N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09102

iShares, Inc.

(Exact name of registrant as specified in charter)

c/o: State Street Bank and Trust Company

200 Clarendon Street, Boston, MA 02116

(Address of principal executive offices) (Zip code)

The Corporation Trust Company

300 East Lombard Street, Baltimore, MD 21202

(Name and address of agent for service)

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

Date of fiscal year end: August 31, 2009

Date of reporting period: August 31, 2009

Item 1.    Reports to Stockholders.

2009 ANNUAL REPORT TO SHAREHOLDERS

iSHARES® MSCI SERIES

AUGUST 31, 2009

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iShares MSCI Austria Investable Market Index Fund

iShares MSCI Belgium Investable Market Index Fund

iShares MSCI EMU Index Fund

iShares MSCI France Index Fund

iShares MSCI Germany Index Fund

iShares MSCI Italy Index Fund

iShares MSCI Netherlands Investable Market Index Fund

iShares MSCI Spain Index Fund

iShares MSCI Sweden Index Fund

iShares MSCI Switzerland Index Fund

iShares MSCI United Kingdom Index Fund

iShares®

iShares

Dear iShares Shareholder:

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Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	34
Schedules of Investments	36
iShares MSCI Austria Investable Market Index Fund	36
iShares MSCI Belgium Investable Market Index Fund	38
iShares MSCI EMU Index Fund	40
iShares MSCI France Index Fund	45
iShares MSCI Germany Index Fund	48
iShares MSCI Italy Index Fund	50
iShares MSCI Netherlands Investable Market Index Fund	52
iShares MSCI Spain Index Fund	54
iShares MSCI Sweden Index Fund	56
iShares MSCI Switzerland Index Fund	58
iShares MSCI United Kingdom Index Fund	60
Financial Statements	63
Financial Highlights	75
Notes to Financial Statements	86
Report of Independent Registered Public Accounting Firm	96
Tax Information (Unaudited)	97
Board Review and Approval of Current Investment Advisory Contract (Unaudited)	98
Board Review and Approval of New Investment Advisory Agreements (Unaudited)	101
Supplemental Information (Unaudited)	107
Director and Officer Information (Unaudited)	116
iShares Family of Funds	124

Management’s Discussion of Fund Performance

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

(TICKER: EWO)

INVESTMENT OBJECTIVE

The iShares MSCI Austria Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Austrian market, as measured by the MSCI Austria Investable Market Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (28.52)%, while the total return for the Index was (31.11)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% – 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Austria’s equity market finished the reporting period with a double-digit decline, despite rebounding sharply in the second half of the reporting period. Austria relies on its European neighbors for most of its exports, and it is vulnerable to the economic health of the constituent markets of the European Union. During the reporting period, Austria’s economic conditions slowed along with the economies of its trading partners, but appeared to be nearing the end of a slowdown as the health of its partners improved. In particular, shifting economic conditions in Germany, Europe’s largest economy and Austria’s leading export market, significantly affected Austria’s GDP growth. For the first quarter of 2009, annual GDP growth declined 2.6%, followed by a decline of a more modest 1.8% for the second quarter of 2009. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

All of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period. Raiffeisen International Bank Holding AG experienced the steepest decline among the ten largest holdings. Steel maker voestalpine AG, and oil and gas company OMV AG also delivered significant negative returns, as did the Fund’s largest holding, retail bank Erste Group Bank AG. Telecommunications company Telekom Austria AG logged more modest, although double-digit, declines. Vienna Insurance Group and Wienerberger AG, the world’s largest producer of bricks, also experienced relatively modest declines.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(28.52)%	(27.71)%	(31.11)%	5.92%	5.79%	5.54%	10.06%	10.08%	9.71%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(28.52)%	(27.71)%	(31.11)%	33.30%	32.49%	30.94%	160.82%	161.21%	152.62%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

2 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	37.17	%
Industrial	16.63
Energy	12.21
Communications	10.25
Basic Materials	8.85
Utilities	7.08
Consumer Non-Cyclical	4.36
Consumer Cyclical	2.66
Short-Term and Other Net Assets	0.79
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Erste Group Bank AG	14.23	%
OMV AG	11.06
Telekom Austria AG	10.25
voestalpine AG	7.10
Oesterreichische Elektrizitaetswirtschafts AG Class A	6.68
Raiffeisen International Bank Holding AG	4.70
Vienna Insurance Group	4.33
Wienerberger AG	3.97
Andritz AG	3.45
Immoeast AG	3.06
TOTAL	68.83	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

(TICKER: EWK)

INVESTMENT OBJECTIVE

The iShares MSCI Belgium Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Belgian market, as measured by the MSCI Belgium Investable Market Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (29.15)%, while the total return for the Index was (29.98)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Belgium’s equity market experienced a double-digit decline during the reporting period, despite a sharp rebound in the final months of the period. With few natural resources, Belgium imports raw materials and exports end products, and is highly sensitive to the economic state of its trading partners. Sluggish economic conditions in Europe and the U.S., Belgium’s largest export destinations, hurt Belgium’s economy during the reporting period. High commodity prices further dampened economic conditions, as evidenced by GDP rates. In the first two quarters of 2009, Belgium’s GDP fell at annualized rates of 3.1% and 3.7%, respectively, as its export levels dropped sharply, the unemployment rate topped 8% and industrial production decreased. Consumer confidence levels sank to their lowest levels in more than 10 years. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

Seven of the ten largest Fund holdings as of August 31, 2009 delivered negative performance for the reporting period. Four financial companies among the Fund’s ten largest holdings declined for the reporting period, including the Fund’s second largest holding, Fortis and KBC Groep NV. The Fund’s largest holding, Anheuser-Busch InBev NV, the world’s largest brewer, posted only a slight decline. Retail food chain Delhaize Group logged a gain for the reporting period, as did biopharmaceutical company UCB SA. Telecommunications company Belgacom SA finished the reporting period with a slight gain.

4 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(29.15)%	(28.62)%	(29.98)%	(0.26)%	(0.44)%	(1.08)%	0.46%	0.37%	(1.20)%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(29.15)%	(28.62)%	(29.98)%	(1.29)%	(2.16)%	(5.28)%	4.67%	3.81%	(11.37)%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Asset
Consumer Non-Cyclical	40.62	%
Financial	22.64
Diversified	10.71
Basic Materials	9.66
Communications	8.51
Industrial	4.62
Consumer Cyclical	1.24
Technology	0.17
Short-Term and Other Net Assets	1.83
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Anheuser-Busch InBev NV	24.16	%
Fortis	8.64
Groupe Bruxelles Lambert SA	7.14
Delhaize Group	6.26
Solvay SA	4.87
Belgacom SA	4.67
KBC Groep NV	4.61
Dexia SA	4.23
UCB SA	3.80
Colruyt SA	3.76
TOTAL	72.14	%

6 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI EMU INDEX FUND

(TICKER: EZU)

INVESTMENT OBJECTIVE

The iShares MSCI EMU Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the EMU markets, as measured by the MSCI EMU Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (19.05)%, while the total return for the Index was (19.02)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun within the U.S. mortgage industry spurred turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events negatively affected markets in the United States and throughout Europe, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

Countries across the European Monetary Union endured a difficult economic environment, with several key nations experiencing recessions. The German economy faced a challenging recession during the reporting period, as evidenced by a contraction in annualized GDP levels for the third and fourth quarters of 2008 and first quarter of 2009. Industrial production declined and the unemployment rate surpassed 8%. The U.K. also struggled with recession during the reporting period. For the fourth quarter of 2008, in particular, annualized GDP declined by its largest level since 1980. Consumer confidence fell to a near record low, and the unemployment rate climbed above 7%. In an effort to stimulate economic activity, the Bank of England cut its key lending rate, the repo rate, aggressively throughout the period, bringing the rate from 5.00% to an unprecedented 0.50%. France experienced its first recession in 16 years. Economic activity, as measured by annualized GDP, contracted for the third and fourth quarters of 2008 and for the first quarter of 2009 as industrial production dropped and the unemployment rate surpassed 9%.

After dipping to multi-year lows in early March 2009, major European markets rebounded, as many investors appeared confident that the threats surrounding financial markets had begun to be mitigated. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. For example, Germany and the U.K. experienced increases in industrial output, while consumer spending climbed in France.

The Fund’s ten largest holdings represented approximately 26% of Fund net assets as of August 31, 2009. Among the Fund’s ten largest holdings performance was mixed for the reporting period. Two financial companies, Allianz SE (Germany) and BNP Paribas (France) both declined. Utility companies E.ON AG (Germany) and ENI SpA (Italy) also lost ground during the period, as did Europe’s largest engineering company, Siemens AG (Germany). On the positive side, two of the four financial companies among the ten largest holdings posted gains: Banco Bilbao Vizcaya Argentaria SA (Spain) delivered a double-digit gain, and the Fund’s largest holding, Banco Santander SA (Spain) also finished the reporting period in positive territory. Telecommunications company Telefonica SA (Spain) also gained ground.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMU INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(19.05)%	(18.31)%	(19.02)%	7.02%	6.88%	7.22%	0.74%	0.77%	1.01%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(19.05)%	(18.31)%	(19.02)%	40.38%	39.48%	41.70%	6.95%	7.20%	9.54%

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

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

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

8 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMU INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	26.96	%
Consumer Non-Cyclical	13.36
Communications	12.85
Industrial	10.97
Utilities	10.33
Energy	7.94
Basic Materials	7.31
Consumer Cyclical	6.13
Technology	2.60
Diversified	1.21
Short-Term and Other Net Assets	0.34
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Banco Santander SA (Spain)	3.99	%
Total SA (France)	3.86
Telefonica SA (Spain)	3.35
E.ON AG (Germany)	2.54
Siemens AG Registered (Germany)	2.26
Sanofi-Aventis (France)	2.25
BNP Paribas (France)	2.13
Banco Bilbao Vizcaya Argentaria SA (Spain)	2.04
Eni SpA (Italy)	1.95
Allianz SE Registered (Germany)	1.66
TOTAL	26.03	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI FRANCE INDEX FUND

(TICKER: EWQ)

INVESTMENT OBJECTIVE

The iShares MSCI France Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the French market, as measured by the MSCI France Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for both the Fund and the Index was (17.11)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

French equity markets declined during the reporting period, despite a strong rebound in the second half of the period. During the reporting period, France experienced its first recession in 16 years. Economic activity, as measured by annualized GDP, contracted for the third and fourth quarters of 2008 and for the first quarter of 2009 as industrial production dropped and the unemployment rate surpassed 9%. In the final months of the reporting period, however, early signs of economic recovery emerged. By June, consumer spending levels rose, the contraction in manufacturing and services slowed, and industrial production increased. For the second quarter of 2009, GDP grew at an annualized 0.3% rate, its first gain in five quarters. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

Nine of the Fund’s ten largest holdings as of August 31, 2009 experienced share price declines for the reporting period. Steelmaker ArcelorMittal posted the largest decline of the ten largest holdings during the reporting period. Financial companies, including insurer AXA and investment bank Societe Generale, also suffered double-digit declines in share prices, as did natural gas producer GDF Suez. The Fund’s largest holding, oil company Total SA, declined for the reporting period. Media conglomerate Vivendi SA also lost ground. On the positive side, pharmaceutical company Sanofi-Aventis delivered a slight gain.

10 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.11)%	(16.44)%	(17.11)%	6.31%	6.25%	6.53%	2.91%	2.90%	3.27%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.11)%	(16.44)%	(17.11)%	35.77%	35.40%	37.20%	33.26%	33.08%	37.96%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Consumer Non-Cyclical	19.49	%
Financial	19.21
Industrial	13.39
Energy	12.90
Communications	11.17
Utilities	8.00
Basic Materials	5.79
Consumer Cyclical	5.41
Diversified	2.29
Technology	2.05
Short-Term and Other Net Assets	0.30
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Total SA	11.97	%
Sanofi-Aventis	6.99
BNP Paribas	6.59
GDF Suez	4.97
France Telecom SA	4.56
Societe Generale	3.67
AXA	3.49
Vivendi SA	3.27
ArcelorMittal	3.01
Danone SA	2.93
TOTAL	51.45	%

12 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI GERMANY INDEX FUND

(TICKER: EWG)

INVESTMENT OBJECTIVE

The iShares MSCI Germany Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the German market, as measured by the MSCI Germany Index^{SM (}the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (21.62)%, while the total return for the Index was (21.71)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Germany’s market finished the reporting period with a double-digit decline, despite rebounding sharply in the second half of the reporting period. The German economy was challenged with a recession during the reporting period, as evidenced by a contraction in annualized GDP levels for the third and fourth quarters of 2008 and first quarter of 2009. Industrial production declined throughout the period, and the unemployment rate surpassed 8%. In the final months of the reporting period, though, early signs of economic recovery began to surface. Industrial production improved and the unemployment rate stabilized at 8.3%. German retail sales rose as consumer confidence reached its highest level in more than a year. For the second quarter of 2009, GDP grew at an annualized 0.3% rate. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

All of the Fund’s ten largest holdings as of August 31, 2009 delivered negative returns for the reporting period. Financial companies Allianz SE and Deutsche Bank AG both posted double-digit declines, as did the Fund’s largest holding, utility company E.ON AG. Bayer AG, Germany’s largest drug maker, and car maker Daimler AG also experienced significant declines. Telecommunications company Deutsche Telekom AG lost ground as well. Chemical company BASF SE posted only a modest drop in share price for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(21.62)%	(21.00)%	(21.71)%	9.51%	9.46%	9.73%	2.62%	2.70%	2.94%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(21.62)%	(21.00)%	(21.71)%	57.47%	57.14%	59.08%	29.51%	30.53%	33.61%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

14 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	19.63	%
Basic Materials	15.63
Utilities	15.60
Industrial	15.36
Consumer Cyclical	14.18
Consumer Non-Cyclical	7.64
Technology	5.94
Communications	5.06
Diversified	0.35
Energy	0.24
Short-Term and Other Net Assets	0.37
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
E.ON AG	10.71	%
Siemens AG Registered	9.37
Allianz SE Registered	6.85
BASF SE	6.21
Bayer AG	6.11
Daimler AG Registered	5.24
SAP AG	5.22
Deutsche Telekom AG Registered	4.79
RWE AG	4.71
Deutsche Bank AG Registered	4.70
TOTAL	63.91	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI ITALY INDEX FUND

(TICKER: EWI)

INVESTMENT OBJECTIVE

The iShares MSCI Italy Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Italian market, as measured by the MSCI Italy Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (20.78)%, while the total return for the Index was (20.48)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Italy’s equity market finished the reporting period with a double-digit decline, despite rebounding sharply in the second half of the reporting period. Already one of the slowest economies in the euro zone, Italy’s economic growth declined further during the reporting period. Annualized GDP contracted for the third and fourth quarters of 2008, as well as the first two quarters of 2009, as industrial production declined and unemployment levels rose above 7%. For the second quarter of 2009, though, the decline in GDP was a relatively modest 0.5%, compared to declines of 2.1% and 2.7% for the fourth quarter of 2008 and first quarter of 2009, respectively. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

For the reporting period, performance was mostly negative among the Fund’s ten largest holdings. The Fund’s largest holding, utility company ENI SpA, detracted significantly from performance. Financial companies Assicurazioni Generali SpA, UniCredit SpA, and Intesa Sanpaolo SpA all posted double-digit declines, as did car maker Fiat SpA. Enel SpA, Italy’s largest power company, also delivered negative returns for the period. On the positive side, telecommunications company Telecom Italia SpA and financial company Mediobanca SpA both produced positive returns for the reporting period.

16 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ITALY INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.78)%	(19.43)%	(20.48)%	2.65%	2.53%	2.51%	2.36%	2.39%	2.17%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.78)%	(19.43)%	(20.48)%	13.94%	13.30%	13.20%	26.32%	26.64%	23.95%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ITALY INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	43.01	%
Energy	20.07
Utilities	14.43
Communications	7.09
Industrial	5.66
Consumer Non-Cyclical	5.25
Consumer Cyclical	3.88
Diversified	0.46
Short-Term and Other Net Assets	0.15
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Eni SpA	17.00	%
UniCredit SpA	14.43
Enel SpA	9.76
Intesa Sanpaolo SpA	8.35
Assicurazioni Generali SpA	4.75
Telecom Italia SpA	3.78
Unione di Banche Italiane ScpA	3.29
Terna SpA	3.29
Mediobanca SpA	2.71
Fiat SpA	2.68
TOTAL	70.04	%

18 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

(TICKER: EWN)

INVESTMENT OBJECTIVE

The iShares MSCI Netherlands Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Dutch market, as measured by the MSCI Netherlands Investable Market Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (20.59)%, while the total return for the Index was (20.01)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Although the Netherlands’ equity market rebounded strongly in the final months of the reporting period, this was not sufficient to fully offset the substantial decline experienced in the first half of the period. Because the Dutch economy is based heavily on export trade, it is sensitive to the economic health of its trading partners. Neighboring European countries, in particular, account for roughly 75% of the Netherlands’ export market. During the reporting period, the economic sluggishness experienced across key European countries appears to have resulted in decreased demand for Dutch products. This, in turn, dampened economic growth for the country. Industrial production contracted throughout the period as export levels generally declined. Economic activity, as measured by GDP, dropped by an annualized 0.7% for the fourth quarter of 2008, and by a more severe 4.5% in the first quarter of 2009. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

Eight of the ten largest Fund holdings as of August 31, 2009 delivered negative returns for the reporting period. Financial companies ING Groep NV and Aegon NV were the largest decliners. Express delivery service company TNT NV and Koninklijke Philips Electronics NV also posted double-digit declines. Beer maker Heineken NV experienced a moderate decline. On the positive side, ASML Holding NV and the Fund’s largest holding, consumer products company Unilever NV, posted positive returns for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.59)%	(19.93)%	(20.01)%	6.78%	6.78%	7.41%	(0.05)%	(0.04)%	1.02%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.59)%	(19.93)%	(20.01)%	38.81%	38.83%	42.96%	(0.54)%	(0.43)%	10.68%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

20 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Consumer Non-Cyclical	31.81	%
Financial	19.81
Industrial	15.78
Communications	15.35
Basic Materials	7.20
Technology	6.15
Energy	2.52
Diversified	0.76
Consumer Cyclical	0.31
Short-Term and Other Net Assets	0.31
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Unilever NV	16.80	%
ING Groep NV	11.00
Koninklijke KPN NV	9.50
Koninklijke Philips Electronics NV	7.45
Koninklijke Ahold NV	4.85
Akzo Nobel NV	4.80
ASML Holding NV	4.75
Aegon NV	4.37
TNT NV	3.97
Heineken NV	3.79
TOTAL	71.28	%

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI SPAIN INDEX FUND

(TICKER: EWP)

INVESTMENT OBJECTIVE

The iShares MSCI Spain Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Spanish market, as measured by the MSCI Spain Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was 0.64%, while the total return for the Index was 0.71%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Although the Spanish equity market declined sharply in the first half of the reporting period, it rebounded soundly in the final months and finished the period with a positive return. Because Spain’s neighboring European countries account for the vast majority of its exports, the country was hurt by the tumultuous economic environments in major European countries during the reporting period. Export trade slowed throughout the reporting period, but climbed in the final months of the period. Economic activity, as measured by GDP, contracted for the third and fourth quarters of 2008 and for the first two quarters of 2009. In the second quarter of 2009, annualized GDP declined 1.06%. As the country struggled with recession, unemployment levels rose. For the second quarter of 2009, the unemployment rate reached 18%, the highest level of all European countries. The U.S dollar depreciated against the euro in the final months of the reporting period, benefiting dollar-denominated performance returns.

Performance among the ten largest holdings as of August 31, 2009 was mostly positive for the reporting period. Among the ten largest holdings, infrastructure construction company Actividades de Construccion y Servicios SA delivered the largest gains, followed by clothing retailer Industria de Diseno Textil SA. Four financial companies posted positive returns, including Banco Bilbao Vizcaya Argentaria SA and the Fund’s largest holding, Banco Santander SA. The Fund’s second largest holding, Telefonica SA, also contributed meaningfully to Fund performance. On the negative side, electric utility company Iberdrola SA and oil and gas company Repsol YPF SA both declined for the reporting period.

22 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
0.64%	1.35%	0.71%	14.88%	14.75%	15.04%	8.67%	8.70%	8.57%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
0.64%	1.35%	0.71%	100.12%	98.95%	101.49%	129.66%	130.37%	127.56%

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

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	46.17	%
Communications	19.50
Utilities	10.27
Industrial	6.64
Energy	5.64
Consumer Cyclical	4.96
Consumer Non-Cyclical	4.52
Technology	1.61
Basic Materials	0.53
Short-Term and Other Net Assets	0.16
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Banco Santander SA	23.18	%
Telefonica SA	18.80
Banco Bilbao Vizcaya Argentaria SA	7.43
Iberdrola SA	4.86
Repsol YPF SA	4.64
Industria de Diseno Textil SA	4.58
Banco Popular Espanol SA	3.44
Banco de Sabadell SA	3.39
Abertis Infraestructuras SA	3.16
Actividades de Construcciones y Servicios SA	2.95
TOTAL	76.43	%

24 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SWEDEN INDEX FUND

(TICKER: EWD)

INVESTMENT OBJECTIVE

The iShares MSCI Sweden Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swedish market, as measured by the MSCI Sweden Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (4.04)%, while the total return for the Index was (4.16)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Although it rebounded strongly in the final months of the reporting period, Sweden’s equity market declined modestly for the reporting period. Sweden’s economy relies heavily on exports, and it is sensitive to the economic health of its export partners. During the reporting period, the economic slowdown in neighboring European countries and in the U.S. appears to have resulted in reduced export levels for Sweden, which in turn translated into slowing economic conditions during the reporting period. For the fourth quarter of 2008 and first two quarters of 2009, annualized GDP contracted, declining 5.1%, 5.6%, and 6.1%, respectively. Unemployment levels escalated, topping 9% by July 2009. Consistent with central banks around the world, Sweden’s Riksbank lowered its key interest rate from 4.50% to 0.25% during the course of the reporting period in an effort to stimulate economic activity.

Seven of the Fund’s ten largest holdings delivered negative returns for the reporting period. Among the ten largest holdings, financial company Skandinaviska Enskilda Banken AB logged the largest decline. Machinery company Sandvik AB and car maker Volvo AB also experienced double-digit declines, as did the mobile phone maker Telefonaktiebolaget LM Ericsson. On the positive side, the clothing retailer Hennes & Mauritz AB contributed positively to Fund performance. Banks Svenska Handelsbanken AB and the Fund’s largest holding, Nordea Bank AB, both posted gains for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 25

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(4.04)%	(3.30)%	(4.16)%	9.46%	9.37%	9.45%	4.54%	4.58%	4.99%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(4.04)%	(3.30)%	(4.16)%	57.13%	56.47%	57.06%	55.83%	56.45%	62.73%

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

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

26 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	28.11	%
Industrial	22.97
Communications	21.46
Consumer Cyclical	15.34
Consumer Non-Cyclical	5.90
Basic Materials	5.22
Energy	0.82
Short-Term and Other Net Assets	0.18
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Nordea Bank AB	13.86	%
Hennes & Mauritz AB Class B	11.63
Telefonaktiebolaget LM Ericsson AB Class B	11.60
TeliaSonera AB	5.97
Svenska Handelsbanken AB Class A	4.84
Skandinaviska Enskilda Banken AB Class A	4.38
Sandvik AB	4.20
Volvo AB Class B	3.92
Investor AB Class B	3.59
Atlas Copco AB Class A	3.18
TOTAL	67.17	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 27

Management’s Discussion of Fund Performance

iSHARES^® MSCI SWITZERLAND INDEX FUND

(TICKER: EWL)

INVESTMENT OBJECTIVE

The iShares MSCI Switzerland Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Swiss market, as measured by the MSCI Switzerland Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (8.63)%, while the total return for the Index was (9.30)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% – 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

Switzerland’s equity market declined for the reporting period, despite rebounding sharply in the second half of the reporting period. Switzerland’s economy relies on countries in the euro zone for the majority of its exports, and appears to have been negatively affected by the difficult economic conditions in some of its neighboring countries during the reporting period. As export levels came under pressure, economic activity slowed. For the fourth quarter of 2008, annualized GDP contracted 0.2%. In the first and second quarters of 2009, GDP declined by 1.6% and 2.1%, respectively. Switzerland’s central bank took decisive steps to lower rates and weaken the Swiss franc in an effort to stimulate export activity. During the course of the reporting period, short term rates were dropped from 2.75% to 0.25%. In the last months of the period, the Swiss economy showed signs of moving toward a potential recovery. In July, the KOF economic indicators that aim to predict the economy’s direction several months in advance posted a record jump of 1.66% in its third consecutive monthly advance.

Nine of the ten largest Fund holdings delivered negative performance for the reporting period. ABB Ltd., the world’s largest producer of power grids, experienced the steepest share price decline among the Fund’s ten largest holdings. The share prices of pharmaceutical companies Novartis AG and Roche Holding AG also fell. The Fund’s largest holding, packaged food company Nestle SA, posted a modest decline. Performance among financial companies was mixed: UBS AG and Zurich Financial Services AG both lost ground during the reporting period, while Credit Suisse Group AG posted solid gains.

28 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(8.63)%	(8.02)%	(9.30)%	8.67%	8.71%	8.17%	3.93%	3.91%	4.06%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(8.63)%	(8.02)%	(9.30)%	51.56%	51.84%	48.09%	47.01%	46.78%	48.88%

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

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 29

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Consumer Non-Cyclical	52.55	%
Financial	23.57
Industrial	9.42
Basic Materials	6.19
Consumer Cyclical	4.05
Communications	2.42
Technology	0.44
Utilities	0.25
Short-Term and Other Net Assets	1.11
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Nestle SA Registered	17.66	%
Roche Holding AG Genusschein	13.91
Novartis AG Registered	10.58
Credit Suisse Group AG Registered	7.16
UBS AG Registered	4.90
Zurich Financial Services AG Registered	4.76
ABB Ltd. Registered	4.72
Syngenta AG Registered	3.73
Compagnie Financiere Richemont SA Class A Bearer Units	2.60
Synthes Inc.	2.54
TOTAL	72.56	%

30 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

(TICKER: EWU)

INVESTMENT OBJECTIVE

The iShares MSCI United Kingdom Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the British market, as measured by the MSCI United Kingdom Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (18.68)%, while the total return for the Index was (18.27)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

A slowing global economic environment and ongoing credit crisis weighed on stock markets around the world during much of the reporting period. Early in the reporting period, the credit crisis that had begun with problems within the U.S. mortgage industry spurred extreme turmoil in the global financial sector, leading to a series of bankruptcies and takeovers among several major financial institutions in late 2008. The events impacted markets worldwide, pushing major indices downward and sapping strength from already weak economies. Unemployment rates climbed in most major economies as industrial output declined and levels of imports and exports fell. In an effort to stabilize markets, key central banks around the world took decisive steps, initiating debt purchase programs and easing monetary policy. In the U.S., the Federal Reserve Board cut the federal funds rate to an unprecedented range of 0.00% - 0.25% during the course of the reporting period. The European Central Bank echoed these actions, lowering its key lending rate from 4.25% to a historically low 1.00%.

After dipping to multi-year lows in early March 2009, most international markets rebounded strongly, as many investors appeared confident that the threats surrounding financial markets were beginning to recede. European markets followed these trends. Market strength continued through the end of the reporting period as early, yet uneven, signs of economic recovery emerged in key European markets. Germany and the U.K. experienced increases in industrial output, while consumer spending increased in France. In Switzerland, the KOF broad measure of economic activity reported large jumps in July and August.

The United Kingdom’s equity market finished the reporting period with a double-digit decline, despite rebounding sharply in the second half of the reporting period. As did many of its European neighbors, the U.K. faced a challenging recession during the reporting period. For the fourth quarter of 2008, in particular, annualized GDP declined by its largest level since 1980. Consumer confidence fell to a near record low, and the unemployment rate climbed above 7%. In an apparent effort to stimulate economic activity, the Bank of England cut its key lending rate, the repo rate, aggressively throughout the period, bringing the rate from 5.0% to an unprecedented 0.50%. In the final months of the reporting period, encouraging signs began to emerge. In June 2009, manufacturing output reached its best results since the beginning of 2008, and the Purchasing Managers’ Index for services rose, implying increased business activity.

All of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period. The Fund’s largest holding, financial company HSBC Holdings PLC, experienced the steepest decline among the ten largest holdings. The oil company Royal Dutch Shell PLC and pharmaceutical company GlaxoSmithKline PLC also posted double-digit declines, as did wireless telecommunications company Vodafone Group PLC. Pharmaceutical company AstraZeneca PLC finished the reporting period with only a slight decline.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 31

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(18.68)%	(18.37)%	(18.27)%	2.89%	2.58%	3.52%	0.45%	0.33%	1.13%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(18.68)%	(18.37)%	(18.27)%	15.31%	13.57%	18.88%	4.57%	3.37%	11.89%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

32 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Consumer Non-Cyclical	24.86	%
Financial	23.48
Energy	20.40
Basic Materials	10.51
Communications	8.98
Utilities	3.95
Consumer Cyclical	3.60
Industrial	2.84
Technology	0.46
Diversified	0.13
Short-Term and Other Net Assets	0.79
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
HSBC Holdings PLC	9.36	%
BP PLC	8.02
Vodafone Group PLC	5.61
GlaxoSmithKline PLC	5.02
Royal Dutch Shell PLC Class A	4.88
Royal Dutch Shell PLC Class B	3.63
Barclays PLC	3.38
AstraZeneca PLC	3.31
British American Tobacco PLC	3.01
BHP Billiton PLC	2.89
TOTAL	49.11	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 33

Shareholder Expenses (Unaudited)

iSHARES^®, INC.

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2009 to August 31, 2009.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Austria Investable Market
Actual	$1,000.00	$2,005.40	0.55	%	$4.17
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Belgium Investable Market
Actual	1,000.00	1,618.10	0.56		3.70
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.56		2.85
EMU
Actual	1,000.00	1,618.80	0.57		3.76
Hypothetical (5% return before expenses)	1,000.00	1,022.30	0.57		2.91
France
Actual	1,000.00	1,570.30	0.55		3.56
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80

34 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Germany
Actual	$1,000.00	$1,588.40	0.55	%	$3.59
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Italy
Actual	1,000.00	1,622.80	0.64		3.64
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.64		2.80
Netherlands Investable Market
Actual	1,000.00	1,590.20	0.56		3.66
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.56		2.85
Spain
Actual	1,000.00	1,735.80	0.55		3.79
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Sweden
Actual	1,000.00	1,838.50	0.55		3.94
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Switzerland
Actual	1,000.00	1,473.00	0.56		3.49
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.56		2.85
United Kingdom
Actual	1,000.00	1,503.70	0.55		3.47
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80

^a Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days).

SHAREHOLDER EXPENSES 35

Schedule of Investments

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.21%
AUTO MANUFACTURERS – 0.50%
Rosenbauer International AG	18,644	$	807,736
			807,736
BANKS – 18.93%
Erste Group Bank AGa	535,778		22,727,745
Raiffeisen International Bank Holding AGa	141,805		7,498,874
			30,226,619
BIOTECHNOLOGY – 2.89%
Intercell AGa,b	128,849		4,622,619
			4,622,619
BUILDING MATERIALS – 3.97%
Wienerberger AGa,b	277,606		6,342,186
			6,342,186
COMMERCIAL SERVICES – 0.32%
Kapsch TrafficCom AG	16,152		514,572
			514,572
ELECTRIC – 7.08%
EVN AG	31,186		648,030
Oesterreichische Elektrizitaetswirtschafts AG Class A	209,903		10,660,222
			11,308,252
ELECTRICAL COMPONENTS & EQUIPMENT – 1.02%
Zumtobel AGb	112,338		1,625,003
			1,625,003
ENGINEERING & CONSTRUCTION – 1.90%
A1 Airports International Ltd.a,b	279,786		1,124,219
Flughafen Wien AG	45,188		1,912,988
			3,037,207
ENTERTAINMENT – 2.16%
bwin Interactive Entertainment AGb	87,848		3,444,131
			3,444,131
ENVIRONMENTAL CONTROL – 0.80%
BWT AGa	46,202		1,272,339
			1,272,339
FOOD – 1.15%
Agrana Beteiligungs AG	18,633		1,829,769
			1,829,769

Security	Shares	Value
FOREST PRODUCTS & PAPER – 1.75%
Mayr-Melnhof Karton AG	29,230	$	2,789,443
			2,789,443
INSURANCE – 4.33%
Vienna Insurance Group	132,799		6,908,279
			6,908,279
IRON & STEEL – 7.10%
voestalpine AG	351,787		11,333,477
			11,333,477
MACHINERY – 3.88%
Andritz AG	121,186		5,512,883
A-TEC Industries AGb	42,028		682,735
			6,195,618
MACHINERY – CONSTRUCTION & MINING – 0.78%
Palfinger AGa	51,745		1,246,027
			1,246,027
MANUFACTURING – 2.27%
RHI AGb	83,977		2,229,457
Semperit AG Holding	40,527		1,395,799
			3,625,256
OIL & GAS – 11.06%
OMV AG	447,693		17,654,851
			17,654,851
OIL & GAS SERVICES – 1.15%
Schoeller-Bleckmann Oilfield Equipment AG	44,951		1,837,157
			1,837,157
REAL ESTATE – 13.91%
Atrium European Real Estate Ltd.b	743,548		4,673,585
CA Immo International AGb	100,962		736,018
CA Immobilien Anlagen AGa,b	297,356		3,686,867
conwert Immobilien Invest SEb	256,592		3,148,301
ECO Business-Immobilien AGb	139,988		823,648
Immoeast AGb	953,135		4,883,033
IMMOFINANZ AGa,b	816,860		2,590,639
Sparkassen Immobilien AGb	231,628		1,668,637
			22,210,728
TELECOMMUNICATIONS – 10.25%
Telekom Austria AG	935,439		16,363,877
			16,363,877

36 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
TRANSPORTATION – 2.01%
Oesterreichische Post AG	119,527	$	3,216,135
			3,216,135
TOTAL COMMON STOCKS
(Cost: $218,122,926)			158,411,281
SHORT-TERM INVESTMENTS – 20.43%
MONEY MARKET FUNDS – 20.43%
Barclays Global Investors Funds
Institutional Money Market
Fund, SL Agency Shares
0.26%c,d,e	28,439,681		28,439,681
Barclays Global Investors Funds
Prime Money Market
Fund, SL Agency Shares
0.21%c,d,e	4,011,865		4,011,865
Barclays Global Investors Funds
Treasury Money Market
Fund, SL Agency Shares
0.08%c,d	160,970		160,970
			32,612,516
TOTAL SHORT-TERM INVESTMENTS
(Cost: $32,612,516)			32,612,516
TOTAL INVESTMENTS IN SECURITIES – 119.64%
(Cost: $250,735,442)			191,023,797
Other Assets, Less Liabilities – (19.64)%			(31,357,870	)
NET ASSETS – 100.00%		$	159,665,927

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

^b Non-income earning security.

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 37

Schedule of Investments

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.17%
AGRICULTURE – 0.49%
SIPEF NV	5,060	$	257,778
			257,778
APPAREL – 0.38%
Van de Velde NV	4,730		198,814
			198,814
BANKS – 17.48%
Dexia SAa	262,240		2,245,546
Fortisa	1,069,420		4,579,459
KBC Groep NVa	65,230		2,445,517
			9,270,522
BEVERAGES – 24.16%
Anheuser-Busch InBev NV	296,560		12,816,294
			12,816,294
BIOTECHNOLOGY – 0.23%
Devgen NVa,b	10,681		124,155
			124,155
CHEMICALS – 5.72%
Recticel SA	10,261		79,810
Solvay SA	24,530		2,585,571
Tessenderlo Chemie NV	10,562		368,770
			3,034,151
DIVERSIFIED FINANCIAL SERVICES – 0.57%
KBC Ancora SCAa	15,070		300,388
			300,388
ELECTRICAL COMPONENTS & EQUIPMENT – 1.57%
NV Bekaert SA	6,270		834,543
			834,543
ELECTRONICS – 1.26%
Barco NVa	6,270		306,014
EVS Broadcast Equipment SA	5,720		364,539
			670,553
ENGINEERING & CONSTRUCTION – 0.38%
Compagnie d’Entreprises CFE	3,080		153,372
Hamon & Cie (International) SA	1,320		50,236
			203,608
ENTERTAINMENT – 0.16%
Kinepolis	2,311		86,392
			86,392

Security	Shares	Value
FOOD – 10.02%
Colruyt SA	8,690	$	1,995,293
Delhaize Group	49,500		3,320,530
			5,315,823
HEALTH CARE - PRODUCTS – 0.21%
Ion Beam Applications SA	10,340		112,624
			112,624
HOLDING COMPANIES - DIVERSIFIED – 10.71%
Ackermans & van Haaren NV	11,660		856,713
Compagnie Nationale a Portefeuille SA	19,910		1,034,444
Groupe Bruxelles Lambert SA	43,230		3,788,613
			5,679,770
INVESTMENT COMPANIES – 0.41%
RHJ International SAa	28,491		218,331
			218,331
MANUFACTURING – 0.64%
Agfa-Gevaert NVa	65,560		339,636
			339,636
MEDIA – 0.07%
Roularta Media Group NVa	1,540		34,255
			34,255
MINING – 3.94%
Nyrstar NVa	46,438		479,814
Umicore	59,400		1,610,221
			2,090,035
PHARMACEUTICALS – 5.51%
Arseus NV	11,770		132,591
Galapagos NVa	18,040		199,340
Omega Pharma SA	9,020		348,521
ThromboGenics NVa	12,540		224,944
UCB SA	51,810		2,017,857
			2,923,253
REAL ESTATE – 0.25%
Atenor Group SA	2,437		133,594
			133,594
REAL ESTATE INVESTMENT TRUSTS – 3.23%
Befimmo SCA	6,600		615,636
Cofinimmo SA	5,280		700,121
Intervest Offices NV	3,190		109,867

38 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
Leasinvest Real Estate SCA	480	$	43,052
Warehouses De Pauw SCA	3,544		164,119
Wereldhave Belgium NV	1,008		78,098
			1,710,893
RETAIL – 0.70%
SA D’Ieteren NV	1,210		369,734
			369,734
SEMICONDUCTORS – 0.17%
Melexis NV	10,347		88,200
			88,200
TELECOMMUNICATIONS – 8.44%
Belgacom SA	66,000		2,477,700
Mobistar SA	17,930		1,155,297
Option NVa	26,732		72,887
Telenet Group Holding NVa	32,340		770,630
			4,476,514
TRANSPORTATION – 0.77%
Compagnie Maritime Belge SA	6,716		208,658
Euronav SAb	10,340		201,802
			410,460
VENTURE CAPITAL – 0.70%
GIMV NV	7,260		373,502
			373,502
TOTAL COMMON STOCKS
(Cost: $94,765,307)			52,073,822
RIGHTS – 0.00%
BANKS – 0.00%
Fortisa,b,c	1,513,303		217
			217
TOTAL RIGHTS
(Cost: $0)			217
SHORT-TERM INVESTMENTS – 0.76%
MONEY MARKET FUNDS – 0.76%
Barclays Global Investors Funds
Institutional Money Market
Fund, SL Agency Shares
0.26%d,e,f	297,433		297,433

Security	Shares	Value
Barclays Global Investors Funds
Prime Money Market
Fund, SL Agency Shares
0.21%d,e,f	41,958	$	41,958
Barclays Global Investors Funds
Treasury Money Market
Fund, SL Agency Shares
0.08%d,e	61,251		61,251
			400,642
TOTAL SHORT-TERM INVESTMENTS
(Cost: $400,642)			400,642
TOTAL INVESTMENTS IN SECURITIES – 98.93% (Cost: $95,165,949)			52,474,681
Other Assets, Less Liabilities – 1.07%			567,566
NET ASSETS – 100.00%		$	53,042,247

^a Non-income earning security.

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

^c Security valued using Level 3 inputs. See Note 1.

^d Affiliated issuer. See Note 2.

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

f All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 39

Schedule of Investments

iSHARES^® MSCI EMU INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.31%
AUSTRIA – 1.06%
Erste Group Bank AG	42,848	$	1,817,616
Oesterreichische Elektrizitaetswirtschafts AG Class A	19,344		982,412
OMV AG	37,648		1,484,655
Raiffeisen International Bank Holding AGa	14,976		791,955
Telekom Austria AG	74,672		1,306,257
Vienna Insurance Group	10,608		551,834
voestalpine AG	29,328		944,856
			7,879,585
BELGIUM – 2.97%
Anheuser-Busch InBev NV	168,688		7,290,110
Belgacom SA	32,656		1,225,936
Colruyt SA	3,536		811,894
Compagnie Nationale a Portefeuille SA	11,440		594,376
Delhaize Group	23,920		1,604,587
Dexia SAb	129,792		1,111,401
Fortisb	546,521		2,340,306
Groupe Bruxelles Lambert SA	22,048		1,932,254
KBC Groep NVb	38,480		1,442,641
Mobistar SA	5,200		335,055
Solvay SA	14,768		1,556,613
UCB SA	23,920		931,618
Umicore	30,784		834,496
			22,011,287
FINLAND – 3.64%
Elisa OYJ	27,456		542,154
Fortum OYJ	106,080		2,773,632
Kesko OYJ Class B	15,565		457,899
Kone OYJ Class B	34,944		1,216,050
Metso OYJ	30,992		779,648
Neste Oil OYJ	32,864		546,130
Nokia OYJ	858,000		11,943,347
Nokian Renkaat OYJ	25,584		576,048
Orion OYJ Class B	22,048		374,934
Outokumpu OYJ	26,624		563,168
Pohjola Bank PLC	40,144		464,326
Rautaruukki OYJ	21,216		495,661

Security	Shares	Value
Sampo OYJ Class A	99,216	$	2,377,745
Sanoma OYJ	20,078		397,618
Stora Enso OYJ Class Rb	155,376		1,068,037
UPM-Kymmene OYJ	134,368		1,615,872
Wartsila OYJ Class B	20,592		779,248
			26,971,517
FRANCE – 32.21%
Accor SA	37,024		1,950,981
Aeroports de Paris	6,865		590,900
Air France-KLMb	28,080		428,953
Alcatel-Lucentb	546,832		2,079,538
ALSTOM	48,256		3,393,585
ArcelorMittal	202,592		7,259,519
Atos Origin SAb	11,024		517,947
AXA	367,120		8,366,149
BioMerieux SA	2,704		264,021
BNP Paribas	196,144		15,810,532
Bouygues SA	52,000		2,583,061
Bureau Veritas SA	11,440		577,713
Cap Gemini SA	33,696		1,631,513
Carrefour SA	147,056		6,931,369
Casino Guichard-Perrachon SA	11,856		898,337
Christian Dior SA	14,352		1,331,315
CNP Assurances SA	8,944		894,092
Compagnie de Saint-Gobain Compagnie Generale de	86,944		3,916,498
Geophysique-Veritasb	35,360		758,613
Compagnie Generale des Etablissements Michelin Class B	33,696		2,538,177
Credit Agricole SA	211,328		3,918,200
Danone SA	127,271		6,927,545
Dassault Systemes SA	12,896		659,753
Eiffage SA	9,776		695,350
Electricite de France	53,248		2,792,915
Erameta	1,248		402,604
Essilor International SA	45,552		2,462,465
Eurazeo	7,488		406,025
European Aeronautic Defence and Space Co.a	93,392		1,937,961
Eutelsat Communications	15,352		410,876
Fonciere des Regions	5,824		610,114
France Telecom SA	422,240		10,749,296

40 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2009

Security	Shares	Value
GDF Suez	282,048	$	11,895,690
Gecina SA	4,992		495,590
Hermes Internationala	12,272		1,820,090
Icade	4,992		465,645
Iliad SA	3,541		363,125
Imerys SA	8,528		447,303
Ipsen SA	5,824		288,342
JCDecaux SAb	14,360		311,377
Klepierre	23,712		892,042
Lafarge SA	46,800		3,983,280
Lagardere SCA	27,872		1,201,531
L’Air Liquide SA	58,032		6,200,108
Legrand SA	28,288		694,981
L’Oreal SA	56,576		5,576,087
LVMH Moet Hennessy Louis Vuitton SA	56,576		5,414,520
M6-Metropole Television	15,392		349,658
Natixisb	228,176		1,040,944
Neopost SA	7,488		617,875
PagesJaunes Groupe SA	30,368		339,311
Pernod Ricard SA	44,304		3,456,761
PPR SA	17,888		2,079,541
PSA Peugeot Citroen SAb	35,568		1,030,790
Publicis Groupe SA	26,832		987,660
Renault SAb	43,264		1,949,501
Safran SA	47,840		879,786
Sanofi-Aventis	245,440		16,666,988
Schneider Electric SA	54,288		5,009,355
SCOR SE	40,352		1,062,886
SES SA	66,352		1,301,160
Societe BIC	5,824		358,129
Societe des Autoroutes Paris-Rhin-Rhone	5,616		419,403
Societe Generale	109,616		8,842,083
Societe Television Francaise 1	27,876		451,639
Sodexo	24,960		1,439,201
STMicroelectronics NV	157,040		1,360,500
Suez Environnement SA	62,816		1,293,568
Technip SA	24,336		1,506,420
Thales SA	22,696		1,042,237
Total SA	498,784		28,609,726
Unibail-Rodamco SE	19,552		3,870,615
Vallourec SA	13,104		1,992,379

Security	Shares	Value
Veolia Environnement	87,776	$	3,039,486
Vinci SA	98,384		5,283,885
Vivendi SA	272,272		7,763,685
			238,790,800
GERMANY – 22.93%
Adidas AG	45,552		2,148,038
Allianz SE Registered	106,288		12,296,855
BASF SE	217,568		11,361,721
Bayer AG	178,256		10,956,183
Bayerische Motoren Werke AG	78,000		3,556,700
Beiersdorf AG	22,048		1,120,055
Celesio AG	19,552		532,823
Commerzbank AGa,b	172,016		1,589,724
Daimler AG Registered	211,744		9,580,808
Deutsche Bank AG Registered	137,280		9,328,123
Deutsche Boerse AG	46,176		3,528,604
Deutsche Lufthansa AG Registered	50,752		815,715
Deutsche Post AG Registered	198,848		3,434,269
Deutsche Postbank AGb	21,632		768,625
Deutsche Telekom AG Registered	654,784		8,715,233
E.ON AG	445,120		18,850,087
Fraport AG	9,360		473,077
Fresenius Medical Care AG & Co. KGaA	44,096		1,983,194
Fresenius SE	6,032		305,391
GEA Group AG	38,688		686,218
Hamburger Hafen und Logistik AG	6,392		267,388
Hannover Rueckversicherung AG Registeredb	14,560		641,456
Henkel AG & Co. KGaA	30,368		1,017,584
Hochtief AG	10,192		754,849
Infineon Technologies AGb	248,144		1,305,103
K+S AG	35,152		1,783,731
Linde AG	33,488		3,368,793
MAN SE	24,752		1,893,235
Merck KGaA	15,184		1,378,205
METRO AG	26,832		1,457,039
Muenchener Rueckversicherungs- Gesellschaft AG Registered	48,880		7,297,210
Puma AG	1,248		353,174
QIAGEN NVb	48,048		988,072
RWE AG	99,008		9,178,460

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2009

Security	Shares	Value
Salzgitter AG	9,360	$	891,755
SAP AG	200,928		9,820,919
Siemens AG Registered	193,440		16,780,683
SolarWorld AGa	20,386		434,143
Suedzucker AG	16,016		312,579
ThyssenKrupp AG	79,456		2,702,353
TUI AGa,b	47,632		414,569
United Internet AG Registeredb	28,914		409,121
Volkswagen AGa	20,800		4,031,113
Wacker Chemie AG	3,952		476,447
			169,989,424
GREECE – 1.52%
Coca-Cola Hellenic Bottling Co. SA SP ADR	87,314		2,012,588
Hellenic Telecommunications Organization SA SP ADR	316,373		2,309,523
National Bank of Greece SA SP ADR	1,087,912		6,951,758
			11,273,869
IRELAND – 0.82%
Anglo Irish Bank Corp. Ltd.c	446,666		64
CRH PLC	162,656		4,178,209
Elan Corp. PLCb	110,656		803,671
Kerry Group PLC Class A	33,696		882,487
Ryanair Holdings PLCb	43,520		194,855
			6,059,286
ITALY – 10.70%
A2A SpA	238,576		462,197
ACEA SpA	21,216		258,943
Alleanza Assicurazioni SpA	93,035		764,344
Assicurazioni Generali SpA	244,816		6,102,484
Atlantia SpA	61,568		1,371,241
Autogrill SpAb	39,936		449,885
Banca Carige SpA	162,448		491,885
Banca Monte dei Paschi di Siena SpA	577,824		1,215,616
Banca Popolare di Milano Scrl	109,408		825,066
Banco Popolare SpAb	156,000		1,383,503
Enel SpA	1,522,953		8,982,461
Eni SpA	608,400		14,440,816
Exor SpA	23,265		400,303
Fiat SpAb	180,544		2,140,081
Finmeccanica SpA	98,592		1,576,137

Security	Shares	Value
Fondiaria-Sai SpA	12,480	$	239,986
Intesa Sanpaolo SpAb	1,818,336		7,886,921
Italcementi SpA	19,847		297,916
Lottomatica SpA	17,888		402,765
Luxottica Group SpAb	23,920		580,803
Mediaset SpA	167,648		1,103,676
Mediobanca SpA	110,448		1,516,830
Mediolanum SpA	40,976		259,761
Parmalat SpA	395,419		1,015,728
Pirelli & C. SpAb	699,920		335,476
Prysmian SpA	21,632		404,490
Saipem SpA	61,984		1,660,699
Saras SpA	60,736		210,272
Snam Rete Gas SpA	340,496		1,583,157
Telecom Italia SpA	2,278,432		3,684,911
Tenaris SA	110,656		1,616,552
Terna SpA	286,416		1,056,325
UniCredit SpAb	3,368,352		12,217,312
Unione di Banche Italiane ScpA	139,984		2,117,318
Unipol Gruppo Finanziario SpAb	192,192		255,396
			79,311,256
NETHERLANDS – 7.30%
Aegon NVb	366,496		2,762,763
Akzo Nobel NV	54,704		3,101,260
ASML Holding NV	99,008		2,718,728
Corio NV	12,480		763,926
Fugro NV CVA	15,184		818,207
Heineken Holding NV	21,632		767,383
Heineken NV	55,120		2,329,098
ING Groep NV CVAb	466,752		7,063,172
Koninklijke Ahold NV	276,432		3,241,385
Koninklijke Boskalis Westminster NV	17,056		537,008
Koninklijke DSM NV	37,024		1,350,863
Koninklijke KPN NV	390,416		6,000,454
Koninklijke Philips Electronics NV	226,096		5,113,475
Randstad Holding NVb	24,752		1,023,874
Reed Elsevier NV	169,936		1,801,931
SBM Offshore NV	36,169		752,613
TNT NV	86,528		2,137,000
Unilever NV CVA	377,936		10,573,251
Wolters Kluwer NV	63,024		1,249,012
			54,105,403

42 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2009

Security	Shares	Value
PORTUGAL – 0.98%
Banco Comercial Portugues SA Registered	621,712	$	814,568
Banco Espirito Santo SA Registered	138,944		915,207
BRISA – Auto-estradas de Portugal SA	51,584		457,478
CIMPOR – Cimentos de Portugal SGPS SA	64,480		472,839
EDP Renovaveis SAb	50,960		506,061
Energias de Portugal SA	433,680		1,876,393
Galp Energia SGPS SA Class B	42,016		608,980
Jeronimo Martins SGPS SA	49,920		389,781
Portugal Telecom SGPS SA Registered	116,688		1,207,337
			7,248,644
SPAIN – 14.18%
Abertis Infraestructuras SA	67,808		1,476,647
Acciona SA	6,448		836,027
Acerinox SA	32,656		691,229
Actividades de Construcciones y Servicios SA	33,280		1,716,439
Banco Bilbao Vizcaya Argentaria SA	849,056		15,096,444
Banco de Sabadell SA	225,056		1,698,804
Banco de Valencia SA	56,368		566,236
Banco Popular Espanol SA	186,052		2,005,124
Banco Santander SA	1,918,384		29,553,208
Bankinter SA	66,768		888,209
Cintra Concesiones de Infraestructuras de Transporte SA	45,968		407,342
Criteria CaixaCorp SA	204,464		1,026,956
Enagas SA	43,339		856,095
Fomento de Construcciones y Contratas SA	7,072		285,888
Gamesa Corporacion Tecnologica SA	45,344		993,633
Gas Natural SDG SA	59,280		1,246,697
Gestevision Telecinco SA	24,752		277,592
Grifols SA	30,045		528,819
Grupo Ferrovial SAa	11,648		427,916
Iberdrola Renovables SA	227,344		1,044,000
Iberdrola SA	838,032		7,768,911
Iberia Lineas Aereas de Espana SAb	102,544		255,904
Indra Sistemas SA	25,972		616,837

Security	Shares	Value
Industria de Diseno Textil SA	49,712	$	2,708,036
Mapfre SAa	176,807		728,196
Red Electrica Corporacion SA	25,792		1,210,319
Repsol YPF SA	173,056		4,296,351
Sacyr Vallehermoso SA	21,216		354,087
Telefonica SA	984,048		24,839,861
Zardoya Otis SA	30,576		668,702
			105,070,509
TOTAL COMMON STOCKS
(Cost: $1,037,059,687)			728,711,580
PREFERRED STOCKS – 1.35%
GERMANY – 1.05%
Bayerische Motoren Werke AG	12,688		381,638
Fresenius SE	18,512		1,045,092
Henkel AG & Co. KGaA	42,016		1,661,732
Porsche Automobil Holding SE	21,424		1,580,268
RWE AG NVS	9,984		814,664
Volkswagen AG	24,752		2,325,518
			7,808,912
ITALY – 0.30%
Intesa Sanpaolo SpA RNC	231,920		757,158
Telecom Italia SpA RNC	1,290,016		1,462,478
			2,219,636
TOTAL PREFERRED STOCKS
(Cost: $16,402,827)			10,028,548
RIGHTS – 0.00%
BELGIUM – 0.00%
Fortisa,b,c	619,476		89
			89
TOTAL RIGHTS (Cost: $0)			89
WARRANTS – 0.00%
ITALY – 0.00%
Unione di Banche Italiane ScpA (Expires 6/30/11)b	148,938		14,790
			14,790
TOTALWARRANTS (Cost: $0)			14,790

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 1.03%
MONEY MARKET FUNDS – 1.03%
Barclays Global Investors Funds
Institutional Money Market
Fund, SL Agency Shares
0.26%d,e,f	6,176,059	$	6,176,059
Barclays Global Investors Funds
Prime Money Market
Fund, SL Agency Shares
0.21%d,e,f	871,231		871,231
Barclays Global Investors Funds
Treasury Money Market
Fund, SL Agency Shares
0.08%d,e	546,876		546,876
			7,594,166
TOTAL SHORT-TERM INVESTMENTS
(Cost: $7,594,166)			7,594,166
TOTAL INVESTMENTS IN SECURITIES – 100.69% (Cost: $1,061,056,680)			746,349,173
Other Assets, Less Liabilities – (0.69)%			(5,079,283	)
NET ASSETS – 100.00%		$	741,269,890

NVS – Non-Voting Shares

SP ADR – Sponsored American Depositary Receipts

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

^b Non-income earning security.

^c Security valued using Level 3 inputs. See Note 1.

^d Affiliated issuer. See Note 2.

