PCL NVDR	249,000		143,262
Krung Thai Bank PCL NVDR	3,375,000		749,124
Siam City Bank PCL NVDR^a	630,000		259,433
Siam Commercial Bank PCL NVDR	1,083,000		2,482,929
Tisco Bank PCL NVDR	327,000		172,859
TMB Bank PCL NVDR^a	24,477,000		836,393

			17,562,706

BUILDING MATERIALS – 3.98%
Siam Cement PCL NVDR	468,000		2,255,257
TPI Polene PCL NVDR	528,000		64,458

			2,319,715

CHEMICALS – 3.65%
Indorama Polymers PCL NVDR	540,200		152,247
IRPC PCL NVDR	12,144,000		1,454,159
PTT Chemical PCL NVDR	24,000		52,921
Thai Plastic & Chemical PCL NVDR	783,000		466,507

			2,125,834

COAL – 4.05%
Banpu PCL NVDR	207,000		2,357,769

			2,357,769

COMMERCIAL SERVICES – 0.37%
Bangkok Expressway PCL NVDR	414,000		214,013

			214,013

COMPUTERS – 0.53%
CalComp Electronics Thailand PCL NVDR	2,334,000		310,837

			310,837


Security	Shares	Value
DIVERSIFIED FINANCIAL SERVICES – 0.93%
Kim Eng Securities (Thailand) PCL NVDR	351,000	$	168,119
Phatra Securities PCL NVDR	123,000		104,176
Thanachart Capital PCL NVDR	789,000		271,910

			544,205

ELECTRIC – 2.04%
Glow Energy PCL NVDR	684,000		579,322
Ratchaburi Electricity Generating Holding PCL NVDR	543,000		606,593

			1,185,915

ELECTRONICS – 1.20%
Delta Electronics Thai PCL NVDR	675,000		344,991
Hana Microelectronics PCL NVDR	675,000		352,877

			697,868

ENGINEERING & CONSTRUCTION – 1.75%
Airports of Thailand PCL NVDR	636,000		705,841
CH Karnchang PCL NVDR	348,400		46,196
Italian-Thai Development PCL NVDR	2,007,000		268,460

			1,020,497

ENTERTAINMENT – 0.36%
Major Cineplex Group PCL NVDR	561,000		208,081

			208,081

FOOD – 1.29%
Khon Kaen Sugar Industry PCL NVDR	939,000		245,445
Thai Union Frozen Products PCL NVDR	375,000		203,709
Thai Vegetable Oil PCL NVDR	486,000		302,331

			751,485

HEALTH CARE - SERVICES – 1.43%
Bangkok Dusit Medical Service PCL NVDR	312,000		332,593
Bumrungrad Hospital PCL NVDR	456,000		499,416

			832,009

HOME BUILDERS – 1.37%
Asian Property Development PCL NVDR	1,119,000		176,478
Land and Houses PCL NVDR	3,210,000		623,438

			799,916


Security	Shares	Value
HOME FURNISHINGS – 0.27%
Live Inc. PCL NVDR^a	1,230,700	$	158,151

			158,151

IRON & STEEL – 1.46%
G Steel PCL NVDR	8,217,000		309,577
Sahaviriya Steel Industries PCL NVDR	7,329,000		203,346
Tata Steel Thailand PCL NVDR	4,188,300		236,081
Thainox Stainless PCL NVDR	2,874,700		100,749

			849,753

MEDIA – 1.51%
BEC World PCL NVDR	1,242,000		812,523
MCOT PCL NVDR	102,000		67,623

			880,146

OIL & GAS – 25.04%
PTT Exploration & Production PCL NVDR	1,307,800		5,691,069
PTT PCL NVDR	904,900		7,029,890
Thai Oil PCL NVDR	1,281,000		1,861,266

			14,582,225

REAL ESTATE – 3.68%
Amata Corp. PCL NVDR	663,000		212,997
Bangkok Land PCL NVDR^a	10,482,000		137,760
Central Pattana PCL NVDR	816,000		486,168
Erawan Group PCL (The) NVDR	417,200		41,428
Hemaraj Land and Development PCL NVDR	5,649,000		194,679
LPN Development PCL NVDR	669,000		96,911
MBK PCL NVDR	108,000		216,063
Preuksa Real Estate PCL NVDR	1,077,000		239,054
Quality House PCL NVDR	5,292,000		279,747
Rojana Industrial Park PCL NVDR	210,300		73,703
Ticon Industrial Connection PCL NVDR	375,000		162,091

			2,140,601

RETAIL – 4.79%
CP All PCL NVDR	2,907,000		916,928
Home Product Center PCL NVDR	248,700		34,283
PTT Aromatics & Refining PCL NVDR	2,106,000		1,328,551


Security	Shares	Value
Robinson Department Store PCL NVDR	591,000	$	176,057
Siam Makro PCL NVDR	135,000		335,134

			2,790,953

TELECOMMUNICATIONS – 7.04%
Advanced Info Service PCL NVDR	1,047,000		2,721,466
Thaicom PCL NVDR^a	546,000		91,691
Total Access Communication PCL NVDR	927,200		1,117,027
True Corp. PCL NVDR^a	2,202,000		169,780

			4,099,964

TRANSPORTATION – 1.49%
Precious Shipping PCL NVDR	516,000		296,881
Regional Container Lines PCL NVDR	258,000		122,821
Thoresen Thai Agencies PCL NVDR	408,000		449,825

			869,527

TOTAL COMMON STOCKS (Cost: $78,922,333)			57,869,506

WARRANTS – 0.00%

REAL ESTATE – 0.00%
Bangkok Land PCL NVDR (Expires 5/2/13)^b	1,083,411		3

			3


TOTAL WARRANTS (Cost: $0)			3

SHORT-TERM INVESTMENTS – 0.18%

MONEY MARKET FUNDS – 0.18%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	106,946		106,946

			106,946


TOTAL SHORT-TERM INVESTMENTS
(Cost: $106,946)			106,946


	Value
TOTAL INVESTMENTS IN SECURITIES – 99.53% (Cost: $79,029,279)	$	57,976,455

Other Assets, Less Liabilities – 0.47%		271,822


NET ASSETS – 100.00%	$	58,248,277

NVDR – Non-Voting Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

See notes to financial statements.


Security	Shares	Value
COMMON STOCKS – 99.88%

AEROSPACE & DEFENSE – 0.22%
Aselsan Elektronik Sanayi ve Ticaret AS^a	79,878	$	326,943

			326,943

AIRLINES – 0.71%
Turk Hava Yollari Anonim Ortakligi^b	196,513		1,080,198

			1,080,198

AUTO MANUFACTURERS – 2.03%
Ford Otomotiv Sanayi AS	216,053		1,680,920
Otokar Otobus Karoseri Sanayi AS	20,484		252,910
Tofas Turk Otomobil Fabrikasi AS	342,151		1,157,382

			3,091,212

BANKS – 38.32%
Akbank TAS^a	2,292,806		11,924,530
Albaraka Turk Katilim Bankasi AS	260,016		760,808
Asya Katilim Bankasi AS^b	1,001,685		2,202,436
Sekerbank TAS^a	367,441		705,362
Tekstil Bankasi AS^a,b	253,542		381,653
Tekstil Bankasi AS New^a,c	22,587		34,000
Turk Ekonomi Bankasi AS^b	422,206		535,568
Turkiye Garanti Bankasi AS^a,b	5,355,500		16,123,112
Turkiye Halk Bankasi AS^a	855,919		4,777,222
Turkiye Is Bankasi AS^a	2,440,294		11,762,939
Turkiye Vakiflar Bankasi TAO	2,051,353		3,920,556
Yapi ve Kredi Bankasi AS^a,b	2,280,751		5,130,484

			58,258,670

BEVERAGES – 4.79%
Anadolu Efes Biracilik ve Malt Sanayii AS^a	555,707		6,015,264
Coca-Cola Icecek AS	138,520		1,265,130

			7,280,394

BUILDING MATERIALS – 1.76%
Adana Cimento Sanayi TAS Class A	122,497		470,306
Akcansa Cimento Sanayi ve Ticaret AS	140,656		554,298
Bolu Cimento Sanayii AS	228,694		328,778
Cimsa Cimento Sanayi ve Ticaret AS^a	146,285		711,322


Security	Shares	Value
Mardin Cimento Sanayii ve Ticaret AS	142,509	$	602,575

			2,667,279

CHEMICALS – 0.92%
Aksa Akrilik Kimya Sanayii AS^b	166,866		286,459
Petkim Petrokimya Holding AS^a,b	242,281		1,116,644

			1,403,103

COMMERCIAL SERVICES – 0.60%
Ihlas Holding AS^a,b	1,044,696		538,913
Koza Anadolu Metal Madencilik Isletmeleri AS^a,b	95,362		370,964

			909,877

DISTRIBUTION & WHOLESALE – 0.32%
Aygaz AS^a,b	178,298		479,482

			479,482

DIVERSIFIED FINANCIAL SERVICES – 0.47%
Finans Finansal Kiralama AS^b	55,348		203,138
Turkiye Sinai Kalkinma Bankasi AS^a,b	546,258		512,766

			715,904

ELECTRIC – 0.86%
Akenerji Elektrik Uretim AS^b	80,330		740,463
Zorlu Enerji Elektrik Uretim AS^b	130,964		564,834

			1,305,297

ENGINEERING & CONSTRUCTION – 4.66%
Enka Insaat ve Sanayi AS	590,093		5,289,629
TAV Havalimanlari Holding AS^a,b	290,812		1,795,288

			7,084,917

FOOD – 4.50%
BIM Birlesik Magazalar AS	113,448		4,413,199
Migros Turk TAS	80,992		1,479,431
Tat Konserve Sanayii AS^a,b	193,320		408,710
Ulker Biskuvi Sanayi AS^a	209,092		541,075

			6,842,415

HOLDING COMPANIES - DIVERSIFIED – 8.39%
Alarko Holding AS^a	391,741		874,585
Dogan Sirketler Grubu Holdings AS^b	1,447,407		2,117,560
Haci Omer Sabanci Holding AS	1,104,379		4,669,679
KOC Holding AS^a,b	575,890		2,016,225


Security	Shares	Value
Tekfen Holding AS^a	319,058	$	2,212,495
Yazicilar Holding AS	128,011		866,036

			12,756,580

HOME FURNISHINGS – 1.28%
Arcelik AS^a	212,469		830,111
Vestel Beyaz Esya Sanayi ve Ticaret AS^a	213,218		692,395
Vestel Elektronik Sanayi ve Ticaret AS^b	260,194		426,872

			1,949,378

HOUSEWARES – 0.85%
Anadolu Cam Sanayii AS^b	206,499		364,975
Turk Sise ve Cam Fabrikalari AS^b	684,808		932,381

			1,297,356

INSURANCE – 1.99%
Aksigorta AS	303,516		1,309,033
Anadolu Anonim Turk Sigorta Sirketi	487,501		523,574
Anadolu Hayat Emeklilik AS^a	85,383		225,281
Yapi Kredi Sigorta AS^a	75,589		965,238

			3,023,126

IRON & STEEL – 7.33%
Eregli Demir ve Celik Fabrikalari TAS^a	1,419,956		9,606,471
Izmir Demir Celik Sanayi AS	75,927		192,627
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS Class A^b	399,513		402,047
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS Class D^a,b	992,167		939,727

			11,140,872

MACHINERY – 0.34%
Turk Traktor ve Ziraat Makineleri AS	58,246		522,121

			522,121
MEDIA – 1.25%
Dogan Gazetecilik AS^a,b	103,710		217,507
Dogan Yayin Holding AS^b	524,216		882,190
Hurriyet Gazetecilik ve Matbaacilik AS^a,b	564,657		802,219

			1,901,916

MISCELLANEOUS - MANUFACTURING – 0.35%
Trakya Cam Sanayii AS^a,b	386,922		530,076

			530,076


Security	Shares	Value
OIL & GAS – 4.61%
Tupras-Turkiye Petrol Rafinerileri AS	295,916	$	7,006,891

			7,006,891

PHARMACEUTICALS – 0.95%
Deva Holding AS^a,b	41,825		424,440
Eczacibasi Ilac Sanayi ve Ticaret AS	439,533		501,792
Selcuk Ecza Deposu Ticaret ve Sanayi AS^a	368,363		513,995

			1,440,227

REAL ESTATE INVESTMENT TRUSTS – 0.77%
Is Gayrimenkul Yatirim Ortakligi AS^a	479,210		457,934
Sinpas Gayrimenkul Yatirim Ortakligi AS^b	187,414		713,203

			1,171,137

RETAIL – 0.79%
Dogus Otomotiv Servis ve Ticaret AS	132,489		441,443
Turcas Petrolculuk AS^a	164,314		764,253

			1,205,696

TELECOMMUNICATIONS – 10.82%
Turk Telekomunikasyon AS^b	1,375,300		4,931,308
Turkcell Iletisim Hizmetleri AS	1,712,392		11,512,487

			16,443,795


TOTAL COMMON STOCKS (Cost: $150,579,372)			151,834,862

SHORT-TERM INVESTMENTS – 13.57%

MONEY MARKET FUNDS – 13.57%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^d,e	122,540		122,540
BGI Cash Premier Fund LLC 2.63%^d,e,f	20,506,414		20,506,414

			20,628,954


TOTAL SHORT-TERM INVESTMENTS (Cost: $20,628,954)			20,628,954


	Value
TOTAL INVESTMENTS IN SECURITIES – 113.45% (Cost: $171,208,326)	$	172,463,816

Other Assets, Less Liabilities – (13.45)%		(20,442,536	)


NET ASSETS – 100.00%	$	152,021,280

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

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See

Note 5.

See notes to financial statements.

These financial statements relate only to the iShares MSCI Australia, iShares MSCI Brazil, iShares MSCI BRIC, iShares MSCI Canada, iShares MSCI Chile Investable Market (formerly iShares MSCI Chile Index Fund), iShares MSCI Hong Kong, iShares MSCI Israel Capped Investable Market, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Mexico Investable Market (formerly iShares MSCI Mexico Index Fund), iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Africa, iShares MSCI South Korea, iShares MSCI Taiwan, iShares MSCI Thailand Investable Market and iShares MSCI Turkey Investable Market Index Funds (each, a “Fund,” collectively, the “Funds”). The iShares MSCI BRIC and iShares MSCI Chile Investable Market Index Funds commenced operations on November 12, 2007. The iShares MSCI Japan Small Cap Index Fund commenced operations on December 20, 2007. The iShares MSCI Israel Capped Investable Market, iShares MSCI Thailand Investable Market and iShares MSCI Turkey Investable Market Index Funds commenced operations on March 26, 2008.

Each Fund invests in the securities of foreign issuers, 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.

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”).

As of August 31, 2008, the tax year-end of the Funds, the components of net distributable earnings (accumulated losses) on a tax basis were as follows:

For the years ended August 31, 2008 and August 31, 2007, as applicable, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid except for the iShares MSCI Brazil and iShares MSCI Pacific ex-Japan Index Funds.

The tax character of distributions paid during the years ended August 31, 2008 and August 31, 2007 for the iShares MSCI Brazil and iShares MSCI Pacific ex-Japan Index Funds were as follows:

The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights.

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 ordinary income and any net capital gains (taking into account any capital loss carry forwards) 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 year ended August 31, 2008.

From November 1, 2007 to August 31, 2008, the Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer these losses and treat them as arising in the year ending August 31, 2009, as follows:

Certain Funds had tax basis net capital loss carryforwards as of August 31, 2008, the tax year-end of the Funds, as follows:

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

As of August 31, 2008, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for uncertainty in a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and disclosures of tax positions, along with accounting for the related interest and penalties. Management has reviewed the tax positions as of August 31, 2008, inclusive of the prior three open tax return years, as applicable, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

For its investment advisory services to the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Mexico Investable Market 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 of the average daily net assets of these Funds and certain other iShares Funds, as follows:

The Board approved a change to the investment advisory fee structure for the iShares MSCI Australia, iShares MSCI Canada, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Mexico Investable Market and iShares MSCI Singapore Index Funds effective September 1, 2008. For its investment advisory services to each Fund, BGFA will be entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds, as follows:

For its investment advisory services to the iShares MSCI Brazil, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI South Africa, iShares MSCI South Korea, iShares MSCI Taiwan, iShares MSCI Thailand Investable Market and iShares MSCI Turkey Investable Market Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these eight Funds, as follows:

The Board approved a change to the investment advisory fee structure for the iShares MSCI Brazil, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI South Africa, iShares MSCI South Korea, iShares MSCI Taiwan, iShares MSCI Thailand Investable Market and iShares MSCI Turkey Investable Market Index Funds effective September 1, 2008. For its investment advisory services to each Fund, BGFA will be entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these eight Funds, as follows:

For its investment advisory services to the iShares MSCI BRIC Index Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds (iShares MSCI All Country Asia ex Japan and iShares MSCI Emerging Markets Index Funds), as follows:

For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is entitled to an annual investment advisory fee of 0.50% of the average daily net assets of the Fund.

and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, PMMF and TMMF 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, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

Certain directors and officers of the Company are also officers of BGI and/or BGFA.

