[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                  iSHARES(Reg. TM) MSCI AUSTRALIA INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Australia Index Fund (the "Fund").

CUSIP: 464286103
TRADING SYMBOL: EWA
UNDERLYING INDEX: MSCI Australia Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 200,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                   
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Australia IndexSM" is a servicemark of MSCI Inc. and has been licensed
for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Australia Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Australian
Stock Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were materials, banks and real estate.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The agricultural and mining sectors of Australia's
economy account for the majority of its exports. Australia is susceptible to
fluctuations in the commodity markets and, in particular, in the price and
demand for agricultural products and natural resources. Any negative changes in
these sectors could have an adverse impact on the Australian economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Australian currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign

                                                                               3




securities, the Fund may be subject to increased risk of loss caused by any of
the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Australia is located in a part of the world that has
historically been prone to natural disasters such as drought and is
economically sensitive to environmental events. Any such event could result in
a significant adverse impact on the Australian economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]



MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Australian economy is dependent on the
economies of Asia, Europe and the United States as key trading partners.
Reduction in spending by any of these economies on Australian products and
services or negative changes in any of these economies may cause an adverse
impact on the Australian economy:

ASIAN ECONOMIC RISK. Certain Asian economies experience over-extension of
credit, currency devaluations and restrictions, rising unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant effect on the entire Asian region as well as
on major trading partners outside Asia and any adverse event in the Asian
markets may have a significant adverse effect on the Australian economy.

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is Australia's largest trade and
investment partner. Decreasing U.S. imports, new trade regulations, changes in
the U.S. dollar

6
[GRAPHIC APPEARS HERE]




exchange rates or a recession in the United States may have an adverse impact
on the Australian economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


    
1998   2.18%
1999   19.24%
2000  -11.52%
2001   2.33%
2002  -0.28%
2003   49.82%
2004   30.86%
2005   16.67%
2006   31.42%
2007   28.96%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -31.89%.

The best calendar quarter return during the periods shown above was 19.81% in
the 4th quarter of 2004; the worst was -15.81% in the 3rd quarter of 2001.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS      10 YEARS
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 3/12/1996)
  Return Before Taxes                  28.96%       31.12%       15.60%
  Return After Taxes on                27.64%       30.07%       14.66%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            19.42%       27.51%       13.53%
MSCI AUSTRALIA INDEX (Index
returns do not reflect
deductions for fees, expenses,         28.34%       30.57%       15.76%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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 Austria Investable Market Index Fund, iShares MSCI Belgium
Investable

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Australia among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 200,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $3,968,000     200,000           $2,400              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   27.62       $    21.59        $  18.28         $  13.56         $  11.22
                                   ---------       ----------        --------         --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.96             0.89            0.75             0.70             0.45
 Net realized and unrealized
  gain (loss)/b/                       (3.34)            6.24            3.23             4.60             2.32
                                   ---------       ----------        --------         --------         --------
Total from investment
  operations                           (2.38)            7.13            3.98             5.30             2.77
                                   ---------       ----------        --------         --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (1.28)           (1.10)          (0.67)           (0.58)           (0.43)
                                   ---------       ----------        --------         --------         --------
Total distributions                    (1.28)           (1.10)          (0.67)           (0.58)           (0.43)
                                   ---------       ----------        --------         --------         --------
NET ASSET VALUE, END OF YEAR       $   23.96       $    27.62        $  21.59         $  18.28         $  13.56
                                   =========       ==========        ========         ========         ========
TOTAL RETURN                           (9.25)%          33.97%          22.35%           39.58%           24.95%
                                   =========       ==========        ========         ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $1,059,092      $1,464,112        $686,407         $369,355         $178,998
 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                                3.38%            3.46%           3.75%            4.13%            3.37%
 Portfolio turnover rate/c/               10%              10%              7%              17%               9%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                  NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
======================================  ================  =========================
                                                    
Greater than 4.0%                                2                    0.45%
Greater than 3.5% and Less than 4.0%             2                    0.45
Greater than 3.0% and Less than 3.5%             4                    0.91
Greater than 2.5% and Less than 3.0%             6                    1.36
Greater than 2.0% and Less than 2.5%             6                    1.36
Greater than 1.5% and Less than 2.0%            20                    4.55
Greater than 1.0% and Less than 1.5%            40                    9.09
Greater than 0.5% and Less than 1.0%            82                   18.64
BETWEEN 0.5% AND -0.5%                         157                   35.69
Less than -0.5% and Greater than -1.0%          40                    9.09
Less than -1.0% and Greater than -1.5%          34                    7.73
Less than -1.5% and Greater than -2.0%          14                    3.18
Less than -2.0% and Greater than -2.5%          13                    2.95
Less than -2.5% and Greater than -3.0%          12                    2.73
Less than -3.0% and Greater than -3.5%           4                    0.91
Less than -3.5% and Greater than -4.0%           3                    0.68
Less than -4.0%                                  1                    0.23
                                               ---                   -----
                                               440                  100.00%
                                               ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                     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
============================ ========== ========== ======== ======== ======== ======== ======== =======
                                                                        
(9.25)%                      (10.72)%   (10.09)%   21.01%   20.59%   20.34%   15.35%   15.35%   15.04%




                                        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
======================== ========== ========== ========= ========= ========= ========= ========= ========
                                                                         
(9.25)%                  (10.72)%   (10.09)%   159.43%   154.96%   152.41%   316.99%   317.08%   306.01%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWA-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]





[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

          iSHARES(Reg. TM) MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Austria Investable Market Index Fund* (the "Fund").

CUSIP: 464286202
TRADING SYMBOL: EWO
UNDERLYING INDEX: MSCI Austria Investable Market Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)

  *  On June 25, 2008, the name of the Fund changed from the iShares MSCI
  Austria Index Fund to the iShares MSCI Austria Investable Market Index Fund
  to reflect a previous change in the Fund's Underlying Index from the MSCI
  Austria Index to the MSCI Austria Investable Market Index.




Table of Contents

                                   
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   6
  Performance Information..........   7
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Austria Investable Market IndexSM" and "MSCI Austria IndexSM" are
servicemarks of MSCI Inc. and have been licensed for use for certain purposes
by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Austria Investable
Market Index (the "Underlying Index"). The Fund's investment objective and the
Underlying Index may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Vienna Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were banks, energy and capital goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Austrian currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange

4
[GRAPHIC APPEARS HERE]




or in any market. The Fund's shares may be less actively traded in certain
markets than others, and investors are subject to the execution and settlement
risks and market standards of the market where they or their broker direct
their trades for execution. Certain information available to investors who
trade Fund shares on a U.S. stock exchange during regular U.S. market hours may
not be available to investors who trade in other markets, which may result in
secondary market prices in such markets being less efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing

                                                                               5




to sell Fund shares (the "ask" price). Because of the costs inherent in buying
or selling Fund shares, frequent trading may detract significantly from
investment results and an investment in Fund shares may not be advisable for
investors who anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Austrian economy is dependent on the
economies of Europe, mainly Eastern Europe, as key trading partners. Reduction
in spending by these economies on Austrian products and services or negative
changes in any of these economies may cause an adverse impact on the Austrian
economy. Eastern European markets remain relatively undeveloped and can be
particularly sensitive to political and economic developments and adverse
events in these Eastern European countries may greatly impact the Austrian
economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

6
[GRAPHIC APPEARS HERE]




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
1998   -1.83%
1999   -10.36%
2000   -10.57%
2001   -2.57%
2002    17.27%
2003    58.46%
2004    70.93%
2005    21.50%
2006    35.84%
2007    3.95%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -41.74%.

The best calendar quarter return during the periods shown above was 28.95% in
the 4th quarter of 2004; the worst was -23.45% in the 3rd quarter of 1998.

                                                                               7




                         AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                     1 YEAR      5 YEARS      10 YEARS
                                   ----------  -----------  -----------
                                                   
  (INCEPTION DATE: 3/12/1996)
  Return Before Taxes                  3.95%       35.97%       15.37%
  Return After Taxes on                4.05%       35.92%       15.10%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            3.34%       32.78%       13.85%
MSCI AUSTRIA INVESTABLE MARKET
INDEX (Index returns do
not reflect deductions for fees,       2.17%       36.17%       15.80%
expenses, or taxes)(2)


- -----------
(1)After-tax returns in the table above are calculated using the historical
   highest individual U.S. federal marginal income tax rates and do not reflect
   the impact of state, local or foreign taxes. Actual after-tax returns depend
   on an investor's tax situation and may differ from those shown, and after-tax
   returns shown are not relevant to tax-exempt investors or investors who hold
   shares through tax-deferred arrangements, such as 401(k) plans or individual
   retirement accounts ("IRAs"). Fund returns after taxes on distributions and
   sale of Fund shares are calculated assuming that an investor has sufficient
   capital gains of the same character from other investments to offset any
   capital losses from the sale of Fund shares. As a result, Fund returns after
   taxes on distributions and sale of Fund shares may exceed Fund returns before
   taxes and/or returns after taxes on distributions.
(2)At a December 7, 2007, special shareholder meeting of the Fund, a proposal to
   change the Underlying Index of the Fund from the MSCI Austria Index to the
   MSCI Austria Investable Market Index was approved in response to MSCI's
   combinations of its standard and small cap indexes to form new investable
   market indexes. The transition to this index was implemented on February 1,
   2008. The returns prior to that date reflect those of the former MSCI Austria
   Index and not the current MSCI Austria Investable Market Index.

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Austria among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $2,145,000     100,000            $600               3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                  NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
======================================  ================  =========================
                                                     
Greater than 3.5% and Less than 4.0%              2                    0.45%
Greater than 3.0% and Less than 3.5%              1                    0.23
Greater than 2.5% and Less than 3.0%              1                    0.23
Greater than 2.0% and Less than 2.5%              3                    0.68
Greater than 1.5% and Less than 2.0%              6                    1.36
Greater than 1.0% and Less than 1.5%             24                    5.45
Greater than 0.5% and Less than 1.0%             45                   10.23
BETWEEN 0.5% AND -0.5%                          260                   59.10
Less than -0.5% and Greater than -1.0%           51                   11.59
Less than -1.0% and Greater than -1.5%           32                    7.27
Less than -1.5% and Greater than -2.0%           10                    2.27
Less than -2.0% and Greater than -2.5%            2                    0.45
Less than -2.5% and Greater than -3.0%            1                    0.23
Less than -3.0% and Greater than -3.5%            1                    0.23
Less than -3.5%                                   1                    0.23
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

Effective February 1, 2008, to broaden its coverage of the market, the Fund
changed its Underlying Index from the MSCI Austria Index to the MSCI Austria
Investable Market Index. 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 through
January 31, 2008 and the MSCI Austria Investable Market Index thereafter.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008



                                     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%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWO-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]





[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

          iSHARES(Reg. TM) MSCI BELGIUM INVESTABLE MARKET INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Belgium Investable Market Index Fund* (the "Fund").

CUSIP: 464286301
TRADING SYMBOL: EWK
UNDERLYING INDEX: MSCI Belgium Investable Market Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 40,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)

  *  On June 25, 2008, the name of the Fund changed from the iShares MSCI
  Belgium Index Fund to the iShares MSCI Belgium Investable Market Index Fund
  to reflect a previous change in the Fund's Underlying Index from the MSCI
  Belgium Index to the MSCI Belgium Investable Market Index.




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   7
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Belgium Investable Market IndexSM" and "MSCI Belgium IndexSM" are
servicemarks of MSCI Inc. and have been licensed for use for certain purposes
by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Belgium Investable
Market Index (the "Underlying Index"). The Fund's investment objective and the
Underlying Index may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Brussels Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were diversified financials, banks and materials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Belgian currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Belgium's geographic location near the center of Europe's
transportation network makes it vulnerable to environmental events (such as
pollution, oil spills, etc.) that may have an adverse impact on the Belgian
economy. Belgium also faces a significant risk of major flooding which could
adversely affect the country's economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Except for its coal, which is no longer
economical to exploit, Belgium has virtually no natural resources. Belgium is
reliant on imports for its commodity needs. Any fluctuations or shortages in
the commodity markets could have a negative impact on the Belgian economy.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Belgian economy is dependent on the
economies of Europe as key trading partners. The Economic and Monetary Union of
the European Union ("EU") requires compliance with restrictions on inflation
rates, deficits, interest rates, debt levels and fiscal and monetary controls,
each of which may significantly affect every country in Europe. Decreasing
imports or exports, changes in governmental regulations on trade, changes in the
exchange rate of the euro and recessions in EU economies may have a significant
adverse impact on the economies of other EU members and their trading partners.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

6
[GRAPHIC APPEARS HERE]




Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    51.69%
1999   -14.05%
2000   -16.10%
2001   -12.99%
2002   -9.36%
2003    41.06%
2004    43.92%
2005    7.75%
2006    36.35%
2007   -1.18%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -41.81%.

The best calendar quarter return during the periods shown above was 30.06% in
the 2nd quarter of 2003; the worst was -25.68% in the 3rd quarter of 2002.

                                                                               7




                         AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 3/12/1996)
  Return Before Taxes                  -1.18%       24.13%      9.78%
  Return After Taxes on                -1.19%       23.45%      8.56%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                             0.20%       21.35%      7.98%
MSCI BELGIUM INVESTABLE MARKET
INDEX (Index returns do
not reflect deductions for fees,       -2.66%       23.02%      9.49%
expenses, or taxes)(2)


- -----------
(1)After-tax returns in the table above are calculated using the historical
   highest individual U.S. federal marginal income tax rates and do not reflect
   the impact of state, local or foreign taxes. Actual after-tax returns depend
   on an investor's tax situation and may differ from those shown, and after-tax
   returns shown are not relevant to tax-exempt investors or investors who hold
   shares through tax-deferred arrangements, such as 401(k) plans or individual
   retirement accounts ("IRAs"). Fund returns after taxes on distributions and
   sale of Fund shares are calculated assuming that an investor has sufficient
   capital gains of the same character from other investments to offset any
   capital losses from the sale of Fund shares. As a result, Fund returns after
   taxes on distributions and sale of Fund shares may exceed Fund returns before
   taxes and/or returns after taxes on distributions.
(2)As of December 1, 2007, the Board changed the Underlying Index of the Fund
   from the MSCI Belgium Index to the MSCI Belgium Investable Market Index in
   response to MSCI's combination of its standard and small cap indexes to form
   new investable market indexes. The returns prior to that date reflect those
   of the former MSCI Belgium Index and not the current MSCI Belgium Investable
   Market Index.

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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 Investable Market Index Fund, iShares MSCI
Austria

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Belgium among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 40,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
     $543,600      40,000            $700               3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.5% and Less than 4.0%              1                    0.23%
Greater than 3.0% and Less than 3.5%              1                    0.23
Greater than 2.5% and Less than 3.0%              1                    0.23
Greater than 2.0% and Less than 2.5%              2                    0.45
Greater than 1.5% and Less than 2.0%              6                    1.36
Greater than 1.0% and Less than 1.5%             23                    5.23
Greater than 0.5% and Less than 1.0%             55                   12.48
BETWEEN 0.5% AND -0.5%                          265                   60.23
Less than -0.5% and Greater than -1.0%           52                   11.82
Less than -1.0% and Greater than -1.5%           23                    5.23
Less than -1.5% and Greater than -2.0%            8                    1.82
Less than -2.0% and Greater than -2.5%            1                    0.23
Less than -2.5% and Greater than -3.0%            1                    0.23
Less than -3.0%                                   1                    0.23
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

Effective December 1, 2007, to broaden its coverage of the market, the Fund
changed its Underlying Index from the MSCI Belgium Index to the MSCI Belgium
Investable Market Index. 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 through
November 30, 2007 and the MSCI Belgium Investable Market Index thereafter.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008



                                    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%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWK-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI BRAZIL INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Brazil Index Fund (the "Fund").

CUSIP: 464286400
TRADING SYMBOL: EWZ
UNDERLYING INDEX: MSCI Brazil Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 50,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Brazil IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Brazil Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the BM&FBOVESPA. As
of September 30, 2008, the Underlying Index's three largest industries were
energy, materials and banks.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The agricultural and mining sectors of Brazil's
economy account for a large portion of its exports. Any changes in these
sectors or fluctuations in the commodity markets could have an adverse impact
on the Brazilian economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Brazilian currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to

                                                                               3




complete and settle, and governments or trade groups may compel local agents to
hold securities in designated depositories that are not subject to independent
evaluation. Local agents are held only to the standards of care of their local
markets. The less developed a country's securities market is, the greater the
likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

4
[GRAPHIC APPEARS HERE]




MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A

                                                                               5




PREMIUM OR DISCOUNT TO NAV. However, because shares can be created and redeemed
in Creation Units at NAV (unlike shares of many closed-end funds, which
frequently trade at appreciable discounts from, and sometimes at premiums to,
their NAVs), BGFA believes that large discounts or premiums to the NAV of the
Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

PRIVATIZATION RISK. The Brazilian government has begun a program of
privatization, notably in the telecommunications and energy sectors.
Historically, investors in some newly privatized entities have suffered losses
due to inability of the newly privatized company to adjust quickly to a
competitive environment or to changed regulatory and legal standards. There is
no assurance that similar losses will not recur.

RELIANCE ON TRADING PARTNERS RISK. Brazil is highly dependent on trade with
other countries. The Brazilian economy is affected by the economies of other
Central and South American countries, some of which have experienced high
interest rates, economic volatility, inflation, currency devaluations and high
unemployment rates. Any adverse economic event in one country can have a
significant effect on other

6
[GRAPHIC APPEARS HERE]




countries of this region. In addition, commodities (such as oil, gas and
minerals) represent a significant percentage of the region's exports and many
economies in this region, including Brazil's, are particularly sensitive to
fluctuations in commodity prices.

STRUCTURAL RISKS. Certain political, economic, legal and currency risks have
contributed to a high level of price volatility in the Brazilian equity and
currency markets and could adversely affect investments in the Fund:

ECONOMIC AND CURRENCY RISK. Brazil is heavily dependent upon commodity prices
and international trade and suffers from high inflation rates. Brazil, like
some emerging market countries, is likely to experience currency devaluations
and economic recessions causing a negative effect on its economy and securities
market.

LARGE GOVERNMENT DEBT RISK. Brazil continues to suffer from chronic structural
public sector deficits. Brazil's outstanding government debt has in recent
times been as high as 51% of gross domestic product. Total foreign debt is
still large in relation to Brazil's export base.

POLITICAL AND SOCIAL RISK. Disparities of wealth, the pace and success of
democratization and capital market development and ethnic and religious and
racial disaffection have led to social unrest, violence and labor unrest.
Unanticipated political or social developments may result in sudden and
significant investment losses.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

                YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
2001   -19.52%
2002   -34.71%
2003    113.03%
2004    34.16%
2005    52.46%
2006    44.28%
2007    76.61%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -29.61%.

The best calendar quarter return during the periods shown above was 40.50% in
the 4th quarter of 2002; the worst was -40.27% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                                                SINCE
                                       ONE          FIVE        FUND
                                       YEAR        YEARS      INCEPTION
                                   -----------  -----------  ----------
                                                    
(INCEPTION DATE: 7/10/2000)
  Return Before Taxes                  76.61%       61.84%      23.40%
  Return After Taxes on                76.02%       61.14%      22.67%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            50.11%       56.66%      20.74%
MSCI BRAZIL INDEX(Index returns
do not reflect deductions
for fees, expenses or taxes)           79.56%       64.07%      25.96%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.63%            None             None           0.63%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses. During the most recently completed fiscal year the Fund incurred
   nominal foreign tax expenses in an amount that rounds to 0.00%. The dollar
   amount of such expenses are shown in the Fund's Financial Highlights; actual
   tax expenses for the current fiscal year may be higher or lower than those
   incurred in the prior year.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $64       $202       $351       $786


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.63%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States does not have an
appropriate comprehensive income tax treaty with Brazil but does with other
countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the

                                                                              15




close of a year consist of foreign stocks or securities, the Fund may "pass
through" to you certain foreign income taxes (including withholding taxes) paid
by the Fund. This means that you would be considered to have received as an
additional dividend your share of such foreign taxes, but you may, in such
case, be entitled to either a corresponding tax deduction in calculating your
taxable income, or, subject to certain limitations, a credit in calculating
your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 50,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933

16
[GRAPHIC APPEARS HERE]




Act, will not be able to receive Fund securities that are restricted securities
eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $2,850,500      50,000           $2,400              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                         $    61.59       $    39.09       $    28.18        $  16.96         $  12.19
                                  ----------       ----------       ----------        --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               1.93             1.09             1.00            0.89             0.55
 Net realized and unrealized
  gain/b/                              11.59            22.35            10.49           10.79             4.49
                                  ----------       ----------       ----------        --------         --------
Total from investment
  operations                           13.52            23.44            11.49           11.68             5.04
                                  ----------       ----------       ----------        --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (1.41)           (0.94)           (0.58)          (0.46)           (0.27)
 Net realized gain                     (0.43)               -                -               -                -
                                  ----------       ----------       ----------        --------         --------
Total distributions                    (1.84)           (0.94)           (0.58)          (0.46)           (0.27)
                                  ----------       ----------       ----------        --------         --------
NET ASSET VALUE, END OF YEAR      $    73.27       $    61.59       $    39.09        $  28.18         $  16.96
                                  ==========       ==========       ==========        ========         ========
TOTAL RETURN                           21.58%           60.82%           41.13%          69.72%           41.42%
                                  ==========       ==========       ==========        ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                          $7,242,260       $4,434,334       $2,468,295        $552,285         $209,504
 Ratio of expenses to
  average net assets                    0.63%            0.69%            0.70%           0.74%            0.96%
 Ratio of expenses to
  average net assets
  exclusive of foreign taxes            0.63%            0.68%          n/a              n/a             n/a
 Ratio of net investment
  income to average net
  assets                                2.37%            2.17%            2.65%           3.94%            3.59%
 Portfolio turnover rate/c/               30%              22%              15%             48%             106%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates include portfolio transactions that are executed as
   a result of the Fund processing capital share transactions in Creation Units
   solely for cash in U.S. dollars. Excluding such transactions, the portfolio
   turnover rate for the years ended August 31, 2008, August 31, 2007, August
   31, 2006 and August 31, 2005 would have been 19%, 6%, 13% and 9%,
   respectively.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.5% and Less than 4.0%              1                    0.23%
Greater than 3.0% and Less than 3.5%              1                    0.23
Greater than 2.5% and Less than 3.0%              1                    0.23
Greater than 2.0% and Less than 2.5%              1                    0.23
Greater than 1.5% and Less than 2.0%              3                    0.68
Greater than 1.0% and Less than 1.5%              9                    2.05
Greater than 0.5% and Less than 1.0%             27                    6.14
BETWEEN 0.5% AND -0.5%                          347                   78.84
Less than -0.5% and Greater than -1.0%           28                    6.36
Less than -1.0% and Greater than -1.5%            8                    1.82
Less than -1.5% and Greater than -2.0%            5                    1.14
Less than -2.0% and Greater than -2.5%            4                    0.91
Less than -2.5% and Greater than -3.0%            1                    0.23
Less than -3.0% and Greater than -3.5%            1                    0.23
Less than -3.5% and Greater than -4.0%            3                    0.68
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which 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, 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008



                                   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
============================ ======== ======== ======== ======== ======== ======== ======== =======
                                                                    
  21.58%                     22.51%   23.37%   45.96%   45.94%   47.86%   19.81%   19.82%   22.16%




                                      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
======================== ======== ======== ========= ========= ========= ========= ========= ========
                                                                     
21.58%                   22.51%   23.37%   562.40%   562.09%   606.80%   335.89%   336.06%   410.16%


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

24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWZ-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI CANADA INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Canada Index Fund (the "Fund").

CUSIP: 464286509
TRADING SYMBOL: EWC
UNDERLYING INDEX: MSCI Canada Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Canada IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Canada Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Toronto Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were energy, banks and materials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The Canadian economy is highly dependent on the demand
for and price of natural resources. As a result, the Canadian market is
relatively concentrated in issuers involved in the production and distribution
of natural resources and any changes in these sectors could have an adverse
impact on the Canadian economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Canadian currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign

                                                                               3




securities, the Fund may be subject to increased risk of loss caused by any of
the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

4
[GRAPHIC APPEARS HERE]




RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

                                                                               5




COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Canadian economy is dependent heavily
upon the economies of Europe as key trading partners. Reduction in spending by
these economies on Canadian products and services or negative changes in any of
these economies may cause an adverse impact in the Canadian economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

NORTH AMERICAN ECONOMIC RISK. The United States is Canada's largest trade and
investment partner and the Canadian economy is significantly affected by
developments in the U.S. economy. Since the implementation of the North
American Free Trade Agreement ("NAFTA") in 1994 among Canada, the U.S. and
Mexico, total two-way merchandise trade between the United States and Canada
has more than doubled. To further this relationship, the three NAFTA countries
entered into The Security and Prosperity Partnership of North America in March
2005, which may further affect Canada's dependency on the U.S. economy. Any
downturn in U.S. or Mexican economic activity is likely to have an adverse
impact on the Canadian economy.