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

^f All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

44 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.70%
ADVERTISING – 0.70%
JCDecaux SAa	11,818	$	256,257
PagesJaunes Groupe SA	23,028		257,299
Publicis Groupe SAb	21,242		781,897
			1,295,453
AEROSPACE & DEFENSE – 1.56%
European Aeronautic Defence and Space Co.b	73,302		1,521,077
Safran SA	33,896		623,353
Thales SA	16,074		738,144
			2,882,574
AIRLINES – 0.20%
Air France-KLMa	24,206		369,773
			369,773
APPAREL – 0.76%
Hermes Internationalb	9,500		1,408,968
			1,408,968
AUTO MANUFACTURERS – 1.25%
PSA Peugeot Citroen SAa	27,550		798,422
Renault SAa	33,288		1,499,976
			2,298,398
AUTO PARTS & EQUIPMENT – 1.07%
Compagnie Generale des Etablissements Michelin Class B	26,106		1,966,455
			1,966,455
BANKS – 12.26%
BNP Paribas	150,898		12,163,399
Credit Agricole SA	160,626		2,978,142
Natixisa	157,358		717,871
Societe Generale	83,828		6,761,915
			22,621,327
BEVERAGES – 1.48%
Pernod Ricard SA	34,960		2,727,708
			2,727,708
BUILDING MATERIALS – 3.45%
Compagnie de Saint-Gobain	66,348		2,988,727
Imerys SA	6,080		318,903
Lafarge SA	36,024		3,066,104
			6,373,734

Security	Shares	Value
CHEMICALS – 2.61%
L’Air Liquide SA	45,106	$	4,819,101
			4,819,101
COMMERCIAL SERVICES – 0.41%
Bureau Veritas SA	8,816		445,203
Societe des Autoroutes Paris-Rhin-Rhone	4,106		306,636
			751,839
COMPUTERS – 0.90%
Atos Origin SAa	8,132		382,070
Cap Gemini SA	26,372		1,276,895
			1,658,965
COSMETICS & PERSONAL CARE – 2.88%
Christian Dior SA	11,552		1,071,582
L’Oreal SA	43,130		4,250,860
			5,322,442
ELECTRIC – 1.21%
Electricite de France	42,712		2,240,290
			2,240,290
ELECTRICAL COMPONENTS & EQUIPMENT – 0.25%
Legrand SA	18,848		463,059
			463,059
ENGINEERING & CONSTRUCTION – 3.83%
Aeroports de Paris	5,358		461,186
Bouygues SA	40,242		1,998,991
Eiffage SA	7,296		518,952
Vinci SA	76,152		4,089,876
			7,069,005
FOOD – 6.26%
Carrefour SA	114,342		5,389,421
Casino Guichard-Perrachon SA	9,994		757,252
Danone SA	99,180		5,398,511
			11,545,184
FOOD SERVICE – 0.53%
Sodexo	17,100		985,991
			985,991
GAS – 4.97%
GDF Suez	217,626		9,178,620
			9,178,620

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2009

Security	Shares	Value
HAND & MACHINE TOOLS – 2.11%
Schneider Electric SA	42,142	$	3,888,599
			3,888,599
HEALTH CARE – PRODUCTS – 1.06%
Essilor International SA	36,138		1,953,560
			1,953,560
HEALTH CARE – SERVICES – 0.13%
BioMerieux SA	2,508		244,883
			244,883
HOLDING COMPANIES – DIVERSIFIED – 2.29%
LVMH Moet Hennessy Louis Vuitton SA	44,194		4,229,520
			4,229,520
HOUSEHOLD PRODUCTS & WARES – 0.16%
Societe BIC	4,864		299,097
			299,097
INSURANCE – 4.28%
AXA	282,530		6,438,461
CNP Assurances SA	6,688		668,570
SCOR SE	29,906		787,734
			7,894,765
INTERNET – 0.16%
Iliad SA	2,926		300,057
			300,057
INVESTMENT COMPANIES – 0.15%
Eurazeo	5,054		274,045
			274,045
IRON & STEEL – 3.01%
ArcelorMittal	154,964		5,552,856
			5,552,856
LODGING – 0.74%
Accor SA	25,802		1,359,637
			1,359,637
MACHINERY – 1.39%
ALSTOM	36,442		2,562,770
			2,562,770
MEDIA – 4.09%
Lagardere SCA	21,242		915,719
M6-Metropole Television	11,628		264,151
Societe Television Francaise 1	20,976		339,847
Vivendi SA	211,242		6,023,448
			7,543,165

Security	Shares	Value
MEDICAL – DRUGS – 0.12%
Ipsen SA	4,598	$	227,643
			227,643
METAL FABRICATE & HARDWARE – 0.80%
Vallourec SA	9,690		1,473,302
			1,473,302
MINING – 0.17%
Eramet	950		306,469
			306,469
OFFICE & BUSINESS EQUIPMENT – 0.25%
Neopost SA	5,624		464,067
			464,067
OIL & GAS – 12.27%
Compagnie Generale de Geophysique-Veritasa	25,916		556,002
Total SA	385,016		22,084,113
			22,640,115
OIL & GAS SERVICES – 0.63%
Technip SA	18,696		1,157,299
			1,157,299
PHARMACEUTICALS – 6.99%
Sanofi-Aventis	189,810		12,889,345
			12,889,345
REAL ESTATE – 2.10%
Gecina SA	3,382		335,754
Klepierre	16,454		618,997
Unibail-Rodamco SE	14,706		2,911,275
			3,866,026
REAL ESTATE INVESTMENT TRUSTS – 0.42%
Fonciere des Regions	4,180		437,891
Icade	3,534		329,645
			767,536
RETAIL – 0.86%
PPR SA	13,680		1,590,347
			1,590,347
SEMICONDUCTORS – 0.58%
STMicroelectronics NV	123,538		1,070,259
			1,070,259
SOFTWARE – 0.32%
Dassault Systemes SA	11,704		598,771
			598,771

46 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 6.22%
Alcatel-Lucenta	418,646	$	1,592,062
Eutelsat Communications	17,784		475,965
France Telecom SA	330,144		8,404,736
SES SA	50,882		997,794
			11,470,557
WATER – 1.82%
Suez Environnement SA	48,754		1,003,990
Veolia Environnement	68,172		2,360,643
			3,364,633
TOTAL COMMON STOCKS (Cost: $269,506,931)			183,968,209
SHORT-TERM INVESTMENTS – 1.56%
MONEY MARKET FUNDS – 1.56%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	2,488,436		2,488,436
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	351,033		351,033
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	35,278		35,278
			2,874,747
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,874,747)			2,874,747
TOTAL INVESTMENTS IN SECURITIES – 101.26% (Cost: $272,381,678)			186,842,956
Other Assets, Less Liabilities – (1.26)%			(2,331,564	)
NET ASSETS – 100.00%		$	184,511,392

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 47

Schedule of Investments

iSHARES^® MSCI GERMANY INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 95.30%
AIRLINES – 0.54%
Deutsche Lufthansa AG Registered	208,653	$	3,353,588
			3,353,588
APPAREL – 1.46%
Adidas AG	161,823		7,630,884
Puma AG	4,914		1,390,622
			9,021,506
AUTO MANUFACTURERS – 9.60%
Bayerische Motoren Werke AG	280,398		12,785,788
Daimler AG Registered	717,951		32,485,220
Volkswagen AG	73,446		14,234,092
			59,505,100
BANKS – 6.01%
Commerzbank AGa,b	592,236		5,473,280
Deutsche Bank AG Registered	428,235		29,098,404
Deutsche Postbank AGa	74,436		2,644,848
			37,216,532
BIOTECHNOLOGY – 0.58%
QIAGEN NVa	174,915		3,596,999
			3,596,999
CHEMICALS – 13.61%
BASF SE	736,737		38,473,489
Bayer AG	615,585		37,835,819
K+S AG	123,453		6,264,421
Wacker Chemie AG	14,580		1,757,744
			84,331,473
COMMERCIAL SERVICES – 0.15%
Hamburger Hafen und Logistik AG	22,374		935,943
			935,943
COSMETICS & PERSONAL CARE – 0.65%
Beiersdorf AG	78,672		3,996,598
			3,996,598
DIVERSIFIED FINANCIAL SERVICES – 2.10%
Deutsche Boerse AG	170,316		13,014,938
			13,014,938
ELECTRIC – 15.42%
E.ON AG	1,567,341		66,374,267
RWE AG	314,445		29,150,382
			95,524,649

Security	Shares	Value
ENERGY - ALTERNATE SOURCES – 0.24%
SolarWorld AGb	70,686	$	1,505,339
			1,505,339
ENGINEERING & CONSTRUCTION – 2.92%
Fraport AG	35,637		1,801,182
Hochtief AG	36,615		2,711,814
Linde AG	135,048		13,585,424
			18,098,420
FOOD – 1.13%
METRO AG	100,431		5,453,633
Suedzucker AG	80,523		1,571,542
			7,025,175
HEALTH CARE - PRODUCTS – 1.54%
Fresenius Medical Care AG & Co. KGaA	181,071		8,143,572
Fresenius SE	28,170		1,426,207
			9,569,779
HOLDING COMPANIES - DIVERSIFIED – 0.35%
GEA Group AG	123,750		2,194,981
			2,194,981
HOUSEHOLD PRODUCTS & WARES – 0.69%
Henkel AG & Co. KGaA	126,771		4,247,895
			4,247,895
INSURANCE – 11.52%
Allianz SE Registered	367,071		42,467,813
Hannover Rueckversicherung AG Registereda	55,860		2,460,970
Muenchener Rueckversicherungs- Gesellschaft AG Registered	177,174		26,449,997
			71,378,780
INTERNET – 0.27%
United Internet AG Registereda,b	120,186		1,700,583
			1,700,583
IRON & STEEL – 2.02%
Salzgitter AG	32,571		3,103,136
ThyssenKrupp AG	276,606		9,407,559
			12,510,695
LEISURE TIME – 0.16%
TUI AGa,b	115,236		1,002,965
			1,002,965

48 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

August 31, 2009

Security	Shares	Value
MACHINERY - DIVERSIFIED – 1.09%
MAN SE	88,137	$	6,741,437
			6,741,437
MANUFACTURING – 9.37%
Siemens AG Registered	668,979		58,033,107
			58,033,107
PHARMACEUTICALS – 1.17%
Celesio AG	76,311		2,079,597
Merck KGaA	57,162		5,188,418
			7,268,015
SEMICONDUCTORS – 0.72%
Infineon Technologies AGa	850,578		4,473,579
			4,473,579
SOFTWARE – 5.22%
SAP AG	662,094		32,361,700
			32,361,700
TELECOMMUNICATIONS – 4.79%
Deutsche Telekom AG Registered	2,228,517		29,661,759
			29,661,759
TRANSPORTATION – 1.98%
Deutsche Post AG Registered	711,144		12,282,045
			12,282,045
TOTAL COMMON STOCKS
(Cost: $763,440,626)			590,553,580
PREFERRED STOCKS – 4.33%
AUTO MANUFACTURERS – 2.42%
Bayerische Motoren Werke AG	52,890		1,590,860
Porsche Automobil Holding SE	70,674		5,213,025
Volkswagen AG	87,324		8,204,328
			15,008,213
ELECTRIC – 0.18%
RWE AG NVS	13,659		1,114,533
			1,114,533
HEALTH CARE - SERVICES – 0.68%
Fresenius SE	73,992		4,177,208
			4,177,208

Security	Shares	Value
HOUSEHOLD PRODUCTS & WARES – 1.05%
Henkel AG & Co. KGaA	164,712	$	6,514,356
			6,514,356
TOTAL PREFERRED STOCKS
(Cost: $34,671,307)			26,814,310
SHORT-TERM INVESTMENTS – 1.23%
MONEY MARKET FUNDS – 1.23%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26% c,d,e	6,264,694		6,264,694
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	883,734		883,734
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	450,646		450,646
			7,599,074
TOTAL SHORT-TERM INVESTMENTS
(Cost: $7,599,074)			7,599,074
TOTAL INVESTMENTS IN SECURITIES – 100.86%
(Cost: $805,711,007)			624,966,964
Other Assets, Less Liabilities – (0.86)%			(5,329,217	)
NET ASSETS – 100.00%		$	619,637,747

NVS – Non-Voting Shares

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 49

Schedule of Investments

iSHARES^® MSCI ITALY INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.38%
AEROSPACE & DEFENSE – 2.22%
Finmeccanica SpA	174,944	$	2,796,735
			2,796,735
AUTO MANUFACTURERS – 2.68%
Fiat SpAa	284,636		3,373,936
			3,373,936
AUTO PARTS & EQUIPMENT – 0.42%
Pirelli & C. SpAa	1,096,235		525,433
			525,433
BANKS – 32.13%
Banca Carige SpA	337,128		1,020,809
Banca Monte dei Paschi di
Siena SpA	1,222,980		2,572,885
Banca Popolare di Milano Scrl	225,320		1,699,180
Banco Popolare SpAa	261,712		2,321,021
Intesa Sanpaolo SpAa	2,420,132		10,497,174
UniCredit SpAa	5,002,624		18,144,962
Unione di Banche Italiane ScpA	273,768		4,140,858
			40,396,889
BUILDING MATERIALS – 0.53%
Italcementi SpAb	44,528		668,393
			668,393
COMMERCIAL SERVICES – 2.31%
Atlantia SpA	130,094		2,897,450
			2,897,450
DIVERSIFIED FINANCIAL SERVICES – 2.71%
Mediobanca SpA	248,424		3,411,713
			3,411,713
ELECTRIC – 14.43%
A2A SpA	899,316		1,742,261
Enel SpA	2,079,555		12,265,331
Terna SpA	1,120,812		4,133,643
			18,141,235
ELECTRICAL COMPONENTS & EQUIPMENT – 0.85%
Prysmian SpA	56,892		1,063,807
			1,063,807
ENTERTAINMENT – 0.37%
Lottomatica SpA	20,856		469,592
			469,592

Security	Shares	Value
FOOD – 1.42%
Parmalat SpA	694,100	$	1,782,962
			1,782,962
HEALTH CARE - PRODUCTS – 1.52%
Luxottica Group SpAa	78,716		1,911,307
			1,911,307
HOLDING COMPANIES - DIVERSIFIED – 0.46%
Exor SpA	33,525		576,839
			576,839
INSURANCE – 7.73%
Assicurazioni Generali SpA	239,492		5,969,774
Fondiaria-Sai SpA	81,488		1,566,987
Mediolanum SpA	195,624		1,240,126
Unipol Gruppo Finanziario SpAa	703,384		934,696
			9,711,583
MEDIA – 2.28%
Mediaset SpA	435,646		2,867,985
			2,867,985
METAL FABRICATE & HARDWARE – 2.06%
Tenaris SA	177,320		2,590,434
			2,590,434
OIL & GAS – 17.41%
Eni SpA	900,592		21,376,206
Saras SpA	147,488		510,612
			21,886,818
OIL & GAS SERVICES – 2.13%
Saipem SpA	99,792		2,673,666
			2,673,666
RETAIL – 0.41%
Autogrill SpAa	45,628		514,006
			514,006
TELECOMMUNICATIONS – 3.78%
Telecom Italia SpA	2,934,228		4,745,531
			4,745,531
UTILITIES – 0.53%
ACEA SpA	54,736		668,058
			668,058
TOTAL COMMON STOCKS
(Cost: $167,679,118)			123,674,372

50 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI ITALY INDEX FUND

August 31, 2009

Security	Shares	Value
PREFERRED STOCKS – 1.45%
BANKS – 0.42%
Intesa Sanpaolo SpA RNC	162,272	$	529,776
			529,776
TELECOMMUNICATIONS – 1.03%
Telecom Italia SpA RNC	1,141,052		1,293,598
			1,293,598
TOTAL PREFERRED STOCKS
(Cost: $2,248,425)			1,823,374
WARRANTS – 0.02%
BANKS – 0.02%
Unione di Banche Italiane ScpA (Expires 6/30/11)a	199,104		19,772
			19,772
TOTAL WARRANTS
(Cost: $0)			19,772
SHORT-TERM INVESTMENTS – 0.06%
MONEY MARKET FUNDS – 0.06%
Barclays Global Investors Funds
Institutional Money Market
Fund, SL Agency Shares
0.26%c,d,e	43,726		43,726
Barclays Global Investors Funds
Prime Money Market
Fund, SL Agency Shares
0.21%c,d,e	6,168		6,168
Barclays Global Investors Funds
Treasury Money Market
Fund, SL Agency Shares
0.08%c,d	29,754		29,754
			79,648
TOTAL SHORT-TERM INVESTMENTS
(Cost: $79,648)			79,648
TOTAL INVESTMENTS
IN SECURITIES – 99.91%
(Cost: $170,007,191)			125,597,166
Other Assets, Less Liabilities – 0.09%			118,759
NET ASSETS – 100.00%		$	125,715,925

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 51

Schedule of Investments

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.69%
BANKS – 0.39%
SNS REAAL NVa	42,300	$	326,216
			326,216
BEVERAGES – 4.87%
Heineken Holding NV	25,470		903,534
Heineken NV	74,700		3,156,452
			4,059,986
BIOTECHNOLOGY – 0.60%
Crucell NVa	22,770		498,310
			498,310
BUILDING MATERIALS – 0.19%
Wavin NV	71,370		154,756
			154,756
CHEMICALS – 7.20%
Akzo Nobel NV	70,560		4,000,163
Koninklijke DSM NV	54,810		1,999,806
			5,999,969
COMMERCIAL SERVICES – 2.24%
Brunel International NV	1,800		49,169
Randstad Holding NVa	35,730		1,477,983
USG People NVa,b	20,853		337,705
			1,864,857
DIVERSIFIED FINANCIAL SERVICES – 0.43%
BinckBank NV	16,200		252,471
KAS Bank NV CVA	5,850		108,884
			361,355
ELECTRICAL COMPONENTS & EQUIPMENT – 0.40%
Draka Holding NVa	5,638		101,176
InnoConcepts NVa,b	2,296		10,445
TKH Group NV	13,950		218,207
			329,828
ELECTRONICS – 7.45%
Koninklijke Philips Electronics NV	274,590		6,210,234
			6,210,234
ENGINEERING & CONSTRUCTION – 1.58%
Arcadis NV	17,100		319,870
Koninklijke BAM Groep NV	37,080		389,562
Koninklijke Boskalis Westminster NV	19,212		604,890
			1,314,322

Security	Shares	Value
FOOD – 23.65%
CSM NV	27,180	$	591,506
Koninklijke Ahold NV	344,520		4,039,770
Koninklijke Wessanen NVa	33,390		181,603
Nutreco Holding NV	12,330		555,508
Sligro Food Group NV	9,000		253,143
Super de Boer NVa	22,061		90,227
Unilever NV CVA	500,580		14,004,376
			19,716,133
HOLDING COMPANIES - DIVERSIFIED – 0.76%
Imtech NV	23,130		560,791
Ordina NVa	12,251		72,995
			633,786
INSURANCE – 15.37%
Aegon NVa	483,750		3,646,661
ING Groep NV CVAa	605,700		9,165,817
			12,812,478
INVESTMENT COMPANIES – 0.14%
Kardan NVa,b	18,000		120,140
			120,140
LEISURE TIME – 0.12%
Accell Group NV	2,070		99,811
			99,811
MANUFACTURING – 0.72%
Aalberts Industries NV	31,231		383,642
Koninklijke Ten Cate NV	10,080		213,291
			596,933
MEDIA – 5.85%
Reed Elsevier NV	255,780		2,712,185
Telegraaf Media Groep NV	5,490		102,262
Wolters Kluwer NV	104,130		2,063,653
			4,878,100
METAL FABRICATE & HARDWARE – 0.08%
Advanced Metallurgical Group NVa,b	4,230		66,560
			66,560
OFFICE & BUSINESS EQUIPMENT – 0.17%
Oce NV	24,660		144,738
			144,738

52 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
OIL & GAS SERVICES – 2.52%
Fugro NV CVA	21,420	$	1,154,241
SBM Offshore NV	45,630		949,479
			2,103,720
PHARMACEUTICALS – 0.45%
Mediq NV	23,580		373,238
			373,238
REAL ESTATE INVESTMENT TRUSTS – 3.48%
Corio NV	20,160		1,234,035
Eurocommercial Properties NV	9,900		393,250
VastNed Offices/Industrial NV	4,050		69,104
VastNed Retail NV	5,490		333,651
Wereldhave NV	8,910		874,455
			2,904,495
RETAIL – 0.19%
Beter Bed Holding NV	3,600		67,057
Macintosh Retail Group NV	5,400		87,567
			154,624
SEMICONDUCTORS – 5.07%
ASM International NVa	14,130		260,867
ASML Holding NV	144,270		3,961,608
			4,222,475
SOFTWARE – 0.91%
Exact Holding NV	4,680		125,388
TomTom NVa	36,810		543,297
Unit 4 Agresso NVa	4,950		93,766
			762,451
TELECOMMUNICATIONS – 9.50%
Koninklijke KPN NV	514,980		7,914,926
			7,914,926
TRANSPORTATION – 5.36%
Royal Vopak NVa	13,696		880,519
Smit Internationale NV	3,780		274,859
TNT NV	134,190		3,314,119
			4,469,497
TOTAL COMMON STOCKS
(Cost: $124,556,545)			83,093,938

Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.70%
MONEY MARKET FUNDS – 0.70%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	445,555	$	445,555
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	62,853		62,853
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	74,636		74,636
			583,044
TOTAL SHORT-TERM INVESTMENTS
(Cost: $583,044)			583,044
TOTAL INVESTMENTS IN SECURITIES – 100.39% (Cost: $125,139,589)			83,676,982
Other Assets, Less Liabilities – (0.39)%			(325,839	)
NET ASSETS – 100.00%		$	83,351,143

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 53

Schedule of Investments

iSHARES^® MSCI SPAIN INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.84%
AIRLINES – 0.38%
Iberia Lineas Aereas de Espana SAa	419,484	$	1,046,844
			1,046,844
BANKS – 40.73%
Banco Bilbao Vizcaya Argentaria SA	1,165,632		20,725,251
Banco de Sabadell SA	1,251,198		9,444,497
Banco de Valencia SA	458,016		4,600,931
Banco Popular Espanol SAb	888,576		9,576,384
Banco Santander SA	4,193,592		64,603,382
Bankinter SA	343,590		4,570,748
			113,521,193
COMMERCIAL SERVICES – 3.84%
Abertis Infraestructuras SA	404,898		8,817,417
Cintra Concesiones de Infraestructuras de Transporte SA	213,486		1,891,792
			10,709,209
COMPUTERS – 1.61%
Indra Sistemas SAb	188,682		4,481,212
			4,481,212
DIVERSIFIED FINANCIAL SERVICES – 2.58%
Criteria CaixaCorp SA	1,432,470		7,194,831
			7,194,831
ELECTRIC – 6.77%
Iberdrola SA	1,459,926		13,534,132
Red Electrica Corporacion SA	113,490		5,325,647
			18,859,779
ENERGY - ALTERNATE SOURCES – 1.00%
Gamesa Corporacion Tecnologica SA	126,906		2,780,918
			2,780,918
ENGINEERING & CONSTRUCTION – 5.99%
Acciona SA	31,356		4,065,518
Actividades de Construcciones y Servicios SA	159,510		8,226,839
Fomento de Construcciones y Contratas SA	45,396		1,835,150
Grupo Ferrovial SAb	41,106		1,510,123
SacyrVallehermoso SA	63,838		1,065,433
			16,703,063

Security	Shares	Value
GAS – 3.50%
Enagas SA	185,562	$	3,665,492
Gas Natural SDG SA	289,536		6,089,132
			9,754,624
INSURANCE – 2.86%
Mapfre SAb	1,937,598		7,980,179
			7,980,179
IRON & STEEL – 0.53%
Acerinox SA	69,420		1,469,412
			1,469,412
MACHINERY – 0.65%
Zardoya Otis SAb	82,482		1,803,895
			1,803,895
MEDIA – 0.70%
Gestevision Telecinco SA	175,266		1,965,593
			1,965,593
OIL & GAS – 4.64%
Repsol YPF SA	520,884		12,931,656
			12,931,656
PHARMACEUTICALS – 0.68%
Grifols SA	107,796		1,897,305
			1,897,305
RETAIL – 4.58%
Industria de Diseno Textil SAb	234,624		12,781,025
			12,781,025
TELECOMMUNICATIONS – 18.80%
Telefonica SA	2,076,048		52,404,703
			52,404,703
TOTAL COMMON STOCKS
(Cost: $356,679,725)			278,285,441
SHORT-TERM INVESTMENTS – 6.08%
MONEY MARKET FUNDS – 6.08%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26% c,d,e	14,754,759		14,754,759

54 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

August 31, 2009

Security	Shares	Value
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares
0.21%c,d,e	2,081,392	$	2,081,392
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares
0.08%c,d	108,630		108,630
			16,944,781
TOTAL SHORT-TERM INVESTMENTS
(Cost: $16,944,781)			16,944,781
TOTAL INVESTMENTS IN SECURITIES – 105.92%
(Cost: $373,624,506)			295,230,222
Other Assets, Less Liabilities – (5.92)%			(16,495,789	)
NET ASSETS – 100.00%		$	278,734,433

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 55

Schedule of Investments

iSHARES^® MSCI SWEDEN INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.82%
AGRICULTURE – 2.04%
Swedish Match AB	201,687	$	3,891,378
			3,891,378
AUTO MANUFACTURERS – 1.65%
Scania AB Class B	253,857		3,137,193
			3,137,193
BANKS – 24.52%
Nordea Bank AB	2,513,262		26,369,324
Skandinaviska Enskilda Banken AB Class Aa	1,184,925		8,343,837
Svenska Handelsbanken AB Class A	350,649		9,209,931
Swedbank AB Class Aa,b	261,738		2,746,174
			46,669,266
COMMERCIAL SERVICES – 1.26%
Securitas AB Class B	246,309		2,407,380
			2,407,380
ENGINEERING & CONSTRUCTION – 2.37%
Skanska AB Class B	310,800		4,508,408
			4,508,408
FOREST PRODUCTS & PAPER – 3.67%
Holmen AB Class B	42,624		1,212,580
Svenska Cellulosa AB Class B	441,780		5,773,763
			6,986,343
HAND & MACHINE TOOLS – 4.20%
Sandvik AB	790,986		7,987,170
			7,987,170
HEALTH CARE - PRODUCTS – 1.41%
Getinge AB Class B	155,733		2,675,749
			2,675,749
HOME FURNISHINGS – 2.06%
Electrolux AB Class Ba	188,589		3,917,539
			3,917,539
HOUSEHOLD PRODUCTS & WARES – 1.19%
Husqvarna AB Class Ba,b	318,459		2,264,904
			2,264,904
INVESTMENT COMPANIES – 3.59%
Investor AB Class B	366,633		6,841,517
			6,841,517

Security	Shares	Value
IRON & STEEL – 1.55%
SSAB AB Class A	141,525	$	2,067,884
SSAB AB Class B	66,489		882,543
			2,950,427
MACHINERY – 10.23%
Atlas Copco AB Class A	479,298		6,041,345
Atlas Copco AB Class B	262,182		2,942,837
Volvo AB Class A	350,871		3,014,271
Volvo AB Class B	851,925		7,468,711
			19,467,164
MANUFACTURING – 1.60%
Alfa Laval AB	271,839		3,039,745
			3,039,745
METAL FABRICATE & HARDWARE – 4.57%
Assa Abloy AB Class B	247,308		3,970,525
SKF AB Class Bb	309,468		4,737,511
			8,708,036
OIL & GAS – 0.82%
Lundin Petroleum ABa	171,384		1,571,290
			1,571,290
RETAIL – 11.63%
Hennes & Mauritz AB Class B	398,268		22,127,247
			22,127,247
TELECOMMUNICATIONS – 21.46%
Millicom International Cellular SA SDRa	58,719		4,114,117
Tele2 AB Class B	236,652		3,292,851
Telefonaktiebolaget LM Ericsson Class B	2,301,696		22,074,965
TeliaSonera AB	1,745,919		11,359,809
			40,841,742
TOTAL COMMON STOCKS
(Cost: $250,556,582)			189,992,498
SHORT-TERM INVESTMENTS – 2.64%
MONEY MARKET FUNDS – 2.64%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares
0.26%c,d,e	4,391,756		4,391,756

56 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

August 31, 2009

Security	Shares	Value
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares
0.21%c,d,e	619,526	$	619,526
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares
0.08%c,d	17,942		17,942
			5,029,224
TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,029,224)			5,029,224
TOTAL INVESTMENTS IN SECURITIES – 102.46%
(Cost: $255,585,806)			195,021,722
Other Assets, Less Liabilities – (2.46)%			(4,688,991	)
NET ASSETS – 100.00%		$	190,332,731

SDR – Swedish Depositary Receipts

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 57

Schedule of Investments

iSHARES^® MSCI SWITZERLAND INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.89%
BANKS – 10.18%
Baloise Holding Registered	26,355	$	2,391,488
Credit Suisse Group AG Registered	381,150		19,456,917
Julius Baer Holding AG Registered	114,240		5,820,906
			27,669,311
BUILDING MATERIALS – 3.43%
Geberit AG Registered	15,960		2,460,031
Holcim Ltd. Registereda	101,502		6,857,400
			9,317,431
CHEMICALS – 6.19%
Givaudan SA Registered	4,651		3,349,019
Lonza Group AG Registered	33,915		3,337,427
Syngenta AG Registered	43,050		10,142,830
			16,829,276
COMMERCIAL SERVICES – 2.39%
Adecco SA Registered	59,115		2,844,299
SGS SA Registered	2,940		3,641,444
			6,485,743
COMPUTERS – 0.44%
Logitech International SA Registereda,b	64,575		1,192,699
			1,192,699
DIVERSIFIED FINANCIAL SERVICES – 4.90%
UBS AG Registereda	720,090		13,313,676
			13,313,676
ELECTRIC – 0.25%
BKW FMB Energie AG	8,525		674,353
			674,353
ENGINEERING & CONSTRUCTION – 4.72%
ABB Ltd. Registereda	666,645		12,817,549
			12,817,549
FOOD – 19.84%
Aryzta AGa	34,965		1,303,516
Lindt & Spruengli AG Participation Certificates	725		1,543,502
Lindt & Spruengli AG Registered	125		3,075,176
Nestle SA Registered	1,154,055		48,025,111
			53,947,305

Security	Shares	Value
HAND & MACHINE TOOLS – 0.70%
Schindler Holding AG Participation Certificates	22,247	$	1,446,155
Schindler Holding AG Registered	6,825		452,697
			1,898,852
HEALTH CARE - PRODUCTS – 4.72%
Nobel Biocare Holding AG Registered	60,480		1,850,710
Sonova Holding AG Registered	28,770		2,757,630
Straumann Holding AG Registered	5,880		1,339,740
Synthes Inc.	58,800		6,893,429
			12,841,509
INSURANCE – 7.54%
Swiss Life Holding AG Registereda	11,550		1,309,259
Swiss Reinsurance Co. Registered	135,555		6,261,811
Zurich Financial Services AG Registered	58,695		12,923,619
			20,494,689
INVESTMENT COMPANIES – 0.95%
Pargesa Holding SA Bearer	32,550		2,590,202
			2,590,202
PHARMACEUTICALS – 25.60%
Actelion Ltd. Registereda	52,290		3,023,058
Novartis AG Registered	619,605		28,774,389
Roche Holding AG Genusschein	237,405		37,805,991
			69,603,438
RETAIL – 4.05%
Compagnie Financiere Richemont SA Class A Bearer Units	258,825		7,058,084
Swatch Group AG (The) Bearer	13,908		3,001,764
Swatch Group AG (The) Registered	22,443		952,423
			11,012,271
TELECOMMUNICATIONS – 2.42%
Swisscom AG Registered	19,005		6,581,663
			6,581,663
TRANSPORTATION – 0.57%
Kuehne & Nagel International AG Registered	19,635		1,562,477
			1,562,477
TOTAL COMMON STOCKS
(Cost: $305,856,222)			268,832,444

58 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.27%
MONEY MARKET FUNDS – 0.27%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	614,950	$	614,950
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	86,748		86,748
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	28,528		28,528
			730,226
TOTAL SHORT-TERM INVESTMENTS
(Cost: $730,226)			730,226
TOTAL INVESTMENTS IN SECURITIES – 99.16%
(Cost: $306,586,448)			269,562,670
Other Assets, Less Liabilities – 0.84%			2,292,270
NET ASSETS – 100.00%		$	271,854,940

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 59

Schedule of Investments

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.21%
AEROSPACE & DEFENSE – 1.75%
BAE Systems PLC	1,286,580	$	6,546,422
Cobham PLC	418,200		1,378,160
Rolls-Royce Group PLCa	674,778		4,978,583
			12,903,165
AGRICULTURE – 4.43%
British American Tobacco PLC	728,406		22,247,305
Imperial Tobacco Group PLC	370,968		10,459,643
			32,706,948
AIRLINES – 0.09%
British Airways PLCa	211,560		660,293
			660,293
APPAREL – 0.17%
Burberry Group PLC	159,162		1,254,210
			1,254,210
BANKS – 17.24%
Barclays PLCa,b	4,025,298		24,946,038
HSBC Holdings PLC	6,318,510		69,212,237
Lloyds Banking Group PLCa	5,935,980		10,771,544
Royal Bank of Scotland Group PLCa	6,156,888		5,784,887
Standard Chartered PLC	733,326		16,684,639
			127,399,345
BEVERAGES – 3.00%
Diageo PLC	912,168		14,182,654
SABMiller PLC	343,662		7,987,031
			22,169,685
CHEMICALS – 0.25%
Johnson Matthey PLC	78,720		1,816,698
			1,816,698
COMMERCIAL SERVICES – 1.34%
Bunzl PLC	120,048		1,149,469
Capita Group PLC	227,796		2,530,150
Experian PLC	371,706		3,135,048
G4S PLC	464,694		1,691,938
Serco Group PLC	178,596		1,363,108
			9,869,713

Security	Shares	Value
DISTRIBUTION & WHOLESALE – 0.33%
Wolseley PLCa	104,058	$	2,457,413
			2,457,413
DIVERSIFIED FINANCIAL SERVICES – 1.30%
ICAP PLC	190,650		1,334,548
Investec PLC	154,488		1,092,241
London Stock Exchange Group PLC	54,612		716,949
Man Group PLC	618,198		2,710,280
Old Mutual PLC	1,912,158		2,924,774
Schroders PLC	45,018		793,133
			9,571,925
ELECTRIC – 2.48%
Drax Group PLC	134,070		1,047,742
International Power PLC	556,944		2,556,104
National Grid PLC	886,830		8,563,732
Scottish & Southern Energy PLC	335,790		6,123,957
			18,291,535
ENGINEERING & CONSTRUCTION – 0.33%
AMEC PLC	122,016		1,499,417
Balfour Beatty PLC	175,152		961,153
			2,460,570
ENTERTAINMENT – 0.09%
Ladbrokes PLC	219,186		695,883
			695,883
FOOD – 5.54%
Cadbury PLC	496,428		4,700,745
J Sainsbury PLC	433,944		2,303,487
Tesco PLC	2,884,350		17,670,734
Unilever PLC	468,384		12,824,654
Wm Morrison Supermarkets PLC	770,964		3,480,552
			40,980,172
FOOD SERVICE – 0.71%
Associated British Foods PLC	130,872		1,707,428
Compass Group PLC	670,104		3,564,730
			5,272,158
GAS – 1.04%
Centrica PLC	1,864,434		7,654,371
			7,654,371

60 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2009

Security	Shares	Value
HEALTH CARE - PRODUCTS – 0.37%
Smith & Nephew PLC	323,982	$	2,766,856
			2,766,856
HOLDING COMPANIES - DIVERSIFIED – 0.13%
Tomkins PLC	322,752		938,948
			938,948
HOME BUILDERS – 0.09%
Berkeley Group Holdings PLC (The) Unitsa	45,018		694,450
			694,450
HOUSEHOLD PRODUCTS & WARES – 1.39%
Reckitt Benckiser PLC	221,154		10,283,262
			10,283,262
INSURANCE – 3.37%
Admiral Group PLC	67,896		1,182,922
Aviva PLC	999,990		6,620,181
Friends Provident Group PLC	852,390		1,187,788
Legal & General Group PLC	2,122,242		2,663,299
Prudential PLC	921,270		8,062,979
RSA Insurance Group PLC	1,221,390		2,599,752
Standard Life PLC	809,832		2,596,173
			24,913,094
LEISURE TIME – 0.44%
Carnival PLC	59,532		1,845,420
Thomas Cook Group PLC	158,178		595,772
TUI Travel PLC	205,164		803,172
			3,244,364
LODGING – 0.16%
InterContinental Hotels Group PLC	94,218		1,175,475
			1,175,475
MANUFACTURING – 0.42%
Invensys PLC	293,970		1,312,768
Smiths Group PLC	139,728		1,826,384
			3,139,152
MEDIA – 2.21%
British Sky Broadcasting Group PLC	413,526		3,679,847
Pearson PLC	293,970		3,602,925
Reed Elsevier PLC	440,094		3,206,175
Thomson Reuters PLC	63,222		1,995,870
WPP PLC	456,084		3,861,577
			16,346,394

Security	Shares	Value
MINING – 10.26%
Anglo American PLCa	480,438	$	15,824,791
Antofagasta PLC	144,648		1,807,003
BHP Billiton PLC	804,912		21,356,846
Eurasian Natural Resources Corp.	94,464		1,331,732
Fresnillo PLC	65,682		667,448
Kazakhmys PLC	78,720		1,268,224
Lonmin PLCa	56,580		1,347,248
Randgold Resources Ltd.	29,767		1,757,186
Rio Tinto PLC	500,118		19,672,253
Vedanta Resources PLC	50,184		1,465,675
Xstrata PLC	695,196		9,364,497
			75,862,903
OIL & GAS – 20.25%
BG Group PLC	1,225,818		20,318,014
BP PLC	6,836,094		59,272,599
Cairn Energy PLCa	50,430		2,060,524
Royal Dutch Shell PLC Class A	1,293,468		36,069,491
Royal Dutch Shell PLC Class B	983,508		26,832,903
Tullow Oil PLC	291,510		5,116,859
			149,670,390
OIL & GAS SERVICES – 0.15%
Petrofac Ltd.	75,276		1,077,786
			1,077,786
PACKAGING & CONTAINERS – 0.19%
Rexam PLC	321,365		1,401,060
			1,401,060
PHARMACEUTICALS – 8.79%
AstraZeneca PLC	528,408		24,458,062
GlaxoSmithKline PLC	1,893,216		37,119,328
Shire PLC	203,196		3,387,857
			64,965,247
REAL ESTATE – 0.89%
British Land Co. PLC	307,746		2,432,588
Land Securities Group PLC	273,552		2,753,031
Liberty International PLCa	166,050		1,418,092
			6,603,711
REAL ESTATE INVESTMENT TRUSTS – 0.44%
Hammerson PLC	255,102		1,683,434
SEGRO PLC	269,125		1,577,277
			3,260,711

SCHEDULES OF INVESTMENTS 61

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2009

Security	Shares	Value
RETAIL – 1.52%
Carphone Warehouse Group PLC (The)	151,290	$	452,214
Home Retail Group PLC	321,768		1,637,231
Kingfisher PLC	855,588		2,952,024
Marks & Spencer Group PLC	572,196		3,168,856
Next PLC	72,324		1,933,128
Whitbread PLC	63,960		1,091,414
			11,234,867
SOFTWARE – 0.46%
Autonomy Corp. PLCa	78,474		1,663,939
Sage Group PLC (The)	480,684		1,729,005
			3,392,944
TELECOMMUNICATIONS – 6.77%
BT Group PLC	2,823,834		6,369,562
Cable & Wireless PLC	930,864		2,251,409
Vodafone Group PLC	19,149,378		41,446,423
			50,067,394
TRANSPORTATION – 0.15%
FirstGroup PLC	176,628		1,092,172
			1,092,172
VENTURE CAPITAL – 0.24%
3i Group PLC	353,502		1,748,577
			1,748,577
WATER – 0.43%
Severn Trent PLC	86,592		1,381,640
United Utilities Group PLC	245,508		1,811,784
			3,193,424
TOTAL COMMON STOCKS
(Cost: $915,956,645)			733,237,265
SHORT-TERM INVESTMENTS – 0.32%
MONEY MARKET FUNDS – 0.32%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%b,c,d	2,057,582		2,057,582
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% b,c,d	290,254		290,254

Security	Shares	Value
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%b,c	29,714	$	29,714
			2,377,550
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,377,550)			2,377,550
TOTAL INVESTMENTS IN SECURITIES – 99.53%
(Cost: $918,334,195)			735,614,815
Other Assets, Less Liabilities – 0.47%			3,509,546
NET ASSETS – 100.00%		$	739,124,361

^a Non-income earning security.

^b Affiliated issuer. See Note 2.

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

^d All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

62 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Austria Investable Market Index Fund			Belgium Investable Market Index Fund			EMU Index Fund			France Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	218,122,926		$	94,765,307		$	1,053,462,514		$	269,506,931
Affiliated issuers (Note 2)		32,612,516			400,642			7,594,166			2,874,747
Total cost of investments	$	250,735,442		$	95,165,949		$	1,061,056,680		$	272,381,678
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	158,411,281		$	52,074,039		$	738,755,007		$	183,968,209
Affiliated issuers (Note 2)		32,612,516			400,642			7,594,166			2,874,747
Total fair value of investments		191,023,797			52,474,681			746,349,173			186,842,956
Foreign currencies, at valueb		177,336			48,556			562,787			76,883
Receivables:
Investment securities sold		4,386,428			931,342			2,024,826			334,093
Due from custodian (Note 4)		182,275			–			–			803,048
Dividends and interest		1,041,190			866,953			1,350,782			277,855
Capital shares sold		96,472			–			–			–
Interest from affiliate (Note 2)		20,682			10,806			98,796			14,058
Total Assets		196,928,180			54,332,338			750,386,364			188,348,893
LIABILITIES
Payables:
Investment securities purchased		4,757,011			928,378			1,745,268			918,306
Collateral for securities on loan (Note 5)		32,451,546			339,391			7,047,290			2,839,469
Investment advisory fees (Note 2)		53,696			22,322			323,916			79,726
Total Liabilities		37,262,253			1,290,091			9,116,474			3,837,501
NET ASSETS	$	159,665,927		$	53,042,247		$	741,269,890		$	184,511,392
Net assets consist of:
Paid-in capital	$	280,076,052		$	118,658,016		$	1,171,792,947		$	291,552,048
Undistributed net investment income		1,306,425			124,156			3,153,761			559,560
Accumulated net realized loss		(61,958,169	)		(22,998,169	)		(118,992,008	)		(22,062,462	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(59,758,381	)		(42,741,756	)		(314,684,810	)		(85,537,754	)
NET ASSETS	$	159,665,927		$	53,042,247		$	741,269,890		$	184,511,392
Shares outstandingc		7,900,000			4,400,000			20,800,000			7,600,000
Net asset value per share	$	20.21		$	12.06		$	35.64		$	24.28

^a Securities on loan with values of $29,729,764, $260,362, $6,592,068 and $2,685,296, respectively. See Note 5.

^b Cost of foreign currencies: $176,938, $47,916, $558,607 and $76,310, respectively.

^c $0.001 par value, number of shares authorized: 100 million, 136.2 million, 1 billion and 340.2 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 63

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Germany Index Fund			Italy Index Fund			Netherlands Investable Market Index Fund			Spain Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	798,111,933		$	169,927,543		$	124,556,545		$	356,679,725
Affiliated issuers (Note 2)		7,599,074			79,648			583,044			16,944,781
Total cost of investments	$	805,711,007		$	170,007,191		$	125,139,589		$	373,624,506
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	617,367,890		$	125,517,518		$	83,093,938		$	278,285,441
Affiliated issuers (Note 2)		7,599,074			79,648			583,044			16,944,781
Total fair value of investments		624,966,964			125,597,166			83,676,982			295,230,222
Foreign currencies, at valueb		372,467			46,674			157,814			265,475
Receivables:
Investment securities sold		14,932,648			493,929			225,945			11,308,728
Due from custodian (Note 4)		3,078,377			–			4,049			–
Dividends and interest		1,687,847			12			30,763			82,293
Capital shares sold		147,612			–			17,445			12,137
Interest from affiliate (Note 2)		55,681			10,140			9,711			19,288
Total Assets		645,241,596			126,147,921			84,122,709			306,918,143
LIABILITIES
Payables:
Investment securities purchased		18,214,498			326,536			226,212			11,232,022
Collateral for securities on loan (Note 5)		7,148,428			49,894			508,408			16,836,151
Investment advisory fees (Note 2)		240,923			55,566			36,946			115,537
Total Liabilities		25,603,849			431,996			771,566			28,183,710
NET ASSETS	$	619,637,747		$	125,715,925		$	83,351,143		$	278,734,433
Net assets consist of:
Paid-in capital	$	922,932,639		$	202,323,901		$	162,920,086		$	384,460,490
Undistributed net investment income		487,996			481,431			431,321			3,516,332
Accumulated net realized loss		(123,158,201	)		(32,679,577	)		(38,538,498	)		(30,847,290	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(180,624,687	)		(44,409,830	)		(41,461,766	)		(78,395,099	)
NET ASSETS	$	619,637,747		$	125,715,925		$	83,351,143		$	278,734,433
Shares outstandingc		29,700,000			6,600,000			4,500,000			5,850,000
Net asset value per share	$	20.86		$	19.05		$	18.52		$	47.65

^a Securities on loan with values of $6,711,454, $47,103, $462,257 and $16,024,325, respectively. See Note 5.

^b Cost of foreign currencies: $370,078, $46,210, $157,218 and $266,369, respectively.

^c $0.001 par value, number of shares authorized: 382.2 million, 63.6 million, 255 million and 127.8 million, respectively.

See notes to financial statements.

64 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	250,556,582		$	305,856,222		$	885,855,482
Affiliated issuers (Note 2)		5,029,224			730,226			32,478,713
Total cost of investments	$	255,585,806		$	306,586,448		$	918,334,195
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	189,992,498		$	268,832,444		$	708,291,227
Affiliated issuers (Note 2)		5,029,224			730,226			27,323,588
Total fair value of investments		195,021,722			269,562,670			735,614,815
Foreign currencies, at valueb		27,593			240,930			946,695
Receivables:
Investment securities sold		1,751,549			4,127,975			3,038,062
Due from custodian (Note 4)		54,541			–			–
Dividends and interest		3,594			2,547,956			4,692,068
Capital shares sold		5,837			135,232			–
Interest from affiliate (Note 2)		15,539			13,079			52,366
Total Assets		196,880,375			276,627,842			744,344,006
LIABILITIES
Payables:
Investment securities purchased		1,460,958			3,955,061			2,538,863
Collateral for securities on loan (Note 5)		5,011,282			701,698			2,347,836
Investment advisory fees (Note 2)		75,404			116,143			332,946
Total Liabilities		6,547,644			4,772,902			5,219,645
NET ASSETS	$	190,332,731		$	271,854,940		$	739,124,361
Net assets consist of:
Paid-in capital	$	278,969,760		$	347,269,106		$	1,040,854,353
Undistributed net investment income		299,283			373,773			4,727,610
Accumulated net realized loss		(28,374,619	)		(38,797,443	)		(123,660,365	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(60,561,693	)		(36,990,496	)		(182,797,237	)
NET ASSETS	$	190,332,731		$	271,854,940		$	739,124,361
Shares outstandingc		8,325,000			13,125,000			49,200,000
Net asset value per share	$	22.86		$	20.71		$	15.02

^a Securities on loan with values of $4,597,484, $652,914 and $2,222,580, respectively. See Note 5.

^b Cost of foreign currencies: $25,202, $234,789 and $963,929, respectively.

^c $0.001 par value, number of shares authorized: 63.6 million, 318.625 million and 934.2 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI
	Austria Investable Market Index Fund			Belgium Investable Market Index Fund			EMU Index Fund			France Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	3,259,994		$	1,657,850		$	25,015,284		$	5,951,609
Interest from affiliated issuers (Note 2)		573			155			797			151
Securities lending income from affiliated issuers (Note 2)		345,958			37,058			456,059			93,885
Interest from affiliate (Note 2)		20,682			10,806			98,796			14,058
Total investment income		3,627,207			1,705,869			25,570,936			6,059,703
EXPENSES
Investment advisory fees (Note 2)		527,579			339,987			3,909,074			900,092
Foreign taxes (Note 1)		–			–			31,782			–
Total expenses		527,579			339,987			3,940,856			900,092
Net investment income		3,099,628			1,365,882			21,630,080			5,159,611
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(52,969,733	)		(40,263,781	)		(101,408,901	)		(13,415,473	)
In-kind redemptions		(34,975,618	)		(6,938,422	)		(129,289,646	)		(48,886,145	)
Foreign currency transactions		87,338			13,921			42,006			49,674
Net realized loss		(87,858,013	)		(47,188,282	)		(230,656,541	)		(62,251,944	)
Net change in unrealized appreciation (depreciation) on:
Investments		5,510,516			7,892,557			(85,589,634	)		(18,845,481	)
Translation of assets and liabilities in foreign currencies		(107,697	)		(27,717	)		126,262			5,508
Net change in unrealized appreciation (depreciation)		5,402,819			7,864,840			(85,463,372	)		(18,839,973	)
Net realized and unrealized loss		(82,455,194	)		(39,323,442	)		(316,119,913	)		(81,091,917	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(79,355,566	)	$	(37,957,560	)	$	(294,489,833	)	$	(75,932,306	)

^a Net of foreign withholding tax of $438,279, $287,618, $4,011,291 and $824,389, respectively.

See notes to financial statements.

66 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI
	Germany Index Fund			Italy Index Fund			Netherlands Investable Market Index Fund			Spain Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	15,683,488		$	3,514,985		$	2,975,276		$	10,825,880
Interest from affiliated issuers (Note 2)		506			127			171			564
Securities lending income from affiliated issuers (Note 2)		199,365			17,461			5,969			849,849
Interest from affiliate (Note 2)		55,681			10,140			9,711			19,288
Total investment income		15,939,040			3,542,713			2,991,127			11,695,581
EXPENSES
Investment advisory fees (Note 2)		2,369,432			570,682			594,140			1,236,278
Foreign taxes (Note 1)		–			39,931			–			–
Total expenses		2,369,432			610,613			594,140			1,236,278
Net investment income		13,569,608			2,932,100			2,396,987			10,459,303
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(74,719,406	)		(31,919,176	)		(29,173,650	)		(30,623,519	)
In-kind redemptions		(59,956,101	)		(39,723,243	)		(33,581,477	)		(45,320,752	)
Foreign currency transactions		(337,459	)		(79,413	)		(918	)		225,187
Net realized loss		(135,012,966	)		(71,721,832	)		(62,756,045	)		(75,719,084	)
Net change in unrealized appreciation (depreciation) on:
Investments		(22,461,468	)		17,642,637			(4,712,365	)		22,767,180
Translation of assets and liabilities in foreign currencies		317,957			(5,670	)		9,091			38,847
Net change in unrealized appreciation (depreciation)		(22,143,511	)		17,636,967			(4,703,274	)		22,806,027
Net realized and unrealized loss		(157,156,477	)		(54,084,865	)		(67,459,319	)		(52,913,057	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(143,586,869	)	$	(51,152,765	)	$	(65,062,332	)	$	(42,453,754	)

^a Net of foreign withholding tax of $2,249,692, $643,001, $517,224 and $1,741,576, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI
	Sweden Index Fund			Switzerland Index Fund			United Kingdom Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	3,830,993		$	5,091,585		$	25,243,084
Interest from affiliated issuers (Note 2)		201			523			518
Securities lending income from affiliated issuers (Note 2)		90,142			18,262			31,262
Interest from affiliate (Note 2)		15,539			13,079			52,366
Total investment income		3,936,875			5,123,449			25,327,230
EXPENSES
Investment advisory fees (Note 2)		754,249			1,439,437			3,150,913
Total expenses		754,249			1,439,437			3,150,913
Net investment income		3,182,626			3,684,012			22,176,317
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(17,607,172	)		(42,571,031	)		(76,008,857	)
Investments in affiliated issuers (Note 2)		–			–			(3,751,912	)
In-kind redemptions		(34,901,090	)		(23,533,072	)		(28,251,989	)
Foreign currency transactions		223,838			(32,024	)		(739,538	)
Net realized loss		(52,284,424	)		(66,136,127	)		(108,752,296	)
Net change in unrealized appreciation (depreciation) on:
Investments		18,455,887			(2,843,480	)		(66,559,027	)
Translation of assets and liabilities in foreign currencies		9,013			146,933			209,004
Net change in unrealized appreciation (depreciation)		18,464,900			(2,696,547	)		(66,350,023	)
Net realized and unrealized loss		(33,819,524	)		(68,832,674	)		(175,102,319	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(30,636,898	)	$	(65,148,662	)	$	(152,926,002	)

^a Net of foreign withholding tax of $676,057, $1,003,303 and $225,568, respectively.

See notes to financial statements.

68 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Austria Investable Market Index Fund						iShares MSCI Belgium Investable Market Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,099,628		$	5,489,871		$	1,365,882		$	8,943,391
Net realized gain (loss)		(87,858,013	)		827,676			(47,188,282	)		10,301,055
Net change in unrealized appreciation (depreciation)		5,402,819			(72,261,407	)		7,864,840			(77,304,920	)
Net decrease in net assets resulting from operations		(79,355,566	)		(65,943,860	)		(37,957,560	)		(58,060,474	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,361,827	)		(10,677,774	)		(1,992,257	)		(16,629,945	)
Total distributions to shareholders		(4,361,827	)		(10,677,774	)		(1,992,257	)		(16,629,945	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		153,297,660			202,420,621			71,837,760			83,185,830
Cost of shares redeemed		(103,516,511	)		(405,710,636	)		(98,800,329	)		(192,024,177	)
Net increase (decrease) in net assets from capital share transactions		49,781,149			(203,290,015	)		(26,962,569	)		(108,838,347	)
DECREASE IN NET ASSETS		(33,936,244	)		(279,911,649	)		(66,912,386	)		(183,528,766	)
NET ASSETS
Beginning of year		193,602,171			473,513,820			119,954,633			303,483,399
End of year	$	159,665,927		$	193,602,171		$	53,042,247		$	119,954,633
Undistributed net investment income included in net assets at end of year	$	1,306,425		$	1,801,453		$	124,156		$	623,146
SHARES ISSUED AND REDEEMED
Shares sold		8,000,000			5,700,000			7,480,000			3,320,000
Shares redeemed		(6,600,000	)		(11,900,000	)		(9,880,000	)		(8,240,000	)
Net increase (decrease) in shares outstanding		1,400,000			(6,200,000	)		(2,400,000	)		(4,920,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI EMU Index Fund						iShares MSCI France Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	21,630,080		$	77,988,337		$	5,159,611		$	12,303,626
Net realized gain (loss)		(230,656,541	)		420,891,072			(62,251,944	)		20,272,014
Net change in unrealized appreciation (depreciation)		(85,463,372	)		(780,256,430	)		(18,839,973	)		(74,337,717	)
Net decrease in net assets resulting from operations		(294,489,833	)		(281,377,021	)		(75,932,306	)		(41,762,077	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(28,747,455	)		(132,228,318	)		(6,641,215	)		(15,471,999	)
Total distributions to shareholders		(28,747,455	)		(132,228,318	)		(6,641,215	)		(15,471,999	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		245,678,933			935,523,497			138,974,524			392,494,736
Cost of shares redeemed		(472,979,784	)		(2,201,675,459	)		(99,092,138	)		(553,753,893	)
Net increase (decrease) in net assets from capital share transactions		(227,300,851	)		(1,266,151,962	)		39,882,386			(161,259,157	)
DECREASE IN NET ASSETS		(550,538,139	)		(1,679,757,301	)		(42,691,135	)		(218,493,233	)
NET ASSETS
Beginning of year		1,291,808,029			2,971,565,330			227,202,527			445,695,760
End of year	$	741,269,890		$	1,291,808,029		$	184,511,392		$	227,202,527
Undistributed net investment income included in net assets at end of year	$	3,153,761		$	10,227,903		$	559,560		$	1,991,490
SHARES ISSUED AND REDEEMED
Shares sold		8,100,000			17,500,000			5,600,000			10,800,000
Shares redeemed		(15,400,000	)		(41,400,000	)		(5,400,000	)		(15,600,000	)
Net increase (decrease) in shares outstanding		(7,300,000	)		(23,900,000	)		200,000			(4,800,000	)

See notes to financial statements.

70 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Germany Index Fund						iShares MSCI Italy Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	13,569,608		$	46,008,248		$	2,932,100		$	11,898,862
Net realized gain (loss)		(135,012,966	)		227,568,876			(71,721,832	)		(6,321,261	)
Net change in unrealized appreciation (depreciation)		(22,143,511	)		(371,327,133	)		17,636,967			(51,884,781	)
Net decrease in net assets resulting from operations		(143,586,869	)		(97,750,009	)		(51,152,765	)		(46,307,180	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(14,693,409	)		(72,915,709	)		(3,732,985	)		(18,054,401	)
Total distributions to shareholders		(14,693,409	)		(72,915,709	)		(3,732,985	)		(18,054,401	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		443,092,148			961,273,471			100,094,796			499,630,008
Cost of shares redeemed		(334,626,102	)		(1,762,400,887	)		(163,647,572	)		(363,609,192	)
Net increase (decrease) in net assets from capital share transactions		108,466,046			(801,127,416	)		(63,552,776	)		136,020,816
INCREASE (DECREASE) IN NET ASSETS		(49,814,232	)		(971,793,134	)		(118,438,526	)		71,659,235
NET ASSETS
Beginning of year		669,451,979			1,641,245,113			244,154,451			172,495,216
End of year	$	619,637,747		$	669,451,979		$	125,715,925		$	244,154,451
Undistributed net investment income included in net assets at end of year	$	487,996		$	1,949,256		$	481,431		$	1,358,007
SHARES ISSUED AND REDEEMED
Shares sold		23,400,000			29,100,000			5,850,000			16,800,000
Shares redeemed		(18,000,000	)		(55,800,000	)		(9,000,000	)		(12,150,000	)
Net increase (decrease) in shares outstanding		5,400,000			(26,700,000	)		(3,150,000	)		4,650,000

See notes to financial statements.

FINANCIAL STATEMENTS 71

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Netherlands Investable Market Index Fund						iShares MSCI Spain Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,396,987		$	9,878,532		$	10,459,303		$	19,885,704
Net realized gain (loss)		(62,756,045	)		13,136,127			(75,719,084	)		24,027,821
Net change in unrealized appreciation (depreciation)		(4,703,274	)		(54,521,906	)		22,806,027			(122,537,204	)
Net decrease in net assets resulting from operations		(65,062,332	)		(31,507,247	)		(42,453,754	)		(78,623,679	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,230,257	)		(15,733,536	)		(13,662,798	)		(24,006,924	)
Total distributions to shareholders		(4,230,257	)		(15,733,536	)		(13,662,798	)		(24,006,924	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		43,167,203			108,417,983			168,127,511			1,073,349,945
Cost of shares redeemed		(100,176,018	)		(102,878,515	)		(154,625,074	)		(1,171,926,810	)
Net increase (decrease) in net assets from capital share transactions		(57,008,815	)		5,539,468			13,502,437			(98,576,865	)
DECREASE IN NET ASSETS		(126,301,404	)		(41,701,315	)		(42,614,115	)		(201,207,468	)
NET ASSETS
Beginning of year		209,652,547			251,353,862			321,348,548			522,556,016
End of year	$	83,351,143		$	209,652,547		$	278,734,433		$	321,348,548
Undistributed net investment income included in net assets at end of year	$	431,321		$	2,265,509		$	3,516,332		$	6,489,523
SHARES ISSUED AND REDEEMED
Shares sold		2,350,000			3,550,000			4,200,000			17,250,000
Shares redeemed		(6,450,000	)		(3,400,000	)		(4,725,000	)		(19,875,000	)
Net increase (decrease) in shares outstanding		(4,100,000	)		150,000			(525,000	)		(2,625,000	)

See notes to financial statements.

72 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Sweden Index Fund						iShares MSCI Switzerland Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,182,626		$	10,430,468		$	3,684,012		$	7,419,424
Net realized gain (loss)		(52,284,424	)		5,147,723			(66,136,127	)		55,472,783
Net change in unrealized appreciation (depreciation)		18,464,900			(109,865,275	)		(2,696,547	)		(89,962,657	)
Net decrease in net assets resulting from operations		(30,636,898	)		(94,287,084	)		(65,148,662	)		(27,070,450	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(3,282,327	)		(24,097,389	)		(4,322,291	)		(10,490,319	)
Total distributions to shareholders		(3,282,327	)		(24,097,389	)		(4,322,291	)		(10,490,319	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		119,540,017			281,026,512			105,041,546			294,689,801
Cost of shares redeemed		(122,941,857	)		(508,014,443	)		(130,240,566	)		(209,602,175	)
Net increase (decrease) in net assets from capital share transactions		(3,401,840	)		(226,987,931	)		(25,199,020	)		85,087,626
INCREASE (DECREASE) IN NET ASSETS		(37,321,065	)		(345,372,404	)		(94,669,973	)		47,526,857
NET ASSETS
Beginning of year		227,653,796			573,026,200			366,524,913			318,998,056
End of year	$	190,332,731		$	227,653,796		$	271,854,940		$	366,524,913
Undistributed net investment income included in net assets at end of year	$	299,283		$	175,146		$	373,773		$	1,044,066
SHARES ISSUED AND REDEEMED
Shares sold		6,675,000			9,300,000			5,125,000			11,750,000
Shares redeemed		(7,650,000	)		(16,575,000	)		(7,875,000	)		(8,250,000	)
Net increase (decrease) in shares outstanding		(975,000	)		(7,275,000	)		(2,750,000	)		3,500,000

See notes to financial statements.

FINANCIAL STATEMENTS 73

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI United Kingdom Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	22,176,317		$	39,928,967
Net realized gain (loss)		(108,752,296	)		89,735,490
Net change in unrealized appreciation (depreciation)		(66,350,023	)		(319,757,708	)
Net decrease in net assets resulting from operations		(152,926,002	)		(190,093,251	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(25,389,028	)		(63,131,140	)
Total distributions to shareholders		(25,389,028	)		(63,131,140	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		148,897,281			463,470,489
Cost of shares redeemed		(113,959,957	)		(455,482,369	)
Net increase in net assets from capital share transactions		34,937,324			7,988,120
DECREASE IN NET ASSETS		(143,377,706	)		(245,236,271	)
NET ASSETS
Beginning of year		882,502,067			1,127,738,338
End of year	$	739,124,361		$	882,502,067
Undistributed net investment income included in net assets at end of year	$	4,727,610		$	8,677,006
SHARES ISSUED AND REDEEMED
Shares sold		12,400,000			20,200,000
Shares redeemed		(8,800,000	)		(20,200,000	)
Net increase in shares outstanding		3,600,000			–

See notes to financial statements.

74 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Austria Investable Market Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	29.78		$	37.28		$	31.08		$	26.62		$	17.04
Income from investment operations:
Net investment incomea		0.51			0.56			0.51			0.44			0.29
Net realized and unrealized gain (loss)b		(9.36	)		(6.98	)		6.42			4.31			9.38
Total from investment operations		(8.85	)		(6.42	)		6.93			4.75			9.67
Less distributions from:
Net investment income		(0.72	)		(1.08	)		(0.73	)		(0.29	)		(0.09	)
Total distributions		(0.72	)		(1.08	)		(0.73	)		(0.29	)		(0.09	)
Net asset value, end of year	$	20.21		$	29.78		$	37.28		$	31.08		$	26.62
Total return		(28.52	)%		(17.64	)%		22.35	%		18.00	%		56.82	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	159,666		$	193,602		$	473,514		$	391,637		$	196,952
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.25	%		1.57	%		1.36	%		1.48	%		1.26	%
Portfolio turnover ratec		26	%		26	%		21	%		32	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 75

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Belgium Investable Market Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	17.64		$	25.89		$	22.83		$	18.94		$	14.77
Income from investment operations:
Net investment incomea		0.22			0.78			0.76			0.75			0.71
Net realized and unrealized gain (loss)b		(5.46	)		(7.27	)		2.74			3.95			3.75
Total from investment operations		(5.24	)		(6.49	)		3.50			4.70			4.46
Less distributions from:
Net investment income		(0.34	)		(1.76	)		(0.44	)		(0.81	)		(0.29	)
Total distributions		(0.34	)		(1.76	)		(0.44	)		(0.81	)		(0.29	)
Net asset value, end of year	$	12.06		$	17.64		$	25.89		$	22.83		$	18.94
Total return		(29.15	)%		(26.21	)%		15.36	%		25.66	%		30.22	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	53,042		$	119,955		$	303,483		$	152,484		$	46,960
Ratio of expenses to average net assets		0.56	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		2.23	%		3.32	%		2.90	%		3.60	%		3.89	%
Portfolio turnover ratec		33	%		31	%		12	%		10	%		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 Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units.

See notes to financial statements.

76 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI EMU Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a			Year ended Aug. 31, 2005a
Net asset value, beginning of year	$	45.97		$	57.15		$	46.14		$	37.49		$	29.69
Income from investment operations:
Net investment incomeb		0.93			1.71			1.40			1.37			0.88
Net realized and unrealized gain (loss)c		(9.97	)		(9.59	)		10.54			7.94			7.57
Total from investment operations		(9.04	)		(7.88	)		11.94			9.31			8.45
Less distributions from:
Net investment income		(1.29	)		(3.30	)		(0.93	)		(0.66	)		(0.65	)
Total distributions		(1.29	)		(3.30	)		(0.93	)		(0.66	)		(0.65	)
Net asset value, end of year	$	35.64		$	45.97		$	57.15		$	46.14		$	37.49
Total return		(19.05	)%		(14.52	)%		26.10	%		25.18	%		28.54	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	741,270		$	1,291,808		$	2,971,565		$	1,794,921		$	547,284
Ratio of expenses to average net assets		0.56	%		0.52	%		0.51	%		0.54	%		0.58	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.56	%		n/a			n/a			n/a			0.57	%
Ratio of net investment income to average net assets		3.07	%		3.06	%		2.60	%		3.23	%		2.50	%
Portfolio turnover rated		8	%		27	%		5	%		8	%		8	%

^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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 77

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI France Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	30.70		$	36.53		$	31.16		$	25.41		$	20.40
Income from investment operations:
Net investment incomea		0.66			0.93			0.77			0.55			0.47
Net realized and unrealized gain (loss)b		(6.13	)		(5.17	)		5.06			5.52			4.84
Total from investment operations		(5.47	)		(4.24	)		5.83			6.07			5.31
Less distributions from:
Net investment income		(0.95	)		(1.59	)		(0.46	)		(0.32	)		(0.30	)
Total distributions		(0.95	)		(1.59	)		(0.46	)		(0.32	)		(0.30	)
Net asset value, end of year	$	24.28		$	30.70		$	36.53		$	31.16		$	25.41
Total return		(17.11	)%		(11.96	)%		18.83	%		24.13	%		26.13	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	184,511		$	227,203		$	445,696		$	211,886		$	81,326
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.18	%		2.60	%		2.17	%		1.95	%		1.98	%
Portfolio turnover ratec		6	%		10	%		6	%		10	%		7	%

^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.