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2008, were as follows:

In-kind transactions (see Note 4) for the year ended August 31, 2008, were as follows:

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes a substantial replication, or a portfolio sampling representation, of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI BRIC, iShares MSCI Chile Investable Market, iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds which are offered in Creation Units solely or partially for cash in U.S. dollars). Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant Fund for brokerage and market impact expenses relating to investing in portfolio securities.

The Board authorized a three-for-one stock split for the iShares MSCI Pacific ex-Japan Index Fund and a two-for-one stock split for the iShares MSCI South Africa Index Fund, effective July 24, 2008, for the shareholders of record on July 21, 2008. The impact of the stock split was to increase the number of shares outstanding by a factor of three and two, respectively, while decreasing the net asset value per share by the same factors, resulting in no effect to total net assets of these Funds. The financial statements for these Funds have been adjusted to reflect the stock splits.

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Australia Index Fund, iShares MSCI Brazil Index Fund, iShares MSCI BRIC Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Chile Investable Market Index Fund (formerly iShares MSCI Chile Index Fund), iShares MSCI Hong Kong Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund (formerly iShares MSCI Mexico Index Fund), iShares MSCI Pacific ex-Japan Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI South Africa Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, iShares MSCI Thailand Investable Market Index Fund and iShares MSCI Turkey Investable Market Index Fund (the “Funds”), at August 31, 2008, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

Under Section 852(b)(3)(C) of the Internal Revenue Code (the “Code”), the iShares MSCI Brazil and iShares MSCI Pacific ex-Japan Index Funds designate $27,927,664 and $4,616,285, respectively, as long-term capital gain dividends for the fiscal year ended August 31, 2008.

Under Section 871(k)(2)(C) of the Code, the iShares MSCI Brazil and iShares MSCI Pacific ex-Japan Index Funds designate $11,929,001 and $12,003, respectively, as short-term capital gain dividends for the fiscal year ended August 31, 2008.

Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2008:

The Board anticipated that there would be no diminution in the scope of services required of BGFA under the Advisory Contract for the coming year as compared to the scope of services provided by BGFA over the past year. In reviewing the scope of these services, the Board considered BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including over the past year, including investment in technology and increasing the number of their employees supporting the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as any of the Funds; therefore, comparative performance information was generally not available. However, the Board also noted that the Funds had met their investment objectives consistently since their respective inception dates. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contract were appropriate and mitigated in favor of the Board’s approval of the Advisory Contract for the coming year.

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such Fund’s applicable peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Funds, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five- and ten-year periods, as applicable, and the “last quarter” period ended March 31, 2008, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison

The Board also noted that the investment advisory fees and overall expense components for the Funds were generally lower than (or in the case of the iShares MSCI South Korea Index Fund not appreciably higher than) the median or average investment advisory fee rates and overall expenses of the funds in their respective Lipper Groups. The Board also reviewed statistical information from Lipper displaying the effects of the proposed extension of breakpoints in the investment advisory fee rates for certain of the Funds (as discussed below) at various assets levels of such Funds as compared to their respective Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO FUNDS AND PROFITS REALIZED BY BGFA AND AFFILIATES

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board was also presented with materials regarding the proposed extension of breakpoints in the investment advisory fee rates at certain asset levels for all of the Funds, except for the iShares MSCI BRIC and iShares MSCI Pacific ex-Japan Index Funds (effective September 1, 2008). The Board noted that the Advisory Contract already provided for breakpoints in the investment advisory fee rates for most of the Funds as the assets of such Funds, on an aggregated basis with the assets of certain other iShares funds, increase, but also noted that the Advisory Contract did not currently provide for any breakpoints in the investment advisory fee rates for the iShares MSCI Pacific ex-Japan Index Fund as possible future economies of scale for that Fund had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. In light of this history, the Board determined that the proposed extension of breakpoints was appropriate and warranted at this juncture for the identified Funds but that reductions in fee rates for the iShares MSCI Pacific ex-Japan Index Fund or further extensions of breakpoints for the iShares MSCI BRIC Index Fund were not warranted at this juncture. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance

benchmark index comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, with the proposed extension of breakpoints for certain of the Funds, reflects appropriate sharing of economies of scale with the Funds’ shareholders.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that comparative investment advisory/management fee information was available for the iShares MSCI Australia and iShares MSCI Canada Index Funds but not for the other Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as any of those Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. In reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts, with the proposed extension of breakpoints for all the Funds except for the iShares MSCI Pacific ex-Japan and iShares MSCI BRIC Index Funds, do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contracts are fair and reasonable.

The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Funds by BGFA, such as any payment of revenue to BGI, the Company’s securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to BGFA and BGI in connection with any investments by the Funds in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA does not use soft dollars or consider the value of research or other services that may be provided to BGFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BGFA affiliate or purchased from an underwriting syndicate in which a BGFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates there under, with the proposed extension of breakpoints, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract, with the fee schedule to the Advisory Contract as proposed to be amended to reflect the extension of breakpoints, for the coming year.

The tables that follow present information about the differences between the daily market price on secondary markets for shares of a Fund and that Fund’s net asset value. Net asset value, or ”NAV”, is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each Fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such Fund is listed for trading (the “Exchange”), as of the time that the Fund’s NAV is calculated. In the case of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, the NAVs of which are determined prior to the opening of the regular trading day on the Exchange, the Market Price is determined using the midpoint of the bid/ask spread as of the opening of regular trading on the Exchange. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

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 S&P North American Natural Resources Sector (IGE)

iShares S&P North American Technology- Multimedia Networking (IGN)

iShares S&P North American

Technology- Semiconductors (IGW)

iShares S&P North American

Technology- Software (IGV)

iShares S&P North American Technology Sector (IGM)

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. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment & Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares FTSE NAREIT Retail (RTL)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary

Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

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 Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

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 China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (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 Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM(KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares S&P World ex-U.S. Property (WPS)

iShares^® is a registered trademark of Barclays Global Investors, N.A. The iShares Funds are not sponsored, endorsed or issued by Lehman Brothers, nor are they sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., KLD Research & Analytics, Inc., MSCI Inc., MorningstarInc., The NASDAQ Stock Market, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), 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. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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.

The ishares Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the iShares Funds. BGFA is a subsidiary of Barclays Global Investors, NA., neither of which is affiliated with SEI.

©2008 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, NA. 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 Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds File their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’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 Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website. Certain financial information required by regulations or listing exchange rules in jurisdictions outside the U.S. in which iShares Funds are cross-listed may be publicly filed in those jurisdictions. This information is available upon request by calling 1-800-474-2737. This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

4. Fill out the appropriate information and provide the e-mail address where you would like your information sent.

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

For its investment advisory services to the Fund, BGFA is entitled to receive a management fee from the Fund based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds (iShares MSCI Australia Index Fund, iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Italy Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI Netherlands Investable Market Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, iShares MSCI Switzerland Index Fund and iShares MSCI United Kingdom Index Fund, which are offered in separate prospectuses) as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets in excess of $48.0 billion.

Also, all references to 45 Fremont Street in the Prospectus are changed to 400 Howard Street.

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^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (16.13)%, while the total return for the Index was (15.81)%.

The Japanese equity market declined for the reporting period amid signs of a slowing domestic economy. Industrial production fell for the first two quarters of 2008 and Gross Domestic Product (GDP) contracted, bringing an end to the longest period of growth for Japan since World War II. Inflation topped 2% for the first time in a decade, unemployment crept to a two-year high of 4.1%, and export levels fell during the period. Retail sales suffered their sharpest decline in more than two years in July 2008, underlining the weakness of household spending. In response to the public’s discontent over the economy, the Japanese government announced a stimulus package worth US$105.7 billion, including an income tax cut, fuel subsidies, and government loans to companies.

The ten largest Fund holdings represented approximately 23% of the net assets of the Fund as of August 31, 2008. For the reporting period, seven of the Fund’s ten largest holdings declined. Leading decliners, Mizuho Financial Group Inc. was one of three financial companies to deliver negative returns for the reporting period. Takeda Pharmaceutical Co. Ltd. and the Fund’s largest holding, car manufacturer Toyota Motor Corp., also declined notably. On the positive side, Nintendo Co. Ltd., Honda Motor Co. Ltd., and Mitsubishi Corp. posted modest gains.

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 March 1, 2008 to August 31, 2008.

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.

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.


Security	Shares	Value
COMMON STOCKS – 99.90%

ADVERTISING – 0.20%
Dentsu Inc.	5,380	$	10,940,944
Hakuhodo DY Holdings Inc.	75,320		3,886,588

			14,827,532

AGRICULTURE – 0.89%
Japan Tobacco Inc.	13,988		66,766,036

			66,766,036

AIRLINES – 0.16%
All Nippon Airways Co. Ltd.^a	2,076,000		7,728,210
Japan Airlines Corp.^a,b	2,152,000		4,600,452

			12,328,662

APPAREL – 0.22%
ASICS Corp.	461,000		4,107,689
Onward Holdings Co. Ltd.	1,108,000		12,129,039

			16,236,728

AUTO MANUFACTURERS – 9.14%
Fuji Heavy Industries Ltd.	2,152,000		12,492,605
Hino Motors Ltd.	1,076,000		5,314,314
Honda Motor Co. Ltd.	4,949,600		163,276,369
Isuzu Motors Ltd.	4,304,000		16,379,194
Mazda Motor Corp.	2,152,000		11,639,935
Mitsubishi Motors Corp.^a,b	10,760,000		16,260,217
Nissan Motor Co. Ltd.	7,209,500		55,869,058
Suzuki Motor Corp.^a	1,076,000		22,952,684
Toyota Motor Corp.	8,393,300		381,285,128

			685,469,504

AUTO PARTS & EQUIPMENT – 1.85%
Aisin Seiki Co. Ltd.	645,800		17,257,038
Bridgestone Corp.	1,936,800		33,194,637
Denso Corp.	1,506,400		39,629,320
JTEKT Corp.	322,800		4,179,074
NGK Spark Plug Co. Ltd.	629,000		7,030,426
NHK Spring Co. Ltd.	406,000		2,775,877
NOK Corp.	322,800		4,675,804
Sumitomo Rubber Industries Inc.	322,800		2,611,549
Tokai Rika Co. Ltd.	107,600		1,580,414


Security	Shares	Value
Toyoda Gosei Co. Ltd.	215,200	$	4,868,150
Toyota Boshoku Corp.	107,600		1,764,828
Toyota Industries Corp.	645,600		18,857,885

			138,425,002

BANKS – 9.72%
Aozora Bank Ltd.	1,076,000		2,121,760
Bank of Kyoto Ltd. (The)	1,076,000		11,372,237
Bank of Yokohama Ltd. (The)	4,304,000		23,398,848
Chiba Bank Ltd. (The)	2,152,000		11,977,038
Chuo Mitsui Trust Holdings Inc.	2,157,000		12,104,243
Fukuoka Financial Group Inc.	2,158,000		7,695,425
Gunma Bank Ltd.	1,076,000		6,127,325
Hachijuni Bank Ltd. (The)	1,076,000		6,315,706
Hiroshima Bank Ltd. (The)	1,076,000		4,084,884
Hokuhoku Financial Group Inc.	4,309,000		10,442,451
Iyo Bank Ltd. (The)	1,076,000		11,550,703
Joyo Bank Ltd. (The)	2,152,000		10,053,573
Mitsubishi UFJ Financial Group Inc.	31,311,680		242,068,643
Mizuho Financial Group Inc.	30,244		130,980,696
Mizuho Trust & Banking Co. Ltd.^a	4,304,000		6,305,791
Nishi-Nippon City Bank Ltd. (The)	2,152,000		5,710,905
Resona Holdings Inc.^a	16,140		19,095,840
Sapporo Hokuyo Holdings Inc.	1,076		5,879,456
77 Bank Ltd. (The)	1,076,000		6,216,558
Shinsei Bank Ltd.	4,304,000		14,832,490
Shizuoka Bank Ltd. (The)	2,152,000		21,832,315
Sumitomo Mitsui Financial Group Inc.	20,144		124,362,866
Sumitomo Trust and Banking Co. Ltd. (The)	4,304,000		26,174,983
Suruga Bank Ltd.	776,000		8,430,352

			729,135,088

BEVERAGES – 0.92%
Asahi Breweries Ltd.	1,076,000		20,077,402
Coca-Cola West Japan Co. Ltd.	215,200		5,026,786
ITO EN Ltd.^a	215,200		3,323,430
Kirin Holdings Co. Ltd.	2,152,000		32,441,115
Sapporo Holdings Ltd.	1,076,000		7,931,813

			68,800,546


Security	Shares	Value
BUILDING MATERIALS – 1.32%
Asahi Glass Co. Ltd.	3,228,000	$	34,711,597
Daikin Industries Ltd.	760,200		26,057,996
JS Group Corp.	860,800		11,786,674
Matsushita Electric Works Ltd.	1,076,000		10,093,232
Nippon Sheet Glass Co. Ltd.	2,152,000		11,203,686
Taiheiyo Cement Corp.	3,228,000		5,383,718

			99,236,903

CHEMICALS – 3.34%
Asahi Kasei Corp.	3,228,000		15,348,058
Daicel Chemical Industries Ltd.	1,076,000		5,532,439
Denki Kagaku Kogyo Kabushiki Kaisha	2,152,000		6,147,155
DIC Corp.	2,152,000		4,838,406
Hitachi Chemical Co. Ltd.	215,200		3,965,906
JSR Corp.	538,000		9,384,326
Kaneka Corp.	1,076,000		6,841,189
Mitsubishi Chemical Holdings Corp.	3,766,000		21,549,744
Mitsubishi Gas Chemical Co. Inc.	1,076,000		6,157,070
Mitsui Chemicals Inc.	2,152,000		10,747,606
Nitto Denko Corp.	538,000		16,359,364
Shin-Etsu Chemical Co. Ltd.	1,291,200		72,933,020
Showa Denko K.K.	3,228,000		8,685,335
Sumitomo Chemical Co. Ltd.	4,304,000		26,690,550
Taiyo Nippon Sanso Corp.	1,076,000		9,706,556
Tokuyama Corp.	908,000		6,241,585
Tosoh Corp.	2,152,000		7,931,813
Ube Industries Ltd.	3,236,000		11,718,480

			250,778,602

COMMERCIAL SERVICES – 0.91%
Benesse Corp.	215,200		9,498,346
Dai Nippon Printing Co. Ltd.	2,152,000		30,735,775
Kamigumi Co. Ltd.	1,076,000		8,397,807
Toppan Printing Co. Ltd.	2,152,000		19,651,067

			68,282,995


Security	Shares	Value
COMPUTERS – 0.93%
CSK Holdings Corp.	215,200	$	3,444,390
Fujitsu Ltd.	5,380,000		37,725,686
Itochu Techno-Solutions Corp.	107,600		2,994,259
OBIC Co. Ltd.	10,760		1,923,465
Otsuka Corp.	62,000		4,501,820
TDK Corp.	322,800		19,036,351

			69,625,971

COSMETICS & PERSONAL CARE – 1.07%
Kao Corp.	1,646,000		47,017,738
Shiseido Co. Ltd.	1,076,000		25,480,949
Uni-Charm Corp.	107,600		8,060,705

			80,559,392

DISTRIBUTION & WHOLESALE – 4.54%
Canon Marketing Japan Inc.	107,600		1,780,692
Hitachi High-Technologies Corp.	107,600		2,012,698
ITOCHU Corp.	4,304,000		35,256,908
Marubeni Corp.	4,458,000		28,056,337
Mitsubishi Corp.	4,196,400		117,162,792
Mitsui & Co. Ltd.	5,380,000		93,198,802
Sojitz Corp.	3,766,000		10,931,030
Sumitomo Corp.	3,228,000		40,928,155
Toyota Tsusho Corp.	645,700		11,251,036