STRUCTURAL RISK

POLITICAL RISK. Past demands for sovereignty by the Province of Quebec have

6
[GRAPHIC APPEARS HERE]




significantly affected equity valuations and foreign currency movements in the
Canadian market.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998   -6.47%
1999    46.13%
2000    7.66%
2001   -17.86%
2002   -13.20%
2003    53.34%
2004    22.45%
2005    27.84%
2006    17.45%
2007    29.24%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -18.65%.

The best calendar quarter return during the periods shown above was 21.44% in
the 4th quarter of 1999; the worst was -24.40% in the 3rd quarter of 1998.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS      10 YEARS
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  29.24%       29.51%       14.35%
  Return After Taxes on                29.26%       29.59%       13.46%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            19.57%       26.80%       12.46%
MSCI CANADA INDEX (Index returns
do not reflect
deductions for fees, expenses,         29.57%       29.91%       14.76%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Canada among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $2,621,000     100,000           $1,900              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                         $    29.87       $    24.69       $    20.30        $  14.33         $ 12.25
                                  ----------       ----------       ----------        --------         -------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.47             0.35             0.25            0.17            0.11
 Net realized and unrealized
  gain/b/                               0.72             5.11             4.29            6.00            2.17
                                  ----------       ----------       ----------        --------         -------
Total from investment
  operations                            1.19             5.46             4.54            6.17            2.28
                                  ----------       ----------       ----------        --------         -------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.51)           (0.28)           (0.15)          (0.20)          (0.20)
                                  ----------       ----------       ----------        --------         -------
Total distributions                    (0.51)           (0.28)           (0.15)          (0.20)          (0.20)
                                  ----------       ----------       ----------        --------         -------
NET ASSET VALUE, END OF YEAR      $    30.55       $    29.87       $    24.69        $  20.30         $ 14.33
                                  ==========       ==========       ==========        ========         =======
TOTAL RETURN                            3.88%           22.33%           22.46%          43.35%          18.70%
                                  ==========       ==========       ==========        ========         =======
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                          $2,071,061       $1,323,122       $1,101,161        $420,301         $325,298
 Ratio of expenses to
  average net assets                    0.52%            0.52%            0.54%           0.57%           0.70%/c/
 Ratio of expenses to
  average net assets
  exclusive of foreign taxes          n/a                0.52%          n/a              n/a            n/a
 Ratio of net investment
  income to average net
  assets                                1.46%            1.32%            1.09%           1.00%           0.81%
 Portfolio turnover rate/d/               11%               8%              20%              9%             10%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Ratio of expenses to average net assets prior to voluntary reimbursed
   distribution fees for the year ended August 31, 2004 was 0.80%.
/d/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                    NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
========================================  ================  =========================
                                                      
Greater than 1.5%                                  2                    0.45%
Greater than 1.0% and Less than 1.5%               3                    0.68
Greater than 0.5% and Less than 1.0%              24                    5.45
BETWEEN 0.5% AND -0.5%                           380                   86.37
Less than -0.5% and Greater than -1.0%            22                    5.00
Less than -1.0% and Greater than -1.5%             7                    1.59
Less than -1.5% and Greater than -2.0%             1                    0.23
Less than -2.0%                                    1                    0.23
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                   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
============================ ======== ======= ======== ======== ======== ======== ======== =======
                                                                   
  3.88%                       3.39%   4.11%   21.50%   21.38%   21.78%   16.55%   16.46%   16.85%




                                      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
======================== ======== ======= ========= ========= ========= ========= ========= ========
                                                                    
  3.88%                   3.39%   4.11%   164.82%   163.53%   167.89%   362.55%   359.10%   374.74%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWC-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

               iSHARES(Reg. TM) MSCI EMERGING MARKETS INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Emerging Markets Index Fund (the "Fund").

CUSIP: 464287234
TRADING SYMBOL: EEM
UNDERLYING INDEX: MSCI Emerging Markets Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 450,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   1
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Emerging Markets IndexSM" is a servicemark of MSCI Inc. and has been
licensed for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

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

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

Principal Investment Strategies

The Underlying Index is designed to measure equity market performance in the
global emerging markets. As of September 30, 2008, the Underlying Index
consisted of the

                                                                               1




following 20 emerging market indexes: Argentina, Brazil, Chile, China,
Colombia, the Czech Republic, Egypt, Hong Kong, Hungary, India, Indonesia,
Israel, Malaysia, Mexico, Peru, the Philippines, Russia, South Korea, Thailand
and Turkey. As of September 30, 2008, the Underlying Index's three largest
industries were energy, banks and materials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts representing securities in its
Underlying Index. The Fund may invest the remainder of its assets in other
securities, including securities not in the Underlying Index, futures
contracts, options on futures contracts, other types of options and swaps
related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.
BGFA will waive portfolio management fees in an amount equal to the portfolio
management fees of such other iShares funds for any portion of the Fund's
assets invested in shares of such other funds.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing


2
[GRAPHIC APPEARS HERE]




strategy. "Replication" is an indexing strategy in which a fund invests in
substantially all of the securities in its underlying index in approximately
the same proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the local currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations

                                                                               3




caused by economic and political developments. As a result of investing in
foreign securities, the Fund may be subject to increased risk of loss caused by
any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Some markets in which the Fund invests are located in parts of
the world that have historically been prone to natural disasters such as
earthquakes, volcanoes, drought or tsunamis and are economically sensitive to
environmental events. Any such event could result in a significant adverse
impact on the economies of these countries and investments made in these
countries.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or

4
[GRAPHIC APPEARS HERE]




industries. During a general economic downturn in the securities markets,
multiple asset classes may be negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to

                                                                               5




correlate exactly with the Fund's NAV due to timing reasons as well as market
supply and demand factors. In addition, disruptions to creations and
redemptions or the existence of extreme market volatility may result in trading
prices that differ significantly from NAV. If a shareholder purchases at a time
when the market price is at a premium to the NAV or sells at a time when the
market price is at a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. Economies in emerging market countries
generally are dependent heavily upon commodity prices and international trade
and, accordingly, may be affected adversely by the economies of their trading
partners, trade barriers, exchange controls, managed adjustments in relative
currency values, and may suffer from extreme and volatile debt burdens or
inflation rates:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on certain emerging
markets.

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

6
[GRAPHIC APPEARS HERE]




U.S. ECONOMIC RISK. The United States is a significant trading partner of many
emerging markets in which the Fund invests. Decreasing U.S. imports, new trade
regulations, changes in the U.S. dollar exchange rates or a recession in the
United States may have an adverse impact on these markets.

SECURITY RISK. Some geographic areas in which the Fund invests have experienced
acts of terrorism or strained international relations due to territorial
disputes, historical animosities or other defense concerns. These situations
may cause uncertainty in the markets of these geographic areas and may
adversely affect the performance of their economies.

STRUCTURAL RISKS. Certain emerging market countries are subject to a
considerable degree of economic, political and social instability.

ECONOMIC RISK. Some emerging market countries have experienced currency
devaluations and substantial (and, in some cases, extremely high) rates of
inflation, while others have experienced economic recessions causing a negative
effect on the economies and securities markets of such emerging countries.

POLITICAL AND SOCIAL RISK. Some governments in emerging market countries are
authoritarian in nature or have been installed or removed as a result of
military coups, and some governments have periodically used force to suppress
civil dissent. Disparities of wealth, the pace and success of democratization,
and ethnic, religious and racial disaffection, have also led to social unrest,
violence and/or labor unrest in some emerging market countries. Unanticipated
political or social developments may result in sudden and significant
investment losses.

EXPROPRIATION RISK. Investing in emerging market countries involves a great
risk of loss due to expropriation, nationalization, confiscation of assets and
property or the imposition of restrictions on foreign investments and
repatriation of capital invested by certain emerging market countries.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
2004    25.54%
2005    33.77%
2006    30.70%
2007    34.56%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -32.28%.

The best calendar quarter return during the periods shown above was 19.05% in
the 4th quarter of 2006; the worst was -7.92% in the 2nd quarter of 2004.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                       ONE       SINCE FUND
                                       YEAR      INCEPTION
                                   -----------  -----------
                                          
(INCEPTION DATE: 4/7/2003)
  Return Before Taxes                  34.56%       38.92%
  Return After Taxes on                34.47%       38.83%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            22.97%       35.36%
MSCI EMERGING MARKETS INDEX
(Index returns do not
reflect deductions for fees,           39.39%       39.60%
expenses or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                                      ANNUAL FUND OPERATING EXPENSES/2/
               --------------------------------------------------------------------------------
                                DISTRIBUTION                                       TOTAL ANNUAL
                                    AND                          ACQUIRED FUND         FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER             FEES          OPERATING      LESS FEE         NET
   FEES/1/         FEES             FEES         EXPENSES/3/    AND EXPENSES/4/      EXPENSES     WAIVERS/5/    EXPENSES/5/
- -------------  ------------  -----------------  -------------  =================  -------------  ============  ============
                                                                                          
      None        0.72%            None             None            0.00%             0.72%         0.00%         0.72%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses. During the most recently completed fiscal year the Fund incurred
   nominal foreign tax expenses in an amount that rounds to 0.00%. The dollar
   amount of such expenses are shown in the Fund's Financial Highlights; actual
   tax expenses for the current fiscal year may be higher or lower than those
   incurred in the prior year.
/4/"Acquired Fund Fees and Expenses" reflect the Fund's PRO RATA share of the
   fees and expenses incurred by investing in other investment companies. The
   impact of Acquired Fund Fees and Expenses is included in the total returns of
   the Fund. Acquired Fund Fees and Expenses are not used to calculate the
   Fund's NAV and do not correlate to the ratio of expenses to average net
   assets shown in the FINANCIAL HIGHLIGHTS section of this Prospectus.
/5/BGFA, the investment adviser to the Fund, has contractually agreed to waive
   its management fees in an amount equal to the Acquired Fund Fees and Expenses
   incurred by the Fund through December 31, 2009. During the most recently
   completed fiscal year, the amount of such expenses incurred and fees waived
   rounded to 0.00%.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $74       $230       $401       $894


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

                                                                               9




Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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 All Country Asia ex Japan Index Fund and iShares MSCI BRIC
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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.72%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided that
the Fund satisfies certain holding period requirements in respect of the stock
of such corporations and has not hedged its position in the stock in certain
ways. For this purpose, a qualified foreign corporation means any foreign
corporation (i) that is incorporated in a possession of the United States, (ii)
that is eligible for benefits under a comprehensive income tax treaty with the
United States which includes an exchange of information program or (iii) if the
stock with respect to which the dividend was paid is readily tradable on an
established United States security market. The term excludes a corporation that
is a passive foreign investment company. Under current Internal Revenue Service
guidance, the United States has appropriate comprehensive income tax treaties
with China (but not with Hong Kong which is treated as a separate jurisdiction
for U.S. tax purposes), the Czech Republic, Egypt, Hungary, India, Israel,
Mexico, the Philippines, Russia, South Korea, Thailand and Turkey, among other
countries, but does not with Argentina, Brazil, Chile, Columbia, Indonesia,
Malaysia or Peru.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

                                                                              15




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

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 450,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy

16
[GRAPHIC APPEARS HERE]




redemption requests will be sold in transactions that would be exempt from
registration under the 1933 Act. Further, an Authorized Participant that is not
a "qualified institutional buyer," as such term is defined under Rule 144A of
the 1933 Act, will not be able to receive Fund securities that are restricted
securities eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to

                                                                              17




the Fund and redeemers of shares in Creation Units are responsible for the
costs of transferring securities from the Fund. Investors who use the services
of a broker or other such intermediary may pay fees for such services.

The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
 $15,228,000      450,000           $7,700              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18

[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                    YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED
                                 AUG. 31, 2008/A/    AUG. 31, 2007/A/    AUG. 31, 2006/A/    AUG. 31, 2005/A/    AUG. 31, 2004/A/
                                ------------------  ------------------  ------------------  ------------------  -----------------
                                                                                                 
NET ASSET VALUE, BEGINNING
  OF YEAR                           $    44.78         $     32.48         $     25.97          $    17.99         $    15.04
                                    ----------         -----------         -----------          ----------         ----------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/b/                 1.10                0.63                0.55                0.55               0.38
 Net realized and unrealized
  gain (loss)/c/                         (4.64)              12.19                6.29                8.23               2.66
                                    ----------         -----------         -----------          ----------         ----------
Total from investment
  operations                             (3.54)              12.82                6.84                8.78               3.04
                                    ----------         -----------         -----------          ----------         ----------
LESS DISTRIBUTIONS FROM:
 Net investment income                   (1.17)              (0.52)              (0.33)              (0.80)             (0.09)
                                    ----------         -----------         -----------          ----------         ----------
Total distributions                      (1.17)              (0.52)              (0.33)              (0.80)             (0.09)
                                    ----------         -----------         -----------          ----------         ----------
NET ASSET VALUE, END OF YEAR        $    40.07         $     44.78         $     32.48          $    25.97         $    17.99
                                    ==========         ===========         ===========          ==========         ==========
TOTAL RETURN                             (8.36)%             39.86%              26.44%              46.17%             20.21%
                                    ==========         ===========         ===========          ==========         ==========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                            $20,302,756        $18,198,371         $11,969,380          $7,000,858         $1,958,596
 Ratio of expenses to
  average net assets prior
  to waived fees                          0.72%               0.74%               0.77%               0.78%              0.77%
 Ratio of expenses to
  average net assets after
  waived fees                             0.72%               0.74%               0.77%               0.77%              0.76%
 Ratio of expenses to
  average net assets after
  waived fees and exclusive
  of foreign taxes                        0.72%               0.74%               0.75%               0.74%              0.74%
 Ratio of net investment
  income to average net
  assets                                  2.32%               1.63%               1.77%               2.40%              2.10%
 Portfolio turnover rate/d/                 11%                  5%                 12%                  9%                 8%


- -----------
/a/Per share amounts were adjusted to reflect a three-for-one stock split
   effective July 24, 2008.
/b/Based on average shares outstanding throughout each period.
/c/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/d/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0%                                 2                    0.45%
Greater than 2.5% and Less than 3.0%              3                    0.68
Greater than 2.0% and Less than 2.5%              3                    0.68
Greater than 1.5% and Less than 2.0%             11                    2.50
Greater than 1.0% and Less than 1.5%             22                    5.00
Greater than 0.5% and Less than 1.0%             67                   15.23
BETWEEN 0.5% AND -0.5%                          221                   50.23
Less than -0.5% and Greater than -1.0%           54                   12.27
Less than -1.0% and Greater than -1.5%           37                    8.41
Less than -1.5% and Greater than -2.0%           12                    2.73
Less than -2.0% and Greater than -2.5%            5                    1.14
Less than -2.5% and Greater than -3.0%            1                    0.23
Less than -3.0% and Greater than -3.5%            2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22

[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which 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, 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008




                                     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
============================ ========= ========== ======== ======== ======== ======== ======== =======
                                                                       
  (8.36)%                    (8.16)%   (10.09)%   23.27%   22.95%   23.50%   28.07%   28.02%   28.04%




                                        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
======================== ========= ========== ========= ========= ========= ========= ========= ========
                                                                        
(8.36)%                  (8.16)%   (10.09)%   184.69%   180.97%   187.29%   280.60%   279.88%   279.88%


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

24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EEM-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                     iSHARES(Reg. TM) MSCI EMU INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI EMU Index Fund (the "Fund").

CUSIP: 464286608
TRADING SYMBOL: EZU
UNDERLYING INDEX: MSCI EMU Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   1
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI EMU IndexSM" is a servicemark of MSCI Inc. and has been licensed for use
for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI EMU Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

Principal Investment Strategies

The Underlying Index consists of stocks from the following 11 countries:
Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the
Netherlands, Portugal

                                                                               1




and Spain. As of September 30, 2008, the Underlying Index's three largest
industries were banks, utilities and capital goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially all of the securities in its underlying index in approximately
the same proportions as in the underlying index.

2
[GRAPHIC APPEARS HERE]




INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the local currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

                                                                               3




[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Some markets in which the Fund invests are located near the
center of Europe's transportation network makes it vulnerable to environmental
events (such as pollution, oil spills, etc.) that may have an adverse impact on
these economies and some are located in parts of the world that have
historically been prone to natural disasters such as drought, earthquakes,
flooding or volcanoes and are economically sensitive to environmental events.
Any such event could result in a significant adverse impact on the economies of
these countries and investments made in these countries.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The economies of the Economic and Monetary
Union ("EMU") are dependent on certain national economies of Europe, both as
key trading partners and as fellow members maintaining the euro. Reduction in
trading activity among EMU member states may cause an adverse impact on the EMU
and each nation's individual economies. Certain established European Union
("EU") states are greatly invested in Eastern European countries. Eastern
European markets remain relatively undeveloped and can be particularly
sensitive to political and economic developments and adverse events in these
Eastern European countries may greatly impact the economies of Western Europe:

EUROPEAN ECONOMIC RISK. The EMU of the EU requires compliance with restrictions
on inflation rates, deficits, interest rates, debt levels and fiscal and
monetary controls, each of which may significantly affect every country in
Europe. Decreasing imports or exports, changes in governmental regulations on
trade, changes in the exchange rate of the euro and recessions in EU economies
may have a significant adverse effect on the economies of EU members and their
trading partners.

U.S. ECONOMIC RISK. The United States is a significant, and in some cases the
most significant, trading partner of or foreign investor in certain EMU markets
and the economies of these countries may be particularly affected by adverse
changes in the U.S. economy. Decreasing U.S. imports, new trade regulations,
changes in the U.S. dollar exchange rates or a recession in the United States
may have an adverse impact on these markets.

6
[GRAPHIC APPEARS HERE]




SECURITY RISK. Some geographic areas in which the Fund invests have experienced
acts of terrorism or strained international relations due to territorial
disputes, historical animosities or other defense concerns. These situations
may cause uncertainty in the markets of these geographic areas and may
adversely affect the performance of their economies.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
2001   -22.96%
2002   -21.60%
2003    42.39%
2004    21.07%
2005    8.61%
2006    35.83%
2007    19.42%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -32.79%.

The best calendar quarter return during the periods shown above was 26.00% in
the 2nd quarter of 2003; the worst was -28.17% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                                              SINCE FUND
                                      1 YEAR      5 YEARS     INCEPTION
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 07/25/2000)
  Return Before Taxes                  19.42%       24.88%       7.09%
  Return After Taxes on                19.42%       24.62%       6.87%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            13.63%       22.25%       6.15%
MSCI EMU INDEX (Index returns do
not reflect deductions
for fees, expenses, or taxes)          19.55%       25.24%       7.41%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada
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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has appropriate
comprehensive income tax treaties with each of: Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain
among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate

                                                                              15




such taxes. If, as is expected, more than 50% of the total assets of the Fund
at the close of a year consist of foreign stocks or securities, the Fund may
"pass through" to you certain foreign income taxes (including withholding
taxes) paid by the Fund. This means that you would be considered to have
received as an additional dividend your share of such foreign taxes, but you
may, in such case, be entitled to either a corresponding tax deduction in
calculating your taxable income, or, subject to certain limitations, a credit
in calculating your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933

16
[GRAPHIC APPEARS HERE]




Act, will not be able to receive Fund securities that are restricted securities
eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $3,892,000     100,000           $8,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                    YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED
                                 AUG. 31, 2008/A/    AUG. 31, 2007/A/    AUG. 31, 2006/A/    AUG. 31, 2005/A/    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%


- -----------
/a/Per share amounts were adjusted to reflect a two-for-one stock split
   effective July 24, 2008.
/b/Based on average shares outstanding throughout each period.
/c/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/d/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                    NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================   ================  =========================
                                                      
Greater than 2.5%                                  4                    0.91%
Greater than 2.0% and Less than 2.5%               3                    0.68
Greater than 1.5% and Less than 2.0%               8                    1.82
Greater than 1.0% and Less than 1.5%              23                    5.23
Greater than 0.5% and Less than 1.0%              51                   11.59
BETWEEN 0.5% AND -0.5%                           265                   60.23
Less than -0.5% and Greater than -1.0%            57                   12.95
Less than -1.0% and Greater than -1.5%            18                    4.09
Less than -1.5% and Greater than -2.0%             9                    2.05
Less than -2.0%                                    2                    0.45
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which 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, 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008



                                    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%


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

24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EZU-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI FRANCE INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI France Index Fund (the "Fund").

CUSIP: 464286707
TRADING SYMBOL: EWQ
UNDERLYING INDEX: MSCI France Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 200,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI France IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI France Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Paris Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were energy, banks and capital goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the French currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange

4
[GRAPHIC APPEARS HERE]




or in any market. The Fund's shares may be less actively traded in certain
markets than others, and investors are subject to the execution and settlement
risks and market standards of the market where they or their broker direct
their trades for execution. Certain information available to investors who
trade Fund shares on a U.S. stock exchange during regular U.S. market hours may
not be available to investors who trade in other markets, which may result in
secondary market prices in such markets being less efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing

                                                                               5




to sell Fund shares (the "ask" price). Because of the costs inherent in buying
or selling Fund shares, frequent trading may detract significantly from
investment results and an investment in Fund shares may not be advisable for
investors who anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON AGRICULTURE RISK. France is one of the world's largest agricultural
producers. It accounts for about one-third of all agricultural land within the
European Union. The French economy is sensitive to fluctuations in agricultural
markets and susceptible to problems such as droughts, labor issues and crop
failures.

RELIANCE ON TRADING PARTNERS RISK. France is the second-largest trading nation
in Western Europe (after Germany). The French economy is dependent on the
economies of Europe as key trading partners. Reduction in spending by these
economies on French products and services or negative changes in any of these
economies may cause an adverse impact on the French economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of France. Decreasing U.S. imports, new trade regulations, changes in the U.S.
dollar exchange rates or a recession in the United States may have an adverse
impact on the French economy.

STRUCTURAL RISKS. The French economy is subject to risks of social unrest and
heavy governmental influence, any of which could adversely affect investments
in the Fund:

POLITICAL AND SOCIAL RISK. France has experienced periods of high unemployment
and labor and social unrest. France is subject to labor strikes, including
countrywide strikes. These issues may slow or disrupt French economic activity.

HEAVY GOVERNMENTAL CONTROL AND REGULATION. Despite significant recent reform
and privatization, the French government continues to control a large share of
French economic activity. The government owns shares in corporations in a range
of sectors including banking, energy production and distribution, automobiles,
transportation and telecommunications. Government spending is sometimes over
50% of gross

6
[GRAPHIC APPEARS HERE]




domestic product and is among the highest of the major industrialized nations.
Heavy regulation of labor and product markets is pervasive and may stifle
French economic growth or cause prolonged periods of recession.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    40.78%
1999    29.97%
2000   -5.09%
2001   -23.99%
2002   -19.97%
2003    39.62%
2004    18.46%
2005    9.53%
2006    34.01%
2007    13.01%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -28.72%.

The best calendar quarter return during the periods shown above was 26.03% in
the 2nd quarter of 2003; the worst was -27.88% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS      10 YEARS
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  13.01%       22.36%       11.23%
  Return After Taxes on                13.05%       22.21%       10.90%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                             8.85%       19.95%        9.93%
MSCI FRANCE INDEX (Index returns
do not reflect
deductions for fees, expenses,         13.24%       22.69%       11.54%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Canada
Index Fund, iShares MSCI EMU 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with France among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 200,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $5,260,000     200,000           $2,900              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21





Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                    NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=================================         ================  =========================
                                                      
Greater than 3.5%                                  1                    0.23%
Greater than 3.0% and less than 3.5%               1                    0.23
Greater than 2.5% and Less than 3.0%               2                    0.45
Greater than 2.0% and Less than 2.5%               1                    0.23
Greater than 1.5% and Less than 2.0%               7                    1.59
Greater than 1.0% and Less than 1.5%              22                    5.00
Greater than 0.5% and Less than 1.0%              50                   11.36
BETWEEN 0.5% AND -0.5%                           276                   62.73
Less than -0.5% and Greater than -1.0%            46                   10.45
Less than -1.0% and Greater than -1.5%            22                    5.00
Less than -1.5% and Greater than -2.0%             9                    2.05
Less than -2.0%                                    3                    0.68
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWQ-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                   iSHARES(Reg. TM) MSCI GERMANY INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Germany Index Fund (the "Fund").

CUSIP: 464286806
TRADING SYMBOL: EWG
UNDERLYING INDEX: MSCI Germany Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 300,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Germany IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Germany Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Frankfurt Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were utilities, automobiles and components and capital goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the German currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange

4
[GRAPHIC APPEARS HERE]




or in any market. The Fund's shares may be less actively traded in certain
markets than others, and investors are subject to the execution and settlement
risks and market standards of the market where they or their broker direct
their trades for execution. Certain information available to investors who
trade Fund shares on a U.S. stock exchange during regular U.S. market hours may
not be available to investors who trade in other markets, which may result in
secondary market prices in such markets being less efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing

                                                                               5




to sell Fund shares (the "ask" price). Because of the costs inherent in buying
or selling Fund shares, frequent trading may detract significantly from
investment results and an investment in Fund shares may not be advisable for
investors who anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. Exports account for more than one-third of
national output and are a key element in German macroeconomic expansion. The
German economy is dependent on the economies of Europe as key trading partners.
Reduction in spending by these economies on German products and services or
negative changes in any of these economies may cause an adverse impact on the
German economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of Germany. Decreasing U.S. imports, new trade regulations, changes in the U.S.
dollar exchange rates or a recession in the United States may have an adverse
impact on the German economy.