See notes to financial statements.

78 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Germany Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	27.55		$	32.18		$	23.68		$	19.08		$	14.96
Income from investment operations:
Net investment incomea		0.58			0.88			0.68			0.57			0.28
Net realized and unrealized gain (loss)b		(6.65	)		(3.84	)		8.33			4.15			4.03
Total from investment operations		(6.07	)		(2.96	)		9.01			4.72			4.31
Less distributions from:
Net investment income		(0.62	)		(1.67	)		(0.51	)		(0.12	)		(0.19	)
Total distributions		(0.62	)		(1.67	)		(0.51	)		(0.12	)		(0.19	)
Net asset value, end of year	$	20.86		$	27.55		$	32.18		$	23.68		$	19.08
Total return		(21.62	)%		(9.81	)%		38.47	%		24.82	%		28.89	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	619,638		$	669,452		$	1,641,245		$	802,795		$	314,793
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.18	%		2.72	%		2.32	%		2.62	%		1.54	%
Portfolio turnover ratec		15	%		11	%		4	%		12	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 79

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Italy Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	25.04		$	33.82		$	30.48		$	25.77		$	20.21
Income from investment operations:
Net investment incomea		0.47			1.53			1.35			1.07			0.78
Net realized and unrealized gain (loss)b		(5.82	)		(7.71	)		2.66			4.15			5.42
Total from investment operations		(5.35	)		(6.18	)		4.01			5.22			6.20
Less distributions from:
Net investment income		(0.64	)		(2.60	)		(0.67	)		(0.51	)		(0.64	)
Total distributions		(0.64	)		(2.60	)		(0.67	)		(0.51	)		(0.64	)
Net asset value, end of year	$	19.05		$	25.04		$	33.82		$	30.48		$	25.77
Total return		(20.78	)%		(19.43	)%		13.20	%		20.61	%		30.74	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	125,716		$	244,154		$	172,495		$	146,324		$	42,526
Ratio of expenses to average net assets		0.59	%		0.52	%		0.52	%		0.54	%		0.57	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.55	%		n/a			n/a			n/a			n/a
Ratio of net investment income to average net assets		2.85	%		5.06	%		4.02	%		3.87	%		3.18	%
Portfolio turnover ratec		18	%		29	%		16	%		15	%		18	%

^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.

See notes to financial statements.

80 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Netherlands Investable Market Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	24.38		$	29.75		$	24.17		$	19.10		$	15.70
Income from investment operations:
Net investment incomea		0.35			1.10			0.98			0.60			0.57
Net realized and unrealized gain (loss)b		(5.55	)		(4.68	)		5.05			4.95			3.09
Total from investment operations		(5.20	)		(3.58	)		6.03			5.55			3.66
Less distributions from:
Net investment income		(0.66	)		(1.79	)		(0.45	)		(0.48	)		(0.26	)
Total distributions		(0.66	)		(1.79	)		(0.45	)		(0.48	)		(0.26	)
Net asset value, end of year	$	18.52		$	24.38		$	29.75		$	24.17		$	19.10
Total return		(20.59	)%		(12.67	)%		25.22	%		29.53	%		23.40	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	83,351		$	209,653		$	251,354		$	109,991		$	63,974
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		2.24	%		3.86	%		3.50	%		2.78	%		3.13	%
Portfolio turnover ratec		15	%		26	%		8	%		17	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 81

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Spain Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	50.41		$	58.06		$	44.81		$	35.70		$	27.55
Income from investment operations:
Net investment incomea		1.75			1.98			1.30			1.07			0.79
Net realized and unrealized gain (loss)b		(2.14	)		(7.33	)		12.33			8.78			7.97
Total from investment operations		(0.39	)		(5.35	)		13.63			9.85			8.76
Less distributions from:
Net investment income		(2.37	)		(2.30	)		(0.38	)		(0.74	)		(0.61	)
Total distributions		(2.37	)		(2.30	)		(0.38	)		(0.74	)		(0.61	)
Net asset value, end of year	$	47.65		$	50.41		$	58.06		$	44.81		$	35.70
Total return		0.64	%		(9.76	)%		30.47	%		28.09	%		31.85	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	278,734		$	321,349		$	522,556		$	178,130		$	66,945
Ratio of expenses to average net assets		0.56	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		4.70	%		3.28	%		2.36	%		2.67	%		2.33	%
Portfolio turnover ratec		19	%		22	%		12	%		6	%		8	%

^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.

See notes to financial statements.

82 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Sweden Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	24.48		$	34.57		$	25.88		$	21.58		$	16.82
Income from investment operations:
Net investment incomea		0.40			0.91			1.15			0.76			0.46
Net realized and unrealized gain (loss)b		(1.56	)		(8.63	)		7.88			3.96			4.45
Total from investment operations		(1.16	)		(7.72	)		9.03			4.72			4.91
Less distributions from:
Net investment income		(0.46	)		(2.37	)		(0.34	)		(0.42	)		(0.15	)
Total distributions		(0.46	)		(2.37	)		(0.34	)		(0.42	)		(0.15	)
Net asset value, end of year	$	22.86		$	24.48		$	34.57		$	25.88		$	21.58
Total return		(4.04	)%		(23.16	)%		35.01	%		22.16	%		29.21	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	190,333		$	227,654		$	573,026		$	151,427		$	61,513
Ratio of expenses to average net assets		0.55	%		0.51	%		0.51	%		0.54	%		0.58	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			n/a			n/a			n/a			0.57	%
Ratio of net investment income to average net assets		2.34	%		2.91	%		3.42	%		3.13	%		2.28	%
Portfolio turnover ratec		9	%		17	%		7	%		14	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 83

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Switzerland Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	23.09		$	25.78		$	22.49		$	17.63		$	14.58
Income from investment operations:
Net investment incomea		0.25			0.49			0.36			0.27			0.22
Net realized and unrealized gain (loss)b		(2.30	)		(2.51	)		3.12			4.71			2.92
Total from investment operations		(2.05	)		(2.02	)		3.48			4.98			3.14
Less distributions from:
Net investment income		(0.33	)		(0.67	)		(0.19	)		(0.12	)		(0.09	)
Total distributions		(0.33	)		(0.67	)		(0.19	)		(0.12	)		(0.09	)
Net asset value, end of year	$	20.71		$	23.09		$	25.78		$	22.49		$	17.63
Total return		(8.63	)%		(7.97	)%		15.53	%		28.36	%		21.54	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	271,855		$	366,525		$	318,998		$	188,319		$	79,324
Ratio of expenses to average net assets		0.56	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		1.42	%		1.93	%		1.42	%		1.34	%		1.34	%
Portfolio turnover ratec		16	%		11	%		5	%		11	%		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.

See notes to financial statements.

84 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI United Kingdom Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	19.35		$	24.73		$	21.92		$	18.74		$	15.72
Income from investment operations:
Net investment incomea		0.50			0.83			0.84			0.97			0.60
Net realized and unrealized gain (loss)b		(4.26	)		(4.89	)		2.78			2.79			2.76
Total from investment operations		(3.76	)		(4.06	)		3.62			3.76			3.36
Less distributions from:
Net investment income		(0.57	)		(1.32	)		(0.81	)		(0.58	)		(0.34	)
Total distributions		(0.57	)		(1.32	)		(0.81	)		(0.58	)		(0.34	)
Net asset value, end of year	$	15.02		$	19.35		$	24.73		$	21.92		$	18.74
Total return		(18.68	)%		(17.16	)%		16.77	%		20.61	%		21.53	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	739,124		$	882,502		$	1,127,738		$	872,409		$	464,850
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.90	%		3.64	%		3.51	%		4.81	%		3.39	%
Portfolio turnover ratec		11	%		14	%		8	%		10	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 85

Notes to Financial Statements

iSHARES^®, INC.

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

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

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

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”). Effective September 1, 2008, the Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to

86 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”);

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”);

• Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”).

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.

The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

NOTES TO FINANCIAL STATEMENTS 87

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar investments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

As of August 31, 2009, the values of each Fund’s investments were classified as Level 1 Prices. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a rate different from the rates used by MSCI may adversely affect a Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

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

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2009, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

88 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

DISTRIBUTIONS TO SHAREHOLDERS

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

As of August 31, 2009, the tax year-end of the Funds, the components of net accumulated losses on a basis were as follows:

iShares MSCI Index Fund	Undistributed Ordinary Income		Unrealized Depreciation			Capital and Other Losses			Net Accumulated Losses
Austria Investable Market	$	2,819,697	$	(84,588,643	)	$	(38,661,861	)	$	(120,430,807	)
Belgium Investable Market		144,377		(45,290,656	)		(20,480,296	)		(65,626,575	)
EMU		3,297,297		(336,777,480	)		(97,141,670	)		(430,621,853	)
France		556,005		(91,629,315	)		(15,981,404	)		(107,054,714	)
Germany		580,444		(214,926,251	)		(89,004,766	)		(303,350,573	)
Italy		498,041		(51,134,581	)		(25,981,576	)		(76,618,116	)
Netherlands Investable Market		421,610		(42,734,471	)		(37,265,793	)		(79,578,654	)
Spain		3,630,824		(86,978,812	)		(22,397,357	)		(105,745,345	)
Sweden		458,198		(63,261,471	)		(25,849,295	)		(88,652,568	)
Switzerland		533,632		(45,058,390	)		(30,902,487	)		(75,427,245	)
United Kingdom		4,783,959		(245,605,264	)		(60,961,053	)		(301,782,358	)

For the years ended August 31, 2009 and August 31, 2008, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carry forwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2009.

NOTES TO FINANCIAL STATEMENTS 89

Notes to Financial Statements (Continued)

iSHARES^®, INC.

From November 1, 2008 to August 31, 2009 the Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2010, as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Austria Investable Market	$	16,658,026
Belgium Investable Market		10,823,537
EMU		67,963,859
France		7,004,521
Germany		28,526,910
Italy		18,199,168

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Netherlands Investable Market	$	22,256,324
Spain		15,454,759
Sweden		8,514,384
Switzerland		22,571,994
United Kingdom		24,400,730

The Funds had tax basis net capital loss carryforwards as of August 31, 2009, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund	Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Expiring 2017		Total
Austria Investable Market	$	1,291,324	$	370,948	$	855,364	$	–	$	–	$	9,795,917	$	2,587,916	$	7,102,366	$	22,003,835
Belgium Investable Market		1,677,678		117,767		175,781		33,969		–		–		1,698,444		5,953,120		9,656,759
EMU		–		–		659,648		1,873,963		–		–		–		26,644,200		29,177,811
France		2,436,748		236,944		2,400,550		–		–		158,472		335,795		3,408,374		8,976,883
Germany		8,697,227		5,469,732		8,656,712		2,241,687		–		4,227,713		3,394,735		27,790,050		60,477,856
Italy		2,648,775		848,408		541,980		527,327		–		–		472,268		2,743,650		7,782,408
Netherlands Investable Market		3,222,792		1,497,810		2,481,175		129,137		403,525		260,715		1,195,162		5,819,153		15,009,469
Spain		–		–		995,671		–		–		–		–		5,946,927		6,942,598
Sweden		713,472		1,577,551		1,149,514		–		107,613		–		100,015		13,686,746		17,334,911
Switzerland		1,970,979		1,018,305		2,149,171		354,252		–		–		–		2,837,786		8,330,493
United Kingdom		856,798		6,448,554		4,272,059		1,517,783		7,063,063		–		261,754		16,140,312		36,560,323

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

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

Each Fund reclassifies at the end of its tax year certain amounts to paid-in-capital from accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss), respectively, as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, realized foreign currency

90 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

gains and losses and gains and losses on in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.

As of August 31, 2009, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

iShares MSCI Index Fund	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Depreciation
Austria Investable Market	$	275,565,704	$	–	$	(84,541,907	)	$	(84,541,907	)
Belgium Investable Market		97,714,849		686,400		(45,926,568	)		(45,240,168	)
EMU		1,083,149,350		–		(336,800,177	)		(336,800,177	)
France		278,473,239		–		(91,630,283	)		(91,630,283	)
Germany		840,012,571		–		(215,045,607	)		(215,045,607	)
Italy		176,731,942		–		(51,134,776	)		(51,134,776	)
Netherlands Investable Market		126,412,294		–		(42,735,312	)		(42,735,312	)
Spain		382,208,219		–		(86,977,997	)		(86,977,997	)
Sweden		258,285,584		–		(63,263,862	)		(63,263,862	)
Switzerland		314,654,342		–		(45,091,672	)		(45,091,672	)
United Kingdom		981,142,222		–		(245,527,407	)		(245,527,407	)

Management has reviewed the tax positions as of August 31, 2009, inclusive of the prior three open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

For its investment advisory services to the Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Funds and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.59%	First $7 billion
0.54	Over $7 billion, up to and including $11 billion
0.49	Over $11 billion, up to and including $24 billion
0.44	Over $24 billion, up to and including $48 billion
0.40	Over $48 billion

NOTES TO FINANCIAL STATEMENTS 91

Notes to Financial Statements (Continued)

iSHARES^®, INC.

Under the terms of the Investment Advisory Agreement, the Funds are required to remit payment of accrued fees to BGFA on a quarterly basis. BGFA has determined that in certain cases such payments to BGFA by the Funds were made earlier than provided for under the Investment Advisory Agreement. BGFA will reimburse the Funds for interest that would have been earned had such payments been made on a quarterly basis. The amounts to be reimbursed are included under receivables and investment income as “Interest from affiliate” in the Statements of Assets and Liabilities and Statements of Operations, respectively. The reimbursements do not have a material effect on net asset value per share or the total return shown in the Financial Highlights.

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Funds. BarCap and BGI are affiliates of BGFA, the Funds’ investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended August 31, 2009, BGI earned securities lending agent fees as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Austria Investable Market	$345,958
Belgium Investable Market	37,058
EMU	456,059
France	93,885
Germany	199,365
Italy	17,461

iShares MSCI Index Fund	Securities Lending Agent Fees
Netherlands Investable Market	$    5,969
Spain	849,849
Sweden	90,142
Switzerland	18,262
United Kingdom	31,262

Cross trades for the year ended August 31, 2009, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

Each Fund may invest in certain money market funds managed by BGFA, the Funds’ investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. These money market funds seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are

92 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

For the year ended August 31, 2009, the iShares MSCI United Kingdom Index Fund had direct investments (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:

Name of Affiliated Issuer	Number of Shares Held Beginning of Year (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Year (in 000s)	Value at End of Year		Net Realized Loss
Barclays PLC	2,878	1,940	793	4,025	$	24,946,038	$	(3,751,912	)

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2009 were as follows:

iShares MSCI Index Fund	Purchases		Sales
Austria Investable Market	$	26,496,480	$	27,171,954
Belgium Investable Market		20,626,231		23,547,368
EMU		55,349,306		64,342,037
France		9,816,843		11,534,352
Germany		69,637,930		69,020,178
Italy		20,321,698		21,626,679
Netherlands Investable Market		17,101,489		18,624,236
Spain		43,100,417		46,598,085
Sweden		13,580,550		12,442,629
Switzerland		43,019,188		43,806,134
United Kingdom		64,425,392		64,315,873

NOTES TO FINANCIAL STATEMENTS 93

Notes to Financial Statements (Continued)

iSHARES^®, INC.

In-kind transactions (see Note 4) for the year ended August 31, 2009 were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
Austria Investable Market	$	145,860,870	$	95,893,123
Belgium Investable Market		64,620,039		89,203,400
EMU		244,047,014		468,204,067
France		138,713,195		98,885,798
Germany		440,931,250		332,259,105
Italy		97,310,138		160,329,289
Netherlands Investable Market		43,008,815		99,731,764
Spain		167,362,736		153,125,062
Sweden		117,804,255		122,330,891
Switzerland		101,378,557		127,389,825
United Kingdom		145,671,167		113,087,643

4. CAPITAL SHARE TRANSACTIONS

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

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

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

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BGFA; such reinvestments are subject to investment risk.

94 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2009, the Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BGFA. The market value of the securities on loan as of August 31, 2009 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

6. BLACKROCK TRANSACTION

On June 16, 2009, Barclays PLC, the ultimate parent company of BGI and BGFA, accepted a binding offer and entered into an agreement to sell its interests in BGFA, BGI and certain affiliated companies, to BlackRock, Inc., (the “BlackRock Transaction”). The BlackRock Transaction is subject to certain regulatory approvals, as well as other conditions to closing.

Under the 1940 Act, completion of the BlackRock Transaction will cause the automatic termination of each Fund’s current investment advisory agreement with BGFA. In order for the management of each Fund to continue uninterrupted, the Board approved a new investment advisory agreement for each Fund subject to shareholder approval. A special meeting of shareholders of the Funds is scheduled to be held on November 4, 2009. Each shareholder of record as of the close of business on August 25, 2009 will receive notice of and be entitled to vote at the meeting.

7. REVIEW OF SUBSEQUENT EVENTS

In connection with the preparation of the financial statements of the Funds as of and for the year ended August 31, 2009, events and transactions through October 23, 2009, the date the financial statements are available to be issued, have been evaluated by the Funds’ management for possible adjustment and/or disclosure. No subsequent events requiring financial statement disclosure have been identified.

NOTES TO FINANCIAL STATEMENTS 95

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI EMU Index Fund, iShares MSCI France Index Fund, iShares MSCI Germany Index Fund, iShares MSCI Italy Index Fund, iShares MSCI 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, each a portfolio of the iShares MSCI Fund Series (the “Funds”) at August 31, 2009, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 23, 2009

96 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^®, INC.

For corporate shareholders, 1.33% of the income dividends paid by the iShares MSCI Switzerland Index Fund during the fiscal year ended August 31, 2009 qualified for the dividends-received deduction.

For the fiscal year ended August 31, 2009, certain Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:

iShares MSCI Index Fund	Foreign Source Income Earned		Foreign Taxes Paid
Austria Investable Market	$	3,698,273	$	438,279
Belgium Investable Market		1,945,468		284,856
EMU		29,026,610		4,022,237
France		6,775,998		814,028
Germany		17,933,178		2,242,079

iShares MSCI Index Fund	Foreign Source Income Earned		Foreign Taxes Paid
Italy	$	4,157,986	$	669,158
Netherlands Investable Market		3,492,500		515,300
Spain		12,567,456		1,741,130
Sweden		4,507,050		669,887
Switzerland		6,037,409		991,789

Under Section 854(b)(2) of the Code, the Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2009:

iShares MSCI Index Fund	Qualified Dividend Income
Austria Investable Market	$	3,071,015
Belgium Investable Market		1,478,513
EMU		26,928,554
France		5,674,647
Germany		14,693,409
Italy		3,732,985

iShares MSCI Index Fund	Qualified Dividend Income
Netherlands Investable Market	$	3,445,180
Spain		10,820,622
Sweden		3,282,327
Switzerland		4,322,291
United Kingdom		25,389,028

In January 2010, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2009. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

TAX INFORMATION 97

Board Review and Approval of Current Investment Advisory Contract (Unaudited)

iSHARES^®, INC.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Funds. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 16-17, 2009, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such Fund’s applicable peer group (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Funds, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five- and ten-year periods, as applicable, and the “last quarter” period ended March 31, 2009, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that

98 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory Contract (Unaudited) (Continued)

iSHARES^®, INC.

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

The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in their respective Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

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

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

ECONOMIES OF SCALE

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board noted that the Advisory Contract already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase, and that extended breakpoints were implemented the previous year. The Board noted that the Funds’ asset size decreased over the past twelve months. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, reflects appropriate sharing of economies of scale with the Funds’ shareholders.

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

The Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for the Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as any of the Funds. However, the Board noted that BGFA provided the Board with general information

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 99

Board Review and Approval of Current Investment Advisory Contract (Unaudited) (Continued)

iSHARES^®, INC.

regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder, is fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract for the coming year.

100 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited)

iSHARES^®, INC.

On June 16, 2009, Barclays Bank PLC (“Barclays”) entered into an agreement to sell its interest in the Barclays Global Investors asset management business, which includes BGI and BGI’s business of advising, sponsoring and distributing exchange-traded funds, to BlackRock, Inc. (“BlackRock”). Assuming receipt of the requisite regulatory approvals and the satisfaction of other conditions to the closing, the subsidiaries of Barclays operating the BGI business, including BGFA (the “Adviser”), will be sold to BlackRock (the “Transaction”) for cash and BlackRock stock.

The Adviser currently serves as the investment adviser to each Fund pursuant to an investment advisory agreement with the Company (the “Current Advisory Agreement”). Under the 1940 Act, the Transaction, if consummated, will result in the automatic termination of the Current Advisory Agreement. In order for the management of each Fund to continue uninterrupted, the Board approved interim and new investment advisory agreements (the “New Advisory Agreements”) with the Company, subject to shareholder approval.

BOARD CONSIDERATIONS IN APPROVING THE NEW ADVISORY AGREEMENTS

At an in-person Board meeting held on August 13, 2009, the Board, including the Independent Directors, unanimously approved the New Advisory Agreements between the Adviser and the Company, on behalf of its Funds after consideration of all factors determined to be relevant to the Board’s deliberations, including those discussed below.

The Approval Process – At telephonic and in-person meetings held in June, July and August of this year, the Board, including the Independent Directors, discussed the Transaction and the New Advisory Agreements for the Funds.

In preparation for their consideration of the New Advisory Agreements, the Directors received, in response to a written due diligence request prepared by the Board and its independent counsel and provided to BlackRock, BGI and the Adviser, comprehensive written information covering a range of issues and received, in response to their additional requests, further information in advance of and at the August 13, 2009 in-person Board meeting. To assist the Board in its consideration of the New Advisory Agreements, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and the Adviser provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.

In June 2009, the Board had performed a full annual review of, or initially approved, as applicable, the current Investment Advisory Agreement between the Adviser and the Company, on behalf of its Funds for each Fund as required by the 1940 Act and, after reviewing, among other things, the investment capabilities, resources and personnel of the Adviser, determined that the nature, extent and quality of the services provided by the Adviser under the Current Advisory Agreements were appropriate. The Board also determined that the advisory fees paid by each Fund, taking into account any applicable agreed-upon fee waivers and breakpoints, were fair and reasonable in light of the services provided, the costs to the Adviser of providing those services, economies of scale, the fees and other expenses paid by similar funds (including information provided by Lipper, Inc. (“Lipper”)), and such other circumstances as the Directors considered relevant in the exercise of their reasonable judgment. The Board approved the Current Advisory Agreements on June 17, 2009.

In advance of the June 2009 Board meeting, the Board requested and received materials specifically relating to each Fund’s Current Advisory Agreement. These materials were prepared for each Fund, and included information (i) compiled by Lipper on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (ii) prepared by the Adviser discussing market conditions generally; (iii) on the profitability to the Adviser of the Current Advisory Agreements and other payments received by the Adviser and its affiliates from the Funds; and (iv) provided by the Adviser concerning services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to the Adviser and its affiliates from their relationship with the Fund.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 101

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

At the June 17, July 29 and August 13, 2009 Board meetings, the Directors discussed with representatives of BGI, the Adviser and BlackRock, the management, investment, risk management and compliance capabilities and processes, and financial condition of BlackRock, the Transaction and its rationale, and BlackRock’s general plans and intentions regarding the Adviser and the Funds. At these Board meetings, representatives of BGI, the Adviser and BlackRock made various presentations to, and responded to questions from, the Board. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of the Adviser in connection with the Transaction, including the anticipated senior management structure of the Adviser following the completion of the Transaction. The Independent Directors also conferred separately and with their independent legal counsel about the Transaction and other matters related to the Transaction on a number of occasions. After the presentations and after reviewing the written materials provided, the Independent Directors met in executive sessions with their independent legal counsel at the June, July and August 2009 Board meetings to consider the Transaction, its expected impact on the Adviser and the Funds, and the New Advisory Agreements.

In connection with the Board’s review of the New Advisory Agreements, BGI, the Adviser and/or BlackRock, as applicable, provided the Board with information about a variety of matters. The Board considered, among other things, the following information:

• the reputation, financial strength and resources of BlackRock and its investment advisory subsidiaries and the anticipated financial strength and resources of the combined company;

• that there is not expected to be any diminution in the nature, quality and extent of services provided to the Funds and their shareholders by the Adviser, including portfolio management and compliance services;

• that the Adviser and BlackRock have no present intention to alter the advisory fee rates and expense arrangements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction;

• that it is expected that substantially all of the current employees of the Adviser will remain employees of the Adviser and will continue to provide services to the Funds following the Transaction;

• that the Funds may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including investment tools, provided under the BlackRock Solutions^® brand name;

• that the Funds are expected to continue to be sold through existing distribution channels;

• that the Funds will have access to greater distribution resources through BlackRock’s relationships with third party brokers and retirement plan platforms;

• that the parties to the Transaction Agreement have agreed to conduct their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act in relation to the Funds;

• that Barclays or one of its affiliates has agreed to pay all expenses of the Funds in connection with the Board’s consideration of the New Advisory Agreements and all costs of seeking shareholder approval of the New Advisory Agreements; and

• that Barclays and BlackRock would derive benefits from the Transaction and that, as a result, they may have a different financial interest in the matters that were being considered than do Fund shareholders.

The Board did not identify any particular information that was all-important or controlling, and each Director may have attributed different weights to the various factors discussed below. The Directors evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. In their deliberations, the Directors considered information received

102 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

in connection with their most recent approval or continuation of each Current Advisory Agreement at the June 2009 Board meeting, in addition to information provided by BGI, the Adviser and BlackRock regarding BlackRock and the Transaction, in connection with their evaluation of the terms and conditions of the New Advisory Agreements. The Directors, including a majority of the Independent Directors, concluded that the terms of the New Advisory Agreements are appropriate, that the fees to be paid are reasonable in light of the services to be provided to each Fund, and that the New Advisory Agreements should be approved and recommended to Fund shareholders. In voting to approve the New Advisory Agreements in respect of each Fund, the Board considered in particular the following factors:

The nature, extent and quality of services to be provided by the Adviser and its affiliates – In connection with their consideration of the New Advisory Agreements, the Board considered representations by the Adviser, BGI and BlackRock that there would be no diminution in the scope of services required of or provided by the Adviser under the New Advisory Agreements for each Fund as compared to the scope of services provided by the Adviser under the Current Advisory Agreement. In reviewing the scope of these services at the June and August 2009 Board meetings, the Board considered the Adviser’s investment philosophy and experience, noting that the Adviser and its affiliates have committed significant resources over time, including over the past year, including investments in technology and increasing the number of their employees supporting the Funds. The Board also considered the Adviser’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that the Adviser reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board noted that it expects that these reports and discussions will continue following the consummation of the Transaction. In addition to the above considerations, the Board considered the Adviser’s investment processes and strategies, and matters related to the Adviser’s portfolio transaction policies and procedures. The Board further took into account that, with respect to most of the Funds, the Adviser does not serve as investment adviser for other series of registered investment companies with substantially similar investment objectives and strategies; therefore, directly comparable performance information was generally not available for most Funds. The Board also considered each Fund’s record of performing in accordance with its investment objective.

In connection with the investment advisory services to be provided under the New Advisory Agreements, the Board took into account detailed discussions with representatives of the Adviser at the June 2009 Board meeting and at prior Board meetings regarding the management of each Fund. In addition to the investment advisory services to be provided to the Funds, the Board, at the August 2009 Board meeting, considered that the Adviser also will continue to provide management and administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements and other services necessary for the operation of the Funds, and that these services were expected to be consistent with the services the Adviser currently performs under the Current Advisory Agreements.

The Board noted the representations of the Adviser, BGI and BlackRock that the Transaction was not expected to have any adverse effect on the resources and strengths of the Adviser in managing the Funds. The Board also considered that the Funds and their shareholders may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. The Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business. The Board also discussed the Adviser’s anticipated financial condition following the completion of the Transaction. The Board discussed BlackRock’s current ownership structure and expected ownership structure following the completion of the Transaction. The Board was advised that BlackRock operates as an independent firm, with its own Board of Directors and no majority shareholder. The Board was also advised that while BlackRock’s largest shareholders, Merrill Lynch, a wholly owned subsidiary of Bank of America, and PNC, are important clients and strategic partners of BlackRock, they are not involved in the firm’s day-to-day management or operations.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 103

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Based on the discussions held and the materials presented at the June, July and August 2009 Board meetings and prior Board meetings, the Board determined that the Transaction would not likely cause an adverse change in the nature, extent and quality of the services to be provided by the Adviser under the New Advisory Agreements compared with the services provided by the Adviser under the Current Advisory Agreements and that the Board expects that the quality of such services will continue to be appropriate.

Funds’ expenses and performance of the Funds – The Board received and reviewed statistical information prepared by Lipper at the June 2009 meeting and also received information at prior meetings regarding the expense ratio components of the Funds, including advisory fees, waivers and reimbursements, and gross and net total expenses, in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising a Fund’s peer group pursuant to Lipper’s proprietary methodology and, for certain Funds, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of the Adviser (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by most of the Funds, the Lipper Groups sometimes included mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to certain Funds.

The Board noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the Funds in their Lipper Groups with respect to the Current and New Advisory Agreements. The Board took into account that the fee rates for each Fund under the New Advisory Agreements are identical to the fee rates under the respective Current Advisory Agreements. Further, the Board noted that representatives of the Adviser and BlackRock had confirmed that there is no present intention to alter the advisory fee rates, expense waivers or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction.

In addition to reviewing the fees and expenses, the Board noted that it regularly reviews each Fund’s performance and at the June 2009 meeting reviewed statistical information prepared by Lipper regarding the performance of each Fund for the quarter-end, one-, three-, five- and ten-year periods, as applicable, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of the relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their performance benchmark indices over the relevant periods. In considering this information, the Board took into account that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indices. This comparative performance information was also considered by the Board. The Board considered the Adviser’s substantial investment advisory experience and capabilities, as well as the possibility of additional resources and support from BlackRock following the completion of the Transaction, but noted that the effect, if any, the consummation of the Transaction would have on the future performance of the Funds could not be predicted.

Based on this review, the Board had concluded that the investment advisory fee rates and expense levels and the historical performance of each Fund, as compared to the investment advisory fee rates and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Current Advisory Agreements and concluded that these comparisons continued to be satisfactory for the purpose of approving the New Advisory Agreements.

104 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Cost of services provided and profits realized by the Adviser from the relationship with each Fund – The Board considered that at the June 2009 Board meeting and at prior meetings, it had reviewed information about the profitability of the Adviser with respect to the Funds based on the fees payable to the Adviser and its affiliates (including fees under the Current Advisory Agreements), and all other sources of revenue and expense to the Adviser and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Companies (including any securities lending by the Funds). The Board also discussed the Adviser’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below).

In evaluating the costs of the services to be provided by the Adviser under the New Advisory Agreements, the Board considered, among other things, whether advisory fee rates or other expenses would change as a result of the Transaction. The Board noted that the New Advisory Agreements are similar to the Current Advisory Agreements, including the fact that the fee rates under the Agreements are identical and that representatives of the Adviser and BlackRock represented that there is no present intention due to the Transaction to alter the advisory fee rates, expense waiver or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction. It was noted that it was not possible to predict how the Transaction would affect the Adviser’s profitability from its relationship with the Funds. Potential cost savings had been described by BlackRock representatives that may be achieved by BlackRock immediately following the Transaction, but even if all of such savings were realized by the Adviser in connection with the management of the Funds, the Adviser’s profitability in respect of the Funds was not expected to increase in a significant respect. The Adviser, BlackRock and the Board discussed how profitability will be calculated and presented to the Board following the Transaction, and the Board reviewed BlackRock’s 2008 profitability methodology with respect to its registered funds. The Board expects to receive profitability information from the Adviser on at least an annual basis following the completion of the Transaction and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.

The extent to which economies of scale would be realized as a Fund grows and whether fee levels would reflect such economies of scale – In connection with its review of the Funds’ profitability analysis at the June 2009 meeting, the Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets. At the June 2009 Board meeting, the Board also reviewed the Adviser’s historic profitability as investment adviser to the iShares fund complex and noted that the Adviser had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that the Adviser had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. The Board further noted that the Current and New Advisory Agreements provide for breakpoints in certain Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other Funds, increase and that breakpoints were implemented the previous year for certain Funds. The Board noted that for certain other Funds, the Current and New Advisory Agreements do not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase; however, the Board further noted that possible future economies of scale for those Funds had, in many cases, been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders may have received from a fee structure with declining breakpoints where the initial fee was higher. At the June 2009 Board meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fee rates, with the breakpoints for certain Funds, reflected appropriate sharing of economies of scale with the Funds’ shareholders.

The Board noted representations from the Adviser and BlackRock that the Adviser will continue to make significant investments in the iShares fund complex and the infrastructure supporting the Funds. The Board determined that changes to the fee structure were not currently necessary and that the Funds appropriately participate in economies of scale. It was noted that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale. The Board expects to consider economies of scale on at least an annual basis following completion of the Transaction and thus be in a position to evaluate additional economies of scale, if any.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 105

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Fees and services provided for other comparable funds/accounts managed by the Adviser and its Affiliates – At the June 2009 Board meeting, the Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Current Advisory Agreements in comparison to the investment advisory/management fee rates for other funds/accounts for which the Adviser or BGI provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for many of the Funds, as the Adviser and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as many of the Funds. The Board noted, however, that the Adviser provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Furthermore, in reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Current Advisory Agreements for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which the Adviser or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Current and New Advisory Agreements do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Current and New Advisory Agreements are fair and reasonable.

Other benefits to the Adviser and its affiliates, including fall-out benefits – In evaluating the fall-out and any other ancillary benefits received by the Adviser under the Current Advisory Agreements, the Board reviewed any ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser or its affiliates, such as any payment of revenue to BGI, the Company’s current securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to the Adviser and BGI in connection with any investments by the Funds in other funds for which the Adviser provides investment advisory services and/or BGI provides administration services. The Board noted that while revenue to BGI in connection with securities lending agency services to the Funds increased overall as against the previous year, overall revenue increased by approximately the same percentage as overall expenses. The Board noted that the Adviser does not use soft dollars or consider the value of research or other services that may be provided to the Adviser (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Adviser or purchased from an underwriting syndicate in which an Adviser affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. Any fall-out or ancillary benefits as a result of the Transaction were difficult to quantify with certainty at this time, and the Board indicated that it would continue to evaluate them going forward.

Conclusion – The Board examined the totality of the information they were provided at the June, July and August 2009 Board meetings, and information they received at other meetings held during the past year, and did not identify any single factor discussed previously as controlling. Based on this analysis, the Board determined that the New Advisory Agreements, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to unanimously approve the New Advisory Agreements.

106 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^®, INC.

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

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

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

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

iShares MSCI Austria Investable Market Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.5%	4	0.29	%
Greater than 5.0% and Less than 5.5%	1	0.07
Greater than 4.5% and Less than 5.0%	2	0.14
Greater than 4.0% and Less than 4.5%	1	0.07
Greater than 3.5% and Less than 4.0%	4	0.29
Greater than 3.0% and Less than 3.5%	3	0.22
Greater than 2.5% and Less than 3.0%	3	0.22
Greater than 2.0% and Less than 2.5%	11	0.80
Greater than 1.5% and Less than 2.0%	32	2.32
Greater than 1.0% and Less than 1.5%	86	6.22
Greater than 0.5% and Less than 1.0%	224	16.21
Between 0.5% and –0.5%	737	53.32
Less than –0.5% and Greater than –1.0%	144	10.42
Less than –1.0% and Greater than –1.5%	71	5.14
Less than –1.5% and Greater than –2.0%	23	1.66
Less than –2.0% and Greater than –2.5%	15	1.09
Less than –2.5% and Greater than –3.0%	4	0.29
Less than –3.0% and Greater than –3.5%	7	0.51
Less than –3.5% and Greater than –4.0%	4	0.29
Less than –4.0% and Greater than –4.5%	1	0.07
Less than –4.5%	5	0.36
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 107

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Belgium Investable Market Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.5%	3	0.22	%
Greater than 4.0% and Less than 4.5%	3	0.22
Greater than 3.5% and Less than 4.0%	1	0.07
Greater than 3.0% and Less than 3.5%	4	0.29
Greater than 2.5% and Less than 3.0%	8	0.58
Greater than 2.0% and Less than 2.5%	16	1.16
Greater than 1.5% and Less than 2.0%	24	1.74
Greater than 1.0% and Less than 1.5%	76	5.50
Greater than 0.5% and Less than 1.0%	211	15.27
Between 0.5% and –0.5%	812	58.74
Less than –0.5% and Greater than –1.0%	134	9.70
Less than –1.0% and Greater than –1.5%	47	3.40
Less than –1.5% and Greater than –2.0%	22	1.59
Less than –2.0% and Greater than –2.5%	4	0.29
Less than –2.5% and Greater than –3.0%	6	0.43
Less than –3.0% and Greater than –3.5%	3	0.22
Less than –3.5% and Greater than –4.0%	3	0.22
Less than –4.0%	5	0.36
	1,382	100.00	%

iShares MSCI EMU Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 3.5%	12	0.87	%
Greater than 3.0% and Less than 3.5%	5	0.36
Greater than 2.5% and Less than 3.0%	3	0.22
Greater than 2.0% and Less than 2.5%	9	0.65
Greater than 1.5% and Less than 2.0%	24	1.74
Greater than 1.0% and Less than 1.5%	54	3.91
Greater than 0.5% and Less than 1.0%	203	14.69
Between 0.5% and –0.5%	849	61.42
Less than –0.5% and Greater than –1.0%	135	9.77
Less than –1.0% and Greater than –1.5%	49	3.55
Less than –1.5% and Greater than –2.0%	21	1.52
Less than –2.0% and Greater than –2.5%	3	0.22
Less than –2.5% and Greater than –3.0%	5	0.36
Less than –3.0% and Greater than –3.5%	4	0.29
Less than –3.5%	6	0.43
	1,382	100.00	%

108 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI France Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	3	0.22	%
Greater than 4.5% and Less than 5.0%	1	0.07
Greater than 4.0% and Less than 4.5%	4	0.29
Greater than 3.5% and Less than 4.0%	1	0.07
Greater than 3.0% and Less than 3.5%	2	0.14
Greater than 2.5% and Less than 3.0%	5	0.36
Greater than 2.0% and Less than 2.5%	8	0.58
Greater than 1.5% and Less than 2.0%	20	1.45
Greater than 1.0% and Less than 1.5%	47	3.40
Greater than 0.5% and Less than 1.0%	151	10.93
Between 0.5% and –0.5%	929	67.24
Less than –0.5% and Greater than –1.0%	122	8.83
Less than –1.0% and Greater than –1.5%	51	3.69
Less than –1.5% and Greater than –2.0%	18	1.30
Less than –2.0% and Greater than –2.5%	5	0.36
Less than –2.5% and Greater than –3.0%	7	0.51
Less than –3.0% and Greater than –3.5%	1	0.07
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	2	0.14
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0% and Greater than –5.5%	1	0.07
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 109

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Germany Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	5	0.36	%
Greater than 4.5% and Less than 5.0%	2	0.14
Greater than 4.0% and Less than 4.5%	1	0.07
Greater than 3.5% and Less than 4.0%	2	0.14
Greater than 3.0% and Less than 3.5%	3	0.22
Greater than 2.5% and Less than 3.0%	4	0.29
Greater than 2.0% and Less than 2.5%	10	0.72
Greater than 1.5% and Less than 2.0%	14	1.01
Greater than 1.0% and Less than 1.5%	55	3.98
Greater than 0.5% and Less than 1.0%	167	12.08
Between 0.5% and –0.5%	907	65.67
Less than –0.5% and Greater than –1.0%	126	9.12
Less than –1.0% and Greater than –1.5%	55	3.98
Less than –1.5% and Greater than –2.0%	10	0.72
Less than –2.0% and Greater than –2.5%	9	0.65
Less than –2.5% and Greater than –3.0%	4	0.29
Less than –3.0% and Greater than –3.5%	2	0.14
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	2	0.14
Less than –4.5% and Greater than –5.0%	2	0.14
	1,382	100.00	%

110 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Italy Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.5%	2	0.14	%
Greater than 5.0% and Less than 5.5%	1	0.07
Greater than 4.5% and Less than 5.0%	3	0.22
Greater than 4.0% and Less than 4.5%	2	0.14
Greater than 3.5% and Less than 4.0%	2	0.14
Greater than 3.0% and Less than 3.5%	4	0.29
Greater than 2.5% and Less than 3.0%	2	0.14
Greater than 2.0% and Less than 2.5%	10	0.72
Greater than 1.5% and Less than 2.0%	19	1.37
Greater than 1.0% and Less than 1.5%	52	3.76
Greater than 0.5% and Less than 1.0%	137	9.91
Between 0.5% and –0.5%	934	67.62
Less than –0.5% and Greater than –1.0%	123	8.90
Less than –1.0% and Greater than –1.5%	49	3.55
Less than –1.5% and Greater than –2.0%	17	1.23
Less than –2.0% and Greater than –2.5%	7	0.51
Less than –2.5% and Greater than –3.0%	5	0.36
Less than –3.0% and Greater than –3.5%	7	0.51
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	2	0.14
Less than –4.5%	2	0.14
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 111

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Netherlands Investable Market Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	3	0.22	%
Greater than 4.5% and Less than 5.0%	2	0.14
Greater than 4.0% and Less than 4.5%	1	0.07
Greater than 3.5% and Less than 4.0%	2	0.14
Greater than 3.0% and Less than 3.5%	2	0.14
Greater than 2.5% and Less than 3.0%	4	0.29
Greater than 2.0% and Less than 2.5%	12	0.87
Greater than 1.5% and Less than 2.0%	14	1.01
Greater than 1.0% and Less than 1.5%	60	4.34
Greater than 0.5% and Less than 1.0%	200	14.47
Between 0.5% and –0.5%	851	61.60
Less than –0.5% and Greater than –1.0%	136	9.84
Less than –1.0% and Greater than –1.5%	54	3.91
Less than –1.5% and Greater than –2.0%	18	1.30
Less than –2.0% and Greater than –2.5%	5	0.36
Less than –2.5% and Greater than –3.0%	7	0.51
Less than –3.0% and Greater than –3.5%	4	0.29
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	2	0.14
Less than –4.5%	3	0.22
	1,382	100.00	%

112 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Spain Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 3.5%	10	0.72	%
Greater than 3.0% and Less than 3.5%	2	0.14
Greater than 2.5% and Less than 3.0%	4	0.29
Greater than 2.0% and Less than 2.5%	13	0.94
Greater than 1.5% and Less than 2.0%	14	1.01
Greater than 1.0% and Less than 1.5%	55	3.98
Greater than 0.5% and Less than 1.0%	174	12.59
Between 0.5% and –0.5%	877	63.49
Less than –0.5% and Greater than –1.0%	144	10.42
Less than –1.0% and Greater than –1.5%	53	3.84
Less than –1.5% and Greater than –2.0%	16	1.16
Less than –2.0% and Greater than –2.5%	6	0.43
Less than –2.5% and Greater than –3.0%	5	0.36
Less than –3.0% and Greater than –3.5%	2	0.14
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	1	0.07
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0%	2	0.14
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 113

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Sweden Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 6.0%	3	0.22	%
Greater than 5.5% and Less than 6.0%	2	0.14
Greater than 5.0% and Less than 5.5%	3	0.22
Greater than 4.5% and Less than 5.0%	2	0.14
Greater than 4.0% and Less than 4.5%	2	0.14
Greater than 3.5% and Less than 4.0%	3	0.22
Greater than 3.0% and Less than 3.5%	6	0.43
Greater than 2.5% and Less than 3.0%	9	0.65
Greater than 2.0% and Less than 2.5%	16	1.16
Greater than 1.5% and Less than 2.0%	32	2.32
Greater than 1.0% and Less than 1.5%	70	5.07
Greater than 0.5% and Less than 1.0%	226	16.35
Between 0.5% and –0.5%	741	53.62
Less than –0.5% and Greater than –1.0%	139	10.06
Less than –1.0% and Greater than –1.5%	67	4.85
Less than –1.5% and Greater than –2.0%	26	1.88
Less than –2.0% and Greater than –2.5%	11	0.80
Less than –2.5% and Greater than –3.0%	6	0.43
Less than –3.0% and Greater than –3.5%	5	0.36
Less than –3.5% and Greater than –4.0%	3	0.22
Less than –4.0% and Greater than –4.5%	3	0.22
Less than –4.5% and Greater than –5.0%	3	0.22
Less than –5.0% and Greater than –5.5%	2	0.14
Less than –5.5% and Greater than –6.0%	1	0.07
Less than –6.0%	1	0.07
	1,382	100.00	%

114 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Switzerland Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.0%	5	0.36	%
Greater than 3.5% and Less than 4.0%	3	0.22
Greater than 3.0% and Less than 3.5%	5	0.36
Greater than 2.5% and Less than 3.0%	2	0.14
Greater than 2.0% and Less than 2.5%	8	0.58
Greater than 1.5% and Less than 2.0%	30	2.17
Greater than 1.0% and Less than 1.5%	69	4.99
Greater than 0.5% and Less than 1.0%	239	17.29
Between 0.5% and –0.5%	838	60.66
Less than –0.5% and Greater than –1.0%	111	8.03
Less than –1.0% and Greater than –1.5%	41	2.97
Less than –1.5% and Greater than –2.0%	10	0.72
Less than –2.0% and Greater than –2.5%	13	0.94
Less than –2.5% and Greater than –3.0%	2	0.14
Less than –3.0%	6	0.43
	1,382	100.00	%

iShares MSCI United Kingdom Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 3.0%	13	0.94	%
Greater than 2.5% and Less than 3.0%	3	0.22
Greater than 2.0% and Less than 2.5%	12	0.87
Greater than 1.5% and Less than 2.0%	41	2.97
Greater than 1.0% and Less than 1.5%	152	11.00
Greater than 0.5% and Less than 1.0%	348	25.18
Between 0.5% and –0.5%	643	46.52
Less than –0.5% and Greater than –1.0%	100	7.24
Less than –1.0% and Greater than –1.5%	34	2.46
Less than –1.5% and Greater than –2.0%	16	1.16
Less than –2.0% and Greater than –2.5%	4	0.29
Less than –2.5% and Greater than –3.0%	7	0.51
Less than –3.0% and Greater than –3.5%	3	0.22
Less than –3.5% and Greater than –4.0%	2	0.14
Less than –4.0% and Greater than –4.5%	1	0.07
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0%	1	0.07
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 115

Director and Officer Information (Unaudited)

iSHARES^®, INC.

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

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 183 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

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

Interested Directors and Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss, 48	Director and Chairman (since 2003).	Non-Executive Chairman (since 2009), iShares; Global Chief Executive Officer (2008-2009) of iShares/Intermediary Groups of BGI; Chief Executive Officer (2005-2008) of iShares Intermediary Index and Market Group of BGI; Chief Executive Officer (2003-2005) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director (since 2005) of BGFA; Director, President and Chief Executive Officer (since 2005) of Barclays Global Investors International, Inc.; Director and Chairman (since 2005) of Barclays Global Investors Services.	Trustee (since 2003) of iShares Trust; Trustee (since 2001) of BGlF and MIP.

* Lee T. Kranefuss is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI.

116 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
George G.C. Parker, 70	Director (since 2002); Lead Independent Director (since 2006).	Dean Witter Distinguished Professor of Finance (since 1994), Emeritus, Stanford University: Graduate School of Business.	Trustee (since 2000) of iShares Trust; Lead Independent Trustee (since 2006) of iShares Trust; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2004) of Threshold Pharmaceuticals; Director (since 2007) of NETGEAR, Inc.
J. Darrell Duffie, 55	Director (since 2008).	Professor (since 1984) of Stanford University: Graduate School of Business.	Trustee (since 2008) of iShares Trust; Director (since 2008) of Moody’s Corp.
Cecilia H. Herbert, 60	Director (since 2005).	Chair (1994-2005) of Investment Committee, Archdiocese of San Francisco; Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee (2004-2005) of Pacific Select Funds; Trustee (since 2002) and Chair (2006-2007) of the Finance and Investment Committees (since 2006) of the Thacher School.	Trustee (since 2005) of iShares Trust; Advisory Board Member (since 2009) of Forward Funds.
Charles A. Hurty, 66	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of ProMark Absolute Return Strategies Fund LLC (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio); Director (since 2005) of CSFB Alternative Investments Fund (6 portfolios).
John E. Kerrigan, 54	Director (since 2005).	Chief Investment Officer (since 2002) of Santa Clara University.	Trustee (since 2005) of iShares Trust.
*John E. Martinez, 48	Director (since 2003).	Director (since 2005) of EquityRock Capital Management; Director (since 2003) of Larkin Street Youth Services.	Trustee (since 2003) of iShares Trust; Chairman (since 2007) of Independent Review Committee, Canadian iShares Funds.

DIRECTOR AND OFFICER INFORMATION 117

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Robert H. Silver, 54	Director (since 2007).	President and Co-Founder (since 2006) of The Bravitas Group, Inc.; Member (since 2006) of Non-Investor Advisory Board of Russia Partners II, LP; Director and member (2006-2009) of the Audit and Compensation Committee of EPAM Systems, Inc.; President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer (1999-2005) of UBS Services USA, LLC; Managing Director (2000-2005) of UBS America, Inc.; Director and Vice Chairman (since 2001) of the YMCA of Greater NYC; Broadway Producer (since 2006); Co-Founder and Vice President (since 2008) of Parentgiving Inc.	Trustee (since 2007) of iShares Trust.

* Prior to August 13, 2009, John E. Martinez was deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI. Effective August 13, 2009, John E. Martinez is a non-interested person notwithstanding his former affiliation with BGFA and its affiliates prior to 2002.

Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham, 44	President (since 2007).	Head (since 2007) of Americas iShares, BGI; Chief Operating Officer (2003-2007) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director and Chief Financial Officer (since 2005) of Barclays Global Investors International, Inc.	None.

118 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Geoffrey D. Flynn, 52	Executive Vice President and Chief Operating Officer (since 2008).	Chief Operating Officer (since 2008) of U.S. iShares, BGI; Director (2007-2008) of Mutual Fund Operations of BGI; President (2003-2007) of Van Kampen Investors Services; Managing Director (2002-2007) of Morgan Stanley; President (2002-2007) of Morgan Stanley Trust, FSB.	None.
Jack Gee, 50	Treasurer and Chief Financial Officer (since 2008).	Senior Director (since 2009) of Fund Administration of Intermediary Investor Business of BGI; Director (2004-2009) of Fund Administration of Intermediary Investor Business of BGI; Treasurer and Chief Financial Officer (2004) of Parnassus Investments.	None.
Eilleen M. Clavere, 57	Secretary (since 2007).	Director (since 2006) of Legal Administration of Intermediary Investors Business of BGI; Legal Counsel and Vice President (2005-2006) of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc.; Counsel (2001-2005) of Kirkpatrick & Lockhart LLP.	None.
Ira P. Shapiro, 46	Vice President and Chief Legal Officer (since 2007).	Associate General Counsel (since 2004) of BGI; First Vice President (1993-2004) of Merrill Lynch Investment Managers.	None.
Amy Schioldager, 47	Executive Vice President (since 2007).	Global Head (since 2008) of Index Equity, BGI; Global Head (2006-2008) of U.S. Indexing, BGI; Head (2001-2006) of Domestic Equity Portfolio Management, BGI.	None.
Patrick O’Connor, 42	Vice President (since 2007).	Head (since 2006) of iShares Portfolio Management, BGI; Senior Portfolio Manager (1999-2006) of BGI.	None.

DIRECTOR AND OFFICER INFORMATION 119

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

		Officers (Continued)
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Lee Sterne, 44	Vice President (since 2007).	Head (since 2007) of U.S. Fixed Income Index and iShares, BGI; Senior Portfolio Manager (2004-2007) of BGI; Portfolio Manager (2001-2004) of BGI.	None.
Matt Tucker, 37	Vice President (since 2007).	Director (since 2009) of Fixed Income Investment Strategy, BGI; Head (2005-2008) of U.S. Fixed Income Investment Solutions, BGI; Fixed Income Investment Strategist (2003-2005) of BGI.	None.

120 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 121

Notes:

122 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 123

The iShares^® Family of Funds

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

iShares Russell Domestic Index Funds	Trading Symbol
iShares Russell 3000	IWV
iShares Russell 3000 Growth	IWZ
iShares Russell 3000 Value	IWW
iShares Russell Top 200	IWL
iShares Russell Top 200 Growth	IWY
iShares Russell Top 200 Value	IWX
iShares Russell 1000	IWB
iShares Russell 1000 Growth	IWF
iShares Russell 1000 Value	IWD
iShares Russell Midcap	IWR
iShares Russell Midcap Growth	IWP
iShares Russell Midcap Value	IWS
iShares Russell 2000	IWM
iShares Russell 2000 Growth	IWO
iShares Russell 2000 Value	IWN
iShares Russell Microcap	IWC
iShares S&P Domestic Index Funds
iShares S&P 1500	ISI
iShares S&P 100	OEF
iShares S&P 500	IVV
iShares S&P 500 Growth	IVW
iShares S&P 500 Value	IVE
iShares S&P MidCap 400	IJH
iShares S&P MidCap 400 Growth	IJK
iShares S&P MidCap 400 Value	IJJ
iShares S&P SmallCap 600	IJR
iShares S&P SmallCap 600 Growth	IJT
iShares S&P SmallCap 600 Value	IJS
iShares Morningstar Domestic Index Funds
iShares Morningstar Large Core	JKD
iShares Morningstar Large Growth	JKE
iShares Morningstar Large Value	JKF
iShares Morningstar Mid Core	JKG
iShares Morningstar Mid Growth	JKH
iShares Morningstar Mid Value	JKI
iShares Morningstar Small Core	JKJ
iShares Morningstar Small Growth	JKK
iShares Morningstar Small Value	JKL
iShares Dow Jones Domestic Index Funds
iShares Dow Jones U.S.	IYY
iShares KLD Socially Responsible Index Funds
iShares FTSE KLD 400 Social	DSI
iShares FTSE KLD Select Social	KLD
iShares NYSE Domestic Index Funds
iShares NYSE Composite	NYC
iShares NYSE 100	NY

iShares Domestic Specialty Index Funds	Trading Symbol
iShares S&P U.S. Preferred Stock	PFF
iShares Dow Jones Select Dividend	DVY
iShares North American Sector/Subsector Index Funds
iShares S&P North American Technology Sector	IGM
iShares S&P North American Technology-Multimedia Networking	IGN
iShares S&P North American Technology- Semiconductors	IGW
iShares S&P North American Technology-Software	IGV
iShares S&P North American Natural Resources Sector	IGE
iShares Domestic Sector Index Funds
iShares Dow Jones U.S. Basic Materials Sector	IYM
iShares Dow Jones U.S. Consumer Goods Sector	IYK
iShares Dow Jones U.S. Consumer Services Sector	IYC
iShares Dow Jones U.S. Energy Sector	IYE
iShares Dow Jones U.S. Financial Sector	IYF
iShares Dow Jones U.S. Healthcare Sector	IYH
iShares Dow Jones U.S. Industrial Sector	IYJ
iShares Dow Jones U.S. Technology Sector	IYW
iShares Dow Jones U.S. Telecommunications Sector	IYZ
iShares Dow Jones U.S. Utilities Sector	IDU
iShares Domestic Subsector Index Funds
iShares Dow Jones Transportation Average	IYT
iShares Dow Jones U.S. Aerospace & Defense	ITA
iShares Dow Jones U.S. Broker-Dealers	IAI
iShares Dow Jones U.S. Financial Services	IYG
iShares Dow Jones U.S. Healthcare Providers	IHF
iShares Dow Jones U.S. Home Construction	ITB
iShares Dow Jones U.S. Insurance	IAK
iShares Dow Jones U.S. Medical Devices	IHI
iShares Dow Jones U.S. Oil & Gas Exploration & Production	IEO
iShares Dow Jones U.S. Oil Equipment & Services	IEZ
iShares Dow Jones U.S. Pharmaceuticals	IHE
iShares Dow Jones U.S. Regional Banks	IAT
iShares Nasdaq Biotechnology	IBB
iShares Domestic Real Estate Index Funds
iShares Cohen & Steers Realty Majors	ICF
iShares Dow Jones U.S. Real Estate	IYR
iShares FTSE NAREIT Real Estate 50	FTY
iShares FTSE NAREIT Industrial/Office Capped	FIO
iShares FTSE NAREIT Mortgage Plus Capped	REM
iShares FTSE NAREIT Residential Plus Capped	REZ
iShares FTSE NAREIT Retail Capped	RTL
iShares Target Risk Index Funds
iShares S&P Conservative Allocation	AOK
iShares S&P Moderate Allocation	AOM
iShares S&P Growth Allocation	AOR
iShares S&P Aggressive Allocation	AOA

124 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds (Continued)

iShares International Country Index Funds	Trading Symbol
iShares FTSE China (HK Listed)	FCHI
iShares FTSE/Xinhua China 25	FXI
iShares MSCI Australia	EWA
iShares MSCI Austria Investable Market	EWO
iShares MSCI Belgium Investable Market	EWK
iShares MSCI Brazil	EWZ
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares MSCI Israel Capped Investable Market	EIS
iShares MSCI Italy	EWI
iShares MSCI Japan	EWJ
iShares MSCI Japan Small Cap	SCJ
iShares S&P/TOPIX 150	ITF
iShares MSCI Malaysia	EWM
iShares MSCI Mexico Investable Market	EWW
iShares MSCI Netherlands Investable Market	EWN
iShares MSCI All Peru Capped	EPU
iShares MSCI Singapore	EWS
iShares MSCI South Africa	EZA
iShares MSCI South Korea	EWY
iShares MSCI Spain	EWP
iShares MSCI Sweden	EWD
iShares MSCI Switzerland	EWL
iShares MSCI Taiwan	EWT
iShares MSCI Thailand Investable Market	THD
iShares MSCI Turkey Investable Market	TUR
iShares MSCI United Kingdom	EWU
iShares International Index Funds
iShares MSCI ACWI ex US	ACWX
iShares MSCI EAFE	EFA
iShares MSCI EAFE Growth	EFG
iShares MSCI EAFE Value	EFV
iShares MSCI EAFE Small Cap	SCZ
iShares FTSE Developed Small Cap ex-North America	IFSM
iShares MSCI Emerging Markets	EEM
iShares MSCI Emerging Markets Eastern Europe	ESR
iShares S&P Emerging Markets Infrastructure	EMIF
iShares MSCI BRIC	BKF
iShares MSCI EMU	EZU
iShares MSCI All Country Asia ex Japan	AAXJ
iShares MSCI Pacific ex-Japan	EPP
iShares S&P Asia 50	AIA
iShares S&P Europe 350	IEV
iShares S&P Latin America 40	ILF
iShares International/Global Real Estate Index Funds
iShares S&P Developed ex-U.S. Property	WPS
iShares FTSE EPRA/NAREIT Developed Real Estate ex-U.S.	IFGL
iShares FTSE EPRA/NAREIT Developed Asia	IFAS
iShares FTSE EPRA/NAREIT Developed Europe	IFEU
iShares FTSE EPRA/NAREIT North America	IFNA
iShares International Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV

iShares Target Date Index Funds	Trading Symbol
iShares S&P Target Date Retirement Income	TGR
iShares S&P Target Date 2010	TZD
iShares S&P Target Date 2015	TZE
iShares S&P Target Date 2020	TZG
iShares S&P Target Date 2025	TZI
iShares S&P Target Date 2030	TZL
iShares S&P Target Date 2035	TZO
iShares S&P Target Date 2040	TZV
iShares Global Index Funds
iShares MSCI ACWI	ACWI
iShares S&P Global 100	IOO
iShares MSCI Kokusai	TOK
iShares Global Sector Index Funds
iShares S&P Global Consumer Discretionary Sector	RXI
iShares S&P Global Consumer Staples Sector	KXI
iShares S&P Global Energy Sector	IXC
iShares S&P Global Financials Sector	IXG
iShares S&P Global Healthcare Sector	IXJ
iShares S&P Global Industrials Sector	EXI
iShares S&P Global Materials Sector	MXI
iShares S&P Global Technology Sector	IXN
iShares S&P Global Telecommunications Sector	IXP
iShares S&P Global Utilities Sector	JXI
iShares Global Theme Based Index Funds
iShares S&P Global Clean Energy	ICLN
iShares S&P Global Infrastructure	IGF
iShares S&P Global Nuclear Energy	NUCL
iShares S&P Global Timber & Forestry	WOOD
iShares U.S. Multisector Bond Funds
iShares Barclays Aggregate	AGG
iShares Barclays Government/Credit	GBF
iShares Barclays Intermediate Government/Credit	GVI
iShares U.S. Government Bond Funds
iShares Barclays Short Treasury	SHV
iShares Barclays 1-3 Year Treasury	SHY
iShares Barclays 3-7 Year Treasury	IEI
iShares Barclays 7-10 Year Treasury	IEF
iShares Barclays 10-20 Year Treasury	TLH
iShares Barclays 20+ Year Treasury	TLT
iShares Barclays TIPS	TIP
iShares Barclays Agency	AGZ
iShares U.S. Credit Bond Funds
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares iBoxx $ High Yield Corporate	HYG
iShares U.S. Securitized Bond Funds
iShares Barclays MBS	MBB

iSHARES FAMILY OF FUNDS 125

The iShares^® Family of Funds (Continued)

iShares AMT-Free Municipal Bond Funds	Trading Symbol
iShares S&P National AMT-Free Municipal	MUB
iShares S&P Short Term National AMT-Free Municipal	SUB
iShares S&P California AMT-Free Municipal	CMF
iShares S&P New York AMT-Free Municipal	NYF

iShares International Bond Funds	Trading Symbol
iShares JPMorgan USD Emerging Markets	EMB
iShares S&P/Citigroup International Treasury	IGOV
iShares S&P/Citigroup 1-3 Year International Treasury	ISHG

iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Frank Russell Company or Standard & Poor’s, nor are they sponsored or endorsed by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above except Barclays Capital, which is an affiliate of BGI. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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

This advertising section does not constitute part of the 2009 Annual Report.

iS-1437-1009

126 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information:

WWW.iSHARES.COM

1-800-iShares (1-800-474-2737)

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

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the company listed above.