			340,578,450

DIVERSIFIED FINANCIAL SERVICES – 2.49%
Acom Co. Ltd.	225,960		6,371,229
AEON Credit Service Co. Ltd.	430,470		4,985,956
AIFUL Corp.	161,400		1,320,647
Credit Saison Co. Ltd.	538,000		11,005,391
Daiwa Securities Group Inc.	4,304,000		33,829,182
Mitsubishi UFJ Lease & Finance Co. Ltd.	150,640		5,344,059
Nomura Holdings Inc.	5,595,200		75,530,689
ORIX Corp.	269,000		33,387,975
Promise Co. Ltd.	269,000		6,097,581
Shinko Securities Co. Ltd.	1,076,000		3,182,640
Takefuji Corp.	398,120		5,337,614

			186,392,963


Security	Shares	Value
ELECTRIC – 4.56%
Chubu Electric Power Co. Inc.	2,044,400	$	49,073,135
Chugoku Electric Power Co. Inc. (The)	538,100		12,197,429
Electric Power Development Co. Ltd.	538,000		19,928,680
Hokkaido Electric Power Co. Inc.	538,000		12,096,015
Hokuriku Electric Power Co.	430,400		10,787,266
Kansai Electric Power Co. Inc. (The)	2,367,200		58,457,461
Kyushu Electric Power Co. Inc.	1,183,600		26,229,514
Shikoku Electric Power Co. Inc.	430,400		11,560,617
Tohoku Electric Power Co. Inc.	1,398,900		33,514,305
Tokyo Electric Power Co. Inc. (The)	3,766,000		108,269,247

			342,113,669

ELECTRICAL COMPONENTS & EQUIPMENT – 4.10%
Brother Industries Ltd.	430,600		4,876,364
Casio Computer Co. Ltd.	753,200		8,488,031
Furukawa Electric Co. Ltd. (The)	2,152,000		11,263,174
Hitachi Ltd.	10,760,000		80,210,459
Mitsubishi Electric Corp.	6,456,000		55,562,349
SANYO Electric Co. Ltd.^a,b	4,611,000		9,347,339
Sharp Corp.	3,228,000		41,642,018
Stanley Electric Co. Ltd.	431,600		8,808,975
Sumitomo Electric Industries Ltd.	2,367,200		27,592,794
Toshiba Corp.	9,684,000		54,788,998
Ushio Inc.	322,800		4,949,451

			307,529,952

ELECTRONICS – 4.39%
Advantest Corp.	430,400		9,181,074
Alps Electric Co. Ltd.	538,000		4,932,596
Fanuc Ltd.	538,000		40,749,689
Hirose Electric Co. Ltd.	107,600		10,579,056
Hoya Pentax HD Corp.	1,291,200		26,710,380
IBIDEN Co. Ltd.	430,400		12,889,196
Keyence Corp.	107,692		22,079,217
Kyocera Corp.	538,000		45,756,646


Security	Shares	Value
Mabuchi Motor Co. Ltd.^a	107,600	$	5,066,445
Minebea Co. Ltd.	1,076,000		4,798,747
Mitsumi Electric Co. Ltd.	215,200		5,839,797
Murata Manufacturing Co. Ltd.	645,600		28,792,481
NEC Corp.	6,456,000		30,339,185
NGK Insulators Ltd.	1,076,000		13,127,150
Nippon Electric Glass Co. Ltd.	1,076,500		14,561,640
Omron Corp.	645,600		11,469,401
Secom Co. Ltd.	645,600		30,160,719
Yaskawa Electric Corp.	1,076,000		7,624,455
Yokogawa Electric Corp.	645,600		4,759,088

			329,416,962

ENGINEERING & CONSTRUCTION – 0.77%
JGC Corp.	1,076,000		20,870,583
Kajima Corp.	3,228,000		10,113,062
Obayashi Corp.	2,152,000		10,073,403
Shimizu Corp.	2,152,000		9,200,904
Taisei Corp.	3,228,000		7,465,819

			57,723,771

ENTERTAINMENT – 0.31%
Oriental Land Co. Ltd.	215,200		14,217,775
Toho Co. Ltd.	431,600		9,206,671

			23,424,446

ENVIRONMENTAL CONTROL – 0.14%
Kurita Water Industries Ltd.	322,800		10,648,459

			10,648,459

FOOD – 1.09%
Ajinomoto Co. Inc.	2,152,000		19,770,044
Kikkoman Corp.	1,076,000		13,484,081
Meiji Dairies Corp.	1,076,000		6,206,644
Nippon Meat Packers Inc.^a	1,076,000		17,648,284
Nisshin Seifun Group Inc.	540,000		7,533,379
Nissin Food Products Co. Ltd.	323,600		10,764,303
Yakult Honsha Co. Ltd.	215,200		6,166,985

			81,573,720

FOREST PRODUCTS & PAPER – 0.28%
Nippon Paper Group Inc.	3,228		9,339,710
Oji Paper Co. Ltd.	2,152,000		11,362,322

			20,702,032


Security	Shares	Value
GAS – 0.82%
Osaka Gas Co. Ltd.	6,456,000	$	23,676,462
Toho Gas Co. Ltd.	1,076,000		6,097,581
Tokyo Gas Co. Ltd.	7,532,000		31,717,337

			61,491,380

HAND & MACHINE TOOLS – 0.87%
Fuji Electric Holdings Co. Ltd.	2,152,000		5,135,849
Makita Corp.	322,800		8,477,125
Nidec Corp.	322,800		21,981,037
SMC Corp.	215,200		22,387,542
THK Co. Ltd.	431,000		7,104,897

			65,086,450

HEALTH CARE - PRODUCTS – 0.40%
Terumo Corp.	538,000		30,289,610

			30,289,610

HOME BUILDERS – 0.42%
Daiwa House Industry Co. Ltd.	1,076,000		10,707,948
Haseko Corp.^a	3,766,000		3,886,588
Sekisui Chemical Co. Ltd.	1,076,000		6,751,956
Sekisui House Ltd.	1,076,000		10,341,101

			31,687,593

HOME FURNISHINGS – 3.32%
Matsushita Electric Industrial Co. Ltd.	5,380,015		112,780,780
Pioneer Corp.	645,600		4,991,093
Sony Corp.	3,120,400		121,911,965
Yamaha Corp.	538,000		9,557,835

			249,241,673

HOUSEWARES – 0.11%
TOTO Ltd.^a	1,076,000		8,070,620

			8,070,620

INSURANCE – 2.57%
Aioi Insurance Co. Ltd.	1,076,000		5,393,633
Mitsui Sumitomo Insurance Group Holdings Inc.^b	1,216,100		40,452,624
Nipponkoa Insurance Co. Ltd.^a	1,076,000		7,168,376
Sompo Japan Insurance Inc.	2,152,000		19,730,385
Sony Financial Holdings Inc.	2,152		8,050,790
T&D Holdings Inc.	645,600		34,503,386
Tokio Marine Holdings Inc.	2,259,600		77,662,363

			192,961,557


Security	Shares	Value
INTERNET – 1.35%
Dena Co. Ltd.^a	1,076	$	5,324,229
Rakuten Inc.	21,650		12,169,085
SBI Holdings Inc.	49,730		9,036,403
SoftBank Corp.	2,259,600		37,810,952
Trend Micro Inc.^a	541,500		18,561,438
Yahoo! Japan Corp.	47,344		18,344,300

			101,246,407

IRON & STEEL – 3.26%
Daido Steel Co. Ltd.	1,076,000		6,057,922
JFE Holdings Inc.	1,614,250		69,314,951
Kobe Steel Ltd.	8,608,000		20,939,986
Nippon Steel Corp.	16,140,000		77,781,341
Nisshin Steel Co. Ltd.	3,236,000		8,766,496
Sumitomo Metal Industries Ltd.	11,836,000		53,113,403
Tokyo Steel Manufacturing Co. Ltd.	431,000		4,606,865
Yamato Kogyo Co. Ltd.	107,600		3,975,821

			244,556,785

LEISURE TIME – 0.54%
Namco Bandai Holdings Inc.	645,698		8,020,280
Sankyo Co. Ltd.	215,200		10,271,698
Sega Sammy Holdings Inc.	322,800		3,099,356
Shimano Inc.	215,200		8,804,312
Yamaha Motor Co. Ltd.	645,800		10,128,096

			40,323,742

MACHINERY – 0.40%
Hitachi Construction Machinery Co. Ltd.	325,800		7,775,370
Japan Steel Works Ltd. (The)	1,076,000		18,838,056
Okuma Corp.	493,000		3,611,472

			30,224,898

MACHINERY - CONSTRUCTION & MINING – 0.80%
Komatsu Ltd.	2,797,600		59,676,978

			59,676,978

MACHINERY - DIVERSIFIED – 0.54%
Amada Co. Ltd.	1,076,000		6,613,149
Kubota Corp.	3,228,000		23,051,832
Sumitomo Heavy Industries Ltd.	2,152,000		10,648,459

			40,313,440


Security	Shares	Value
MANUFACTURING – 2.66%
FUJIFILM Holdings Corp.	1,506,400	$	42,058,438
IHI Corp.	4,310,000		7,466,298
Kawasaki Heavy Industries Ltd.	4,304,000		9,637,153
Konica Minolta Holdings Inc.	1,614,000		22,590,795
Mitsubishi Heavy Industries Ltd.	9,684,000		46,936,503
Nikon Corp.^a	1,076,000		35,395,715
Olympus Corp.	1,076,000		35,395,715

			199,480,617

MEDIA – 0.10%
Fuji Television Network Inc.	1,655		2,400,341
Jupiter Telecommunications Co. Ltd.	4,304		3,295,668
Tokyo Broadcasting System Inc.^a	107,600		1,783,666

			7,479,675

METAL FABRICATE & HARDWARE – 0.23%
Maruichi Steel Tube Ltd.	107,600		3,242,129
NSK Ltd.	1,076,000		7,822,751
NTN Corp.	1,076,000		6,057,922

			17,122,802

MINING – 0.68%
Dowa Holdings Co. Ltd.	1,076,000		6,107,496
Mitsubishi Materials Corp.	3,228,000		11,630,021
Mitsui Mining & Smelting Co. Ltd.	2,152,000		5,810,053
OSAKA Titanium technologies Co. Ltd.^a	78,400		3,055,812
Sumitomo Metal Mining Co. Ltd.	1,740,000		22,478,507
Toho Titanium Co. Ltd.^a	107,600		1,617,098

			50,698,987

OFFICE & BUSINESS EQUIPMENT – 2.61%
Canon Inc.	3,228,050		147,236,559
Ricoh Co. Ltd.	2,152,000		36,129,408
Seiko Epson Corp.	430,400		12,571,924

			195,937,891

OIL & GAS – 1.26%
Cosmo Oil Co. Ltd.	2,152,000		6,385,109
Idemitsu Kosan Co. Ltd.	34,000		3,051,463
INPEX Holdings Inc.	2,152		23,597,144


Security	Shares	Value
Japan Petroleum Exploration Co. Ltd.	38,000	$	2,542,087
Nippon Mining Holdings Inc.	2,690,000		15,243,953
Nippon Oil Corp.	4,304,500		27,209,279
Showa Shell Sekiyu K.K.	645,700		7,395,578
TonenGeneral Sekiyu K.K.	1,076,000		8,734,910

			94,159,523

PACKAGING & CONTAINERS – 0.13%
Toyo Seikan Kaisha Ltd.	538,000		9,885,022

			9,885,022

PHARMACEUTICALS – 5.61%
Alfresa Holdings Corp.	107,600		7,069,228
Astellas Pharma Inc.	1,506,430		68,849,507
Chugai Pharmaceutical Co. Ltd.	645,600		10,743,641
Daiichi Sankyo Co. Ltd.	2,152,069		65,439,555
Eisai Co. Ltd.	753,200		30,259,866
Hisamitsu Pharmaceutical Co. Inc.	107,600		4,818,576
Kyowa Hakko Kogyo Co. Ltd.	754,000		8,337,249
Mediceo Paltac Holdings Co. Ltd.	430,400		6,523,916
Mitsubishi Tanabe Pharma Corp.	1,076,000		15,229,081
Ono Pharmaceutical Co. Ltd.	215,200		11,362,322
Santen Pharmaceutical Co. Ltd.	107,600		2,929,813
Shionogi & Co. Ltd.	1,076,000		24,539,047
Suzuken Co. Ltd.	215,200		7,773,177
Taisho Pharmaceutical Co. Ltd.	944,000		20,180,419
Takeda Pharmaceutical Co. Ltd.	2,582,400		136,347,864

			420,403,261

REAL ESTATE – 2.53%
AEON Mall Co. Ltd.	107,600		3,133,066
Daito Trust Construction Co. Ltd.	215,200		9,022,437
Leopalace21 Corp.	430,400		4,425,952
Mitsubishi Estate Co. Ltd.	3,527,000		79,136,098
Mitsui Fudosan Co. Ltd.	2,628,000		55,817,001
Nomura Real Estate Holdings Inc.^a	107,600		2,240,737
NTT Urban Development Corp.	3,228		4,372,412
Sumitomo Realty & Development Co. Ltd.	1,076,000		21,862,060


Security	Shares	Value
Tokyo Tatemono Co. Ltd.	1,076,000	$	5,264,741
Tokyu Land Corp.	1,076,000		4,630,196

			189,904,700

REAL ESTATE INVESTMENT TRUSTS – 0.47%
Japan Prime Realty Investment Corp.	1,076		2,357,731
Japan Real Estate Investment Corp.	1,076		10,152,720
Japan Retail Fund Investment Corp.	1,076		4,511,219
Nippon Building Fund Inc.	1,318		14,427,865
Nomura Real Estate Office Fund Inc.	520		3,761,345

			35,210,880

RETAIL – 2.84%
AEON Co. Ltd.	1,829,200		21,271,139
Citizen Watch Co. Ltd.	1,183,600		8,277,838
FamilyMart Co. Ltd.	215,200		8,804,313
Fast Retailing Co. Ltd.	107,600		11,035,135
Isetan Mitsukoshi Holdings Ltd. Class L^a,b	1,023,460		11,561,962
J. Front Retailing Co. Ltd.	1,216,000		6,678,056
Lawson Inc.	215,200		9,914,766
Marui Group Co. Ltd.	968,400		7,156,478
Nitori Co. Ltd.	107,600		6,028,178
Seven & I Holdings Co. Ltd.	2,582,480		76,147,763
Shimamura Co. Ltd.	47,700		2,698,715
Takashimaya Co. Ltd.	1,076,000		9,280,221
UNY Co. Ltd.	1,078,000		12,019,166
USS Co. Ltd.	75,320		5,219,133
Yamada Denki Co. Ltd.	236,720		17,253,676

			213,346,539

SEMICONDUCTORS – 0.92%
Elpida Memory Inc.^b	322,800		7,079,143
NEC Electronics Corp.^a,b	107,600		2,761,262
Rohm Co. Ltd.	323,200		18,821,691
Shinko Electric Industries Co. Ltd.	215,200		3,041,850
Sumco Corp.	322,800		6,528,874
Tokyo Electron Ltd.	538,052		30,937,060

			69,169,880


Security	Shares	Value
SHIPBUILDING – 0.06%
Mitsui Engineering & Shipbuilding Co. Ltd.	2,152,000	$	4,402,156

			4,402,156

SOFTWARE – 0.31%
Konami Corp.	323,600		10,018,852
Nomura Research Institute Ltd.	215,200		4,937,554
Oracle Corp.	107,600		4,729,343
Square Enix Co. Ltd.	107,600		3,579,231

			23,264,980

STORAGE & WAREHOUSING – 0.05%
Mitsubishi Logistics Corp.	319,000		3,674,269

			3,674,269

TELECOMMUNICATIONS – 3.06%
Hikari Tsushin Inc.	107,600		2,766,220
KDDI Corp.	8,608		50,763,603
Nippon Telegraph and Telephone Corp.	16,140		80,607,049
NTT Data Corp.	4,304		17,886,238
NTT DoCoMo Inc.	48,420		77,320,304

			229,343,414

TEXTILES – 0.75%
Kuraray Co. Ltd.	1,076,000		11,382,152
Mitsubishi Rayon Co. Ltd.	1,076,000		2,944,686
Nisshinbo Industries Inc.	1,076,000		12,026,611
Teijin Ltd.	3,228,000		10,469,993
Toray Industries Inc.^a	4,304,000		19,194,988

			56,018,430

TOYS, GAMES & HOBBIES – 2.05%
Nintendo Co. Ltd.	322,800		154,075,467

			154,075,467

TRANSPORTATION – 4.79%
Central Japan Railway Co.	5,132		53,767,187
East Japan Railway Co.	10,760		86,258,466
Hankyu Hanshin Holdings Inc.	3,233,800		14,392,310
Kawasaki Kisen Kaisha Ltd.	2,152,000		15,506,695
Keihin Electric Express Railway Co. Ltd.^a	1,080,000		6,946,234
Keio Corp.	2,152,000		12,076,185
Kintetsu Corp.^a	5,384,000		16,818,023
Mitsui O.S.K. Lines Ltd.	3,228,000		38,905,543


Security	Shares	Value
Nippon Express Co. Ltd.	2,152,000	$	10,172,550
Nippon Yusen Kabushiki Kaisha	3,228,000		26,115,494
Odakyu Electric Railway Co. Ltd.	1,076,000		7,475,734
Tobu Railway Co. Ltd.	3,228,000		14,782,917
Tokyu Corp.	3,228,000		16,716,296
West Japan Railway Co.	5,380		26,224,556
Yamato Holdings Co. Ltd.	1,076,000		12,799,963

			358,958,153

VENTURE CAPITAL – 0.05%
JAFCO Co. Ltd.	107,600		3,747,782

			3,747,782


TOTAL COMMON STOCKS (Cost: $8,102,377,852)			7,492,032,946

SHORT-TERM INVESTMENTS – 2.27%

MONEY MARKET FUNDS – 2.27%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,d	86,309		86,309
BGI Cash Premier Fund LLC 2.63%^c,d,e	169,869,850		169,869,850

			169,956,159


TOTAL SHORT-TERM INVESTMENTS (Cost: $169,956,159)			169,956,159


TOTAL INVESTMENTS IN SECURITIES – 102.17% (Cost: $8,272,334,011)			7,661,989,105

Other Assets, Less Liabilities – (2.17)%			(162,452,787	)


NET ASSETS – 100.00%		$	7,499,536,318

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

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 MSCI 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.