STRUCTURAL RISKS. Germany is subject to risks of social unrest and heavy
governmental control, any of which may adversely affect investments in Germany:

POLITICAL AND SOCIAL RISK. Certain sectors and regions of Germany have
experienced high unemployment and labor and social unrest. These issues may
cause downturns in the German markets.

HEAVY GOVERNMENTAL CONTROL AND REGULATION. Heavy regulation of labor and
product markets is pervasive in Germany. These regulations may at times stifle
German economic growth or cause prolonged periods of recession.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

6
[GRAPHIC APPEARS HERE]




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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    28.28%
1999    20.87%
2000   -15.97%
2001   -22.57%
2002   -32.29%
2003    63.09%
2004    15.82%
2005    9.68%
2006    35.66%
2007    34.73%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -31.51%.

The best calendar quarter return during the periods shown above was 38.44% in
the 2nd quarter of 2003; the worst was -36.46% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  34.73%       30.56%      9.99%
  Return After Taxes on                34.78%       30.40%      9.44%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            23.29%       27.55%      8.60%
MSCI GERMANY INDEX (Index
returns do not reflect
deductions for fees, expenses,         35.21%       30.92%     10.23%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Germany among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 300,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $7,074,000     300,000           $1,500              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0%                                 1                    0.23%
Greater than 2.5% and Less than 3.0%              3                    0.68
Greater than 2.0% and Less than 2.5%              2                    0.45
Greater than 1.5% and Less than 2.0%              4                    0.91
Greater than 1.0% and Less than 1.5%             20                    4.55
Greater than 0.5% and Less than 1.0%             48                   10.91
BETWEEN 0.5% AND -0.5%                          285                   64.78
Less than -0.5% and Greater than -1.0%           50                   11.36
Less than -1.0% and Greater than -1.5%           21                    4.77
Less than -1.5% and Greater than -2.0%            2                    0.45
Less than -2.0% and Greater than -2.5%            3                    0.68
Less than -2.5%                                   1                    0.23
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22

[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWG-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                  iSHARES(Reg. TM) MSCI HONG KONG INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Hong Kong Index Fund (the "Fund").

CUSIP: 464286871
TRADING SYMBOL: EWH
UNDERLYING INDEX: MSCI Hong Kong Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 75,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Hong Kong IndexSM" is a servicemark of MSCI Inc. and has been licensed
for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Hong Kong Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Stock Exchange
of Hong Kong Limited (SEHK). As of September 30, 2008, the Underlying Index's
three largest industries were real estate, utilities and banks.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Hong Kong currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Hong Kong is located in a part of the world that has
historically been prone to natural disasters such as earthquakes and tsunamis
and is economically sensitive to environmental events. Any such event could
result in a significant adverse impact on the Hong Kong economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Hong Kong is a small island state with few raw
material resources and limited land area and is reliant on imports for its
commodity needs. Any fluctuations or shortages in the commodity markets could
have a negative impact on the Hong Kong economy.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Hong Kong economy is dependent on the
economies of Asia, Europe and the United States as key trading partners.
Reduction in spending by these economies on Hong Kong products and services or
negative changes in any of these economies may cause an adverse impact on the
Hong Kong economy:

ASIAN ECONOMIC RISK. Certain Asian economies experience over-extension of
credit, currency devaluations and restrictions, rising unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant effect on the entire Asian region as well as
on major trading partners outside Asia and any adverse event in the Asian
markets may have a significant adverse effect on the Hong Kong economy.

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of Hong Kong. Decreasing U.S. imports, new trade regulations, changes in the
U.S. dollar

6
[GRAPHIC APPEARS HERE]




exchange rates or a recession in the United States may have an adverse impact
on the Hong Kong economy.

STRUCTURAL RISK

POLITICAL RISK. Hong Kong reverted to Chinese sovereignty on July 1, 1997 as a
Special Administrative Region (SAR) of the People's Republic of China under the
principle of "one country, two systems." Although China is obligated to
maintain the current capitalist economic and social system of Hong Kong through
June 30, 2047, the continuation of economic and social freedoms enjoyed in Hong
Kong is dependent on the government of China. Any attempt by China to tighten
its control over Hong Kong's political, economic or social policies may result
in an adverse effect on Hong Kong's economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998   -9.21%
1999    54.00%
2000   -14.02%
2001   -18.99%
2002   -19.00%
2003    36.82%
2004    24.01%
2005    7.84%
2006    26.69%
2007    40.54%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -40.00%.

The best calendar quarter return during the periods shown above was 26.95% in
the 4th quarter of 1998; the worst was -27.04% in the 2nd quarter of 1998.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  40.54%       27.24%     10.16%
  Return After Taxes on                39.71%       26.34%      9.21%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            26.35%       23.78%      8.34%
MSCI HONG KONG INDEX (Index
returns do not reflect
deductions for fees, expenses,         41.20%       28.06%     11.64%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with China among other countries, but not with
Hong Kong which is treated as a separate jurisdiction for U.S. tax purposes.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the

                                                                              15




close of a year consist of foreign stocks or securities, the Fund may "pass
through" to you certain foreign income taxes (including withholding taxes) paid
by the Fund. This means that you would be considered to have received as an
additional dividend your share of such foreign taxes, but you may, in such
case, be entitled to either a corresponding tax deduction in calculating your
taxable income, or, subject to certain limitations, a credit in calculating
your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 75,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933

16
[GRAPHIC APPEARS HERE]




Act, will not be able to receive Fund securities that are restricted securities
eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
     $984,750      75,000           $2,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   18.30       $    14.20        $  13.01         $  10.91         $   9.03
                                   ---------       ----------        --------         --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.45             0.47            0.38             0.33             0.28
 Net realized and unrealized
  gain (loss)/b/                       (2.25)            3.94            1.17             2.04             1.75
                                   ---------       ----------        --------         --------         --------
Total from investment
  operations                           (1.80)            4.41            1.55             2.37             2.03
                                   ---------       ----------        --------         --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.63)           (0.31)          (0.36)           (0.27)           (0.15)
                                   ---------       ----------        --------         --------         --------
Total distributions                    (0.63)           (0.31)          (0.36)           (0.27)           (0.15)
                                   ---------       ----------        --------         --------         --------
NET ASSET VALUE, END OF YEAR       $   15.87       $    18.30        $  14.20         $  13.01         $  10.91
                                   =========       ==========        ========         ========         ========
TOTAL RETURN                          (10.54)%          31.44%          12.20%           21.96%           22.69%
                                   =========       ==========        ========         ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $1,675,184      $1,445,309        $882,712         $637,985         $449,923
 Ratio of expenses to
  average net assets                    0.52%            0.52%           0.54%            0.57%            0.80%
 Ratio of net investment
  income to average net
  assets                                2.34%            2.92%           2.87%            2.75%            2.78%
 Portfolio turnover rate/c/               17%               9%             10%               6%               5%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 5.0%                                 1                    0.23%
Greater than 4.5% and Less than 5.0%              2                    0.45
Greater than 4.0% and Less than 4.5%              3                    0.68
Greater than 3.5% and Less than 4.0%              2                    0.45
Greater than 3.0% and Less than 3.5%              5                    1.14
Greater than 2.5% and Less than 3.0%             10                    2.27
Greater than 2.0% and Less than 2.5%             15                    3.41
Greater than 1.5% and Less than 2.0%             19                    4.32
Greater than 1.0% and Less than 1.5%             36                    8.18
Greater than 0.5% and Less than 1.0%             63                   14.32
BETWEEN 0.5% AND -0.5%                          151                   34.33
Less than -0.5% and Greater than -1.0%           36                    8.18
Less than -1.0% and Greater than -1.5%           29                    6.59
Less than -1.5% and Greater than -2.0%           26                    5.91
Less than -2.0% and Greater than -2.5%           16                    3.64
Less than -2.5% and Greater than -3.0%           10                    2.27
Less than -3.0% and Greater than -3.5%            7                    1.59
Less than -3.5% and Greater than -4.0%            3                    0.68
Less than -4.0% and Greater than -4.5%            2                    0.45
Less than -4.5% and Greater than -5.0%            2                    0.45
Less than -5.0% and Greater than -5.5%            1                    0.23
Less than -5.0% and Greater than -6.0%            1                    0.23
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                     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
============================ ========== ========== ======== ======== ======== ======== ======== =======
                                                                        
(10.54)%                     (11.20)%   (10.22)%   14.57%   14.47%   15.16%   11.95%   13.48%   13.10%




                                       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
======================== ========== ========== ======== ======== ========= ========= ========= ========
                                                                       
(10.54)%                 (11.20)%   (10.22)%   97.40%   96.57%   102.50%   209.26%   254.25%   242.57%


24

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWH-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI ITALY INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Italy Index Fund (the "Fund").

CUSIP: 464286855
TRADING SYMBOL: EWI
UNDERLYING INDEX: MSCI Italy Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 150,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Italy IndexSM" is a servicemark of MSCI Inc. and has been licensed for use
for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Italy Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Milan Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were banks, energy and utilities.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Italian currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Italy is located in a part of the world that has historically
been prone to natural disasters such as earthquakes, flooding and volcanoes and
is economically sensitive to environmental events. Any such event could result
in a significant adverse impact on the Italian economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

4
[GRAPHIC APPEARS HERE]




RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

                                                                               5




COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Italian economy is dependent on the
economies of Europe as key trading partners. The Economic and Monetary Union
("EMU") of the European Union ("EU") requires compliance with restrictions on
inflation rates, deficits, interest rates, debt levels and fiscal and monetary
controls, each of which may significantly affect every country in Europe.
Decreasing imports or exports, changes in governmental regulations on trade,
changes in the exchange rate of the euro and recessions in EU economies may
have a significant adverse effect on the economies of EU members and their
trading partners.

STRUCTURAL RISKS. Italy is subject to certain structural risks such as
inadequate infrastructure, corruption, excessive governmental spending and
frequent government turnover, any of which could adversely affect investments
in the Fund:

POLITICAL AND SOCIAL RISK. A significant portion of Italy's workforce is
unionized and certain regions and sectors of Italy have experienced periods of
high unemployment and labor and social unrest. Italy is also subject to labor
and overall countrywide strikes. These issues may affect Italian economic
activity. Italy's strong presence in the lower-end industrial product sectors
has eroded through competition with other countries (notably China) due to its
higher labor costs.

GOVERNMENT SPENDING AND ECONOMIC DEBT. The government has experienced
significant budget deficits and a high amount of public debt causing credit
rating agencies to lower Italy's sovereign debt rating at times. Italy has been
warned by the EMU to reduce its public spending and debt. This high amount of
debt and public spending may stifle Italian economic growth or cause prolonged
periods of recession.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and

6
[GRAPHIC APPEARS HERE]




regulatory requirements may cause tracking error, the divergence of the Fund's
performance from that of its Underlying Index. Tracking error also may result
because the Fund incurs fees and expenses while its Underlying Index does not.
BGFA expects that the Fund may experience higher tracking error than is typical
for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    50.24%
1999    0.53%
2000   -1.17%
2001   -26.71%
2002   -6.73%
2003    38.85%
2004    32.17%
2005    1.49%
2006    32.85%
2007    5.42%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -33.57%.

The best calendar quarter return during the periods shown above was 34.44% in
the 1st quarter of 1998; the worst was -21.58% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                     1 YEAR      5 YEARS     10 YEARS
                                   ----------  -----------  ---------
                                                   
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  5.42%       21.14%     10.28%
  Return After Taxes on                5.44%       20.80%      9.41%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            5.12%       18.88%      8.77%
MSCI ITALY INDEX (Index returns
do not reflect deductions
for fees, expenses, or taxes)          6.06%       21.19%     10.36%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Italy among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 150,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $3,202,500     150,000           $1,400              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0% and Less than 3.5%              2                    0.45%
Greater than 2.5% and Less than 3.0%              1                    0.23
Greater than 2.0% and Less than 2.5%              4                    0.91
Greater than 1.5% and Less than 2.0%              4                    0.91
Greater than 1.0% and Less than 1.5%             27                    6.14
Greater than 0.5% and Less than 1.0%             48                   10.91
BETWEEN 0.5% AND -0.5%                          277                   62.95
Less than -0.5% and Greater than -1.0%           45                   10.23
Less than -1.0% and Greater than -1.5%           19                    4.32
Less than -1.5% and Greater than -2.0%            8                    1.82
Less than -2.0% and Greater than -2.5%            3                    0.68
Less than -2.5%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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
============================ ========== ========== ======== ======== ======== ======= ======== ======
                                                                       
(19.43)%                     (20.82)%   (20.40)%   12.46%   12.13%   12.26%   5.30%    5.31%   4.99%




                                     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
======================== ========== ========== ======== ======== ======== ======== ======== =======
                                                                    
(19.43)%                 (20.82)%   (20.40)%   79.92%   77.23%   78.30%   67.64%   67.81%   62.69%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWI-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI JAPAN INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Japan Index Fund (the "Fund").

CUSIP: 464286848
TRADING SYMBOL: EWJ
UNDERLYING INDEX: MSCI Japan Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 600,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Japan IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Japan Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Tokyo Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were capital goods, automobiles and components and banks.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Japanese currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Japan is located in a part of the world that has historically
been prone to natural disasters such as earthquakes, volcanoes and tsunamis and
is economically sensitive to environmental events. Any such event could result
in a significant adverse impact on the Japanese economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Japan is an island state with few natural
resources and limited land area and is reliant on imports for its commodity
needs. Any fluctuations or shortages in the commodity markets could have a
negative impact on the Japanese economy.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4

[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Japanese economy is heavily dependent on
international trade and has been adversely affected by trade tariffs, other
protectionist measures and rising commodity prices. Japanese economic growth
has been dependent on the U.S. and Chinese economies, with trade increasing
with China in recent years:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on the Japanese economy.

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a significant trading partner of
Japan.

6
[GRAPHIC APPEARS HERE]




Decreasing U.S. imports, new trade regulations, changes in the U.S. dollar
exchange rates or a recession in the United States may have an adverse impact
on the Japanese economy.

SECURITY RISK. Japan's relations with its neighbors, particularly China, North
Korea, South Korea and Russia, have at times been strained due to territorial
disputes, historical animosities and defense concerns. Most recently, the
Japanese government has shown concern over the increased nuclear and military
activity by North Korea. Strained relations may cause uncertainty in the
Japanese markets and adversely affect the overall Japanese economy in times of
crisis.

STRUCTURAL RISKS. Japan may be subject to risks relating to political, economic
and labor risks. Any of these risks, individually or in the aggregate, could
adversely affect investments in the Fund:

POLITICAL RISK. Historically, Japan has been subject to unpredictable national
politics and may experience frequent political turnover. Future political
developments may lead to changes in policy that might adversely affect the
Fund's investments.

LARGE GOVERNMENT DEBT RISK. The Japanese economy faces several concerns,
including a financial system with large levels of nonperforming loans,
over-leveraged corporate balance sheets, extensive cross-ownership by major
corporations, a changing corporate governance structure, and large government
deficits.

CURRENCY RISK. The Japanese yen has fluctuated widely at times and any increase
in its value may cause a decline in exports that could weaken the economy.

LABOR RISK. Japan has an aging workforce. It is a labor market undergoing
fundamental structural changes, as traditional lifetime employment clashes with
the need for increased labor mobility, which may adversely affect Japan's
economic competitiveness.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    3.53%
1999    57.89%
2000   -28.57%
2001   -29.90%
2002   -10.47%
2003    35.54%
2004    14.78%
2005    24.65%
2006    5.49%
2007   -4.30%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -22.45%.

The best calendar quarter return during the periods shown above was 26.25% in
the 4th quarter of 1998; the worst was -18.75% in the 3rd quarter of 2001.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  -4.30%       14.38%      3.68%
  Return After Taxes on                -4.35%       14.35%      3.59%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            -2.51%       12.71%      3.21%
MSCI JAPAN INDEX (Index returns
do not reflect deductions
for fees, expenses, or taxes)          -4.23%       15.00%      4.48%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Japan among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 600,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $6,192,000     600,000           $5,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED         YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005      AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  -------------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   14.07      $     13.80      $     10.99       $     9.89          $   8.29
                                   ---------      -----------      -----------       ----------          ---------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.14             0.10             0.06             0.06              0.03
 Net realized and unrealized
  gain (loss)/b/                       (2.39)            0.27             2.81             1.08              1.57
                                   ---------      -----------      -----------       ----------          ---------
Total from investment
  operations                           (2.25)            0.37             2.87             1.14              1.60
                                   ---------      -----------      -----------       ----------          ---------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.20)           (0.10)           (0.06)           (0.04)            (0.00)/c/
                                   ---------      -----------      -----------       ----------          ---------
Total distributions                    (0.20)           (0.10)           (0.06)           (0.04)            (0.00)/c/
                                   ---------      -----------      -----------       ----------          ---------
NET ASSET VALUE, END OF YEAR       $   11.62      $     14.07      $     13.80       $    10.99          $   9.89
                                   =========      ===========      ===========       ==========          =========
TOTAL RETURN                          (16.13)%           2.68%           26.10%           11.58%            19.32%
                                   =========      ===========      ===========       ==========          =========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $7,499,536     $11,780,006      $13,724,590       $7,248,107          $5,863,332
 Ratio of expenses to
  average net assets                    0.52%            0.52%            0.54%            0.57%             0.64%/d/
 Ratio of net investment
  income to average net
  assets                                1.11%            0.68%            0.48%            0.59%             0.28%
 Portfolio turnover rate/e/                4%               3%               8%               6%                5%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Rounds to less than $0.01.
/d/Ratio of expenses to average net assets prior to voluntarily reimbursed
   distribution fees for the year ended August 31, 2004 was 0.78%.
/e/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                     NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=========================================  ================  =========================
                                                       
Greater than 3.0%                                  5                    1.14%
Greater than 2.5% and Less than 3.0%               4                    0.91
Greater than 2.0% and Less than 2.5%               7                    1.59
Greater than 1.5% and Less than 2.0%              13                    2.95
Greater than 1.0% and Less than 1.5%              27                    6.14
Greater than 0.5% and Less than 1.0%              64                   14.55
BETWEEN 0.5% AND -0.5%                           187                   42.50
Less than -0.5% and Greater than -1.0%            54                   12.27
Less than -1.0% and Greater than -1.5%            31                    7.05
Less than -1.5% and Greater than -2.0%            24                    5.45
Less than -2.0% and Greater than -2.5%            12                    2.73
Less than -2.5% and Greater than -3.0%             6                    1.36
Less than -3.0% and Greater than -3.5%             3                    0.68
Less than -3.5%                                    3                    0.68
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


22

[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                   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
============================ ========== ========== ======= ======== ======= ======= ======== ======
                                                                     
(16.13)%                     (17.49)%   (15.81)%   7.65%    7.19%   8.28%   4.08%    4.47%   4.78%




                                     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
======================== ========== ========== ======== ======== ======== ======== ======== =======
                                                                    
(16.13)%                 (17.49)%   (15.81)%   44.57%   41.52%   48.84%   49.14%   54.79%   59.52%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWJ-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                   iSHARES(Reg. TM) MSCI MALAYSIA INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Malaysia Index Fund (the "Fund").

CUSIP: 464286830
TRADING SYMBOL: EWM
UNDERLYING INDEX: MSCI Malaysia Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 75,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Malaysia IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Malaysia Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                              1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Kuala Lumpur
Stock Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were banks, food, beverage and tobacco and capital goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Malaysian currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign

                                                                               3




securities, the Fund may be subject to increased risk of loss caused by any of
the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Malaysia is located in a part of the world that has
historically been prone to natural disasters such as earthquakes, volcanoes and
tsunamis and is economically sensitive to environmental events. Any such event
could result in a significant adverse impact on the Malaysian economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Malaysian economy is dependent on the
economies of Southeast Asia and the United States as key trading partners.
Reduction in spending by these countries on Malaysian products and services or
negative changes in any of these economies may cause an adverse impact in the
Malaysian economy:

ASIAN ECONOMIC RISK. Certain Asian economies experience over-extension of
credit, currency devaluations and restrictions, rising unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant effect on the entire Asian region as well as
on major trading partners outside Asia and any adverse event in the Asian
markets may have a significant adverse effect on the Malaysian economy.

U.S. ECONOMIC RISK. The United States is a significant trading and investment
partner of Malaysia. Decreasing U.S. imports, new trade regulations, changes in
the U.S. dollar exchange rates or a recession in the United States may have an
adverse impact on the Malaysian economy.

RISK OF CAPITAL CONTROLS. Recent volatility in the exchange rate of the
Malaysian currency and general economic deterioration led to the imposition and
then reversal of stringent capital controls, a prohibition on repatriation of
capital and an indefinite prohibition on free transfers of securities:

POSSIBILITY OF LEVY ON REPATRIATION BY FUND. A levy was placed on profits
repatriated by foreign entities such as the Fund and this disruption of the
creation/redemption

6
[GRAPHIC APPEARS HERE]




mechanism for the Fund adversely affected the trading market for shares of the
Fund, resulting in trading prices that differed materially from their NAV on
many days. There can be no assurance that a similar levy will not be reinstated
by Malaysian authorities in the future, to the possible detriment of the Fund
and its shareholders.

POTENTIAL FUTURE CONTROLS ON CAPITAL. Since Malaysian capital controls were
imposed, the shares of the Fund have often traded at discounts or premiums to
their NAV. Since the Company's decision to permit offers and redemptions of
Creation Units of the Fund's shares for U.S. dollars, shares of the Fund have
traded at prices that have generally been close to their NAV. However, there
can be no assurance that this will continue to be the case. Malaysian capital
controls have been changed in significant ways since they were adopted and
without prior warning. There can be no assurance that Malaysian capital
controls will not be changed in the future in ways that adversely affect the
Fund and its shareholders.

SECURITY RISK. Malaysia has historically experienced acts of terrorism and
strained international relations related to border disputes, historical
animosities and other defense concerns. These situations may cause uncertainty
in the Malaysian market and may adversely affect the performance of the
Malaysian economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998   -29.31%
1999    92.98%
2000   -15.85%
2001    4.56%
2002    0.66%
2003    25.07%
2004    14.38%
2005    1.57%
2006    36.20%
2007    45.49%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -32.43%.

The best calendar quarter return during the periods shown above was 122.01% in
the 2nd quarter of 1999; the worst was -46.01% in the 2nd quarter of 1998.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS      10 YEARS
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  45.49%       23.55%       13.28%
  Return After Taxes on                43.85%       22.61%       12.57%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            29.51%       20.39%       11.46%
MSCI MALAYSIA INDEX (Index
returns do not reflect
deductions for fees, expenses,         46.07%       24.47%       14.95%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States does not have an
appropriate comprehensive income tax treaty with Malaysia but does with other
countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the

                                                                              15




close of a year consist of foreign stocks or securities, the Fund may "pass
through" to you certain foreign income taxes (including withholding taxes) paid
by the Fund. This means that you would be considered to have received as an
additional dividend your share of such foreign taxes, but you may, in such
case, be entitled to either a corresponding tax deduction in calculating your
taxable income, or, subject to certain limitations, a credit in calculating
your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 75,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933

16
[GRAPHIC APPEARS HERE]




Act, will not be able to receive Fund securities that are restricted securities
eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
     $642,000      75,000           $5,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                           $ 10.97         $   7.75         $   7.19         $   6.54         $   5.99
                                    -------         --------         --------         --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/              0.34             0.34             0.26             0.20             0.13
 Net realized and unrealized
  gain (loss)/b/                      (1.31)            3.08             0.59             0.61             0.52
                                    -------         --------         --------         --------         --------
Total from investment
  operations                          (0.97)            3.42             0.85             0.81             0.65
                                    -------         --------         --------         --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                (0.61)           (0.20)           (0.29)           (0.16)           (0.10)
                                    -------         --------         --------         --------         --------
Total distributions                   (0.61)           (0.20)           (0.29)           (0.16)           (0.10)
                                    -------         --------         --------         --------         --------
NET ASSET VALUE, END OF YEAR        $  9.39         $  10.97         $   7.75         $   7.19         $   6.54
                                    =======         ========         ========         ========         ========
TOTAL RETURN                          (9.86)%          44.64%           12.35%           12.39%           11.01%
                                    =======         ========         ========         ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                            $473,091        $741,440         $374,334         $387,575         $224,218
 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                               2.84%            3.21%            3.46%            2.85%            1.97%
 Portfolio turnover rate/c/              92%              87%              60%              15%              39%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates include portfolio transactions that are executed as
   a result of the Fund processing capital share transactions in Creation Units
   solely for cash in U.S. dollars. Excluding such transactions, the portfolio
   turnover rate for the years ended August 31, 2008, August 31, 2007, August
   31, 2006 and August 31, 2005 would have been 16%, 3%, 9% and 9%,
   respectively.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
listed for trading, as of the time that the Fund's NAV is calculated. In the
case of the 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. 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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 2.5%                                 9                    2.05%
Greater than 2.0% and Less than  2.5%             7                    1.59
Greater than 1.5% and Less than  2.0%            16                    3.64
Greater than 1.0% and Less than  1.5%            30                    6.82
Greater than 0.5% and Less than  1.0%            61                   13.86
BETWEEN 0.5% AND -0.5%                          170                   38.64
Less than -0.5% and Greater than -1.0%           63                   14.32
Less than -1.0% and Greater than -1.5%           35                    7.95
Less than -1.5% and Greater than -2.0%           11                    2.50
Less than -2.0% and Greater than -2.5%           20                    4.55
Less than -2.5% and Greater than -3.0%            6                    1.36
Less than -3.0% and Greater than -3.5%            4                    0.91
Less than -3.5% and Greater than -4.0%            2                    0.45
Less than -4.0% and Greater than -4.5%            4                    0.91
Less than -4.5%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23





II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. In the case of the
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. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                     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
============================ ========== ========= ======== ======== ======== ======== ======== =======
                                                                       
  (9.86)%                    (12.35)%   (9.64)%   12.82%   12.35%   13.54%   19.33%   19.94%   20.79%




                                      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
======================== ========== ========= ======== ======== ======== ========= ========= ========
                                                                     
(9.86)%                  (12.35)%   (9.64)%   82.76%   79.03%   88.65%   485.52%   516.25%   561.21%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWM-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

           iSHARES(Reg. TM) MSCI MEXICO INVESTABLE MARKET INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Mexico Investable Market Index Fund* (the "Fund").