©2009 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

Investing involves risk, including possible loss of principal.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website.

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

BGI-AR-82-0809

iShares®

LET’S BUILD A BETTER INVESTMENT WORLD®.

BARCLAYS

GLOBAL INVESTORS

Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	28
Schedules of Investments	30
iShares MSCI Australia Index Fund	30
iShares MSCI Hong Kong Index Fund	33
iShares MSCI Japan Small Cap Index Fund	35
iShares MSCI Malaysia Index Fund	44
iShares MSCI Pacific ex-Japan Index Fund	46
iShares MSCI Singapore Index Fund	49
iShares MSCI South Korea Index Fund	51
iShares MSCI Taiwan Index Fund	55
iShares MSCI Thailand Investable Market Index Fund	59
Financial Statements	62
Financial Highlights	73
Notes to Financial Statements	82
Report of Independent Registered Public Accounting Firm	91
Tax Information (Unaudited)	92
Board Review and Approval of Current Investment Advisory Contract (Unaudited)	93
Board Review and Approval of New Investment Advisory Agreements (Unaudited)	96
Supplemental Information (Unaudited)	102
Director and Officer Information (Unaudited)	112
iShares Family of Funds	120

Management’s Discussion of Fund Performance

iSHARES^® MSCI AUSTRALIA INDEX FUND

(TICKER: EWA)

INVESTMENT OBJECTIVE

The iShares MSCI Australia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australian market, as measured by the MSCI Australia Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (8.91)%, while the total return for the Index was (9.04)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

Australia’s economy emerged from the global financial crisis in relatively strong condition. However, the Australian equity market declined along with many of its Pacific region counterparts during the reporting period.

Gross domestic product (“GDP”) did not decline more than 1% in any quarter compared to prior year results. After contracting 0.6% in the fourth quarter of 2008, GDP grew 0.4% during the first quarter of 2009 and 0.6% in the second quarter compared to the year-ago period. Australia generally benefited from relatively healthy consumer and business spending, as well as its trading relationship with China – where the economy recovered relatively rapidly. For example, during the period, China agreed to buy $41 billion in liquefied natural gas from Australia in the largest-ever trade contract between the two countries. China’s investment in Australia, while still small compared to its investment in the U.S., is growing rapidly.

Although trade with China has grown this decade, there have been political tensions between the two countries. China detained four employees of a major Australian mining company, accusing them of stealing state secrets, while Australia granted a visa to a Chinese rights advocate at odds with the Chinese government. The Australian Prime Minister indicated that although China and Australia’s relationship is “full of challenges,” their broader ties will endure. Meanwhile, China’s economy appears back on track as factories begin to rehire workers. Its second quarter 2009 GDP advanced nearly 15% on an annualized basis as bank lending was liberalized, government support for exports was strengthened and fiscal stimulus was enacted.

Australia also embarked on an early fiscal stimulus program which included a tax break on equipment investment that appears to have boosted job creation in the retail and construction sectors. In addition, Australia’s central bank lowered interest rates by 4.25 percentage points from September 2008, bringing the interest rate to a nearly 50-year low of 3% in April 2009. The unemployment rate in Australia ended the reporting period at 5.8%, significantly below its 30-year average of 7.2%. In contrast, U.S. unemployment was nearing 10%.

Despite these positive signs, the Australian Prime Minister warned that the global economic recession would continue to have an adverse impact on Australia. For example, he noted that a sluggish world economy has depressed world prices for Australian iron ore, a major export. In addition, he warned that the government stimulus program has not come without cost, leading to a federal budget deficit of nearly 5% of GDP, the largest since World War II. Still, Australia’s domestic economy remained relatively strong, as banks did not hold a significant amount of sub-prime mortgages and other poorly performing assets.

The ten largest holdings of the Fund posted mixed results during the reporting period. In banking, Commonwealth Bank of Australia, National Australia Bank Ltd., and Australia and New Zealand Banking Group Ltd. posted the most positive returns for the period. In contrast, shares of Rio Tinto Ltd. (mining), Westfield Group (shopping centers) and Woodside Petroleum Ltd. declined significantly.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(8.91)%	(8.48)%	(9.04)%	13.59%	13.57%	13.06%	11.14%	11.07%	10.88%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(8.91)%	(8.48)%	(9.04)%	89.13%	88.94%	84.73%	187.57%	185.68%	180.89%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

2 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	43.96	%
Basic Materials	22.31
Consumer Non-Cyclical	11.97
Industrial	8.91
Energy	6.25
Consumer Cyclical	2.22
Communications	1.99
Utilities	0.83
Technology	0.51
Short-Term and Other Net Assets	1.05
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
BHP Billiton Ltd.	14.07	%
Westpac Banking Corp.	8.09
Commonwealth Bank of Australia	7.95
National Australia Bank Ltd.	6.23
Australia and New Zealand Banking Group Ltd.	5.66
Woolworths Ltd.	3.92
Westfield Group	2.95
Wesfarmers Ltd.	2.88
Rio Tinto Ltd.	2.78
Woodside Petroleum Ltd.	2.76
TOTAL	57.29	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI HONG KONG INDEX FUND

(TICKER: EWH)

INVESTMENT OBJECTIVE

The iShares MSCI Hong Kong Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Hong Kong market, as measured by the MSCI Hong Kong Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (4.77)%, while the total return for the Index was (4.09)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After four quarters of negative growth, Hong Kong emerged from its deepest recession since the Asian financial crisis of a decade ago, and the stock market rebounded accordingly. Gross domestic product (“GDP”) advanced 3.3% in the second quarter compared to the first quarter of 2009. Hong Kong benefited from its proximity to mainland China, as exports to China – where GDP growth was 15% in the second quarter – rebounded. Meanwhile, inflation has remained low at 1.5%. Real estate in Hong Kong has recovered to pre-crash prices, while consumer spending increased 4% in the second quarter. Unemployment remained at 5.4% as of the end of the reporting period.

China’s economy appears to have benefited from a government-encouraged stimulus in bank lending to consumers and businesses, financing auto loans, factory construction, and other spending. In addition, the government has offered tax breaks to exporters and acted to depress the value of the local currency, which makes exports more attractive. China’s trade surplus remains the largest in the world. One measure of Hong Kong/China’s financial health is the success of its investment banking activities. In 2009, companies that went public in China and Hong Kong raised four times more money than U.S. and European issues combined.

However, Hong Kong still faced challenges as the reporting period drew to a close. Although GDP advanced in the most recent quarter, it was still significantly weaker than the year ago period, when GDP surged 7.1%. Total exports declined in the second quarter by 12% versus the prior year period. Still, that was better than the first quarter of 2009, when the decline year over year was 23%. Most of the improvement was accounted for by China, and to a lesser extent in some other Asian countries. Exports to the U.S. and Europe were down sharply. In September 2009, the Asian Development Bank (“ADB”) cut its 2009 growth forecast for the Hong Kong economy to -4% from its prior projection of -2%, saying that Asia’s trade dependent economies, including Hong Kong, were hit harder than expected by the financial crisis.

The ten largest holdings of the Fund posted mixed results during the reporting period. The highest return was posted by the Hong Kong Exchanges and Clearing Ltd., the stock exchange of Hong Kong. The second highest return among the top ten holdings was produced by Li & Fung Ltd., which searches for high quality and cost effective manufacturing operations for its retail clients. Swire Pacific Ltd., which has diversified interests including aviation, beverages, marine services, property and trading, also produced positive returns. However, shares of Hang Seng Bank Ltd., a leading commercial bank offering corporate lending and private wealth management services, declined notably. Hutchison Whampoa Ltd., a conglomerate with interests in telecommunications, property development and port operations, also declined in share price. CLP Holdings Ltd., one of Asia’s largest electric utilities, saw its shares decline during the reporting period.

4 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(4.77)%	(4.67)%	(4.09)%	8.91%	8.86%	9.50%	4.45%	4.47%	5.34%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(4.77)%	(4.67)%	(4.09)%	53.22%	52.86%	57.42%	54.59%	54.87%	68.24%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	52.58	%
Diversified	14.67
Utilities	14.15
Consumer Cyclical	9.74
Industrial	5.97
Communications	1.46
Technology	0.59
Basic Materials	0.49
Short-Term and Other Net Assets	0.35
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Sun Hung Kai Properties Ltd.	8.92	%
Hong Kong Exchanges and Clearing Ltd.	8.29
Cheung Kong (Holdings) Ltd.	7.70
Hutchison Whampoa Ltd.	7.17
CLP Holdings Ltd.	6.52
Hang Seng Bank Ltd.	5.00
Hong Kong and China Gas Co. Ltd. (The)	4.01
Swire Pacific Ltd. Class A	3.87
Li & Fung Ltd.	3.69
Hongkong Electric Holdings Ltd.	3.62
TOTAL	58.79	%

6 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

(TICKER: SCJ)

INVESTMENT OBJECTIVE

The iShares MSCI Japan Small Cap Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Japan Small Cap Index^SM (the “Index”). The Index targets 40% of the eligible small-cap universe within each industry group in the MSCI Japan Index^SM. The small-cap universe is defined as all listed securities that have a market capitalization in the range of $200 million to $1,500 million. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was 4.62%, while the total return for the Index was 4.80%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

Japan’s economy was among the weakest in Asia, as the country experienced high unemployment, lagging business investment and deflation fears. Accordingly, the broad Japanese equity market performed relatively poorly compared to its Asian counterparts during the reporting period. However, small capitalization stocks significantly outperformed large capitalization stocks, as these smaller companies were generally less reliant on exporting activity, which declined amid the challenging global economic environment.

Although Japan’s gross domestic product (“GDP”) rose 3.7% in the second quarter of 2009 compared to the year ago quarter, it declined a record 13.5% during the fourth quarter of 2008 and 14.2% in the first quarter of 2009. Even though GDP has shown signs of stabilizing, other economic statistics did not rebound.

Business investment contracted at a 4.8% annual rate in the second quarter of 2009. Core machinery orders dropped 9.3% in July, hitting the lowest level since recordkeeping began in April 1987. According to the Ministry of Internal Affairs, unemployment reached 5.7% in July, a post-World War II record. Household spending decreased 2% compared to the same month a year ago. Deflation was also a major concern, as Japan’s wholesale prices fell 8.5% in August compared to a year ago.

One of Japan’s most important economic activities is exporting, particularly to the rest of Asia as well as to the U.S. However, Japan’s exports dropped about 50% in the first half of 2009. Trouble continued into the second half of the year, as exports shrank for the 10th straight month in July, down 38% year over year, while imports posted the second-largest contraction since records began in 1986, dropping by 41%. At the end of the period the country’s public debt stood at about 170% of GDP, the worst ratio in the industrialized world.

In the midst of this economic environment, there was a major shift in the political environment during the reporting period. Japan elected a more liberal new government during the reporting period, one that promised increased social benefits and favored policies that were seen as disadvantageous to large corporations. The Democratic Party of Japan was elected into power, beating the Liberal Democratic Party that had ruled Japan since World War II. Yukio Hatoyama, the new Japanese Prime Minister, has promised to reverse Japan’s weak economy, blaming the government bureaucracy for the country’s woes. Meanwhile, the global economic environment began to improve at the end of the reporting period, which was a positive development for a country so dependent on exports.

The ten largest holdings of the Fund represented approximately 5% of Fund net assets as of August 31, 2009. Performance for these ten holdings was mixed for the reporting period. Ebara Corp. (engineering & construction), Autobacs Seven Co. Ltd. (retail auto parts) and Miraca Holdings Inc. (life sciences) posted strong returns, while shares of Rengo Co. Ltd. (packaging) and AirWater Inc. (air conditioners) declined notably in value.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
4.62%	4.79%	4.80%	(4.23)%	(4.59)%	(3.96)%	(7.08)%	(7.69)%	(6.64)%

Total returns for the period since inception are calculated from the inception date of the Fund (12/20/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/21/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

8 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Industrial	26.38	%
Consumer Cyclical	24.67
Financial	18.05
Consumer Non-Cyclical	13.42
Basic Materials	9.97
Communications	3.58
Technology	2.90
Utilities	0.72
Energy	0.10
Short-Term and Other Net Assets	0.21
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
AirWater Inc.	0.52	%
Ebara Corp.	0.51
Sagami Railway Co. Ltd.	0.49
Nipro Corp.	0.48
Fujikura Ltd.	0.48
COMSYS Holdings Corp.	0.47
Miraca Holdings Inc.	0.46
Shiga Bank Ltd. (The)	0.43
Autobacs Seven Co. Ltd.	0.42
Rengo Co. Ltd.	0.42
TOTAL	4.68	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI MALAYSIA INDEX FUND

(TICKER: EWM)

INVESTMENT OBJECTIVE

The iShares MSCI Malaysia Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was 8.00%, while the total return for the Index was 8.45%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After hitting a low in March 2009, the Malaysian equity market rebounded sharply and posted a gain for the reporting period as market performance was among the best in Southeast Asia. However, the Malaysian economy did not perform as well as the stock market during the period. During 2009, the Malaysian economy entered its first recession in more than a decade, with second quarter 2009 gross domestic product (“GDP”) declining 3.9% from the year-ago quarter and first quarter 2009 GDP contracting by 6.2%. In contrast, GDP was flat the fourth quarter of 2008 and up anywhere from 4 to 7% in the prior three quarters of 2008. In addition, manufacturing activity contracted about 15% in the second quarter of 2009 while exports dropped 17%.

Despite these statistics, there were some stable signs for the economy. June industrial production fell by the least amount in seven months, while exports posted the smallest decline in three months. This improvement mirrored that of other countries in Southeast Asia whose economies have improved due to government stimulus policies in the region.

The Malaysian government enacted two stimulus plans in November 2008 and March 2009 worth a total of about $19 billion aimed at the construction industry. About 90,000 projects were awarded, and half have been completed. Malaysia’s budget deficit is currently about 7% of GDP, its highest level since the mid-1980s. Meanwhile, in August, the country’s central bank kept short-term interest rates at 2% for a fourth straight meeting.

As a provider of manufacturing and financial services, Malaysia faces intense competition with other Southeast Asian countries. The government has taken steps to help the economy. For example, regulators have encouraged companies in the brokerage industry to merge to create the scale and strength to compete on a global basis. Liberalization of rules in the past two years have been aimed at getting more companies to list shares on the Malaysia stock exchange, which has lost market share to the Singapore exchange. Recently, in an effort to broaden distribution of shares, the government announced that local companies listing on the Kuala LumpurStock Exchange would be required to allocate only 12.5% of their equity to ethnic Malaysians, down from 30%. All of these steps were intended to increase interest in the Malaysian stock market, which performed particularly well towards the end of the reporting period.

All but one of the Fund’s top ten holdings posted market gains for the reporting period. Shares of Malayan Banking Bhd, the country’s largest commercial bank, declined moderately. Bumiputra-Commerce Holdings Bhd, the country’s second largest financial services provider, was one of the Fund’s best performers within the top ten holdings. Shares of PPB Group Bhd, which owns movie theatres, sugar refineries and flour mills, performed strongly during the period, as did Sime Darby Bhd, a conglomerate with interests in agriculture, automobiles, real estate and utilities.

10 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
8.00%	7.73%	8.45%	12.20%	12.32%	12.77%	8.27%	7.99%	9.01%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
8.00%	7.73%	8.45%	77.80%	78.79%	82.38%	121.26%	115.78%	136.95%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV 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, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	29.63	%
Consumer Non-Cyclical	17.05
Consumer Cyclical	13.74
Industrial	10.89
Utilities	9.45
Diversified	9.35
Communications	7.77
Basic Materials	1.05
Energy	0.80
Short-Term and Other Net Assets	0.27
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Sime Darby Bhd	9.35	%
Malayan Banking Bhd	8.71
Bumiputra-Commerce Holdings Bhd	7.43
IOI Corp. Bhd	6.64
Tenaga Nasional Bhd	5.92
Genting Bhd	5.61
Public Bank Bhd	3.97
MISC Bhd Foreign	3.68
Genting Malaysia Bhd	3.40
PPB Group Bhd	3.09
TOTAL	57.80	%

12 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

(TICKER: EPP)

INVESTMENT OBJECTIVE

The iShares MSCI Pacific ex-Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Australia, Hong Kong, New Zealand and Singapore markets, as measured by the MSCI Pacific ex-Japan Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (7.23)%, while the total return for the Index was (7.36)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After declining significantly during the first half of the reporting period, Pacific region equity markets generally rebounded by August 31, 2009, but still posted a modest negative return for the year. The Hong Kong and Singapore markets were more volatile than those of Australia and New Zealand.

Australia’s economy emerged from the global financial crisis in relatively strong condition. Gross domestic product (“GDP”) did not decline more than 1% in any quarter compared to its prior year results. After contracting 0.6% in the fourth quarter of 2008, GDP grew 0.4% during the first quarter of 2009 and 0.6% in the second quarter compared to the year-ago period. Australia generally appears to have benefited from relatively healthy consumer and business spending, as well as its trading relationship with China – where the economy recovered relatively rapidly.

Australia also embarked on an early fiscal stimulus program which included a tax break on equipment investment that appears to have boosted job creation in the retail and construction sectors. In addition, Australia’s central bank lowered interest rates by 4.25% from September 2008 to bring rates to a nearly 50-year low of 3 percent in April 2009. The unemployment rate in Australia ended the reporting period at 5.8%, significantly below its 30-year average of 7.2%. In contrast, U.S. unemployment was nearing 10%.

Despite these positive signs, the Australian Prime Minister warned that the global economic recession would continue to have an adverse impact on Australia. For example, he noted that a sluggish world economy has depressed world prices for Australian iron ore, a major export. In addition, he warned that the government stimulus program has not come without cost, leading to a federal budget deficit of nearly 5% of GDP, the largest since World War II. Still, Australia’s domestic economy remained relatively strong, as banks did not hold a significant amount of sub-prime mortgages and other poorly performing assets.

Australia’s neighbor, New Zealand, also reported modest declines in its economy, with GDP declines in the 1% range during the fourth quarter of 2008 and first quarter of 2009 – and roughly flat in the second quarter of 2009, with the largest detractors from GDP coming from the construction and manufacturing sectors. However, most of the increase in consumption came from government spending, not private spending. Indeed, a major concern in New Zealand is the country’s expanding national debt.

In Hong Kong, the real estate market has recovered to pre-financial crisis levels, as demand reflected the rebounding economy and stock markets in mainland China. Meanwhile, Singapore’s export-dependent economy declined at about a 15% annual rate during the height of the crisis, but has since rebounded. According to the Singapore Ministry of Trade and Industry, second quarter 2009 GDP advanced 21%.

The ten largest holdings of the Fund posted mixed results during the reporting period. In banking, Commonwealth Bank of Australia, National Australia Bank Ltd., and Australia and New Zealand Banking Group Ltd. posted the most positive returns for the period. In contrast, shares of Rio Tinto Ltd. (mining), Westfield Group (shopping centers) and Woodside Petroleum Ltd. declined significantly.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(7.23)%	(6.41)%	(7.36)%	12.36%	12.36%	12.18%	14.17%	14.17%	14.05%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(7.23)%	(6.41)%	(7.36)%	79.11%	79.08%	77.65%	183.10%	183.08%	180.59%

Total returns for the period since inception are calculated from the inception date of the Fund (10/25/01). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/26/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

14 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	46.06	%
Basic Materials	15.22
Consumer Non-Cyclical	9.29
Industrial	8.62
Energy	4.23
Communications	4.05
Consumer Cyclical	4.04
Diversified	3.63
Utilities	3.42
Technology	0.47
Short-Term and Other Net Assets	0.97
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
BHP Billiton Ltd. (Australia)	9.53	%
Westpac Banking Corp. (Australia)	5.48
Commonwealth Bank of Australia (Australia)	5.37
National Australia Bank Ltd. (Australia)	4.22
Australia and New Zealand Banking Group Ltd. (Australia)	3.83
Woolworths Ltd. (Australia)	2.68
Westfield Group (Australia)	2.00
Wesfarmers Ltd. (Australia)	1.95
Rio Tinto Ltd. (Australia)	1.89
Woodside Petroleum Ltd. (Australia)	1.87
TOTAL	38.82	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI SINGAPORE INDEX FUND

(TICKER: EWS)

INVESTMENT OBJECTIVE

The iShares MSCI Singapore Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Singaporean market, as measured by the MSCI Singapore Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (5.87)%, while the total return for the Index was (6.02)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After hitting a low in March 2009, the Singapore stock market recouped most of its losses by the end of the reporting period. As a result, the market’s performance was in line with other countries in the region, posting a modest decline.

Singapore’s economy hit a low in the fourth quarter of 2008, when gross domestic product (“GDP”) contracted at a 16% annualized rate, the worst performance in more than 40 years. For the first half of 2009, non-oil exports, which account for about 60% of Singapore’s GDP, declined as demand from Japan, the U.S. and Europe fell sharply. However, some of the slack was taken up by Indonesia, Malaysia and China, where economic growth was stronger than in developed countries.

Singapore’s economy staged a rally during the second quarter of 2009, growing at a seasonally adjusted annualized rate of nearly 21% compared to the prior quarter, its first advance in a year. Unemployment was expected to reach 3.8% in 2009, up from only 2.6% in 2008. By August 2009, the end of the reporting period, the outlook for the economy appeared to be better, particularly in the pharmaceutical industry. A major drug company opened a large factory in Singapore in June – the first of its kind in Asia – to produce a vaccine for meningitis.

To monitor the economy, the Monetary Authority of Singapore conducts a quarterly survey of 21 economists. The most recent survey forecast a drop in manufacturing of 7% in 2009, a 3% decline in financial services activity and a drop of nearly 12% in wholesale and retail trade. Only construction, which received a boost of $14 billion in government stimulus, was expected to grow in 2009. However, the economic forecasts changed sharply in three months. In June, the median forecast from these economists predicted that the Singapore economy would contract 6.5% in 2009 and that consumer prices would decline 0.5%. Three months later, the survey showed a forecast of a 3.6% decline in GDP for 2009 and an inflation rate of zero.

The ten largest holdings of the Fund posted mixed results during the reporting period. On the positive side, Wilmar International Ltd., an agricultural firm, produced the strongest returns. Wilmar operates more than 250 food processing plants, employs about 70,000 people and conducts business with about 50 countries. Singapore Exchange Ltd., the stock exchange of Singapore, also produced positive returns. On the negative side, shares of Keppel Corp. Ltd., a conglomerate, declined notably. Keppel has interests in shipbuilding, real estate development, environmental engineering and telecommunications. Shares of DBS Group Holdings Ltd. (financial services) also declined.

16 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(5.87)%	(4.40)%	(6.02)%	14.00%	13.88%	13.83%	5.75%	5.61%	5.46%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(5.87)%	(4.40)%	(6.02)%	92.55%	91.54%	91.11%	74.93%	72.66%	70.17%

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

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	51.25	%
Communications	17.58
Consumer Non-Cyclical	9.93
Industrial	8.98
Diversified	6.22
Consumer Cyclical	5.26
Short-Term and Other Net Assets	0.78
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Singapore Telecommunications Ltd.	13.61	%
DBS Group Holdings Ltd.	11.99
United Overseas Bank Ltd.	11.31
Oversea-Chinese Banking Corp. Ltd.	10.48
Keppel Corp. Ltd.	4.64
CapitaLand Ltd.	4.60
Wilmar International Ltd.	4.43
Singapore Exchange Ltd.	3.96
Singapore Airlines Ltd.	3.69
Singapore Press Holdings Ltd.	3.22
TOTAL	71.93	%

18 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SOUTH KOREA INDEX FUND

(TICKER: EWY)

INVESTMENT OBJECTIVE

The iShares MSCI South Korea Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South Korean market, as measured by the MSCI Korea Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (2.31)%, while the total return for the Index was (1.83)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After hitting a low in March 2009, the South Korea stock market recouped most of its losses by the end of the reporting period. As a result, the country’s market performance was in line with other countries in the region, posting a modest decline.

South Korea posted gross domestic product growth of 2.3% during the second quarter of 2009 compared to the previous quarter. However, domestic consumption has been weak, unemployment has increased, and consumer confidence has not returned to pre-crisis levels. Although the country’s prospects show signs of improving, it is highly dependent on the performance of its trading partners. Exports are expected to contract in the single digit range in 2009, with a potential to rise modestly in 2010, although the rate of growth will likely be well below what was recorded before the recession. In addition, imports are falling in 2009 as companies along with consumers find it harder to obtain bank financing.

Inflation averaged 4.7% in 2008, its highest rate since 1998. However, as domestic demand declines and commodity prices fall, inflationary pressures appear to be easing. This is offset somewhat by the stronger imported inflation resulting from the weaknesses in South Korea’s currency. During the second half of 2008 and the first quarter of 2009, investors withdrew investment from the country amid concerns about South Korea’s export status, causing weakness in the currency against the U.S. dollar. However these factors started to reverse in early 2009. The government’s efforts to strengthen the South Korean banking system have appeared to increase investor confidence, and the currency has strengthened.

The global recession has helped the South Korean automobile industry gain a foothold in the U.S. and Japanese auto markets. Hyundai Motor Co.’s sales were up 47% from August 2008 to August 2009, eclipsing the market share of Chrysler, one of the traditional Big Three U.S. automakers. Hyundai Motor America, along with its affiliate, Kia Motors America, has been able to accomplish this through aggressive pricing in the U.S. market and improved brand reputation.

Hyundai Motor Co. Ltd. was among the top performers in the Fund’s ten largest holdings during the reporting period. In addition Samsung Electronics Co. Ltd., a large semiconductor company, posted strong gains. LG Chem Ltd., a chemicals and electronic materials maker, and LG Display Co. Ltd., a maker of television and computer monitors also generated strong returns. Detractors from performance included two diversified financial services companies – KB Financial Group Inc. and Shinhan Financial Group Co. Ltd. – as well as POSCO, a large steelmaker.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.31)%	(2.49)%	(1.83)%	12.72%	12.49%	13.36%	8.82%	8.71%	9.37%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.31)%	(2.49)%	(1.83)%	81.95%	80.12%	87.20%	119.75%	117.78%	130.36%

Total returns for the period since inception are calculated from the inception date of the Fund (5/9/00). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV 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 (5/12/00), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

20 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Technology	24.31	%
Financial	17.28
Industrial	17.24
Consumer Cyclical	13.77
Basic Materials	11.64
Communications	5.17
Consumer Non-Cyclical	4.01
Energy	2.47
Utilities	2.06
Diversified	1.97
Short-Term and Other Net Assets	0.08
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Samsung Electronics Co. Ltd.	19.11	%
POSCO	6.69
KB Financial Group Inc.	3.75
Shinhan Financial Group Co. Ltd.	3.67
Hyundai Motor Co. Ltd.	3.66
LG Electronics Inc.	3.00
Hynix Semiconductor Inc.	2.30
Samsung Electronics Co. Ltd. Preferred	2.25
LG Chem Ltd.	1.94
LG Display Co. Ltd.	1.91
TOTAL	48.28	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI TAIWAN INDEX FUND

(TICKER: EWT)

INVESTMENT OBJECTIVE

The iShares MSCI Taiwan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Taiwanese market, as measured by the MSCI Taiwan Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (9.67)%, while the total return for the Index was (9.20)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After hitting a low in March 2009, the Taiwan market rebounded in the second half of the reporting period, although not enough to avoid a decline for the year.

While stocks were still in negative territory, the Taiwan economy rebounded briskly during the second quarter of 2009. Taiwan’s central bank reported that although the economy contracted about 7.5% compared to the same quarter in 2008, it advanced more than 20% compared to the first quarter of 2009.

As a result of this fast growth, the central bank announced recently that it was leaving short-term interest rates at 1.25%, after having lowered rates from about 3.6% in early 2009. Lowering the rate further would indicate that the government wasn’t satisfied with the growth rate. Raising the rate would suggest that the government was worried about inflation. Currently, inflation is about zero in Taiwan while unemployment reached 6.1% in August 2009.

The country faced natural disasters and political turmoil during 2009. The Taiwan premier resigned shortly after the end of the reporting period, taking responsibility for the government’s slow response to a deadly typhoon in August that caused 700 casualties. The new cabinet pledged to continue improved relations with China, a conflict whose origins date back a century, including the elimination of most tariffs between the two countries.

Like most of its Southeast Asia counterparts, Taiwan’s economic results are tied to the global economy. And there is evidence that the global economy may be improving at a faster pace than was widely anticipated a few months ago. While challenges remain, notably unemployment levels in the U.S. and Europe, manufacturing activity grew in the U.S., France, China and Australia in August, the first time that has happened since January 2008. In addition, Japan recently reported an increase in industrial production, the best monthly performance since late 2007.

Most of the Fund’s ten largest holdings declined during the reporting period. Shares of Chunghwa Telecom Co. Ltd., a telecommunications manufacturer, declined significantly during the period. Cathay Financial Holding Co. Ltd., which owns banks, insurance companies, venture capital funds and other financial services, also saw its shares decline notably. On the positive side, MediaTek Inc., a semiconductor manufacturer, posted a strong return during the period. Other positive performers included Taiwan Semiconductor Manufacturing Co. Ltd. and Formosa Plastics Corp., a maker of specialty chemicals and resins.

22 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.67)%	(9.69)%	(9.20)%	3.50%	3.60%	4.33%	(4.11)%	(4.21)%	(3.27)%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.67)%	(9.69)%	(9.20)%	18.77%	19.33%	23.61%	(32.06)%	(32.66)%	(26.32)%

Total returns for the period since inception are calculated from the inception date of the Fund (6/20/00). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. As the Fund has a NAV 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 (6/23/00), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Technology	38.39	%
Industrial	24.15
Financial	14.82
Basic Materials	10.63
Communications	4.58
Consumer Cyclical	3.87
Consumer Non-Cyclical	1.27
Energy	1.21
Short-Term and Other Net Assets	1.08
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd.	14.38	%
Hon Hai Precision Industry Co. Ltd.	8.48
MediaTek Inc.	4.25
China Steel Corp.	2.95
Chunghwa Telecom Co. Ltd.	2.93
Cathay Financial Holding Co. Ltd.	2.68
AU Optronics Corp.	2.47
Nan Ya Plastic Corp.	2.36
Formosa Plastics Corp.	2.30
HTC Corp.	2.30
TOTAL	45.10	%

24 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

(TICKER: THD)

INVESTMENT OBJECTIVE

The iShares MSCI Thailand Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Thailand Investable Market Index^SM (the “Index”). The Index is a free float adjusted market capitalization index designed to measure broad based equity market performance in Thailand. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (0.33)%, while the total return for the Index was 0.12%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

After hitting a low in March 2009, the Thailand stock market recouped virtually all of its decline for the reporting period, resulting in performance that was among the best in the region. However, Thailand’s economy struggled along with other countries in Asia. Gross domestic product fell by 4.9% in the second quarter of 2009 compared to the year ago period. That compared to a decline of 7.1% in the first quarter. At the same time, the country saw deflation of about 3% as recently as May 2009.

Because Thailand’s economy is highly export dependent, its fortunes depend on the economies of its trading partners. Some of those trading partners, including the U.S., were in the midst of their own recessions during the reporting period. Thai exports fell by 22% in the second quarter, while imports declined 25%. The reporting period brought to an end six years of double-digit annual export growth.

The Thai government responded with a significant expansion in spending, including a subsidy to electricity and transportation fares as well as payments to low income wage earners. During the first half of 2009, the government spent about $3.4 billion on subsidies, and recently decided to expand the program. In August, the cabinet approved a new three-year spending package of about $45 billion, much of it on infrastructure, health care and education. However, the government is now running a significant budget deficit.

Meanwhile, the Thai Central Bank decided in late August to maintain short-term interest rates at 1.25%, as deflation fears continued. The government had previously cut interest rates from 4% earlier in the reporting period.

In addition, the economy has appeared to be adversely affected by political tensions within the country. Supporters and opponents of a former prime minister who was ousted in a military coup three years ago continue to stage major protests, costing the country billions in tourist dollars. To lure back tourists, the Tourism Authority of Thailand offered free round trips to the country’s most popular resort areas.

There were other positive signs towards the end of the reporting period, including Ford Motor’s announced $500 million investment in a Thai manufacturing plant and Mitsubishi’s decision to hire 1,300 workers in Thailand, reflecting signs of a potential recovery in the global auto industry. Indeed, the manufacturing sector had already begun to grow in the second quarter, expanding by about 6%, following two quarters of contraction when world demand for cars and electronics made in Thailand was moribund.

The ten largest holdings of the Fund posted mixed results during the reporting period. Retailer CPAll PCL, formerly CP Seven Eleven, posted the best return for the Fund. Siam Cement PCL, the country’s largest cement company, also posted a positive double-digit return. On the negative side, shares of PTT Exploration & Production PCL, a major energy company and two Thai-based commercial banks – Bank of Ayudhya PCL and Bangkok Bank PCL – declined notably during the period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 25

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(0.33)%	0.73%	0.12%	(16.37)%	(16.18)%	(16.14)%	(22.64)%	(22.38)%	(22.33)%

Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

26 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Energy	30.28	%
Financial	30.18
Consumer Cyclical	8.59
Communications	8.21
Industrial	7.91
Basic Materials	6.39
Consumer Non-Cyclical	4.63
Utilities	2.77
Technology	0.42
Short-Term and Other Net Assets	0.62
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
PTT PCL NVDR	12.84	%
PTT Exploration & Production PCL NVDR	10.29
Bangkok Bank PCL NVDR	8.93
Siam Commercial Bank PCL NVDR	5.39
Kasikornbank PCL NVDR	5.04
Advanced Info Service PCL NVDR	4.55
Siam Cement PCL NVDR	4.40
Banpu PCL NVDR	4.07
Bank of Ayudhya PCL NVDR	2.68
CP All PCL NVDR	2.64
TOTAL	60.83	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 27

Shareholder Expenses (Unaudited)

iSHARES^®, INC.

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2009 to August 31, 2009.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Australia
Actual	$1,000.00	$1,795.00	0.55	%	$3.87
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Hong Kong
Actual	1,000.00	1,488.00	0.55		3.45
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Japan Small Cap
Actual	1,000.00	1,399.20	0.55		3.33
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Malaysia
Actual	1,000.00	1,413.90	0.55		3.35
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80

28 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Pacific ex-Japan
Actual	$1,000.00	$1,724.00	0.50	%	$3.43
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.50		2.55
Singapore
Actual	1,000.00	1,780.50	0.55		3.85
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
South Korea
Actual	1,000.00	1,887.90	0.64		4.66
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26
Taiwan
Actual	1,000.00	1,562.90	0.86		5.56
Hypothetical (5% return before expenses)	1,000.00	1,020.90	0.86		4.38
Thailand Investable Market
Actual	1,000.00	1,724.40	0.64		4.39
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26

^a Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days).

SHAREHOLDER EXPENSES 29

Schedule of Investments

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.95%
AIRLINES – 0.31%
Qantas Airways Ltd.	2,352,784	$	5,018,292
			5,018,292
APPAREL – 0.24%
Billabong International Ltd.	425,712		3,768,413
			3,768,413
BANKS – 29.35%
Australia and New Zealand Banking Group Ltd.	5,023,480		90,164,104
Bendigo and Adelaide Bank Ltd.	645,624		4,517,634
Bendigo and Adelaide Bank Ltd. Newa	52,398		360,019
Commonwealth Bank of Australia	3,266,928		126,692,448
National Australia Bank Ltd.	4,132,464		99,220,725
Suncorp-Metway Ltd.	2,707,152		17,870,131
Westpac Banking Corp.	6,272,392		128,867,100
			467,692,161
BEVERAGES – 2.23%
Coca-Cola Amatil Ltd.	1,199,520		10,021,540
Foster’s Group Ltd.	4,150,888		19,176,745
Lion Nathan Ltd.	639,352		6,365,657
			35,563,942
BIOTECHNOLOGY – 0.59%
Sonic Healthcare Ltd.	792,624		9,341,739
			9,341,739
BUILDING MATERIALS – 1.02%
Boral Ltd.	1,267,336		6,186,196
CSR Ltd.	2,663,640		4,580,987
James Hardie Industries NVa	931,784		5,459,507
			16,226,690
CHEMICALS – 0.76%
Incitec Pivot Ltd.	3,446,464		8,745,680
Nufarm Ltd.	368,331		3,325,685
			12,071,365

Security	Shares	Value
COMMERCIAL SERVICES – 2.06%
Brambles Ltd.	3,010,560	$	18,857,731
Macquarie Infrastructure Group	4,946,648		5,546,461
Transurban Group	2,492,728		8,490,037
			32,894,229
COMPUTERS – 0.51%
Computershare Ltd.	956,088		8,148,963
			8,148,963
DIVERSIFIED FINANCIAL SERVICES – 2.59%
ASX Ltd.	371,224		10,358,989
Macquarie Group Ltd.	654,248		28,019,440
Perpetual Ltd.	81,536		2,828,607
			41,207,036
ELECTRIC – 0.71%
AGL Energy Ltd.	966,280		11,372,128
			11,372,128
ELECTRIC - DISTRIBUTION – 0.12%
SP AusNet	2,865,128		1,859,893
			1,859,893
ENGINEERING & CONSTRUCTION – 1.16%
Leighton Holdings Ltd.	319,872		9,964,236
WorleyParsons Ltd.	352,408		8,458,368
			18,422,604
ENTERTAINMENT – 1.00%
Aristocrat Leisure Ltd.	851,509		3,316,535
Tabcorp Holdings Ltd.	1,284,192		7,264,501
Tatts Group Ltd.	2,600,920		5,437,910
			16,018,946
FOOD – 4.52%
Goodman Fielder Ltd.	2,699,312		3,504,509
Metcash Ltd.	1,667,960		6,018,423
Woolworths Ltd.	2,646,000		62,504,503
			72,027,435
HEALTH CARE - PRODUCTS – 0.36%
Cochlear Ltd.	121,520		5,764,717
			5,764,717

30 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2009

Security	Shares	Value
INSURANCE – 5.41%
AMP Ltd.	4,324,152	$	23,185,230
AXA Asia Pacific Holdings Ltd.	2,206,176		7,997,642
Insurance Australia Group Ltd.	4,430,776		13,372,609
QBE Insurance Group Ltd.	2,158,352		41,632,417
			86,187,898
IRON & STEEL – 1.09%
BlueScope Steel Ltd.	3,923,920		9,461,054
OneSteel Ltd.	2,867,088		7,855,570
			17,316,624
LODGING – 0.43%
Crown Ltd.	1,034,880		6,901,124
			6,901,124
MANUFACTURING – 4.24%
Orica Ltd.	775,376		14,760,111
Wesfarmers Ltd.	2,165,016		45,867,697
Wesfarmers Ltd. Partially Protected	326,928		6,973,101
			67,600,909
MEDIA – 0.36%
Fairfax Media Ltd.b	4,605,608		5,707,654
			5,707,654
METAL FABRICATE & HARDWARE – 0.39%
Sims Metal Management Ltd.	316,344		6,195,297
			6,195,297
MINING – 20.46%
Alumina Ltd.	5,263,776		7,410,836
BHP Billiton Ltd.	7,224,168		224,124,322
Energy Resources of Australia Ltd.	146,608		3,213,545
Fortescue Metals Group Ltd.a	2,658,936		9,885,526
Newcrest Mining Ltd.	1,041,152		26,341,073
OZ Minerals Ltd.a	6,714,960		6,000,710
Paladin Energy Ltd.a	1,205,400		4,674,577
Rio Tinto Ltd.	937,664		44,354,822
			326,005,411

Security	Shares	Value
OIL & GAS – 6.25%
Arrow Energy Ltd.a	1,236,368	$	4,784,249
Caltex Australia Ltd.	292,824		3,053,723
Origin Energy Ltd.	1,884,344		24,321,408
Santos Ltd.	1,762,824		23,481,151
Woodside Petroleum Ltd.	1,066,240		44,045,788
			99,686,319
PACKAGING & CONTAINERS – 0.80%
Amcor Ltd.	2,610,192		12,697,014
			12,697,014
PHARMACEUTICALS – 2.21%
CSL Ltd.	1,298,696		35,265,623
			35,265,623
REAL ESTATE – 6.24%
BGP Holdings PLCc	18,888,372		2,711
Dexus Property Group	9,966,992		6,259,991
Goodman Group	12,865,832		6,724,855
GPT Group	18,547,872		9,616,622
Lend Lease Corp. Ltd.	928,256		7,379,600
Mirvac Group	5,497,016		6,858,704
Stockland Corp. Ltd.	4,930,184		15,711,160
Westfield Group	4,398,240		46,942,473
			99,496,116
REAL ESTATE INVESTMENT TRUSTS – 0.37%
CFS Retail Property Trustb	3,718,512		5,956,294
			5,956,294
RETAIL – 0.24%
Harvey Norman Holdings Ltd.b	1,145,424		3,804,660
			3,804,660
TELECOMMUNICATIONS – 1.63%
Telstra Corp. Ltd.	9,460,528		26,000,776
			26,000,776
TRANSPORTATION – 1.30%
Asciano Groupa	5,841,584		7,830,348
Macquarie Airports	1,505,808		3,249,847
Toll Holdings Ltd.	1,427,664		9,592,629
			20,672,824
TOTAL COMMON STOCKS (Cost: $1,568,183,250)			1,576,893,096

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.38%
MONEY MARKET FUNDS – 0.38%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%d,e,f	5,105,560	$	5,105,560
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% d,e,f	720,220		720,220
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%d,e	265,283		265,283
			6,091,063
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,091,063)			6,091,063
TOTAL INVESTMENTS IN SECURITIES – 99.33%
(Cost: $1,574,274,313)			1,582,984,159
Other Assets, Less Liabilities – 0.67%			10,692,238
NET ASSETS – 100.00%		$	1,593,676,397

^a Non-income earning security.

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

^c Security valued using Level 3 inputs. See Note 1.

^d Affiliated issuer. See Note 2.

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

^f All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

32 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI HONG KONG INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.65%
AIRLINES – 0.81%
Cathay Pacific Airways Ltd.a,b	10,854,000	$	15,740,481
			15,740,481
APPAREL – 0.86%
Yue Yuen Industrial Holdings Ltd.	6,331,500		16,705,589
			16,705,589
BANKS – 11.43%
Bank of East Asia Ltd.	13,024,910		42,012,315
BOC Hong Kong (Holdings) Ltd.	33,466,500		67,100,103
Hang Seng Bank Ltd.	6,874,200		97,649,800
Wing Hang Bank Ltd.	1,809,000		16,337,984
			223,100,202
DISTRIBUTION & WHOLESALE – 6.85%
Esprit Holdings Ltd.	10,130,400		61,626,878
Li & Fung Ltd.b	21,709,000		72,123,854
			133,750,732
DIVERSIFIED FINANCIAL SERVICES – 8.29%
Hong Kong Exchanges and Clearing Ltd.b	9,295,000		161,899,325
			161,899,325
ELECTRIC – 10.14%
CLP Holdings Ltd.	18,994,700		127,192,549
Hongkong Electric Holdings Ltd.	12,663,000		70,743,473
			197,936,022
ENGINEERING & CONSTRUCTION – 3.35%
Cheung Kong Infrastructure Holdings Ltd.	3,618,000		13,163,748
Hong Kong Aircraft Engineering Co. Ltd.	723,600		8,467,744
New World Development Co. Ltd.	21,708,800		43,806,085
			65,437,577
GAS – 4.01%
Hong Kong and China Gas Co. Ltd. (The)b	36,180,712		78,330,507
			78,330,507

Security	Shares	Value
HOLDING COMPANIES - DIVERSIFIED – 14.67%
Hutchison Whampoa Ltd.	19,899,800	$	139,928,793
NWS Holdings Ltd.	7,236,000		14,097,347
Swire Pacific Ltd. Class A	7,236,000		75,481,489
Wharf (Holdings) Ltd. (The)	12,663,500		56,776,738
			286,284,367
LODGING – 0.82%
Shangri-La Asia Ltd.b	10,854,000		15,964,545
			15,964,545
MEDIA – 0.48%
Television Broadcasts Ltd.	2,209,000		9,419,526
			9,419,526
MINING – 0.49%
Mongolia Energy Corp. Ltd.a,b	27,135,000		9,627,741
			9,627,741
REAL ESTATE – 30.61%
Cheung Kong (Holdings) Ltd.	12,663,000		150,227,768
Chinese Estates Holdings Ltd.b	7,236,000		13,313,124
Hang Lung Group Ltd.	7,236,000		33,329,488
Hang Lung Properties Ltd.b	19,899,000		62,002,651
Henderson Land Development Co. Ltd.	9,595,332		56,391,060
Hopewell Holdings Ltd.	5,427,000		16,419,674
Hysan Development Co. Ltd.	5,427,000		12,729,624
Kerry Properties Ltd.	6,331,500		29,980,202
Sino Land Co. Ltd.b	14,472,000		24,721,704
Sun Hung Kai Properties Ltd.	12,863,000		174,092,328
Wheelock and Co. Ltd.b	9,045,000		24,331,927
			597,539,550
REAL ESTATE INVESTMENT TRUSTS – 2.25%
Link REIT (The)b	19,899,000		43,851,150
			43,851,150
RETAIL – 0.40%
Lifestyle International Holdings Ltd.	5,427,000		7,730,201
			7,730,201
SEMICONDUCTORS – 0.59%
ASM Pacific Technology Ltd.b	1,809,000		11,588,299
			11,588,299

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 0.98%
Foxconn International Holdings Ltd.a	18,090,000	$	11,109,829
PCCW Ltd.	30,753,000		7,975,271
			19,085,100
TRANSPORTATION – 2.62%
MTR Corp. Ltd.b	12,663,083		42,560,729
Orient Overseas International Ltd.b	1,809,200		8,496,691
			51,057,420
TOTAL COMMON STOCKS (Cost: $2,305,121,236)			1,945,048,334
SHORT-TERM INVESTMENTS – 4.87%
MONEY MARKET FUNDS – 4.87%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	82,770,853		82,770,853
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% c,d,e	11,676,133		11,676,133
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	554,354		554,354
			95,001,340
TOTAL SHORT-TERM INVESTMENTS
(Cost: $95,001,340)			95,001,340
TOTAL INVESTMENTS IN SECURITIES – 104.52% (Cost: $2,400,122,576)			2,040,049,674
Other Assets, Less Liabilities – (4.52)%			(88,272,809	)
NET ASSETS – 100.00%		$	1,951,776,865

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

34 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.79%
ADVERTISING – 0.33%
Asatsu-DK Inc.	3,200	$	69,336
Moshi Moshi Hotline Inc.	2,400		46,828
			116,164
AEROSPACE & DEFENSE – 0.14%
Japan Aviation Electronics Industry Ltd.	8,000		51,485
			51,485
AGRICULTURE – 0.47%
Hokuto Corp.	2,400		56,659
Sakata Seed Corp.	7,200		110,369
			167,028
APPAREL – 1.14%
Descente Ltd.	8,000		37,687
Gunze Ltd.	16,000		72,959
Japan Wool Textile Co. Ltd. (The)	8,000		61,920
Katakura Industries Co. Ltd.	3,200		36,876
Sanyo Shokai Ltd.	8,000		26,993
Tokyo Style Co. Ltd.	8,000		67,267
Wacoal Holdings Corp.	8,000		101,331
			405,033
AUTO MANUFACTURERS – 0.73%
Kanto Auto Works Ltd.	4,800		49,415
Nissan Shatai Co. Ltd.	8,000		66,059
Shinmaywa Industries Ltd.	16,000		66,404
Toyota Auto Body Co. Ltd.	4,000		78,909
			260,787
AUTO PARTS & EQUIPMENT – 3.60%
Aisan Industry Co. Ltd.	2,400		19,223
Akebono Brake Industry Co. Ltd.a	6,400		50,364
Calsonic Kansei Corp.	16,000		39,843
Exedy Corp.	3,200		68,302
FCC Co. Ltd.	4,000		62,136
Kayaba Industry Co. Ltd.	16,000		43,292
Keihin Corp.	4,000		66,663
Koito Manufacturing Co. Ltd.	8,000		106,506
Musashi Seimitsu Industry Co. Ltd.	2,400		43,698
Nifco Inc.	4,000		71,492
Nissin Kogyo Co. Ltd.	4,000		52,261
Press Kogyo Co. Ltd.	8,000		19,231

Security	Shares	Value
Riken Corp.	16,000	$	54,331
Sanden Corp.b	16,000		48,467
Showa Corp.	6,400		41,119
T.RAD Co. Ltd.	8,000		22,077
Takata Corp.	3,200		61,023
Tokai Rika Co. Ltd.	3,200		57,608
Topre Corp.	6,400		60,299
Toyo Tire & Rubber Co. Ltd.b	16,000		38,118
TS Tech Co. Ltd.	4,800		87,085
Unipres Corp.	3,200		43,154
Yokohama Rubber Co. Ltd. (The)	24,000		125,478
			1,281,770
BANKS – 10.42%
Aichi Bank Ltd. (The)	800		73,390
Akita Bank Ltd. (The)	24,000		97,278
Aomori Bank Ltd. (The)	16,000		65,887
Awa Bank Ltd. (The)	24,000		144,106
Bank of Ikeda Ltd. (The)b	1,600		61,575
Bank of Iwate Ltd. (The)	1,600		94,001
Bank of Nagoya Ltd. (The)	16,000		72,786
Bank of Okinawa Ltd. (The)	2,400		95,208
Bank of Saga Ltd. (The)	16,000		55,366
Bank of the Ryukyus Ltd.	4,000		55,668
Chiba Kogyo Bank Ltd. (The)b	4,000		34,582
Chukyo Bank Ltd. (The)	16,000		50,536
Daishi Bank Ltd. (The)	32,000		132,464
Ehime Bank Ltd. (The)	16,000		46,224
Eighteenth Bank Ltd. (The)	16,000		52,261
Fukui Bank Ltd. (The)	32,000		107,627
Higashi-Nippon Bank Ltd. (The)	16,000		37,255
Higo Bank Ltd. (The)	16,000		103,660
Hokkoku Bank Ltd. (The)	24,000		92,104
Hokuetsu Bank Ltd. (The)	24,000		48,898
Hyakugo Bank Ltd. (The)	24,000		125,996
Hyakujushi Bank Ltd. (The)	24,000		118,234
Juroku Bank Ltd. (The)	32,000		120,045
Kagoshima Bank Ltd. (The)	16,000		129,877
Kansai Urban Banking Corp.	16,000		26,044
Kanto Tsukuba Bank Ltd. (The)b	5,600		19,197
Keiyo Bank Ltd. (The)	24,000		130,653
Kiyo Holdings Inc.	64,000		82,100
Michinoku Bank Ltd. (The)	16,000		35,703

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
Mie Bank Ltd. (The)	8,000	$	28,890
Minato Bank Ltd. (The)b	16,000		23,112
Miyazaki Bank Ltd. (The)	16,000		67,784
Musashino Bank Ltd. (The)	3,200		113,836
Nanto Bank Ltd. (The)	24,000		141,778
Ogaki Kyoritsu Bank Ltd. (The)	24,000		96,502
Oita Bank Ltd. (The)	16,000		70,371
San-in Godo Bank Ltd. (The)	16,000		148,332
Shiga Bank Ltd. (The)	24,000		154,196
Shikoku Bank Ltd. (The)	16,000		59,850
Shonai Bank Ltd. (The)	8,000		14,057
Tochigi Bank Ltd. (The)	8,000		42,775
Toho Bank Ltd. (The)	24,000		109,955
Tokushima Bank Ltd. (The)	8,000		42,516
Tokyo Tomin Bank Ltd. (The)	3,200		58,298
Yachiyo Bank Ltd. (The)	1,600		47,863
Yamagata Bank Ltd. (The)	16,000		90,724
Yamanashi Chuo Bank Ltd. (The)	16,000		86,584
			3,706,148
BEVERAGES – 0.70%
Kagome Co. Ltd.	7,200		134,973
Takara Holdings Inc.	16,000		113,491
			248,464
BIOTECHNOLOGY – 0.19%
AnGes MG Inc.b	16		29,804
OncoTherapy Science Inc.b	8		17,507
Takara Bio Inc.b	8		19,783
			67,094
BUILDING MATERIALS – 1.32%
Central Glass Co. Ltd.	24,000		118,493
Chofu Seisakusho Co. Ltd.	2,400		51,614
Nichias Corp.	8,000		30,874
Sanwa Holdings Corp.	24,000		88,482
Sumitomo Osaka Cement Co. Ltd.	40,000		85,377
Takara Standard Co. Ltd.	16,000		94,346
			469,186
CHEMICALS – 6.15%
Adeka Corp.	9,600		96,761
Aica Kogyo Co. Ltd.	8,000		83,049
Air Water Inc.	16,000		184,552
C. Uyemura & Co. Ltd.	800		34,496

Security	Shares	Value
Chugoku Marine Paints Ltd.	8,000	$	50,709
Dainichiseika Color & Chemicals Manufacturing Co. Ltd.	8,000		28,114
Earth Chemical Co. Ltd.	1,600		46,224
Fujimi Inc.	2,400		37,359
Ishihara Sangyo Kaisha Ltd.b	40,000		42,689
Lintec Corp.	4,800		100,952
Nihon Nohyaku Co. Ltd.a	8,000		66,491
Nihon Parkerizing Co. Ltd.	8,000		98,399
Nippon Carbon Co. Ltd.	16,000		57,608
Nippon Kayaku Co. Ltd.	16,000		140,743
Nippon Paint Co. Ltd.	24,000		136,603
Nippon Shokubai Co. Ltd.	8,000		75,804
Nippon Soda Co. Ltd.	16,000		76,236
Nippon Synthetic Chemical Industry Co. Ltd. (The)	8,000		53,727
NOF Corp.	16,000		91,414
Sakai Chemical Industry Co. Ltd.	8,000		38,808
Sumitomo Bakelite Co. Ltd.	24,000		122,632
Taiyo Ink Manufacturing Co. Ltd.	1,600		40,791
Takasago International Corp.	8,000		43,810
Toagosei Co. Ltd.	24,000		78,909
Tokai Carbon Co. Ltd.	16,000		82,445
Tokyo Ohka Kogyo Co. Ltd.	4,800		113,836
Toyo Ink Manufacturing Co. Ltd.	24,000		85,377
Zeon Corp.	16,000		78,823
			2,187,361
COMMERCIAL SERVICES – 2.20%
Aeon Delight Co. Ltd.	1,600		23,526
Daiseki Co. Ltd.	3,260		70,988
Meitec Corp.	4,000		79,728
Nichii Gakkan Co.	4,800		55,676
Nishio Rent All Co. Ltd.	2,400		22,612
Nissha Printing Co. Ltd.	2,400		127,031
Park 24 Co. Ltd.	10,400		105,385
Pasona Group Inc.	32		23,112
Sohgo Security Services Co. Ltd.	6,400		80,237
So-net M3 Inc.a	8		26,044
TKC Corp.	2,400		46,957
Toppan Forms Co. Ltd.	6,400		89,965
Zenrin Co. Ltd.	2,400		32,495
			783,756

36 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
COMPUTERS – 0.89%
CSK Holdings Corp.a,b	7,200	$	34,849
DTS Corp.	3,200		29,425
Hitachi Information Systems Ltd.	2,400		74,770
Ines Corp.	2,400		21,267
Net One Systems Co. Ltd.	48		79,116
NS Solutions Corp.	2,400		42,249
Vic Tokai Corp.	2,400		33,375
			315,051
COSMETICS & PERSONAL CARE – 1.24%
Aderans Holdings Co. Ltd.	4,000		54,676
Fancl Corp.	4,800		67,888
Kose Corp.	3,200		77,443
Lion Corp.	16,000		82,100
Mandom Corp.	3,200		93,311
Pigeon Corp.	1,600		66,404
			441,822
DISTRIBUTION & WHOLESALE – 2.35%
Doshisha Co. Ltd.	2,400		44,422
F&A Aqua Holdings Inc.	3,200		36,255
Hanwa Co. Ltd.	24,000		94,950
Inaba Denki Sangyo Co. Ltd.	3,200		73,993
Itochu Enex Co. Ltd.	8,800		54,262
Iwatani Corp.	32,000		95,208
Japan Pulp & Paper Co. Ltd.	16,000		60,195
Japan Wind Development Co. Ltd.a	8		30,787
JFE Shoji Holdings Inc.	8,000		32,599
Kanematsu Corp.b	48,000		47,087
Matsuda Sangyo Co. Ltd.	2,460		37,603
Nagase & Co. Ltd.	8,000		95,812
Nippon Gas Co. Ltd.	4,800		74,200
Sumikin Bussan Corp.	8,000		18,455
Trusco Nakayama Corp.	2,400		40,386
			836,214
DIVERSIFIED FINANCIAL SERVICES – 2.51%
AIFUL Corp.	8,000		23,975
Aizawa Securities Co. Ltd.	4,800		11,849
Cedyna Financial Corp.b	12,000		22,509
Century Tokyo Leasing Corp.	5,680		65,639
Fuyo General Lease Co. Ltd.	1,600		35,876
Hitachi Credit Corp.	4,000		57,694
IBJ Leasing Co. Ltd.	2,400		34,591

Security	Shares	Value
Ichiyoshi Securities Co. Ltd.	4,800	$	34,099
Jaccs Co. Ltd.	16,000		40,705
Japan Securities Finance Co. Ltd.	8,800		72,001
Marusan Securities Co. Ltd.	7,200		49,829
Mizuho Investors Securities Co. Ltd.b	32,000		37,945
Okasan Securities Group Inc.	16,000		79,685
Orient Corp.b	20,000		21,991
Osaka Securities Exchange Co. Ltd.	24		109,955
Ricoh Leasing Co. Ltd.	2,400		52,261
SPARX Group Co. Ltd.b	88		13,376
Takefuji Corp.a	10,160		52,133
Tokai Tokyo Financial Holdings Inc.	16,000		57,953
Toyo Securities Co. Ltd.b	8,000		19,145
			893,211
ELECTRIC – 0.27%
Okinawa Electric Power Co. Inc. (The)	1,600		95,553
			95,553
ELECTRICAL COMPONENTS & EQUIPMENT – 1.48%
Fujikura Ltd.	32,000		169,029
Funai Electric Co. Ltd.	2,400		95,984
Hitachi Cable Ltd.	16,000		53,641
Nippon Signal Co. Ltd. (The)	4,000		40,144
Sinfonia Technology Co. Ltd.	16,000		42,602
Takaoka Electric Manufacturing Co. Ltd.	8,000		28,287
Tokyo Rope Manufacturing Co. Ltd.	8,000		27,165
Toshiba Tec Corp.	16,000		69,336
			526,188
ELECTRONICS – 5.88%
Alps Electric Co. Ltd.	12,800		77,409
Anritsu Corp.	16,000		62,092
Chiyoda Integre Co. Ltd.b	2,400		28,433
CMK Corp.	5,600		48,717
Cosel Co. Ltd.	4,000		47,432
Dainippon Screen Manufacturing Co. Ltd.b	24,000		83,049
Eizo Nanao Corp.	2,400		54,978
Fujitsu General Ltd.	8,000		26,993
Furuno Electric Co. Ltd.	3,200		18,145
Futaba Corp.	4,000		69,078
Hamamatsu Photonics K.K.	6,400		136,948
HORIBA Ltd.	3,200		72,786