Pursuant to 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.

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”). The preparation of 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.

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”).

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

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

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 rate different 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 on the respective dates 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 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.

As of August 31, 2008, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $1,704,867, unrealized depreciation of $666,724,525, and capital and other losses of $336,385,711, for net accumulated losses of $1,001,405,369.

For the years ended August 31, 2008 and August 31, 2007, the tax characterization of distributions paid for the Fund represents ordinary income. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for the Fund.

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 ordinary income and any net capital 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 year ended August 31, 2008.

From November 1, 2007 to August 31, 2008, the Fund incurred net realized capital losses of $112,520,757. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2009.

As of August 31, 2008, 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, $8,733,802, $68,122,871, $27,817,841 and $44,443,527 expiring in 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, 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 marked-to-market gains.

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 August 31, 2008, the cost of investments for federal income tax purposes was $8,328,735,507. Net unrealized depreciation was $666,746,402, of which $579,750,317 represented gross unrealized appreciation on securities and $1,246,496,719 represented gross unrealized depreciation on securities.

The Fund adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for uncertainty in a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and disclosures of tax positions, along with accounting for the related interest and penalties. Management has reviewed the tax positions as of August 31, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Fund’s financial statements.

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.

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 of the average daily net assets of the Fund and certain other iShares Funds, as follows:

The Board approved a change to the investment advisory fee structure for the Fund effective September 1, 2008. For its investment advisory services to the Fund, BGFA will be entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds, as follows:

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 Fund. BarCap and BGI are affiliates of BGFA, the Fund’s 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 year ended August 31, 2008, BGI earned securities lending agent fees of $1,757,400.

Cross trades for the year ended August 31, 2008 were executed by the Fund pursuant to Rule 17a-7 under the 1940 Act. 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.

advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statement of Operations. Income distributions earned by the Fund from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statement of Operations.

The Fund may invest its securities lending cash collateral, if any, in the BGI Cash Premier Fund LLC (“Premier Fund”), an affiliated private money market fund managed by BGFA. Although the Premier Fund is not registered as an investment company under the 1940 Act, it intends to operate as a money market fund in compliance with Rule 2a-7 under the 1940 Act. See Note 5 for additional information regarding the Premier Fund.

Certain directors and officers of the Company are also officers of BGI and/or BGFA.

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2008, aggregated $379,737,187 and $503,759,318, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2008, aggregated $1,000,551,278 and $3,328,260,294, respectively.

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 deposit of a designated portfolio of equity securities, which constitutes a substantial replication, or a portfolio sampling representation of the securities involved in the MSCI Japan Index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

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 August 31, 2008, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in the Premier Fund. The Premier Fund seeks to achieve its investment objective by investing in a portfolio of high-quality, short-term fixed-income instruments, including money market funds (which may be managed by BGFA or its affiliate) and other instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition.

The market value of the securities on loan as of August 31, 2008 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Fund’s Statement of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Japan Index Fund (the “Fund”) at August 31, 2008, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at August 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

For the fiscal year ended August 31, 2008, the Fund earned foreign source income of $157,120,292 and paid foreign taxes of $10,799,226 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).

Under Section 854(b)(2) of the Code, the Fund hereby designates the maximum amount of $103,928,863 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2008.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Fund. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 18-19, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Fund, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

The Board anticipated that there would be no diminution in the scope of services required of BGFA under the Advisory Contract for the coming year as compared to the scope of services provided by BGFA over the past year. In reviewing the scope of these services, the Board considered BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including over the past year, including investment in technology and increasing the number of their employees supporting the Fund. The Board also considered BGFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Fund; therefore, comparative performance information was generally not available. However, the Board also noted that the Fund had met its investment objective consistently since its inception date. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Fund under the Advisory Contract were appropriate and mitigated in favor of the Board’s approval of the Advisory Contract for the coming year.

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising the Fund’s peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the Lipper Group and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Group, the statistical information may or may not provide meaningful direct comparisons to the Fund. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five- and ten-year, and “last quarter” periods ended March 31, 2008, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper provided, and the Board reviewed, a comparison of the Fund’s performance to that of its relevant performance benchmark index.

Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)

The Board noted that the Fund performed in line with its performance benchmark index over relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expense components for the Fund were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in its respective Lipper Group. The Board also reviewed statistical information from Lipper displaying the effects of the current breakpoints in the investment advisory fee rates for the Fund (as discussed below) at various assets levels of the Fund as compared to the Lipper Group. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in its Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO THE FUND AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Fund based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BGFA and its affiliates from the Fund’s operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Company (including any securities lending by the Fund). The Board also discussed BGFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BGFA and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate.

In connection with its review of the Fund’s profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract already provided for breakpoints (effective September 1, 2008) in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board was also presented with materials regarding the proposed extension of breakpoints in the investment advisory fee rates at certain asset levels for the Fund. The Board also discussed the substantial growth in assets of certain iShares funds, including the Fund, over the last few years. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and the BGFA had incurred operating losses during earlier years when the iShares funds, including the Fund, had not yet reached scale. In light of this history, the Board determined that the proposed extension of breakpoints were appropriate and warranted at this juncture for the Fund. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, with the proposed extension of breakpoints, reflects appropriate sharing of economies of scale with the Fund’s shareholders.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)

of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). In reviewing the comparative investment advisory/management fee information, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Fund in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Fund and the Other Accounts under differing regulatory requirements and client guidelines. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

The Board reviewed any ancillary revenue received by BGFA and/or its affiliates in connection with the services provided to the Fund by BGFA, such as any payment of revenue to BGI, the Company’s securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to BGFA and BGI in connection with any investments by the Fund in other funds for which BGFA provides investment advisory services and/or BGI provides administration services. The Board noted that BGFA does not use soft dollars or consider the value of research or other services that may be provided to BGFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BGFA affiliate or purchased from an underwriting syndicate in which a BGFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Fund and its shareholders to approve the Advisory Contract, with the fee schedule to the Advisory Contract as proposed to be amended to reflect the extension of breakpoints, for the coming year.

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

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

The following information shows the frequency distributions of premiums and discounts for the Fund. The information shown for the Fund is for five calendar years through the date of the most recent calendar quarter-end.

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

iShares 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 S&P North American Natural Resources Sector (IGE)

iShares S&P North American

Technology-Multimedia Networking (IGN)

iShares S&P North American

Technology-Semiconductors (IGW)

iShares S&P North American

Technology-Software (IGV)

iShares S&P North American Technology

Sector (IGM)

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. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment &

Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares FTSE NAREIT Retail (RTL)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary

Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

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 Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications

Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

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 China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (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 Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate

Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM (KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North

America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares S&P World ex-U.S. Property (WPS)

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.

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 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 U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on

Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’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 monthly basis on the Fund’s website.

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.

4. Fill out the appropriate information and provide the e-mail address where you would like

The information in this Supplement updates information in, and should be read in conjunction with, the Prospectus for the Fund.

Effective August 12, 2008, the second and fourth paragraphs under the heading “Management” beginning on page 12 of the Prospectus are hereby deleted in their entirety and replaced with the following:

Total returns for the period 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 period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) 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 primary 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 Market 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 8/31/08
Sector/Investment Type	Percentage of Net Assets
Financial	20.28	%

Energy	17.63

Basic Materials	14.49

Communications	14.23

Technology	11.08

Industrial	7.58

Consumer Non-Cyclical	4.40

Utilities	4.27

Consumer Cyclical	3.30

Diversified	1.62

Exchange-Traded Funds	0.44

Short-Term and Other Net Assets	0.68


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 8/31/08
Security	Percentage of Net Assets
OAO Gazprom SP ADR (Russia)	3.16	%

Samsung Electronics Co. Ltd. GDR (South Korea)	2.90

Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR (Taiwan)	2.79

Petroleo Brasileiro SA Preferred SP ADR (Brazil)	2.61

Petroleo Brasileiro SA ADR (Brazil)	2.50

Chunghwa Telecom Co. Ltd. SP ADR (Taiwan)	2.49

POSCO ADR (South Korea)	2.39

China Mobile Ltd. (China)	2.07

Companhia Vale do Rio Doce Preferred SP ADR (Brazil)	1.84

Banco Itau Holding Financiera SA Preferred ADR (Brazil)	1.66


TOTAL	24.41	%

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^SM (the “Index”). The Index is designed to measure equity market performance in the global emerging markets. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2008 (the “reporting period”), the total return for the Fund was (8.36)%, while the total return for the Index was (10.09)%.

Emerging markets stocks fell for the reporting period, with the entire decline occurring in the last six months. The negative performance ended a five-year rally in emerging equity markets (as represented by the Index) that produced average annual returns of more than 35% between March 2003 and March 2008.

Emerging market stock markets advanced during the first half of the reporting period thanks to solid economic growth in many developing nations. Most notably, China – the world’s fourth-largest economy – generated double-digit economic growth in 2007, and economic activity was also robust in India and Latin America. Continued strength in demand for commodities – which are the primary exports of many developing countries – also contributed to the gains in emerging country stock markets.

However, emerging markets fell sharply in the second half of the reporting period as the main supporting factors reversed course. Global economic activity began to weaken as an economic slowdown in the U.S. spread to Europe and other developed regions. The sluggish economic environment dampened demand for exported goods, curtailing economic growth in developing countries. In addition, prices for energy and other commodities eased after peaking in mid-2008, putting further downward pressure on emerging economies.

Emerging markets in Asia suffered the largest declines during the reporting period. China and India – two of the top-performing equity markets worldwide in 2007 – were among the biggest decliners in the first eight months of 2008 as a sharp decline in exports to developed nations weighed on economic growth in both countries. The South Korean stock market also slumped as inflation reached a

seven-year high, squeezing profit margins and undermining the country’s economy and currency. The lone exception to the stock market weakness in emerging Asia was Indonesia, which posted a positive return for the reporting period as an increase in domestic consumption helped offset weaker export growth.

In Eastern Europe and the Middle East, market performance was generally negative but better than Index performance as a whole. The best performers included Israel and the Czech Republic, both of which maintained robust economic growth rates despite the challenging global environment. Russia, the largest market in this region, and Turkey were the weakest performers.

Latin American markets bucked the trend in emerging markets, generating double-digit gains for the reporting period. Brazil, the largest market in Latin America, was the best performer, benefiting from a combination of strong raw materials exports, a recent offshore oil discovery, and healthy domestic demand. Markets in Colombia and Argentina also advanced during the reporting period. The weaker performers in the region included Mexico and Peru, though even these markets held up better than the overall Index.

Looking at the Fund’s ten largest holdings as of August 31, 2008, the strongest performer for the reporting period was Brazilian energy producer Petroleo Brasileiro SA, whose shares benefited from a 56% increase in the price of crude oil. Other top performers included Brazilian nickel and iron-ore producer Companhia Vale do Rio Doce and Chinese telecommunications company Chunghwa Telecom Co. Ltd. On the downside, the largest decliners among the Fund’s top ten holdings were South Korean electronics manufacturer Samsung Electronics Co. Ltd., as well as POSCO, a South Korean steel producer.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2008 to August 31, 2008.

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.


Security	Shares	Value
COMMON STOCKS – 88.99%

ARGENTINA – 0.84%
Petrobras Energia Participaciones SA SP ADR	2,127,014	$	24,120,339
Tenaris SA ADR	2,673,124		146,193,152

			170,313,491

BRAZIL – 5.79%
Centrais Eletricas Brasileiras SA SP ADR	450,400		8,108,371
Companhia de Saneamento Basico do Estado de Sao Paulo ADR	337,800		15,133,440
Companhia Siderurgica Nacional SP ADR^a	2,550,390		88,524,037
Companhia Vale do Rio Doce ADR	11,258,874		298,923,105
CPFL Energia SA ADR^a	225,200		14,167,332
Empresa Brasileira de Aeronautica SA ADR	2,589,800		87,923,710
Gafisa SA ADR^a	819,728		23,509,799
Petroleo Brasileiro SA ADR	9,618,292		507,268,720
TAM SA ADR^a	1,086,353		21,140,429
Unibanco - Uniao de Bancos Brasileiros SA Units GDR	869,272		103,930,160
Vivo Participacoes SA ADR	1,126,000		5,888,980

			1,174,518,083

CHILE – 2.46%
Banco Santander Chile SA ADR	2,142,778		94,303,660
Compania de Telecomunicaciones de Chile SA SP ADR	2,652,858		14,723,362
Enersis SA SP ADR	6,377,294		109,306,819
LAN Airlines SA SP ADR^a	2,856,441		33,506,053
Sociedad Quimica y Minera de Chile SA SP ADR	6,484,195		248,474,352

			500,314,246

CHINA – 14.68%
Agile Property Holdings Ltd.	15,764,000		11,755,211
Air China Ltd. Class H^a	29,276,000		15,154,238


Security	Shares	Value
Aluminum Corp. of China Ltd. Class H^a	6,756,000	$	6,076,699
Angang New Steel Co. Ltd. Class H	15,765,320		21,654,022
Anhui Conch Cement Co. Ltd. Class H^a,b	2,252,000		11,772,523
Bank of China Ltd. Class H^a	159,892,000		69,449,231
Bank of Communications Co. Ltd. Class H^a	53,028,000		61,624,519
Beijing Capital International Airport Co. Ltd. Class H^a	18,020,000		14,314,872
Beijing Enterprises Holdings Ltd.	4,504,000		16,879,721
Belle International Holdings Ltd.^a	16,904,000		17,110,298
Chaoda Modern Agriculture (Holdings) Ltd.	2,280,175		2,430,706
China Agri-Industries Holdings Ltd.^a,b	15,764,000		10,704,917
China Coal Energy Co. Class H	14,638,000		24,831,945
China Communications Construction Co. Ltd. Class H^a	30,402,000		52,041,477
China Construction Bank Class H^a	217,710,000		178,525,128
China COSCO Holdings Co. Ltd. Class H	15,764,000		30,377,726
China Eastern Airlines Corp. Ltd. Class H^a,b	77,268,000		16,236,205
China Everbright Ltd.^a	25,000,000		45,485,121
China High Speed Transmission Equipment Group Co. Ltd.	2,252,000		4,420,467
China Life Insurance Co. Ltd. Class H^a	58,552,000		223,937,628
China Mengniu Dairy Co. Ltd.	4,504,000		13,705,756
China Merchants Bank Co. Ltd. Class H^a	18,016,000		60,940,120
China Merchants Holdings (International) Co. Ltd.	9,008,000		33,586,316
China Mobile Ltd.^a	36,595,000		420,117,493