CUSIP: 464286822
TRADING SYMBOL: EWW
UNDERLYING INDEX: MSCI Mexico Investable Market Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)

  *  On June 25, 2008, the name of the Fund changed from the iShares MSCI
  Mexico Index Fund to the iShares MSCI Mexico Investable Market Index Fund to
  reflect a previous change in the Fund's Underlying Index from the MSCI
  Mexico Index to the MSCI Mexico Investable Market Index.




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................  10
  Management.......................  10
  Shareholder Information..........  12
  Distribution.....................  19
  Financial Highlights.............  20
  Index Provider...................  21
  Disclaimers......................  21
  Supplemental Information.........  23



"MSCI Mexico Investable Market IndexSM" and "MSCI Mexico IndexSM" are
servicemarks of MSCI Inc. and have been licensed for use for certain purposes
by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Mexico Investable
Market Index (the "Underlying Index"). The Fund's investment objective and the
Underlying Index may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Mexican Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were telecommunication services, materials and food, beverage and
tobacco.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The agricultural and mining sectors of Mexico's
economy account for a large portion of its exports. Any changes in these
sectors or fluctuations in the commodity markets could have an adverse impact
on the Mexican economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Mexican currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

                                                                               3




FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

PRIVATIZATION RISK. Mexico has begun a process of privatization of certain
entities and industries. Historically, investors in some newly privatized
entities have suffered losses due to the inability of the newly privatized
company to adjust quickly to a competitive environment or to changing
regulatory and legal standards. There is no assurance that such losses will not
recur.

RELIANCE ON TRADING PARTNERS RISK. The Mexican economy is dependent on the
economies of the Americas as key trading partners. Reduction in spending by
these economies on Mexican products and services or negative changes in any of
these economies may cause an adverse impact on the Mexican economy:

CENTRAL AND SOUTH AMERICAN ECONOMIC RISK. The Mexican economy may be
significantly affected by the economies of other Central and South American
countries. High interest, inflation, and unemployment rates characterize the
economies in some Central and South American countries. Currency devaluations
in any Central and South American country can have a significant effect on the
entire region. Because commodities such as oil and gas, minerals, and metals
represent a significant percentage of the region's exports, the economies of
Central and South American countries are particularly sensitive to fluctuations
in commodity prices. As a result, the economies in many Central and South
American countries can experience significant volatility.

NORTH AMERICAN ECONOMIC RISK. The United States is Mexico's largest trade and
investment partner and the Mexican economy is significantly affected by

6
[GRAPHIC APPEARS HERE]




developments in the U.S. economy. Since the implementation of the North
American Free Trade Agreement ("NAFTA") in 1994 among Canada, the U.S. and
Mexico, total two-way merchandise trade between the United States and Mexico
has increased. To further this relationship, the three NAFTA countries entered
into The Security and Prosperity Partnership of North America in March 2005,
which may further affect Mexico's dependency on the U.S. economy. Any downturn
in U.S. or Canadian economic activity is likely to have an adverse impact on
the Mexican economy.

SECURITY RISK. Mexico has historically experienced acts of terrorism,
significant criminal activity and strained international relations related to
border disputes, historical animosities, the drug trade and other defense
concerns. These situations may cause uncertainty in the Mexican market and
adversely affect the performance of the Mexican economy.

STRUCTURAL RISKS. Certain political and currency instability risks have
contributed to a high level of price volatility in the Mexican equity and
currency markets and could adversely affect investments in the Fund:

POLITICAL RISK. Mexico has been destabilized by local insurrections and social
upheavals in certain regions, particularly the State of Chiapas. Recurrence of
these conditions may adversely impact the Mexican economy. In addition, Mexico
has had one political party dominating government until the elections of 2000.
Recently, Mexican elections have been contentious and have been very closely
decided. Changes in political parties or other Mexican political events may
affect the economy and cause instability.

CURRENCY INSTABILITY RISK. Mexico has, in recent history, experienced
substantial economic instability resulting from, among other things, periods of
very high inflation and significant devaluations of the Mexican currency, the
peso.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998   -35.00%
1999    76.12%
2000   -22.78%
2001    13.49%
2002   -13.13%
2003    36.24%
2004    48.29%
2005    45.61%
2006    44.02%
2007    12.25%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -17.21%.

The best calendar quarter return during the periods shown above was 35.92% in
the 4th quarter of 1999; the worst was -24.30% in the 3rd quarter of 1998.

8
[GRAPHIC APPEARS HERE]




                         AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                      1 YEAR      5 YEARS      10 YEARS
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  12.25%       36.60%       15.28%
  Return After Taxes on                11.93%       36.33%       14.73%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                             8.37%       33.10%       13.48%
MSCI MEXICO INVESTABLE MARKET
INDEX (Index returns do
not reflect deductions for fees,       12.37%       36.09%       16.34%
expenses, or taxes)(2)


- -----------
(1)After-tax returns in the table above are calculated using the historical
   highest individual U.S. federal marginal income tax rates and do not reflect
   the impact of state, local or foreign taxes. Actual after-tax returns depend
   on an investor's tax situation and may differ from those shown, and after-tax
   returns shown are not relevant to tax-exempt investors or investors who hold
   shares through tax-deferred arrangements, such as 401(k) plans or individual
   retirement accounts ("IRAs"). Fund returns after taxes on distributions and
   sale of Fund shares are calculated assuming that an investor has sufficient
   capital gains of the same character from other investments to offset any
   capital losses from the sale of Fund shares. As a result, Fund returns after
   taxes on distributions and sale of Fund shares may exceed Fund returns before
   taxes and/or returns after taxes on distributions.
(2)As of December 1, 2007, the Board of Directors changed the Underlying Index
   of the Fund from the MSCI Mexico Index to the MSCI Mexico Investable Market
   Index following MSCI's combination of standard and small cap indexes to form
   new investable market indexes. The returns prior to that date reflect those
   of the former MSCI Mexico Index and not that of the current MSCI Mexico
   Investable Market Index.

                                                                               9




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

10
[GRAPHIC APPEARS HERE]




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

                                                                              11




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

12
[GRAPHIC APPEARS HERE]




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

                                                                              13




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

14
[GRAPHIC APPEARS HERE]




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

                                                                              15




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Mexico among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

16
[GRAPHIC APPEARS HERE]




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

                                                                              17




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

18
[GRAPHIC APPEARS HERE]




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $4,613,000     100,000           $1,400              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

                                                                              19




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                           $ 58.35        $    41.30        $  29.04         $  19.35         $  15.04
                                    -------        ----------        --------         --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/              1.40              0.64            0.76             0.42             0.26
 Net realized and unrealized
  gain (loss)/b/                      (6.21)            16.87           11.98             9.55             4.26
                                    -------        ----------        --------         --------         --------
Total from investment
  operations                          (4.81)            17.51           12.74             9.97             4.52
                                    -------        ----------        --------         --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                (1.60)            (0.46)          (0.48)           (0.28)           (0.21)
                                    -------        ----------        --------         --------         --------
Total distributions                   (1.60)            (0.46)          (0.48)           (0.28)           (0.21)
                                    -------        ----------        --------         --------         --------
NET ASSET VALUE, END OF YEAR        $ 51.94        $    58.35        $  41.30         $  29.04         $  19.35
                                    =======        ==========        ========         ========         ========
TOTAL RETURN                          (8.44)%           42.58%          44.11%           51.77%           30.28%
                                    =======        ==========        ========         ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                            $955,684       $1,382,810        $764,107         $255,557         $129,623
 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                               2.42%             1.19%           2.06%            1.70%            1.40%
 Portfolio turnover rate/c/              13%               14%             12%               9%              12%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


20
[GRAPHIC APPEARS HERE]




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

                                                                              21




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

22
[GRAPHIC APPEARS HERE]




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 2.0%                                 1                    0.23%
Greater than 1.5% and Less than 2.0%              4                    0.91
Greater than 1.0% and Less than 1.5%              4                    0.91
Greater than 0.5% and Less than 1.0%             34                    7.73
BETWEEN 0.5% AND -0.5%                          325                   73.86
Less than -0.5% and Greater than -1.0%           59                   13.41
Less than -1.0% and Greater than -1.5%            8                    1.82
Less than -1.5% and Greater than -2.0%            2                    0.45
Less than -2.0%                                   3                    0.68
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

Effective December 1, 2007, to broaden its coverage of the market, the Fund
changed its Underlying Index from the MSCI Mexico Index to the MSCI Mexico
Investable Market Index. 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 through
November 30, 2007 and the MSCI Mexico Investable Market Index thereafter.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

24
[GRAPHIC APPEARS HERE]




                       PERFORMANCE AS OF AUGUST 31, 2008



                                    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
============================ ========= ========= ======== ======== ======== ======== ======== =======
                                                                      
  (8.44)%                    (8.13)%   (9.10)%   30.05%   30.11%   29.35%   22.45%   22.73%   23.51%




                                       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
======================== ========= ========= ========= ========= ========= ========= ========= ========
                                                                       
  (8.44)%                (8.13)%   (9.10)%   271.98%   272.85%   262.04%   657.73%   675.15%   725.84%


                                                                              25




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWW-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

        iSHARES(Reg. TM) MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Netherlands Investable Market Index Fund* (the "Fund").

CUSIP: 464286814
TRADING SYMBOL: EWN
UNDERLYING INDEX: MSCI Netherlands Investable Market Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 50,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)

  *  On June 25, 2008, the name of the Fund changed from the iShares MSCI
  Netherlands Index Fund to the iShares MSCI Netherlands Investable Market
  Index Fund to reflect a previous change in the Fund's Underlying Index from
  the MSCI Netherlands Index to the MSCI Netherlands Investable Market Index.




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   6
  Performance Information..........   7
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Netherlands Investable Market IndexSM" and "MSCI Netherlands IndexSM" are
servicemarks of MSCI Inc. and have been licensed for use for certain purposes
by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Netherlands Investable
Market Index (the "Underlying Index"). The Fund's investment objective and the
Underlying Index may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Amsterdam Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were food, beverage and tobacco, diversified financials and capital
goods.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Dutch currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. The Netherlands' geographic location near the center of
Europe's transportation network makes it vulnerable to environmental events
(such as pollution, oil spills, etc.) that may have an adverse impact on the
Dutch economy. The Netherlands also faces a significant risk of major flooding
which could adversely affect the country's economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

4
[GRAPHIC APPEARS HERE]




RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

                                                                               5




COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Dutch economy is dependent heavily upon
the economies of Europe as key trading partners. The Economic and Monetary
Union of the European Union ("EU") requires compliance with restrictions on
inflation rates, deficits, interest rates, debt levels and fiscal and monetary
controls, each of which may significantly affect every country in Europe.
Decreasing imports or exports, changes in governmental regulations on trade,
changes in the exchange rate of the euro and recessions in EU economies may
have a significant adverse effect on the economies of EU members and their
trading partners.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

6
[GRAPHIC APPEARS HERE]




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
1998    24.09%
1999    4.54%
2000   -7.80%
2001   -23.96%
2002   -20.52%
2003    25.71%
2004    13.49%
2005    12.79%
2006    32.06%
2007    18.59%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -32.28%.

The best calendar quarter return during the periods shown above was 22.23% in
the 2nd quarter of 2003; the worst was -30.27% in the 3rd quarter of 2002.

                                                                               7




                         AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  18.59%       20.30%      6.18%
  Return After Taxes on                18.43%       20.02%      5.64%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            13.29%       18.07%      5.23%
MSCI NETHERLANDS INVESTABLE
MARKET INDEX (Index returns
do not reflect deductions for          20.59%       20.99%      7.27%
fees, expenses, or taxes)(2)


- -----------
(1)After-tax returns in the table above are calculated using the historical
   highest individual U.S. federal marginal income tax rates and do not reflect
   the impact of state, local or foreign taxes. Actual after-tax returns depend
   on an investor's tax situation and may differ from those shown, and after-tax
   returns shown are not relevant to tax-exempt investors or investors who hold
   shares through tax-deferred arrangements, such as 401(k) plans or individual
   retirement accounts ("IRAs"). Fund returns after taxes on distributions and
   sale of Fund shares are calculated assuming that an investor has sufficient
   capital gains of the same character from other investments to offset any
   capital losses from the sale of Fund shares. As a result, Fund returns after
   taxes on distributions and sale of Fund shares may exceed Fund returns before
   taxes and/or returns after taxes on distributions.
(2)At a December 7, 2007, special shareholder meeting of the Fund, a proposal to
   change the Underlying Index of the Fund from the MSCI Netherlands Index to
   the MSCI Netherlands Investable Market Index was approved in response to
   MSCI's combinations of its standard and small cap indexes to form new
   investable market indexes. The transition to this index was implemented on
   February 1, 2008. The returns prior to that date reflect those of the former
   MSCI Netherlands Index and not the current MSCI Netherlands Investable Market
   Index.

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with the Netherlands among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 50,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
     $989,500      50,000           $1,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0%                                 1                    0.23%
Greater than 2.5% and Less than 3.0%              3                    0.68
Greater than 2.0% and Less than 2.5%              2                    0.45
Greater than 1.5% and Less than 2.0%              5                    1.14
Greater than 1.0% and Less than 1.5%             20                    4.55
Greater than 0.5% and Less than 1.0%             51                   11.59
BETWEEN 0.5% AND -0.5%                          268                   60.91
Less than -0.5% and Greater than -1.0%           54                   12.27
Less than -1.0% and Greater than -1.5%           26                    5.91
Less than -1.5% and Greater than -2.0%            7                    1.59
Less than -2.0%                                   3                    0.68
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

Effective February 1, 2008, to broaden its coverage of the market, the Fund
changed its Underlying Index from the MSCI Netherlands Index to the MSCI
Netherlands Investable Market Index. 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
through January 31, 2008 and the MSCI Netherlands Investable Market Index
thereafter.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              23




                       PERFORMANCE AS OF AUGUST 31, 2008



                                    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
============================ ========== ========== ======== ======== ======== ======= ======== ======
                                                                       
(12.67)%                     (13.16)%   (11.54)%   14.44%   14.31%   14.83%   3.16%    3.31%   4.49%




                                     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
======================== ========== ========== ======== ======== ======== ======== ======== =======
                                                                    
(12.67)%                 (13.16)%   (11.54)%   96.28%   95.15%   99.62%   36.50%   38.47%   55.17%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWN-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

               iSHARES(Reg. TM) MSCI PACIFIC ex-JAPAN INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Pacific ex-Japan Index Fund (the "Fund").

CUSIP: 464286665
TRADING SYMBOL: EPP
UNDERLYING INDEX: MSCI Pacific ex-Japan Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 300,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   8
  Performance Information..........   9
  Fees and Expenses................  10
  Management.......................  10
  Shareholder Information..........  11
  Distribution.....................  19
  Financial Highlights.............  20
  Index Provider...................  21
  Disclaimers......................  21
  Supplemental Information.........  23



"MSCI Pacific ex-Japan IndexSM" is a servicemark of MSCI Inc. and has been
licensed for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Pacific ex-Japan Index
(the "Underlying Index"). The Fund's investment objective and the Underlying
Index may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks from the following four countries:
Australia, Hong Kong, New Zealand and Singapore. As of September 30, 2008, the
Underlying Index's three largest industries were banks, materials and real
estate.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The agricultural and mining sectors of Australia's and
New Zealand's economies account for the majority of their exports. Both
countries are susceptible to fluctuations in the commodity markets and, in
particular, in the price and demand for agricultural products and natural
resources. Any negative changes in these sectors could have an adverse impact
on these economies.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the local currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign

                                                                               3




securities, the Fund may be subject to increased risk of loss caused by any of
the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Some markets in which the Fund invests are located in parts of
the world that have historically been prone to natural disasters such as
droughts, earthquakes, volcanoes or tsunamis and are economically sensitive to
environmental events. Any such event could result in a significant adverse
impact on the economies of these countries and investments made in these
countries.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Hong Kong and Singapore are small island states
with few raw material resources and limited land area and each is reliant on
imports for their commodity needs. Any fluctuations or shortages in the
commodity markets could have a negative impact on these economies. Given its
size and position, Singapore is also sensitive to the socio-political and
economic developments of its neighbors, Indonesia and Malaysia, relying on both
as markets for Singapore's service industry and on Malaysia for its raw water
supply.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

4
[GRAPHIC APPEARS HERE]




MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A

                                                                               5




PREMIUM OR DISCOUNT TO NAV. However, because shares can be created and redeemed
in Creation Units at NAV (unlike shares of many closed-end funds, which
frequently trade at appreciable discounts from, and sometimes at premiums to,
their NAVs), BGFA believes that large discounts or premiums to the NAV of the
Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Pacific ex-Japan economies are dependent
on the economies of Asia, Australasia, Europe and the United States as key
trading partners. Reduction in spending by these economies on Pacific ex-Japan
products and services or negative changes in any of these economies may
adversely affect the Fund:

ASIAN ECONOMIC RISK. Certain Asian economies experience over-extension of
credit, currency devaluations and restrictions, rising unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant effect on the entire Asian region as well as
on major trading partners outside Asia and any adverse event in the Asian
markets may have a significant adverse effect on some or all of the economies
of the Pacific region ex-Japan.

AUSTRALASIA ECONOMIC RISK. The economies of Australasia, which include
Australia and

6
[GRAPHIC APPEARS HERE]




New Zealand, are dependent on exports from the agricultural and mining sectors.
This makes Australasian economies susceptible to fluctuations in the commodity
markets. Australasian economies are also increasingly dependent on their
growing service industries. Because the economies of Australasia are dependent
on the economies of Asia, Europe and the United States as key trading partners
and investors, reduction in spending by any of these trading partners on
Australasian products and services or negative changes in any of these
economies may have an adverse impact on the Australasian economies.

EUROPEAN ECONOMIC RISK. The European Union ("EU") is a significant trading
partner of the Pacific ex-Japan countries. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

INTERDEPENDENCE RISK. Many of the Pacific region economies are intertwined and
it is not uncommon for many of the countries to be in recession at the same
time. The region's four economies are also dependent on the economies of Asia,
Europe and the United States and, in particular, on the price and demand for
agricultural products and natural resources. The enactment by the United States
or other principal trading partners of protectionist trade legislation,
reduction of foreign investment in the local economies and general declines in
the securities markets of Asian countries may affect the Fund's investments.

oHong Kong's economy is dependent on trade and its relationship with China,
along with the economies of Asia and the United States.

oAs a small, open economy, Singapore is particularly vulnerable to external
economic influences. While Singapore has been a leading manufacturer of
electronic goods, the extent to which other countries can successfully compete
with Singapore in this and related industries, and adverse Asian economic
influences generally, may adversely affect Singapore's economy.

oAustralia and New Zealand rely on trade with each other and the U.S. and other
Asian economies.

U.S. ECONOMIC RISK. The United States is a significant, and in some cases the
most significant, trading partner of or foreign investor in certain countries
in the Pacific ex-Japan region and the economies of these countries may be
particularly affected by adverse changes in the U.S. economy. Decreasing U.S.
imports, new trade regulations, changes in the U.S. dollar exchange rates or a
recession in the United States may have an adverse impact on the economies of
these nations.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

                                                                               7




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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

8
[GRAPHIC APPEARS HERE]




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
2002   -5.73%
2003    45.72%
2004    28.68%
2005    14.02%
2006    32.06%
2007    30.66%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -33.48%.

The best calendar quarter return during the periods shown above was 16.62% in
the 4th quarter of 2006; the worst was -11.75% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                                              SINCE FUND
                                      1 YEAR      5 YEARS     INCEPTION
                                   -----------  -----------  -----------
                                                    
(INCEPTION DATE: 10/25/2001)
  Return Before Taxes                  30.66%       29.84%       24.14%
  Return After Taxes on                29.08%       28.73%       23.12%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            20.42%       26.21%       21.16%
MSCI PACIFIC EX-JAPAN INDEX
(Index returns do not reflect
deductions for fees, expenses,         30.73%       29.76%       24.08%
or taxes)


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

                                                                               9




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.50%            None             None           0.50%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $51       $160       $280       $628


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

For its investment advisory services to the Fund, BGFA is entitled to receive a
management fee from the Fund equal to the Fund's average daily net assets at an
annual rate of 0.50%.

10
[GRAPHIC APPEARS HERE]




BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the

                                                                              11




bid price and the ask price. The commission is frequently a fixed amount and
may be a significant proportional cost for investors seeking to buy or sell
small amounts of shares. The spread varies over time for shares of the Fund
based on its trading volume and market liquidity, and is generally lower if the
Fund has a lot of trading volume and market liquidity and higher if the Fund
has little trading volume and market liquidity. The Fund's shares trade under
the trading symbol listed on the first page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Fund's primary listing exchange is NYSE Arca.

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

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

Investors owning shares of the Fund are beneficial owners as shown on the
records of DTC or its participants. DTC serves as the securities depository for
shares of the Fund. DTC participants include securities brokers and dealers,
banks, trust companies, clearing corporations and other institutions that
directly or indirectly maintain a custodial relationship with DTC. As a
beneficial owner of shares, you are not entitled to receive physical delivery
of stock certificates or to have shares registered in your name, and you are
not considered a registered owner of shares. Therefore, to exercise

12
[GRAPHIC APPEARS HERE]




any right as an owner of shares, you must rely upon the procedures of DTC and
its participants. These procedures are the same as those that apply to any
other securities that you hold in book-entry or "street name" form.