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
Hosiden Corp.	6,400	$	94,587
JEOL Ltd.	8,000		37,514
Kaga Electronics Co. Ltd.	4,000		48,208
Koa Corp.	5,600		54,210
Kuroda Electric Co. Ltd.	4,000		56,314
Macnica Inc.	2,400		41,240
Meiko Electronics Co. Ltd.	800		17,196
Micronics Japan Co. Ltd.	1,600		28,632
Nichicon Corp.	7,200		100,512
Nihon Dempa Kogyo Co. Ltd.	1,600		36,393
Nippon Chemi-Con Corp.	16,000		62,092
Nitto Kogyo Corp.	3,200		30,701
Ryosan Co. Ltd.	4,800		122,374
Sanyo Denki Co. Ltd.	8,000		35,876
Sodick Co. Ltd.	7,200		17,308
Star Micronics Co. Ltd.	4,800		50,450
Taiyo Yuden Co. Ltd.	8,000		95,726
Tamura Corp.	8,000		30,615
Tokyo Seimitsu Co. Ltd.	4,000		57,263
Toyo Corp.	4,000		41,309
ULVAC Inc.a	3,200		92,449
Wacom Co. Ltd.a	40		80,763
Yamatake Corp.	6,400		131,153
			2,088,945
ENGINEERING & CONSTRUCTION – 4.60%
Chiyoda Corp.	16,000		129,704
Chudenko Corp.	3,200		53,882
COMSYS Holdings Corp.	14,400		166,873
Hitachi Plant Engineering & Construction Co. Ltd.	8,000		52,434
Japan Airport Terminal Co. Ltd.	6,400		74,442
Kandenko Co. Ltd.	8,000		55,538
Kyowa Exeo Corp.	8,000		80,893
Maeda Corp.	24,000		79,685
Maeda Road Construction Co. Ltd.	8,000		70,544
Nippo Corp.	8,000		69,423
Nippon Road Co. Ltd. (The)	8,000		20,697
Nishimatsu Construction Co. Ltd.	32,000		57,263
Okumura Corp.	16,000		66,404
Penta-Ocean Construction Co. Ltd.b	28,000		38,333
Shinko Plantech Co. Ltd.	4,800		46,466
SHO-BOND Holdings Co. Ltd.	3,200		62,161

Security	Shares	Value
Taihei Kogyo Co. Ltd.	8,000	$	24,578
Taikisha Ltd.	4,000		54,374
Takasago Thermal Engineering Co. Ltd.	8,000		71,579
Takuma Co. Ltd.b	8,000		21,474
Toa Corp.	16,000		19,663
Toda Corp.	24,000		97,019
Tokyu Construction Co. Ltd.b	10,080		31,077
Toshiba Plant Systems & Services Corp.	8,000		108,920
Toyo Construction Co. Ltd.	40,000		24,147
Toyo Engineering Corp.	16,000		57,435
			1,635,008
ENTERTAINMENT – 0.84%
Avex Group Holdings Inc.	4,000		36,221
Resorttrust Inc.	4,000		49,760
Shochiku Co. Ltd.a	8,000		69,509
Toei Co. Ltd.	8,000		45,621
Tokyotokeiba Co. Ltd.	16,000		25,872
Yomiuri Land Co. Ltd.	8,000		26,821
Yoshimoto Kogyo Co. Ltd.	4,000		46,397
			300,201
ENVIRONMENTAL CONTROL – 0.12%
Asahi Holdings Inc.b	2,400		41,395
			41,395
FOOD – 3.88%
Ariake Japan Co. Ltd.	2,400		37,669
Ezaki Glico Co. Ltd.	8,000		88,395
Fuji Oil Co. Ltd.	9,600		135,154
House Foods Corp.	7,200		112,154
Itoham Foods Inc.	16,000		56,228
J-Oil Mills Inc.	8,000		29,753
Kato Sangyo Co. Ltd.	1,600		27,096
Maruha Nichiro Holdings Inc.	40,000		60,799
Mitsui Sugar Co. Ltd.	8,000		29,580
Morinaga & Co. Ltd.	32,000		68,992
Morinaga Milk Industry Co. Ltd.	24,000		105,040
Nichirei Corp.	24,000		93,139
Nippon Beet Sugar Manufacturing Co. Ltd.	16,000		45,017
Nippon Flour Mills Co. Ltd.	16,000		82,445
Nippon Suisan Kaisha Ltd.	23,200		69,776

38 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
Nisshin OilliO Group Ltd. (The)	16,000	$	85,377
Prima Meat Packers Ltd.	16,000		19,145
Q.P. Corp.	9,600		103,487
Snow Brand Milk Products Co. Ltd.	20,000		72,441
Unicharm Petcare Corp.	1,600		57,608
			1,379,295
FOREST PRODUCTS & PAPER – 1.32%
Daio Paper Corp.	8,000		76,667
Hokuetsu Paper Mills Ltd.	12,000		65,326
Mitsubishi Paper Mills Ltd.	32,000		45,189
Rengo Co. Ltd.	24,000		150,057
Sumitomo Forestry Co. Ltd.	16,000		132,809
			470,048
GAS – 0.45%
Saibu Gas Co. Ltd.	48,000		130,911
Shizuoka Gas Co. Ltd.	4,000		29,968
			160,879
HAND & MACHINE TOOLS – 1.60%
DISCO Corp.	2,400		143,589
Hitachi Koki Co. Ltd.	5,600		59,402
Meidensha Corp.a	24,000		131,688
Mori Seiki Co. Ltd.	8,000		91,586
OSG Corp.	8,800		91,638
Union Tool Co.	1,600		49,243
			567,146
HEALTH CARE - PRODUCTS – 1.76%
Hogy Medical Co. Ltd.	1,600		90,034
Nakanishi Inc.	800		69,681
Nihon Kohden Corp.	4,000		65,758
Nipro Corp.	8,000		171,185
Paramount Bed Co. Ltd.	2,400		50,191
Sysmex Corp.	3,200		145,227
Topcon Corp.a	6,400		32,909
			624,985
HOME BUILDERS – 0.57%
Haseko Corp.b	104,000		117,717
PanaHome Corp.	8,000		50,881
Token Corp.	960		34,875
			203,473

Security	Shares	Value
HOME FURNISHINGS – 1.41%
Alpine Electronics Inc.	4,800	$	46,311
Canon Electronics Inc.	2,400		41,291
Daiwa Industries Ltd.	8,000		43,206
Foster Electric Co. Ltd.	2,400		48,691
France Bed Holdings Co. Ltd.	16,000		26,217
Hitachi Maxell Ltd.	4,800		89,672
Juki Corp.	16,000		21,560
JVC KENWOOD Holdings Inc.b	78,400		43,948
Nidec Sankyo Corp.	8,000		46,828
Noritz Corp.	3,200		42,602
Pioneer Corp.a,b	16,000		51,744
			502,070
HOUSEHOLD PRODUCTS & WARES – 0.08%
Pilot Corp.	24		28,174
			28,174
HOUSEWARES – 0.41%
Noritake Co. Ltd.	16,000		56,573
Sangetsu Co. Ltd.	4,000		90,336
			146,909
INSURANCE – 0.03%
Fuji Fire & Marine Insurance Co. Ltd. (The)b	8,000		11,125
			11,125
INTERNET – 1.60%
Access Co. Ltd.b	24		64,550
CyberAgent Inc.	56		53,305
Dwango Co. Ltd.	8		13,859
eAccess Ltd.	136		100,426
En-Japan Inc.	16		19,318
GMO Internet Inc.	5,600		24,570
Gourmet Navigator Inc.	16		38,515
Internet Initiative Japan Inc.	16		38,394
kabu.com Securities Co. Ltd.	40		50,019
Kakaku.com Inc.	16		60,023
Monex Group Inc.	112		47,509
Opt Inc.	8		12,099
So-net Entertainment Corp.	16		32,047
VeriSign Japan K.K.	32		14,230
			568,864

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
IRON & STEEL – 1.33%
Aichi Steel Corp.	16,000	$	68,647
Godo Steel Ltd.	16,000		39,325
Kyoei Steel Ltd.	1,600		38,290
Mitsubishi Steel Manufacturing Co. Ltd.	16,000		37,255
Nakayama Steel Works Ltd.	8,000		17,075
Nippon Metal Industry Co. Ltd.	16,000		35,703
Nippon Yakin Kogyo Co. Ltd.	12,000		70,371
Sanyo Special Steel Co. Ltd.	8,000		32,599
TOPY Industries Ltd.	24,000		60,281
Yodogawa Steel Works Ltd.	16,000		72,269
			471,815
LEISURE TIME – 1.50%
Accordia Golf Co. Ltd.	64		63,817
Daiichikosho Co. Ltd.	4,800		63,645
Fields Corp.	16		24,026
Heiwa Corp.	5,600		62,782
HIS Co. Ltd.	3,200		68,164
Mars Engineering Corp.	1,600		51,744
Mizuno Corp.	8,000		36,134
Pacific Golf Group International Holdings K.K.	56		40,446
Roland Corp.	2,400		28,200
Round One Corp.	4,800		43,672
Tokyo Dome Corp.	16,000		48,984
			531,614
LODGING – 0.10%
Fujita Kanko Inc.	8,000		34,668
			34,668
MACHINERY – 3.89%
Aida Engineering Ltd.	8,000		27,942
Chugai Ro Co. Ltd.	8,000		24,578
CKD Corp.	7,200		41,912
Daifuku Co. Ltd.	8,000		55,366
Daihen Corp.	16,000		66,059
Fuji Machine Manufacturing Co. Ltd.	4,800		67,008
Furukawa Co. Ltd.	32,000		46,569
Harmonic Drive Systems Inc.	8		21,077
Iseki & Co. Ltd.b	24,000		109,697
Komori Corp.	6,400		76,167
Makino Milling Machine Co. Ltd.	8,000		31,822

Security	Shares	Value
Max Co. Ltd.	8,000	$	86,757
Miura Co. Ltd.	3,200		80,548
Modec Inc.	2,400		47,164
Nabtesco Corp.	8,000		89,344
Nippon Sharyo Ltd.	8,000		53,037
Nippon Thompson Co. Ltd.	8,000		49,157
Obara Corp.	1,600		12,936
Okuma Corp.	16,000		81,065
Shima Seiki Manufacturing Ltd.	2,400		56,013
Sintokogio Ltd.	6,400		53,261
Tadano Ltd.	8,000		39,411
Toshiba Machine Co. Ltd.	16,000		64,335
Toyo Kanetsu K.K.	16,000		32,254
Tsubakimoto Chain Co.	16,000		69,854
			1,383,333
MACHINERY - DIVERSIFIED – 0.51%
Ebara Corp.b	40,000		179,809
			179,809
MANUFACTURING – 1.62%
Amano Corp.	8,000		72,441
Glory Ltd.	6,400		143,502
Kureha Corp.	16,000		97,451
Nikkiso Co. Ltd.	8,000		63,300
Nitta Corp.	3,200		51,295
Tamron Co. Ltd.	1,600		21,198
Tenma Corp.	3,200		40,360
Tokai Rubber Industries Ltd.	3,200		39,670
Toyo Tanso Co. Ltd.	800		45,189
			574,406
MEDIA – 0.43%
Gakken Co. Ltd.	8,000		18,110
Kadokawa Group Holdings Inc.	2,400		55,366
SKY Perfect JSAT Holdings Inc.	160		64,938
Usen Corp.b	11,448		15,179
			153,593
METAL FABRICATE & HARDWARE – 1.57%
Kitz Corp.	8,000		36,479
Misumi Group Inc.	8,000		148,763
Nachi-Fujikoshi Corp.	24,000		55,624
Neturen Co. Ltd.	4,800		37,204
Oiles Corp.	4,080		67,425

40 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
Onoken Co. Ltd.	1,600	$	16,454
Ryobi Ltd.	16,000		47,604
Tocalo Co. Ltd.	2,400		42,585
Toho Zinc Co. Ltd.	16,000		78,650
Yamezen Corp.	7,200		29,183
			559,971
MINING – 1.17%
Nippon Coke & Engineering Co. Ltd.	20,000		26,303
Nippon Denko Co. Ltd.	8,000		61,575
Nippon Light Metal Co. Ltd.b	64,000		73,821
Nittetsu Mining Co. Ltd.	8,000		39,325
Pacific Metals Co. Ltd.	16,000		134,706
Sumitomo Light Metal Industries Ltd.b	40,000		42,689
Toho Titanium Co. Ltd.	2,400		39,066
			417,485
OFFICE & BUSINESS EQUIPMENT – 0.11%
Canon Finetech Inc.	3,200		38,946
			38,946
OFFICE FURNISHINGS – 0.42%
Itoki Corp.	5,600		15,092
Kokuyo Co. Ltd.	9,600		87,136
Okamura Corp.	8,000		45,621
			147,849
OIL & GAS – 0.10%
AOC Holdings Inc.	4,800		37,255
			37,255
PACKAGING & CONTAINERS – 0.36%
FP Corp.	1,600		76,236
Fuji Seal International Inc.	2,400		51,071
			127,307
PHARMACEUTICALS – 2.90%
EPS Co. Ltd.	8		33,030
Kaken Pharmaceutical Co. Ltd.	8,000		73,304
Kobayashi Pharmaceutical Co. Ltd.	3,200		144,192
Miraca Holdings Inc.	5,600		162,087
Mochida Pharmaceutical Co. Ltd.	8,000		82,876
Nichi-Iko Pharmaceutical Co. Ltd.	2,400		83,566
Nippon Shinyaku Co. Ltd.	8,000		103,660
Rohto Pharmaceutical Co. Ltd.	8,000		102,711
Sawai Pharmaceutical Co. Ltd.	1,600		92,621

Security	Shares	Value
Seikagaku Corp.	4,000	$	51,356
Toho Holdings Co. Ltd.	4,000		59,505
Towa Pharmaceutical Co. Ltd.	800		40,446
			1,029,354
REAL ESTATE – 1.10%
Daibiru Corp.	5,600		50,709
Daikyo Inc.b	24,000		62,610
Goldcrest Co. Ltd.	2,080		61,101
Heiwa Real Estate Co. Ltd.	20,000		70,070
Sankei Building Co. Ltd. (The)	3,200		24,906
Shoei Co. Ltd.	3,200		25,872
Sumitomo Real Estate Sales Co. Ltd.	800		34,582
TOC Co. Ltd.	8,000		38,463
Tokyu Livable Inc.	2,400		21,939
			390,252
REAL ESTATE INVESTMENT TRUSTS – 3.99%
DA Office Investment Corp.	24		76,296
Frontier Real Estate Investment Corp.	16		114,526
Fukuoka REIT Corp.	8		42,602
Global One Real Estate Investment Corp.	8		59,764
Hankyu REIT Inc.	8		37,255
Japan Excellent Inc.	16		78,305
Japan Logistics Fund Inc.	16		109,524
Kenedix Realty Investment Corp.	16		60,195
MID REIT Inc.	16		35,600
Mori Hills REIT Investment Corp.	8		30,787
MORI TRUST Sogo REIT Inc.	16		129,359
Nippon Accommodations Fund Inc.	16		88,309
Nippon Commercial Investment Corp.	32		57,677
Nippon Residential Investment Corp.	24		60,023
ORIX JREIT Inc.	24		125,220
Premier Investment Corp.	16		67,612
TOKYU REIT Inc.	16		90,724
Top REIT Inc.	16		66,749
United Urban Investment Corp.	16		89,517
			1,420,044
RETAIL – 9.66%
Alpen Co. Ltd.	800		13,548
Aoki Holdings Inc.	3,200		35,772
Aoyama Trading Co. Ltd.	6,400		119,010
Arcs Co. Ltd.	3,200		48,950
Askul Corp.	2,400		47,992

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
Autobacs Seven Co. Ltd.	4,000	$	150,057
Best Denki Co. Ltd.	8,000		41,222
BIC Camera Inc.	72		28,951
Cawachi Ltd.	1,600		34,496
Chiyoda Co. Ltd.	3,200		45,051
Circle K Sunkus Co. Ltd.	4,800		78,288
Colowide Co. Ltd.	4,000		28,459
Culture Convenience Club Co. Ltd.a	9,600		71,199
Daiei Inc. (The)a,b	7,200		32,055
DCM Japan Holdings Co. Ltd.	7,200		48,665
Don Quijote Co. Ltd.	4,800		115,388
Doutor Nichires Holdings Co. Ltd.	4,800		72,596
Duskin Co. Ltd.	5,600		103,530
EDION Corp.	8,000		68,647
GEO Corp.	48		49,674
H2O Retailing Corp.	16,000		101,073
Heiwado Co. Ltd.	4,000		58,858
Izumi Co. Ltd.	6,400		93,622
Izumiya Co. Ltd.	8,000		49,157
Joshin Denki Co. Ltd.a	8,000		64,593
Keiyo Co. Ltd.	4,000		20,137
Kisoji Co. Ltd.	4,000		88,611
Kohnan Shoji Co. Ltd.	2,400		27,295
Komeri Co. Ltd.	3,200		85,377
K’s Holdings Corp.	4,000		123,107
Maruetsu Inc. (The)	8,000		40,878
Matsumotokiyoshi Co. Ltd.	4,800		120,821
Matsuya Co. Ltd.a,b	3,200		30,805
Megane Top Co. Ltd.	1,600		26,062
Nishimatsuya Chain Co. Ltd.	5,600		56,202
Nissen Holdings Co. Ltd.	5,600		18,714
Parco Co. Ltd.	8,000		79,340
Paris Miki Holdings Inc.	4,000		39,239
Plenus Co. Ltd.	3,200		47,466
Point Inc.	1,440		88,326
Right On Co. Ltd.	2,400		22,741
Ryohin Keikaku Co. Ltd.	2,400		109,955
Saizeriya Co. Ltd.	3,200		53,158
San-A & Co. Ltd.	800		31,132
Sankyo-Tateyama Holdings Inc.b	40,000		43,551
Seiko Corp.	8,000		21,732
Senshukai Co. Ltd.	4,800		33,789
Shimachu Co. Ltd.	4,800		113,577

Security	Shares	Value
St. Marc Holdings Co. Ltd.	800	$	25,829
Sugi Pharmacy Co. Ltd.	3,200		73,476
Sundrug Co. Ltd.	3,200		82,445
Tsuruha Holdings Inc.	1,600		62,782
Valor Co. Ltd.	4,000		36,781
Watami Co. Ltd.	3,200		67,267
Xebio Co. Ltd.	2,400		52,390
Yoshinoya Holdings Co. Ltd.	48		58,988
Zensho Co. Ltd.	7,200		52,623
			3,435,449
SEMICONDUCTORS – 0.48%
Megachips Corp.	1,600		36,134
Mimasu Semiconductor Industry Co. Ltd.	2,400		33,219
NEC Electronics Corp.b	3,200		31,564
Sanken Electric Co. Ltd.	8,000		29,063
Shindengen Electric Manufacturing Co. Ltd.	16,000		39,325
			169,305
SHIPBUILDING – 0.50%
Hitachi Zosen Corp.b	84,000		112,284
Namura Shipbuilding Co. Ltd.	4,800		31,615
Sasebo Heavy Industries Co. Ltd.	16,000		33,978
			177,877
SOFTWARE – 1.42%
Capcom Co. Ltd.	4,800		94,691
Fuji Soft Inc.	3,200		60,747
Hitachi Software Engineering Co. Ltd.	3,200		91,069
Nihon Unisys Ltd.	6,400		54,986
NSD Co. Ltd.	4,000		42,559
Obic Business Consultants Co. Ltd.	800		38,808
Sumisho Computer Systems Corp.	2,400		39,946
Tecmo Koei Holdings Co. Ltd.b	2,400		20,128
Trans Cosmos Inc.b	3,200		36,462
Works Applications Co. Ltd.	40		26,260
			505,656
STORAGE & WAREHOUSING – 0.48%
Mitsui-Soko Co. Ltd.	16,000		62,265
Shibusawa Warehouse Co. Ltd. (The)	8,000		30,701
Sumitomo Warehouse Co. Ltd. (The)	16,000		78,133
			171,099

42 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 1.22%
Denki Kogyo Co. Ltd.	8,000	$	40,705
Hitachi Kokusai Electric Inc.	8,000		57,953
IT Holdings Corp.	8,048		114,172
Japan Radio Co. Ltd.	8,000		20,180
MTI Ltd.	8		18,723
Oki Electric Industry Co. Ltd.b	80,000		84,515
Okinawa Cellular Telephone Co.	16		31,822
Telepark Corp.	24		42,430
Uniden Corp.b	8,000		22,250
			432,750
TEXTILES – 1.15%
Daiwabo Holdings Co. Ltd.a	16,000		73,648
Kurabo Industries Ltd.	24,000		53,037
Nitto Boseki Co. Ltd.	32,000		63,472
Seiren Co. Ltd.	6,400		41,671
Toyobo Co. Ltd.	64,000		122,805
Unitika Ltd.b	56,000		54,331
			408,964
TOYS, GAMES & HOBBIES – 0.31%
Sanrio Co. Ltd.	4,800		42,533
Tomy Co. Ltd.	8,000		68,215
			110,748
TRANSPORTATION – 2.79%
Daiichi Chuo Kisen Kaishaa	16,000		44,155
Fukuyama Transporting Co. Ltd.	16,000		87,274
Hitachi Transport System Ltd.	4,800		65,145
Iino Kaiun Kaisha Ltd.	8,800		45,819
Inui Steamship Co. Ltd.	2,400		17,075
Kintetsu World Express Inc.	1,600		36,738
Nippon Konpo Unyu Soko Co. Ltd.	8,000		98,399
Nishi-Nippon Railroad Co. Ltd.	32,000		128,324
Sagami Railway Co. Ltd.	40,000		172,910
Sankyu Inc.	24,000		108,403
Seino Holdings Co. Ltd.	16,000		142,985
Shinwa Kaiun Kaisha Ltd.	8,000		22,164
Yusen Air & Sea Service Co. Ltd.	1,600		22,388
			991,779
TOTAL COMMON STOCKS
(Cost: $35,290,408)			35,482,160

Security	Shares	Value
SHORT-TERM INVESTMENTS – 2.38%
MONEY MARKET FUNDS – 2.38%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	733,632	$	733,632
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% c,d,e	103,490		103,490
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	6,946		6,946
			844,068
TOTAL SHORT-TERM INVESTMENTS
(Cost: $844,068)			844,068
TOTAL INVESTMENTS IN SECURITIES – 102.17%
(Cost: $36,134,476)			36,326,228
Other Assets, Less Liabilities – (2.17)%			(770,042	)
NET ASSETS – 100.00%		$	35,556,186

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

^b Non-income earning security.

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 43

Schedule of Investments

iSHARES^® MSCI MALAYSIA INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.73%
AGRICULTURE – 12.05%
British American Tobacco (Malaysia) Bhd	978,600	$	12,755,286
Genting Plantations Bhd	1,537,800		2,576,465
IOI Corp. Bhd	23,486,430		34,080,834
Kuala Lumpur Kepong Bhd	3,285,300		12,407,920
			61,820,505
AIRLINES – 1.04%
AirAsia Bhda	7,269,600		2,828,156
Malaysian Airline System Bhda	2,796,000		2,501,036
			5,329,192
AUTO PARTS & EQUIPMENT – 1.29%
UMW Holdings Bhd	3,774,600		6,613,455
			6,613,455
BANKS – 25.54%
Alliance Financial Group Bhd	6,360,900		4,317,067
AMMB Holdings Bhd	12,092,737		14,113,630
Bumiputra-Commerce Holdings Bhd	13,490,732		38,118,070
Hong Leong Bank Bhd	3,215,400		5,478,461
Malayan Banking Bhd	24,185,420		44,710,233
Public Bank Bhd Foreign	7,199,700		20,342,756
RHB Capital Bhd	2,935,800		3,943,301
			131,023,518
BUILDING MATERIALS – 0.79%
Lafarge Malayan Cement Bhd	2,306,760		4,061,312
			4,061,312
COMMERCIAL SERVICES – 1.91%
PLUS Expressways Bhd	10,205,400		9,795,329
			9,795,329
DIVERSIFIED FINANCIAL SERVICES – 1.52%
Bursa Malaysia Bhd	2,306,700		5,109,260
Hong Leong Financial Group Bhd	1,817,400		2,683,652
			7,792,912
ELECTRIC – 7.64%
Tenaga Nasional Bhd	13,350,950		30,405,969
YTL Power International Bhd	14,049,975		8,817,392
			39,223,361

Security	Shares	Value
ENGINEERING & CONSTRUCTION – 6.42%
Gamuda Bhd	10,974,300	$	9,567,259
IJM Corp. Bhd	5,452,200		9,258,599
MMC Corp. Bhd	5,172,600		3,451,827
YTL Corp. Bhd	5,102,788		10,664,921
			32,942,606
ENTERTAINMENT – 2.40%
Berjaya Sports Toto Bhd	5,102,750		6,216,328
Tanjong PLC	1,398,000		6,081,886
			12,298,214
FOOD – 3.09%
PPB Group Bhd	3,634,866		15,875,121
			15,875,121
GAS – 1.81%
Petronas Gas Bhd	3,355,200		9,270,509
			9,270,509
HOLDING COMPANIES - DIVERSIFIED – 9.35%
Sime Darby Bhd	20,477,282		47,973,187
			47,973,187
IRON & STEEL – 1.05%
Parkson Holdings Bhd	3,564,900		5,395,688
			5,395,688
LODGING – 9.01%
Genting Bhd	15,168,300		28,773,035
Genting Malaysia Bhd	22,018,500		17,444,729
			46,217,764
MEDIA – 0.63%
Astro All Asia Networks PLC	3,285,300		3,246,584
			3,246,584
OIL & GAS – 0.80%
Petronas Dagangan Bhd	1,677,600		4,106,464
			4,106,464
REAL ESTATE – 2.57%
IGB Corp. Bhd	6,081,300		3,125,700
KLCC Property Holdings Bhd	3,215,400		3,013,153
SP Setia Bhd	5,522,100		7,025,134
			13,163,987

44 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 7.14%
Axiata Group Bhda	17,265,300	$	15,443,900
DiGi.Com Bhd	2,376,600		14,914,911
Telekom Malaysia Bhd	7,059,900		6,254,973
			36,613,784
TRANSPORTATION – 3.68%
MISC Bhd Foreign	7,619,100		18,866,549
			18,866,549
TOTAL COMMON STOCKS (Cost: $316,242,208)			511,630,041
SHORT-TERM INVESTMENTS – 0.02%
MONEY MARKET FUNDS – 0.02%
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%b,c	104,102		104,102
			104,102
TOTAL SHORT-TERM INVESTMENTS
(Cost: $104,102)			104,102
TOTAL INVESTMENTS IN SECURITIES – 99.75% (Cost: $316,346,310)			511,734,143
Other Assets, Less Liabilities – 0.25%			1,265,506
NET ASSETS – 100.00%		$	512,999,649

^a Non-income earning security.

^b Affiliated issuer. See Note 2.

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

See notes to financial statements.

SCHEDULES OF INVESTMENTS 45

Schedule of Investments

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.03%
AUSTRALIA – 67.04%
AGL Energy Ltd.	1,396,890	$	16,439,968
Alumina Ltd.	7,629,498		10,741,521
Amcor Ltd.	3,726,659		18,127,954
AMP Ltd.	6,227,406		33,390,093
Aristocrat Leisure Ltd.	1,191,564		4,641,012
Arrow Energy Ltd.a	1,780,614		6,890,263
Asciano Groupa	8,259,552		11,071,512
ASX Ltd.	532,746		14,866,253
Australia and New Zealand Banking Group Ltd.	7,219,152		129,573,199
AXA Asia Pacific Holdings Ltd.	3,156,696		11,443,386
Bendigo and Adelaide Bank Ltd.	930,852		6,513,465
Bendigo and Adelaide Bank Ltd. Newa	76,304		524,274
BGP Holdings PLCb	27,004,595		3,875
BHP Billiton Ltd.	10,390,536		322,358,482
Billabong International Ltd.	613,243		5,428,442
BlueScope Steel Ltd.	5,649,372		13,621,331
Boral Ltd.	1,842,732		8,994,853
Brambles Ltd.	4,321,332		27,068,225
Caltex Australia Ltd.	418,302		4,362,274
CFS Retail Property Trust	5,402,736		8,654,076
Coca-Cola Amatil Ltd.c	1,730,430		14,457,095
Cochlear Ltd.	175,338		8,317,758
Commonwealth Bank of Australia	4,684,248		181,656,543
Computershare Ltd.	1,386,486		11,817,347
Crown Ltd.	1,460,538		9,739,635
CSL Ltd.	1,867,212		50,703,471
CSR Ltd.	3,908,844		6,722,516
Dexus Property Group	14,094,621		8,852,440
Energy Resources of Australia Ltd.	211,752		4,641,456
Fairfax Media Ltd.c	6,582,978		8,158,176
Fortescue Metals Group Ltd.a	3,811,536		14,170,721
Foster’s Group Ltd.	5,974,650		27,602,369
Goodman Fielder Ltd.	3,963,312		5,145,556
Goodman Group	18,262,080		9,545,425

Security	Shares	Value
GPT Group	26,909,640	$	13,951,996
Harvey Norman Holdings Ltd.c	1,686,978		5,603,495
Incitec Pivot Ltd.	4,974,336		12,622,778
Insurance Australia Group Ltd.	6,370,308		19,226,348
James Hardie Industries NVa	1,339,668		7,849,379
Leighton Holdings Ltd.	463,284		14,431,620
Lend Lease Corp. Ltd.	1,359,864		10,810,866
Lion Nathan Ltd.	914,022		9,100,387
Macquarie Airports	2,116,602		4,568,067
Macquarie Group Ltd.c	938,502		40,193,169
Macquarie Infrastructure Group	7,113,582		7,976,150
Metcash Ltd.	2,386,188		8,609,972
Mirvac Group	7,903,674		9,861,525
National Australia Bank Ltd.	5,941,296		142,650,897
Newcrest Mining Ltd.	1,496,952		37,872,782
Nufarm Ltd.	528,156		4,768,755
OneSteel Ltd.	4,113,252		11,269,951
Orica Ltd.	1,112,004		21,168,185
Origin Energy Ltd.	2,712,996		35,016,899
OZ Minerals Ltd.a	9,747,630		8,710,804
Paladin Energy Ltd.a	1,757,970		6,817,460
Perpetual Ltd.	115,362		4,002,082
Qantas Airways Ltd.	3,265,326		6,964,668
QBE Insurance Group Ltd.	3,101,922		59,832,924
Rio Tinto Ltd.	1,349,154		63,819,754
Santos Ltd.	2,537,658		33,802,087
Sims Metal Management Ltd.	457,164		8,953,123
Sonic Healthcare Ltd.	1,128,528		13,300,649
SP AusNet	3,953,644		2,566,502
Stockland Corp. Ltd.	7,113,888		22,670,033
Suncorp-Metway Ltd.	3,899,970		25,744,020
Tabcorp Holdings Ltd.	1,823,454		10,315,034
Tatts Group Ltd.	3,803,886		7,953,028
Telstra Corp. Ltd.	13,691,970		37,630,230
Toll Holdings Ltd.	2,052,648		13,791,965
Transurban Group	3,613,554		12,307,483
Wesfarmers Ltd.	3,108,042		65,846,501
Wesfarmers Ltd. Partially Protected	469,412		10,012,166
Westfield Group	6,325,938		67,516,819
Westpac Banking Corp.	9,015,984		185,234,550
Woodside Petroleum Ltd.	1,529,388		63,178,177

46 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
Woolworths Ltd.	3,832,956	$	90,543,087
WorleyParsons Ltd.	510,714		12,257,970
			2,267,569,303
HONG KONG – 19.49%
ASM Pacific Technology Ltd.	612,000		3,920,420
Bank of East Asia Ltd.	4,528,920		14,608,194
BOC Hong Kong (Holdings) Ltd.	11,475,000		23,007,296
Cathay Pacific Airways Ltd.a	3,366,000		4,881,376
Cheung Kong (Holdings) Ltd.c	4,284,000		50,823,324
Cheung Kong Infrastructure Holdings Ltd.	1,530,000		5,566,759
Chinese Estates Holdings Ltd.	2,142,000		3,940,949
CLP Holdings Ltd.	6,273,000		42,005,341
Esprit Holdings Ltd.	3,457,800		21,035,045
Foxconn International Holdings Ltd.a	6,732,000		4,134,404
Hang Lung Group Ltd.	2,448,000		11,275,648
Hang Lung Properties Ltd.	6,426,736		20,024,859
Hang Seng Bank Ltd.	2,356,200		33,470,434
Henderson Land Development Co. Ltd.	3,366,056		19,782,063
Hong Kong Aircraft Engineering Co. Ltd.	244,800		2,864,709
Hong Kong and China Gas Co. Ltd. (The)	12,240,661		26,500,783
Hong Kong Exchanges and Clearing Ltd.	3,213,000		55,963,693
Hongkong Electric Holdings Ltd.	4,284,000		23,933,115
Hopewell Holdings Ltd.	1,836,000		5,554,915
Hutchison Whampoa Ltd.	6,732,000		47,337,191
Hysan Development Co. Ltd.	1,836,000		4,306,540
Kerry Properties Ltd.	2,295,000		10,867,024
Li & Fung Ltd.	6,733,600		22,371,053
Lifestyle International Holdings Ltd.	2,142,000		3,051,058
Link REIT (The)	6,732,000		14,835,215
Mongolia Energy Corp. Ltd.a	9,180,000		3,257,146
MTR Corp. Ltd.c	4,437,000		14,912,794
New World Development Co. Ltd.	7,650,941		15,438,798
NWS Holdings Ltd.	2,448,000		4,769,252

Security	Shares	Value
Orient Overseas International Ltd.	612,000	$	2,874,185
PCCW Ltd.	11,322,000		2,936,169
Shangri-La Asia Ltd.	4,284,000		6,301,097
Sino Land Co. Ltd.	5,508,000		9,409,007
Sun Hung Kai Properties Ltd.c	4,284,000		57,981,150
Swire Pacific Ltd. Class A	2,295,000		23,940,025
Television Broadcasts Ltd.	918,000		3,914,498
Wharf (Holdings) Ltd. (The)	4,284,000		19,207,292
Wheelock and Co. Ltd.	2,754,000		7,408,527
Wing Hang Bank Ltd.	612,000		5,527,278
Yue Yuen Industrial Holdings Ltd.	1,989,000		5,247,953
			659,186,579
NEW ZEALAND – 0.93%
Auckland International Airport Ltd.	2,596,104		3,079,882
Contact Energy Ltd.	950,130		4,072,198
Fletcher Building Ltd.	1,796,220		9,681,617
Sky City Entertainment Group Ltd.	1,675,832		3,746,398
Telecom Corp. of New Zealand Ltd.	5,836,950		11,007,393
			31,587,488
SINGAPORE – 11.57%
Ascendas Real Estate Investment Trust	3,978,813		4,555,735
CapitaLand Ltd.c	7,956,000		20,482,814
CapitaMall Trust Management Ltd.	7,038,781		7,961,704
City Developments Ltd.	1,530,000		10,553,555
ComfortDelGro Corp. Ltd.	5,814,000		6,253,565
COSCO Corp. (Singapore) Ltd.c	3,060,104		2,654,405
DBS Group Holdings Ltd.	5,202,000		45,628,729
Fraser and Neave Ltd.	3,060,150		8,175,690
Genting Singapore PLCa,c	11,934,000		8,364,276
Golden Agri-Resources Ltd.a	20,743,987		6,837,649
Jardine Cycle & Carriage Ltd.	372,000		5,988,966
Keppel Corp. Ltd.	3,978,000		21,007,307
Neptune Orient Lines Ltd.c	2,754,750		3,077,719
Noble Group Ltd.c	4,284,400		6,302,993
Olam International Ltd.c	3,672,600		6,269,454

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
Oversea-Chinese Banking Corp. Ltd.c	7,956,600	$	42,735,564
SembCorp Industries Ltd.	3,060,240		6,816,814
SembCorp Marine Ltd.	2,448,200		5,249,601
Singapore Airlines Ltd.	1,530,800		13,660,933
Singapore Airport Terminal Services Ltd.	1,318,964		2,260,741
Singapore Exchange Ltd.c	2,754,000		15,976,850
Singapore Press Holdings Ltd.c	4,896,517		12,436,246
Singapore Technologies Engineering Ltd.c	3,978,000		7,149,662
Singapore Telecommunications Ltd.	24,786,328		54,008,584
StarHub Ltd.	1,836,000		2,802,956
United Overseas Bank Ltd.	3,672,000		42,553,971
UOL Group Ltd.	1,530,000		3,641,719
Wilmar International Ltd.c	3,978,000		18,053,586
			391,461,788
TOTAL COMMON STOCKS (Cost: $3,054,146,100)			3,349,805,158
SHORT-TERM INVESTMENTS – 4.51%
MONEY MARKET FUNDS – 4.51%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%d,e,f	133,594,273		133,594,273
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% d,e,f	18,845,577		18,845,577
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08% d,e	209,734		209,734
			152,649,584
TOTAL SHORT-TERM INVESTMENTS
(Cost: $152,649,584)			152,649,584

Security	Value
TOTAL INVESTMENTS IN SECURITIES – 103.54% (Cost: $3,206,795,684)	$	3,502,454,742
Other Assets, Less Liabilities – (3.54)%		(119,901,123	)
NET ASSETS – 100.00%	$	3,382,553,619

^a Non-income earning security.

^b Security valued using Level 3 inputs. See Note 1.

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

^d Affiliated issuer. See Note 2.

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

^f All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

48 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SINGAPORE INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.22%
AGRICULTURE – 6.17%
Golden Agri-Resources Ltd.a	68,202,628	$	22,481,002
Wilmar International Ltd.b	12,630,000		57,319,455
			79,800,457
AIRLINES – 3.69%
Singapore Airlines Ltd.b	5,352,467		47,765,675
			47,765,675
BANKS – 33.78%
DBS Group Holdings Ltd.	17,682,500		155,099,962
Oversea-Chinese Banking Corp. Ltd.b	25,260,000		135,673,571
United Overseas Bank Ltd.	12,630,000		146,366,191
			437,139,724
BEVERAGES – 2.09%
Fraser and Neave Ltd.	10,104,000		26,994,483
			26,994,483
DISTRIBUTION & WHOLESALE – 1.57%
Jardine Cycle & Carriage Ltd.	1,263,000		20,333,507
			20,333,507
DIVERSIFIED FINANCIAL SERVICES – 3.96%
Singapore Exchange Ltd.	8,841,000		51,289,518
			51,289,518
ENGINEERING & CONSTRUCTION – 4.40%
SembCorp Industries Ltd.	11,367,000		25,320,475
Singapore Airport Terminal Services Ltd.	3,907,300		6,697,222
Singapore Technologies Engineering Ltd.b	13,893,000		24,969,897
			56,987,594
FOOD – 1.67%
Olam International Ltd.b	12,630,000		21,560,529
			21,560,529
HOLDING COMPANIES - DIVERSIFIED – 6.22%
Keppel Corp. Ltd.	11,367,000		60,027,667
Noble Group Ltd.b	13,893,000		20,438,680
			80,466,347
MEDIA – 3.22%
Singapore Press Holdings Ltd.b	16,419,000		41,701,218
			41,701,218

Security	Shares	Value
REAL ESTATE – 10.41%
CapitaLand Ltd.b	23,094,000	$	59,455,772
City Developments Ltd.b	5,052,000		34,847,424
Genting Singapore PLCa,b	40,416,000		28,326,678
UOL Group Ltd.	5,052,000		12,024,815
			134,654,689
REAL ESTATE INVESTMENT TRUSTS – 3.10%
Ascendas Real Estate Investment Trust	12,630,335		14,461,714
CapitaMall Trust Management Ltd.	22,734,800		25,715,779
			40,177,493
SHIPBUILDING – 1.46%
SembCorp Marine Ltd.b	8,841,000		18,957,489
			18,957,489
TELECOMMUNICATIONS – 14.36%
Singapore Telecommunications Ltd.	80,832,568		176,131,476
StarHub Ltd.	6,315,000		9,640,887
			185,772,363
TRANSPORTATION – 3.12%
ComfortDelGro Corp. Ltd.	20,208,000		21,735,818
COSCO Corp. (Singapore) Ltd.b	10,104,000		8,764,443
Neptune Orient Lines Ltd.b	8,841,499		9,878,084
			40,378,345
TOTAL COMMON STOCKS (Cost: $1,406,535,547)			1,283,979,431

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 21.07%
MONEY MARKET FUNDS – 21.07%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	238,501,923	$	238,501,923
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% c,d,e	33,644,454		33,644,454
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	477,170		477,170
			272,623,547
TOTAL SHORT-TERM INVESTMENTS (Cost: $272,623,547)			272,623,547
TOTAL INVESTMENTS IN SECURITIES – 120.29% (Cost: $1,679,159,094)			1,556,602,978
Other Assets, Less Liabilities – (20.29)%			(262,564,406	)
NET ASSETS – 100.00%		$	1,294,038,572

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

50 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 97.08%
AGRICULTURE – 1.67%
KT&G Corp.	742,306	$	40,000,956
			40,000,956
AIRLINES – 0.34%
Korean Air Co. Ltd.a	239,822		8,026,711
			8,026,711
AUTO MANUFACTURERS – 4.42%
Hyundai Motor Co. Ltd.b	1,034,652		87,815,767
Kia Motors Corp.a,b	1,347,560		18,235,058
			106,050,825
AUTO PARTS & EQUIPMENT – 2.24%
Hankook Tire Co. Ltd.	502,480		8,931,905
Hyundai Mobis	422,546		44,829,326
			53,761,231
BANKS – 1.92%
Busan Bank	1,062,062		9,566,977
Daegu Bank	799,400		9,313,212
Industrial Bank of Koreaa	1,084,900		11,727,240
Korea Exchange Bankb	1,724,420		15,395,374
			46,002,803
BEVERAGES – 0.19%
Hite Brewery Co. Ltd.b	35,402		4,634,660
			4,634,660
BIOTECHNOLOGY – 0.20%
Celltrion Inc.a,b	359,730		4,853,431
			4,853,431
CHEMICALS – 3.74%
Hanwha Chemical Corp.	513,900		5,349,267
Honam Petrochemical Corp.b	91,360		6,861,693
KCC Corp.	34,260		8,723,420
Korea Zinc Co. Ltd.b	57,100		6,240,812
LG Chem Ltd.	308,345		46,539,381
OCI Co. Ltd.b	79,940		15,970,078
			89,684,651
COMMERCIAL SERVICES – 0.19%
S1 Corp.	114,208		4,608,922
			4,608,922

Security	Shares	Value
COSMETICS & PERSONAL CARE – 0.56%
AmorePacific Corp.b	22,840	$	13,313,730
			13,313,730
DISTRIBUTION & WHOLESALE – 2.99%
Daewoo International Corp.b	331,189		7,650,575
Hanwha Corp.b	319,760		11,214,259
Hyosung Corp.b	148,465		10,734,558
Samsung C&T Corp.	833,660		37,380,863
SK Networks Co. Ltd.	491,060		4,836,286
			71,816,541
DIVERSIFIED FINANCIAL SERVICES – 13.15%
Daewoo Securities Co. Ltd.b	822,240		15,109,623
Hana Financial Group Inc.b	1,267,621		33,240,922
Hyundai Securities Co. Ltd.	799,407		10,689,484
KB Financial Group Inc.a	2,181,224		89,945,581
Korea Investment Holdings Co. Ltd.	251,245		7,201,995
Mirae Asset Securities Co. Ltd.b	148,469		8,678,226
Samsung Card Co. Ltd.	251,245		10,259,825
Samsung Securities Co.b	331,180		19,835,266
Shinhan Financial Group Co. Ltd.a	2,683,707		88,103,120
Tong Yang Securities Inc.	468,220		6,092,221
Woori Finance Holdings Co. Ltd.a	1,621,640		18,243,288
Woori Investment & Securities Co. Ltd.	571,000		8,001,041
			315,400,592
ELECTRIC – 1.79%
Korea Electric Power Corp.a,b	1,713,000		42,999,880
			42,999,880
ELECTRICAL COMPONENTS & EQUIPMENT – 3.71%
LG Electronics Inc.b	628,106		71,918,615
LS Corp.	114,200		7,552,983
LS Industrial Systems Co. Ltd.	103,922		6,698,471
Taihan Electric Wire Co. Ltd.b	148,460		2,716,239
			88,886,308

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2009

Security	Shares	Value
ELECTRONICS – 4.23%
LG Display Co. Ltd.b	1,553,122	$	45,888,543
Samsung Electro-Mechanics Co. Ltd.	399,700		28,579,718
Samsung SDI Co. Ltd.b	228,400		27,066,378
			101,534,639
ENGINEERING & CONSTRUCTION – 3.41%
Daelim Industrial Co. Ltd.	182,720		10,548,572
Daewoo Engineering & Construction Co. Ltd.b	765,144		8,577,161
Doosan Heavy Industries & Construction Co. Ltd.b	205,560		10,435,186
GS Engineering & Construction Corp.	239,820		18,376,791
Hanjin Heavy Industries & Construction Co. Ltd.b	205,564		4,542,851
Hyundai Engineering & Construction Co. Inc.b	331,188		15,964,062
Samsung Engineering Co. Ltd.	205,560		13,364,939
			81,809,562
ENVIRONMENTAL CONTROL – 0.37%
Woongjin Coway Co. Ltd.b	319,760		8,845,951
			8,845,951
FOOD – 0.41%
CJ CheilJedang Corp.	52,532		7,024,457
Lotte Confectionery Co. Ltd.b	3,500		2,903,355
			9,927,812
GAS – 0.27%
Korea Gas Corp.	159,880		6,413,634
			6,413,634
HOLDING COMPANIES - DIVERSIFIED – 1.97%
GS Holdings Corp.b	342,600		9,052,606
LG Corp.b	628,101		38,272,469
			47,325,075
HOME BUILDERS – 0.57%
Hyundai Development Co.b	376,867		13,760,217
			13,760,217
HOUSEHOLD PRODUCTS & WARES – 0.41%
LG Household & Health Care Ltd.b	57,100		9,898,431
			9,898,431

Security	Shares	Value
INSURANCE – 2.21%
Dongbu Insurance Co. Ltd.	262,660	$	7,991,897
Samsung Fire & Marine Insurance Co. Ltd.	251,245		45,062,759
			53,054,656
INTERNET – 2.28%
LG Dacom Corp.	274,080		4,038,011
NCsoft Corp.b	89,076		9,771,328
NHN Corp.a,b	271,796		36,996,813
SK Broadband Co. Ltd.a	970,703		3,979,501
			54,785,653
IRON & STEEL – 7.90%
Dongkuk Steel Mill Co. Ltd.	251,241		5,874,159
Hyundai Steel Co.b	365,445		23,204,251
POSCO	433,960		160,359,148
			189,437,558
LODGING – 0.36%
Kangwon Land Inc.	650,942		8,600,002
			8,600,002
MACHINERY – 0.29%
Doosan Infracore Co. Ltd.b	502,480		7,061,033
			7,061,033
MANUFACTURING – 0.74%
Cheil Industries Inc.	319,760		13,108,905
Doosan Corp.b	68,520		4,570,195
			17,679,100
METAL PROCESSORS & FABRICATORS – 0.13%
Taewoong Co. Ltd.b	49,106		3,165,212
			3,165,212
OIL & GAS – 2.47%
SK Corp.b	159,884		13,442,085
SK Energy Co. Ltd.	399,702		32,164,346
S-Oil Corp.	296,920		13,670,350
			59,276,781
PHARMACEUTICALS – 0.38%
Yuhan Corp.b	58,242		9,023,803
			9,023,803

52 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2009

Security	Shares	Value
RETAIL – 2.48%
Hyundai Department Store Co. Ltd.	102,780	$	7,867,538
Lotte Shopping Co. Ltd.	57,105		13,008,546
Shinsegae Co. Ltd.b	92,860		38,515,078
			59,391,162
SEMICONDUCTORS – 22.06%
Hynix Semiconductor Inc.a,b	3,140,500		55,195,752
Samsung Electronics Co. Ltd.	742,300		458,253,903
Samsung Techwin Co. Ltd.	251,241		15,651,013
			529,100,668
SHIPBUILDING – 3.50%
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b	639,520		10,241,332
Hyundai Heavy Industries Co. Ltd.b	251,240		38,322,700
Hyundai Mipo Dockyard Co. Ltd.	68,520		6,775,739
Samsung Heavy Industries Co. Ltd.b	1,073,480		25,227,511
STX Offshore & Shipbuilding Co. Ltd.b	285,500		3,394,727
			83,962,009
TELECOMMUNICATIONS – 2.89%
KT Corp.	639,522		19,970,661
KT Corp. SP ADRb	427,108		6,650,072
LG Telecom Ltd.	913,603		5,705,904
SKTelecom Co. Ltd.	159,880		22,402,915
SKTelecom Co. Ltd. SP ADR	932,575		14,510,867
			69,240,419
TRANSPORTATION – 0.64%
Hanjin Shipping Co. Ltd.b	388,280		6,746,478
Korea Express Co. Ltd.a,b	44,538		2,492,759
STX Pan Ocean Co. Ltd.b	685,230		6,090,202
			15,329,439
TOTAL COMMON STOCKS (Cost: $1,539,016,920)			2,328,664,057

Security	Shares	Value
PREFERRED STOCKS – 2.84%
AUTO MANUFACTURERS – 0.37%
Hyundai Motor Co. Ltd.b	251,240	$	8,801,145
			8,801,145
ELECTRICAL COMPONENTS & EQUIPMENT – 0.22%
LG Electronics Inc.b	114,206		5,331,259
			5,331,259
SEMICONDUCTORS – 2.25%
Samsung Electronics Co. Ltd.b	137,040		53,931,588
			53,931,588
TOTAL PREFERRED STOCKS (Cost: $49,174,572)			68,063,992
SHORT-TERM INVESTMENTS – 9.24%
MONEY MARKET FUNDS – 9.24%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	191,437,649		191,437,649
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21% c,d,e	27,005,297		27,005,297
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08% c,d	3,124,083		3,124,083
			221,567,029
TOTAL SHORT-TERM INVESTMENTS
(Cost: $221,567,029)			221,567,029

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2009

	Value
TOTAL INVESTMENTS IN SECURITIES – 109.16%
(Cost: $1,809,758,521)	$	2,618,295,078
Other Assets, Less Liabilities – (9.16)%		(219,745,067	)
NET ASSETS – 100.00%	$	2,398,550,011

SP ADR – Sponsored American Depositary Receipts

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

54 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 98.92%
AIRLINES – 0.30%
China Airlines Ltd.a	19,390,588	$	4,565,402
EVA Airways Corp.a	19,418,396		4,459,863
			9,025,265
APPAREL – 0.59%
Pou Chen Corp.	23,579,023		14,613,099
Ruentex Industries Ltd.a	2,774,000		3,219,261
			17,832,360
AUTO MANUFACTURERS – 0.24%
Yulon Motor Co. Ltd.	8,322,362		7,281,577
			7,281,577
AUTO PARTS & EQUIPMENT – 0.52%
Cheng Shin Rubber Industry Co. Ltd.	8,322,892		15,878,894
			15,878,894
BANKS – 6.42%
Chang Hwa Commercial Bank Ltd.	45,771,446		19,119,815
Chinatrust Financial Holding Co. Ltd.	81,833,342		45,495,425
E.Sun Financial Holding Co. Ltd.a	31,427,060		9,738,460
First Financial Holding Co. Ltd.	47,158,816		25,573,341
Hua Nan Financial Holdings Co. Ltd.	33,288,428		18,102,254
Mega Financial Holding Co. Ltd.	77,672,136		38,698,617
Taishin Financial Holdings Co. Ltd.a	40,223,439		13,319,627
Taiwan Business Banka	20,805,000		4,866,815
Taiwan Cooperative Bank Ltd.	36,062,650		19,884,772
			194,799,126
BUILDING MATERIALS – 1.84%
Asia Cement Corp.	17,143,236		18,280,424
Taiwan Cement Corp.	29,127,558		31,590,656
Taiwan Glass Industrial Corp.	9,709,791		6,047,141
			55,918,221

Security	Shares	Value
CHEMICALS – 7.23%
Eternal Chemical Co. Ltd.	7,002,916	$	6,073,952
Formosa Chemicals & Fibre Corp.	27,740,204		48,626,366
Formosa Plastics Corp.	38,836,768		69,847,543
Nan Ya Plastic Corp.	51,427,860		71,634,815
Taiwan Fertilizer Co. Ltd.	6,935,000		20,099,312
TSRC Corp.	2,774,000		3,189,765
			219,471,753
COMMERCIAL SERVICES – 0.13%
Taiwan Secom Co. Ltd.	2,774,610		4,075,536
			4,075,536
COMPUTERS – 11.87%
Acer Inc.	25,210,781		57,442,577
Advantech Co. Ltd.	2,787,883		4,488,867
Chicony Electronics Co. Ltd.	4,161,015		9,961,204
Clevo Co.a	4,366,300		5,339,072
CMC Magnetics Corp.a	27,740,400		6,025,667
Compal Electronics Inc.	36,242,399		36,554,544
Foxconn Technology Co. Ltd.	5,548,300		14,158,772
HTC Corp.	6,935,077		69,737,381
Innolux Display Corp.	20,805,189		23,291,395
Inotera Memories Inc.a	15,257,000		8,574,864
Inventec Co. Ltd.	16,780,717		9,278,296
Lite-On Technology Corp.	20,909,772		23,440,237
MiTAC International Corp.	9,709,585		3,952,681
Qisda Corp.a	15,257,211		7,045,391
Quanta Computer Inc.	22,192,240		45,980,306
Wistron Corp.	18,031,755		34,949,827
			360,221,081
DIVERSIFIED FINANCIAL SERVICES – 4.26%
Capital Securities Corp.a	8,322,000		3,463,655
Fubon Financial Holding Co. Ltd.a	44,384,000		41,462,732
KGI Securities Co. Ltd.	27,740,000		11,714,064
Polaris Securities Co. Ltd.a	20,805,991		10,081,739
SinoPac Financial Holdings Co. Ltd.a	56,867,193		17,051,606
Yuanta Financial Holding Co. Ltd.	73,511,076		45,446,824
			129,220,620

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2009

Security	Shares	Value
ELECTRICAL COMPONENTS & EQUIPMENT – 2.49%
Delta Electronics Inc.	16,644,180	$	44,497,071
Pacific Electric Wire & Cable Co. Ltd.b	197		–
Simplo Technology Co. Ltd.	1,524,300		6,876,750
Tatung Co. Ltd.a	36,062,120		7,679,901
Walsin Lihwa Corp.a	27,740,069		9,143,735
Young Fast
Optoelectronics Co. Ltd.	700,000		7,368,645
			75,566,102
ELECTRONICS – 17.89%
ASUSTeK Computer Inc.	37,449,803		59,616,596
AU Optronics Corp.	74,285,830		74,925,631
Cheng Uei Precision Industry Co. Ltd.	4,161,871		7,801,177
Chi Mei Optoelectronics Corp.a	47,158,629		23,137,693
Chunghwa Picture Tubes Ltd.a	95,703,105		10,612,196
Coretronic Corp.	5,548,000		6,404,812
HannStar Display Corp.a	47,158,675		9,885,463
Hon Hai Precision Industry Co. Ltd.	76,350,827		257,467,889
Kinsus Interconnect Technology Corp.	2,774,043		5,772,848
Micro-Star International Co. Ltd.	8,322,855		5,170,732
Nan Ya Printed Circuit Board Corp.	1,415,453		4,622,642
Phison Electronics Corp.	1,387,968		9,698,256
Pixart Imaging Inc.	1,400,682		10,233,895
Prime View International Co. Ltd.	3,087,000		4,736,029
Synnex Technology International Corp.	10,676,952		18,650,973
Tripod Technology Corp.	4,202,488		9,345,529
Unimicron Technology Corp.	8,322,794		8,761,102
Wintek Corp.a	9,709,000		7,108,499
WPG Holdings Co. Ltd.	6,935,000		8,954,096
Ya Hsin Industrial Co. Ltd.b	6,845,461		21
			542,906,079
ENERGY - ALTERNATE SOURCES – 0.23%
Motech Industries Inc.	2,774,403		6,936,745
			6,936,745

Security	Shares	Value
FOOD – 1.14%
Uni-President Enterprises Co.	33,305,567	$	34,503,056
			34,503,056
HOME FURNISHINGS – 0.21%
Teco Electric and Machinery Co. Ltd.	15,257,092		6,280,546
			6,280,546
INSURANCE – 3.26%
Cathay Financial Holding Co. Ltd.a	58,254,200		81,497,301
Shin Kong Financial Holding Co. Ltd.a	51,319,490		17,617,615
			99,114,916
INVESTMENT COMPANIES – 0.73%
China Development Financial Holding Corp.a	95,703,496		22,067,642
			22,067,642
IRON & STEEL – 3.40%
China Steel Corp.	98,477,902		89,453,292
Feng Hsin Iron & Steel Co. Ltd.	4,161,050		6,560,797
Tung Ho Steel Enterprise Corp.	7,142,300		7,290,607
			103,304,696
LEISURE TIME – 0.19%
Giant Manufacturing Co. Ltd.	2,230,800		5,706,359
			5,706,359
MANUFACTURING – 0.56%
Largan Precision Co. Ltd.	1,387,794		16,864,418
			16,864,418
METAL FABRICATE & HARDWARE – 0.35%
Catcher Technology Co. Ltd.	4,161,130		10,745,251
			10,745,251
OIL & GAS – 0.98%
Formosa Petrochemical Corp.	12,483,950		29,658,223
			29,658,223
REAL ESTATE – 0.15%
Farglory Land Development Co. Ltd.	2,589,000		4,593,368
			4,593,368

56 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2009

Security	Shares	Value
RETAIL – 0.72%
Far Eastern Department Stores Co. Ltd.	8,570,735	$	7,472,851
President Chain Store Corp.	6,306,215		14,521,930
			21,994,781
SEMICONDUCTORS – 26.52%
Advanced Semiconductor Engineering Inc.	41,610,372		29,706,796
Epistar Corp.	4,161,047		12,224,059
Everlight Electronics Co. Ltd.a	2,823,592		7,806,020
Formosa Sumco Technology Corp.	1,455,000		2,873,179
Macronix International Co. Ltd.	33,288,527		15,826,879
MediaTek Inc.	8,878,319		128,927,331
Nanya Technology Corp.a	6,781,371		3,502,295
Novatek Microelectronics Corp. Ltd.	5,548,544		13,030,014
Powerchip Semiconductor Corp.a	77,495,901		7,675,076
Powertech Technology Inc.	5,548,760		15,154,513
Realtek Semiconductor Corp.	4,203,150		8,874,544
Richtek Technology Corp.	1,387,635		11,002,772
Siliconware Precision Industries Co. Ltd.	29,127,214		36,457,133
Sino-American Silicon Products Inc.	2,041,323		4,068,197
Taiwan Semiconductor Manufacturing Co. Ltd.	242,725,882		436,540,102
Transcend Information Inc.	2,774,015		9,228,036
United Microelectronics Corp.a	123,443,501		50,627,717
Vanguard International Semiconductor Corp.	9,709,416		4,129,595
Via Technologies Inc.a	7,968,000		2,686,944
Winbond Electronics Corp.a	27,740,000		4,660,344
			805,001,546
SHIPBUILDING – 0.09%
CSBC Corp.a	2,774,000		2,734,686
			2,734,686

Security	Shares	Value
TELECOMMUNICATIONS – 4.58%
Chunghwa Telecom Co. Ltd.	51,868,417	$	88,872,715
Compal Communications Inc.a	2,869,810		2,550,148
Far EasTone Telecommunications Co. Ltd.	15,257,259		17,219,546
Taiwan Cellular Corp.	19,418,677		30,499,767
			139,142,176
TEXTILES – 1.10%
Far Eastern Textile Ltd.	28,294,198		28,194,058
Formosa Taffeta Co. Ltd.	8,322,515		5,233,730
			33,427,788
TRANSPORTATION – 0.93%
Evergreen International Storage & Transport Corp.a	2,774,000		2,014,145
Evergreen Marine Corp. Ltd.a	11,096,467		6,708,480
Sincere Navigation Corp.	1,387,000		1,580,135
U-Ming Marine Transport Corp.	4,161,800		6,738,989
Wan Hai Lines Ltd.a	11,096,433		5,511,724
Yang Ming Marine Transport Corp.	15,257,305		5,678,064
			28,231,537
TOTAL COMMON STOCKS (Cost: $2,681,363,020)			3,002,504,348
SHORT-TERM INVESTMENTS – 0.42%
MONEY MARKET FUNDS – 0.42%
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08% c,d	12,660,393		12,660,393
			12,660,393
TOTAL SHORT-TERM INVESTMENTS
(Cost: $12,660,393)			12,660,393

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2009

	Value
TOTAL INVESTMENTS IN SECURITIES – 99.34% (Cost: $2,694,023,413)	$	3,015,164,741
Other Assets, Less Liabilities – 0.66%		20,166,575
NET ASSETS – 100.00%	$	3,035,331,316

^a Non-income earning security.