Security	Shares	Value
China National Building Material Co. Ltd. Class H^a	11,260,000	$	17,629,931
China Overseas Land & Investment Ltd.^a	31,528,000		52,918,646
China Petroleum & Chemical Corp. Class H	117,104,000		112,831,555
China Railway Construction Corp. Class H^b	10,697,000		14,802,217
China Railway Group Ltd. Class H^a,b	22,520,000		17,456,805
China Resources Enterprises Ltd.^a	15,778,000		43,160,934
China Resources Land Ltd.^a	36,064,000		42,695,968
China Resources Power Holdings Co. Ltd.^a	6,756,000		16,793,158
China Shenhua Energy Co. Ltd. Class H	11,823,000		40,900,862
China Shipping Development Co. Ltd. Class H^a	20,286,000		48,552,802
China Southern Airlines Co. Ltd. Class H^a,b	22,520,000		7,126,993
China Telecom Corp. Ltd. Class H	29,324,000		14,991,225
China Travel International Investment Hong Kong Ltd.^a	77,562,951		17,093,216
CITIC Pacific Ltd.^a	12,386,000		43,403,966
CITIC Resources Holdings Ltd.^a,b	39,453,000		9,452,847
CNOOC Ltd.	129,490,000		200,089,612
COSCO Pacific Ltd.	6,756,000		10,352,895
Datang International Power Generation Co. Ltd. Class H^a	18,032,000		12,014,017
Denway Motors Ltd.	42,788,000		15,350,447
Dongfang Electric Co. Ltd. Class H	4,504,000		14,023,153
Dongfeng Motor Group Co. Ltd. Class H^a	11,260,000		4,804,228
GOME Electrical Appliances Holdings Ltd.^a	54,048,000		22,367,794
Guangdong Investment Ltd.	15,768,110		5,394,260
Guangshen Railway Co. Ltd. Class H^a,c	72,134,363		32,625,555


Security	Shares	Value
Guangzhou Investment Co. Ltd.	34,834,000	$	4,686,339
Guangzhou R&F Properties Co. Ltd. Class H^a	900,800		1,581,211
Harbin Power Equipment Co. Ltd. Class H^a	6,756,000		8,431,204
Hidili Industry International Development Ltd.^a	7,882,000		9,230,466
Hopson Development Holdings Ltd.	6,756,000		6,751,888
Huaneng Power International Inc. Class H^a	24,772,000		18,472,474
Industrial and Commercial Bank of China Class H^a	233,100,000		161,577,372
Jiangsu Expressway Co. Ltd. Class H	6,762,000		5,215,701
Jiangxi Copper Co. Ltd. Class H	22,538,000		36,212,117
KWG Property Holding Ltd.^a	5,630,000		2,596,880
Lenovo Group Ltd.^a	47,292,000		32,114,751
Li Ning Co. Ltd.^a	4,504,000		11,264,689
Maanshan Iron & Steel Co. Ltd. Class H^a	24,772,000		11,235,835
Nine Dragons Paper Holdings Ltd.^a	24,772,000		15,298,509
Parkson Retail Group Ltd.^a	2,815,000		4,068,446
PetroChina Co. Ltd. Class H	137,372,000		176,714,805
Ping An Insurance (Group) Co. of China Ltd. Class H^a	12,389,500		91,594,753
Shanghai Industrial Holdings Ltd.^a	4,508,000		12,245,056
Shimao Property Holdings Ltd.^a	2,252,000		2,550,713
Shui On Land Ltd.	12,949,000		9,888,342
Sinofert Holdings Ltd.^a	37,526,000		24,569,379
Sino-Ocean Land Holdings Ltd.	10,697,000		5,317,833
Sinopec Shanghai Petrochemical Co. Ltd. Class H^a	27,048,000		8,594,643
Tencent Holdings Ltd.^a	5,630,000		48,330,824
Yanzhou Coal Mining Co. Ltd. Class H^a	24,772,800		43,421,238


Security	Shares	Value
Zhejiang Expressway Co. Ltd. Class H	24,772,000	$	16,726,793
Zijin Mining Group Co. Ltd. Class H	45,040,000		30,816,311

			2,979,473,997

COLOMBIA – 0.22%
Bancolombia SA SP ADR	1,351,200		44,994,960

			44,994,960

CZECH REPUBLIC – 2.23%
Central European Media Enterprises Ltd. Class A^b	21,104		1,678,260
CEZ AS	4,077,246		309,234,225
Komercni Banka AS	314,873		70,092,616
Unipetrol AS^a	5,175,206		63,667,343
Zentiva NV	137,460		8,826,599

			453,499,043

EGYPT – 0.80%
Orascom Construction Industries Co. GDR	805,395		103,694,606
Orascom Telecom Holding SAE GDR^a,d	1,145,284		59,325,711

			163,020,317

HUNGARY – 1.56%
Magyar Telekom PLC^a	3,187,706		16,473,979
MOL Magyar Olaj-es Gazipari Rt^a	660,962		71,588,470
OTP Bank Rt^a,b	2,932,704		132,753,138
Richter Gedeon Rt^a	479,676		95,574,079

			316,389,666

INDIA – 6.12%
HDFC Bank Ltd. ADR^a	2,854,410		258,295,561
ICICI Bank Ltd. SP ADR^a	5,058,706		156,921,060
Infosys Technologies Ltd. SP ADR	5,359,095		221,223,442
Mahanagar Telephone Nigam Ltd. ADR^a	6,872,700		32,026,782
Reliance Industries Ltd. GDR^a,e	2,422,026		233,241,104
Satyam Computer Services Ltd. ADR^a	6,775,146		150,814,750
Tata Communications Ltd. ADR^a	6,151,208		114,473,981
Wipro Ltd. ADR^a	6,509,406		75,378,921

			1,242,375,601


Security	Shares	Value
INDONESIA – 1.81%
PT Aneka Tambang Tbk	101,903,000	$	21,048,817
PT Astra Agro Lestari Tbk	2,815,000		5,522,322
PT Astra International Tbk	17,460,000		39,690,492
PT Bank Central Asia Tbk	101,410,000		35,188,716
PT Bank Danamon Indonesia Tbk	19,070,487		11,254,714
PT Bank Internasional Indonesia Tbk	117,226,000		5,893,329
PT Bank Mandiri Tbk	37,721,000		11,646,101
PT Bank Rakyat Indonesia Tbk	45,369,061		29,006,449
PT Bumi Resources Tbk	150,321,000		90,356,886
PT Indosat Tbk	1,689,000		1,135,229
PT Perusahaan Gas Negara Tbk	106,972,500		29,812,008
PT Semen Gresik (Persero) Tbk	5,790,000		2,562,787
PT Telekomunikasi Indonesia Tbk	69,812,500		61,038,251
PT Truba Alam Manunggal Engineering Tbk^b	1,126,000		58,454
PT United Tractors Tbk	20,915,271		23,658,257

			367,872,812

ISRAEL – 3.62%
Africa Israel Investments Ltd.^a	275,417		10,591,470
Bank Hapoalim Ltd.	12,042,570		47,668,153
Bank Leumi le-Israel^a	15,972,310		66,823,159
Check Point Software Technologies Ltd.^b	1,382,728		33,863,009
Discount Investment Corp. Ltd.	66,434		1,506,486
Elbit Systems Ltd.	824,232		45,908,062
Israel Chemicals Ltd.^a	7,507,464		126,904,589
Israel Corp. Ltd. (The)^b	22,520		23,094,182
Israel Discount Bank Ltd. Class A^a,b	18,745,648		31,222,502
Koor Industries Ltd.	357,155		15,948,463
Makhteshim-Agan Industries Ltd.^a	3,657,248		25,037,647
Mizrahi Tefahot Bank Ltd.^a	6,034,234		38,930,542
NICE Systems Ltd.^a,b	200,428		6,154,853
Teva Pharmaceutical Industries Ltd.	5,440,832		260,430,302

			734,083,419


Security	Shares	Value
MALAYSIA – 0.47%
AMMB Holdings Bhd	9,752,175	$	8,793,769
Bumiputra-Commerce Holdings Bhd	2,034,000		5,004,833
Bursa Malaysia Bhd	2,930,800		5,959,193
Gamuda Bhd	12,166,000		9,249,530
Genting Bhd	3,359,400		5,791,216
IGB Corp. Bhd	4,577,800		1,821,137
IJM Corp. Bhd^b	3,701,200		5,507,900
IOI Corp. Bhd	5,265,000		7,912,627
MMC Corp. Bhd	3,896,000		2,410,962
Resorts World Bhd	19,905,500		15,896,244
Sime Darby Bhd	1,501,673		3,009,099
SP Setia Bhd	4,821,300		4,802,120
Tenaga Nasional Bhd	3,152,700		7,339,422
UEM World Bhd^b	3,896,000		2,870,193
YTL Corp. Bhd	4,480,400		8,449,848
YTL Power International Bhd	298,693		165,476

			94,983,569

MEXICO – 5.64%
Alfa SAB de CV Series A^a	4,644,700		24,222,539
America Movil SAB de CV Series L	111,248,800		285,057,849
Axtel SAB de CV Series CPO^b	1,126,000		1,379,117
Cemex SAB de CV Series CPO^a,b	53,314,403		107,277,133
Controladora Comercial Mexicana SA de CV BC Units^a	12,171,900		30,372,218
Corporacion Geo SAB de CV Series B^b	6,114,100		17,859,499
Desarrolladora Homex SAB de CV^b	1,158,300		9,793,383
Empresas ICA SAB de CV^a,b	7,769,400		35,118,236
Fomento Economico Mexicano SAB de CV BD Units	19,615,400		86,889,732
Grupo Carso SA de CV Series A1^a	1,015,041		3,976,316
Grupo Financiero Banorte SAB de CV Series O	11,946,856		48,112,821
Grupo Mexico SA de CV Series B	34,685,292		57,148,827


Security	Shares	Value
Grupo Modelo SAB de CV Series C	13,849,898	$	66,910,646
Grupo Televisa SA Series CPO	21,957,000		101,573,629
Industrias Penoles SAB de CV	1,126,088		18,554,955
Kimberly-Clark de Mexico SAB de CV Series A^a	8,004,300		35,215,201
Telefonos de Mexico SAB de CV Series L	48,305,400		59,492,820
Telmex Internacional SAB de CV Class L	51,589,200		36,607,824
Urbi Desarrollos Urbanos SA de CV^a,b	3,873,800		10,788,327
Wal-Mart de Mexico SAB de CV Series V^a	29,839,000		108,856,682

			1,145,207,754

PERU – 0.64%
Compania de Minas Buenaventura SA ADR	3,603,200		83,594,240
Southern Copper Corp.	1,837,632		46,914,745

			130,508,985

PHILIPPINE ISLANDS – 1.08%
Ayala Corp.	4,910,993		32,087,507
Ayala Land Inc.	38,696,200		8,638,485
Bank of the Philippine Islands	31,463,040		31,863,908
Globe Telecom Inc.	517,960		12,408,929
Jollibee Foods Corp.	40,672,700		38,533,430
Manila Electric Co.	13,384,802		16,324,707
Metropolitan Bank & Trust Co.	40		33
Philippine Long Distance Telephone Co.	653,080		38,688,394
SM Investments Corp.	2,163,211		13,309,531
SM Prime Holdings Inc.	155,844,820		27,493,043

			219,347,967

RUSSIA – 8.63%
Comstar United Telesystems GDR^d	253,390		1,748,391
JSC MMC Norilsk Nickel ADR	6,835,961		135,078,589
LUKOIL SP ADR	3,251,888		241,615,278
Mechel OAO ADR^a	1,084,338		29,645,801
Mobile TeleSystems SP ADR	1,351,200		91,881,600
Novolipetsk Steel GDR^d	546,110		21,008,852
OAO Gazprom SP ADR	16,468,876		642,286,164


Security	Shares	Value
OAO NOVATEK SP GDR^d	541,606	$	38,995,632
OAO Rosneft Oil Co. GDR^d	6,935,172		59,157,017
OAO Tatneft SP ADR^d	378,336		39,157,776
PIK Group GDR^d	675,600		13,471,464
Polyus Gold SP ADR^a	1,353,124		21,568,797
Rostelecom SP ADR	806,219		55,427,556
Sberbank GDR^a,d	441,538		121,885,185
Surgutneftegaz SP ADR	3,834,030		27,605,016
Uralkali SP GDR	1,042,676		44,835,068
Vimpel-Communications SP ADR	4,979,172		119,649,503
VTB Bank OJSC GDR^a,d	5,010,700		27,809,385
Wimm-Bill-Dann Foods OJSC ADR^b	285,411		19,841,773

			1,752,668,847

SOUTH AFRICA – 8.35%
Adcock Ingram Holdings Ltd.^b	1,559,108		7,607,632
African Bank Investments Ltd.	11,678,883		42,170,262
African Rainbow Minerals Ltd.	280,374		9,485,344
Anglo Platinum Ltd.	475,907		60,314,683
AngloGold Ashanti Ltd.^a	1,467,889		39,823,670
ArcelorMittal South Africa Ltd.	3,630,224		85,969,977
Aveng Ltd.	1,623,431		13,984,078
Barloworld Ltd.	2,285,914		20,312,295
Bidvest Group Ltd.	2,497,486		37,046,733
Exxaro Resources Ltd.	1,637,204		24,498,677
FirstRand Ltd.	29,395,810		62,805,920
Foschini Ltd.	5,519,708		30,524,393
Gold Fields Ltd.	4,656,010		43,014,438
Harmony Gold Mining Co. Ltd.^b	2,541,382		22,321,107
Impala Platinum Holdings Ltd.	4,054,726		114,990,083
Imperial Holdings Ltd.^b	2,434,140		17,103,355
Investec Ltd.	3,823,247		28,605,016
Kumba Iron Ore Ltd.	418,872		13,734,848
Liberty Group Ltd.^b	824,828		7,566,491
MTN Group Ltd.	11,019,036		170,104,867
Murray & Roberts Holdings Ltd.	2,125,888		28,768,401
Naspers Ltd.	3,875,787		97,711,035
Nedbank Group Ltd.	3,218,443		43,637,066
Network Healthcare Holdings Ltd.^b	17,818,960		19,939,892
Northam Platinum Ltd.	288,437		2,015,428


Security	Shares	Value
Pick’n Pay Stores Ltd.	5,097,902	$	19,561,775
Pretoria Portland Cement Co. Ltd.	4,093,343		18,098,539
Remgro Ltd.	337,800		8,217,262
Reunert Ltd.	1,590,510		12,024,154
Sanlam Ltd.	17,981,533		41,553,889
Sappi Ltd.	461,028		4,844,086
Sasol Ltd.	4,653,758		257,325,977
Shoprite Holdings Ltd.	11,752,062		70,341,869
Standard Bank Group Ltd.	8,933,696		104,620,232
Steinhoff International Holdings Ltd.	1,892,806		4,544,064
Telkom South Africa Ltd.	1,363,737		24,738,112
Tiger Brands Ltd.	1,559,108		27,497,023
Truworths International Ltd.	9,379,671		38,054,473
Woolworths Holdings Ltd.	12,683,759		20,745,565

			1,696,222,711

SOUTH KOREA – 11.21%
Daelim Industrial Co. Ltd.	199,100		12,451,749
Doosan Heavy Industries & Construction Co. Ltd.	231,790		16,688,710
Hyundai Development Co.	212,800		8,139,517
Hyundai Engineering & Construction Co. Inc.	325,410		16,854,738
Hyundai Heavy Industries Co. Ltd.	375,500		82,589,999
Kookmin Bank SP ADR^a	6,105,175		334,563,590
Korea Electric Power Corp. SP ADR	14,765,972		222,227,879
KT Corp. SP ADR^a	7,849,740		159,820,706
LG Display Co. Ltd. ADR^a	6,890,753		84,894,077
NHN Corp.^b	187,575		25,839,150
POSCO ADR	4,523,142		484,428,508
Samsung Electronics Co. Ltd. GDR^d	2,505,350		588,757,250
Samsung Engineering Co. Ltd.	187,990		12,067,684
Samsung Heavy Industries Co. Ltd.	2,036,070		58,619,519
Shinhan Financial Group Co. Ltd. ADR	224,657		20,252,829
SK Telecom Co. Ltd. ADR	7,220,068		147,289,387