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other than the U.S. dollar shall be translated into U.S. dollars at
the prevailing market rates on the date of valuation as quoted by one or more
major banks or dealers that makes a two-way market in such currencies (or a
data service provider based on quotations received from such banks or dealers)
and (b) U.S. fixed-income assets may be valued as of the announced closing time
for trading in fixed-income instruments on any day that the Securities Industry
and Financial Markets Association announces an early closing time. The NAV of
the Fund is calculated by dividing the value of the net assets of the Fund
(I.E., the value of its total assets less total liabilities) by the total
number of outstanding shares of the Fund, generally rounded to the nearest
cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of

                                                                              13




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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

14
[GRAPHIC APPEARS HERE]




DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income from taxable U.S. corporations and qualified foreign
corporations, provided that the Fund satisfies certain holding period
requirements in respect of the stock of such corporations and has not hedged
its position in the stock in certain ways. For this purpose, a qualified
foreign corporation means any foreign corporation (i) that is incorporated in a
possession of the United States, (ii) that is eligible for benefits under a
comprehensive income tax treaty with the United States which includes an
exchange of information program or (iii) if the stock with respect to which the
dividend was paid is readily tradable on an established United States security
market. The term excludes a corporation that is a passive foreign investment
company. Under current Internal Revenue Service guidance, the United States has
appropriate comprehensive income tax treaties with each of Australia and New
Zealand among other countries, but does not with Hong Kong or Singapore.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

                                                                              15




Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

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

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

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

16
[GRAPHIC APPEARS HERE]




THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 300,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and

                                                                              17




thus dealing with shares that are part of an "unsold allotment" within the
meaning of Section 4(3)(C) of the 1933 Act, would be unable to take advantage
of the prospectus delivery exemption provided by Section 4(3) of the 1933 Act.
For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the 1933 Act is available only with respect to
transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
 $10,311,000      300,000           $6,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

18
[GRAPHIC APPEARS HERE]




Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

                                                                              19




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                    YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED
                                 AUG. 31, 2008/A/    AUG. 31, 2007/A/    AUG. 31, 2006/A/    AUG. 31, 2005/A/    AUG. 31, 2004/A/
                                ------------------  ------------------  ------------------  ------------------  -----------------
                                                                                                 
NET ASSET VALUE, BEGINNING
  OF YEAR                           $   48.31           $    37.34          $    32.52          $    25.24          $  20.68
                                    ---------           ----------          ----------          ----------          --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/b/                1.64                 1.52                1.28                1.23              0.89
 Net realized and unrealized
  gain (loss)/c/                        (6.01)               11.18                4.77                7.05              4.17
                                    ---------           ----------          ----------          ----------          --------
Total from investment
  operations                            (4.37)               12.70                6.05                8.28              5.06
                                    ---------           ----------          ----------          ----------          --------
LESS DISTRIBUTIONS FROM:
 Net investment income                  (2.51)               (1.73)              (1.23)              (1.00)            (0.50)
 Net realized gain                      (0.06)                   -                   -                   -                 -
                                    ---------           ----------          ----------          ----------          --------
Total distributions                     (2.57)               (1.73)              (1.23)              (1.00)            (0.50)
                                    ---------           ----------          ----------          ----------          --------
NET ASSET VALUE, END OF YEAR        $   41.37           $    48.31          $    37.34          $    32.52          $  25.24
                                    =========           ==========          ==========          ==========          ========
TOTAL RETURN                            (9.87)%              34.86%              19.17%              33.27%            24.74%
                                    =========           ==========          ==========          ==========          ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                            $3,263,971          $3,536,295          $2,094,931          $1,522,107          $651,250
 Ratio of expenses to
  average net assets                     0.50%                0.50%               0.50%               0.50%             0.50%
 Ratio of net investment
  income to average net
  assets                                 3.35%                3.43%               3.67%               4.09%             3.68%
 Portfolio turnover rate/d/                14%                  11%                  8%                 16%                8%


- -----------
/a/Per share amounts were adjusted to reflect a three-for-one stock split
   effective July 24, 2008.
/b/Based on average shares outstanding throughout each period.
/c/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/d/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

20
[GRAPHIC APPEARS HERE]




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

                                                                              21




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

22
[GRAPHIC APPEARS HERE]




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

                                                                              23






PREMIUM/DISCOUNT RANGE                      NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
==========================================  ================  =========================
                                                        
Greater than 4.5%                                    2                    0.45%
Greater than 4.0% and Less than 4.5%                 2                    0.45
Greater than 3.5% and Less than 4.0%                 3                    0.68
Greater than 3.0% and Less than 3.5%                 2                    0.45
Greater than 2.5% and Less than 3.0%                 2                    0.45
Greater than 2.0% and Less than 2.5%                11                    2.50
Greater than 1.5% and Less than 2.0%                17                    3.86
Greater than 1.0% and Less than 1.5%                41                    9.32
Greater than 0.5% and Less than 1.0%                78                   17.75
BETWEEN 0.5% AND -0.5%                             157                   35.69
Less than -0.5% and Greater than -1.0%              39                    8.86
Less than -1.0% and Greater than -1.5%              37                    8.41
Less than -1.5% and Greater than -2.0%              18                    4.09
Less than -2.0% and Greater than -2.5%               9                    2.05
Less than -2.5% and Greater than -3.0%              10                    2.27
Less than -3.0% and Greater than -3.5%               7                    1.59
Less than -3.5% and Greater than -4.0%               2                    0.45
Less than -4.0% and Greater than -4.5%               2                    0.45
Less than -4.5%                                      1                    0.23
                                                   ---                   -----
                                                   440                  100.00%
                                                   ===                  ======


24
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which 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, 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              25




                       PERFORMANCE AS OF AUGUST 31, 2008



                                     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
============================ ========== ========== ======== ======== ======== ======== ======== =======
                                                                        
(9.87)%                      (11.35)%   (10.28)%   19.21%   18.67%   18.98%   17.68%   17.53%   17.56%




                                        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
======================== ========== ========== ========= ========= ========= ========= ========= ========
                                                                         
(9.87)%                  (11.35)%   (10.28)%   140.73%   135.34%   138.40%   205.15%   202.46%   202.87%


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

26
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EPP-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                  iSHARES(Reg. TM) MSCI SINGAPORE INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Singapore Index Fund (the "Fund").

CUSIP: 464286673
TRADING SYMBOL: EWS
UNDERLYING INDEX: MSCI Singapore Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Singapore IndexSM" is a servicemark of MSCI Inc. and has been licensed
for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Singapore Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Singapore Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were banks, capital goods and telecommunications services.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Singaporean currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Singapore is located in a part of the world that has
historically been prone to natural disasters such as tsunamis and is
economically sensitive to environmental events. Any such event could result in
a significant adverse impact on the Singaporean economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Singapore is a small island state with few raw
material resources and limited land area and is reliant on imports for its
commodity needs. Any fluctuations or shortages in the commodity markets could
have a negative impact on the Singaporean economy. Given its size and position,
Singapore is also sensitive to the socio-political and economic developments of
its neighbors, Indonesia and Malaysia, relying on both as markets for
Singapore's service industry and on Malaysia for its raw water supply.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or

4
[GRAPHIC APPEARS HERE]




industries. During a general economic downturn in the securities markets,
multiple asset classes may be negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to

                                                                               5




correlate exactly with the Fund's NAV due to timing reasons as well as market
supply and demand factors. In addition, disruptions to creations and
redemptions or the existence of extreme market volatility may result in trading
prices that differ significantly from NAV. If a shareholder purchases at a time
when the market price is at a premium to the NAV or sells at a time when the
market price is at a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Singaporean economy is dependent on the
economies of the U.S. and Asia, most significantly those of Indonesia, Malaysia
and China, as key trading partners. Reduction in spending by these economies on
Singaporean products and services or negative changes in any of these economies
may cause an adverse impact on the Singaporean economy:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on the Singaporean economy.

U.S. ECONOMIC RISK. The United States is a significant trade and investment
partner of Singapore. Decreasing U.S. imports, new trade regulations, changes
in the U.S. dollar exchange rates or a recession in the United States may have
an adverse impact on the Singaporean economy.

STRUCTURAL RISK

LABOR RISK. Rising labor costs and increasing environmental consciousness have
led

6
[GRAPHIC APPEARS HERE]




some labor-intensive industries to relocate to countries with cheaper work
forces, and continued labor outsourcing may adversely affect the Singaporean
economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

                YEAR BY YEAR RETURNS/1/ (YEAR ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
1998   -5.44%
1999    55.35%
2000   -25.06%
2001   -23.22%
2002   -12.04%
2003    39.70%
2004    22.62%
2005    15.57%
2006    46.06%
2007    27.79%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -28.67%.

The best calendar quarter return during the periods shown above was 55.99% in
the 4th quarter of 1998; the worst was -36.28% in the 2nd quarter of 1998.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)



                                      1 YEAR      5 YEARS     10 YEARS
                                   -----------  -----------  ---------
                                                    
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  27.79%       29.87%     10.63%
  Return After Taxes on                26.11%       28.62%      9.71%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            18.00%       26.02%      8.84%
MSCI SINGAPORE INDEX (Index
returns do not reflect
deductions for fees, expenses,         28.35%       29.37%     10.65%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service ("IRS") guidance, the United States does not have an
appropriate comprehensive income tax treaty with Singapore but does with other
countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the

                                                                              15




close of a year consist of foreign stocks or securities, the Fund may "pass
through" to you certain foreign income taxes (including withholding taxes) paid
by the Fund. This means that you would be considered to have received as an
additional dividend your share of such foreign taxes, but you may, in such
case, be entitled to either a corresponding tax deduction in calculating your
taxable income, or, subject to certain limitations, a credit in calculating
your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933

16
[GRAPHIC APPEARS HERE]




Act, will not be able to receive Fund securities that are restricted securities
eligible for resale under Rule 144A.

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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
     $974,000     100,000           $2,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   13.28       $     9.11        $   7.77         $   6.52         $   5.38
                                   ---------       ----------        --------         --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.47             0.47            0.40             0.38             0.22
 Net realized and unrealized
  gain (loss)/b/                       (1.67)            4.01            1.23             1.15             1.04
                                   ---------       ----------        --------         --------         --------
Total from investment
  operations                           (1.20)            4.48            1.63             1.53             1.26
                                   ---------       ----------        --------         --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.64)           (0.31)          (0.29)           (0.28)           (0.12)
                                   ---------       ----------        --------         --------         --------
Total distributions                    (0.64)           (0.31)          (0.29)           (0.28)           (0.12)
                                   ---------       ----------        --------         --------         --------
NET ASSET VALUE, END OF YEAR       $   11.44       $    13.28        $   9.11         $   7.77         $   6.52
                                   =========       ==========        ========         ========         ========
TOTAL RETURN                           (9.55)%          49.92%          21.61%           24.06%           23.47%
                                   =========       ==========        ========         ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $1,476,968      $1,669,210        $574,620         $341,137         $170,047
 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                                3.56%            3.80%           4.74%            5.19%            3.50%
 Portfolio turnover rate/c/               16%               8%              6%               8%               9%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                    NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================   ================  =========================
                                                      
Greater than 3.0%                                  6                    1.36%
Greater than 2.5% and Less than 3.0%               3                    0.68
Greater than 2.0% and Less than 2.5%              11                    2.50
Greater than 1.5% and Less than 2.0%              15                    3.41
Greater than 1.0% and Less than 1.5%              44                   10.00
Greater than 0.5% and Less than 1.0%              74                   16.82
BETWEEN 0.5% AND -0.5%                           158                   35.91
Less than -0.5% and Greater than -1.0%            46                   10.45
Less than -1.0% and Greater than -1.5%            27                    6.14
Less than -1.5% and Greater than -2.0%            21                    4.77
Less than -2.0% and Greater than -2.5%            16                    3.64
Less than -2.5% and Greater than -3.0%             8                    1.82
Less than -3.0% and Greater than -3.5%             5                    1.14
Less than -3.5% and Greater than -4.0%             2                    0.45
Less than -4.0% and Greater than -4.5%             2                    0.45
Less than -4.5% and Greater than -5.0%             1                    0.23
Less than -5.0% and Greater than -5.5%             1                    0.23
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                     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
============================ ========== ========= ======== ======== ======== ======== ======== =======
                                                                       
  (9.55)%                    (10.93)%   (9.38)%   20.36%   19.83%   20.22%   16.34%   16.77%   15.54%




                                        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
======================== ========== ========= ========= ========= ========= ========= ========= ========
                                                                        
(9.55)%                  (10.93)%   (9.38)%   152.57%   147.06%   151.10%   354.40%   371.36%   323.94%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWS-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                 iSHARES(Reg. TM) MSCI SOUTH AFRICA INDEX FUND
                                JANUARY 1, 2009
                               (January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI South Africa Index Fund (the "Fund").

CUSIP: 464286780
TRADING SYMBOL: EZA
UNDERLYING INDEX: MSCI South Africa Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 100,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   8
  Performance Information..........   9
  Fees and Expenses................  10
  Management.......................  10
  Shareholder Information..........  12
  Distribution.....................  19
  Financial Highlights.............  20
  Index Provider...................  21
  Disclaimers......................  21
  Supplemental Information.........  23



"MSCI South Africa IndexSM" is a servicemark of MSCI Inc. and has been licensed
for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI South Africa Index
(the "Underlying Index"). The Fund's investment objective and the Underlying
Index may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Johannesburg
Stock Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were materials, telecommunication services and energy.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The agricultural and mining sectors of South Africa's
economy account for a large portion of its exports. Any changes in these
sectors or fluctuations in the commodity markets could have an adverse impact
on the South African economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the South African currency depreciates against
the U.S. dollar, even if the local currency value of the Fund's holdings in
that market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets, such as the South
African market, are subject to a greater risk of loss than investments in
developed markets. This is due to, among other things, greater market
volatility, lower trading volume,

                                                                               3




political and economic instability, greater risk of a market shutdown and more
governmental limitations on foreign investments than typically found in
developed markets.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or

4
[GRAPHIC APPEARS HERE]




industries. During a general economic downturn in the securities markets,
multiple asset classes may be negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to

                                                                               5




correlate exactly with the Fund's NAV due to timing reasons as well as market
supply and demand factors. In addition, disruptions to creations and
redemptions or the existence of extreme market volatility may result in trading
prices that differ significantly from NAV. If a shareholder purchases at a time
when the market price is at a premium to the NAV or sells at a time when the
market price is at a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

PRIVATIZATION RISK. South Africa has begun a process of privatization of
certain entities and industries. Historically, investors in some newly
privatized entities have suffered losses due to the inability of the newly
privatized company to adjust quickly to a competitive environment or to
changing regulatory and legal standards. There is no assurance that such losses
will not recur.

RELIANCE ON TRADING PARTNERS RISK. The South African economy is heavily
dependent upon the economies of Europe, Asia (particularly Japan) and the
United States as key trading partners. Reduction in spending by these economies
on South African products and services or negative changes in any of these
economies may cause an adverse impact on the South African economy:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on the South African
economy.

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates,

6
[GRAPHIC APPEARS HERE]




debt levels and fiscal and monetary controls, each of which may significantly
affect every country in Europe. Decreasing imports or exports, changes in
governmental regulations on trade, changes in the exchange rate of the euro and
recessions in EU economies may have a significant adverse effect on the
economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a significant trading partner of South
Africa. Decreasing U.S. imports, new trade regulations, changes in the U.S.
dollar exchange rates or a recession in the United States may have an adverse
impact on the South African economy.

SECURITY RISK. South Africa has historically experienced acts of terrorism and
strained international relations related to border disputes, historical
animosities, racial tensions and other defense concerns. These situations may
cause uncertainty in the South African market and may adversely affect the
performance of the South African economy.

STRUCTURAL RISKS. Various domestic and geopolitical factors have affected South
Africa's economic performance. Any of these factors, individually or in the
aggregate, could adversely affect investments in the Fund:

POLITICAL AND SOCIAL RISK. South Africa's two-tiered economy, with one rivaling
other developed countries and the other exhibiting many characteristics of
developing countries, is characterized by uneven distribution of wealth and
income. This may cause civil and social unrest, which could adversely impact
the South African economy. Ethnic and civil conflict could result in the
abandonment of many of South Africa's free market reforms. In addition, there
is a serious health crisis due to high rates of human immunodeficiency virus
(HIV).

ECONOMIC RISK. While South Africa is a developing country with a strong supply
of natural resources, unemployment and income disparity continue to cause
economic concerns. Although economic reforms have been enacted to promote
growth and foreign investments, there can be no assurance that these programs
will achieve the desired results. In addition, South Africa's inadequate
currency reserves have left its currency vulnerable at times to devaluation.

HEAVY GOVERNMENT CONTROL AND REGULATION. Despite significant reform and
privatization, the South African government continues to control a large share
of South African economic activity. Heavy regulation of labor and product
markets is pervasive and may stifle South African economic growth or cause
prolonged periods of recession.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

                                                                               7




Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

8
[GRAPHIC APPEARS HERE]




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
2004    43.64%
2005    26.50%
2006    19.51%
2007    17.28%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -26.01%.

The best calendar quarter return during the periods shown above was 28.11% in
the 4th quarter of 2006; the worst was -15.07% in the 2nd quarter of 2006.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                                 SINCE FUND
                                      1 YEAR     INCEPTION
                                   -----------  -----------
                                          
(INCEPTION DATE: 02/03/2003)
  Return Before Taxes                  17.28%       31.02%
  Return After Taxes on                16.92%       30.61%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            11.68%       27.81%
MSCI SOUTH AFRICA INDEX (Index
returns do not reflect
deductions for fees, expenses,         18.14%       32.47%
or taxes)


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

                                                                               9




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.63%            None             None           0.63%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $64       $202       $351       $786


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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,

10
[GRAPHIC APPEARS HERE]




iShares MSCI Israel Capped Investable Market 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.63%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

                                                                              11




Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Fund's primary listing exchange is NYSE Arca.

Section 12(d)(1) of the Investment Company Act of 1940, as amended, restricts
investments by registered investment companies in the securities of other
investment companies. Registered investment companies are permitted to invest
in the Fund beyond the limits set forth in Section 12(d)(1), subject to certain
terms and

12
[GRAPHIC APPEARS HERE]




conditions set forth in an SEC exemptive order issued to the Company, including
that such investment companies enter into an agreement with the Company.

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other than the U.S. dollar shall be translated into U.S. dollars at
the prevailing market rates on the date of valuation as quoted by one or more
major banks or dealers that makes a two-way market in such currencies (or a
data service provider based on quotations received from such banks or dealers)
and (b) U.S. fixed-income assets may be valued as of the announced closing time
for trading in fixed-income instruments on any day that the Securities Industry
and Financial Markets Association announces an early

                                                                              13




closing time. The NAV of the Fund is calculated by dividing the value of the
net assets of the Fund (I.E., the value of its total assets less total
liabilities) by the total number of outstanding shares of the Fund, generally
rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

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

DIVIDENDS AND DISTRIBUTIONS

14
[GRAPHIC APPEARS HERE]




GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income from taxable U.S. corporations and qualified foreign
corporations, provided that the Fund satisfies certain holding period
requirements in respect of the stock of such corporations and has not hedged
its position in the stock in certain ways. For this purpose, a qualified
foreign corporation means any foreign corporation (i) that is incorporated in a
possession of the United States, (ii) that is eligible for benefits under

                                                                              15




a comprehensive income tax treaty with the United States which includes an
exchange of information program or (iii) if the stock with respect to which the
dividend was paid is readily tradable on an established United States security
market. The term excludes a corporation that is a passive foreign investment
company. Under current Internal Revenue Service guidance, the United States has
an appropriate comprehensive income tax treaty with South Africa among other
countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

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

16
[GRAPHIC APPEARS HERE]




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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 100,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

Creations and redemptions must be made through a firm that is either a member
of the Continuous Net Settlement System of the National Securities Clearing
Corporation or a DTC participant and has executed an agreement with the
Distributor with respect to creations and redemptions of Creation Unit
aggregations. Information

                                                                              17




about the procedures regarding creation and redemption of Creation Units
(including the cut-off times for receipt of creation and redemption orders) is
included in the SAI.

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

18
[GRAPHIC APPEARS HERE]




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $4,748,000     100,000           $1,200              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

                                                                              19




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                    YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED          YEAR ENDED
                                 AUG. 31, 2008/A/    AUG. 31, 2007/A/    AUG. 31, 2006/A/    AUG. 31, 2005/A/    AUG. 31, 2004/A/
                                ------------------  ------------------  ------------------  ------------------  -----------------
                                                                                                 
NET ASSET VALUE, BEGINNING
  OF YEAR                            $ 62.26             $  48.84            $  41.50            $  29.96            $ 23.41
                                     -------             --------            --------            --------            -------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/b/               2.28                 1.50                1.44                0.96               0.62
 Net realized and unrealized
  gain (loss)/c/                       (6.02)               13.18                6.89               11.18               6.61
                                     -------             --------            --------            --------            -------
Total from investment
  operations                           (3.74)               14.68                8.33               12.14               7.23
                                     -------             --------            --------            --------            -------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (2.72)               (1.26)              (0.99)              (0.60)             (0.68)
                                     -------             --------            --------            --------            -------
Total distributions                    (2.72)               (1.26)              (0.99)              (0.60)             (0.68)
                                     -------             --------            --------            --------            -------
NET ASSET VALUE, END OF YEAR         $ 55.80             $  62.26            $  48.84            $  41.50            $ 29.96
                                     =======             ========            ========            ========            =======
TOTAL RETURN                           (6.18)%              30.34%              20.06%              40.62%             31.30%
                                     =======             ========            ========            ========            =======
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                             $429,655            $466,940            $297,898            $153,530            $92,882
 Ratio of expenses to
  average net assets                    0.63%                0.68%               0.70%               0.74%              0.95%
 Ratio of net investment
  income to average net
  assets                                3.61%                2.58%               2.79%               2.62%              2.23%
 Portfolio turnover rate/d/               21%                   8%                  7%                 32%                13%


- -----------
/a/Per share amounts were adjusted to reflect a two-for-one stock split
   effective July 24, 2008.
/b/Based on average shares outstanding throughout each period.
/c/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/d/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.


20
[GRAPHIC APPEARS HERE]




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

                                                                              21




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

22
[GRAPHIC APPEARS HERE]




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

                                                                              23






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 4.0%                                 1                    0.23%
Greater than 3.5% and Less than 4.0%              2                    0.45
Greater than 3.0% and Less than 3.5%              4                    0.91
Greater than 2.5% and Less than 3.0%              2                    0.45
Greater than 2.0% and Less than 2.5%             15                    3.41
Greater than 1.5% and Less than 2.0%             25                    5.68
Greater than 1.0% and Less than 1.5%             41                    9.32
Greater than 0.5% and Less than 1.0%             64                   14.55
BETWEEN 0.5% AND -0.5%                          158                   35.91
Less than -0.5% and Greater than -1.0%           47                   10.69
Less than -1.0% and Greater than -1.5%           23                    5.23
Less than -1.5% and Greater than -2.0%           26                    5.91
Less than -2.0% and Greater than -2.5%           12                    2.73
Less than -2.5% and Greater than -3.0%            6                    1.36
Less than -3.0% and Greater than -3.5%            8                    1.82
Less than -3.5% and Greater than -4.0%            2                    0.45
Less than -4.0% and greater than -4.5%            2                    0.45
Less than -4.5%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


24
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which 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, 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                                                                              25




                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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
============================ ========= ========= ======== ======== ======== ======== ======== =======
                                                                      
  (6.18)%                    (7.84)%   (5.74)%   22.06%   21.87%   23.00%   23.72%   23.42%   25.01%




                                       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
======================== ========= ========= ========= ========= ========= ========= ========= ========
                                                                       
  (6.18)%                (7.84)%   (5.74)%   170.92%   168.79%   181.58%   227.60%   223.23%   246.78%


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

26
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EZA-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                 iSHARES(Reg. TM) MSCI SOUTH KOREA INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI South Korea Index Fund (the "Fund").

CUSIP: 464286772
TRADING SYMBOL: EWY
UNDERLYING INDEX: MSCI Korea Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 50,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Korea IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Korea Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Stock Market
Division of the Korea Exchange. As of September 30, 2008, the Underlying Index's
three largest industries were semiconductors and semiconductor equipment,
capital goods and banks.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the South Korean currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign

                                                                               3




securities, the Fund may be subject to increased risk of loss caused by any of
the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. South Korea is located in a part of the world that has
historically been prone to natural disasters such as earthquakes and tsunamis
and is economically sensitive to environmental events. Any such event could
result in a significant adverse impact on the South Korean economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The South Korean economy is dependent on the
economies of Asia and the United States as key trading partners. Reduction in
spending by these economies on South Korean products and services or negative
changes in any of these economies, mainly in China or Southeast Asia, may cause
an adverse impact on the South Korean economy:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on the South Korean
economy.

U.S. ECONOMIC RISK. The United States is a large trade partner of and investor
in South Korea. Decreasing U.S. imports, new trade regulations, changes in the
U.S. dollar exchange rates or a recession in the United States may have an
adverse impact on the South Korean economy.

SECURITY RISK. North and South Korea each have substantial military
capabilities, and historical tensions between the two present the ongoing risk
of war. Any outbreak of hostilities between the two countries could have a
severe adverse effect on the South Korean economy and its securities markets.

STRUCTURAL RISKS. South Korea may be subject to economic and labor risks. Any
of these risks, individually or in the aggregate, could adversely affect
investments in the

6
[GRAPHIC APPEARS HERE]




Fund:

ECONOMIC RISK. Among these structural concerns are the country's underdeveloped
financial markets and a general lack of regulatory transparency. The
restructuring of the South Korean economy and the need to create a more
liberalized economy with a mechanism for bankrupt firms to exit the market,
remain important unfinished economic reform tasks. These factors may adversely
affect the South Korean economy and cause a diversion of corporate investment
to China and other lower wage countries.

LABOR RISK. South Korea's economic growth potential is susceptible to problems
from large scale emigration, rigid labor regulations and ongoing labor
relations issues. In addition, the average age of South Korea's workforce is
rapidly increasing.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
2001    46.74%
2002    6.05%
2003    33.74%
2004    18.22%
2005    55.00%
2006    11.10%
2007    32.08%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -39.23%.