^b Security valued using Level 3 inputs. See Note 1.

^c Affiliated issuer. See Note 2.

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

See notes to financial statements.

58 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.34%
AGRICULTURE – 1.30%
Charoen Pokphand Foods PCL NVDR	6,930,900	$	1,222,740
			1,222,740
AIRLINES – 0.68%
Thai Airways International PCL NVDRa	1,111,800		637,463
			637,463
AUTO PARTS & EQUIPMENT – 0.09%
Thai Stanley Electric PCL NVDR	30,600		83,675
			83,675
BANKS – 26.46%
Bangkok Bank PCL NVDR	2,595,900		8,396,031
Bank of Ayudhya PCL NVDR	4,819,500		2,522,408
Kasikornbank PCL NVDR	2,223,600		4,740,106
Kiatnakin Bank PCL NVDR	545,700		301,651
Krung Thai Bank PCL NVDR	6,905,400		1,746,146
Siam City Bank PCL NVDR	1,387,200		881,021
Siam Commercial Bank PCL NVDR	2,238,900		5,068,959
TMB Bank PCL NVDRa	39,280,200		1,224,258
			24,880,580
BUILDING MATERIALS – 4.88%
Dynasty Ceramic PCL NVDR	382,500		236,181
Siam Cement PCL NVDR	724,200		4,130,985
TPI Polene PCL NVDRa	958,800		218,486
			4,585,652
CHEMICALS – 5.15%
Indorama Polymers PCL NVDR	887,400		328,763
IRPC PCL NVDR	21,787,200		2,459,949
PTT Chemical PCL NVDR	887,400		1,722,093
Thai Plastic & Chemical PCL NVDR	617,100		326,604
			4,837,409
COAL – 4.07%
Banpu PCL NVDR	326,400		3,829,274
			3,829,274

Security	Shares	Value
COMMERCIAL SERVICES – 0.52%
Bangkok Expressway PCL NVDR	907,800	$	491,136
			491,136
COMPUTERS – 0.42%
Cal-Comp Electronics (Thailand) PCL NVDR	3,967,800		398,997
			398,997
DIVERSIFIED FINANCIAL SERVICES – 1.57%
Kim Eng Securities (Thailand) PCL NVDR	673,200		257,324
Phatra Securities PCL NVDR	260,100		136,130
Thanachart Capital PCL NVDR	1,672,800		723,027
TISCO Financial Group PCL NVDR	683,400		357,675
			1,474,156
ELECTRIC – 2.40%
Glow Energy PCL NVDR	1,285,200		1,162,008
Ratchaburi Electricity Generating Holding PCL NVDR	989,400		1,098,202
			2,260,210
ELECTRONICS – 1.23%
Delta Electronics (Thailand) PCL NVDR	948,600		488,106
Hana Microelectronics PCL NVDR	1,147,500		668,054
			1,156,160
ENGINEERING & CONSTRUCTION – 0.57%
CH. Karnchang PCL NVDR	851,700		102,174
Italian-Thai Development PCL NVDRa	2,974,400		248,377
Sino Thai Engineering & Construction PCL NVDRa	1,320,900		182,541
			533,092
ENTERTAINMENT – 0.22%
Major Cineplex Group PCL NVDR	953,700		208,911
			208,911
FOOD – 1.65%
Khon Kaen Sugar Industry PCL NVDR	1,229,100		516,793
Thai Union Frozen Products PCL NVDR	1,009,800		771,973
Thai Vegetable Oil PCL NVDR	530,400		266,682
			1,555,448

SCHEDULES OF INVESTMENTS 59

Schedule of Investments (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
HEALTH CARE - SERVICES – 1.15%
Bangkok Chain Hospital PCL NVDR	693,600	$	175,388
Bangkok Dusit Medical Services PCL NVDR	581,400		423,955
Bumrungrad Hospital PCL NVDR	617,100		480,834
			1,080,177
HOME BUILDERS – 1.34%
Asian Property Development PCL NVDR	1,397,400		230,092
Land and Houses PCL NVDR	5,814,000		1,025,698
			1,255,790
IRON & STEEL – 1.24%
G J Steel PCL NVDRa	41,891,400		234,030
G Steel PCL NVDRa	11,444,400		141,330
Sahaviriya Steel Industries PCL NVDRa	12,178,800		325,866
Tata Steel (Thailand) PCL NVDRa	5,324,400		277,100
Thainox Stainless PCL NVDRa	5,431,500		186,853
			1,165,179
LODGING – 0.81%
Central Plaza Hotel PCL NVDR	489,600		54,128
Minor International PCL NVDR	2,269,500		707,342
			761,470
MEDIA – 1.35%
BEC World PCL NVDR	2,106,300		1,158,124
MCOT PCL NVDR	188,700		109,858
			1,267,982
OIL & GAS – 26.21%
Esso (Thailand) PCL NVDR	2,896,800		600,483
PTT Exploration & Production PCL NVDR	2,376,600		9,678,303
PTT PCL NVDR	1,683,000		12,074,448
Thai Oil PCL NVDR	1,922,700		2,289,602
			24,642,836
REAL ESTATE – 2.12%
Amata Corp. PCL NVDR	1,071,000		223,584
Bangkok Land PCL NVDRa	14,897,100		219,011
Hemaraj Land and Development PCL NVDR	9,603,300		254,130
LPN Development PCL NVDR	1,137,300		210,673
Preuksa Real Estate PCL NVDR	1,137,300		331,058

Security	Shares	Value
Quality House PCL NVDR	7,114,500	$	435,112
Rojana Industrial Park PCL NVDR	688,500		155,879
Ticon Industrial Connection PCL NVDR	637,500		166,826
			1,996,273
RETAIL – 5.45%
CP All PCL NVDR	4,998,000		2,483,569
Home Product Center PCL NVDR	1,326,000		272,920
PTT Aromatics & Refining PCL NVDR	2,560,200		1,633,530
Robinson Department Store PCL NVDR	765,000		229,432
Siam Makro PCL NVDR	244,800		505,651
			5,125,102
TELECOMMUNICATIONS – 6.86%
Advanced Info Service PCL NVDR	1,688,100		4,281,053
Samart Corp. PCL NVDR	933,300		168,768
Thaicom PCL NVDRa	1,127,100		248,552
Total Access Communication PCL NVDR	1,203,600		1,212,094
True Corp. PCL NVDRa	7,634,700		538,762
			6,449,229
TRANSPORTATION – 1.23%
Bangkok Metro PCL NVDRa	5,946,600		129,388
Precious Shipping PCL NVDR	892,500		435,622
Regional Container Lines PCL NVDRa	362,100		117,116
Thoresen Thai Agencies PCL NVDR	698,730		474,586
			1,156,712
WATER – 0.37%
Thai Tap Water Supply PCL NVDR	2,876,400		346,758
			346,758
TOTAL COMMON STOCKS (Cost: $93,673,833)			93,402,411
WARRANTS – 0.04%
FOOD – 0.01%
Thai Vegetable Oil PCL NVDR (Expires 5/18/12)a	49,680		9,568
			9,568

60 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
REAL ESTATE – 0.03%
Bangkok Land PCL NVDR (Expires 5/2/13)a	1,083,411	$	2,230
Rojana Industrial Park PCL NVDR (Expires 7/30/14)a,b	162,000		17,624
Ticon Industrial Connection PCL Class W3 NVDR (Expires 1/31/14)a,b	79,167		–
Ticon Industrial Connection PCL Class W4 NVDR (Expires 5/22/11)a,b	52,083		1,379
			21,233
TOTAL WARRANTS (Cost: $0)			30,801
SHORT-TERM INVESTMENTS – 0.14%
MONEY MARKET FUNDS – 0.14%
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	133,091		133,091
			133,091
TOTAL SHORT-TERM INVESTMENTS (Cost: $133,091)			133,091
TOTAL INVESTMENTS IN SECURITIES – 99.52% (Cost: $93,806,924)			93,566,303
Other Assets, Less Liabilities – 0.48%			454,573
NET ASSETS – 100.00%		$	94,020,876

NVDR – Non-Voting Depositary Receipts

^a Non-income earning security.

^b Security valued using Level 3 inputs. See Note 1.

^c Affiliated issuer. See Note 2.

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

See notes to financial statements.

SCHEDULES OF INVESTMENTS 61

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Australia Index Fund			Hong Kong Index Fund			Japan Small Cap Index Fund			Malaysia Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	1,568,183,250		$	2,305,121,236		$	35,290,408		$	316,242,208
Affiliated issuers (Note 2)		6,091,063			95,001,340			844,068			104,102
Total cost of investments	$	1,574,274,313		$	2,400,122,576		$	36,134,476		$	316,346,310
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	1,576,893,096		$	1,945,048,334		$	35,482,160		$	511,630,041
Affiliated issuers (Note 2)		6,091,063			95,001,340			844,068			104,102
Total fair value of investments		1,582,984,159			2,040,049,674			36,326,228			511,734,143
Foreign currencies, at valueb		2,357,453			2,169,858			31,839			974,027
Receivables:
Investment securities sold		9,964,686			4,664,075			–			12,516,183
Dividends and interest		14,658,718			3,612,791			50,900			606,688
Capital shares sold		130,044			–			–			11,734,854
Interest from affiliate (Note 2)		50,401			66,275			97			36,147
Total Assets		1,610,145,461			2,050,562,673			36,409,064			537,602,042
LIABILITIES
Payables:
Investment securities purchased		9,952,731			3,175,608			–			24,374,444
Collateral for securities on loan (Note 5)		5,825,780			94,446,986			837,122			–
Capital shares redeemed		–			213,058			–			–
Investment advisory fees (Note 2)		690,553			950,156			15,756			227,949
Total Liabilities		16,469,064			98,785,808			852,878			24,602,393
NET ASSETS	$	1,593,676,397		$	1,951,776,865		$	35,556,186		$	512,999,649
Net assets consist of:
Paid-in capital	$	1,701,016,771		$	2,505,176,184		$	35,942,450		$	419,987,987
Undistributed net investment income		12,740,394			4,275,742			73,258			1,906,004
Accumulated net realized loss		(128,960,727	)		(197,602,365	)		(653,341	)		(104,287,368	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		8,879,959			(360,072,696	)		193,819			195,393,026
NET ASSETS	$	1,593,676,397		$	1,951,776,865		$	35,556,186		$	512,999,649
Shares outstandingc		78,400,000			135,675,000			800,000			52,425,000
Net asset value per share	$	20.33		$	14.39		$	44.45		$	9.79

^a Securities on loan with values of $5,547,286, $89,137,708, $792,077 and $–, respectively. See Note 5.

^b Cost of foreign currencies: $2,352,630, $2,169,797, $31,144 and $973,110, respectively.

^c $0.001 par value, number of shares authorized: 127.8 million, 250 million, 500 million and 300 million, respectively.

See notes to financial statements.

62 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Pacific ex-Japan Index Fund			Singapore Index Fund			South Korea Index Fund			Taiwan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	3,054,146,100		$	1,406,535,547		$	1,588,191,492		$	2,681,363,020
Affiliated issuers (Note 2)		152,649,584			272,623,547			221,567,029			12,660,393
Total cost of investments	$	3,206,795,684		$	1,679,159,094		$	1,809,758,521		$	2,694,023,413
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	3,349,805,158		$	1,283,979,431		$	2,396,728,049		$	3,002,504,348
Affiliated issuers (Note 2)		152,649,584			272,623,547			221,567,029			12,660,393
Total fair value of investments		3,502,454,742			1,556,602,978			2,618,295,078			3,015,164,741
Foreign currencies, at valueb		6,231,510			5,840,351			–			2,136,025
Cash		–			–			2,546			–
Receivables:
Investment securities sold		23,435,862			14,723,251			16,825,005			9,670,062
Dividends and interest		25,269,504			7,673,948			248,254			23,395,160
Capital shares sold		–			–			–			6,568,466
Interest from affiliate (Note 2)		114,680			56,182			118,949			137,794
Total Assets		3,557,506,298			1,584,896,710			2,635,489,832			3,057,072,248
LIABILITIES
Payables:
Investment securities purchased		21,125,204			18,117,539			17,248,902			16,597,159
Collateral for securities on loan (Note 5)		152,439,850			272,146,377			218,442,946			–
Capital shares redeemed		–			–			–			2,188,301
Foreign taxes (Note 1)		–			–			–			1,347,480
Investment advisory fees (Note 2)		1,387,625			594,222			1,247,973			1,607,992
Total Liabilities		174,952,679			290,858,138			236,939,821			21,740,932
NET ASSETS	$	3,382,553,619		$	1,294,038,572		$	2,398,550,011		$	3,035,331,316
Net assets consist of:
Paid-in capital	$	3,423,651,495		$	1,611,290,622		$	2,617,961,634		$	3,718,288,554
Undistributed (distributions in excess of) net investment income		12,221,049			14,645,717			(1,028,101	)		55,542,497
Accumulated net realized loss		(349,261,598	)		(209,375,406	)		(1,026,919,943	)		(1,059,587,175	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		295,942,673			(122,522,361	)		808,536,421			321,087,440
NET ASSETS	$	3,382,553,619		$	1,294,038,572		$	2,398,550,011		$	3,035,331,316
Shares outstandingc		91,800,000			126,300,000			57,100,000			277,400,000
Net asset value per share	$	36.85		$	10.25		$	42.01		$	10.94

^a Securities on loan with values of $144,320,340, $251,851,928, $207,139,504 and $–, respectively. See Note 5.

^b Cost of foreign currencies: $6,214,235, $5,827,965, $– and $2,139,581, respectively.

^c $0.001 par value, number of shares authorized: 1 billion, 300 million, 200 million and 400 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 63

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Thailand Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	93,673,833
Affiliated issuers (Note 2)		133,091
Total cost of investments	$	93,806,924
Investments in securities, at fair value (Note 1):
Unaffiliated issuers	$	93,433,212
Affiliated issuers (Note 2)		133,091
Total fair value of investments		93,566,303
Foreign currency, at valuea		66,590
Receivables:
Dividends and interest		433,747
Interest from affiliate (Note 2)		205
Total Assets		94,066,845
LIABILITIES
Payables:
Investment advisory fees (Note 2)		45,969
Total Liabilities		45,969
NET ASSETS	$	94,020,876
Net assets consist of:
Paid-in capital	$	99,443,846
Undistributed net investment income		542,360
Accumulated net realized loss		(5,725,097	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(240,233	)
NET ASSETS	$	94,020,876
Shares outstandingb		2,550,000
Net asset value per share	$	36.87

^a Cost of foreign currency: $66,483.

^b $0.001 par value, number of shares authorized: 200 million.

See notes to financial statements.

64 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^®, INC.

Year Ended August 31, 2009

	iShares MSCI
	Australia Index Fund			Hong Kong Index Fund			Japan Small Cap Index Fund			Malaysia Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	42,932,950		$	67,198,296		$	569,362		$	14,489,575
Interest from affiliated issuers (Note 2)		824			2,469			32			228
Securities lending income from affiliated issuers (Note 2)		179,862			636,758			15,463			–
Interest from affiliate (Note 2)		50,401			66,275			97			36,147
Total investment income		43,164,037			67,903,798			584,954			14,525,950
EXPENSES
Investment advisory fees (Note 2)		4,365,698			7,779,500			151,508			2,012,558
Total expenses		4,365,698			7,779,500			151,508			2,012,558
Net investment income		38,798,339			60,124,298			433,446			12,513,392
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(159,386,832	)		(150,159,397	)		(599,655	)		(15,963,255	)
In-kind redemptions		(42,535,915	)		15,542,407			(1,171,691	)		–
Foreign currency transactions		(895,538	)		54,003			35,492			9,547
Net realized loss		(202,818,285	)		(134,562,987	)		(1,735,854	)		(15,953,708	)
Net change in unrealized appreciation (depreciation) on:
Investments		205,318,167			(10,344,904	)		2,188,324			36,845,989
Translation of assets and liabilities in foreign currencies		343,159			(2,722	)		1,977			39,997
Net change in unrealized appreciation (depreciation)		205,661,326			(10,347,626	)		2,190,301			36,885,986
Net realized and unrealized gain (loss)		2,843,041			(144,910,613	)		454,447			20,932,278
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	41,641,380		$	(84,786,315	)	$	887,893		$	33,445,670

^a Net of foreign withholding tax of $540,557, $–, $42,273 and $–, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Operations (Continued)

iSHARES^®, INC.

Year Ended August 31, 2009

	iShares MSCI
	Pacific ex-Japan Index Fund			Singapore Index Fund			South Korea Index Fund			Taiwan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	120,673,687		$	40,555,433		$	20,038,303		$	78,175,064
Interest from unaffiliated issuers		–			–			16,890			3,110
Interest from affiliated issuers (Note 2)		3,745			1,238			6,401			15,920
Securities lending income from affiliated issuers (Note 2)		1,073,117			921,370			3,878,123			–
Interest from affiliate (Note 2)		114,680			56,182			118,949			137,794
Total investment income		121,865,229			41,534,223			24,058,666			78,331,888
EXPENSES
Investment advisory fees (Note 2)		11,437,463			5,088,402			10,039,046			12,738,136
Foreign taxes (Note 1)		–			–			5,555			3,315,900
Total expenses		11,437,463			5,088,402			10,044,601			16,054,036
Net investment income		110,427,766			36,445,821			14,014,065			62,277,852
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(268,299,190	)		(196,109,858	)		(685,942,723	)		(679,893,183	)
In-kind redemptions		51,310,571			(81,796,758	)		–			–
Foreign currency transactions		(2,270,354	)		(552,715	)		(1,329,556	)		(1,421,575	)
Net realized loss		(219,258,973	)		(278,459,331	)		(687,272,279	)		(681,314,758	)
Net change in unrealized appreciation (depreciation) on:
Investments		(61,871,135	)		61,379,043			558,389,314			178,866,744
Translation of assets and liabilities in foreign currencies		616,123			16,559			(56,216	)		368,592
Net change in unrealized appreciation (depreciation)		(61,255,012	)		61,395,602			558,333,098			179,235,336
Net realized and unrealized loss		(280,513,985	)		(217,063,729	)		(128,939,181	)		(502,079,422	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(170,086,219	)	$	(180,617,908	)	$	(114,925,116	)	$	(439,801,570	)

^a Net of foreign withholding tax of $1,220,964, $–, $3,433,839 and $19,010,732, respectively.

See notes to financial statements.

66 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^®, INC.

Year Ended August 31, 2009

	iShares MSCI
	Thailand Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	1,842,514
Interest from affiliated issuers (Note 2)		287
Interest from affiliate (Note 2)		205
Total investment income		1,843,006
EXPENSES
Investment advisory fees (Note 2)		257,410
Total expenses		257,410
Net investment income		1,585,596
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(6,172,312	)
In-kind redemptions		(12,561,586	)
Foreign currency transactions		12,085
Net realized loss		(18,721,813	)
Net change in unrealized appreciation (depreciation) on:
Investments		20,812,203
Translation of assets and liabilities in foreign currencies		3,412
Net change in unrealized appreciation (depreciation)		20,815,615
Net realized and unrealized gain		2,093,802
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,679,398

^a Net of foreign withholding tax of $204,655.

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Australia Index Fund						iShares MSCI Hong Kong Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	38,798,339		$	53,814,337		$	60,124,298		$	50,723,883
Net realized gain (loss)		(202,818,285	)		153,528,689			(134,562,987	)		231,716,450
Net change in unrealized appreciation (depreciation)		205,661,326			(365,807,308	)		(10,347,626	)		(582,947,008	)
Net increase (decrease) in net assets resulting from operations		41,641,380			(158,464,282	)		(84,786,315	)		(300,506,675	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(36,574,071	)		(81,749,137	)		(63,227,759	)		(69,181,586	)
Total distributions to shareholders		(36,574,071	)		(81,749,137	)		(63,227,759	)		(69,181,586	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		845,682,054			709,635,261			788,711,422			1,671,011,829
Cost of shares redeemed		(316,165,212	)		(874,442,072	)		(364,104,881	)		(1,071,448,062	)
Net increase (decrease) in net assets from capital share transactions		529,516,842			(164,806,811	)		424,606,541			599,563,767
INCREASE (DECREASE) IN NET ASSETS		534,584,151			(405,020,230	)		276,592,467			229,875,506
NET ASSETS
Beginning of year		1,059,092,246			1,464,112,476			1,675,184,398			1,445,308,892
End of year	$	1,593,676,397		$	1,059,092,246		$	1,951,776,865		$	1,675,184,398
Undistributed net investment income included in net assets at end of year	$	12,740,394		$	9,698,082		$	4,275,742		$	6,974,052
SHARES ISSUED AND REDEEMED
Shares sold		53,800,000			23,200,000			61,575,000			82,050,000
Shares redeemed		(19,600,000	)		(32,000,000	)		(31,425,000	)		(55,500,000	)
Net increase (decrease) in shares outstanding		34,200,000			(8,800,000	)		30,150,000			26,550,000

See notes to financial statements.

68 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Japan Small Cap Index Fund						iShares MSCI Malaysia Index Fund
	Year ended August 31, 2009			Period from December 20, 2007a to August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	433,446		$	91,139		$	12,513,392		$	27,165,781
Net realized loss		(1,735,854	)		(107,449	)		(15,953,708	)		(42,591,881	)
Net change in unrealized appreciation (depreciation)		2,190,301			(1,996,482	)		36,885,986			(98,392,878	)
Net increase (decrease) in net assets resulting from operations		887,893			(2,012,792	)		33,445,670			(113,818,978	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(458,327	)		(56,942	)		(12,659,798	)		(46,957,845	)
Total distributions to shareholders		(458,327	)		(56,942	)		(12,659,798	)		(46,957,845	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		14,997,836			36,663,666			162,777,082			714,281,254
Cost of shares redeemed		(14,465,148	)		–			(143,654,071	)		(821,853,186	)
Net increase (decrease) in net assets from capital share transactions		532,688			36,663,666			19,123,011			(107,571,932	)
INCREASE (DECREASE) IN NET ASSETS		962,254			34,593,932			39,908,883			(268,348,755	)
NET ASSETS
Beginning of period		34,593,932			–			473,090,766			741,439,521
End of period	$	35,556,186		$	34,593,932		$	512,999,649		$	473,090,766
Undistributed net investment income included in net assets at end of period	$	73,258		$	29,166		$	1,906,004		$	1,897,270
SHARES ISSUED AND REDEEMED
Shares sold		400,000			800,000			19,725,000			56,250,000
Shares redeemed		(400,000	)		–			(17,700,000	)		(73,425,000	)
Net increase (decrease) in shares outstanding		–			800,000			2,025,000			(17,175,000	)

^a Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Pacific ex-Japan Index Fund						iShares MSCI Singapore Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	110,427,766		$	128,526,593		$	36,445,821		$	65,504,376
Net realized gain (loss)		(219,258,973	)		102,089,773			(278,459,331	)		132,846,334
Net change in unrealized appreciation (depreciation)		(61,255,012	)		(653,824,213	)		61,395,602			(410,162,165	)
Net decrease in net assets resulting from operations		(170,086,219	)		(423,207,847	)		(180,617,908	)		(211,811,455	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(89,338,841	)		(199,385,029	)		(40,706,510	)		(95,160,270	)
From net realized gain		–			(4,628,288	)		–			–
Total distributions to shareholders		(89,338,841	)		(204,013,317	)		(40,706,510	)		(95,160,270	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		606,264,055			726,432,412			368,595,441			810,998,513
Cost of shares redeemed		(228,256,529	)		(371,535,398	)		(330,200,942	)		(696,268,481	)
Net increase in net assets from capital share transactions		378,007,526			354,897,014			38,394,499			114,730,032
INCREASE (DECREASE) IN NET ASSETS		118,582,466			(272,324,150	)		(182,929,919	)		(192,241,693	)
NET ASSETS
Beginning of year		3,263,971,153			3,536,295,303			1,476,968,491			1,669,210,184
End of year	$	3,382,553,619		$	3,263,971,153		$	1,294,038,572		$	1,476,968,491
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	12,221,049		$	(11,255,053	)	$	14,645,717		$	19,330,971
SHARES ISSUED AND REDEEMED
Shares sold		20,400,000			13,800,000			41,900,000			58,500,000
Shares redeemed		(7,500,000	)		(8,100,000	)		(44,700,000	)		(55,100,000	)
Net increase (decrease) in shares outstanding		12,900,000			5,700,000			(2,800,000	)		3,400,000

See notes to financial statements.

70 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI South Korea Index Fund						iShares MSCI Taiwan Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	14,014,065		$	40,026,865		$	62,277,852		$	111,484,150
Net realized loss		(687,272,279	)		(254,209,320	)		(681,314,758	)		(187,544,546	)
Net change in unrealized appreciation (depreciation)		558,333,098			(859,380,138	)		179,235,336			(549,162,768	)
Net decrease in net assets resulting from operations		(114,925,116	)		(1,073,562,593	)		(439,801,570	)		(625,223,164	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(19,134,761	)		(49,844,649	)		(105,890,576	)		(68,184,922	)
Total distributions to shareholders		(19,134,761	)		(49,844,649	)		(105,890,576	)		(68,184,922	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,407,195,537			1,462,000,429			1,421,796,026			1,558,478,632
Cost of shares redeemed		(860,348,791	)		(782,282,834	)		(758,780,360	)		(716,827,104	)
Net increase in net assets from capital share transactions		546,846,746			679,717,595			663,015,666			841,651,528
INCREASE (DECREASE) IN NET ASSETS		412,786,869			(443,689,647	)		117,323,520			148,243,442
NET ASSETS
Beginning of year		1,985,763,142			2,429,452,789			2,918,007,796			2,769,764,354
End of year	$	2,398,550,011		$	1,985,763,142		$	3,035,331,316		$	2,918,007,796
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(1,028,101	)	$	5,324,787		$	55,542,497		$	100,550,924
SHARES ISSUED AND REDEEMED
Shares sold		43,400,000			21,550,000			140,800,000			98,600,000
Shares redeemed		(31,900,000	)		(14,150,000	)		(85,600,000	)		(49,600,000	)
Net increase in shares outstanding		11,500,000			7,400,000			55,200,000			49,000,000

See notes to financial statements.

FINANCIAL STATEMENTS 71

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Thailand Investable Market Index Fund
	Year ended August 31, 2009			Period from March 26, 2008a to August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	1,585,596		$	412,262
Net realized loss		(18,721,813	)		(7,034,262	)
Net change in unrealized appreciation (depreciation)		20,815,615			(21,055,848	)
Net increase (decrease) in net assets resulting from operations		3,679,398			(27,677,848	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(1,466,522	)		–
Total distributions to shareholders		(1,466,522	)		–
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		57,023,862			147,211,231
Cost of shares redeemed		(23,464,139	)		(61,285,106	)
Net increase in net assets from capital share transactions		33,559,723			85,926,125
INCREASE IN NET ASSETS		35,772,599			58,248,277
NET ASSETS
Beginning of period		58,248,277			–
End of period	$	94,020,876		$	58,248,277
Undistributed net investment income included in net assets at end of period	$	542,360		$	411,201
SHARES ISSUED AND REDEEMED
Shares sold		1,900,000			2,900,000
Shares redeemed		(850,000	)		(1,400,000	)
Net increase in shares outstanding		1,050,000			1,500,000

^a Commencement of operations.

See notes to financial statements.

72 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Australia Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	23.96		$	27.62		$	21.59		$	18.28		$	13.56
Income from investment operations:
Net investment incomea		0.78			0.96			0.89			0.75			0.70
Net realized and unrealized gain (loss)b		(3.47	)		(3.34	)		6.24			3.23			4.60
Total from investment operations		(2.69	)		(2.38	)		7.13			3.98			5.30
Less distributions from:
Net investment income		(0.94	)		(1.28	)		(1.10	)		(0.67	)		(0.58	)
Total distributions		(0.94	)		(1.28	)		(1.10	)		(0.67	)		(0.58	)
Net asset value, end of year	$	20.33		$	23.96		$	27.62		$	21.59		$	18.28
Total return		(8.91	)%		(9.25	)%		33.97	%		22.35	%		39.58	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,593,676		$	1,059,092		$	1,464,112		$	686,407		$	369,355
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		4.92	%		3.38	%		3.46	%		3.75	%		4.13	%
Portfolio turnover ratec		14	%		10	%		10	%		7	%		17	%

^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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 73

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Hong Kong Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	15.87		$	18.30		$	14.20		$	13.01		$	10.91
Income from investment operations:
Net investment incomea		0.52			0.45			0.47			0.38			0.33
Net realized and unrealized gain (loss)b		(1.46	)		(2.25	)		3.94			1.17			2.04
Total from investment operations		(0.94	)		(1.80	)		4.41			1.55			2.37
Less distributions from:
Net investment income		(0.54	)		(0.63	)		(0.31	)		(0.36	)		(0.27	)
Total distributions		(0.54	)		(0.63	)		(0.31	)		(0.36	)		(0.27	)
Net asset value, end of year	$	14.39		$	15.87		$	18.30		$	14.20		$	13.01
Total return		(4.77	)%		(10.54	)%		31.44	%		12.20	%		21.96	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,951,777		$	1,675,184		$	1,445,309		$	882,712		$	637,985
Ratio of expenses to average net assets		0.55	%		0.52	%		0.52	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		4.29	%		2.34	%		2.92	%		2.87	%		2.75	%
Portfolio turnover ratec		9	%		17	%		9	%		10	%		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.

See notes to financial statements.

74 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Japan Small Cap Index Fund
	Year ended Aug. 31, 2009			Period from Dec. 20, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	43.24		$	48.85
Income from investment operations:
Net investment incomeb		0.60			0.29
Net realized and unrealized gain (loss)c		1.29			(5.74	)
Total from investment operations		1.89			(5.45	)
Less distributions from:
Net investment income		(0.68	)		(0.16	)
Total distributions		(0.68	)		(0.16	)
Net asset value, end of period	$	44.45		$	43.24
Total return		4.62	%		(11.19	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	35,556		$	34,594
Ratio of expenses to average net assetse		0.56	%		0.53	%
Ratio of net investment income to average net assetse		1.59	%		0.93	%
Portfolio turnover ratef		7	%		7	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

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

See notes to financial statements.

FINANCIAL HIGHLIGHTS 75

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Malaysia Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	9.39		$	10.97		$	7.75		$	7.19		$	6.54
Income from investment operations:
Net investment incomea		0.28			0.34			0.34			0.26			0.20
Net realized and unrealized gain (loss)b		0.40			(1.31	)		3.08			0.59			0.61
Total from investment operations		0.68			(0.97	)		3.42			0.85			0.81
Less distributions from:
Net investment income		(0.28	)		(0.61	)		(0.20	)		(0.29	)		(0.16	)
Total distributions		(0.28	)		(0.61	)		(0.20	)		(0.29	)		(0.16	)
Net asset value, end of year	$	9.79		$	9.39		$	10.97		$	7.75		$	7.19
Total return		8.00	%		(9.86	)%		44.64	%		12.35	%		12.39	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	513,000		$	473,091		$	741,440		$	374,334		$	387,575
Ratio of expenses to average net assets		0.56	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.45	%		2.84	%		3.21	%		3.46	%		2.85	%
Portfolio turnover ratec		52	%		92	%		87	%		60	%		15	%

^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, 2009, August 31, 2008, August 31, 2007, August 31, 2006 and August 31, 2005 would have been 12%, 16%, 3%, 9% and 9%, respectively. See Note 4.

See notes to financial statements.

76 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Pacific ex-Japan Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a			Year ended Aug. 31, 2005a
Net asset value, beginning of year	$	41.37		$	48.31		$	37.34		$	32.52		$	25.24
Income from investment operations:
Net investment incomeb		1.38			1.64			1.52			1.28			1.23
Net realized and unrealized gain (loss)c		(4.79	)		(6.01	)		11.18			4.77			7.05
Total from investment operations		(3.41	)		(4.37	)		12.70			6.05			8.28
Less distributions from:
Net investment income		(1.11	)		(2.51	)		(1.73	)		(1.23	)		(1.00	)
Net realized gain		–			(0.06	)		–			–			–
Total distributions		(1.11	)		(2.57	)		(1.73	)		(1.23	)		(1.00	)
Net asset value, end of year	$	36.85		$	41.37		$	48.31		$	37.34		$	32.52
Total return		(7.23	)%		(9.87	)%		34.86	%		19.17	%		33.27	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,382,554		$	3,263,971		$	3,536,295		$	2,094,931		$	1,522,107
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		4.83	%		3.35	%		3.43	%		3.67	%		4.09	%
Portfolio turnover rated		10	%		14	%		11	%		8	%		16	%

^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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 77

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Singapore Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	11.44		$	13.28		$	9.11		$	7.77		$	6.52
Income from investment operations:
Net investment incomea		0.32			0.47			0.47			0.40			0.38
Net realized and unrealized gain (loss)b		(1.16	)		(1.67	)		4.01			1.23			1.15
Total from investment operations		(0.84	)		(1.20	)		4.48			1.63			1.53
Less distributions from:
Net investment income		(0.35	)		(0.64	)		(0.31	)		(0.29	)		(0.28	)
Total distributions		(0.35	)		(0.64	)		(0.31	)		(0.29	)		(0.28	)
Net asset value, end of year	$	10.25		$	11.44		$	13.28		$	9.11		$	7.77
Total return		(5.87	)%		(9.55	)%		49.92	%		21.61	%		24.06	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,294,039		$	1,476,968		$	1,669,210		$	574,620		$	341,137
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		3.97	%		3.56	%		3.80	%		4.74	%		5.19	%
Portfolio turnover ratec		15	%		16	%		8	%		6	%		8	%

^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.

See notes to financial statements.

78 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI South Korea Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	43.55		$	63.60		$	46.00		$	34.75		$	24.17
Income from investment operations:
Net investment incomea		0.30			0.80			0.51			0.31			0.46
Net realized and unrealized gain (loss)b		(1.45	)		(19.87	)		17.42			11.20			10.22
Total from investment operations		(1.15	)		(19.07	)		17.93			11.51			10.68
Less distributions from:
Net investment income		(0.39	)		(0.98	)		(0.33	)		(0.26	)		(0.10	)
Total distributions		(0.39	)		(0.98	)		(0.33	)		(0.26	)		(0.10	)
Net asset value, end of year	$	42.01		$	43.55		$	63.60		$	46.00		$	34.75
Total return		(2.31	)%		(30.35	)%		39.18	%		33.16	%		44.29	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	2,398,550		$	1,985,763		$	2,429,453		$	1,621,334		$	698,455
Ratio of expenses to average net assets		0.65	%		0.63	%		0.68	%		0.70	%		0.74	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.65	%		0.63	%		0.68	%		0.70	%		0.74	%
Ratio of net investment income to average net assets		0.91	%		1.35	%		0.96	%		0.71	%		1.49	%
Portfolio turnover ratec		62	%		42	%		20	%		47	%		30	%

^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, 2009, August 31, 2008, August 31, 2007, August 31, 2006 and August 31, 2005 would have been 8%, 15%, 6%, 14% and 9%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 79

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Taiwan Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	13.13		$	15.99		$	12.57		$	11.57		$	10.66
Income from investment operations:
Net investment incomea		0.30			0.54			0.38			0.34			0.27
Net realized and unrealized gain (loss)b		(1.89	)		(3.01	)		3.34			0.80			0.72
Total from investment operations		(1.59	)		(2.47	)		3.72			1.14			0.99
Less distributions from:
Net investment income		(0.60	)		(0.39	)		(0.30	)		(0.14	)		(0.08	)
Total distributions		(0.60	)		(0.39	)		(0.30	)		(0.14	)		(0.08	)
Net asset value, end of year	$	10.94		$	13.13		$	15.99		$	12.57		$	11.57
Total return		(9.67	)%		(15.69	)%		29.91	%		9.84	%		9.28	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,035,331		$	2,918,008		$	2,769,764		$	1,893,751		$	752,640
Ratio of expenses to average net assets		0.82	%		0.73	%		0.77	%		0.85	%		1.03	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.65	%		0.63	%		0.68	%		0.70	%		0.74	%
Ratio of net investment income to average net assets		3.18	%		3.54	%		2.61	%		2.74	%		2.34	%
Portfolio turnover ratec		52	%		33	%		35	%		29	%		20	%

^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, 2009, August 31, 2008, August 31, 2007, August 31, 2006 and August 31, 2005 would have been 14%, 11%, 12%, 10% and 10%, respectively. See Note 4.

See notes to financial statements.

80 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Thailand Investable Market Index Fund
	Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	38.83		$	50.03
Income from investment operations:
Net investment incomeb		1.17			0.32
Net realized and unrealized lossc		(1.88	)		(11.52	)
Total from investment operations		(0.71	)		(11.20	)
Less distributions from:
Net investment income		(1.25	)		–
Total distributions		(1.25	)		–
Net asset value, end of period	$	36.87		$	38.83
Total return		(0.33	)%		(22.39	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	94,021		$	58,248
Ratio of expenses to average net assetse		0.65	%		0.63	%
Ratio of net investment income to average net assetse		4.00	%		1.68	%
Portfolio turnover ratef		15	%		19	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

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

See notes to financial statements.

FINANCIAL HIGHLIGHTS 81

Notes to Financial Statements

iSHARES^®, INC.

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

These financial statements relate only to the iShares MSCI Australia, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia, iShares MSCI Pacific ex-Japan, iShares MSCI Singapore, iShares MSCI South Korea, iShares MSCI Taiwan and iShares MSCI Thailand Investable Market Index Funds (each, a “Fund,” collectively, the “Funds”).

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

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”). Effective September 1, 2008, the Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to

82 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”);

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”);

• Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”).

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.

The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

NOTES TO FINANCIAL STATEMENTS 83

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

As of August 31, 2009, the values of each Fund’s investments were classified as Level 1 Prices. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a rate different from the rates used by MSCI may adversely affect a Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

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

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2009, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, including any net foreign currency gains, are declared and distributed at least annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and distributed once a year.

84 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.

As of August 31, 2009, the tax year-end of the Funds, the components of net distributable earnings (accumulated losses) on a tax basis were as follows:

iShares MSCI Index Fund	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			Capital and Other Losses			Net Distributable Earnings (Accumulated Losses)
Australia	$	32,111,373	$	(85,005,882	)	$	(54,496,266	)	$	(107,390,775	)
Hong Kong		6,689,574		(399,411,566	)		(160,743,602	)		(553,465,594	)
Japan Small Cap		262,682		(41,743	)		(607,300	)		(386,361	)
Malaysia		3,145,927		166,390,469			(76,560,881	)		92,975,515
Pacific ex-Japan		38,045,763		94,997,735			(174,256,054	)		(41,212,556	)
Singapore		18,776,670		(177,427,151	)		(158,657,751	)		(317,308,232	)
South Korea		7,113,247		236,713,726			(463,357,545	)		(219,530,572	)
Taiwan		57,586,103		105,285,434			(845,966,569	)		(683,095,032	)
Thailand Investable Market		542,155		(3,088,458	)		(2,876,872	)		(5,423,175	)

For the years ended August 31, 2009 and August 31, 2008, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid except for the iShares MSCI Pacific ex-Japan Index Fund. The tax character of distributions paid during the years ended August 31, 2009 and August 31, 2008 for the iShares MSCI Pacific ex-Japan Index Fund was as follows:

	2009		2008
Distributions paid from:
Ordinary income	$	89,338,841	$	199,397,032
Long-term capital gain		–		4,616,285
Total Distributions	$	89,338,841	$	204,013,317

The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all the Funds.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2009.

NOTES TO FINANCIAL STATEMENTS 85

Notes to Financial Statements (Continued)

iSHARES^®, INC.

From November 1, 2008 to August 31, 2009, the Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2010, as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Australia	$	24,697,258
Hong Kong		114,356,249
Japan Small Cap		475,582
Malaysia		9,994,880
Pacific ex-Japan		108,048,226
Singapore		128,992,922
South Korea		227,074,012
Taiwan		364,046,657
Thailand Investable Market		2,321,428

The Funds had tax basis net capital loss carryforwards as of August 31, 2009, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund	Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Expiring 2017		Total
Australia	$	3,625,203	$	650,082	$	596,240	$	384,424	$	–	$	7,066	$	529,868	$	24,006,125	$	29,799,008
Hong Kong		4,971,970		2,870,602		2,330,414		468,716		425,440		2,899,247		3,185,408		29,235,556		46,387,353
Japan Small Cap		–		–		–		–		–		–		–		131,718		131,718
Malaysia		9,819,029		2,898,105		775,477		6,820,474		1,543,708		3,357,786		1,127,892		40,223,530		66,566,001
Pacific ex-Japan		–		–		–		–		–		–		–		66,207,828		66,207,828
Singapore		1,934,119		4,428,316		4,256,421		2,558,348		–		–		807,115		15,680,510		29,664,829
South Korea		666,642		504,041		3,363,449		11,590,303		3,172,573		38,097,223		–		178,889,302		236,283,533
Taiwan		12,532,361		8,689,663		9,129,874		12,022,719		14,435,986		64,999,586		16,734,578		343,375,145		481,919,912
Thailand Investable Market		–		–		–		–		–		–		–		555,444		555,444

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

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

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

86 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2009, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

iShares MSCI Index Fund	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Australia	$	1,668,160,154	$	–	$	(85,175,995	)	$	(85,175,995	)
Hong Kong		2,439,461,446		–		(399,411,772	)		(399,411,772	)
Japan Small Cap		36,370,038		2,753,870		(2,797,680	)		(43,810	)
Malaysia		345,348,867		168,518,363		(2,133,087	)		166,385,276
Pacific ex-Japan		3,407,740,622		309,091,518		(214,377,398	)		94,714,120
Singapore		1,734,063,884		–		(177,460,906	)		(177,460,906	)
South Korea		2,381,581,216		261,244,577		(24,530,715	)		236,713,862
Taiwan		2,909,825,419		246,713,659		(141,374,337	)		105,339,322
Thailand Investable Market		96,655,149		2,193,446		(5,282,292	)		(3,088,846	)

Management has reviewed the tax positions as of August 31, 2009, inclusive of the prior three open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

For its investment advisory services to the iShares MSCI Australia, iShares MSCI Hong Kong, iShares MSCI Japan Small Cap, iShares MSCI Malaysia and iShares MSCI Singapore Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.59%	First $7 billion
0.54	Over $7 billion, up to and including $11 billion
0.49	Over $11 billion, up to and including $24 billion
0.44	Over $24 billion, up to and including $48 billion
0.40	Over $48 billion

NOTES TO FINANCIAL STATEMENTS 87

Notes to Financial Statements (Continued)

iSHARES^®, INC.

For its investment advisory services to the iShares MSCI South Korea, iShares MSCI Taiwan and iShares MSCI Thailand Investable Market Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.74%	First $2 billion
0.69	Over $2 billion, up to and including $4 billion
0.64	Over $4 billion, up to and including $8 billion
0.57	Over $8 billion, up to and including $16 billion
0.51	Over $16 billion

For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, BGFA is entitled to an annual investment advisory fee of 0.50% of the average daily net assets of the Fund.

Under the terms of the Investment Advisory Agreement, the Funds are required to remit payment of accrued fees to BGFA on a quarterly basis. BGFA has determined that in certain cases such payments to BGFA by the Funds were made earlier than provided for under the Investment Advisory Agreement. BGFA will reimburse the Funds for interest that would have been earned had such payments been made on a quarterly basis. The amounts to be reimbursed are included under receivables and investment income as “Interest from affiliate” in the Statements of Assets and Liabilities and Statements of Operations, respectively. The reimbursements do not have a material effect on net asset value per share or the total return shown in the Financial Highlights.

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Funds. BarCap and BGI are affiliates of BGFA, the Funds’ investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended August 31, 2009, BGI earned securities lending agent fees as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Australia	$  179,862
Hong Kong	636,758
Japan Small Cap	15,463
Pacific ex-Japan	1,073,117
Singapore	921,370
South Korea	3,878,123

Cross trades for the year ended August 31, 2009, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

88 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

Each Fund may invest in certain money market funds managed by BGFA, the Funds’ investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. These money market funds seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2009, were as follows:

iShares MSCI Index Fund	Purchases		Sales
Australia	$	114,315,659	$	115,462,767
Hong Kong		134,823,794		130,566,934
Japan Small Cap		1,906,564		1,933,327
Malaysia		212,826,713		192,392,499
Pacific ex-Japan		261,153,964		248,956,039
Singapore		147,654,916		154,328,615
South Korea		1,520,458,734		980,225,720
Taiwan		1,684,584,662		1,059,066,946
Thailand Investable Market		6,090,933		6,139,897

In-kind transactions (see Note 4) for the year ended August 31, 2009, were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
Australia	$	837,006,545	$	312,326,694
Hong Kong		776,747,217		358,446,383
Japan Small Cap		14,868,622		14,313,131
Pacific ex-Japan		601,025,840		225,641,092
Singapore		362,202,138		321,817,318
Thailand Investable Market		56,813,208		23,278,846

NOTES TO FINANCIAL STATEMENTS 89

Notes to Financial Statements (Continued)

iSHARES^®, INC.

4. CAPITAL SHARE TRANSACTIONS

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

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds which are offered in Creation Units solely for cash in U.S. dollars). Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant Fund for brokerage and market impact expenses relating to investing in portfolio securities.

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BGFA; such reinvestments are subject to investment risk.

As of August 31, 2009, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BGFA. The market value of the securities on loan as of August 31, 2009 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

6. BLACKROCK TRANSACTION

On June 16, 2009, Barclays PLC, the ultimate parent company of BGI and BGFA, accepted a binding offer and entered into an agreement to sell its interests in BGFA, BGI and certain affiliated companies, to BlackRock, Inc., (the “BlackRock Transaction”). The BlackRock Transaction is subject to certain regulatory approvals, as well as other conditions to closing.

Under the 1940 Act, completion of the BlackRock Transaction will cause the automatic termination of each Fund’s current investment advisory agreement with BGFA. In order for the management of each Fund to continue uninterrupted, the Board approved a new investment advisory agreement for each Fund subject to shareholder approval. A special meeting of shareholders of the Funds is scheduled to be held on November 4, 2009. Each shareholder of record as of the close of business on August 25, 2009 will receive notice of and be entitled to vote at the meeting.

7. REVIEW OF SUBSEQUENT EVENTS

In connection with the preparation of the financial statements of the Funds as of and for the year ended August 31, 2009, events and transactions through October 23, 2009, the date the financial statements are available to be issued, have been evaluated by the Funds’ management for possible adjustment and/or disclosure. No subsequent events requiring financial statement disclosure have been identified.

90 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Australia Index Fund, iShares MSCI Hong Kong Index Fund, iShares MSCI Japan Small Cap Index Fund, iShares MSCI Malaysia Index Fund, iShares MSCI Pacific ex-Japan Index Fund, iShares MSCI Singapore Index Fund, iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund and iShares MSCI Thailand Investable Market Index Fund, each a portfolio of the iShares MSCI Series (the “Funds”), at August 31, 2009, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 23, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 91

Tax Information (Unaudited)

iSHARES^®, INC.

For the fiscal year ended August 31, 2009, certain Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:

iShares MSCI Index Fund	Foreign Source Income Earned		Foreign Taxes Paid
Australia	$	43,473,507	$	538,879
Japan Small Cap		611,635		42,043
Pacific ex-Japan		121,894,649		1,201,161
South Korea		23,472,142		3,220,543
Taiwan		97,185,797		22,307,164
Thailand Investable Market		2,047,168		202,173

Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2009:

iShares MSCI Index Fund	Qualified Dividend Income
Australia	$	36,574,071
Japan Small Cap		458,327
Pacific ex-Japan		74,074,461
South Korea		19,134,761
Thailand Investable Market		1,466,522

In January 2010, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2009. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

92 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory Contract (Unaudited)

iSHARES^®, INC.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Funds. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on
June 16-17, 2009, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS

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

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each Fund for the one-, three-, five- and ten-year periods, as applicable, and the “last quarter” period ended March 31, 2009, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in their respective Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

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

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

ECONOMIES OF SCALE

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board noted that the Advisory Contract already provided for breakpoints in the investment advisory fee rates for most of the Funds as the assets of such Funds, on an aggregated basis with the assets of certain other iShares funds, increase, and that extended breakpoints were implemented for such Funds the previous year. The Board also noted that the Advisory Contract did not currently provide for any breakpoints in the investment advisory fee rates for the iShares MSCI Pacific ex-Japan Index Fund as possible future economies of scale for that Fund had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. The Board noted that the asset size of each of the Funds except the iShares MSCI Japan Small Cap Index Fund decreased over the past twelve months. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark index comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of economies of scale with the Funds’ shareholders.

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

The Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for the Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as any of the Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract for the coming year.

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Board Review and Approval of New Investment Advisory Agreements (Unaudited)

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On June 16, 2009, Barclays Bank PLC (“Barclays”) entered into an agreement to sell its interest in the Barclays Global Investors asset management business, which includes BGI and BGI’s business of advising, sponsoring and distributing exchange-traded funds, to BlackRock, Inc. (“BlackRock”). Assuming receipt of the requisite regulatory approvals and the satisfaction of other conditions to the closing, the subsidiaries of Barclays operating the BGI business, including BGFA (the “Adviser”), will be sold to BlackRock (the “Transaction”) for cash and BlackRock stock.

The Adviser currently serves as the investment adviser to each Fund pursuant to an investment advisory agreement with the Company (the “Current Advisory Agreement”). Under the 1940 Act, the Transaction, if consummated, will result in the automatic termination of the Current Advisory Agreement. In order for the management of each Fund to continue uninterrupted, the Board approved interim and new investment advisory agreements (the “New Advisory Agreements”) with the Company, subject to shareholder approval.

BOARD CONSIDERATIONS IN APPROVING THE NEW ADVISORY AGREEMENTS

At an in-person Board meeting held on August 13, 2009, the Board, including the Independent Directors, unanimously approved the New Advisory Agreements between the Adviser and the Company, on behalf of its Funds after consideration of all factors determined to be relevant to the Board’s deliberations, including those discussed below.

The Approval Process – At telephonic and in-person meetings held in June, July and August of this year, the Board, including the Independent Directors, discussed the Transaction and the New Advisory Agreements for the Funds.

In preparation for their consideration of the New Advisory Agreements, the Directors received, in response to a written due diligence request prepared by the Board and its independent counsel and provided to BlackRock, BGI and the Adviser, comprehensive written information covering a range of issues and received, in response to their additional requests, further information in advance of and at the August 13, 2009 in-person Board meeting. To assist the Board in its consideration of the New Advisory Agreements, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and the Adviser provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.

In June 2009, the Board had performed a full annual review of, or initially approved, as applicable, the current Investment Advisory Agreement between the Adviser and the Company, on behalf of its Funds for each Fund as required by the 1940 Act and, after reviewing, among other things, the investment capabilities, resources and personnel of the Adviser, determined that the nature, extent and quality of the services provided by the Adviser under the Current Advisory Agreements were appropriate. The Board also determined that the advisory fees paid by each Fund, taking into account any applicable agreed-upon fee waivers and breakpoints, were fair and reasonable in light of the services provided, the costs to the Adviser of providing those services, economies of scale, the fees and other expenses paid by similar funds (including information provided by Lipper, Inc. (“Lipper”)), and such other circumstances as the Directors considered relevant in the exercise of their reasonable judgment. The Board approved the Current Advisory Agreements on June 17, 2009.

In advance of the June 2009 Board meeting, the Board requested and received materials specifically relating to each Fund’s Current Advisory Agreement. These materials were prepared for each Fund, and included information (i) compiled by Lipper on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (ii) prepared by the Adviser discussing market conditions generally; (iii) on the profitability to the Adviser of the Current Advisory Agreements and other payments received by the Adviser and its affiliates from the Funds; and (iv) provided by the Adviser concerning services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to the Adviser and its affiliates from their relationship with the Fund.

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At the June 17, July 29 and August 13, 2009 Board meetings, the Directors discussed with representatives of BGI, the Adviser and BlackRock, the management, investment, risk management and compliance capabilities and processes, and financial condition of BlackRock, the Transaction and its rationale, and BlackRock’s general plans and intentions regarding the Adviser and the Funds. At these Board meetings, representatives of BGI, the Adviser and BlackRock made various presentations to, and responded to questions from, the Board. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of the Adviser in connection with the Transaction, including the anticipated senior management structure of the Adviser following the completion of the Transaction. The Independent Directors also conferred separately and with their independent legal counsel about the Transaction and other matters related to the Transaction on a number of occasions. After the presentations and after reviewing the written materials provided, the Independent Directors met in executive sessions with their independent legal counsel at the June, July and August 2009 Board meetings to consider the Transaction, its expected impact on the Adviser and the Funds, and the New Advisory Agreements.

In connection with the Board’s review of the New Advisory Agreements, BGI, the Adviser and/or BlackRock, as applicable, provided the Board with information about a variety of matters. The Board considered, among other things, the following information:

• the reputation, financial strength and resources of BlackRock and its investment advisory subsidiaries and the anticipated financial strength and resources of the combined company;

• that there is not expected to be any diminution in the nature, quality and extent of services provided to the Funds and their shareholders by the Adviser, including portfolio management and compliance services;

• that the Adviser and BlackRock have no present intention to alter the advisory fee rates and expense arrangements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction;

• that it is expected that substantially all of the current employees of the Adviser will remain employees of the Adviser and will continue to provide services to the Funds following the Transaction;

• that the Funds may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including investment tools, provided under the BlackRock Solutions^® brand name;

• that the Funds are expected to continue to be sold through existing distribution channels;

• that the Funds will have access to greater distribution resources through BlackRock’s relationships with third party brokers and retirement plan platforms;

• that the parties to the Transaction Agreement have agreed to conduct their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act in relation to the Funds;

• that Barclays or one of its affiliates has agreed to pay all expenses of the Funds in connection with the Board’s consideration of the New Advisory Agreements and all costs of seeking shareholder approval of the New Advisory Agreements; and

• that Barclays and BlackRock would derive benefits from the Transaction and that, as a result, they may have a different financial interest in the matters that were being considered than do Fund shareholders.

The Board did not identify any particular information that was all-important or controlling, and each Director may have attributed different weights to the various factors discussed below. The Directors evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. In their deliberations, the Directors considered information received

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in connection with their most recent approval or continuation of each Current Advisory Agreement at the June 2009 Board meeting, in addition to information provided by BGI, the Adviser and BlackRock regarding BlackRock and the Transaction, in connection with their evaluation of the terms and conditions of the New Advisory Agreements. The Directors, including a majority of the Independent Directors, concluded that the terms of the New Advisory Agreements are appropriate, that the fees to be paid are reasonable in light of the services to be provided to each Fund, and that the New Advisory Agreements should be approved and recommended to Fund shareholders. In voting to approve the New Advisory Agreements in respect of each Fund, the Board considered in particular the following factors:

The nature, extent and quality of services to be provided by the Adviser and its affiliates – In connection with their consideration of the New Advisory Agreements, the Board considered representations by the Adviser, BGI and BlackRock that there would be no diminution in the scope of services required of or provided by the Adviser under the New Advisory Agreements for each Fund as compared to the scope of services provided by the Adviser under the Current Advisory Agreement. In reviewing the scope of these services at the June and August 2009 Board meetings, the Board considered the Adviser’s investment philosophy and experience, noting that the Adviser and its affiliates have committed significant resources over time, including over the past year, including investments in technology and increasing the number of their employees supporting the Funds. The Board also considered the Adviser’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that the Adviser reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board noted that it expects that these reports and discussions will continue following the consummation of the Transaction. In addition to the above considerations, the Board considered the Adviser’s investment processes and strategies, and matters related to the Adviser’s portfolio transaction policies and procedures. The Board further took into account that, with respect to most of the Funds, the Adviser does not serve as investment adviser for other series of registered investment companies with substantially similar investment objectives and strategies; therefore, directly comparable performance information was generally not available for most Funds. The Board also considered each Fund’s record of performing in accordance with its investment objective.

In connection with the investment advisory services to be provided under the New Advisory Agreements, the Board took into account detailed discussions with representatives of the Adviser at the June 2009 Board meeting and at prior Board meetings regarding the management of each Fund. In addition to the investment advisory services to be provided to the Funds, the Board, at the August 2009 Board meeting, considered that the Adviser also will continue to provide management and administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements and other services necessary for the operation of the Funds, and that these services were expected to be consistent with the services the Adviser currently performs under the Current Advisory Agreements.

The Board noted the representations of the Adviser, BGI and BlackRock that the Transaction was not expected to have any adverse effect on the resources and strengths of the Adviser in managing the Funds. The Board also considered that the Funds and their shareholders may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. The Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business. The Board also discussed the Adviser’s anticipated financial condition following the completion of the Transaction. The Board discussed BlackRock’s current ownership structure and expected ownership structure following the completion of the Transaction. The Board was advised that BlackRock operates as an independent firm, with its own Board of Directors and no majority shareholder. The Board was also advised that while BlackRock’s largest shareholders, Merrill Lynch, a wholly owned subsidiary of Bank of America, and PNC, are important clients and strategic partners of BlackRock, they are not involved in the firm’s day-to-day management or operations.

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Based on the discussions held and the materials presented at the June, July and August 2009 Board meetings and prior Board meetings, the Board determined that the Transaction would not likely cause an adverse change in the nature, extent and quality of the services to be provided by the Adviser under the New Advisory Agreements compared with the services provided by the Adviser under the Current Advisory Agreements and that the Board expects that the quality of such services will continue to be appropriate.

Funds’ expenses and performance of the Funds – The Board received and reviewed statistical information prepared by Lipper at the June 2009 meeting and also received information at prior meetings regarding the expense ratio components of the Funds, including advisory fees, waivers and reimbursements, and gross and net total expenses, in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising a Fund’s peer group pursuant to Lipper’s proprietary methodology and, for certain Funds, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of the Adviser (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by most of the Funds, the Lipper Groups sometimes included mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to certain Funds.

The Board noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the Funds in their Lipper Groups with respect to the Current and New Advisory Agreements. The Board took into account that the fee rates for each Fund under the New Advisory Agreements are identical to the fee rates under the respective Current Advisory Agreements. Further, the Board noted that representatives of the Adviser and BlackRock had confirmed that there is no present intention to alter the advisory fee rates, expense waivers or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction.

In addition to reviewing the fees and expenses, the Board noted that it regularly reviews each Fund’s performance and at the June 2009 meeting reviewed statistical information prepared by Lipper regarding the performance of each Fund for the quarter-end, one-, three-, five-and ten-year periods, as applicable, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of the relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their performance benchmark indices over the relevant periods. In considering this information, the Board took into account that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indices. This comparative performance information was also considered by the Board. The Board considered the Adviser’s substantial investment advisory experience and capabilities, as well as the possibility of additional resources and support from BlackRock following the completion of the Transaction, but noted that the effect, if any, the consummation of the Transaction would have on the future performance of the Funds could not be predicted.

Based on this review, the Board had concluded that the investment advisory fee rates and expense levels and the historical performance of each Fund, as compared to the investment advisory fee rates and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Current Advisory Agreements and concluded that these comparisons continued to be satisfactory for the purpose of approving the New Advisory Agreements.

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Cost of services provided and profits realized by the Adviser from the relationship with each Fund – The Board considered that at the June 2009 Board meeting and at prior meetings, it had reviewed information about the profitability of the Adviser with respect to the Funds based on the fees payable to the Adviser and its affiliates (including fees under the Current Advisory Agreements), and all other sources of revenue and expense to the Adviser and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Companies (including any securities lending by the Funds). The Board also discussed the Adviser’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below).

In evaluating the costs of the services to be provided by the Adviser under the New Advisory Agreements, the Board considered, among other things, whether advisory fee rates or other expenses would change as a result of the Transaction. The Board noted that the New Advisory Agreements are similar to the Current Advisory Agreements, including the fact that the fee rates under the Agreements are identical and that representatives of the Adviser and BlackRock represented that there is no present intention due to the Transaction to alter the advisory fee rates, expense waiver or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction. It was noted that it was not possible to predict how the Transaction would affect the Adviser’s profitability from its relationship with the Funds. Potential cost savings had been described by BlackRock representatives that may be achieved by BlackRock immediately following the Transaction, but even if all of such savings were realized by the Adviser in connection with the management of the Funds, the Adviser’s profitability in respect of the Funds was not expected to increase in a significant respect. The Adviser, BlackRock and the Board discussed how profitability will be calculated and presented to the Board following the Transaction, and the Board reviewed BlackRock’s 2008 profitability methodology with respect to its registered funds. The Board expects to receive profitability information from the Adviser on at least an annual basis following the completion of the Transaction and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.