			2,275,485,292


Security	Shares	Value
TAIWAN – 9.91%
Asia Cement Corp.	3,234,060	$	3,599,325
AU Optronics Corp. SP ADR^a	15,909,124		189,954,941
Catcher Technology Co. Ltd.	3,201,000		10,860,137
Cheng Shin Rubber Industry Co. Ltd.	3,508,650		4,694,814
Chunghwa Telecom Co. Ltd. SP ADR^a,b	20,445,908		505,831,764
CMC Magnetics Corp.^b	8,136,000		2,117,971
Compal Communications Inc.	2,598,750		3,584,426
D-Link Corp.	1,401,888		1,704,687
Epistar Corp.	2,314,345		4,182,816
Evergreen Marine Corp. Ltd.	10,170,000		5,804,426
Far Eastern Textile Ltd.	5,186,700		4,802,195
Foxconn Technology Co. Ltd.^b	1,068,000		5,333,566
HannStar Display Corp.	11,767,963		3,115,686
Hon Hai Precision Industry Co. Ltd.^b	5,085,000		25,797,451
HTC Corp.	4,063,800		76,152,762
Macronix International Co. Ltd.	22,176,448		8,895,049
MediaTek Inc.	3,176,450		36,913,213
MiTAC International Corp.	7,403,727		4,190,390
Mosel Vitelic Inc.^b	10,545,000		6,887,786
Siliconware Precision Industries Co. SP ADR^a,c	40,207,832		276,629,884
Synnex Technology International Corp.	4,474,800		8,740,176
Taiwan Cement Corp.	7,190,190		7,090,333
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR^a	58,378,684		566,857,022
Tatung Co. Ltd.^b	14,763,000		5,429,983
U-Ming Marine Transport Corp.	2,034,000		5,404,566
Uni-President Enterprises Co.	6,407,100		6,968,214
United Microelectronics Corp. SP ADR^a	83,688,012		194,993,068
Wintek Corp.	9,378,000		5,902,508
Yang Ming Marine Transport Corp.	16,238,978		7,929,490
Yuanta Financial Holding Co. Ltd.	38,829,000		22,407,502

			2,012,776,151


Security	Shares	Value
THAILAND – 1.73%
Bangkok Bank PCL	7,972,800	$	27,476,355
Banpu PCL	2,511,000		28,747,430
IRPC PCL	73,112,500		8,754,709
Kasikornbank PCL	16,172,200		34,006,963
Krung Thai Bank PCL	17,375,600		3,856,734
PTT Aromatics & Refining PCL	15,996,886		10,091,494
PTT Chemical PCL	6,823,968		15,047,009
PTT Exploration & Production PCL	17,280,800		73,685,654
PTT PCL	10,039,000		77,403,505
Ratchaburi Electricity Generating Holding PCL	36,614,900		40,903,035
Siam Cement PCL	2,544,600		12,559,503
Siam Makro PCL	6,280,300		15,590,698
United Broadcasting Corp. PCL^b,f	5,658,800		2,974,837

			351,097,926

TURKEY – 1.20%
Akbank TAS^a	5,204,805		27,069,388
Arcelik AS^a	1,654,094		6,462,507
Asya Katilim Bankasi AS^a,b	7,431,690		16,340,291
Dogan Yayin Holding AS^b	2,068,462		3,480,964
Enka Insaat ve Sanayi AS	112,600		1,009,353
Eregli Demir ve Celik Fabrikalari TAS^a	4,509,369		30,507,357
Migros Turk TAS^a	699,041		12,768,945
Petkim Petrokimya Holding AS^a,b	1,325,966		6,111,218
Tofas Turk Otomobil Fabrikasi AS^a	6,803,292		23,013,250
Tupras-Turkiye Petrol Rafinerileri AS^a	872,464		20,658,767
Turk Sise ve Cam Fabrikalari AS^a,b	12,018,924		16,364,032
Turkiye Garanti Bankasi AS^a,b	10,126,368		30,486,148
Turkiye Vakiflar Bankasi TAO^a	11,835,386		22,619,850
Yapi ve Kredi Bankasi AS^a,b	11,596,731		26,086,516

			242,978,586


TOTAL COMMON STOCKS (Cost: $21,429,353,919)			18,068,133,423


Security	Shares	Value
PREFERRED STOCKS – 9.88%

BRAZIL – 9.88%
Aracruz Celulose SA SP ADR	746,956	$	41,299,197
Banco Bradesco SA SP ADR	17,678,200		325,455,662
Banco Itau Holding Financiera SA ADR	17,790,800		338,025,200
Brasil Telecom Participacoes SA ADR	631,692		41,401,094
Companhia Brasileira de Distribuicao Grupo Pao de Acucar SP ADR^a	969,144		40,384,230
Companhia de Bebidas das Americas ADR	1,392,862		86,204,229
Companhia Energetica de Minas Gerais SP ADR^a	1,887,214		40,726,078
Companhia Paranaense de Energia SP ADR	337,800		5,806,782
Companhia Vale do Rio Doce SP ADR	15,744,858		374,255,275
Gerdau SA SP ADR	4,865,528		91,034,029
Net Servicos de Comunicacao SA ADR^a	1,689,084		19,458,248
Petroleo Brasileiro SA SP ADR	12,336,456		530,097,514
Tele Norte Leste Participacoes SA ADR	2,117,112		49,159,341
Votorantim Celulose e Papel SA SP ADR	1,037,178		21,905,199

			2,005,212,078


TOTAL PREFERRED STOCKS (Cost: $1,956,881,962)			2,005,212,078

RIGHTS – 0.01%

INDONESIA – 0.01%
PT United Tractors Tbk^f	3,485,878		1,085,765

			1,085,765


TOTAL RIGHTS (Cost: $0)			1,085,765


Security	Shares	Value
WARRANTS – 0.00%

MALAYSIA – 0.00%
IJM Land Bhd^f	370,120	$	11

			11


TOTAL WARRANTS (Cost: $0)			11

EXCHANGE-TRADED FUNDS – 0.44%
iShares MSCI Malaysia Index Fund^a,c	1,208,557		11,263,751
iShares MSCI South Korea Index Fund^c	750,109		32,457,217
iShares MSCI Taiwan Index Fund^c	3,463,576		45,130,395


TOTAL EXCHANGE-TRADED FUNDS
(Cost: $107,852,126)			88,851,363

SHORT-TERM INVESTMENTS – 9.22%

MONEY MARKET FUNDS – 9.22%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%^c,g	39,718,676		39,718,676
BGI Cash Premier Fund LLC 2.63%^c,g,h	1,832,671,421		1,832,671,421

			1,872,390,097


TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,872,390,097)			1,872,390,097


TOTAL INVESTMENTS IN SECURITIES – 108.54% (Cost: $25,366,478,104)			22,035,672,737

Other Assets, Less Liabilities – (8.54)%			(1,732,916,294	)

NET ASSETS – 100.00%		$	20,302,756,443

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

^d	This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^e	This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

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

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

^h	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

These financial statements relate only to the iShares MSCI Emerging Markets 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 global emerging markets, as measured by the MSCI Emerging Markets Index compiled by MSCI 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 certain emerging markets, 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.

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”). The preparation of 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.

The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are disclosed in the Statement of Operations. Foreign taxes payable as of August 31, 2008, if any, are reflected in the Fund’s Statement of Assets and Liabilities.

As of August 31, 2008, the tax year-end of the Fund, the components of net distributable earnings on a tax basis consisted of undistributed ordinary income of $153,378,787, unrealized depreciation of $3,496,822,553, and capital and other losses of $285,031,365, for net accumulated losses of $3,628,475,131.

The Fund is treated as a separate entity 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 ordinary income and any net capital gains (taking into account any capital loss carry forwards) 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 year ended August 31, 2008.

From November 1, 2007 to August 31, 2008, the Fund incurred net realized capital losses of $208,836,563. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2009.

As of August 31, 2008, the tax year-end of the Fund, the Fund had tax basis net capital loss carry forwards of $840,778, $20,296,564, $11,239,258, $29,973,301 and $13,844,901 expiring in 2012, 2013, 2014, 2015 and 2016, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.

As of August 31, 2008, the cost of investments for federal income tax purposes was $25,531,659,819. Net unrealized depreciation was $3,495,987,082, of which $541,142,622 represented gross unrealized appreciation on securities and $4,037,129,704 represented gross unrealized depreciation on securities.

Effective August 11, 2008, BGFA has contractually agreed to waive a portion of its advisory fees for the Fund through December 31, 2009 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds. Prior to August 11, 2008, the advisory fee waiver was voluntary.

The Fund may invest in the Institutional Shares of certain money market funds managed by BGFA, the Fund’s investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, PMMF and TMMF 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, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statement of Operations. Income distributions earned by the Fund from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statement of Operations.

The 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 August 31, 2008, the Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.

For the year ended August 31, 2008, the Fund had direct investment (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:

Certain directors and officers of the Company are also officers of BGI and/or BGFA.

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2008, aggregated $2,860,607,210 and $2,755,780,444, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2008, aggregated $18,237,399,117 and $13,070,004,023, respectively.

The consideration for the purchase of Creation Units of the Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes a substantial replication, or a portfolio sampling representation, of the securities involved in the MSCI Emerging Markets Index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

The Board authorized a three-for-one stock split for the Fund, effective July 24, 2008, for the shareholders of record on July 21, 2008. The impact of the stock split was to increase the number of shares outstanding by a factor of three, while decreasing the net asset value per share by a factor of three, resulting in no effect to total net assets of the Fund. The financial statements for the Fund have been adjusted to reflect the stock split.

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Emerging Markets Index Fund (the “Fund”), at August 31, 2008, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at August 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

For the fiscal year ended August 31, 2008, the Fund earned foreign source income of $750,930,981 and paid foreign taxes of $42,252,576 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).

Under Section 854(b)(2) of the Code, the Fund hereby designates the maximum amount of $589,951,878 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2008.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Fund. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 18-19, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Fund, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

The Board anticipated that there would be no diminution in the scope of services required of BGFA under the Advisory Contract for the coming year as compared to the scope of services provided by BGFA over the past year. In reviewing the scope of these services, the Board considered BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including over the past year, including investment in technology and increasing the number of their employees supporting the Fund. The Board also considered BGFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Fund; therefore, comparative performance information was generally not available. However, the Board also noted that the Fund had met its investment objective consistently since its inception date. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Fund under the Advisory Contract were appropriate and mitigated in favor of the Board’s approval of the Advisory Contract for the coming year.

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other funds registered under the 1940 Act objectively selected by Lipper as comprising the Fund’s peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the Lipper Group and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Group, the statistical information may or may not provide meaningful direct comparisons to the Fund. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, and five-year periods, and “last quarter” period ended March 31, 2008 and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison

Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)

funds. The Board noted that the Fund generally performed in line with its performance benchmark index over relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expense components for the Fund were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in the Lipper Group. The Board also reviewed statistical information from Lipper displaying the effects of the current breakpoints in the investment advisory fee rates for the Fund (as discussed below) at various assets levels of the Fund as compared to its Lipper Group. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in its Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO THE FUND AND PROFITS REALIZED BY BGFA AND AFFILIATES

In connection with its review of the Fund’s profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board also discussed the substantial growth in assets of certain iShares funds, including the Fund, over the last few years. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Fund, had not yet reached scale. In light of this history, the Board determined that the current breakpoints were appropriate and warranted at this juncture for the Fund. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of economies of scale with the Fund’s shareholders.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board received and considered certain information regarding the Fund’s annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and

Board Review and Approval of Investment Advisory Contract (Unaudited) (Continued)

separate accounts (together, the “Other Accounts”). The Board noted that comparative investment advisory/management fee information was not available, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as the Fund. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Fund. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract, do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

The following information shows the frequency distributions of premiums and discounts for the Fund. The information shown for the Fund is for each full calendar quarter completed after the inception date of the Fund through the date of the most recent calendar quarter-end.

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

iShares 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 S&P North American Natural Resources Sector (IGE)

iShares S&P North American

Technology-Multimedia Networking (IGN)

iShares S&P North American

Technology-Semiconductors (IGW)

iShares S&P North American

Technology-Software (IGV)

iShares S&P North American

Technology Sector (IGM)

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. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment &

Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares FTSE NAREIT Retail (RTL)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary

Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

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 Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications

Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

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 China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (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 Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate

Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM (KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North

America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)

iShares S&P World ex-U.S. Property (WPS)

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.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Q is available on the SEC’s website or may be reviewed and copied at the SEC’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 monthly basis on the Fund’s website.

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.

BCI-F-054-10008 iShares® LET’S BUILD A BETTER INVESTMENT WORLDSM. BARCLAYS GLOBAL INVESTORS

iShares, Inc. (the “Registrant”) has adopted a code of ethics that applies to persons appointed by the Registrant’s Board of Directors as the President and/or Chief Financial Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2008, there were no amendments to any provision of this code of ethics, nor were there any waivers granted from any provision of this code of ethics. A copy of this code of ethics is filed with this Form N-CSR under Item 12(a)(1).

The Registrant’s Board of Directors has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are Charles A. Hurty, John E. Kerrigan, George G.C. Parker and Robert H. Silver, all of whom are independent, as that term is defined under Item 3(a)(2).

(2) There were no services described in (b) through (d) above (including services required by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are George G.C. Parker, Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, Robert H. Silver and Darrell Duffie.

The Registrant’s full schedules of investments are included as part of the reports to shareholders filed under Item 1 of this Form.

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.

(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s 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.

(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is 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.

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.


Average Annual Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.64)%	(18.02)%	(18.57)%	24.85%	24.70%	25.49%	12.79%	13.19%	12.93%

Cumulative Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.64)%	(18.02)%	(18.57)%	203.38%	201.48%	211.24%	233.15%	245.35%	237.22%


Average Annual Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(26.21)%	(26.64)%	(29.27)%	14.76%	14.63%	13.92%	3.88%	4.10%	2.70%

Cumulative Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(26.21)%	(26.64)%	(29.27)%	99.04%	97.96%	91.85%	46.26%	49.42%	30.47%


Average Annual Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Inception to 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(14.52)%	(15.11)%	(14.26)%	15.80%	15.53%	16.11%	3.50%	3.41%	3.80%

Cumulative Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Inception to 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(14.52)%	(15.11)%	(14.26)%	108.22%	105.79%	111.04%	32.13%	31.21%	35.27%


Average Annual Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.96)%	(12.50)%	(11.81)%	14.93%	14.78%	15.23%	6.88%	7.20%	7.18%

Cumulative Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.96)%	(12.50)%	(11.81)%	100.57%	99.21%	103.16%	94.55%	100.48%	100.14%


Average Annual Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.81)%	(10.53)%	(9.66)%	19.35%	19.20%	19.61%	5.87%	6.18%	6.14%

Cumulative Total Returns

Year Ended 8/31/08			Five Years Ended 8/31/08			Ten Years Ended 8/31/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.81)%	(10.53)%	(9.66)%	142.18%	140.70%	144.83%	76.86%	82.11%	81.39%


Fund	Management Fee
iShares MSCI Belgium Investable Market Index Fund	0.51	%
iShares MSCI EMU Index Fund	0.51	%
iShares MSCI France Index Fund	0.51	%
iShares MSCI Germany Index Fund	0.51	%
iShares MSCI Italy Index Fund	0.52	%
iShares MSCI Spain Index Fund	0.51	%
iShares MSCI Sweden Index Fund	0.51	%
iShares MSCI Switzerland Index Fund	0.51	%
iShares MSCI United Kingdom Index Fund	0.51	%


iShares^® is a registered trademark of Barclays Global Investors, N.A.		BGI-A-055-09008


iShares^® is a registered trademark of Barclays Global Investors, N.A.		BGI-A-120-09008


iShares^® is a registered trademark of Barclays Global Investors, N.A.		BGI-A-121-09008


Management’s Discussions of Fund Performance		1
Shareholder Expenses (Unaudited)		23
Schedules of Investments		25
iShares MSCI Austria Investable Market Index Fund		25
iShares MSCI Belgium Investable Market Index Fund		27
iShares MSCI EMU Index Fund		29
iShares MSCI France Index Fund		34
iShares MSCI Germany Index Fund		37
iShares MSCI Italy Index Fund		40
iShares MSCI Netherlands Investable Market Index Fund		42
iShares MSCI Spain Index Fund		44
iShares MSCI Sweden Index Fund		46
iShares MSCI Switzerland Index Fund		48
iShares MSCI United Kingdom Index Fund		50
Financial Statements		53
Financial Highlights		65
Notes to Financial Statements		76
Report of Independent Registered Public Accounting Firm		85
Tax Information (Unaudited)		86
Board Review and Approval of Investment Advisory Contract (Unaudited)		87
Supplemental Information (Unaudited)		90
Director and Officer Information (Unaudited)		96
iShares Family of Funds		101


iShares MSCI Index Fund	Beginning Account Value (3/1/08)	Ending Account Value (8/31/08)	Annualized Expense Ratio		Expenses Paid During Period^a(3/1/08 to 8/31/08)
Austria Investable Market
Actual	$1,000.00	$ 896.70	0.52	%	$2.48
Hypothetical (5% return before expenses)	1,000.00	1,022.50	0.52		2.64
Belgium Investable Market
Actual	1,000.00	811.80	0.52		2.37
Hypothetical (5% return before expenses)	1,000.00	1,022.50	0.52		2.64
EMU
Actual	1,000.00	888.00	0.52		2.47
Hypothetical (5% return before expenses)	1,000.00	1,022.50	0.52		2.64
France
Actual	1,000.00	931.60	0.52		2.52
Hypothetical (5% return before expenses)	1,000.00	1,022.50	0.52		2.64


	iShares MSCI
	Austria Investable Market Index Fund			Belgium Investable Market Index Fund			EMU Index Fund			France Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	256,776,004		$	169,472,008		$	1,517,278,586		$	293,671,300
Affiliated issuers (Note 2)		15,696,870			18,926,723			31,504,308			982,665