The best calendar quarter return during the periods shown above was 58.55% in
the 4th quarter of 2001; the worst was -21.37% in the 3rd quarter of 2001.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                                               SINCE FUND
                                       1 YEAR      5 YEARS     INCEPTION
                                    -----------  -----------  -----------
                                                     
(INCEPTION DATE: 05/09/2000)
  Return Before Taxes                   32.08%       29.17%       16.92%
  Return After Taxes on                 32.14%       29.20%       16.94%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                             21.18%       26.36%       15.32%
MSCI KOREA INDEX (Index returns
do not reflect deductions
for fees, expenses, or taxes)           31.85%       30.89%       17.56%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.63%            None             None           0.63%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses. During the most recently completed fiscal year the Fund incurred
   nominal foreign tax expenses in an amount that rounds to 0.00%. The dollar
   amount of such expenses are shown in the Fund's Financial Highlights; actual
   tax expenses for the current fiscal year may be higher or lower than those
   incurred in the prior year.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $64       $202       $351       $786


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.63%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with South Korea among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 50,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $1,945,000      50,000           $4,000              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   63.60       $    46.00       $    34.75        $  24.17         $  23.06
                                   ---------       ----------       ----------        --------         --------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.80             0.51             0.31            0.46             0.22
 Net realized and unrealized
  gain (loss)/b/                      (19.87)           17.42            11.20           10.22             1.13
                                   ---------       ----------       ----------        --------         --------
Total from investment
  operations                          (19.07)           17.93            11.51           10.68             1.35
                                   ---------       ----------       ----------        --------         --------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.98)           (0.33)           (0.26)          (0.10)           (0.24)
                                   ---------       ----------       ----------        --------         --------
Total distributions                    (0.98)           (0.33)           (0.26)          (0.10)           (0.24)
                                   ---------       ----------       ----------        --------         --------
NET ASSET VALUE, END OF YEAR       $   43.55       $    63.60       $    46.00        $  34.75         $  24.17
                                   =========       ==========       ==========        ========         ========
TOTAL RETURN                          (30.35)%          39.18%           33.16%          44.29%            5.83%
                                   =========       ==========       ==========        ========         ========
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $1,985,763      $2,429,453       $1,621,334        $698,455         $315,464
 Ratio of expenses to
  average net assets                    0.63%            0.68%            0.70%           0.74%            0.94%
 Ratio of expenses to
  average net assets
  exclusive of foreign taxes            0.63%            0.68%            0.70%           0.74%            0.94%
 Ratio of net investment
  income to average net
  assets                                1.35%            0.96%            0.71%           1.49%            0.87%
 Portfolio turnover rate/c/               42%              20%              47%             30%              29%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates include portfolio transactions that are executed as
   a result of the Fund processing capital share transactions in Creation Units
   solely for cash in U.S. dollars. Excluding such transactions, the portfolio
   turnover rate for the years ended August 31, 2008, August 31, 2007, August
   31, 2006 and August 31, 2005 would have been 15%, 6%, 14% and 9%,
   respectively.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
listed for trading, as of the time that the Fund's NAV is calculated. In the
case of the 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. 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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.5%                                 6                    1.36%
Greater than 3.0% and Less than 3.5%              3                    0.68
Greater than 2.5% and Less than 3.0%              6                    1.36
Greater than 2.0% and Less than 2.5%             17                    3.86
Greater than 1.5% and Less than 2.0%             19                    4.32
Greater than 1.0% and Less than 1.5%             41                    9.32
Greater than 0.5% and Less than 1.0%             66                   15.00
BETWEEN 0.5% AND -0.5%                          132                   30.00
Less than -0.5% and Greater than -1.0%           51                   11.59
Less than -1.0% and Greater than -1.5%           37                    8.41
Less than -1.5% and Greater than -2.0%           20                    4.55
Less than -2.0% and Greater than -2.5%           11                    2.50
Less than -2.5% and Greater than -3.0%           12                    2.73
Less than -3.0% and Greater than -3.5%            6                    1.36
Less than -3.5% and Greater than -4.0%            5                    1.14
Less than -4.0% and Greater than -4.5%            1                    0.23
Less than -4.5% and Greater than -5.0%            1                    0.23
Less than -5.0% and Greater than -5.5%            2                    0.45
Less than -5.5% and Greater than -6.0%            1                    0.23
Less than -6.0%                                   3                    0.68
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. In the case of the
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 after the Fund's inception, for the period from
inception to the first day of secondary market trading in shares of the Fund,
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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

24
[GRAPHIC APPEARS HERE]




                       PERFORMANCE AS OF AUGUST 31, 2008



                                     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
============================ ========== ========== ======== ======== ======== ======== ======== =======
                                                                        
(30.35)%                     (31.46)%   (30.22)%   14.54%   14.23%   15.68%   10.24%   10.15%   10.81%




                                       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
======================== ========== ========== ======== ======== ========= ========= ========= ========
                                                                       
(30.35)%                 (31.46)%   (30.22)%   97.11%   94.46%   107.18%   124.95%   123.35%   134.66%


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

                                                                              25




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWY-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI SPAIN INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Spain Index Fund (the "Fund").

CUSIP: 464286764
TRADING SYMBOL: EWP
UNDERLYING INDEX: MSCI Spain Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 75,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Spain IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Spain Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Madrid Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were banks, telecommunication services and utilities.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Spanish currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Spain is located in a part of the world that has historically
been prone to natural disasters such as droughts and is economically sensitive
to environmental events. Any such event could result in a significant adverse
impact on the Spanish economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

4
[GRAPHIC APPEARS HERE]




RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

                                                                               5




COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Spanish economy is dependent on the
economies of Europe as key trading partners. The Economic and Monetary Union of
the European Union ("EU") requires compliance with restrictions on inflation
rates, deficits, interest rates, debt levels and fiscal and monetary controls,
each of which may significantly affect every country in Europe. Decreasing
imports or exports, changes in governmental regulations on trade, changes in
the exchange rate of the euro and recessions in EU economies may have a
significant adverse effect on the economies of EU members and their trading
partners.

SECURITY RISK. Spain has historically experienced acts of terrorism and
strained international relations related to border disputes, historical
animosities, separatist tensions and other defense concerns. These situations
may cause uncertainty in the Spanish market and may adversely affect the
performance of the Spanish economy.

STRUCTURAL RISKS. Spain is subject to labor, political and economic risks, any
of which could adversely affect investments in the Fund:

POLITICAL AND SOCIAL RISK. Certain regions and sectors of Spain have
experienced periods of high unemployment and labor and social unrest.
Continuing nationalist and terrorist group activities may adversely impact the
Spanish economy.

HEAVY GOVERNMENTAL CONTROLS AND REGULATION. The Spanish government continues to
control a large share of Spanish economic activity. Extensive regulation of
labor and product markets is pervasive and may stifle Spanish economic growth
or cause prolonged periods of recession.

LABOR AND ECONOMIC RISK. Spain's export strength has eroded due to its
relatively high labor costs. In addition, Spain continues to face high levels
of unemployment, inflation and low productivity compared to other European
countries.

6
[GRAPHIC APPEARS HERE]




TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    51.30%
1999   -2.12%
2000   -13.62%
2001   -10.21%
2002   -13.67%
2003    56.78%
2004    29.45%
2005    4.45%
2006    49.53%
2007    22.30%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -27.46%.

The best calendar quarter return during the periods shown above was 38.58% in
the 1st quarter of 1998; the worst was -21.78% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                       1 YEAR      5 YEARS      10 YEARS
                                    -----------  -----------  -----------
                                                     
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                   22.30%       31.13%       14.41%
  Return After Taxes on                 22.35%       30.92%       14.04%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                             15.30%       28.06%       12.87%
MSCI SPAIN INDEX (Index returns
do not reflect deductions
for fees, expenses, or taxes)           23.95%       31.61%       14.59%


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Spain among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 75,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $3,423,750      75,000           $1,500              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0%                                 2                    0.45%
Greater than 2.5% and Less than 3.0%              1                    0.23
Greater than 2.0% and Less than 2.5%              2                    0.45
Greater than 1.5% and Less than 2.0%              5                    1.14
Greater than 1.0% and Less than 1.5%             23                    5.23
Greater than 0.5% and Less than 1.0%             45                   10.23
BETWEEN 0.5% AND -0.5%                          267                   60.68
Less than -0.5% and Greater than -1.0%           59                   13.41
Less than -1.0% and Greater than -1.5%           26                    5.91
Less than -1.5% and Greater than -2.0%            7                    1.59
Less than -2.0% and Greater than -2.5%            1                    0.23
Less than -2.5%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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
============================ ========== ========= ======== ======== ======== ======= ======== =======
                                                                      
  (9.76)%                    (10.50)%   (9.43)%   19.83%   19.61%   20.06%   9.97%   10.30%   10.04%




                                        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
======================== ========== ========= ========= ========= ========= ========= ========= ========
                                                                        
(9.76)%                  (10.50)%   (9.43)%   147.10%   144.86%   149.47%   158.73%   166.48%   160.28%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWP-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI SWEDEN INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Sweden Index Fund (the "Fund").

CUSIP: 464286756
TRADING SYMBOL: EWD
UNDERLYING INDEX: MSCI Sweden Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 75,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Sweden IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Sweden Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Stockholm Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were capital goods, banks and technology, hardware and equipment.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

COMMODITY EXPOSURE RISK. The Swedish economy is dependent on the export of
natural resources and natural resource products and any negative changes in
these sectors could have an adverse impact on the Swedish economy.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Swedish currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

                                                                               3




FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

4
[GRAPHIC APPEARS HERE]




MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ

                                                                               5




significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Swedish economy is dependent on the
economies of Europe as key trading partners. The Economic and Monetary Union
("EMU") of the European Union ("EU") requires compliance with restrictions on
inflation rates, deficits, interest rates, debt levels and fiscal and monetary
controls, each of which may significantly affect every country in Europe.
Decreasing imports or exports, changes in governmental regulations on trade,
changes in the exchange rate of the euro and recessions in EU economies may
have a significant adverse effect on the economies of EU members and their
trading partners.

STRUCTURAL RISK

LABOR RISK. Sweden's previous efforts to comply with EMU restrictions have
resulted in reduced government spending and interim higher unemployment. In
additions, Sweden has an extensive social welfare system and more than 80% of
the Swedish workforce is unionized. These conditions may result in increased
production costs and higher governmental spending and may stifle Swedish
economic growth or cause prolonged periods of recession.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

6
[GRAPHIC APPEARS HERE]




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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    11.06%
1999    63.93%
2000   -23.74%
2001   -23.86%
2002   -29.76%
2003    64.24%
2004    35.71%
2005    10.20%
2006    43.32%
2007    0.52%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -32.89%.

The best calendar quarter return during the periods shown above was 36.63% in
the 4th quarter of 1999; the worst was -29.67% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                     1 YEAR      5 YEARS      10 YEARS
                                   ----------  -----------  -----------
                                                   
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  0.52%       28.75%       10.14%
  Return After Taxes on                0.36%       28.49%        9.33%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            1.39%       25.87%        8.71%
MSCI SWEDEN INDEX (Index returns
do not reflect
deductions for fees, expenses,         0.62%       28.97%       11.29%
or taxes)


- -----------

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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.51%            None             None           0.51%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.
EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $52       $164       $285       $640


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.51%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Sweden among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 75,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $1,494,750      75,000           $1,300              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 4.0%                                 1                    0.23%
Greater than 3.5% and Less than 4.0%              1                    0.23
Greater than 3.0% and Less than 3.5%              2                    0.45
Greater than 2.5% and Less than 3.0%              2                    0.45
Greater than 2.0% and Less than 2.5%              2                    0.45
Greater than 1.5% and Less than 2.0%             10                    2.27
Greater than 1.0% and Less than 1.5%             17                    3.86
Greater than 0.5% and Less than 1.0%             66                   15.00
BETWEEN 0.5% AND -0.5%                          241                   54.79
Less than -0.5% and Greater than -1.0%           44                   10.00
Less than -1.0% and Greater than -1.5%           28                    6.36
Less than -1.5% and Greater than -2.0%           19                    4.32
Less than -2.0% and Greater than -2.5%            2                    0.45
Less than -2.5% and Greater than -3.0%            2                    0.45
Less than -3.0% and Greater than -3.5%            1                    0.23
Less than -3.5% and Greater than -4.0%            1                    0.23
Less than -4.0%                                   1                    0.23
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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
============================ ========== ========== ======== ======== ======== ======= ======== ======
                                                                       
(23.16)%                     (23.71)%   (23.35)%   17.33%   17.17%   17.48%   7.34%    7.62%   8.20%




                                        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
======================== ========== ========== ========= ========= ========= ========= ========= ========
                                                                         
(23.16)%                 (23.71)%   (23.35)%   122.39%   120.88%   123.75%   103.14%   108.37%   119.92%


24
[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWD-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                 iSHARES(Reg. TM) MSCI SWITZERLAND INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Switzerland Index Fund (the "Fund").

CUSIP: 464286749
TRADING SYMBOL: EWL
UNDERLYING INDEX: MSCI Switzerland Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 125,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   1
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Switzerland IndexSM" is a servicemark of MSCI Inc. and has been licensed
for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Switzerland Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Zurich Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries

                                                                               1




were pharmaceuticals, biotechnology and life sciences, food, beverage and
tobacco and diversified financials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 90% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially all of the securities in its underlying index in approximately
the same proportions as in the underlying index.

2
[GRAPHIC APPEARS HERE]




INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Swiss currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

                                                                               3




[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Switzerland has a dearth of natural resources.
The country is dependent upon imports for raw materials and its ability to
produce the range of goods and services available in the country. Any
fluctuations or shortages in the commodity markets could have a negative impact
on the Swiss economy.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will

4
[GRAPHIC APPEARS HERE]




continue to trade on any such stock exchange or in any market or that the
Fund's shares will continue to meet the requirements for listing or trading on
any exchange or in any market. The Fund's shares may be less actively traded in
certain markets than others, and investors are subject to the execution and
settlement risks and market standards of the market where they or their broker
direct their trades for execution. Certain information available to investors
who trade Fund shares on a U.S. stock exchange during regular U.S. market hours
may not be available to investors who trade in other markets, which may result
in secondary market prices in such markets being less efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the

                                                                               5




cost of the "spread" - that is, the difference between what professional
investors are willing to pay for Fund shares (the "bid" price) and the price at
which they are willing to sell Fund shares (the "ask" price). Because of the
costs inherent in buying or selling Fund shares, frequent trading may detract
significantly from investment results and an investment in Fund shares may not
be advisable for investors who anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. Though Switzerland is not a member of the
European Union ("EU"), the Swiss economy is dependent on the economies of
Europe as key trading partners. Reduction in spending by these economies on
Swiss products and services or negative changes in any of these economies may
cause an adverse impact on the Swiss economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the EU requires
compliance with restrictions on inflation rates, deficits, interest rates, debt
levels and fiscal and monetary controls, each of which may significantly affect
every country in Europe. Decreasing imports or exports, changes in governmental
regulations on trade, changes in the exchange rate of the euro and recessions
in EU economies may have a significant adverse effect on the economies of EU
members and their trading partners, including Switzerland, though Switzerland
is not a member of the EU.

U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of Switzerland. Decreasing U.S. imports, new trade regulations, changes in the
U.S. dollar exchange rates or a recession in the United States may have an
adverse impact on the Swiss economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to the
Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index. Tracking
error also may result because the Fund incurs fees and expenses while its
Underlying Index does not. BGFA expects that the Fund may experience higher
tracking error than is typical for equity index ETFs.

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

6
[GRAPHIC APPEARS HERE]




Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    18.27%
1999   -3.25%
2000    5.87%
2001   -24.93%
2002   -11.46%
2003    33.20%
2004    15.66%
2005    14.34%
2006    29.41%
2007    6.98%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -19.05%.

The best calendar quarter return during the periods shown above was 24.63% in
the 4th quarter of 1998; the worst was -22.09% in the 3rd quarter of 1998.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                     1 YEAR      5 YEARS     10 YEARS
                                   ----------  -----------  ---------
                                                   
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  6.98%       19.51%      6.98%
  Return After Taxes on                7.07%       19.50%      6.70%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            5.02%       17.41%      6.04%
MSCI SWITZERLAND INDEX (Index
returns do not reflect
deductions for fees, expenses,         5.29%       19.19%      7.45%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with Switzerland among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 125,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $2,605,000     125,000           $1,500              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                    NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================   ================  =========================
                                                      
Greater than 2.5%                                  4                    0.91%
Greater than 2.0% and Less than 2.5%               1                    0.23
Greater than 1.5% and Less than 2.0%               4                    0.91
Greater than 1.0% and Less than 1.5%              13                    2.95
Greater than 0.5% and Less than 1.0%              59                   13.41
BETWEEN 0.5% AND -0.5%                           287                   65.23
Less than -0.5% and Greater than -1.0%            52                   11.82
Less than -1.0% and Greater than -1.5%            16                    3.64
Less than -1.5% and Greater than -2.0%             2                    0.45
Less than -2.0% and Greater than -2.5%             2                    0.45
                                                 ---                   -----
                                                 440                  100.00%
                                                 ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                   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
============================ ========= ========= ======== ======== ======== ======= ======== ======
                                                                     
  (7.97)%                    (8.31)%   (9.13)%   14.68%   14.49%   14.19%   5.02%    5.39%   5.32%




                                    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
======================== ========= ========= ======== ======== ======== ======== ======== =======
                                                                  
  (7.97)%                (8.31)%   (9.13)%   98.32%   96.71%   94.14%   63.25%   69.04%   67.99%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWL-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                    iSHARES(Reg. TM) MSCI TAIWAN INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI Taiwan Index Fund (the "Fund").

CUSIP: 464286731
TRADING SYMBOL: EWT
UNDERLYING INDEX: MSCI Taiwan Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 200,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                  
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   1
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI Taiwan IndexSM" is a servicemark of MSCI Inc. and has been licensed for
use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI Taiwan Index (the
"Underlying Index"). The Fund's investment objective and the Underlying Index
may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the Taiwan Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries

                                                                               1




were technology, hardware and equipment, semiconductors and semiconductor
equipment and materials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 80% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially all of the securities in its underlying index in approximately
the same proportions as in the underlying index.

2
[GRAPHIC APPEARS HERE]




INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the Taiwanese currency depreciates against the
U.S. dollar, even if the local currency value of the Fund's holdings in that
market increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

EMERGING MARKETS RISK. Investments in emerging markets are subject to a greater
risk of loss than investments in developed markets. This is due to, among other
things, greater market volatility, lower trading volume, political and economic
instability, greater risk of a market shutdown and more governmental
limitations on foreign investments than typically found in developed markets.

                                                                               3




FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

GEOGRAPHIC RISK. Taiwan is located in a part of the world that has historically
been prone to natural disasters such as earthquakes, droughts, floods and
tsunamis and is economically sensitive to environmental events. Any such event
could result in a significant adverse impact on the Taiwanese economy.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

LACK OF NATURAL RESOURCES RISK. Taiwan is a small island state with few raw
material resources and limited land area and is reliant on imports for its
commodity needs. Any fluctuations or shortages in the commodity markets could
have a negative impact on the Taiwanese economy.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

4
[GRAPHIC APPEARS HERE]




MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange or in any market. The Fund's shares may be less
actively traded in certain markets than others, and investors are subject to
the execution and settlement risks and market standards of the market where
they or their broker direct their trades for execution. Certain information
available to investors who trade Fund shares on a U.S. stock exchange during
regular U.S. market hours may not be available to investors who trade in other
markets, which may result in secondary market prices in such markets being less
efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A

                                                                               5




PREMIUM OR DISCOUNT TO NAV. However, because shares can be created and redeemed
in Creation Units at NAV (unlike shares of many closed-end funds, which
frequently trade at appreciable discounts from, and sometimes at premiums to,
their NAVs), BGFA believes that large discounts or premiums to the NAV of the
Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing to sell Fund
shares (the "ask" price). Because of the costs inherent in buying or selling
Fund shares, frequent trading may detract significantly from investment results
and an investment in Fund shares may not be advisable for investors who
anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The Taiwanese economy is dependent on the
economies of Asia, mainly those of Japan and China, and the United States as
key trading partners. Reduction in spending by any of these countries on
Taiwanese products and services or negative changes in any of these economies
may cause an adverse impact on the Taiwanese economy:

ASIAN ECONOMIC RISK. Certain Asian economies have experienced over-extension of
credit, currency devaluations and restrictions, high unemployment, high
inflation, decreased exports and economic recessions. Economic events in any
one country can have a significant economic effect on the entire Asian region
as well as on major trading partners outside Asia and any adverse event in the
Asian markets may have a significant adverse effect on the Taiwanese economy.

6
[GRAPHIC APPEARS HERE]




U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of Taiwan. Decreasing U.S. imports, new trade regulations, changes in the U.S.
dollar exchange rates or a recession in the United States may have an adverse
impact on the Taiwanese economy.

SECURITY RISK. Taiwan's size and geographic proximity to the People's Republic
of China and its history of political contention with China which regards
Taiwan as a renegade province, have resulted in ongoing tensions with China,
including the continual risk of war with China. These tensions may materially
impact the Taiwanese economy and securities markets.

STRUCTURAL RISK

LABOR RISK. Rising labor costs and increasing environmental consciousness have
led some labor-intensive industries to relocate to countries with cheaper work
forces, and continued labor outsourcing may adversely affect the Taiwanese
economy.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]

     
2001    5.00%
2002   -25.65%
2003    39.92%
2004    8.56%
2005    4.89%
2006    18.94%
2007    7.63%



- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -29.94%.

The best calendar quarter return during the periods shown above was 52.27% in
the 4th quarter of 2001; the worst was -29.25% in the 3rd quarter of 2001.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                                             SINCE FUND
                                     1 YEAR      5 YEARS     INCEPTION
                                   ----------  -----------  -----------
                                                   
(INCEPTION DATE: 06/20/2000)
  Return Before Taxes                  7.63%       15.32%       -1.82%
  Return After Taxes on                7.19%       15.20%       -1.93%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            5.47%       13.59%       -1.49%
MSCI TAIWAN INDEX (Index returns
do not reflect
deductions for fees, expenses,         8.38%       16.43%       -0.88%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.63%            None            0.10%           0.73%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses. The percentage of "Other Expenses" includes 0.10% for foreign tax
   expenses, and is based on amounts incurred during the Fund's most recent
   fiscal year. Actual tax expenses for the current fiscal year may be higher or
   lower than the amount shown in the table.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $75       $233       $406       $906


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.63%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

10
[GRAPHIC APPEARS HERE]




ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Fund's primary listing exchange is NYSE Arca.

Section 12(d)(1) of the Investment Company Act of 1940, as amended, restricts
investments by registered investment companies in the securities of other
investment

                                                                              11




companies. Registered investment companies are permitted to invest in the Fund
beyond the limits set forth in Section 12(d)(1), subject to certain terms and
conditions set forth in an SEC exemptive order issued to the Company, including
that such investment companies enter into an agreement with the Company.

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other than the U.S. dollar shall be translated into U.S. dollars at
the prevailing market rates on the date of valuation as quoted by one or more
major banks or dealers that makes a two-way market in such currencies (or a
data service provider based on quotations received from such banks or dealers)
and (b) U.S. fixed-income assets may be valued

12
[GRAPHIC APPEARS HERE]




as of the announced closing time for trading in fixed-income instruments on any
day that the Securities Industry and Financial Markets Association announces an
early closing time. The NAV of the Fund is calculated by dividing the value of
the net assets of the Fund (I.E., the value of its total assets less total
liabilities) by the total number of outstanding shares of the Fund, generally
rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

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

                                                                              13




DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income from taxable U.S. corporations and qualified foreign
corporations, provided that the Fund satisfies certain holding period
requirements in respect of the stock of such corporations and has not hedged
its position in the stock in certain ways. For this purpose, a qualified
foreign corporation means any foreign corporation (i) that is

14
[GRAPHIC APPEARS HERE]




incorporated in a possession of the United States, (ii) that is eligible for
benefits under a comprehensive income tax treaty with the United States which
includes an exchange of information program or (iii) if the stock with respect
to which the dividend was paid is readily tradable on an established United
States security market. The term excludes a corporation that is a passive
foreign investment company. Under current Internal Revenue Service guidance,
the United States does not have an appropriate comprehensive income tax treaty
with Taiwan but does with other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to you certain foreign income taxes (including
withholding taxes) paid by the Fund. This means that you would be considered to
have received as an additional dividend your share of such foreign taxes, but
you may, in such case, be entitled to either a

                                                                              15




corresponding tax deduction in calculating your taxable income, or, subject to
certain limitations, a credit in calculating your U.S. federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 200,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

Creations and redemptions must be made through a firm that is either a member
of the Continuous Net Settlement System of the National Securities Clearing
Corporation or a DTC participant and has executed an agreement with the
Distributor

16
[GRAPHIC APPEARS HERE]




with respect to creations and redemptions of Creation Unit aggregations.
Information about the procedures regarding creation and redemption of Creation
Units (including the cut-off times for receipt of creation and redemption
orders) is included in the SAI.