The extent to which economies of scale would be realized as a Fund grows and whether fee levels would reflect such economies of scale – In connection with its review of the Funds’ profitability analysis at the June 2009 meeting, the Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets. At the June 2009 Board meeting, the Board also reviewed the Adviser’s historic profitability as investment adviser to the iShares fund complex and noted that the Adviser had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that the Adviser had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. The Board further noted that the Current and New Advisory Agreements provide for breakpoints in certain Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other Funds, increase and that breakpoints were implemented the previous year for certain Funds. The Board noted that for certain other Funds, the Current and New Advisory Agreements do not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase; however, the Board further noted that possible future economies of scale for those Funds had, in many cases, been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders may have received from a fee structure with declining breakpoints where the initial fee was higher. At the June 2009 Board meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fee rates, with the breakpoints for certain Funds, reflected appropriate sharing of economies of scale with the Funds’ shareholders.

The Board noted representations from the Adviser and BlackRock that the Adviser will continue to make significant investments in the iShares fund complex and the infrastructure supporting the Funds. The Board determined that changes to the fee structure were not currently necessary and that the Funds appropriately participate in economies of scale. It was noted that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale. The Board expects to consider economies of scale on at least an annual basis following completion of the Transaction and thus be in a position to evaluate additional economies of scale, if any.

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Fees and services provided for other comparable funds/accounts managed by the Adviser and its Affiliates – At the June 2009 Board meeting, the Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Current Advisory Agreements in comparison to the investment advisory/management fee rates for other funds/accounts for which the Adviser or BGI provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for many of the Funds, as the Adviser and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as many of the Funds. The Board noted, however, that the Adviser provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Furthermore, in reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Current Advisory Agreements for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which the Adviser or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Current and New Advisory Agreements do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Current and New Advisory Agreements are fair and reasonable.

Other benefits to the Adviser and its affiliates, including fall-out benefits – In evaluating the fall-out and any other ancillary benefits received by the Adviser under the Current Advisory Agreements, the Board reviewed any ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser or its affiliates, such as any payment of revenue to BGI, the Company’s current securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to the Adviser and BGI in connection with any investments by the Funds in other funds for which the Adviser provides investment advisory services and/or BGI provides administration services. The Board noted that while revenue to BGI in connection with securities lending agency services to the Funds increased overall as against the previous year, overall revenue increased by approximately the same percentage as overall expenses. The Board noted that the Adviser does not use soft dollars or consider the value of research or other services that may be provided to the Adviser (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Adviser or purchased from an underwriting syndicate in which an Adviser affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. Any fall-out or ancillary benefits as a result of the Transaction were difficult to quantify with certainty at this time, and the Board indicated that it would continue to evaluate them going forward.

Conclusion – The Board examined the totality of the information they were provided at the June, July and August 2009 Board meetings, and information they received at other meetings held during the past year, and did not identify any single factor discussed previously as controlling. Based on this analysis, the Board determined that the New Advisory Agreements, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to unanimously approve the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 101

Supplemental Information (Unaudited)

iSHARES^®, INC.

The tables that follow present information about the differences between the daily market price on secondary markets for shares of a Fund and that Fund’s net asset value. Net asset value, or “NAV,” is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each Fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such Fund is listed for trading (the “Exchange”), as of the time that the Fund’s NAV is calculated. In the case of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds, the NAVs of which are determined prior to the opening of the regular trading day on the Exchange, the Market Price is determined using the midpoint of the bid/ask spread as of the opening of regular trading on the Exchange. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.

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

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

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

102 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Australia Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	5	0.36	%
Greater than 4.5% and Less than 5.0%	3	0.22
Greater than 4.0% and Less than 4.5%	4	0.29
Greater than 3.5% and Less than 4.0%	6	0.43
Greater than 3.0% and Less than 3.5%	12	0.87
Greater than 2.5% and Less than 3.0%	15	1.09
Greater than 2.0% and Less than 2.5%	19	1.37
Greater than 1.5% and Less than 2.0%	44	3.18
Greater than 1.0% and Less than 1.5%	107	7.74
Greater than 0.5% and Less than 1.0%	274	19.83
Between 0.5% and –0.5%	606	43.86
Less than –0.5% and Greater than –1.0%	117	8.47
Less than –1.0% and Greater than –1.5%	71	5.14
Less than –1.5% and Greater than –2.0%	31	2.24
Less than –2.0% and Greater than –2.5%	22	1.59
Less than –2.5% and Greater than –3.0%	19	1.37
Less than –3.0% and Greater than –3.5%	7	0.51
Less than –3.5% and Greater than –4.0%	5	0.36
Less than –4.0% and Greater than –4.5%	1	0.07
Less than –4.5% and Greater than –5.0%	3	0.22
Less than –5.0% and Greater than –5.5%	4	0.29
Less than –5.5% and Greater than –6.0%	2	0.14
Less than –6.0%	5	0.36
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 103

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Hong Kong Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	7	0.51	%
Greater than 4.5% and Less than 5.0%	2	0.14
Greater than 4.0% and Less than 4.5%	5	0.36
Greater than 3.5% and Less than 4.0%	4	0.29
Greater than 3.0% and Less than 3.5%	10	0.72
Greater than 2.5% and Less than 3.0%	17	1.23
Greater than 2.0% and Less than 2.5%	30	2.17
Greater than 1.5% and Less than 2.0%	47	3.40
Greater than 1.0% and Less than 1.5%	105	7.60
Greater than 0.5% and Less than 1.0%	226	16.35
Between 0.5% and –0.5%	585	42.35
Less than –0.5% and Greater than –1.0%	133	9.62
Less than –1.0% and Greater than –1.5%	75	5.43
Less than –1.5% and Greater than –2.0%	57	4.12
Less than –2.0% and Greater than –2.5%	31	2.24
Less than –2.5% and Greater than –3.0%	14	1.01
Less than –3.0% and Greater than –3.5%	13	0.94
Less than –3.5% and Greater than –4.0%	3	0.22
Less than –4.0% and Greater than –4.5%	4	0.29
Less than –4.5% and Greater than –5.0%	5	0.36
Less than –5.0% and Greater than –5.5%	3	0.22
Less than –5.5% and Greater than –6.0%	1	0.07
Less than –6.0%	5	0.36
	1,382	100.00	%

104 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Japan Small Cap Index Fund

Period Covered: January 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 6.0%	7	1.86	%
Greater than 5.5% and Less than 6.0%	2	0.53
Greater than 4.5% and Less than 5.0%	3	0.80
Greater than 4.0% and Less than 4.5%	3	0.80
Greater than 3.5% and Less than 4.0%	5	1.33
Greater than 3.0% and Less than 3.5%	10	2.66
Greater than 2.5% and Less than 3.0%	10	2.66
Greater than 2.0% and Less than 2.5%	16	4.26
Greater than 1.5% and Less than 2.0%	36	9.57
Greater than 1.0% and Less than 1.5%	42	11.17
Greater than 0.5% and Less than 1.0%	45	11.97
Between 0.5% and –0.5%	88	23.40
Less than –0.5% and Greater than –1.0%	29	7.71
Less than –1.0% and Greater than –1.5%	17	4.52
Less than –1.5% and Greater than –2.0%	15	3.99
Less than –2.0% and Greater than –2.5%	13	3.46
Less than –2.5% and Greater than –3.0%	5	1.33
Less than –3.0% and Greater than –3.5%	12	3.19
Less than –3.5% and Greater than –4.0%	5	1.33
Less than –4.0% and Greater than –4.5%	2	0.53
Less than –4.5% and Greater than –5.0%	2	0.53
Less than –5.0% and Greater than –5.5%	3	0.80
Less than –5.5% and Greater than –6.0%	3	0.80
Less than –6.0%	3	0.80
	376	100.00	%

SUPPLEMENTAL INFORMATION 105

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Malaysia Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 6.0%	1	0.07	%
Greater than 5.5% and Less than 6.0%	2	0.14
Greater than 5.0% and Less than 5.5%	3	0.22
Greater than 4.5% and Less than 5.0%	1	0.07
Greater than 4.0% and Less than 4.5%	1	0.07
Greater than 3.5% and Less than 4.0%	1	0.07
Greater than 3.0% and Less than 3.5%	7	0.51
Greater than 2.5% and Less than 3.0%	6	0.43
Greater than 2.0% and Less than 2.5%	35	2.53
Greater than 1.5% and Less than 2.0%	65	4.70
Greater than 1.0% and Less than 1.5%	136	9.84
Greater than 0.5% and Less than 1.0%	215	15.56
Between 0.5% and –0.5%	471	34.10
Less than –0.5% and Greater than –1.0%	190	13.75
Less than –1.0% and Greater than –1.5%	118	8.54
Less than –1.5% and Greater than –2.0%	52	3.76
Less than –2.0% and Greater than –2.5%	42	3.04
Less than –2.5% and Greater than –3.0%	14	1.01
Less than –3.0% and Greater than –3.5%	8	0.58
Less than –3.5% and Greater than –4.0%	3	0.22
Less than –4.0% and Greater than –4.5%	7	0.51
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0% and Greater than –5.5%	2	0.14
	1,382	100.00	%

106 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Pacific ex-Japan Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.5%	7	0.51	%
Greater than 4.0% and Less than 4.5%	3	0.22
Greater than 3.5% and Less than 4.0%	8	0.58
Greater than 3.0% and Less than 3.5%	9	0.65
Greater than 2.5% and Less than 3.0%	11	0.80
Greater than 2.0% and Less than 2.5%	21	1.52
Greater than 1.5% and Less than 2.0%	48	3.47
Greater than 1.0% and Less than 1.5%	123	8.90
Greater than 0.5% and Less than 1.0%	262	18.96
Between 0.5% and –0.5%	617	44.66
Less than –0.5% and Greater than –1.0%	103	7.45
Less than –1.0% and Greater than –1.5%	69	4.99
Less than –1.5% and Greater than –2.0%	39	2.82
Less than –2.0% and Greater than –2.5%	14	1.01
Less than –2.5% and Greater than –3.0%	18	1.30
Less than –3.0% and Greater than –3.5%	9	0.65
Less than –3.5% and Greater than –4.0%	5	0.36
Less than –4.0% and Greater than –4.5%	4	0.29
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0% and Greater than –5.5%	3	0.22
Less than –5.5% and Greater than –6.0%	2	0.14
Less than –6.0%	5	0.36
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 107

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Singapore Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.5%	6	0.43	%
Greater than 4.0% and Less than 4.5%	3	0.22
Greater than 3.5% and Less than 4.0%	3	0.22
Greater than 3.0% and Less than 3.5%	2	0.14
Greater than 2.5% and Less than 3.0%	13	0.94
Greater than 2.0% and Less than 2.5%	38	2.75
Greater than 1.5% and Less than 2.0%	57	4.12
Greater than 1.0% and Less than 1.5%	155	11.22
Greater than 0.5% and Less than 1.0%	269	19.46
Between 0.5% and –0.5%	520	37.65
Less than –0.5% and Greater than –1.0%	127	9.19
Less than –1.0% and Greater than –1.5%	78	5.64
Less than –1.5% and Greater than –2.0%	43	3.11
Less than –2.0% and Greater than –2.5%	31	2.24
Less than –2.5% and Greater than –3.0%	13	0.94
Less than –3.0% and Greater than –3.5%	7	0.51
Less than –3.5% and Greater than –4.0%	4	0.29
Less than –4.0% and Greater than –4.5%	6	0.43
Less than –4.5% and Greater than –5.0%	3	0.22
Less than –5.0% and Greater than –5.5%	2	0.14
Less than –5.5%	2	0.14
	1,382	100.00	%

108 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI South Korea Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.5%	9	0.65	%
Greater than 5.0% and Less than 5.5%	1	0.07
Greater than 4.5% and Less than 5.0%	4	0.29
Greater than 4.0% and Less than 4.5%	4	0.29
Greater than 3.5% and Less than 4.0%	10	0.72
Greater than 3.0% and Less than 3.5%	12	0.87
Greater than 2.5% and Less than 3.0%	19	1.37
Greater than 2.0% and Less than 2.5%	40	2.89
Greater than 1.5% and Less than 2.0%	64	4.63
Greater than 1.0% and Less than 1.5%	134	9.70
Greater than 0.5% and Less than 1.0%	231	16.71
Between 0.5% and –0.5%	457	33.09
Less than –0.5% and Greater than –1.0%	151	10.93
Less than –1.0% and Greater than –1.5%	98	7.09
Less than –1.5% and Greater than –2.0%	44	3.18
Less than –2.0% and Greater than –2.5%	29	2.10
Less than –2.5% and Greater than –3.0%	26	1.88
Less than –3.0% and Greater than –3.5%	13	0.94
Less than –3.5% and Greater than –4.0%	10	0.72
Less than –4.0% and Greater than –4.5%	5	0.36
Less than –4.5% and Greater than –5.0%	3	0.22
Less than –5.0% and Greater than –5.5%	2	0.14
Less than –5.5% and Greater than –6.0%	5	0.36
Less than –6.0%	11	0.80
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 109

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Taiwan Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	7	0.51	%
Greater than 4.5% and Less than 5.0%	9	0.65
Greater than 4.0% and Less than 4.5%	5	0.36
Greater than 3.5% and Less than 4.0%	10	0.72
Greater than 3.0% and Less than 3.5%	15	1.09
Greater than 2.5% and Less than 3.0%	17	1.23
Greater than 2.0% and Less than 2.5%	37	2.68
Greater than 1.5% and Less than 2.0%	76	5.50
Greater than 1.0% and Less than 1.5%	113	8.18
Greater than 0.5% and Less than 1.0%	203	14.69
Between 0.5% and –0.5%	424	30.68
Less than –0.5% and Greater than –1.0%	194	14.04
Less than –1.0% and Greater than –1.5%	107	7.74
Less than –1.5% and Greater than –2.0%	62	4.49
Less than –2.0% and Greater than –2.5%	35	2.53
Less than –2.5% and Greater than –3.0%	24	1.74
Less than –3.0% and Greater than –3.5%	19	1.37
Less than –3.5% and Greater than –4.0%	7	0.51
Less than –4.0% and Greater than –4.5%	2	0.14
Less than –4.5% and Greater than –5.0%	4	0.29
Less than –5.0% and Greater than –5.5%	2	0.14
Less than –5.5% and Greater than –6.0%	2	0.14
Less than –6.0%	8	0.58
	1,382	100.00	%

110 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Thailand Investable Market Index Fund

Period Covered: April 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.0%	1	0.32	%
Greater than 4.5% and Less than 5.0%	2	0.63
Greater than 4.0% and Less than 4.5%	3	0.95
Greater than 3.5% and Less than 4.0%	3	0.95
Greater than 3.0% and Less than 3.5%	5	1.59
Greater than 2.5% and Less than 3.0%	10	3.17
Greater than 2.0% and Less than 2.5%	10	3.17
Greater than 1.5% and Less than 2.0%	21	6.67
Greater than 1.0% and Less than 1.5%	37	11.75
Greater than 0.5% and Less than 1.0%	42	13.33
Between 0.5% and –0.5%	71	22.57
Less than –0.5% and Greater than –1.0%	31	9.84
Less than –1.0% and Greater than –1.5%	23	7.30
Less than –1.5% and Greater than –2.0%	22	6.98
Less than –2.0% and Greater than –2.5%	8	2.54
Less than –2.5% and Greater than –3.0%	6	1.90
Less than –3.0% and Greater than –3.5%	6	1.90
Less than –3.5% and Greater than –4.0%	1	0.32
Less than –4.0% and Greater than –4.5%	2	0.63
Less than –4.5% and Greater than –5.0%	3	0.95
Less than –5.0% and Greater than –5.5%	3	0.95
Less than –5.5% and Greater than –6.0%	1	0.32
Less than –6.0%	4	1.27
	315	100.00	%

SUPPLEMENTAL INFORMATION 111

Director and Officer Information (Unaudited)

iSHARES^®, INC.

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

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 183 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

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

Interested Directors and Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss, 48	Director and Chairman (since 2003).	Non-Executive Chairman (since 2009), iShares; Global Chief Executive Officer (2008-2009) of iShares/Intermediary Groups of BGI; Chief Executive Officer (2005-2008) of iShares Intermediary Index and Market Group of BGI; Chief Executive Officer (2003-2005) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director (since 2005) of BGFA; Director, President and Chief Executive Officer (since 2005) of Barclays Global Investors International, Inc.; Director and Chairman (since 2005) of Barclays Global Investors Services.	Trustee (since 2003) of iShares Trust; Trustee (since 2001) of BGlF and MIP.

* Lee T. Kranefuss is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI.

112 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
George G.C. Parker, 70	Director (since 2002); Lead Independent Director (since 2006).	Dean Witter Distinguished Professor of Finance (since 1994), Emeritus, Stanford University: Graduate School of Business.	Trustee (since 2000) of iShares Trust; Lead Independent Trustee (since 2006) of iShares Trust; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2004) of Threshold Pharmaceuticals; Director (since 2007) of NETGEAR, Inc.
J. Darrell Duffie, 55	Director (since 2008).	Professor (since 1984) of Stanford University: Graduate School of Business.	Trustee (since 2008) of iShares Trust; Director (since 2008) of Moody’s Corp.
Cecilia H. Herbert, 60	Director (since 2005).	Chair (1994-2005) of Investment Committee, Archdiocese of San Francisco; Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee (2004-2005) of Pacific Select Funds; Trustee (since 2002) and Chair (2006-2007) of the Finance and Investment Committees (since 2006) of the Thacher School.	Trustee (since 2005) of iShares Trust; Advisory Board Member (since 2009) of Forward Funds.
Charles A. Hurty, 66	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of ProMark Absolute Return Strategies Fund LLC (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi- Adviser Hedge Fund Portfolios LLC (1 portfolio); Director (since 2005) of CSFB Alternative Investments Fund (6 portfolios).
John E. Kerrigan, 54	Director (since 2005).	Chief Investment Officer (since 2002) of Santa Clara University.	Trustee (since 2005) of iShares Trust.
John E. Martinez, 48	Director (since 2003).	Director (since 2005) of EquityRock Capital Management; Director (since 2003) of Larkin Street Youth Services.	Trustee (since 2003) of iShares Trust; Chairman (since 2007) of Independent Review Committee, Canadian iShares Funds.

DIRECTOR AND OFFICER INFORMATION 113

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Robert H. Silver, 54	Director (since 2007).	President and Co-Founder (since 2006) of The Bravitas Group, Inc.; Member (since 2006) of Non-Investor Advisory Board of Russia Partners II, LP; Director and member (2006-2009) of the Audit and Compensation Committee of EPAM Systems, Inc.; President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer (1999-2005) of UBS Services USA, LLC; Managing Director (2000-2005) of UBS America, Inc.; Director and Vice Chairman (since 2001) of the YMCA of Greater NYC; Broadway Producer (since 2006); Co- Founder and Vice President (since 2008) of Parentgiving Inc.	Trustee (since 2007) of iShares Trust.

* Prior to August 13, 2009, John E. Martinez was deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI. Effective August 13, 2009, John E. Martinez is a non-interested person notwithstanding his former affiliation with BGFA and its affiliates prior to 2002.

Officers
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham, 44	President (since 2007).	Head (since 2007) of Americas iShares, BGI; Chief Operating Officer (2003-2007) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director and Chief Financial Officer (since 2005) of Barclays Global Investors International, Inc.	None.

114 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Geoffrey D. Flynn, 52	Executive Vice President and Chief Operating Officer (since 2008).	Chief Operating Officer (since 2008) of U.S. iShares, BGI; Director (2007-2008) of Mutual Fund Operations of BGI; President (2003-2007) of Van Kampen Investors Services; Managing Director (2002-2007) of Morgan Stanley; President (2002-2007) of Morgan Stanley Trust, FSB.	None.
Jack Gee, 50	Treasurer and Chief Financial Officer (since 2008).	Senior Director (since 2009) of Fund Administration of Intermediary Investor Business of BGI; Director (2004-2009) of Fund Administration of Intermediary Investor Business of BGI; Treasurer and Chief Financial Officer (2004) of Parnassus Investments.	None.
Eilleen M. Clavere, 57	Secretary (since 2007).	Director (since 2006) of Legal Administration of Intermediary Investors Business of BGI; Legal Counsel and Vice President (2005-2006) of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc.; Counsel (2001-2005) of Kirkpatrick & Lockhart LLP.	None.
Ira P. Shapiro, 46	Vice President and Chief Legal Officer (since 2007).	Associate General Counsel (since 2004) of BGI; First Vice President (1993-2004) of Merrill Lynch Investment Managers.	None.
Amy Schioldager, 47	Executive Vice President (since 2007).	Global Head (since 2008) of Index Equity, BGI; Global Head (2006-2008) of U.S. Indexing, BGI; Head (2001-2006) of Domestic Equity Portfolio Management, BGI.	None.
Patrick O’Connor, 42	Vice President (since 2007).	Head (since 2006) of iShares Portfolio Management, BGI; Senior Portfolio Manager (1999-2006) of BGI.	None.

DIRECTOR AND OFFICER INFORMATION 115

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Lee Sterne, 44	Vice President (since 2007).	Head (since 2007) of U.S. Fixed Income Index and iShares, BGI; Senior Portfolio Manager (2004-2007) of BGI; Portfolio Manager (2001-2004) of BGI.	None.
Matt Tucker, 37	Vice President (since 2007).	Director (since 2009) of Fixed Income Investment Strategy, BGI; Head (2005-2008) of U.S. Fixed Income Investment Solutions, BGI; Fixed Income Investment Strategist (2003-2005) of BGI.	None.

116 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 117

Notes:

118 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 119

The iShares^® Family of Funds

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

iShares Russell Domestic Index Funds	Trading Symbol
iShares Russell 3000	IWV
iShares Russell 3000 Growth	IWZ
iShares Russell 3000 Value	IWW
iShares Russell Top 200	IWL
iShares Russell Top 200 Growth	IWY
iShares Russell Top 200 Value	IWX
iShares Russell 1000	IWB
iShares Russell 1000 Growth	IWF
iShares Russell 1000 Value	IWD
iShares Russell Midcap	IWR
iShares Russell Midcap Growth	IWP
iShares Russell Midcap Value	IWS
iShares Russell 2000	IWM
iShares Russell 2000 Growth	IWO
iShares Russell 2000 Value	IWN
iShares Russell Microcap	IWC
iShares S&P Domestic Index Funds
iShares S&P 1500	ISI
iShares S&P 100	OEF
iShares S&P 500	IVV
iShares S&P 500 Growth	IVW
iShares S&P 500 Value	IVE
iShares S&P MidCap 400	IJH
iShares S&P MidCap 400 Growth	IJK
iShares S&P MidCap 400 Value	IJJ
iShares S&P SmallCap 600	IJR
iShares S&P SmallCap 600 Growth	IJT
iShares S&P SmallCap 600 Value	IJS
iShares Morningstar Domestic Index Funds
iShares Morningstar Large Core	JKD
iShares Morningstar Large Growth	JKE
iShares Morningstar Large Value	JKF
iShares Morningstar Mid Core	JKG
iShares Morningstar Mid Growth	JKH
iShares Morningstar Mid Value	JKI
iShares Morningstar Small Core	JKJ
iShares Morningstar Small Growth	JKK
iShares Morningstar Small Value	JKL
iShares Dow Jones Domestic Index Funds
iShares Dow Jones U.S.	IYY
iShares KLD Socially Responsible Index Funds
iShares FTSE KLD 400 Social	DSI
iShares FTSE KLD Select Social	KLD
iShares NYSE Domestic Index Funds
iShares NYSE Composite	NYC
iShares NYSE 100	NY
iShares Domestic Specialty Index Funds
iShares S&P U.S. Preferred Stock	PFF
iShares Dow Jones Select Dividend	DVY

iShares North American Sector/Subsector Index Funds	Trading Symbol
iShares S&P North American Technology Sector	IGM
iShares S&P North American Technology-Multimedia Networking	IGN
iShares S&P North American Technology-Semiconductors	IGW
iShares S&P North American Technology-Software	IGV
iShares S&P North American Natural Resources Sector	IGE
iShares Domestic Sector Index Funds
iShares Dow Jones U.S. Basic Materials Sector	IYM
iShares Dow Jones U.S. Consumer Goods Sector	IYK
iShares Dow Jones U.S. Consumer Services Sector	IYC
iShares Dow Jones U.S. Energy Sector	IYE
iShares Dow Jones U.S. Financial Sector	IYF
iShares Dow Jones U.S. Healthcare Sector	IYH
iShares Dow Jones U.S. Industrial Sector	IYJ
iShares Dow Jones U.S. Technology Sector	IYW
iShares Dow Jones U.S. Telecommunications Sector	IYZ
iShares Dow Jones U.S. Utilities Sector	IDU
iShares Domestic Subsector Index Funds
iShares Dow Jones Transportation Average	IYT
iShares Dow Jones U.S. Aerospace & Defense	ITA
iShares Dow Jones U.S. Broker-Dealers	IAI
iShares Dow Jones U.S. Financial Services	IYG
iShares Dow Jones U.S. Healthcare Providers	IHF
iShares Dow Jones U.S. Home Construction	ITB
iShares Dow Jones U.S. Insurance	IAK
iShares Dow Jones U.S. Medical Devices	IHI
iShares Dow Jones U.S. Oil & Gas Exploration & Production	IEO
iShares Dow Jones U.S. Oil Equipment & Services	IEZ
iShares Dow Jones U.S. Pharmaceuticals	IHE
iShares Dow Jones U.S. Regional Banks	IAT
iShares Nasdaq Biotechnology	IBB
iShares Domestic Real Estate Index Funds
iShares Cohen & Steers Realty Majors	ICF
iShares Dow Jones U.S. Real Estate	IYR
iShares FTSE NAREIT Real Estate 50	FTY
iShares FTSE NAREIT Industrial/Office Capped	FIO
iShares FTSE NAREIT Mortgage Plus Capped	REM
iShares FTSE NAREIT Residential Plus Capped	REZ
iShares FTSE NAREIT Retail Capped	RTL
iShares Target Risk Index Funds
iShares S&P Conservative Allocation	AOK
iShares S&P Moderate Allocation	AOM
iShares S&P Growth Allocation	AOR
iShares S&P Aggressive Allocation	AOA

120 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds (Continued)

iShares International Country Index Funds	Trading Symbol
iShares FTSE China (HK Listed)	FCHI
iShares FTSE/Xinhua China 25	FXI
iShares MSCI Australia	EWA
iShares MSCI Austria Investable Market	EWO
iShares MSCI Belgium Investable Market	EWK
iShares MSCI Brazil	EWZ
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares MSCI Israel Capped Investable Market	EIS
iShares MSCI Italy	EWI
iShares MSCI Japan	EWJ
iShares MSCI Japan Small Cap	SCJ
iShares S&P/TOPIX 150	ITF
iShares MSCI Malaysia	EWM
iShares MSCI Mexico Investable Market	EWW
iShares MSCI Netherlands Investable Market	EWN
iShares MSCI All Peru Capped	EPU
iShares MSCI Singapore	EWS
iShares MSCI South Africa	EZA
iShares MSCI South Korea	EWY
iShares MSCI Spain	EWP
iShares MSCI Sweden	EWD
iShares MSCI Switzerland	EWL
iShares MSCI Taiwan	EWT
iShares MSCI Thailand Investable Market	THD
iShares MSCI Turkey Investable Market	TUR
iShares MSCI United Kingdom	EWU
iShares International Index Funds
iShares MSCI ACWI ex US	ACWX
iShares MSCI EAFE	EFA
iShares MSCI EAFE Growth	EFG
iShares MSCI EAFE Value	EFV
iShares MSCI EAFE Small Cap	SCZ
iShares FTSE Developed Small Cap ex-North America	IFSM
iShares MSCI Emerging Markets	EEM
iShares MSCI Emerging Markets Eastern Europe	ESR
iShares S&P Emerging Markets Infrastructure	EMIF
iShares MSCI BRIC	BKF
iShares MSCI EMU	EZU
iShares MSCI All Country Asia ex Japan	AAXJ
iShares MSCI Pacific ex-Japan	EPP
iShares S&P Asia 50	AIA
iShares S&P Europe 350	IEV
iShares S&P Latin America 40	ILF
iShares International/Global Real Estate Index Funds
iShares S&P Developed ex-U.S. Property	WPS
iShares FTSE EPRA/NAREIT Developed Real Estate ex-U.S.	IFGL
iShares FTSE EPRA/NAREIT Developed Asia	IFAS
iShares FTSE EPRA/NAREIT Developed Europe	IFEU
iShares FTSE EPRA/NAREIT North America	IFNA
iShares International Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV

iShares Target Date Index Funds	Trading Symbol
iShares S&P Target Date Retirement Income	TGR
iShares S&P Target Date 2010	TZD
iShares S&P Target Date 2015	TZE
iShares S&P Target Date 2020	TZG
iShares S&P Target Date 2025	TZI
iShares S&P Target Date 2030	TZL
iShares S&P Target Date 2035	TZO
iShares S&P Target Date 2040	TZV
iShares Global Index Funds
iShares MSCI ACWI	ACWI
iShares S&P Global 100	IOO
iShares MSCI Kokusai	TOK
iShares Global Sector Index Funds
iShares S&P Global Consumer Discretionary Sector	RXI
iShares S&P Global Consumer Staples Sector	KXI
iShares S&P Global Energy Sector	IXC
iShares S&P Global Financials Sector	IXG
iShares S&P Global Healthcare Sector	IXJ
iShares S&P Global Industrials Sector	EXI
iShares S&P Global Materials Sector	MXI
iShares S&P Global Technology Sector	IXN
iShares S&P Global Telecommunications Sector	IXP
iShares S&P Global Utilities Sector	JXI
iShares Global Theme Based Index Funds
iShares S&P Global Clean Energy	ICLN
iShares S&P Global Infrastructure	IGF
iShares S&P Global Nuclear Energy	NUCL
iShares S&P Global Timber & Forestry	WOOD
iShares U.S. Multisector Bond Funds
iShares Barclays Aggregate	AGG
iShares Barclays Government/Credit	GBF
iShares Barclays Intermediate Government/Credit	GVI
iShares U.S. Government Bond Funds
iShares Barclays Short Treasury	SHV
iShares Barclays 1-3 Year Treasury	SHY
iShares Barclays 3-7 Year Treasury	IEI
iShares Barclays 7-10 Year Treasury	IEF
iShares Barclays 10-20 Year Treasury	TLH
iShares Barclays 20+ Year Treasury	TLT
iShares Barclays TIPS	TIP
iShares Barclays Agency	AGZ
iShares U.S. Credit Bond Funds
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares iBoxx $ High Yield Corporate	HYG
iShares U.S. Securitized Bond Funds
iShares Barclays MBS	MBB

iSHARES FAMILY OF FUNDS 121

The iShares^® Family of Funds (Continued)

iShares AMT-Free Municipal Bond Funds	Trading Symbol
iShares S&P National AMT-Free Municipal	MUB
iShares S&P Short Term National AMT-Free Municipal	SUB
iShares S&P California AMT-Free Municipal	CMF
iShares S&P New York AMT-Free Municipal	NYF

iShares International Bond Funds	Trading Symbol
iShares JPMorgan USD Emerging Markets	EMB
iShares S&P/Citigroup International Treasury	IGOV
iShares S&P/Citigroup 1-3 Year International Treasury	ISHG

iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Frank Russell Company or Standard & Poor’s, nor are they sponsored or endorsed by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above except Barclays Capital, which is an affiliate of BGI. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua”is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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

This advertising section does not constitute part of the 2009 Annual Report.

iS-1437-1009

122 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

2009 ANNUAL REPORT TO SHAREHOLDERS iSHARES® MSCI SERIES AUGUST 31, 2009

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

iShares MSCI Brazil Index Fund

iShares MSCI BRIC Index Fund

iShares MSCI Canada Index Fund

iShares MSCI Chile Investable Market Index Fund

iShares MSCI Israel Capped Investable Market Index Fund

iShares MSCI Mexico Investable Market Index Fund

iShares MSCI South Africa Index Fund

iShares MSCI Turkey Investable Market Index Fund

iShares®

iShares®

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.

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

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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.

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Your information and email 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.

Once you have enrolled, you will no longer receive prospectuses and shareholder reports 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.

Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	25
Schedules of Investments	27
iShares MSCI Brazil Index Fund	27
iShares MSCI BRIC Index Fund	30
iShares MSCI Canada Index Fund	34
iShares MSCI Chile Investable Market Index Fund	37
iShares MSCI Israel Capped Investable Market Index Fund	39
iShares MSCI Mexico Investable Market Index Fund	42
iShares MSCI South Africa Index Fund	44
iShares MSCI Turkey Investable Market Index Fund	46
Financial Statements	49
Financial Highlights	57
Notes to Financial Statements	65
Report of Independent Registered Public Accounting Firm	75
Tax Information (Unaudited)	76
Board Review and Approval of Current Investment Advisory Contract (Unaudited)	77
Board Review and Approval of New Investment Advisory Agreements (Unaudited)	80
Supplemental Information (Unaudited)	86
Director and Officer Information (Unaudited)	93
iShares Family of Funds	100

Management’s Discussion of Fund Performance

iSHARES^® MSCI BRAZIL INDEX FUND

(TICKER: EWZ)

INVESTMENT OBJECTIVE

The iShares MSCI Brazil Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Brazilian market, as measured by the MSCI Brazil Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (16.05)%, while the total return for the Index was (15.42)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Brazilian stock market posted a double-digit decline during the reporting period, reflecting an intense and volatile global investment environment. Brazil’s market retracted in the last four months of 2008 amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets softened the country’s exports and put downward pressure on the Brazilian currency. In particular, a substantial drop in global demand for oil and other commodities, which comprise two-thirds of Brazil’s exports, appears to have contributed to a marked slowdown in Brazil’s economy, which contracted by 1.2% for the 12 months ended June 30, 2009. Increased risk aversion among investors may also have contributed to the stock market decline in Brazil and many other emerging markets.

The Brazilian government implemented several policies in early 2009 apparently intended to revive the economy. The country’s central bank reduced interest rates from 13.75% to a record low of 8.75% to stimulate domestic consumption and boost economic growth. In addition, the bank injected capital into the financial system to stimulate the credit markets, and the government provided tax breaks for purchases of large durable goods such as appliances and cars.

The government’s efforts appeared to produce results in the last half of the reporting period as industrial production increased and the unemployment rate fell. Early signs of economic stabilization elsewhere, primarily in the U.S., boosted expectations of a nascent global recovery and helped restore investor confidence. Commodity prices stabilized and began to retrace some of their declines, which was also supportive for the Brazilian economy. As a result, Brazil’s equity market staged a sharp recovery. However, it was insufficient to fully offset the steep decline in late 2008 and early 2009.

Seven of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period, led by steelmaker Gerdau SA and metals and mining company Vale SA, both of which struggled with falling commodity prices. Other notable decliners that were hurt by lower commodity prices included energy producer Petroleo Brasileiro SA and steelmaker Companhia Siderurgica Nacional SA. By far, the best performer among the Fund’s top ten holdings was beverage maker Companhia de Bebidas das Americas, which was relatively immune to the economic downturn. The other two positive performers were financial stocks, investment bank Itausa – Investimentos Itau SA and financial conglomerate Itau Unibanco Holding SA.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(16.05)%	(16.32)%	(15.42)%	31.50%	31.33%	33.39%	15.24%	15.21%	17.33%

Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(16.05)%	(16.32)%	(15.42)%	293.24%	290.63%	322.30%	265.95%	264.90%	331.51%

Total returns for the period since inception are calculated from the inception date of the Fund (7/10/00). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (7/14/00), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

2 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Basic Materials	27.20	%
Energy	24.13
Financial	20.52
Consumer Non-Cyclical	9.30
Utilities	8.16
Communications	5.09
Diversified	2.13
Industrial	1.67
Consumer Cyclical	1.10
Short-Term and Other Net Assets	0.70
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Petroleo Brasileiro SA Preferred	11.88	%
Petroleo Brasileiro SA	10.38
Vale SA Class A Preferred	8.62
Itau Unibanco Holding SA Preferred	8.07
Vale SA SP ADR	6.23
Banco Bradesco SA Preferred	4.98
Companhia de Bebidas das Americas Preferred	3.08
Companhia Siderurgica Nacional SA	2.77
Gerdau SA Preferred	2.21
Itausa – Investimentos Itau SA Preferred	2.13
TOTAL	60.35	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI BRIC INDEX FUND

(TICKER: BKF)

INVESTMENT OBJECTIVE

The iShares MSCI BRIC Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI BRIC Index^SM (the “Index”). The Index is designed to measure the combined equity market performance in Brazil, Russia, India and China (“BRIC”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (13.08)%, while the total return for the Index was (13.43)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Fund posted a double-digit decline for the reporting period in an intense and volatile investment environment. Equity markets worldwide retracted early in the reporting period amid one of the worst global economic downturns since World War II and a credit challenge that led to the near-collapse of some of the world’s largest financial institutions. However, in the last six months of the reporting period, global stock markets reversed course, enjoying a tremendous recovery as initial signs of economic stabilization – mainly in the U.S. – and an easing of the credit crunch boosted investor confidence.

Three of the four markets comprising the Index – Brazil, Russia, and India – declined overall for the reporting period. The exception was China, though it produced only a modest positive return for the period. All four countries faced sharp declines in export demand as the global economy weakened in late 2008 and early 2009. In particular, Brazil and Russia were affected negatively by declining demand for commodities, especially oil and metals. The result was a pronounced drop in each of the four stock markets in the first half of the reporting period.

Each country’s government took steps to resuscitate its respective economy. The Chinese government implemented a domestic spending plan, including increased investment in infrastructure and greater lending activity, to offset the drop in exports and restore the country’s robust economic growth rate. India expanded government subsidies to sustain economic activity, while Brazil’s central bank reduced interest rates and Russia limited speculation that could harm its currency. These efforts, combined with improving economic conditions worldwide, helped generated a substantial rebound in BRIC markets in the last half of the reporting period.

China and India held up the best, with China advancing modestly and India declining modestly for the reporting period. Both of these countries had the least exposure to falling commodity prices and the greatest success maintaining their economic growth rates. Brazil’s equity market suffered a double-digit decline, while Russia posted the largest losses – the world’s largest oil producer felt the impact of a 30% decline in the price of oil.

Six of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period, led by energy producers OAO Gazprom of Russia and Petroleo Brasileiro SA of Brazil, which struggled with reduced demand for energy and falling oil prices. Other notable decliners that were hurt by falling commodity prices included Brazilian metals and mining company Vale SA and Indian energy conglomerate Reliance Industries Ltd. On the positive side, the best performer among the top ten holdings was Chinese insurer China Life Insurance Co. Ltd. Commercial banks HDFC Bank Ltd. in India and Itau Unibanco Holding SA in Brazil also fared well.

4 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRIC INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(13.08)%	(13.48)%	(13.43)%	(19.17)%	(19.42)%	(19.76)%	(31.90)%	(32.29)%	(32.80)%

Total returns for the period since inception are calculated from the inception date of the Fund (11/12/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRIC INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	27.35	%
Energy	27.22
Basic Materials	11.61
Communications	10.33
Consumer Non-Cyclical	6.11
Technology	5.81
Industrial	4.14
Utilities	2.51
Diversified	2.43
Consumer Cyclical	2.16
Short-Term and Other Net Assets	0.33
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
China Mobile Ltd. (China)	4.66	%
Petroleo Brasileiro SA Preferred (Brazil)	4.25
OAO Gazprom SP ADR (Russia)	4.14
Petroleo Brasileiro SA (Brazil)	3.60
Reliance Industries Ltd. SP GDR (India)	3.59
Vale SA Class A Preferred (Brazil)	2.97
Itau Unibanco Holding SA Preferred (Brazil)	2.88
Infosys Technologies Ltd. SP ADR (India)	2.76
China Life Insurance Co. Ltd. Class H (China)	2.69
HDFC Bank Ltd. SP ADR (India)	2.43
TOTAL	33.97	%

6 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI CANADA INDEX FUND

(TICKER: EWC)

INVESTMENT OBJECTIVE

The iShares MSCI Canada Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Canadian market, as measured by the MSCI Canada Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (20.51)%, while the total return for the Index was (20.43)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Canadian stock market declined by more than 20% for the reporting period, reflecting an intense and volatile global investment environment. Canada’s equity market declined in the last four months of 2008 amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets. The economic malaise was particularly acute in the U.S., Canada’s neighbor and largest trading partner – more than three-quarters of Canada’s exports are sent to the U.S. A substantial drop in global demand for oil and other commodities, which are a major portion of Canada’s exports, also contributed to the slowdown in the Canadian economy, which contracted by 3.2% for the 12 months ended June 30, 2009.

On the positive side, the Canadian banking industry mitigated the mortgage-related problems that afflicted financial companies in the U.S. and elsewhere in the world, remaining profitable despite a global credit crunch. In addition, the Bank of Canada, the country’s central bank, lowered its overnight lending rate from 3.0% to 0.25% during the reporting period to help boost domestic spending and stimulate economic activity. The federal government enacted some fiscal measures to help shore up the auto industry and other struggling segments of the economy.

Market conditions improved in the last half of the reporting period. Early signs of economic stabilization, both in Canada and the U.S., boosted expectations of a nascent global recovery and helped restore investor confidence. Commodity prices stabilized and began to retrace some of their declines, which was also supportive for the Canadian economy. As a result, the Canadian stock market staged a sharp recovery, as the Index returned more than 50% for the last six months of the reporting period. However, it was insufficient to fully offset the steep decline in late 2008 and early 2009.

Seven of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period, led by energy producers Suncor Energy Inc. and Canadian Natural Resources Ltd., both of which struggled with reduced demand for energy and falling oil prices. Other notable decliners included financial services firm Manulife Financial Corp. and wireless products maker Research in Motion Ltd. The best performers among the Fund’s top ten holdings were banking stocks Royal Bank of Canada and Toronto-Dominion Bank, which were the Fund’s two largest holdings as of August 31, 2009.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CANADA INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.51)%	(20.12)%	(20.43)%	12.14%	12.06%	12.40%	10.16%	10.16%	10.50%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(20.51)%	(20.12)%	(20.43)%	77.34%	76.70%	79.40%	163.18%	163.08%	171.41%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

8 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CANADA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	34.99	%
Energy	24.51
Basic Materials	18.53
Industrial	5.33
Communications	4.78
Technology	4.60
Consumer Cyclical	2.35
Consumer Non-Cyclical	2.05
Diversified	1.50
Utilities	1.15
Short-Term and Other Net Assets	0.21
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Royal Bank of Canada	7.89	%
Toronto-Dominion Bank (The)	5.73
Suncor Energy Inc.	5.18
Bank of Nova Scotia	4.52
EnCana Corp.	4.26
Research In Motion Ltd.	4.08
Manulife Financial Corp.	3.61
Canadian Natural Resources Ltd.	3.38
Barrick Gold Corp.	3.28
Goldcorp Inc.	2.89
TOTAL	44.82	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

(TICKER: ECH)

INVESTMENT OBJECTIVE

The iShares MSCI Chile Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Chile Investable Market Index^SM (the “Index”). The Index is designed to measure broad based equity market performance in Chile. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was 0.89%, while the total return for the Index was 0.52%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Chilean stock market advanced modestly for the reporting period, but its relatively flat return masked considerable volatility in an intense investment environment. Chile’s equity market declined in the first two months of the reporting period amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets. In particular, a substantial drop in global demand for commodities – particularly copper, which comprises nearly half of Chile’s exports – contributed to a marked slowdown in the country’s economy. After years of robust growth, the Chilean economy contracted by 4.5% for the 12 months ended June 30, 2009. Increased risk aversion among investors was another contributing factor to the stock market decline in Chile and many other emerging markets.

However, the Chilean government maintained a fiscal policy that appears to have forced the country to save much of the revenues earned when copper prices rise. As a result, Chile has a large sovereign wealth fund that allowed the government to enact fiscal stimulus to boost the economy without increasing the country’s debt. Chile’s central bank also reduced interest rates sharply to stimulate domestic consumption. These actions appear to have contributed to the modest recovery of Chile’s stock market in late 2008 and early 2009, while many other emerging markets were still declining.

The recovery in the Chilean equity market accelerated during the last six months of the reporting period. Early signs of economic stabilization elsewhere, primarily in the U.S., may have raised expectations of a nascent global recovery and helped restore investor confidence. Commodity prices firmed up and began to retrace some of their declines, which was also supportive for the Chilean economy. By the end of the reporting period, Chile’s stock market had returned to the same levels as at the beginning of the period.

Among the Fund’s ten largest holdings as of August 31, 2009 the top performer was commercial bank Banco Santander Chile SA, which held up well by largely avoiding the mortgage-related problems that afflicted financial companies in many other regions of the world. Other positive performers included electric utilities Colbun SA and Enersis SA, which were relatively immune to the economic downturn as demand and prices for power remained relatively steady. On the downside, steel and iron producer CAP SA suffered the largest declines, weighed down by the broad decline in commodity prices. Chemicals producer Sociedad Quimica y Minera de Chile SA and food retailer Cencosud SA also declined during the reporting period.

10 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
0.89%	1.57%	0.52%	(3.55)%	(3.78)%	(3.68)%	(6.32)%	(6.73)%	(6.54)%

Total returns for the period since inception are calculated from the inception date of the Fund (11/12/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Utilities	31.69	%
Basic Materials	19.47
Diversified	12.40
Consumer Cyclical	10.89
Consumer Non-Cyclical	9.74
Financial	9.06
Communications	3.02
Industrial	2.55
Technology	1.08
Short-Term and Other Net Assets	0.10
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Empresas Copec SA	12.40	%
Empresa Nacional de Electricidad SA	11.48
Enersis SA	10.30
Sociedad Quimica y Minera de Chile SA Series B	7.59
Empresas CMPC SA	6.37
Banco Santander Chile SA	4.98
Cencosud SA	4.73
CAP SA	4.35
Colbun SA	4.07
LAN Airlines SA	4.00
TOTAL	70.27	%

12 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

(TICKER: EIS)

INVESTMENT OBJECTIVE

The iShares MSCI Israel Capped Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Israel Capped Investable Market Index^SM (the “Index”). The Index is a custom, free float adjusted market capitalization index designed to measure broad based equity market performance in Israel. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (0.63)%, while the total return for the Index was (1.25)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Israel stock market declined fractionally for the reporting period, but experienced considerable volatility in an intense investment environment. Israel’s equity market declined in the first three months of the reporting period amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets. The economic malaise was particularly acute in the U.S., Israel’s largest trading partner, but also had a substantial impact on other regions of the world. Consequently, exports from Israel, which comprise nearly half of the country’s economic growth, weakened significantly, and foreign investment and tourism also waned. The end result was an economic growth rate of just 0.1% for the 12 months ended June 30, 2009.

However, virtually every developed country, and many emerging economies, faced economic contraction during the reporting period; Israel was one of the few countries to generate flat or positive growth despite the global downturn. One factor in Israel’s favor was a stable financial industry that appears to have mitigated the mortgage-related problems afflicting financial companies in the U.S. and elsewhere in the world. Increased government spending on infrastructure, including road and school construction, also appear to have helped sustain Israel’s economic growth.

The Israel stock market staged a healthy rebound during the last six months of the reporting period. Early signs of economic stabilization, primarily in the U.S., may have raised expectations of a nascent global recovery. Increased risk aversion, which had been a contributing factor to the stock market decline in Israel and many other emerging markets in late 2008, appeared to give way to renewed investor confidence. By the end of the reporting period, Israel’s stock market had recovered nearly its entire decline from earlier in the period.

Among the Fund’s ten largest holdings as of August 31, 2009 the top performer was Bezeq Israeli Telecommunication Corp. Ltd., Israel’s largest telecommunication services provider, which benefited from strength in its wireless business. Other positive performers included aerospace and defense company Elbit Systems Ltd., which was largely unaffected by the economic downturn, and commercial bank Mizrahi Tefahot Bank Ltd. On the downside, chemicals producer Israel Chemicals Ltd. posted the largest decline as the company struggled with reduced demand for commodities and lower commodity prices. Commercial bank Bank Hapoalim Ltd. was among the few Israeli banks with exposure to the U.S. mortgage market, which forced the company to take losses on some of its mortgage-backed securities and other assets.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(0.63)%	1.44%	(1.25)%	(2.81)%	(2.76)%	(1.87)%	(4.01)%	(3.94)%	(2.67)%

Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

14 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	26.24	%
Consumer Non-Cyclical	25.43
Communications	24.37
Basic Materials	13.17
Industrial	6.18
Energy	1.32
Consumer Cyclical	1.24
Technology	1.01
Diversified	0.61
Short-Term and Other Net Assets	0.43
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Teva Pharmaceutical Industries Ltd.	23.02	%
Israel Chemicals Ltd.	9.83
Check Point Software Technologies Ltd.	7.78
Bank Leumi le-Israel	6.47
Bezeq Israeli Telecommunication Corp. Ltd.	4.96
Bank Hapoalim Ltd.	4.69
NICE Systems Ltd.	3.36
Partner Communications Co. Ltd.	3.26
Elbit Systems Ltd.	2.91
Mizrahi Tefahot Bank Ltd.	2.53
TOTAL	68.81	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

(TICKER: EWW)

INVESTMENT OBJECTIVE

The iShares MSCI Mexico Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Mexican market, as measured by the MSCI Mexico Investable Market Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (16.50)%, while the total return for the Index was (16.23)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Mexican stock market posted a double-digit decline during the reporting period, reflecting an intense and volatile global investment environment. Mexico’s equity market retracted by more than 40% in the first three months of the reporting period amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets. The economic malaise was particularly acute in the U.S., Mexico’s neighbor and largest trading partner as 85% of Mexico’s exports are sent to the U.S. A substantial drop in global demand for oil – Mexico’s state-owned oil company is the world’s third-largest oil producer – also contributed to a marked slowdown in the Mexican economy. Meanwhile, an outbreak of the H1N1 virus and an increase in drug-related violence dampened tourism, another critical component of Mexico’s economy. At the same time, a flight of foreign capital out of Mexico led to a lack of liquidity in the country’s financial system, which hampered lending activity. The end result was a 10.3% contraction in Mexico’s economy for the 12 months ended June 30, 2009; only Russia experienced a greater economic contraction over the same period.

Nonetheless, Mexico’s stock market enjoyed a strong recovery in the last half of the reporting period. Early signs of economic stabilization, primarily in the U.S., may have boosted expectations of a nascent global recovery. Increased risk aversion, which appears to have been a contributing factor to the stock market decline in Mexico and many other emerging markets in late 2008, appeared to give way to renewed investor confidence. The prices of oil and other commodities stabilized and began to retrace some of their declines, which was supportive for the Mexican economy. Ultimately, the improving outlook helped the Mexican stock market surge by approximately 80% over the last six months of the reporting period. Even this robust gain, though, was insufficient to fully offset the steep decline in late 2008.

Each of the Fund’s ten largest holdings as of August 31, 2009 declined for the reporting period, led by cement producer Cemex SAB de CV, which struggled with declining demand and lower prices. Two telecommunication services stocks, Telefonos de Mexico SAB de CV and Carso Global Telecom SAB de CV, and financial services stock Grupo Financiero Banorte SAB de CV were also among the largest decliners during the reporting period. The best performer among the Fund’s top ten holdings was discount retailer Wal-Mart de Mexico SAB de CV, which declined modestly for the reporting period. Wal-Mart benefited from increased demand as consumers traded down to lower-priced goods during a recession. Metals and mining company Grupo Mexico SAB de CV and telecom services provider Telmex Internacional SAB de CV also held up well during the reporting period.

16 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(16.50)%	(16.91)%	(16.23)%	18.98%	18.81%	18.78%	14.25%	14.28%	14.71%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(16.50)%	(16.91)%	(16.23)%	138.42%	136.77%	136.44%	279.05%	279.98%	294.47%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Communications	42.86	%
Consumer Cyclical	14.45
Consumer Non-Cyclical	12.25
Basic Materials	10.18
Industrial	9.08
Financial	6.95
Diversified	4.11
Short-Term and Other Net Assets	0.12
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
America Movil SAB de CV Series L	24.30	%
Wal-Mart de Mexico SAB de CV Series V	7.91
Fomento Economico Mexicano SAB de CV BD Units	5.61
Telefonos de Mexico SAB de CV Series L	5.03
Cemex SAB de CV CPO	4.98
Grupo Televisa SA CPO	4.84
Grupo Mexico SAB de CV Series B	4.80
Telmex Internacional SAB de CV Series L	3.88
Grupo Financiero Banorte SAB de CV Series O	3.86
Carso Global Telecom SAB de CV Series A1	3.30
TOTAL	68.51	%

18 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

(TICKER: EZA)

INVESTMENT OBJECTIVE

The iShares MSCI South Africa Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the South African market, as measured by the MSCI South Africa Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (2.23)%, while the total return for the Index was (0.18)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The South African stock market declined modestly for the reporting period, but experienced considerable volatility in an intense investment environment. South Africa’s equity market declined in the first two months of the reporting period amid one of the worst global economic downturn since World War II and a liquidity challenge in the credit markets. In particular, a substantial drop in global demand for commodities, a major component of South Africa’s exports, contributed to a marked slowdown in the country’s economy. Manufacturing and retail sales also declined, and unemployment hovered around 25% by the end of the reporting period. The end result was a 2.8% contraction in the South African economy for the 12 months ended June 30, 2009, the country’s first recession in 17 years.

South Africa’s central bank reduced interest rates from 12% to 7% in an effort to boost the economy. In addition, the country’s banking system remained sound, with little exposure to the mortgage-related problems that afflicted financial companies in the U.S. and elsewhere in the world. Finally, the government embarked on a three-year infrastructure build-out to help create jobs and stimulate economic activity. These factors helped keep the South African economy from the global recession.

The South African stock market staged a healthy rebound during the last half of the reporting period. Early signs of economic stabilization, primarily in the U.S., may have raised expectations of a nascent global recovery. Increased risk aversion, which had been a contributing factor to the stock market decline in South Africa and many other emerging markets in late 2008, appeared to give way to renewed investor confidence. Commodity prices firmed up and began to retrace some of their declines, which was also supportive for the South African economy. By the end of the reporting period, South African’s stock market had regained nearly all of its losses from late 2008.

Seven of the Fund’s ten largest holdings as of August 31, 2009 advanced for the reporting period. The top performers were gold producers Gold Fields Ltd. and AngloGold Ashanti Ltd., both of which benefited from a 15% increase in the price of gold during the reporting period. Electronic media company Naspers Ltd. and financial services firm Sanlam Ltd. were also among the better performers. On the downside, the three decliners among the Fund’s top ten holdings were all commodity-related stocks, energy producer Sasol Ltd. and metals and mining companies Anglo Platinum Ltd. and Impala Platinum Holdings Ltd. All three companies struggled with reduced demand for commodities and lower commodity prices.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.23)%	(0.51)%	(0.18)%	15.07%	14.98%	16.42%	19.37%	19.44%	20.77%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.23)%	(0.51)%	(0.18)%	101.76%	100.94%	113.86%	220.30%	221.58%	246.16%

Total returns for the period since inception are calculated from the inception date of the Fund (2/3/03). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/7/03), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

20 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Basic Materials	26.08	%
Financial	23.77
Communications	20.30
Energy	10.72
Consumer Cyclical	5.39
Diversified	5.26
Consumer Non-Cyclical	4.56
Industrial	3.75
Short-Term and Other Net Assets	0.17
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
MTN Group Ltd.	11.97	%
Sasol Ltd.	10.72
Standard Bank Group Ltd.	7.48
Naspers Ltd. Class N	6.24
Impala Platinum Holdings Ltd.	6.23
AngloGold Ashanti Ltd.	5.72
Gold Fields Ltd.	4.04
FirstRand Ltd.	2.86
Sanlam Ltd.	2.68
Anglo Platinum Ltd.	2.62
TOTAL	60.56	%

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

(TICKER: TUR)

INVESTMENT OBJECTIVE

The iShares MSCI Turkey Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Turkey Investable Market Index^SM (the “Index”). The Index is a free float adjusted market capitalization index designed to measure broad based equity market performance in Turkey. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (5.56)%, while the total return for the Index was (5.59)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

The Turkish stock market declined for the reporting period, reflecting an intense and volatile global investment environment. Turkey’s equity market declined in the first three months of the reporting period amid one of the worst global economic downturns since World War II and a liquidity challenge in the credit markets. The economic malaise was particularly acute in the U.S., but it also significantly impacted Europe, which receives half of Turkey’s exports. Foreign investment in Turkey declined substantially, while the country’s fiscal deficit increased during the reporting period. As a result, the Turkish economy contracted by 7% for the 12 months ended June 30, 2009.

On the positive side, however, the Turkish central bank reduced interest rates from 16.75% to 8.25% which may have helped to revive domestic economic activity. Turkey’s banking industry weathered the credit crunch well and mitigated the mortgage-related problems that afflicted financial companies in the U.S. and elsewhere in the world. In addition, discussions regarding a renewed lending facility with the International Monetary Fund and a relatively stable political situation in Turkey may have helped retain the confidence of some foreign investors.

Turkey’s stock market enjoyed a recovery in the last half of the reporting period. Early signs of economic stabilization, primarily in the U.S., boosted expectations of a nascent global recovery. Increased risk aversion, which appears to have been a contributing factor to the stock market decline in Turkey and many other emerging markets in late 2008, gave way to renewed investor confidence. The improving outlook helped the Turkish stock market surge over the last six months of the reporting period. Even this robust recovery, though, was insufficient to fully offset the market’s steep decline in late 2008.

Among the Fund’s ten largest holdings as of August 31, 2009 the top performers were banks, including Turkiye Garanti Bankasi AS (the Fund’s largest holding as of August 31, 2009), Turkiye Vakiflar Bankasi TAO, and Akbank TAS. The relative stability of the banking sector and its lack of exposure to financial assets helped boost these stocks. Wireless services provider Turkcell Iletisim Hizmetleri AS and beverage maker Anadolu Efes Biracilik ve Malt Sanayii AS also advanced for the reporting period. By far, the biggest decliner among the Fund’s top ten holdings was oil producer Turkiye Petrol Rafinerileri AS, which struggled with reduced demand for energy and falling oil prices. Other noteworthy decliners included financial stocks Yapi ve Kredi Bankasi AS and Turkiye Is Bankasi AS.

22 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/09			Inception to 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(5.56)%	(4.95)%	(5.59)%	(1.10)%	(0.62)%	(0.92)%	(1.58)%	(0.89)%	(1.32)%

Total returns for the period since inception are calculated from the inception date of the Fund (3/26/08). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Financial	45.68	%
Communications	13.88
Consumer Non-Cyclical	10.22
Diversified	9.02
Industrial	5.23
Consumer Cyclical	4.83
Basic Materials	4.64
Energy	3.61
Utilities	0.47
Short-Term and Other Net Assets	2.42
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Turkiye Garanti Bankasi AS	12.80	%
Turkcell Iletisim Hizmetleri AS	9.62
Akbank TAS	8.27
Turkiye Is Bankasi AS	8.22
Anadolu Efes Biracilik ve Malt Sanayii AS	4.26
Turkiye Petrol Rafinerileri AS	3.61
Haci Omer Sabanci Holding AS	3.53
Yapi ve Kredi Bankasi AS	3.52
Turkiye Halk Bankasi AS	3.24
Turkiye Vakiflar Bankasi TAO	3.19
TOTAL	60.26	%

24 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Unaudited)

iSHARES^®, INC.

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2009 to August 31, 2009.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Brazil
Actual	$1,000.00	$1,713.40	0.64	%	$4.38
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26
BRIC
Actual	1,000.00	1,725.10	0.71		4.88
Hypothetical (5% return before expenses)	1,000.00	1,021.60	0.71		3.62
Canada
Actual	1,000.00	1,572.20	0.55		3.57
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
Chile Investable Market
Actual	1,000.00	1,368.20	0.64		3.82
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26

SHAREHOLDER EXPENSES 25

Shareholder Expenses (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Index Fund	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Israel Capped Investable Market
Actual	$1,000.00	$1,506.10	0.64	%	$4.04
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26
Mexico Investable Market
Actual	1,000.00	1,790.90	0.55		3.87
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.55		2.80
South Africa
Actual	1,000.00	1,704.80	0.64		4.36
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26
Turkey Investable Market
Actual	1,000.00	2,230.50	0.64		5.21
Hypothetical (5% return before expenses)	1,000.00	1,022.00	0.64		3.26

^a Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days).