Total cost of investments	$	272,472,874		$	188,398,731		$	1,548,782,894		$	294,653,965

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	191,553,843		$	118,888,183		$	1,288,160,713		$	226,978,059
Affiliated issuers (Note 2)		15,696,870			18,926,723			31,504,308			982,665

Total value of investments		207,250,713			137,814,906			1,319,665,021			227,960,724
Foreign currencies, at value^b		82,991			120,750			1,428,802			107,019
Receivables:
Investment securities sold		3,389,359			–			3,061,459			450,874
Dividends and interest		2,017,765			971,147			2,484,680			11,208

Total Assets		212,740,828			138,906,803			1,326,639,962			228,529,825


LIABILITIES
Payables:
Investment securities purchased		2,667,829			–			2,790,608			259,465
Securities related to in-kind transactions (Note 4)		–			–			43,372			–
Collateral for securities on loan (Note 5)		15,647,007			18,898,386			31,256,539			955,062
Capital shares redeemed		698,572			–			89,876			–
Investment advisory fees (Note 2)		125,249			53,784			651,538			112,771

Total Liabilities		19,138,657			18,952,170			34,831,933			1,327,298


NET ASSETS	$	193,602,171		$	119,954,633		$	1,291,808,029		$	227,202,527


Net assets consist of:
Paid-in capital	$	282,735,010		$	180,435,697		$	1,549,466,620		$	302,975,911
Undistributed net investment income		1,801,453			623,146			10,227,903			1,991,490
Accumulated net realized loss		(25,773,092	)		(10,497,614	)		(38,665,056	)		(11,067,093	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(65,161,200	)		(50,606,596	)		(229,221,438	)		(66,697,781	)

NET ASSETS	$	193,602,171		$	119,954,633		$	1,291,808,029		$	227,202,527


Shares outstanding^c		6,500,000			6,800,000			28,100,000	^d		7,400,000


Net asset value per share	$	29.78		$	17.64		$	45.97	^d	$	30.70


	iShares MSCI
	Germany Index Fund			Italy Index Fund			Netherlands Investable Market Index Fund			Spain Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	823,497,543		$	305,894,094		$	245,565,011		$	421,883,990
Affiliated issuers (Note 2)		72,932,631			2,872,388			794,927			25,379,174

Total cost of investments	$	896,430,174		$	308,766,482		$	246,359,938		$	447,263,164

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	665,214,968		$	243,841,432		$	208,814,769		$	320,722,526
Affiliated issuers (Note 2)		72,932,631			2,872,388			794,927			25,379,174

Total value of investments		738,147,599			246,713,820			209,609,696			346,101,700
Foreign currencies, at value^b		113,549			289,874			402,745			628,795
Receivables:
Investment securities sold		2,691,356			1,163,271			1,832,040			525,075
Dividends and interest		3,546,530			79,716			479,897			344,530

Total Assets		744,499,034			248,246,681			212,324,378			347,600,100


LIABILITIES
Payables:
Investment securities purchased		1,805,483			1,126,584			1,804,154			683,472
Collateral for securities on loan (Note 5)		72,879,678			2,850,983			768,475			25,354,104
Capital shares redeemed		–			–			–			38,702
Investment advisory fees (Note 2)		361,894			114,663			99,202			175,274

Total Liabilities		75,047,055			4,092,230			2,671,831			26,251,552


NET ASSETS	$	669,451,979		$	244,154,451		$	209,652,547		$	321,348,548


Net assets consist of:
Paid-in capital	$	887,049,031		$	322,486,540		$	262,500,168		$	425,389,263
Undistributed net investment income		1,949,256			1,358,007			2,265,509			6,489,523
Accumulated net realized loss		(61,065,132	)		(17,643,299	)		(18,354,638	)		(9,329,112	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(158,481,176	)		(62,046,797	)		(36,758,492	)		(101,201,126	)

NET ASSETS	$	669,451,979		$	244,154,451		$	209,652,547		$	321,348,548


Shares outstanding^c		24,300,000			9,750,000			8,600,000			6,375,000


Net asset value per share	$	27.55		$	25.04		$	24.38		$	50.41


	iShares MSCI
	Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	306,453,559		$	398,727,743		$	962,325,419
Affiliated issuers (Note 2)		6,501,525			18,762			28,852,626

Total cost of investments	$	312,955,084		$	398,746,505		$	991,178,045

Investments in securities, at value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	227,433,588		$	364,547,445		$	856,360,752
Affiliated issuers (Note 2)		6,501,525			18,762			18,656,940

Total value of investments		233,935,113			364,566,207			875,017,692
Foreign currencies, at value^b		128,624			249,443			1,383,851
Receivables:
Investment securities sold		1,179,617			1,932,772			2,048,312
Dividends and interest		5,352			1,550,292			6,621,668

Total Assets		235,248,706			368,298,714			885,071,523


LIABILITIES
Payables:
Investment securities purchased		1,055,797			1,600,402			2,144,615
Collateral for securities on loan (Note 5)		6,438,507			–			–
Investment advisory fees (Note 2)		100,606			173,399			424,841

Total Liabilities		7,594,910			1,773,801			2,569,456


NET ASSETS	$	227,653,796		$	366,524,913		$	882,502,067


Net assets consist of:
Paid-in capital	$	325,072,289		$	409,072,816		$	1,044,390,792
Undistributed net investment income		175,146			1,044,066			8,677,006
Accumulated net realized loss		(18,567,046	)		(9,298,020	)		(54,118,517	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(79,026,593	)		(34,293,949	)		(116,447,214	)

NET ASSETS	$	227,653,796		$	366,524,913		$	882,502,067


Shares outstanding^c		9,300,000			15,875,000			45,600,000


Net asset value per share	$	24.48		$	23.09		$	19.35


	iShares MSCI
	Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	12,220,988		$	9,383,103		$	43,660,500
Dividends from affiliated issuers (Note 2)		–			–			1,874,570
Interest from affiliated issuers (Note 2)		18,346			12,148			55,840
Securities lending income from affiliated issuers (Note 2)		33,742			20,063			6,763

Total investment income		12,273,076			9,415,314			45,597,673


EXPENSES
Investment advisory fees (Note 2)		1,842,608			1,995,890			5,668,706

Total expenses		1,842,608			1,995,890			5,668,706

Net investment income		10,430,468			7,419,424			39,928,967


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(16,718,602	)		(3,603,902	)		(25,896,900	)
Investments in affiliated issuers (Note 2)		–			–			(1,368,896	)
In-kind redemptions		21,812,450			58,891,723			117,552,669
Foreign currency transactions		53,875			184,962			(551,383	)

Net realized gain		5,147,723			55,472,783			89,735,490

Net change in unrealized appreciation (depreciation) on:
Investments		(109,862,168	)		(89,845,698	)		(319,445,393	)
Translation of assets and liabilities in foreign currencies		(3,107	)		(116,959	)		(312,315	)

Net change in unrealized appreciation (depreciation)		(109,865,275	)		(89,962,657	)		(319,757,708	)

Net realized and unrealized loss		(104,717,552	)		(34,489,874	)		(230,022,218	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(94,287,084	)	$	(27,070,450	)	$	(190,093,251	)


MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE		1


2		2008 iSHARES ANNUAL REPORT TO SHAREHOLDERS


MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE		3


4		2008 iSHARES ANNUAL REPORT TO SHAREHOLDERS


	iShares MSCI Austria Investable Market Index Fund						iShares MSCI Belgium Investable Market Index Fund
	Year ended August 31, 2008			Year ended August 31, 2007			Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	5,489,871		$	6,906,656		$	8,943,391		$	7,500,507
Net realized gain		827,676			89,929,345			10,301,055			4,698,517
Net change in unrealized appreciation (depreciation)		(72,261,407	)		(27,238,773	)		(77,304,920	)		13,471,138

Net increase (decrease) in net assets resulting from operations		(65,943,860	)		69,597,228			(58,060,474	)		25,670,162


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(10,677,774	)		(8,705,133	)		(16,629,945	)		(4,042,358	)

Total distributions to shareholders		(10,677,774	)		(8,705,133	)		(16,629,945	)		(4,042,358	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		202,420,621			345,391,061			83,185,830			145,006,107
Cost of shares redeemed		(405,710,636	)		(324,406,725	)		(192,024,177	)		(15,634,722	)

Net increase (decrease) in net assets from capital share transactions		(203,290,015	)		20,984,336			(108,838,347	)		129,371,385

INCREASE (DECREASE) IN NET ASSETS		(279,911,649	)		81,876,431			(183,528,766	)		150,999,189

NET ASSETS
Beginning of year		473,513,820			391,637,389			303,483,399			152,484,210

End of year	$	193,602,171		$	473,513,820		$	119,954,633		$	303,483,399

Undistributed net investment income included in net assets at end of year	$	1,801,453		$	6,668,789		$	623,146		$	6,750,550


SHARES ISSUED AND REDEEMED
Shares sold		5,700,000			8,800,000			3,320,000			5,640,000
Shares redeemed		(11,900,000	)		(8,700,000	)		(8,240,000	)		(600,000	)

Net increase (decrease) in shares outstanding		(6,200,000	)		100,000			(4,920,000	)		5,040,000


	iShares MSCI EMU Index Fund						iShares MSCI France Index Fund
	Year ended August 31, 2008^a			Year ended August 31, 2007^a			Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	77,988,337		$	64,897,028		$	12,303,626		$	5,363,789
Net realized gain		420,891,072			78,401,296			20,272,014			16,902,131
Net change in unrealized appreciation (depreciation)		(780,256,430	)		372,001,498			(74,337,717	)		131,397

Net increase (decrease) in net assets resulting from operations		(281,377,021	)		515,299,822			(41,762,077	)		22,397,317


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(132,228,318	)		(39,632,439	)		(15,471,999	)		(2,600,180	)

Total distributions to shareholders		(132,228,318	)		(39,632,439	)		(15,471,999	)		(2,600,180	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		935,523,497			890,425,624			392,494,736			308,549,207
Cost of shares redeemed		(2,201,675,459	)		(189,448,664	)		(553,753,893	)		(94,536,345	)

Net increase (decrease) in net assets from capital share transactions		(1,266,151,962	)		700,976,960			(161,259,157	)		214,012,862

INCREASE (DECREASE) IN NET ASSETS		(1,679,757,301	)		1,176,644,343			(218,493,233	)		233,809,999

NET ASSETS
Beginning of year		2,971,565,330			1,794,920,987			445,695,760			211,885,761

End of year	$	1,291,808,029		$	2,971,565,330		$	227,202,527		$	445,695,760

Undistributed net investment income included in net assets at end of year	$	10,227,903		$	62,166,681		$	1,991,490		$	5,048,619


SHARES ISSUED AND REDEEMED
Shares sold		17,500,000			16,600,000			10,800,000			8,200,000
Shares redeemed		(41,400,000	)		(3,500,000	)		(15,600,000	)		(2,800,000	)

Net increase (decrease) in shares outstanding		(23,900,000	)		13,100,000			(4,800,000	)		5,400,000


	iShares MSCI Germany Index Fund						iShares MSCI Italy Index Fund
	Year ended August 31, 2008			Year ended August 31, 2007			Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	46,008,248		$	28,068,699		$	11,898,862		$	8,244,893
Net realized gain (loss)		227,568,876			152,044,593			(6,321,261	)		45,811,884
Net change in unrealized appreciation (depreciation)		(371,327,133	)		148,406,473			(51,884,781	)		(31,574,902	)

Net increase (decrease) in net assets resulting from operations		(97,750,009	)		328,519,765			(46,307,180	)		22,481,875


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(72,915,709	)		(17,227,480	)		(18,054,401	)		(4,310,712	)

Total distributions to shareholders		(72,915,709	)		(17,227,480	)		(18,054,401	)		(4,310,712	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		961,273,471			972,720,932			499,630,008			255,824,310
Cost of shares redeemed		(1,762,400,887	)		(445,562,698	)		(363,609,192	)		(247,823,971	)

Net increase (decrease) in net assets from capital share transactions		(801,127,416	)		527,158,234			136,020,816			8,000,339

INCREASE (DECREASE) IN NET ASSETS		(971,793,134	)		838,450,519			71,659,235			26,171,502

NET ASSETS
Beginning of year		1,641,245,113			802,794,594			172,495,216			146,323,714

End of year	$	669,451,979		$	1,641,245,113		$	244,154,451		$	172,495,216

Undistributed net investment income included in net assets at end of year	$	1,949,256		$	27,920,700		$	1,358,007		$	7,309,944


SHARES ISSUED AND REDEEMED
Shares sold		29,100,000			31,800,000			16,800,000			7,500,000
Shares redeemed		(55,800,000	)		(14,700,000	)		(12,150,000	)		(7,200,000	)

Net increase (decrease) in shares outstanding		(26,700,000	)		17,100,000			4,650,000			300,000


	iShares MSCI Netherlands Investable Market Index Fund						iShares MSCI Spain Index Fund
	Year ended August 31, 2008			Year ended August 31, 2007			Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	9,878,532		$	7,751,323		$	19,885,704		$	12,640,003
Net realized gain		13,136,127			25,566,651			24,027,821			113,046,969
Net change in unrealized appreciation (depreciation)		(54,521,906	)		4,801,697			(122,537,204	)		(7,855,721	)

Net increase (decrease) in net assets resulting from operations		(31,507,247	)		38,119,671			(78,623,679	)		117,831,251


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(15,733,536	)		(3,524,849	)		(24,006,924	)		(4,483,132	)

Total distributions to shareholders		(15,733,536	)		(3,524,849	)		(24,006,924	)		(4,483,132	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		108,417,983			202,315,940			1,073,349,945			743,582,607
Cost of shares redeemed		(102,878,515	)		(95,548,185	)		(1,171,926,810	)		(512,504,767	)

Net increase (decrease) in net assets from capital share transactions		5,539,468			106,767,755			(98,576,865	)		231,077,840

INCREASE (DECREASE) IN NET ASSETS		(41,701,315	)		141,362,577			(201,207,468	)		344,425,959

NET ASSETS
Beginning of year		251,353,862			109,991,285			522,556,016			178,130,057

End of year	$	209,652,547		$	251,353,862		$	321,348,548		$	522,556,016

Undistributed net investment income included in net assets at end of year	$	2,265,509		$	8,180,561		$	6,489,523		$	10,548,212


SHARES ISSUED AND REDEEMED
Shares sold		3,550,000			7,350,000			17,250,000			14,100,000
Shares redeemed		(3,400,000	)		(3,450,000	)		(19,875,000	)		(9,075,000	)

Net increase (decrease) in shares outstanding		150,000			3,900,000			(2,625,000	)		5,025,000


	iShares MSCI Sweden Index Fund						iShares MSCI Switzerland Index Fund
	Year ended August 31, 2008			Year ended August 31, 2007			Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	10,430,468		$	13,800,011		$	7,419,424		$	3,903,136
Net realized gain		5,147,723			35,325,675			55,472,783			8,791,737
Net change in unrealized appreciation (depreciation)		(109,865,275	)		28,147,722			(89,962,657	)		19,142,733

Net increase (decrease) in net assets resulting from operations		(94,287,084	)		77,273,408			(27,070,450	)		31,837,606


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(24,097,389	)		(3,600,238	)		(10,490,319	)		(1,891,314	)

Total distributions to shareholders		(24,097,389	)		(3,600,238	)		(10,490,319	)		(1,891,314	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		281,026,512			453,975,174			294,689,801			119,606,280
Cost of shares redeemed		(508,014,443	)		(106,048,705	)		(209,602,175	)		(18,873,671	)

Net increase (decrease) in net assets from capital share transactions		(226,987,931	)		347,926,469			85,087,626			100,732,609

INCREASE (DECREASE) IN NET ASSETS		(345,372,404	)		421,599,639			47,526,857			130,678,901

NET ASSETS
Beginning of year		573,026,200			151,426,561			318,998,056			188,319,155

End of year	$	227,653,796		$	573,026,200		$	366,524,913		$	318,998,056

Undistributed net investment income included in net assets at end of year	$	175,146		$	13,788,192		$	1,044,066		$	3,929,999