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $2,130,000     200,000           $4,500              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    AUG. 31, 2004
                                ---------------  ---------------  ---------------  ---------------  --------------
                                                                                     
NET ASSET VALUE, BEGINNING
  OF YEAR                          $   15.99       $    12.57       $    11.57        $  10.66         $ 10.79
                                   ---------       ----------       ----------        --------         -------
INCOME FROM INVESTMENT
  OPERATIONS:
 Net investment income/a/               0.54             0.38             0.34            0.27            0.14
 Net realized and unrealized
  gain (loss)/b/                       (3.01)            3.34             0.80            0.72           (0.25)
                                   ---------       ----------       ----------        --------         -------
Total from investment
  operations                           (2.47)            3.72             1.14            0.99           (0.11)
                                   ---------       ----------       ----------        --------         -------
LESS DISTRIBUTIONS FROM:
 Net investment income                 (0.39)           (0.30)           (0.14)          (0.08)          (0.02)
                                   ---------       ----------       ----------        --------         -------
Total distributions                    (0.39)           (0.30)           (0.14)          (0.08)          (0.02)
                                   ---------       ----------       ----------        --------         -------
NET ASSET VALUE, END OF YEAR       $   13.13       $    15.99       $    12.57        $  11.57         $ 10.66
                                   =========       ==========       ==========        ========         =======
TOTAL RETURN                          (15.69)%          29.91%            9.84%           9.28%          (1.10)%
                                   =========       ==========       ==========        ========         =======
RATIOS/SUPPLEMENTAL DATA:
 Net assets, end of year
  (000s)                           $2,918,008      $2,769,764       $1,893,751        $752,640         $390,228
 Ratio of expenses to
  average net assets                    0.73%            0.77%            0.85%           1.03%           1.19%/c/
 Ratio of expenses to
  average net assets
  exclusive of foreign taxes            0.63%            0.68%            0.70%           0.74%           0.92%
 Ratio of net investment
  income to average net
  assets                                3.54%            2.61%            2.74%           2.34%           1.23%
 Portfolio turnover rate/d/               33%              35%              29%             20%             19%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Ratio of expenses to average net assets prior to voluntary reimbursed
   distribution fees for the year ended August 31, 2004 was 1.22%.
/d/Portfolio turnover rates include portfolio transactions that are executed as
   a result of the Fund processing capital share transactions in Creation Units
   solely for cash in U.S. dollars. Excluding such transactions, the portfolio
   turnover rate for the years ended August 31, 2008, August 31, 2007, August
   31, 2006 and August 31, 2005 would have been 11%, 12%, 10% and 10%,
   respectively.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
listed for trading, as of the time that the Fund's NAV is calculated. In the
case of the 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. 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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.

22
[GRAPHIC APPEARS HERE]






PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 4.5% and Less than 5.0%              2                    0.45%
Greater than 4.0% and Less than 4.5%              2                    0.45
Greater than 3.5% and Less than 4.0%              3                    0.68
Greater than 3.0% and Less than 3.5%              5                    1.14
Greater than 2.5% and Less than 3.0%              7                    1.59
Greater than 2.0% and Less than 2.5%             11                    2.50
Greater than 1.5% and Less than 2.0%             15                    3.41
Greater than 1.0% and Less than 1.5%             39                    8.86
Greater than 0.5% and Less than 1.0%             70                   15.91
BETWEEN 0.5% AND -0.5%                          131                   29.78
Less than -0.5% and Greater than -1.0%           66                   15.00
Less than -1.0% and Greater than -1.5%           30                    6.82
Less than -1.5% and Greater than -2.0%           17                    3.86
Less than -2.0% and Greater than -2.5%           18                    4.09
Less than -2.5% and Greater than -3.0%            9                    2.05
Less than -3.0% and Greater than -3.5%            8                    1.82
Less than -3.5% and Greater than -4.0%            3                    0.68
Less than -4.0% and Greater than -4.5%            1                    0.23
Less than -4.5% and Greater than -5.0%            1                    0.23
Less than -5.0%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


                                                                              23




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. In the case of the
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 after the Fund's inception, for the period from
inception to the first day of secondary market trading in shares of the Fund,
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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

24
[GRAPHIC APPEARS HERE]




                       PERFORMANCE AS OF AUGUST 31, 2008



                                      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
============================ ========== ========== ======= ======== ======= ========= ========= ========
                                                                        
(15.69)%                     (16.67)%   (15.07)%   5.39%    4.59%   6.28%   (3.41)%   (3.52)%   (2.52)%




                                        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
======================== ========== ========== ======== ======== ======== ========== ========== =========
                                                                        
(15.69)%                 (16.67)%   (15.07)%   30.03%   25.14%   35.58%   (24.78)%   (25.43)%   (18.85)%


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

                                                                              25




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                         1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.


If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWT-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]


                        2009 PROSPECTUS TO SHAREHOLDERS

                iSHARES(Reg. TM) MSCI UNITED KINGDOM INDEX FUND
                                JANUARY 1, 2009
                         (as revised January 20, 2009)

             >>  WOULD YOU PREFER TO RECEIVE MATERIALS LIKE THIS
                 ELECTRONICALLY?
                 SEE INSIDE COVER FOR DETAILS.

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

[GRAPHIC APPEARS HERE]




[GRAPHIC APPEARS HERE]

Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on
your iShares holdings. In addition, it's a way we can all care for our
environment. To that end, we are pleased to offer shareholder reports and
prospectuses online.

Once you have enrolled, you will no longer receive shareholder reports and
prospectuses in the mail. Instead, you will receive e-mail notifications
announcing that the shareholder report or prospectus has been posted on the
iShares website at www.iShares.com and is available to be viewed or downloaded.

To sign up for electronic delivery, please follow these simple steps:

1. Go to www.icsdelivery.com.
         ===================

2. From the main page, select the first letter of your brokerage firm's name.

3. Select your brokerage institution from the list that follows. If your
   brokerage firm is not listed, electronic delivery may not be available.
   Please contact your brokerage firm or financial adviser.

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

Your information and e-mail address will be kept confidential and only used to

deliver documents to you. If at any time you are not satisfied, you can cancel

electronic delivery at www.icsdelivery.com and once again receive physical
                       ===================
delivery of your materials. If you have any questions, please contact your
brokerage firm or financial adviser.




iShares(Reg. TM)

iShares, Inc. (the "Company") is a registered investment company that consists
of more than 25 separate investment portfolios called funds. This prospectus
(the "Prospectus") relates to the following fund:

     iShares MSCI United Kingdom Index Fund (the "Fund").

CUSIP: 464286699
TRADING SYMBOL: EWU
UNDERLYING INDEX: MSCI United Kingdom Index

The Fund issues and redeems shares at their net asset value ("NAV") only in
blocks of 200,000 shares or multiples thereof ("Creation Units"). Only certain
large institutional investors known as "Authorized Participants" may purchase
or redeem Creation Units directly with the Fund at NAV. These transactions are
usually in exchange for a basket of securities similar to the Fund's portfolio
and an amount of cash. EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES OF THE
FUND ARE NOT REDEEMABLE SECURITIES. SHAREHOLDERS WHO ARE NOT AUTHORIZED
PARTICIPANTS MAY NOT REDEEM SHARES DIRECTLY FROM THE FUND AT NAV.

iShares(Reg. TM) is a registered trademark of Barclays Global Investors, N.A.
("BGI").

                        PROSPECTUS DATED JANUARY 1, 2009
                         (as revised January 20, 2009)




Table of Contents

                                   
  Introduction.....................   1
  Investment Objective.............   1
  Principal Investment Strategies..   2
  Principal Risks..................   3
  Portfolio Holdings Information...   7
  Performance Information..........   8
  Fees and Expenses................   9
  Management.......................   9
  Shareholder Information..........  11
  Distribution.....................  18
  Financial Highlights.............  19
  Index Provider...................  20
  Disclaimers......................  20
  Supplemental Information.........  22



"MSCI United Kingdom IndexSM" is a servicemark of MSCI Inc. and has been
licensed for use for certain purposes by BGI.

                                                                             iii




Introduction

This Prospectus contains important information about investing in the Fund.
Please read this Prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.iShares.com.

Barclays Global Fund Advisors ("BGFA") is the investment adviser to the Fund.
Shares of the Fund are listed and trade at market prices on NYSE Arca, Inc.
("NYSE Arca"). The market price for a share of the Fund may be different from
the Fund's most recent NAV per share. The Fund has its own CUSIP number and
exchange trading symbol.

The Fund is an exchange traded fund (commonly referred to as an "ETF"). ETFs
are funds that trade like other publicly-traded securities and are designed to
track an index. Similar to shares of an index mutual fund, each share of the
Fund represents a partial ownership in an underlying portfolio of securities
intended to track a market index. Unlike shares of a mutual fund, which can be
bought and redeemed from the issuing fund by all shareholders at a price based
on NAV, shares of the Fund may be purchased or redeemed directly from the Fund
at NAV solely by Authorized Participants. Also unlike shares of a mutual fund,
shares of the Fund are listed on a national securities exchange and trade in
the secondary market at market prices that change throughout the day.

The Fund invests in a particular segment of the securities markets and seeks to
track the performance of a securities index that generally is not
representative of the market as a whole. The Fund is designed to be used as
part of broader asset allocation strategies. Accordingly, an investment in the
Fund should not constitute a complete investment program.

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

Investment Objective

The Fund seeks investment results that correspond generally to the price and
yield performance, before fees and expenses, of the MSCI United Kingdom Index
(the "Underlying Index"). The Fund's investment objective and the Underlying
Index may not be changed without shareholder approval.

The Underlying Index is sponsored by an organization (the "Index Provider")
that is independent of the Fund and BGFA. The Index Provider determines the
composition and relative weightings of the securities in the Underlying Index
and publishes information regarding the market value of the Underlying Index.
The Fund's Index Provider is MSCI Inc. ("MSCI"). Additional information
regarding the Index Provider is provided in the INDEX PROVIDER section of this
Prospectus.

                                                                               1




Principal Investment Strategies

The Underlying Index consists of stocks traded primarily on the London Stock
Exchange. As of September 30, 2008, the Underlying Index's three largest
industries were energy, banks and materials.

BGFA uses a "passive" or indexing approach to try to achieve the Fund's
investment objective. Unlike many investment companies, the Fund does not try
to "beat" the index it tracks and does not seek temporary defensive positions
when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform
its Underlying Index but also may reduce some of the risks of active
management, such as poor security selection. Indexing seeks to achieve lower
costs and better after-tax performance by keeping portfolio turnover low in
comparison to actively managed investment companies.

The Fund generally invests at least 95% of its assets in the securities of its
Underlying Index and in depositary receipts ("DRs") representing securities in
its Underlying Index. The Fund will at all times invest at least 90% of its
assets in the securities of the Underlying Index or in DRs representing
securities in its Underlying Index. The Fund may invest the remainder of its
assets in other securities, including securities not in the Underlying Index,
futures contracts, options on futures contracts, other types of options and
swaps related to its Underlying Index, as well as cash and cash equivalents,
including shares of money market funds affiliated with BGFA or its affiliates.

BGFA uses a representative sampling indexing strategy to manage the Fund as
described below.

REPRESENTATIVE SAMPLING. "Representative sampling" is an indexing strategy that
involves investing in a representative sample of securities that collectively
has an investment profile similar to the Underlying Index. The securities
selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings),
fundamental characteristics (such as return variability and yield) and
liquidity measures similar to those of the Underlying Index. The Fund may or
may not hold all of the securities in the Underlying Index.

TRACKING ERROR. An index is a theoretical financial calculation while the Fund
is an actual investment portfolio. The performance of the Fund and its
Underlying Index may vary somewhat due to transaction costs, foreign currency
valuation, asset valuations, corporate actions (such as mergers and spin-offs),
timing variances, and differences between the Fund's portfolio and the
Underlying Index resulting from legal restrictions (such as diversification
requirements) that apply to the Fund but not to the Underlying Index or the use
of representative sampling. "Tracking error" is the difference between the
performance (return) of the Fund's portfolio and that of its Underlying Index.
BGFA expects that, over time, the Fund's tracking error will not exceed 5%.
Because the Fund uses a representative sampling indexing strategy, it can be
expected to have a larger tracking error than if it used a replication indexing
strategy. "Replication" is an indexing strategy in which a fund invests in
substantially

2
[GRAPHIC APPEARS HERE]




all of the securities in its underlying index in approximately the same
proportions as in the underlying index.

INDUSTRY CONCENTRATION POLICY. The Fund will concentrate its investments (I.E.,
hold 25% or more of its total assets) in a particular industry or group of
industries to approximately the same extent that its Underlying Index is
concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) and repurchase
agreements collateralized by U.S. government securities are not considered to
be issued by members of any industry.

Principal Risks

The Fund is subject to the principal risks noted below, any of which may
adversely affect the Fund's NAV, trading price, yield, total return and ability
to meet its investment objective.

ASSET CLASS RISK. The securities in the Underlying Index or the Fund's
portfolio may underperform the returns of other securities or indexes that
track other industries, groups of industries, markets, asset classes or
sectors. Various types of securities or indexes tend to experience cycles of
outperformance and underperformance in comparison to the general securities
markets.

CONCENTRATION RISK. To the extent that its Underlying Index or the Fund's
portfolio is concentrated in the securities of companies in a particular
market, industry, group of industries, country, region, group of countries,
sector or asset class, the Fund may be adversely affected by the performance of
those securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, country, region, group of
countries, sector or asset class.

CURRENCY RISK. Because the Fund's NAV is determined on the basis of the U.S.
dollar, you may lose money if the British currency depreciates against the U.S.
dollar, even if the local currency value of the Fund's holdings in that market
increases.

CUSTODY RISK. Custody risk refers to the risks in the process of clearing and
settling trades and to the holding of securities by local banks, agents and
depositories. Low trading volumes and volatile prices in less developed markets
make trades harder to complete and settle, and governments or trade groups may
compel local agents to hold securities in designated depositories that are not
subject to independent evaluation. Local agents are held only to the standards
of care of their local markets. The less developed a country's securities
market is, the greater the likelihood of custody problems.

FOREIGN SECURITIES RISKS. Investments in the securities of non-U.S. issuers are
subject to all the risks of investing in the market of such issuers, including
market fluctuations caused by economic and political developments. As a result
of investing in foreign securities, the Fund may be subject to increased risk
of loss caused by any of the factors listed below:

[]  Lower levels of liquidity and market efficiency;

[]  Greater securities price volatility;

                                                                               3




[]  Exchange rate fluctuations and exchange controls;

[]  Less availability of public information about issuers;

[]  Limitations on foreign ownership of securities;

[]  Imposition of withholding or other taxes;

[]  Imposition of restrictions on the expatriation of the funds or other assets
  of the Fund;

[]  Higher transaction and custody costs and delays in settlement procedures;

[]  Difficulties in enforcing contractual obligations;

[]  Lower levels of regulation of the securities market;

[]  Weaker accounting, disclosure and reporting requirements; and

[]  Legal principles relating to corporate governance, directors' fiduciary
  duties and liabilities and stockholders' rights in markets in which the Fund
  invests may not be as extensive as those that apply in the United States.

ISSUER RISK. The performance of the Fund depends on the performance of
individual companies in which the Fund invests. Any issuer may perform poorly,
causing the value of its securities to decline. Poor performance may be caused
by poor management decisions, competitive pressures, changes in technology,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or
on their own discretion, decide to reduce or eliminate dividends, which may
also cause their stock prices to decline.

MANAGEMENT RISK. The Fund does not fully replicate its Underlying Index and may
hold securities not included in its Underlying Index. As a result, the Fund is
subject to the risk that BGFA's investment management strategy, the
implementation of which is subject to a number of constraints, may not produce
the intended results.

MARKET RISK. The Fund's NAV reacts to securities market movements. You could
lose money over short periods due to fluctuation in the Fund's NAV in response
to short-term market movements and over longer periods during market downturns.
Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the markets. The value of a
security may decline due to general market conditions, economic trends or
events that are not specifically related to the issuer of the security or to
factors that affect a particular industry or industries. During a general
economic downturn in the securities markets, multiple asset classes may be
negatively affected.

MARKET TRADING RISKS

ABSENCE OF ACTIVE MARKET. Although shares of the Fund are listed for trading on
one or more stock exchanges, there can be no assurance that an active trading
market for such shares will develop or be maintained.

RISKS OF SECONDARY LISTINGS. The Fund's shares may be listed or traded on U.S.
and non-U.S. stock exchanges other than the U.S. stock exchange where the
Fund's primary listing is maintained. There can be no assurance that the Fund's
shares will continue to trade on any such stock exchange or in any market or
that the Fund's shares will continue to meet the requirements for listing or
trading on any exchange

4
[GRAPHIC APPEARS HERE]




or in any market. The Fund's shares may be less actively traded in certain
markets than others, and investors are subject to the execution and settlement
risks and market standards of the market where they or their broker direct
their trades for execution. Certain information available to investors who
trade Fund shares on a U.S. stock exchange during regular U.S. market hours may
not be available to investors who trade in other markets, which may result in
secondary market prices in such markets being less efficient.

SECONDARY MARKET TRADING RISKS. Shares of the Fund may trade in the secondary
market at times when the Fund does not accept orders to purchase or redeem
shares. At such times, shares may trade in the secondary market with more
significant premiums or discounts than might be experienced at times when the
Fund accepts purchase and redemption orders.

Secondary market trading in Fund shares may be halted by a stock exchange
because of market conditions or other reasons. In addition, trading in Fund
shares on a stock exchange or in any market may be subject to trading halts
caused by extraordinary market volatility pursuant to "circuit breaker" rules
on the exchange or market. There can be no assurance that the requirements
necessary to maintain the listing or trading of Fund shares will continue to be
met or will remain unchanged.

SHARES OF THE FUND MAY TRADE AT PRICES OTHER THAN NAV. Shares of the Fund trade
on exchanges at prices at, above or below their most recent NAV. The per share
NAV of the Fund is calculated at the end of each business day and fluctuates
with changes in the market value of the Fund's holdings since the most recent
calculation. The trading prices of the Fund's shares fluctuate continuously
throughout trading hours based on market supply and demand rather than NAV. The
trading prices of the Fund's shares may deviate significantly from NAV during
periods of market volatility. ANY OF THESE FACTORS MAY LEAD TO THE FUND'S
SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. However, because shares can be
created and redeemed in Creation Units at NAV (unlike shares of many closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAVs), BGFA believes that large discounts or premiums to the
NAV of the Fund are not likely to be sustained over the long-term. While the
creation/redemption feature is designed to make it likely that the Fund's
shares normally will trade on exchanges at prices close to the Fund's next
calculated NAV, exchange prices are not expected to correlate exactly with the
Fund's NAV due to timing reasons as well as market supply and demand factors.
In addition, disruptions to creations and redemptions or the existence of
extreme market volatility may result in trading prices that differ
significantly from NAV. If a shareholder purchases at a time when the market
price is at a premium to the NAV or sells at a time when the market price is at
a discount to the NAV, the shareholder may sustain losses.

COSTS OF BUYING OR SELLING FUND SHARES. Buying or selling Fund shares involves
two types of costs that apply to all securities transactions. When buying or
selling shares of the Fund through a broker, you will incur a brokerage
commission or other charges imposed by brokers as determined by that broker. In
addition, you will also incur the cost of the "spread" - that is, the
difference between what professional investors are willing to pay for Fund
shares (the "bid" price) and the price at which they are willing

                                                                               5




to sell Fund shares (the "ask" price). Because of the costs inherent in buying
or selling Fund shares, frequent trading may detract significantly from
investment results and an investment in Fund shares may not be advisable for
investors who anticipate regularly making small investments.

NON-DIVERSIFICATION RISK. The Fund is classified as "non-diversified." This
means that the Fund may invest a large percentage of its assets in securities
issued by or representing a small number of issuers. As a result, the Fund may
be more susceptible to the risks associated with these particular issuers, or
to a single economic, political or regulatory occurrence affecting these
issuers.

PASSIVE INVESTMENT RISK. The Fund is not actively managed and may be affected
by a general decline in market segments relating to its Underlying Index. The
Fund invests in securities included in, or representative of, its Underlying
Index regardless of their investment merits. BGFA does not attempt to take
defensive positions in declining markets.

RELIANCE ON TRADING PARTNERS RISK. The British economy is dependent on the
economies of Europe as key trading partners. Reduction in spending by these
economies on British products and services or negative changes in any of these
economies may cause an adverse impact on the British economy:

EUROPEAN ECONOMIC RISK. The Economic and Monetary Union of the European Union
("EU") requires compliance with restrictions on inflation rates, deficits,
interest rates, debt levels and fiscal and monetary controls, each of which may
significantly affect every country in Europe. Decreasing imports or exports,
changes in governmental regulations on trade, changes in the exchange rate of
the euro and recessions in EU economies may have a significant adverse effect
on the economies of EU members and their trading partners.

U.S. ECONOMIC RISK. The United States is a large trade and investment partner
of the United Kingdom. Decreasing U.S. imports, new trade regulations, changes
in the U.S. dollar exchange rates or a recession in the United States may have
an adverse impact on the British economy.

STRUCTURAL RISK

GOVERNMENT CONTROL OF ECONOMY. Continued governmental involvement or control in
certain sectors may stifle competition in certain sectors or cause adverse
effects on economic growth.

TRACKING ERROR RISK. Imperfect correlation between the Fund's portfolio
securities and those in its Underlying Index, rounding of prices, changes to
the Underlying Index and regulatory requirements may cause tracking error, the
divergence of the Fund's performance from that of its Underlying Index.
Tracking error also may result because the Fund incurs fees and expenses while
its Underlying Index does not.

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

6
[GRAPHIC APPEARS HERE]




Portfolio Holdings Information

A description of the Company's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information ("SAI"). The top holdings of the Fund can
be found at www.iShares.com. Fund fact sheets provide information regarding the
Fund's top holdings and may be requested by calling 1-800-iShares
(1-800-474-2737).

                                                                               7




Performance Information

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

               YEAR BY YEAR RETURNS/1/ (YEARS ENDED DECEMBER 31)

[GRAPHIC APPEARS HERE]


     
1998    18.42%
1999    12.14%
2000   -11.67%
2001   -15.94%
2002   -15.25%
2003    30.74%
2004    18.59%
2005    6.63%
2006    29.82%
2007    7.58%





- -----------
    /1/ The Fund's total return for the nine months ended September 30, 2008
        was -30.02%.

The best calendar quarter return during the periods shown above was 18.43% in
the 1st quarter of 1998; the worst was -17.32% in the 3rd quarter of 2002.

                          AVERAGE ANNUAL TOTAL RETURNS
                   (for the periods ended December 31, 2007)




                                     1 YEAR      5 YEARS     10 YEARS
                                   ----------  -----------  ---------
                                                   
(INCEPTION DATE: 03/12/1996)
  Return Before Taxes                  7.58%       18.22%      6.79%
  Return After Taxes on                7.03%       17.74%      6.06%
  Distributions(1)
  Return After Taxes on
  Distributions and Sale of Fund
  Shares(1)                            5.65%       16.08%      5.64%
MSCI UNITED KINGDOM INDEX (Index
returns do not reflect
deductions for fees, expenses,         8.36%       19.13%      7.34%
or taxes)


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

8
[GRAPHIC APPEARS HERE]




Fees and Expenses

The following table describes the fees and expenses that you will incur if you
own shares of the Fund. You will also incur usual and customary brokerage
commissions when buying or selling shares of the Fund:



                             ANNUAL FUND OPERATING EXPENSES/2/
               -------------------------------------------------------------
                                DISTRIBUTION                    TOTAL ANNUAL
                                    AND                             FUND
 SHAREHOLDER    MANAGEMENT    SERVICE (12B-1)       OTHER        OPERATING
   FEES/1/         FEES             FEES         EXPENSES/3/      EXPENSES
- -------------  ------------  -----------------  -------------  -------------
                                                   
      None        0.52%            None             None           0.52%


- -----------
/1/Fees paid directly from your investment.
/2/Expenses that are deducted from the Fund's assets, expressed as a percentage
   of average net assets.
/3/The Company's Investment Advisory Agreement provides that BGFA will pay all
   operating expenses of the Fund, except interest expense and taxes, any
   brokerage expenses, future distribution fees or expenses and extraordinary
   expenses.

EXAMPLE. This example is intended to help you compare the cost of owning shares
of the Fund with the cost of investing in other funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:



   1 YEAR      3 YEARS    5 YEARS    10 YEARS
- ------------  ---------  =========  =========
                           
       $53       $167       $291       $653


Management

INVESTMENT ADVISER. As investment adviser, BGFA has overall responsibility for
the general management and administration of the Company. BGFA provides an
investment program for the Fund and manages the investment of the Fund's
assets. In seeking to achieve the Fund's investment objective, BGFA uses teams
of portfolio managers, investment strategists and other investment specialists.
This team approach brings together many disciplines and leverages BGFA's
extensive resources.

Pursuant to the Investment Advisory Agreement between BGFA and the Company
(entered into on behalf of the Fund), BGFA is responsible for substantially all
expenses of the Fund, including the cost of transfer agency, custody, fund
administration, legal, audit and other services except interest expense and
taxes, brokerage expenses, future distribution fees or expenses and
extraordinary expenses.

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

                                                                               9




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 and iShares MSCI Switzerland 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.

As calculated on August 31, 2008, for its investment advisory services to the
Fund, BGFA is entitled to receive a management fee from the Fund, based on a
percentage of the Fund's average daily net assets, at an annual rate of 0.52%.