SHARES ISSUED AND REDEEMED
Shares sold		9,300,000			13,725,000			11,750,000			4,750,000
Shares redeemed		(16,575,000	)		(3,000,000	)		(8,250,000	)		(750,000	)

Net increase (decrease) in shares outstanding		(7,275,000	)		10,725,000			3,500,000			4,000,000


	iShares MSCI United Kingdom Index Fund
	Year ended August 31, 2008			Year ended August 31, 2007

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	39,928,967		$	37,583,387
Net realized gain		89,735,490			40,620,180
Net change in unrealized appreciation (depreciation)		(319,757,708	)		76,385,578

Net increase (decrease) in net assets resulting from operations		(190,093,251	)		154,589,145


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(63,131,140	)		(34,304,512	)

Total distributions to shareholders		(63,131,140	)		(34,304,512	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		463,470,489			229,005,308
Cost of shares redeemed		(455,482,369	)		(93,960,543	)

Net increase in net assets from capital share transactions		7,988,120			135,044,765

INCREASE (DECREASE) IN NET ASSETS		(245,236,271	)		255,329,398

NET ASSETS
Beginning of year		1,127,738,338			872,408,940

End of year	$	882,502,067		$	1,127,738,338

Undistributed net investment income included in net assets at end of year	$	8,677,006		$	32,407,502


SHARES ISSUED AND REDEEMED
Shares sold		20,200,000			9,800,000
Shares redeemed		(20,200,000	)		(4,000,000	)

Net increase in shares outstanding		–			5,800,000


	iShares MSCI Austria Investable Market Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	37.28		$	31.08		$	26.62		$	17.04		$	10.61


Income from investment operations:
Net investment income^a		0.56			0.51			0.44			0.29			0.21
Net realized and unrealized gain (loss)^b		(6.98	)		6.42			4.31			9.38			6.39

Total from investment operations		(6.42	)		6.93			4.75			9.67			6.60


Less distributions from:
Net investment income		(1.08	)		(0.73	)		(0.29	)		(0.09	)		(0.17	)

Total distributions		(1.08	)		(0.73	)		(0.29	)		(0.09	)		(0.17	)

Net asset value, end of year	$	29.78		$	37.28		$	31.08		$	26.62		$	17.04


Total return		(17.64	)%		22.35	%		18.00	%		56.82	%		62.70	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	193,602		$	473,514		$	391,637		$	196,952		$	57,920
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.77	%
Ratio of net investment income to average net assets		1.57	%		1.36	%		1.48	%		1.26	%		1.37	%
Portfolio turnover rate^c		26	%		21	%		32	%		21	%		11	%


	iShares MSCI Belgium Investable Market Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	25.89		$	22.83		$	18.94		$	14.77		$	11.16


Income from investment operations:
Net investment income^a		0.78			0.76			0.75			0.71			0.37
Net realized and unrealized gain (loss)^b		(7.27	)		2.74			3.95			3.75			4.25

Total from investment operations		(6.49	)		3.50			4.70			4.46			4.62


Less distributions from:
Net investment income		(1.76	)		(0.44	)		(0.81	)		(0.29	)		(1.01	)

Total distributions		(1.76	)		(0.44	)		(0.81	)		(0.29	)		(1.01	)

Net asset value, end of year	$	17.64		$	25.89		$	22.83		$	18.94		$	14.77


Total return		(26.21	)%		15.36	%		25.66	%		30.22	%		42.88	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	119,955		$	303,483		$	152,484		$	46,960		$	24,813
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.78	%
Ratio of net investment income to average net assets		3.32	%		2.90	%		3.60	%		3.89	%		2.79	%
Portfolio turnover rate^c		31	%		12	%		10	%		10	%		21	%


	iShares MSCI EMU Index Fund
	Year ended Aug. 31, 2008^a			Year ended Aug. 31, 2007^a			Year ended Aug. 31, 2006^a			Year ended Aug. 31, 2005^a			Year ended Aug. 31, 2004^a

Net asset value, beginning of year	$	57.15		$	46.14		$	37.49		$	29.69		$	25.06


Income from investment operations:
Net investment income^b		1.71			1.40			1.37			0.88			0.68
Net realized and unrealized gain (loss)^c		(9.59	)		10.54			7.94			7.57			4.35

Total from investment operations		(7.88	)		11.94			9.31			8.45			5.03


Less distributions from:
Net investment income		(3.30	)		(0.93	)		(0.66	)		(0.65	)		(0.40	)

Total distributions		(3.30	)		(0.93	)		(0.66	)		(0.65	)		(0.40	)

Net asset value, end of year	$	45.97		$	57.15		$	46.14		$	37.49		$	29.69


Total return		(14.52	)%		26.10	%		25.18	%		28.54	%		20.07	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,291,808		$	2,971,565		$	1,794,921		$	547,284		$	326,606
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.58	%		0.79	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			n/a			n/a			0.57	%		0.79	%
Ratio of net investment income to average net assets		3.06	%		2.60	%		3.23	%		2.50	%		2.29	%
Portfolio turnover rate^d		27	%		5	%		8	%		8	%		11	%


	iShares MSCI France Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	36.53		$	31.16		$	25.41		$	20.40		$	16.90


Income from investment operations:
Net investment income^a		0.93			0.77			0.55			0.47			0.24
Net realized and unrealized gain (loss)^b		(5.17	)		5.06			5.52			4.84			3.54

Total from investment operations		(4.24	)		5.83			6.07			5.31			3.78


Less distributions from:
Net investment income		(1.59	)		(0.46	)		(0.32	)		(0.30	)		(0.28	)

Total distributions		(1.59	)		(0.46	)		(0.32	)		(0.30	)		(0.28	)

Net asset value, end of year	$	30.70		$	36.53		$	31.16		$	25.41		$	20.40


Total return		(11.96	)%		18.83	%		24.13	%		26.13	%		22.44	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	227,203		$	445,696		$	211,886		$	81,326		$	61,201
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.79	%
Ratio of net investment income to average net assets		2.60	%		2.17	%		1.95	%		1.98	%		1.23	%
Portfolio turnover rate^c		10	%		6	%		10	%		7	%		9	%


	iShares MSCI Germany Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	32.18		$	23.68		$	19.08		$	14.96		$	12.57


Income from investment operations:
Net investment income^a		0.88			0.68			0.57			0.28			0.19
Net realized and unrealized gain (loss)^b		(3.84	)		8.33			4.15			4.03			2.40

Total from investment operations		(2.96	)		9.01			4.72			4.31			2.59


Less distributions from:
Net investment income		(1.67	)		(0.51	)		(0.12	)		(0.19	)		(0.20	)

Total distributions		(1.67	)		(0.51	)		(0.12	)		(0.19	)		(0.20	)

Net asset value, end of year	$	27.55		$	32.18		$	23.68		$	19.08		$	14.96


Total return		(9.81	)%		38.47	%		24.82	%		28.89	%		20.55	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	669,452		$	1,641,245		$	802,795		$	314,793		$	98,764
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.80	%
Ratio of net investment income to average net assets		2.72	%		2.32	%		2.62	%		1.54	%		1.27	%
Portfolio turnover rate^c		11	%		4	%		12	%		9	%		9	%


	iShares MSCI Italy Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	33.82		$	30.48		$	25.77		$	20.21		$	16.67


Income from investment operations:
Net investment income^a		1.53			1.35			1.07			0.78			0.56
Net realized and unrealized gain (loss)^b		(7.71	)		2.66			4.15			5.42			3.59

Total from investment operations		(6.18	)		4.01			5.22			6.20			4.15


Less distributions from:
Net investment income		(2.60	)		(0.67	)		(0.51	)		(0.64	)		(0.61	)

Total distributions		(2.60	)		(0.67	)		(0.51	)		(0.64	)		(0.61	)

Net asset value, end of year	$	25.04		$	33.82		$	30.48		$	25.77		$	20.21


Total return		(19.43	)%		13.20	%		20.61	%		30.74	%		25.09	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	244,154		$	172,495		$	146,324		$	42,526		$	27,279
Ratio of expenses to average net assets		0.52	%		0.52	%		0.54	%		0.57	%		0.83	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			n/a			n/a			n/a			0.79	%
Ratio of net investment income to average net assets		5.06	%		4.02	%		3.87	%		3.18	%		2.85	%
Portfolio turnover rate^c		29	%		16	%		15	%		18	%		9	%


	iShares MSCI Netherlands Investable Market Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	29.75		$	24.17		$	19.10		$	15.70		$	14.31


Income from investment operations:
Net investment income^a		1.10			0.98			0.60			0.57			0.39
Net realized and unrealized gain (loss)^b		(4.68	)		5.05			4.95			3.09			1.37

Total from investment operations		(3.58	)		6.03			5.55			3.66			1.76


Less distributions from:
Net investment income		(1.79	)		(0.45	)		(0.48	)		(0.26	)		(0.37	)

Total distributions		(1.79	)		(0.45	)		(0.48	)		(0.26	)		(0.37	)

Net asset value, end of year	$	24.38		$	29.75		$	24.17		$	19.10		$	15.70


Total return		(12.67	)%		25.22	%		29.53	%		23.40	%		12.28	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	209,653		$	251,354		$	109,991		$	63,974		$	28,265
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.78	%
Ratio of net investment income to average net assets		3.86	%		3.50	%		2.78	%		3.13	%		2.45	%
Portfolio turnover rate^c		26	%		8	%		17	%		6	%		9	%


	iShares MSCI Spain Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	58.06		$	44.81		$	35.70		$	27.55		$	22.39


Income from investment operations:
Net investment income^a		1.98			1.30			1.07			0.79			0.44
Net realized and unrealized gain (loss)^b		(7.33	)		12.33			8.78			7.97			4.99

Total from investment operations		(5.35	)		13.63			9.85			8.76			5.43


Less distributions from:
Net investment income		(2.30	)		(0.38	)		(0.74	)		(0.61	)		(0.27	)

Total distributions		(2.30	)		(0.38	)		(0.74	)		(0.61	)		(0.27	)

Net asset value, end of year	$	50.41		$	58.06		$	44.81		$	35.70		$	27.55


Total return		(9.76	)%		30.47	%		28.09	%		31.85	%		24.28	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	321,349		$	522,556		$	178,130		$	66,945		$	45,456
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.80	%
Ratio of net investment income to average net assets		3.28	%		2.36	%		2.67	%		2.33	%		1.64	%
Portfolio turnover rate^c		22	%		12	%		6	%		8	%		6	%


	iShares MSCI Sweden Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	34.57		$	25.88		$	21.58		$	16.82		$	12.59


Income from investment operations:
Net investment income^a		0.91			1.15			0.76			0.46			0.28
Net realized and unrealized gain (loss)^b		(8.63	)		7.88			3.96			4.45			4.20

Total from investment operations		(7.72	)		9.03			4.72			4.91			4.48


Less distributions from:
Net investment income		(2.37	)		(0.34	)		(0.42	)		(0.15	)		(0.25	)

Total distributions		(2.37	)		(0.34	)		(0.42	)		(0.15	)		(0.25	)

Net asset value, end of year	$	24.48		$	34.57		$	25.88		$	21.58		$	16.82


Total return		(23.16	)%		35.01	%		22.16	%		29.21	%		35.81	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	227,654		$	573,026		$	151,427		$	61,513		$	27,758
Ratio of expenses to average net assets		0.51	%		0.51	%		0.54	%		0.58	%		0.92	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			n/a			n/a			0.57	%		0.79	%
Ratio of net investment income to average net assets		2.91	%		3.42	%		3.13	%		2.28	%		1.74	%
Portfolio turnover rate^c		17	%		7	%		14	%		6	%		9	%


	iShares MSCI Switzerland Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	25.78		$	22.49		$	17.63		$	14.58		$	12.23


Income from investment operations:
Net investment income^a		0.49			0.36			0.27			0.22			0.09
Net realized and unrealized gain (loss)^b		(2.51	)		3.12			4.71			2.92			2.31

Total from investment operations		(2.02	)		3.48			4.98			3.14			2.40


Less distributions from:
Net investment income		(0.67	)		(0.19	)		(0.12	)		(0.09	)		(0.05	)

Total distributions		(0.67	)		(0.19	)		(0.12	)		(0.09	)		(0.05	)

Net asset value, end of year	$	23.09		$	25.78		$	22.49		$	17.63		$	14.58


Total return		(7.97	)%		15.53	%		28.36	%		21.54	%		19.56	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	366,525		$	318,998		$	188,319		$	79,324		$	41,920
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.79	%
Ratio of net investment income to average net assets		1.93	%		1.42	%		1.34	%		1.34	%		0.64	%
Portfolio turnover rate^c		11	%		5	%		11	%		5	%		4	%


	iShares MSCI United Kingdom Index Fund
	Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005			Year ended Aug. 31, 2004

Net asset value, beginning of year	$	24.73		$	21.92		$	18.74		$	15.72		$	13.00


Income from investment operations:
Net investment income^a		0.83			0.84			0.97			0.60			0.48
Net realized and unrealized gain (loss)^b		(4.89	)		2.78			2.79			2.76			2.72

Total from investment operations		(4.06	)		3.62			3.76			3.36			3.20


Less distributions from:
Net investment income		(1.32	)		(0.81	)		(0.58	)		(0.34	)		(0.48	)

Total distributions		(1.32	)		(0.81	)		(0.58	)		(0.34	)		(0.48	)

Net asset value, end of year	$	19.35		$	24.73		$	21.92		$	18.74		$	15.72


Total return		(17.16	)%		16.77	%		20.61	%		21.53	%		24.77	%


Ratios/Supplemental data:
Net assets, end of year (000s)	$	882,502		$	1,127,738		$	872,409		$	464,850		$	452,870
Ratio of expenses to average net assets		0.52	%		0.51	%		0.54	%		0.57	%		0.77	%
Ratio of net investment income to average net assets		3.64	%		3.51	%		4.81	%		3.39	%		3.11	%
Portfolio turnover rate^c		14	%		8	%		10	%		11	%		6	%


iShares MSCI Index Fund	Undistributed Ordinary Income		Unrealized Depreciation			Capital and Other Losses			Net Accumulated Losses
Austria Investable Market	$	1,858,667	$	(68,573,853	)	$	(22,417,653	)	$	(89,132,839	)
Belgium Investable Market		783,669		(51,535,501	)		(9,729,232	)		(60,481,064	)
EMU		9,716,846		(240,818,188	)		(26,557,249	)		(257,658,591	)
France		1,973,533		(68,770,033	)		(8,976,884	)		(75,773,384	)
Germany		1,317,923		(163,041,526	)		(55,873,449	)		(217,597,052	)
Italy		1,337,510		(72,274,945	)		(7,394,654	)		(78,332,089	)
Netherlands Investable Market		2,232,976		(40,010,242	)		(15,070,355	)		(52,847,621	)
Spain		5,360,722		(102,477,644	)		(6,923,793	)		(104,040,715	)
Sweden		148,655		(80,232,237	)		(17,334,911	)		(97,418,493	)
Switzerland		1,024,002		(38,079,198	)		(5,492,707	)		(42,547,903	)
United Kingdom		8,678,934		(137,367,977	)		(33,199,682	)		(161,888,725	)


iShares MSCI Index Fund		Deferred Net Realized Capital Losses
Austria Investable Market		$ 7,179,631
Belgium Investable Market		5,965,717
EMU		24,023,638
France		3,408,375
Germany		23,185,643


iShares MSCI Index Fund	Expiring 2009		Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Total
Austria Investable Market	$	336,553	$	1,291,324	$	370,948	$	855,364	$	–	$	–	$	9,795,917	$	2,587,916	$	15,238,022
Belgium Investable Market		59,876		1,677,678		117,767		175,781		33,969		–		–		1,698,444		3,763,515
EMU		–		–		–		659,648		1,873,963		–		–		–		2,533,611
France		–		2,436,748		236,944		2,400,550		–		–		158,472		335,795		5,568,509
Germany		–		8,697,227		5,469,732		8,656,712		2,241,687		–		4,227,713		3,394,735		32,687,806
Italy		–		2,648,775		848,408		541,980		527,327		–		–		472,268		5,038,758
Netherlands Investable Market		60,885		3,222,792		1,497,810		2,481,175		129,137		403,525		260,715		1,195,162		9,251,201
Spain		–		–		–		995,671		–		–		–		–		995,671
Sweden		–		713,472		1,577,551		1,149,514		–		107,613		–		100,015		3,648,165
Switzerland		–		1,970,979		1,018,305		2,149,171		354,252		–		–		–		5,492,707
United Kingdom		–		856,798		6,448,554		4,272,059		1,517,783		7,063,063		–		261,754		20,420,011