BGFA is located at 400 Howard Street, San Francisco, CA 94105. It is a
wholly-owned subsidiary of BGI, which in turn is a majority-owned subsidiary of
Barclays Bank PLC. As of September 30, 2008, BGI and its affiliates, including
BGFA, provided investment advisory services for assets in excess of $1.70
trillion. BGI, BGFA, Barclays Global Investors Services, Barclays Bank PLC and
their affiliates deal, trade and invest for their own accounts in the types of
securities in which the Fund may also invest.

A discussion regarding the basis for the Fund's Board of Directors' approval of
the Investment Advisory Agreement with BGFA is available in the Fund's annual
report for the period ended August 31.

PORTFOLIO MANAGERS. Diane Hsiung and Greg Savage (the "Portfolio Managers") are
primarily responsible for the day-to-day management of the Fund. Each Portfolio
Manager is responsible for various functions related to portfolio management,
including, but not limited to, investing cash inflows, coordinating with
members of his or her team to focus on certain asset classes, implementing
investment strategy, researching and reviewing investment strategy and
overseeing members of his or her portfolio management team with more limited
responsibilities.

Diane Hsiung is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Ms. Hsiung has been a senior portfolio manager for BGFA and BGI since
2007 and a portfolio manager for BGFA and BGI from 2002 to 2006. Ms. Hsiung has
been a Portfolio Manager of the Fund since January 2008.

Greg Savage is an employee of BGFA and BGI and, together with the other
Portfolio Manager, is primarily responsible for the day-to-day management of
the Fund. Mr. Savage has been a senior portfolio manager for BGFA and BGI since
2006 and a portfolio manager for BGFA and BGI from 2001 to 2006. Mr. Savage has
been a Portfolio Manager of the Fund since January 2008.

10
[GRAPHIC APPEARS HERE]




The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers and the
Portfolio Managers' ownership (if any) of shares in the Fund.

ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust
Company ("State Street") is the administrator, custodian and transfer agent for
the Fund.

Shareholder Information

ADDITIONAL SHAREHOLDER INFORMATION, INCLUDING HOW TO BUY AND SELL SHARES OF THE
FUND, IS AVAILABLE FREE OF CHARGE BY CALLING TOLL-FREE: 1-800-ISHARES
(1-800-474-2737) OR VISITING OUR WEBSITE AT WWW.ISHARES.COM.

BUYING AND SELLING SHARES. Shares of the Fund trade on a national securities
exchange during the trading day. Shares can be bought and sold throughout the
trading day like shares of other publicly-traded companies. The Company does
not impose any minimum investment for shares of the Fund purchased on an
exchange. Buying or selling Fund shares involves two types of costs that apply
to all securities transactions. When buying or selling shares of the Fund
through a broker, you will incur a brokerage commission or other charges
determined by your broker. In addition, you will incur the cost of the "spread"
- - that is, the difference between the bid price and the ask price. The
commission is frequently a fixed amount and may be a significant proportional
cost for investors seeking to buy or sell small amounts of shares. The spread
varies over time for shares of the Fund based on its trading volume and market
liquidity, and is generally lower if the Fund has a lot of trading volume and
market liquidity and higher if the Fund has little trading volume and market
liquidity. The Fund's shares trade under the trading symbol listed on the first
page of this Prospectus.

Shares of the Fund may be acquired or redeemed directly from the Fund only in
Creation Units or multiples thereof, as discussed in the CREATIONS AND
REDEMPTIONS section of this Prospectus. Once created, shares of the Fund
generally trade in the secondary market in amounts less than a Creation Unit.

The Company's Board of Directors (the "Board") has adopted a policy of not
monitoring for frequent purchases and redemptions of Fund shares ("frequent
trading") that appear to attempt to take advantage of a potential arbitrage
opportunity presented by a lag between a change in the value of the Fund's
portfolio securities after the close of the primary markets for the Fund's
portfolio securities and the reflection of that change in the Fund's NAV
("market timing"), because the Fund sells and redeems its shares directly
through transactions that are in-kind and/or for cash with a deadline for
placing cash-related transactions no later than the close of the primary
markets for the Fund's portfolio securities. The Board has not adopted a policy
of monitoring for other frequent trading activity because shares of the Fund
are listed and traded on national securities exchanges.

The national securities exchange on which the Fund's shares are listed is open
for trading Monday through Friday and is closed on weekends and the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday,

                                                                              11




Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's primary listing exchange is NYSE Arca.

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

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

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

SHARE PRICES. The trading prices of the Fund's shares in the secondary market
generally differ from the Fund's daily NAV per share and are affected by market
forces such as supply and demand, economic conditions and other factors.
Information regarding the intraday value of shares of the Fund, also known as
the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15
seconds throughout the trading day by the national securities exchange on which
the Fund's shares are listed or by market data vendors or other information
providers. The IOPV is based on the current market value of the securities
and/or cash required to be deposited in exchange for a Creation Unit. The IOPV
does not necessarily reflect the precise composition of the current portfolio
of securities held by the Fund at a particular point in time nor the best
possible valuation of the current portfolio. Therefore, the IOPV should not be
viewed as a "real-time" update of the NAV, which is computed only once a day.
The IOPV is generally determined by using both current market quotations and/or
price quotations obtained from broker-dealers that may trade in the portfolio
securities held by the Fund. The quotations of certain Fund holdings may not be
updated during U.S. trading hours if such holdings do not trade in the U.S. The
Fund is not involved in, or responsible for, the calculation or dissemination
of the IOPV and makes no representation or warranty as to its accuracy.

DETERMINATION OF NET ASSET VALUE. The NAV for the Fund is generally determined
once daily Monday through Friday generally as of the regularly scheduled close
of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.,
Eastern time) on each day that the NYSE is open for trading, based on prices at
the time of closing, provided that (a) any assets or liabilities denominated in
currencies other

12
[GRAPHIC APPEARS HERE]




than the U.S. dollar shall be translated into U.S. dollars at the prevailing
market rates on the date of valuation as quoted by one or more major banks or
dealers that makes a two-way market in such currencies (or a data service
provider based on quotations received from such banks or dealers) and (b) U.S.
fixed-income assets may be valued as of the announced closing time for trading
in fixed-income instruments on any day that the Securities Industry and
Financial Markets Association announces an early closing time. The NAV of the
Fund is calculated by dividing the value of the net assets of the Fund (I.E.,
the value of its total assets less total liabilities) by the total number of
outstanding shares of the Fund, generally rounded to the nearest cent.

Investments held by the Fund are valued pursuant to the pricing policy and
procedures approved by the Board. In calculating the Fund's NAV, the Fund's
investments 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. BGFA may use various pricing
services or discontinue the use of any pricing service. A price obtained from a
pricing service based on such pricing service's valuation matrix may be
considered a market valuation.

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. The frequency with which the Fund's
investments are valued using fair value pricing is primarily a function of the
types of securities and other assets in which the Fund invests pursuant to its
investment objective, strategies and limitations.

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

Valuing the Fund's investments using fair value pricing will result in using
prices for those investments that may differ from current market valuations.
Use of fair value prices and certain current market valuations could result in
a difference between the prices used to calculate the Fund's NAV and the prices
used by the Underlying Index, which, in turn, could result in a difference
between the Fund's performance and the performance of the Underlying Index.

                                                                              13




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

DIVIDENDS AND DISTRIBUTIONS

GENERAL POLICIES. Dividends from net investment income, if any, are generally
declared and paid semi-annually by the Fund. Distributions of net realized
securities gains, if any, generally are declared and paid once a year, but the
Company may make distributions on a more frequent basis for the Fund. The
Company reserves the right to declare special distributions if, in its
reasonable discretion, such action is necessary or advisable to preserve its
status as a regulated investment company ("RIC") or to avoid imposition of
income or excise taxes on undistributed income or realized gains.

Dividends and other distributions on shares of the Fund are distributed on a
PRO RATA basis to beneficial owners of such shares. Dividend payments are made
through DTC participants and indirect participants to beneficial owners then of
record with proceeds received from the Fund.

DIVIDEND REINVESTMENT SERVICE. No dividend reinvestment service is provided by
the Company. Broker-dealers may make available the DTC book-entry Dividend
Reinvestment Service for use by beneficial owners of the Fund for reinvestment
of their dividend distributions. Beneficial owners should contact their broker
to determine the availability and costs of the service and the details of
participation therein. Brokers may require beneficial owners to adhere to
specific procedures and timetables. If this service is available and used,
dividend distributions of both income and realized gains will be automatically
reinvested in additional whole shares of the Fund purchased in the secondary
market.

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

Unless your investment in Fund shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an IRA, you need to be aware of the
possible tax consequences when the Fund makes distributions or you sell Fund
shares.

TAXES ON DISTRIBUTIONS. Distributions from the Fund's net investment income
(other than qualified dividend income), including distributions of income from
securities lending and distributions out of the Fund's net short-term capital
gains, if any, are taxable to you as ordinary income. Distributions by the Fund
of net long-term capital gains in excess of net short-term capital losses
(capital gain dividends) are taxable to you as long-term capital gains,
generally at a 15% tax rate (0% at certain income levels), regardless of how
long you have held the Fund's shares. Distributions by the Fund that qualify as
qualified dividend income are taxable to you at long-term capital gain rates.
The 15% and 0% tax rates expire for taxable years beginning after December 31,
2010.

Dividends will be qualified dividend income to you if they are attributable to
qualified dividend income received by the Fund which, in general, includes
dividend income

14
[GRAPHIC APPEARS HERE]




from taxable U.S. corporations and qualified foreign corporations, provided
that the Fund satisfies certain holding period requirements in respect of the
stock of such corporations and has not hedged its position in the stock in
certain ways. For this purpose, a qualified foreign corporation means any
foreign corporation (i) that is incorporated in a possession of the United
States, (ii) that is eligible for benefits under a comprehensive income tax
treaty with the United States which includes an exchange of information program
or (iii) if the stock with respect to which the dividend was paid is readily
tradable on an established United States security market. The term excludes a
corporation that is a passive foreign investment company. Under current
Internal Revenue Service guidance, the United States has an appropriate
comprehensive income tax treaty with the United Kingdom among other countries.

Dividends received by the Fund from a real estate investment trust ("REIT") or
another RIC generally are qualified dividend income only to the extent the
dividend distributions are made out of qualified dividend income received by
such REIT or RIC. It is expected that dividends received by the Fund from a
REIT and distributed to a shareholder generally will be taxable to the
shareholder as ordinary income.

Under current law, the taxation of qualified dividend income at long-term
capital gain rates will no longer apply for taxable years beginning after
December 31, 2010.

A dividend will not be treated as qualified dividend income if the dividend is
received with respect to any share of stock held without being hedged by the
Fund, or to any share of the Fund held without being hedged by you, for fewer
than 61 days during the 121-day period beginning at the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such
dividend or in the case of certain preferred stock 91 days during the 181-day
period beginning 90 days before such date. In general, your distributions are
subject to U.S. federal income tax for the year when they are paid. Certain
distributions paid in January, however, may be treated as paid on December 31
of the prior year.

If the Fund's distributions exceed current and accumulated earnings and
profits, all or a portion of the distributions made in the taxable year may be
recharacterized as a return of capital to shareholders. A return of capital
distribution generally will not be taxable but will reduce the shareholder's
cost basis and result in a higher capital gain or lower capital loss when those
shares on which the distribution was received are sold.

If you are neither a resident nor a citizen of the United States or if you are
a foreign entity, the Fund's ordinary income dividends (which include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies, provided that
withholding tax will generally not apply to any gain or income realized by a
non-U.S. shareholder in respect of any distributions of long-term capital gains
or upon the sale or other disposition of shares of the Fund.

Dividends and interest received by the Fund with respect to foreign securities
may give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If, as is expected, more than 50% of the total assets of
the Fund at the close of a year consist of foreign stocks or securities, the
Fund may "pass through" to

                                                                              15




you certain foreign income taxes (including withholding taxes) paid by the
Fund. This means that you would be considered to have received as an additional
dividend your share of such foreign taxes, but you may, in such case, be
entitled to either a corresponding tax deduction in calculating your taxable
income, or, subject to certain limitations, a credit in calculating your U.S.
federal income tax.

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

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

THE FOREGOING DISCUSSION SUMMARIZES SOME OF THE CONSEQUENCES UNDER CURRENT U.S.
FEDERAL TAX LAW OF AN INVESTMENT IN THE FUND. IT IS NOT A SUBSTITUTE FOR
PERSONAL TAX ADVICE. YOU MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXATION ON
FUND DISTRIBUTIONS AND SALES OF SHARES. CONSULT YOUR PERSONAL TAX ADVISER ABOUT
THE POTENTIAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES OF THE FUND UNDER ALL
APPLICABLE TAX LAWS.

CREATIONS AND REDEMPTIONS. Shares of the Fund that trade in the secondary
market are "created" at NAV by market makers, large investors and institutions
only in block-size Creation Units of 200,000 shares or multiples thereof. Each
"creator" or "Authorized Participant" enters into an authorized participant
agreement with the Fund's distributor, SEI Investments Distribution Co. (the
"Distributor"). A creation transaction, which is subject to acceptance by the
transfer agent, takes place when an Authorized Participant deposits into the
Fund a portfolio of securities approximating the holdings of the Fund and a
specified amount of cash in exchange for a specified number of Creation Units.
To the extent practicable, the composition of such portfolio generally
corresponds PRO RATA to the holdings of the Fund.

Similarly, shares can be redeemed only in Creation Units, generally in-kind for
a portfolio of securities held by the Fund and a specified amount of cash.
EXCEPT WHEN AGGREGATED IN CREATION UNITS, SHARES ARE NOT REDEEMABLE BY THE
FUND. The prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received in a form described in the
authorized participant agreement.

The Fund intends to comply with the U.S. federal securities laws in accepting
securities for deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the securities used to
satisfy redemption requests will be sold in transactions that would be exempt
from registration under the 1933 Act. Further, an Authorized Participant that
is not a "qualified institutional buyer," as such term is defined under Rule
144A of the 1933 Act, will not be able to receive Fund securities that are
restricted securities eligible for resale under Rule 144A.

16
[GRAPHIC APPEARS HERE]




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

Because new shares may be created and issued on an ongoing basis, at any point
during the life of the Fund a "distribution," as such term is used in the 1933
Act, may be occurring. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner that could render them
statutory underwriters and subject to the prospectus delivery and liability
provisions of the 1933 Act. Any determination of whether one is an underwriter
must take into account all the relevant facts and circumstances of each
particular case.

Broker-dealers should also note that dealers who are not "underwriters" but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the 1933 Act. For delivery of prospectuses to exchange members,
the prospectus delivery mechanism of Rule 153 under the 1933 Act is available
only with respect to transactions on a national securities exchange.

TRANSACTION FEES. Investors are charged standard creation and redemption
transaction fees to offset transfer and other transaction costs associated with
the issuance and redemption of Creation Units. Purchasers and redeemers, up to
the maximum amount shown below, of Creation Units for cash are required to pay
an additional variable charge (up to the maximum amount shown below) to
compensate for brokerage and market impact expenses. The standard creation and
redemption transaction fees are set forth below. The standard creation
transaction fee is charged to each purchaser on the day such purchaser creates
a Creation Unit. The fee is a single charge regardless of the number of
Creation Units purchased by an investor on the same day. BGFA may, from time to
time, at its own expense, compensate purchasers of Creation Units who have
purchased substantial amounts of Creation Units and other financial
institutions for administrative or marketing services. Similarly, the standard
redemption transaction fee is a single charge regardless of the number of
Creation Units redeemed on the same day. Creations and redemptions through DTC
for cash (when cash creations and redemptions are available or specified) are
also subject to an additional variable charge up to the maximum amount shown in
the table below. In addition, purchasers of shares in Creation Units are
responsible for payment of the costs of transferring securities to the Fund and
redeemers of shares in Creation Units are responsible for the costs of
transferring securities from the Fund. Investors who use the services of a
broker or other such intermediary may pay fees for such services.

                                                                              17




The following table also shows, as of September 30, 2008, the approximate value
of one Creation Unit, including standard and maximum additional creation and
redemption transaction fees:



                                   STANDARD       MAXIMUM ADDITIONAL    MAXIMUM ADDITIONAL
  APPROXIMATE                     CREATION/         VARIABLE CHARGE      VARIABLE CHARGE
   VALUE OF A      CREATION       REDEMPTION              FOR                  FOR
 CREATION UNIT    UNIT SIZE    TRANSACTION FEE        CREATIONS*           REDEMPTIONS*
- ---------------  -----------  -----------------  --------------------  -------------------
                                                           
   $3,298,000     200,000           $3,500              3.0%                  2.0%


- -----------
* As a percentage of the amount invested.

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

Distribution

The Distributor distributes Creation Units for the Fund on an agency basis. The
Distributor does not maintain a secondary market in shares of the Fund. The
Distributor has no role in determining the policies of the Fund or the
securities that are purchased or sold by the Fund. The Distributor's principal
address is One Freedom Valley Drive, Oaks, PA 19456.

18
[GRAPHIC APPEARS HERE]




Financial Highlights

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

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)



                                   YEAR ENDED       YEAR ENDED       YEAR ENDED       YEAR ENDED      YEAR ENDED
                                 AUG. 31, 2008    AUG. 31, 2007    AUG. 31, 2006    AUG. 31, 2005    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%


- -----------
/a/Based on average shares outstanding throughout each period.
/b/The amounts reported may not accord with the change in aggregate gains and
   losses in securities due to the timing of capital share transactions.
/c/Portfolio turnover rates exclude portfolio securities received or delivered
   as a result of processing capital share transactions in Creation Units.

                                                                              19




Index Provider

MSCI is a leading provider of global indexes and benchmark related products and
services to investors worldwide. MSCI is not affiliated with the Company, BGI,
BGFA, State Street, the Distributor or any of their respective affiliates.

BGI has entered into a license agreement with the Index Provider to use the
Underlying Index. BGI sublicenses rights in the Underlying Index to the Company
at no charge.

Disclaimers

THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI OR ANY AFFILIATE
OF MSCI. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE OWNERS OF THIS FUND OR ANY MEMBER OF THE PUBLIC
REGARDING ADVISABILITY OF INVESTING IN FUNDS GENERALLY OR IN THIS FUND
PARTICULARLY OR THE ABILITY OF THE UNDERLYING INDEX TO TRACK GENERAL STOCK
MARKET PERFORMANCE. MSCI IS THE LICENSOR OF CERTAIN TRADEMARKS, SERVICE MARKS
AND TRADE NAMES OF MSCI AND OF THE UNDERLYING INDEX WHICH IS DETERMINED,
COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO THE COMPANY, BGI, BGFA OR THE
FUND. MSCI HAS NO OBLIGATION TO TAKE THE NEEDS OF THE BGI, BGFA OR THE OWNERS
OF THE FUND INTO CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE
UNDERLYING INDEX. MSCI IS NOT RESPONSIBLE FOR AND HAS NOT PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE FUND TO BE
ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE FUND
IS REDEEMABLE FOR CASH. NEITHER MSCI NOR ANY OTHER PARTY HAS ANY OBLIGATION OR
LIABILITY TO OWNERS OF THE FUND IN CONNECTION WITH THE ADMINISTRATION,
MARKETING OR TRADING OF THE FUND.

ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE
CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER
MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE
INDEXES OR ANY DATA INCLUDED THEREIN, NEITHER MSCI NOR ANY OTHER PARTY MAKES
ANY WARRANTY, EXPRESS OR IMPLIED AS TO RESULTS TO BE OBTAINED BY LICENSEE,
LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED HEREUNDER OR
FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR
IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE INDEXES
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR DIRECT, INDIRECT,
SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS)
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

SHARES OF THE FUND ARE NOT SPONSORED, ENDORSED OR PROMOTED BY NYSE ARCA. NYSE
ARCA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF
THE SHARES OF THE FUND OR ANY MEMBER OF THE PUBLIC REGARDING THE ABILITY OF THE
FUND TO TRACK THE TOTAL RETURN PERFORMANCE OF THE UNDERLYING INDEX OR THE
ABILITY OF THE UNDERLYING INDEX TO TRACK STOCK MARKET PERFORMANCE. NYSE ARCA IS
NOT RESPONSIBLE FOR, NOR HAS IT PARTICIPATED IN, THE DETERMINATION OF THE
COMPILATION OR THE CALCULATION OF THE UNDERLYING INDEX, NOR IN THE
DETERMINATION OF THE TIMING OF,

20
[GRAPHIC APPEARS HERE]




PRICES OF, OR QUANTITIES OF SHARES OF THE FUND TO BE ISSUED, NOR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY WHICH THE SHARES ARE
REDEEMABLE. NYSE ARCA HAS NO OBLIGATION OR LIABILITY TO OWNERS OF THE SHARES OF
THE FUND IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE
SHARES OF THE FUND.

NYSE ARCA DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. NYSE ARCA MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY ON BEHALF OF
THE FUND AS LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE
SHARES OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE SUBJECT
INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED AS
DESCRIBED HEREIN OR FOR ANY OTHER USE. NYSE ARCA MAKES NO EXPRESS OR IMPLIED
WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE UNDERLYING INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL
NYSE ARCA HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.

BGFA DOES NOT GUARANTEE THE ACCURACY OR THE COMPLETENESS OF THE UNDERLYING
INDEX OR ANY DATA INCLUDED THEREIN AND BGFA SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN.

BGFA MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO THE OWNERS OF SHARES OF THE FUND
OR TO ANY OTHER PERSON OR ENTITY, AS TO RESULTS TO BE OBTAINED BY THE FUND FROM
THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. BGFA MAKES NO
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL BGFA HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                                                              21




Supplemental Information

I. Premium/Discount Information
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
NAV. 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 price used to calculate market returns ("Market Price") of the Fund
generally is determined using the midpoint between the highest bid and the
lowest offer on the primary securities exchange on which shares of the Fund are
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 the
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 of distributions of premiums and
discounts for the Fund for each full calendar quarter of 2007 through September
30, 2008.

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.



PREMIUM/DISCOUNT RANGE                   NUMBER OF DAYS     PERCENTAGE OF TOTAL DAYS
=======================================  ================  =========================
                                                     
Greater than 3.0%                                 3                    0.68%
Greater than 2.5% and Less than 3.0%              2                    0.45
Greater than 2.0% and Less than 2.5%              3                    0.68
Greater than 1.5% and Less than 2.0%             12                    2.73
Greater than 1.0% and Less than 1.5%             38                    8.64
Greater than 0.5% and Less than 1.0%             90                   20.45
BETWEEN 0.5% AND -0.5%                          224                   50.92
Less than -0.5% and Greater than -1.0%           39                    8.86
Less than -1.0% and Greater than -1.5%           18                    4.09
Less than -1.5% and Greater than -2.0%            9                    2.05
Less than -2.0%                                   2                    0.45
                                                ---                   -----
                                                440                  100.00%
                                                ===                  ======


22
[GRAPHIC APPEARS HERE]




II. Total Return Information

The tables that follow present information about the total returns of the
Fund's Underlying Index and the total returns of the Fund. The information
presented for the Fund is as of its fiscal year ended August 31, 2008.

"Average Annual Total Returns" represent the average annual change in value of
an investment over the periods indicated. "Cumulative Total Returns" represent
the total change in value of an investment over the periods indicated.

The Fund's per share 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 of the Fund. The price used to calculate Market Price is
determined by using the midpoint between the highest bid and the lowest offer
on the primary stock exchange on which shares of the Fund are listed for
trading, as of the time that the Fund's NAV is calculated. 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, the Underlying 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 below do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or
the redemption or sale of Fund shares. The investment return and principal
value of shares of 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.

                       PERFORMANCE AS OF AUGUST 31, 2008




                                    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
============================ ========== ========== ======== ======== ======== ======= ======== ======
                                                                       
(17.16)%                     (17.43)%   (16.68)%   12.09%   11.98%   12.87%   4.02%    4.57%   4.75%




                                     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
======================== ========== ========== ======== ======== ======== ======== ======== =======
                                                                    
(17.16)%                 (17.43)%   (16.68)%   76.92%   76.11%   83.16%   48.28%   56.40%   59.08%


                                                                              23




[GRAPHIC APPEARS HERE]

                             FOR MORE INFORMATION:

                                WWW.iSHARES.COM
                        1-800-iShares (1-800-474-2737)

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

Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual reports to shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the last fiscal year.

If you have any questions about the Company or shares of the Fund or you wish
to obtain the SAI, Semi-Annual or Annual report free of charge, please:

            
Call:          1-800-iShares
(toll free)    1-800-474-2737
               Monday through Friday
               8:30 a.m. to 6:30 p.m. (Eastern Time)
E-mail:        iSharesETFs@barclaysglobal.com
Write:         c/o SEI Investments Distribution Co.
               One Freedom Valley Drive
               Oaks, PA 19456



Information about the Fund (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-551-8090. Reports and other information about the Fund are available on
the EDGAR Database on the SEC's website at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing to
the SEC's Public Reference Section, Washington, D.C. 20549-0102.

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

BGI-F-EWU-0109

                   Investment Company Act File No.: 811-09102

[GRAPHIC APPEARS HERE]

[GRAPHIC APPEARS HERE]


[GRAPHIC APPEARS HERE]