26 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 41.12%
AEROSPACE & DEFENSE – 0.83%
Empresa Brasileira de Aeronautica SA	13,558,532	$	72,753,099
			72,753,099
AGRICULTURE – 0.87%
Souza Cruz SA	2,410,400		76,478,439
			76,478,439
BANKS – 1.94%
Banco do Brasil SA	9,641,660		133,735,857
Banco Nossa Caixa SA	903,900		36,294,988
			170,030,845
COMMERCIAL SERVICES – 1.87%
Companhia Brasileira de Meios de Pagamento	12,052,000		105,055,610
Companhia de Concessoes Rodoviarias	3,615,600		59,525,122
			164,580,732
COSMETICS & PERSONAL CARE – 0.78%
Natura Cosmeticos SA	4,218,200		68,193,488
			68,193,488
DIVERSIFIED FINANCIAL SERVICES – 3.10%
BM&F Bovespa SA	26,815,700		165,216,561
Redecard SA	7,833,800		107,164,390
			272,380,951
ELECTRIC – 2.68%
Centrais Eletricas Brasileiras SA	6,327,399		92,428,336
CPFL Energia SA	4,218,250		74,367,345
EDP Energias do Brasil SA	1,807,800		27,126,585
Tractebel Energia SA	3,916,900		41,432,744
			235,355,010
FOOD – 2.11%
BRF - Brasil Foods SAa	3,916,975		87,228,499
Cosan SA Industria e Comercioa	2,711,790		30,353,068
JBS SA	10,244,287		42,476,312
Marfrig Alimentos SAa	3,013,000		25,241,463
			185,299,342

Security	Shares	Value
FOREST PRODUCTS & PAPER – 0.44%
Votorantim Celulose e Papel SAa	2,468,407	$	38,491,967
			38,491,967
HOME BUILDERS – 0.50%
MRV Engenharia e Participacoes SA	2,410,449		43,633,472
			43,633,472
INSURANCE – 0.25%
Porto Seguro SA	2,410,400		22,110,244
			22,110,244
INTERNET – 0.53%
B2W Companhia Global do Varejo	1,807,830		46,604,822
			46,604,822
IRON & STEEL – 3.93%
Companhia Siderurgica Nacional SA	9,340,327		242,769,263
Gerdau SA	4,218,200		38,133,781
Usinas Siderurgicas de Minas Gerais SA	2,711,700		63,896,049
			344,799,093
MINING – 6.23%
Vale SA SP ADRb	28,493,941		547,368,607
			547,368,607
OIL & GAS – 12.25%
OGX Petroleo e Gas Participacoes SAa	301,300		163,750,000
Petroleo Brasileiro SA	45,797,644		911,339,120
			1,075,089,120
REAL ESTATE – 0.65%
Cyrela Brazil Realty SA	4,519,500		56,769,329
			56,769,329
TELECOMMUNICATIONS – 0.75%
GVT (Holding) SAa	2,109,103		37,574,688
Tele Norte Leste Participacoes SA	1,506,538		28,205,650
			65,780,338

SCHEDULES OF INVESTMENTS 27

Schedule of Investments (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2009

Security	Shares	Value
TRANSPORTATION – 0.84%
ALL - America Latina Logistica SA	10,244,200	$	73,979,854
			73,979,854
WATER – 0.57%
Companhia de Saneamento Basico do Estado de Sao Paulo	2,711,700		49,891,829
			49,891,829
TOTAL COMMON STOCKS (Cost: $2,498,309,217)			3,609,590,581
PREFERRED STOCKS – 58.18%
BANKS – 13.35%
Banco Bradesco SA	26,815,700		437,212,500
Banco do Estado do Rio Grande do Sul SA	4,820,810		26,685,714
Itau Unibanco Holding SA	41,760,249		708,108,570
			1,172,006,784
BEVERAGES – 3.08%
Companhia de Bebidas das Americas	3,615,680		270,313,298
			270,313,298
CHEMICALS – 1.63%
Braskem SA Class Aa	4,820,836		26,736,980
Fertilizantes Fosfatados SAa	4,218,280		39,476,480
Ultrapar Participacoes SA	2,109,100		77,095,098
			143,308,558
ELECTRIC – 4.91%
AES Tiete SA	2,164,600		23,252,808
Centrais Eletricas Brasileiras SA Class B	6,026,000		79,079,268
Companhia de Transmissao de Energia Eletrica Paulista	914,176		23,232,479
Companhia Energetica de Minas Gerais	10,244,232		150,730,349
Companhia Energetica de Sao Paulo Class B	3,916,970		41,931,932
Companhia Paranaense de Energia Class B	3,314,300		51,542,110

Security	Shares	Value
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B	3,314,320	$	61,453,749
			431,222,695
FOOD – 0.59%
Companhia Brasileira de Distribuicao Grupo Pao de Acucar	2,124,128		51,931,889
			51,931,889
FOREST PRODUCTS & PAPER – 1.01%
Aracruz Celulose SA Class Ba	11,148,100		23,407,463
Klabin SA	15,968,900		30,904,817
Suzano Bahia Sul Papel e Celulose SAa	3,615,685		34,124,705
			88,436,985
HOLDING COMPANIES - DIVERSIFIED – 2.13%
Itausa - Investimentos Itau SA	36,457,336		187,119,307
			187,119,307
INVESTMENT COMPANIES – 1.23%
Bradespar SA	6,929,900		107,475,915
			107,475,915
IRON & STEEL – 5.34%
Gerdau SA	16,571,546		193,832,611
Metalurgica Gerdau SA	8,135,190		119,137,830
Usinas Siderurgicas de Minas Gerais SA Class A	6,628,600		155,698,293
			468,668,734
MEDIA – 0.62%
Net Servicos de Comunicacao SAa	5,122,182		53,856,240
			53,856,240
MINING – 8.62%
Vale SA Class A	43,387,200		756,860,488
			756,860,488
OIL & GAS – 11.88%
Petroleo Brasileiro SA	62,670,450		1,042,735,271
			1,042,735,271
RETAIL – 0.60%
Lojas Americanas SA	8,737,700		52,120,427
			52,120,427

28 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 3.19%
Brasil Telecom Participacoes SA	4,820,830	$	42,175,872
Brasil Telecom SA	3,916,959		28,349,147
Tele Norte Leste Participacoes SA	6,327,339		101,317,941
TIM Participacoes SA	15,366,319		32,264,381
Vivo Participacoes SA	3,314,380		76,005,798
			280,113,139
TOTAL PREFERRED STOCKS (Cost: $3,635,242,957)			5,106,169,730
SHORT-TERM INVESTMENTS – 0.41%
MONEY MARKET FUNDS – 0.41%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	26,801,172		26,801,172
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	3,780,728		3,780,728
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	5,360,938		5,360,938
			35,942,838
TOTAL SHORT-TERM INVESTMENTS
(Cost: $35,942,838)			35,942,838
TOTAL INVESTMENTS IN SECURITIES – 99.71% (Cost: $6,169,495,012)			8,751,703,149
Other Assets, Less Liabilities – 0.29%			25,663,334
NET ASSETS – 100.00%		$	8,777,366,483

SP ADR – Sponsored American Depositary Receipts

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 29

Schedule of Investments

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 80.42%
BRAZIL – 12.36%
ALL - America Latina Logistica SA	185,500	$	1,339,613
B2W Companhia Global do Varejo	26,500		683,155
Banco do Brasil SA	159,000		2,205,430
BM&F Bovespa SA	477,069		2,939,312
BRF - Brasil Foods SAa	79,500		1,770,414
Centrais Eletricas Brasileiras SA	106,000		1,548,409
Companhia Brasileira de Meios de Pagamento	212,000		1,847,975
Companhia de Concessoes Rodoviarias	79,500		1,308,841
Companhia Siderurgica Nacional SA	159,000		4,132,651
Cosan SA Industria e Comercioa	53,000		593,229
CPFL Energia SA	53,000		934,385
Cyrela Brazil Realty SA	106,000		1,331,463
Empresa Brasileira de Aeronautica SA	212,000		1,137,561
Gerdau SA	106,000		958,272
GVT (Holding) SAa	26,500		472,110
JBS SA	159,052		659,484
MRV Engenharia e Participacoes SA	53,000		959,395
OGX Petroleo e Gas Participacoes SAa	1,200		652,174
Petroleo Brasileiro SA	901,000		17,929,231
Redecard SA	132,500		1,812,566
Souza Cruz SA	53,000		1,681,612
Tele Norte Leste Participacoes SA	26,500		496,137
Tractebel Energia SA	79,500		840,946
Usinas Siderurgicas de Minas Gerais SA	53,000		1,248,844
Vale SA	583,000		11,338,515
Votorantim Celulose e Papel SAa	45,854		715,040
			61,536,764
CHINA – 39.48%
Agile Property Holdings Ltd.	1,060,000		1,204,880
Air China Ltd. Class Ha,b	1,590,000		935,457
Alibaba.com Ltd.b	530,000		1,315,657
Aluminum Corp. of China Ltd. Class H	1,590,000		1,686,284

Security	Shares	Value
Angang New Steel Co. Ltd. Class H	530,000	$	1,005,206
Anhui Conch Cement Co. Ltd. Class H	38,000		240,483
Bank of China Ltd. Class H	22,260,000		10,827,505
Bank of Communications Co. Ltd. Class H	2,915,000		3,437,531
Beijing Capital International Airport Co. Ltd. Class Ha,b	530,000		294,724
Belle International Holdings Ltd.b	1,855,000		1,672,950
BYD Co. Ltd. Class Ha,b	265,000		1,661,667
Chaoda Modern Agriculture (Holdings) Ltd.	734,556		435,958
China Agri-Industries Holdings Ltd.	1,060,000		743,989
China CITIC Bank Class H	2,120,000		1,277,364
China Coal Energy Co. Class H	1,590,000		2,012,463
China Communications Construction Co. Ltd. Class Hb	1,855,000		2,120,506
China Construction Bank Class H	14,840,000		11,200,867
China COSCO Holdings Co. Ltd. Class H	1,192,500		1,444,727
China Dongxiang Group Co.	1,590,000		982,640
China Everbright Ltd.	530,000		1,248,644
China High Speed Transmission Equipment Group Co. Ltd.	530,000		1,143,336
China Life Insurance Co. Ltd. Class H	3,180,000		13,416,423
China Mengniu Dairy Co. Ltd.a	530,000		1,255,482
China Merchants Bank Co. Ltd. Class H	1,497,400		3,261,160
China Merchants Holdings (International) Co. Ltd.b	530,000		1,719,791
China Mobile Ltd.	2,385,000		23,201,796
China National Building Material Co. Ltd. Class H	530,000		1,120,087
China Oilfield Services Ltd. Class H	1,060,000		925,884
China Overseas Land & Investment Ltd.	1,590,800		3,234,698
China Petroleum & Chemical Corp. Class H	6,890,000		5,751,556
China Railway Construction Corp. Class H	1,060,000		1,567,301

30 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2009

Security	Shares	Value
China Railway Group Ltd. Class Ha	1,590,000	$	1,372,414
China Resources Enterprise Ltd.	530,000		1,243,173
China Resources Land Ltd.	1,060,000		2,218,291
China Resources Power Holdings Co. Ltd.	564,200		1,377,260
China Shenhua Energy Co. Ltd. Class H	1,325,000		5,342,294
China Shipping Container Lines Co. Ltd. Class Ha,b	1,590,000		576,455
China Shipping Development Co. Ltd. Class Hb	530,000		663,983
China South Locomotive and Rolling Stock Corp. Ltd. Class H	530,000		312,503
China Telecom Corp. Ltd. Class H	4,252,000		2,177,939
China Unicom (Hong Kong) Ltd.	2,147,900		3,020,664
China Yurun Food Group Ltd.	530,000		914,943
China Zhongwang Holdings Ltd.a,b	530,000		576,455
CITIC Pacific Ltd.b	530,000		1,415,494
CNOOC Ltd.	6,625,000		8,701,528
CNPC Hong Kong Ltd.b	2,650,000		2,212,137
Country Garden Holdings Co. Ltd.b	1,590,000		652,358
Datang International Power Generation Co. Ltd. Class H	1,590,000		845,194
Denway Motors Ltd.	2,650,000		1,179,579
Dongfeng Motor Group Co. Ltd. Class H	1,590,000		1,645,255
Fosun International Ltd.	1,722,500		1,324,547
Franshion Properties (China) Ltd.	1,060,000		298,143
Fushan International Energy Group Ltd.a	1,060,000		720,740
Geely Automobile Holdings Ltd.	1,325,000		319,683
GOME Electrical Appliances Holdings Ltd.a	2,650,400		704,434
Guangdong Investment Ltd.	1,590,000		814,422
Guangshen Railway Co. Ltd. Class H	530,000		230,445
Guangzhou R&F Properties Co. Ltd. Class Hb	530,000		865,708
Harbin Power Equipment Co. Ltd. Class H	530,000		526,536
Hengan International Group Co. Ltd.	530,000		2,933,561

Security	Shares	Value
Hidili Industry International Development Ltd.a	795,000	$	787,753
Huaneng Power International Inc. Class Hb	1,060,000		742,622
Industrial and Commercial Bank of China Ltd. Class H	17,490,000		11,937,334
Jiangsu Expressway Co. Ltd. Class H	1,060,000		836,988
Jiangxi Copper Co. Ltd. Class Hb	795,000		1,659,616
Kingboard Chemical Holdings Co. Ltd.b	132,500		417,981
Lenovo Group Ltd.	1,590,000		670,821
Li Ning Co. Ltd.b	530,000		1,473,618
Maanshan Iron & Steel Co. Ltd. Class Ha	1,060,000		653,726
Parkson Retail Group Ltd.	397,500		579,532
PetroChina Co. Ltd. Class H	8,480,000		9,365,511
PICC Property and Casualty Co. Ltd. Class Ha,b	1,060,000		666,035
Ping An Insurance (Group) Co. of China Ltd. Class H	457,000		3,419,842
Shanghai Electric Group Co. Ltd. Class H	1,590,000		732,365
Shanghai Industrial Holdings Ltd.	265,000		1,268,474
Shimao Property Holdings Ltd.	795,000		1,183,681
Shui On Land Ltd.b	1,855,000		1,026,746
Sinofert Holdings Ltd.	1,060,000		480,037
Sino-Ocean Land Holdings Ltd.	1,722,500		1,560,121
Soho China Ltd.	1,325,000		704,328
Tencent Holdings Ltd.	275,000		4,090,947
Tingyi (Cayman Islands) Holding Corp.	530,000		949,133
Yanzhou Coal Mining Co. Ltd. Class H	1,036,000		1,473,001
Zhejiang Expressway Co. Ltd. Class H	1,060,000		1,007,941
Zijin Mining Group Co. Ltd. Class H	1,590,000		1,329,334
			196,550,641
INDIA – 15.45%
Dr. Reddy’s Laboratories Ltd. SP ADRb	385,575		6,215,469
HDFC Bank Ltd. SP ADRb	122,960		12,112,790

SCHEDULES OF INVESTMENTS 31

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2009

Security	Shares	Value
ICICI Bank Ltd. SP ADR	325,950	$	9,947,994
Infosys Technologies Ltd. SP ADR	318,265		13,758,596
Mahanagar Telephone Nigam Ltd. SP ADRb	296,270		1,143,602
Reliance Industries Ltd. SP GDRa,c	210,145		17,862,325
Satyam Computer Services Ltd. SP ADRb	748,360		4,984,078
Tata Communications Ltd. SP ADRb	64,395		1,313,014
Wipro Ltd. SP ADRb	607,645		9,570,409
			76,908,277
RUSSIA – 13.13%
Cherepovets MK Severstal SP GDRd	120,575		895,872
JSC MMC Norilsk Nickel SP ADRa	361,865		4,016,702
LUKOIL SP ADR	199,015		10,070,159
Mechel OAO SP ADR	88,510		1,080,707
Mobile TeleSystems SP ADR	79,500		3,448,710
Novolipetsk Steel SP GDRa,d	42,930		1,030,320
OAO Gazprom SP ADR	971,490		20,595,588
OAO NovaTek SP GDRd	39,220		1,552,720
OAO Tatneft SP ADR	98,826		2,470,650
OAO TMK SP GDRd	43,990		505,885
OJSC Comstar United Telesystems SP GDR	111,300		550,935
OJSC Rosneft Oil Co. SP GDR	537,420		3,466,359
Pharmstandard SP GDRa,d	36,570		630,833
Polyus Gold SP ADR	59,890		1,204,987
Rostelecom SP ADR	13,780		416,432
Sberbank GDRb,d	29,680		5,053,574
Sistema JSFC SP GDRa,d	46,375		742,000
Surgutneftegaz SP ADR	283,550		2,438,530
Uralkali SP GDRa,d	73,670		1,407,097
Vimpel-Communications SP ADRa	156,350		2,414,044
VTB Bank OJSC SP GDRd	262,085		733,838
Wimm-Bill-Dann Foods OJSC SP ADRa	10,070		637,532
			65,363,474
TOTAL COMMON STOCKS
(Cost: $419,705,497)			400,359,156

Security	Shares	Value
PREFERRED STOCKS – 19.25%
BRAZIL – 19.25%
AES Tiete SA	26,500	$	284,671
Aracruz Celulose SA Class Ba	291,500		612,057
Banco Bradesco SA	636,000		10,369,565
Banco do Estado do Rio Grande do Sul SA	26,500		146,691
Bradespar SA	106,000		1,643,955
Brasil Telecom Participacoes SA	82,021		717,575
Brasil Telecom SA	30,953		224,024
Braskem SA Class Aa	79,500		440,917
Centrais Eletricas Brasileiras SA Class B	79,500		1,043,279
Companhia de Bebidas das Americas	79,595		5,950,634
Companhia de Transmissao de Energia Eletrica Paulista	26,671		677,805
Companhia Energetica de Minas Gerais	132,903		1,955,492
Companhia Energetica de Sao Paulo Class B	79,500		851,063
Companhia Paranaense de Energia Class B	53,000		824,226
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B	26,500		491,360
Fertilizantes Fosfatados SAa	53,020		496,184
Gerdau SA	291,500		3,409,592
Itau Unibanco Holding SA	845,367		14,334,484
Itausa - Investimentos Itau SA	965,173		4,953,804
Klabin SA	159,000		307,715
Lojas Americanas SA	159,000		948,436
Metalurgica Gerdau SA	112,800		1,651,928
Net Servicos de Comunicacao SAa	79,840		839,463
Petroleo Brasileiro SA	1,272,000		21,164,030
Tele Norte Leste Participacoes SA	106,000		1,697,349
Telemar Norte Leste SA Class A	26,500		726,432
TIM Participacoes SA	238,657		501,104
Usinas Siderurgicas de Minas Gerais SA Class A	108,150		2,540,321

32 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2009

Security	Shares	Value
Vale SA Class A	848,000	$	14,792,789
Vivo Participacoes SA	55,319		1,268,583
			95,865,528
TOTAL PREFERRED STOCKS
(Cost: $99,093,888)			95,865,528
SHORT-TERM INVESTMENTS – 3.70%
MONEY MARKET FUNDS – 3.70%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%e,f,g	15,245,936		15,245,936
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%e,f,g	2,150,679		2,150,679
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%e,f	1,014,835		1,014,835
			18,411,450
TOTAL SHORT-TERM INVESTMENTS
(Cost: $18,411,450)			18,411,450
TOTAL INVESTMENTS IN SECURITIES – 103.37% (Cost: $537,210,835)			514,636,134
Other Assets, Less Liabilities – (3.37)%			(16,797,261	)
NET ASSETS – 100.00%		$	497,838,873

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

^a Non-income earning security.

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

^c This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^d This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^e Affiliated issuer. See Note 2.

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

^g All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 33

Schedule of Investments

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.79%
ADVERTISING – 0.18%
Groupe Aeroplan Inc.	516,110	$	4,304,637
			4,304,637
AEROSPACE & DEFENSE – 0.23%
CAE Inc.	669,630		5,377,771
			5,377,771
AIRLINES – 0.00%
Jazz Air Income Funda	20,078		63,438
			63,438
APPAREL – 0.26%
Gildan Activewear Inc.b	301,980		6,200,454
			6,200,454
AUTO PARTS & EQUIPMENT – 0.53%
Magna International Inc. Class A	278,760		12,589,571
			12,589,571
BANKS – 24.42%
Bank of Montreal	1,423,070		68,675,356
Bank of Nova Scotia	2,593,680		108,305,181
Canadian Imperial Bank of Commerce	995,860		58,259,964
National Bank of Canada	418,140		23,396,042
Royal Bank of Canada	3,672,360		188,759,137
Toronto-Dominion Bank (The)	2,224,008		137,055,189
			584,450,869
CHEMICALS – 3.67%
Agrium Inc.	411,070		19,594,368
Potash Corp. of Saskatchewan Inc.	770,630		68,190,142
			87,784,510
COMMERCIAL SERVICES – 0.27%
Ritchie Bros. Auctioneers Inc.c	258,560		6,474,300
			6,474,300
COMPUTERS – 4.39%
CGI Group Inc. Class Ab	713,060		7,349,728
Research In Motion Ltd.b	1,334,204		97,612,831
			104,962,559
DIVERSIFIED FINANCIAL SERVICES – 1.07%
CI Financial Corp.	422,180		7,784,334
IGM Financial Inc.	309,060		11,509,724
TMX Group Inc.	193,920		6,241,814
			25,535,872

Security	Shares	Value
ELECTRIC – 0.84%
Fortis Inc.	442,380	$	10,033,859
TransAlta Corp.	518,130		10,058,303
			20,092,162
ENGINEERING & CONSTRUCTION – 0.70%
SNC-Lavalin Group Inc.	395,920		16,705,607
			16,705,607
FOOD – 1.58%
Empire Co. Ltd. Class A	75,750		2,890,674
George Weston Ltd.	135,340		7,031,642
Loblaw Companies Ltd.	286,840		8,684,207
Metro Inc. Class A	290,880		9,783,844
Saputo Inc.	379,760		9,533,333
			37,923,700
FOREST PRODUCTS & PAPER – 0.29%
Sino-Forest Corp. Class Ab	565,123		6,998,109
			6,998,109
GAS – 0.31%
Canadian Utilities Ltd. Class A	219,170		7,475,628
			7,475,628
HAND & MACHINE TOOLS – 0.27%
Finning International Inc.	447,430		6,567,331
			6,567,331
HOLDING COMPANIES - DIVERSIFIED – 1.50%
Brookfield Asset Management Inc. Class A	1,267,560		25,772,470
Onex Corp.	256,540		5,349,206
Sherritt International Corp.	758,477		4,654,801
			35,776,477
INSURANCE – 9.03%
Fairfax Financial Holdings Ltd.	44,438		15,059,353
Great-West Lifeco Inc.	741,340		17,523,502
Industrial Alliance Insurance and Financial Services Inc.	211,090		5,670,071
Intact Financial Corp.	217,158		6,718,897
Manulife Financial Corp.	4,207,660		86,317,851
Power Corp. of Canada	902,948		23,999,137
Power Financial Corp.	645,390		17,653,099
Sun Life Financial Inc.	1,462,480		43,145,324
			216,087,234

34 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2009

Security	Shares	Value
IRON & STEEL – 0.12%
Gerdau Ameristeel Corp.	394,910	$	2,858,670
			2,858,670
MANUFACTURING – 0.57%
Bombardier Inc. Class B	3,753,160		13,669,602
			13,669,602
MEDIA – 3.20%
Astral Media Inc. Class A	126,250		3,638,345
Rogers Communications Inc. Class B	1,299,870		35,673,191
Shaw Communications Inc. Class B	904,960		15,482,994
Thomson Reuters Corp.	592,870		18,856,316
Yellow Pages Income Fund	641,350		2,954,911
			76,605,757
MINING – 14.45%
Agnico-Eagle Mines Ltd.	407,026		23,270,806
Barrick Gold Corp.	2,280,580		78,452,367
Cameco Corp.	1,025,134		27,190,670
Eldorado Gold Corp.b,c	986,770		10,152,972
First Quantum Minerals Ltd.	204,016		12,043,121
Franco-Nevada Corp.	288,860		7,409,229
Goldcorp Inc.	1,906,880		69,260,590
IAMGOLD Corp.	906,952		10,504,375
Inmet Mining Corp.	131,300		5,674,025
Ivanhoe Mines Ltd.b	644,380		7,111,209
Kinross Gold Corp.	1,815,952		34,359,647
Pan American Silver Corp.b	214,120		4,176,144
Silver Wheaton Corp.b	752,412		7,796,448
Teck Resources Ltd. Class Bb	1,286,740		30,954,401
Yamana Gold Inc.	1,916,980		17,577,044
			345,933,048
OIL & GAS – 20.77%
ARC Energy Trust	294,920		4,667,161
Canadian Natural Resources Ltd.	1,416,016		80,854,417
Canadian Oil Sands Trust	617,110		15,452,333
Crescent Point Energy Corp.	382,790		12,791,617
EnCana Corp.	1,960,410		101,853,853
Enerplus Resources Fund	426,232		8,895,276
Ensign Energy Services Inc.	342,390		5,006,859
Husky Energy Inc.	667,610		17,920,458
Imperial Oil Ltd.	776,700		27,843,095

Security	Shares	Value
Nexen Inc.	1,224,120	$	23,964,106
Niko Resources Ltd.	116,150		7,508,900
Penn West Energy Trust	1,081,672		13,897,011
Progress Energy Resources Corp.	409,050		3,862,371
Provident Energy Trust	667,610		3,477,104
Suncor Energy Inc.	4,069,578		124,097,593
Talisman Energy Inc.	2,662,360		42,665,637
Vermilion Energy Trust	89,890		2,385,062
			497,142,853
OIL & GAS SERVICES – 0.13%
Trican Well Service Ltd.	333,300		3,077,316
			3,077,316
PHARMACEUTICALS – 0.20%
Biovail Corp.	368,650		4,696,029
			4,696,029
PIPELINES – 3.61%
Enbridge Inc.	926,170		34,491,558
TransCanada Corp.	1,749,320		51,926,093
			86,417,651
REAL ESTATE – 0.29%
Brookfield Properties Corp.	632,878		6,938,175
			6,938,175
REAL ESTATE INVESTMENT TRUSTS – 0.18%
RioCan Real Estate Investment Trust	285,830		4,385,373
			4,385,373
RETAIL – 1.56%
Alimentation Couche-Tard Inc. Class B	331,308		5,659,311
Canadian Tire Corp. Ltd. Class A	204,020		10,607,368
Shoppers Drug Mart Corp.	540,350		21,156,431
			37,423,110
SOFTWARE – 0.21%
Open Text Corp.b	145,440		5,106,457
			5,106,457
TELECOMMUNICATIONS – 1.40%
BCE Inc.	661,614		16,205,251
Manitoba Telecom Services Inc.	56,560		1,683,539
TELUS Corp.	151,158		4,672,719
TELUS Corp. NVS	372,690		11,011,874
			33,573,383

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2009

Security	Shares	Value
TRANSPORTATION – 3.56%
Canadian National Railway Co.	1,224,120	$	58,985,140
Canadian Pacific Railway Ltd.	439,344		20,970,100
Viterra Inc.b	607,010		5,328,091
			85,283,331
TOTAL COMMON STOCKS
(Cost: $2,766,636,910)			2,388,480,984
SHORT-TERM INVESTMENTS – 0.42%
MONEY MARKET FUNDS – 0.42%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%d,e,f	8,152,755		8,152,755
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%d,e,f	1,150,075		1,150,075
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%d,e	811,492		811,492
			10,114,322
TOTAL SHORT-TERM INVESTMENTS
(Cost: $10,114,322)			10,114,322
TOTAL INVESTMENTS IN SECURITIES – 100.21%
(Cost: $2,776,751,232)			2,398,595,306
Other Assets, Less Liabilities – (0.21)%			(4,957,750	)
NET ASSETS – 100.00%		$	2,393,637,556

NVS – Non-Voting Shares

^a Security valued using Level 3 inputs. See Note 1.

^b Non-income earning security.

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

^d Affiliated issuer. See Note 2.

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

^f All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

36 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.90%
AIRLINES – 4.00%
LAN Airlines SA	887,478	$	10,530,978
			10,530,978
APPAREL – 0.20%
Forus SA	533,506		530,612
			530,612
BANKS – 8.55%
Banco de Credito e Inversiones	223,374		6,099,362
Banco Santander Chile SA	266,710,285		13,099,188
CorpBanca SA	565,444,940		3,302,690
			22,501,240
BEVERAGES – 4.69%
Compania Cervecerias Unidas SA	971,494		6,350,725
Vina Concha y Toro SA	3,073,428		6,002,355
			12,353,080
BUILDING MATERIALS – 0.48%
SalfaCorp SA	952,891		1,275,116
			1,275,116
CHEMICALS – 7.59%
Sociedad Quimica y Minera de Chile SA Series B	572,923		19,974,603
			19,974,603
COMPUTERS – 1.08%
Sonda SA	2,087,055		2,845,641
			2,845,641
ELECTRIC – 29.98%
AES Gener SA	15,206,594		6,544,610
Almendral SA	40,708,405		3,607,810
Colbun SA	47,241,182		10,712,557
Empresa Electrica del Norte Grande SA	490,584		603,250
Empresa Electrica Pilmaiquen SA	34,706		138,071
Empresa Nacional de Electricidad SA	19,701,252		30,207,399
Enersis SA	77,867,600		27,105,810
			78,919,507
ENGINEERING & CONSTRUCTION – 0.36%
Socovesa SA	3,217,039		936,606
			936,606

Security	Shares	Value
FOOD – 4.73%
Cencosud SA	4,803,103	$	12,455,063
			12,455,063
FOREST PRODUCTS & PAPER – 7.53%
Empresas CMPC SA	579,268		16,770,490
Masisa SA	23,181,518		3,039,168
			19,809,658
HEALTH CARE - SERVICES – 0.32%
Banmedica SA	875,814		831,469
			831,469
HOLDING COMPANIES - DIVERSIFIED – 12.40%
Empresas Copec SA	2,738,734		32,636,993
			32,636,993
IRON & STEEL – 4.35%
CAP SA	477,074		11,439,424
			11,439,424
METAL FABRICATE & HARDWARE – 0.57%
Madeco SA	22,505,196		1,489,494
			1,489,494
REAL ESTATE – 0.51%
Parque Arauco SA	1,510,877		1,340,118
			1,340,118
RETAIL – 6.69%
La Polar SA	1,581,236		6,690,944
Ripley Corp. SA	2,812,564		2,003,888
S.A.C.I. Falabella SA	2,160,462		8,919,231
			17,614,063
TELECOMMUNICATIONS – 3.02%
Empresa Nacional de Telecomunicaciones SA	623,767		7,940,904
			7,940,904
TRANSPORTATION – 1.14%
Compania SudAmericana de Vapores SAa	3,969,748		3,000,641
			3,000,641
WATER – 1.71%
Inversiones Aguas Metropolitanas SAa	4,078,906		4,514,161
			4,514,161
TOTAL COMMON STOCKS
(Cost: $228,811,699)			262,939,371

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.17%
MONEY MARKET FUNDS – 0.17%
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%b,c	451,456	$	451,456
			451,456
TOTAL SHORT-TERM INVESTMENTS
(Cost: $451,456)			451,456
TOTAL INVESTMENTS IN SECURITIES – 100.07%
(Cost: $229,263,155)			263,390,827
Other Assets, Less Liabilities – (0.07)%			(185,948	)
NET ASSETS – 100.00%		$	263,204,879

^a Non-income earning security.

^b Affiliated issuer. See Note 2.

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

See notes to financial statements.

38 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.57%
AEROSPACE & DEFENSE – 2.91%
Elbit Systems Ltd.	48,208	$	3,142,589
			3,142,589
AIRLINES – 0.12%
El Al Israel Airlines Ltd.a	555,358		133,286
			133,286
BANKS – 15.82%
Bank Hapoalim Ltd.a,b	1,568,812		5,053,335
Bank Leumi le-Israela	2,035,132		6,979,898
Israel Discount Bank Ltd. Class A	1,162,512		2,041,110
Mizrahi Tefahot Bank Ltd.a	357,236		2,723,011
Union Bank of Israela	61,245		255,491
			17,052,845
CHEMICALS – 12.96%
Frutaromb	94,024		727,367
Israel Chemicals Ltd.	947,554		10,595,092
Makhteshim-Agan Industries Ltd.	575,368		2,643,275
			13,965,734
COMMERCIAL SERVICES – 0.62%
AL-ROV Israel Ltd.a	9,200		206,930
Nitsba Holdings 1995 Ltd.a	52,933		461,198
			668,128
COMPUTERS – 0.02%
MATRIX IT Ltd.	6,992		24,497
			24,497
DIVERSIFIED FINANCIAL SERVICES – 0.53%
FIBI Holdings Ltd.a	26,312		438,360
Mivtach Shamir Holdings Ltd.a	5,152		130,014
			568,374
ELECTRICAL COMPONENTS & EQUIPMENT – 0.28%
Electra (Israel) Ltd.	2,333		300,595
			300,595
ELECTRONICS – 1.10%
Elron Electronic Industries Ltd.a	41,998		195,048
Ituran Location and Control Ltd.	36,572		343,777
Orbotech Ltd.a	70,196		645,101
			1,183,926

Security	Shares	Value
ENGINEERING & CONSTRUCTION – 0.61%
Shikun & Binui Ltd.	390,586	$	654,844
			654,844
FOOD – 0.71%
Blue Square-Israel Ltd.	23,598		223,924
Maabarot Products Ltd.	2,760		39,926
Shufersal Ltd.b	124,982		499,928
			763,778
FOREST PRODUCTS & PAPER – 0.21%
Hadera Paper Ltd.a	3,864		221,893
			221,893
HEALTH CARE - PRODUCTS – 1.08%
Given Imaging Ltd.	47,840		564,990
Syneron Medical Ltd.a	61,207		597,380
			1,162,370
HOLDING COMPANIES - DIVERSIFIED – 0.61%
Clal Industries and Investments Ltd.	88,552		397,695
Elco Holdings Ltd.	18,217		193,497
Granite Hacarmel Investments Ltd.a	36,202		67,864
			659,056
HOME BUILDERS – 0.44%
Bayside Land Corp. Ltd.	968		213,663
Property & Building Corp. Ltd.	3,880		256,106
			469,769
INSURANCE – 2.27%
Clal Insurance Enterprises Holdings Ltd.a,b	23,828		497,006
Harel Insurance Investments & Finances Ltd.a,b	20,361		981,091
Menorah Mivtachim Holdings Ltd. Class La	53,652		648,782
Phoenix Holdings Ltd.a	127,114		319,169
			2,446,048
INTERNET – 8.69%
Check Point Software Technologies Ltd.a,b	300,932		8,386,975
NetVision Ltd.	8,096		85,524
RADVision Ltd.a	38,557		348,941
Radware Ltd.a	49,174		543,864
			9,365,304

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
INVESTMENT COMPANIES – 4.52%
Delek Group Ltd. (The)	8,234	$	1,375,486
Discount Investment Corp. Ltd.	35,282		820,592
Elbit Imaging Ltd.a	26,124		658,014
Israel Corp. Ltd. (The)	3,267		1,958,044
Queenco Ltd.	35,162		57,875
			4,870,011
MACHINERY – 0.96%
Ormat Industries Ltd.	128,938		1,033,206
			1,033,206
MANUFACTURING – 0.32%
FMS Enterprises Migun Ltd.	7,163		246,048
Plasson Industries Ltd.	4,968		95,504
			341,552
MEDIA – 0.59%
Hot Telecommunication Systems Ltd.a	69,061		640,558
			640,558
OIL & GAS – 1.32%
Delek Drilling LP	444,452		698,919
Oil Refineries Ltd.b	1,731,578		729,663
			1,428,582
PHARMACEUTICALS – 23.02%
Teva Pharmaceutical Industries Ltd.	481,068		24,818,663
			24,818,663
REAL ESTATE – 3.10%
Adgar Investments & Development Ltd.	15,410		16,747
Africa Israel Properties Ltd.a	13,350		213,248
Airport City Ltd.a	15,778		63,487
Alony Hetz Properties & Investments Ltd.	121,027		402,625
Amot Investments Ltd.	109,100		227,965
Azorim-Investment Development & Construction Co. Ltd.a	19,506		121,697
British Israel Investments Ltd.	91,632		238,304
Delek Real Estate Ltd.a,b	199,536		287,121
Electra Real Estate Ltd.	10,718		98,478
Gazit Globe Ltd.b	100,586		815,311
Gazit Inc.	16,078		259,625

Security	Shares	Value
Jerusalem Economy Ltd.a	37,628	$	285,128
Melisron Ltd.	14,904		312,443
			3,342,179
RETAIL – 0.68%
Delek Automotive Systems Ltd.	65,458		738,314
			738,314
SEMICONDUCTORS – 0.49%
Mellanox Technologies Ltd.a	36,616		527,754
			527,754
SOFTWARE – 0.50%
Fundtech Ltd.a	13,242		122,356
Retalix Ltd.a	42,524		413,170
			535,526
TELECOMMUNICATION EQUIPMENT – 0.14%
AudioCodes Ltd.a	77,787		151,685
			151,685
TELECOMMUNICATIONS – 14.95%
Alvarion Ltd.a	96,416		375,058
Bezeq Israeli Telecommunication Corp. Ltd.	2,548,575		5,342,755
Cellcom Israel Ltd.	81,186		2,297,564
Ceragon Networks Ltd.a	65,194		460,270
Gilat Satellite Networks Ltd.a	77,179		328,011
NICE Systems Ltd.a,b	131,100		3,620,610
Partner Communications Co. Ltd.	184,690		3,517,765
RRSat Global Communications Network Ltd.	15,134		168,139
			16,110,172
TOTAL COMMON STOCKS (Cost: $129,708,160)			107,321,238
SHORT-TERM INVESTMENTS – 11.18%
MONEY MARKET FUNDS – 11.18%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	10,546,366		10,546,366

40 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	1,487,731	$	1,487,731
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	20,173		20,173
			12,054,270
TOTAL SHORT-TERM INVESTMENTS
(Cost: $12,054,270)			12,054,270
TOTAL INVESTMENTS IN SECURITIES – 110.75% (Cost: $141,762,430)			119,375,508
Other Assets, Less Liabilities – (10.75)%			(11,583,483	)
NET ASSETS – 100.00%		$	107,792,025

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 41

Schedule of Investments

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.88%
BANKS – 0.81%
Banco Compartamos SA de CVa	1,630,000	$	5,591,634
			5,591,634
BEVERAGES – 8.80%
Coca-Cola FEMSA SAB de CV SP ADR	162,916		7,262,795
Fomento Economico Mexicano SAB de CV BD Units	10,692,808		38,929,064
Grupo Modelo SAB de CV Series Cb	4,091,356		14,901,451
			61,093,310
BUILDING MATERIALS – 4.98%
Cemex SAB de CV CPOb	26,063,770		34,578,313
			34,578,313
CHEMICALS – 0.71%
Mexichem SAB de CVa	3,767,231		4,915,889
			4,915,889
DIVERSIFIED FINANCIAL SERVICES – 6.14%
Bolsa Mexicana de Valores SAB de CVa,b	1,450,700		1,737,274
Financiera Independencia SAB de CVa	425,642		255,981
Grupo Financiero Banorte SAB de CV Series O	9,111,700		26,810,486
Grupo Financiero Inbursa SAB de CV Series O	5,118,200		13,799,478
			42,603,219
ENGINEERING & CONSTRUCTION – 4.22%
Carso Infraestructura y Construccion SAB de CV Series B1a,b	5,509,400		2,771,463
Empresas ICA SAB de CVb	2,950,374		6,280,007
Grupo Aeroportuario del Centro Norte SAB de CVa	1,157,300		1,664,836
Grupo Aeroportuario del Pacifico SAB de CV Series B	3,667,500		9,604,541
Grupo Aeroportuario del Sureste SA de CV Series B SP ADR	198,860		8,173,146
Promotora y Operadora de Infraestructura SAB de CVa,b	407,500		784,469
			29,278,462

Security	Shares	Value
ENVIRONMENTAL CONTROL – 0.01%
Promotora Ambiental SAB de CVa,b	32,600	$	33,802
			33,802
FOOD – 3.38%
Alsea SAB de CVa,b	2,396,145		1,484,216
Gruma SAB de CV Series Ba,b	1,418,169		2,182,790
Grupo Bimbo SAB de CV Series Aa	3,390,400		19,763,619
			23,430,625
FOREST PRODUCTS & PAPER – 2.72%
Kimberly-Clark de Mexico SAB de CV Series A	4,368,400		18,862,349
			18,862,349
HOLDING COMPANIES - DIVERSIFIED – 4.11%
Alfa SAB de CV Series A	2,249,400		9,819,101
Grupo Carso SAB de CV Series A1	5,802,830		18,721,266
			28,540,367
HOME BUILDERS – 3.82%
Consorcio ARA SAB de CVa,b	5,835,400		3,364,820
Corporacion Geo SAB de CV Series Ba,b	2,689,960		6,367,952
Desarrolladora Homex SAB de CVb	1,532,230		9,057,205
Sare Holding SAB de CV Series Ba,b	929,100		369,018
Urbi Desarrollos Urbanos SAB de CVb	3,846,800		7,390,944
			26,549,939
HOUSEWARES – 0.02%
Vitro SAB de CV Series Aa,b	293,400		163,233
			163,233
IRON & STEEL – 0.24%
Compania Minera Autlan SAB de CV Series Ba	297,200		617,653
Grupo Simec SAB de CV Series Ba,b	391,200		1,070,598
			1,688,251

42 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
MACHINERY – 0.27%
Industrias CH SAB de CV Series Ba,b	521,600	$	1,899,761
			1,899,761
MEDIA – 5.67%
Grupo Televisa SA CPO	9,600,799		33,634,279
Megacable Holdings SAB de CV CPOa,b	1,760,400		3,037,326
TV Azteca SAB de CV CPOa	6,414,000		2,706,421
			39,378,026
MINING – 6.11%
Grupo Mexico SAB de CV Series Bb	22,918,210		33,295,970
Industrias Penoles SAB de CV	586,800		9,124,314
			42,420,284
PHARMACEUTICALS – 0.07%
Genomma Lab Internacional SAB de CV Series Bb	358,600		507,249
			507,249
RETAIL – 10.61%
Grupo Elektra SA de CVa	423,830		16,099,173
Grupo Famsa SAB de CV Series Aa,b	1,689,316		2,676,230
Wal-Mart de Mexico SAB de CV Series V	15,452,400		54,911,393
			73,686,796
TELECOMMUNICATIONS – 37.19%
America Movil SAB de CV Series L	74,686,640		168,731,094
Axtel SAB de CV CPOa,b	6,878,600		4,456,982
Carso Global Telecom SAB de CV Series A1b	5,656,131		22,919,328
Maxcom Telecomunicaciones SAB de CVa,b	587,000		282,064
Telefonos de Mexico SAB de CV Series L	37,473,700		34,916,312
Telmex Internacional SAB de CV Series L	41,402,000		26,919,638
			258,225,418
TOTAL COMMON STOCKS
(Cost: $901,517,035)			693,446,927

Security	Shares	Value
SHORT-TERM INVESTMENTS – 4.27%
MONEY MARKET FUNDS – 4.27%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	25,836,318	$	25,836,318
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	3,644,619		3,644,619
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	166,138		166,138
			29,647,075
TOTAL SHORT-TERM INVESTMENTS
(Cost: $29,647,075)			29,647,075
TOTAL INVESTMENTS IN SECURITIES – 104.15%
(Cost: $931,164,110)			723,094,002
Other Assets, Less Liabilities – (4.15)%			(28,816,383	)
NET ASSETS – 100.00%		$	694,277,619

SP ADR – Sponsored American Depositary Receipts

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

^b Non-income earning security.

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 43

Schedule of Investments

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.83%
BANKS – 14.36%
Absa Group Ltd.	783,678	$	12,752,998
FirstRand Ltd.	6,847,618		13,961,005
Nedbank Group Ltd.	466,240		6,900,054
Standard Bank Group Ltd.	2,832,314		36,545,518
			70,159,575
BUILDING MATERIALS – 1.02%
Pretoria Portland Cement Co. Ltd.	1,210,720		4,994,374
			4,994,374
DIVERSIFIED FINANCIAL SERVICES – 3.43%
African Bank Investments Ltd.	1,855,748		6,873,714
Investec Ltd.	521,606		3,906,261
RMB Holdings Ltd.	1,762,218		5,984,281
			16,764,256
ELECTRONICS – 0.58%
Reunert Ltd.	430,708		2,809,140
			2,809,140
ENGINEERING & CONSTRUCTION – 2.15%
Aveng Ltd.	960,210		5,079,139
Murray & Roberts Holdings Ltd.	765,912		5,408,393
			10,487,532
FOOD – 3.14%
Shoprite Holdings Ltd.	990,102		7,371,565
Tiger Brands Ltd.	399,688		7,977,493
			15,349,058
FOREST PRODUCTS & PAPER – 0.98%
Sappi Ltd.	1,239,484		4,805,898
			4,805,898
HEALTH CARE - PRODUCTS – 0.81%
Aspen Pharmacare Holdings Ltd.a	526,494		3,954,358
			3,954,358
HEALTH CARE - SERVICES – 0.61%
Netcare Ltd.a	2,246,506		2,982,324
			2,982,324
HOLDING COMPANIES - DIVERSIFIED – 5.26%
Bidvest Group Ltd.	693,720		10,064,433
Imperial Holdings Ltd.	404,012		3,843,608
Remgro Ltd.	1,067,558		11,787,361
			25,695,402

Security	Shares	Value
HOME FURNISHINGS – 1.29%
Steinhoff International Holdings Ltd.b	2,823,854	$	6,315,635
			6,315,635
INSURANCE – 3.63%
Discovery Holdings Ltd.	648,130		2,321,630
Liberty Holdings Ltd.	277,958		2,301,789
Sanlam Ltd.	4,984,538		13,119,142
			17,742,561
IRON & STEEL – 2.61%
ArcelorMittal South Africa Ltd.	433,152		6,495,459
Kumba Iron Ore Ltd.	194,016		6,264,479
			12,759,938
MEDIA – 6.24%
Naspers Ltd. Class N	933,044		30,487,132
			30,487,132
MINING – 22.49%
African Rainbow Minerals Ltd.	257,372		5,320,027
Anglo Platinum Ltd.a	144,572		12,807,369
AngloGold Ashanti Ltd.	730,850		27,966,881
Exxaro Resources Ltd.	302,304		3,586,266
Gold Fields Ltd.	1,625,166		19,765,688
Harmony Gold Mining Co. Ltd.a	879,370		8,240,654
Impala Platinum Holdings Ltd.	1,304,062		30,438,187
Northam Platinum Ltd.	349,680		1,798,492
			109,923,564
OIL & GAS – 10.72%
Sasol Ltd.	1,393,174		52,410,037
			52,410,037
REAL ESTATE – 2.35%
Growthpoint Properties Ltd.	3,422,540		6,063,931
Redefine Income Fund Ltd.	5,790,588		5,419,720
			11,483,651
RETAIL – 4.10%
Foschini Ltd.	496,602		3,888,604
Massmart Holdings Ltd.	487,578		4,851,460
Pick’n Pay Stores Ltd.	553,284		2,678,034
Truworths International Ltd.	1,048,100		5,295,099
Woolworths Holdings Ltd.	1,650,452		3,337,414
			20,050,611

44 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 14.06%
MTN Group Ltd.	3,575,384	$	58,527,441
Telkom South Africa Ltd.	630,082		3,511,669
Vodacom Group Pty Ltd.a	903,622		6,682,453
			68,721,563
TOTAL COMMON STOCKS (Cost: $547,579,081)			487,896,609
SHORT-TERM INVESTMENTS – 0.50%
MONEY MARKET FUNDS – 0.50%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	2,147,116		2,147,116
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	302,884		302,884
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	12,156		12,156
			2,462,156
TOTAL SHORT-TERM INVESTMENTS
(Cost: $2,462,156)			2,462,156
TOTAL INVESTMENTS IN SECURITIES – 100.33% (Cost: $550,041,237)			490,358,765
Other Assets, Less Liabilities – (0.33)%			(1,630,496	)
NET ASSETS – 100.00%		$	488,728,269

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 45

Schedule of Investments

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 97.58%
AEROSPACE & DEFENSE – 0.17%
Aselsan Elektronik Sanayi ve TASa	108,371	$	411,673
			411,673
AIRLINES – 1.29%
Turk Hava Yollari AOa	1,633,506		3,135,286
			3,135,286
AUTO MANUFACTURERS – 0.73%
Otokar Otobus Karoseri Sanayi ASa	38,214		318,344
TOFAS Turk Otomobil Fabrikasi ASa	581,242		1,456,495
			1,774,839
BANKS – 42.57%
Akbank TASa	3,498,622		20,052,082
Albaraka Turk Katilim Bankasi ASa	896,512		1,236,774
Asya Katilim Bankasi ASb	2,095,200		3,881,810
Sekerbank TASa,b	827,193		1,345,119
Tekstil Bankasi ASa,b	551,668		338,244
Turk Ekonomi Bankasi ASa,b	1,023,765		1,248,578
Turkiye Garanti Bankasi ASb	8,392,789		31,042,972
Turkiye Halk Bankasi AS	1,456,530		7,862,641
Turkiye Is Bankasi AS	5,025,840		19,929,189
Turkiye Vakiflar Bankasi TAOb	3,498,758		7,741,337
Yapi ve Kredi Bankasi ASa,b	4,052,687		8,534,816
			103,213,562
BEVERAGES – 5.11%
Anadolu Efes Biracilik ve Malt Sanayii AS	944,006		10,317,693
Coca-Cola Icecek ASa	295,512		2,067,895
			12,385,588
BUILDING MATERIALS – 1.60%
Adana Cimento Sanayii TAS Class A	206,145		707,529
Adana Cimento Sanayii TAS Class C	577,530		219,388
Akcansa Cimento Sanayi ve TASa	220,058		777,279
Bolu Cimento Sanayii AS	307,185		302,988
Cimsa Cimento Sanayi ve TASa	185,689		680,633
Goltas Goller Bolgesi Cimento Sanayi ve TAS	13,391		359,205
Mardin Cimento Sanayii ve TAS	191,301		835,069
			3,882,091

Security	Shares	Value
CHEMICALS – 1.25%
Aksa Akrilik Kimya Sanayii ASa,b	391,659	$	378,478
Bagfas Bandirma Gubre Fabrikalari ASa	8,508		430,928
Gubre Fabrikalari TASa,b	75,625		408,241
Petkim Petrokimya Holding ASa,b	381,826		1,819,431
			3,037,078
COMMERCIAL SERVICES – 0.59%
Ihlas Holding ASa,b	1,371,066		493,419
Koza Anadolu Metal Madencilik Isletmeleri ASa,b	451,530		926,833
			1,420,252
DISTRIBUTION & WHOLESALE – 0.49%
Aygaz ASa	417,794		1,180,570
			1,180,570
DIVERSIFIED FINANCIAL SERVICES – 0.46%
Finans Finansal Kiralama ASa,b	263,596		293,372
Turkiye Sinai Kalkinma Bankasi ASb	997,227		830,745
			1,124,117
ELECTRIC – 0.47%
Akenerji Elektrik Uretim ASa	90,354		716,570
Zorlu Enerji Elektrik Uretim ASa,b	117,144		425,481
			1,142,051
ENGINEERING & CONSTRUCTION – 2.68%
Enka Insaat ve Sanayi ASa	1,088,852		4,390,240
TAV Havalimanlari Holding ASa,b	759,610		2,116,075
			6,506,315
ENTERTAINMENT – 0.24%
Galatasaray Sportif Sinai ve Ticari Yatirimlar ASa	3,831		393,185
Trabzonspor Sportif Yatirim ve TASb	28,762		190,724
			583,909
FOOD – 3.50%
Banvit Bandirma Vitaminli Yem Sanayii ASa,b	167,287		363,449
BIM Birlesik Magazalar ASa	176,770		6,597,214
Tat Konserve Sanayii ASa,b	283,835		518,299
Ulker Biskuvi Sanayi ASa	433,571		1,005,550
			8,484,512

46 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
FOREST PRODUCTS & PAPER – 0.17%
Kartonsan Karton Sanayi ve TASa	8,557	$	404,896
			404,896
HOLDING COMPANIES - DIVERSIFIED – 9.02%
Alarko Holding ASa	308,134		726,954
Dogan Sirketler Grubu Holdings ASb	3,997,657		3,756,545
Haci Omer Sabanci Holding ASa	2,213,162		8,554,708
KOC Holding ASa,b	2,247,436		5,961,211
Tekfen Holding ASa,b	609,657		1,673,967
Yazicilar Holding ASa	187,681		1,181,996
			21,855,381
HOME FURNISHINGS – 0.46%
Vestel Beyaz Esya Sanayi ve TASa	263,253		480,715
Vestel Elektronik Sanayi ve TASa,b	409,076		629,768
			1,110,483
HOUSEWARES – 1.03%
Anadolu Cam Sanayii ASa,b	535,188		613,478
Turk Sise ve Cam Fabrikalari ASa,b	1,772,586		1,878,315
			2,491,793
INSURANCE – 1.65%
Aksigorta ASa	568,575		1,932,511
Anadolu Anonim Turk Sigorta Sirketia	891,335		748,472
Anadolu Hayat Emeklilik AS	175,262		345,735
Gunes Sigorta ASa,b	176,624		223,649
Yapi Kredi Sigorta ASa	134,312		747,421
			3,997,788
IRON & STEEL – 3.06%
Eregli Demir ve Celik Fabrikalari TASb	1,337,103		5,302,076
Izmir Demir Celik Sanayi ASb	208,144		339,855
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Ab	813,442		444,533
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Bb	424,029		228,899
Kardemir Karabuk Demir Celik Sanayi ve TAS Class Da,b	2,645,982		1,093,308
			7,408,671

Security	Shares	Value
MACHINERY – 0.12%
Turk Traktor ve Ziraat Makineleri ASa	61,635	$	295,749
			295,749
MEDIA – 1.19%
Dogan Gazetecilik ASa,b	273,605		417,565
Dogan Yayin Holding ASa,b	1,180,291		1,290,022
Hurriyet Gazetecilik ve Matbaacilik ASa,b	1,133,658		1,186,167
			2,893,754
METAL FABRICATE & HARDWARE – 0.13%
Borusan Mannesmann Boru Sanayi ve TASb	40,253		321,917
			321,917
MINING – 0.16%
Park Elektrik Madencilik Sanayi ve TASa,b	194,516		394,088
			394,088
MISCELLANEOUS - MANUFACTURING – 0.44%
Trakya Cam Sanayii ASa,b	938,451		1,056,970
			1,056,970
OIL & GAS – 3.61%
Turkiye Petrol Rafinerileri AS	583,055		8,742,911
			8,742,911
PHARMACEUTICALS – 1.02%
Deva Holding ASb	268,739		684,161
EIS Eczacibasi Ilac Sanayi ve TASa	760,659		765,475
Selcuk Ecza Deposu Ticaret ve Sanayi ASa	481,498		1,026,853
			2,476,489
REAL ESTATE INVESTMENT TRUSTS – 1.00%
Is Gayrimenkul Yatirim Ortakligi ASa	1,147,905		1,231,674
Sinpas Gayrimenkul Yatirim Ortakligi ASa	348,293		1,179,159
			2,410,833
RETAIL – 0.45%
Dogus Otomotiv Servis ve TASa,b	178,349		534,869
Turcas Petrolculuk ASa	191,718		546,854
			1,081,723

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2009

Security	Shares	Value
TELECOMMUNICATIONS – 12.69%
Turk Telekomunikasyon AS	2,440,315	$	7,448,612
Turkcell Iletisim Hizmetleri AS	3,588,320		23,316,308
			30,764,920
TEXTILES – 0.14%
Bossa Ticaret ve Sanayi Isletmeleri TASa	185,859		346,821
			346,821
TRANSPORTATION – 0.09%
Celebi Hava Servisi AS	28,182		217,868
			217,868
TOTAL COMMON STOCKS (Cost: $230,417,506)			236,554,898
SHORT-TERM INVESTMENTS – 13.13%
MONEY MARKET FUNDS – 13.13%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%c,d,e	25,502,056		25,502,056
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	3,597,467		3,597,467
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	2,734,052		2,734,052
			31,833,575
TOTAL SHORT-TERM INVESTMENTS
(Cost: $31,833,575)			31,833,575
TOTAL INVESTMENTS IN SECURITIES – 110.71% (Cost: $262,251,081)			268,388,473
Other Assets, Less Liabilities – (10.71)%			(25,953,664	)
NET ASSETS – 100.00%		$	242,434,809

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

^b Non-income earning security.

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

48 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Brazil Index Fund			BRIC Index Fund			Canada Index Fund			Chile Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	6,133,552,174		$	518,799,385		$	2,766,636,910		$	228,811,699
Affiliated issuers (Note 2)		35,942,838			18,411,450			10,114,322			451,456
Total cost of investments	$	6,169,495,012		$	537,210,835		$	2,776,751,232		$	229,263,155
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	8,715,760,311		$	496,224,684		$	2,388,480,984		$	262,939,371
Affiliated issuers (Note 2)		35,942,838			18,411,450			10,114,322			451,456
Total fair value of investments		8,751,703,149			514,636,134			2,398,595,306			263,390,827
Foreign currencies, at valueb		12,920,541			492,170			4,124,076			–
Cash		–			–			137,568			–
Receivables:
Investment securities sold		118,424,661			2,565,231			1,671,575			22,412,337
Due from custodian (Note 4)		–			89,099			–			–
Dividends and interest		48,836,441			913,926			2,533,129			34,655
Capital shares sold		–			–			31,945			–
Interest from affiliate (Note 2)		202,198			865			61,546			559
Total Assets		8,932,086,990			518,697,425			2,407,155,145			285,838,378
LIABILITIES
Payables:
Investment securities purchased		–			3,170,130			3,107,020			2,090,900
Collateral for securities on loan (Note 5)		30,581,900			17,396,615			9,302,830			–
Capital shares redeemed		119,274,588			–			–			20,373,745
Investment advisory fees (Note 2)		4,864,019			291,807			1,107,739			168,854
Total Liabilities		154,720,507			20,858,552			13,517,589			22,633,499
NET ASSETS	$	8,777,366,483		$	497,838,873		$	2,393,637,556		$	263,204,879
Net assets consist of:
Paid-in capital	$	7,142,377,956		$	538,313,483		$	2,914,334,836		$	252,166,060
Undistributed net investment income		71,899,211			1,242,283			9,728,466			553,151
Accumulated net realized loss		(1,020,608,105	)		(19,156,333	)		(152,206,990	)		(23,642,017	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		2,583,697,421			(22,560,560	)		(378,218,756	)		34,127,685
NET ASSETS	$	8,777,366,483		$	497,838,873		$	2,393,637,556		$	263,204,879
Shares outstandingc		150,650,000			13,250,000			101,000,000			5,900,000
Net asset value per share	$	58.26		$	37.57		$	23.70		$	44.61

^a Securities on loan with values of $30,656,490, $16,505,912, $8,500,569 and $–, respectively. See Note 5.

^b Cost of foreign currencies: $13,000,521, $494,086, $4,167,667 and $–, respectively.

^c $0.001 par value, number of shares authorized: 500 million, 500 million, 340.2 million and 200 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 49

Statements of Assets and Liabilities (Continued)

iSHARES^®, INC.

August 31, 2009

	iShares MSCI
	Israel Capped Investable Market Index Fund			Mexico Investable Market Index Fund			South Africa Index Fund			Turkey Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	129,708,160		$	901,517,035		$	547,579,081		$	230,417,506
Affiliated issuers (Note 2)		12,054,270			29,647,075			2,462,156			31,833,575
Total cost of investments	$	141,762,430		$	931,164,110		$	550,041,237		$	262,251,081
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	107,321,238		$	693,446,927		$	487,896,609		$	236,554,898
Affiliated issuers (Note 2)		12,054,270			29,647,075			2,462,156			31,833,575
Total fair value of investments		119,375,508			723,094,002			490,358,765			268,388,473
Foreign currencies, at valueb		190,976			478,638			1,062,860			5,501
Receivables:
Investment securities sold		5,078,800			9,241,464			3,948,733			292,961
Due from custodian (Note 4)		–			–			–			14,431,110
Dividends and interest		134,341			33,065			58,716			85,779
Capital shares sold		–			–			–			5,784,810
Interest from affiliate (Note 2)		506			49,220			24,520			313
Total Assets		124,780,131			732,896,389			495,453,594			288,988,947
LIABILITIES
Payables:
Investment securities purchased		4,896,473			8,825,666			4,028,729			17,004,486
Collateral for securities on loan (Note 5)		12,034,097			29,480,937			2,450,000			29,099,523
Capital shares redeemed		–			–			–			347,183
Investment advisory fees (Note 2)		57,536			312,167			246,596			102,946
Total Liabilities		16,988,106			38,618,770			6,725,325			46,554,138
NET ASSETS	$	107,792,025		$	694,277,619		$	488,728,269		$	242,434,809
Net assets consist of:
Paid-in capital	$	143,079,922		$	937,212,839		$	599,820,942		$	246,708,527
Undistributed net investment income		339,150			2,841,028			2,312,820			181,540
Accumulated net realized loss		(13,244,801	)		(37,690,252	)		(53,722,704	)		(10,593,609	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		(22,382,246	)		(208,085,996	)		(59,682,789	)		6,138,351
NET ASSETS	$	107,792,025		$	694,277,619		$	488,728,269		$	242,434,809
Shares outstandingc		2,300,000			16,300,000			9,400,000			5,050,000
Net asset value per share	$	46.87		$	42.59		$	51.99		$	48.01

^a Securities on loan with values of $11,577,954, $27,589,271, $2,236,530 and $26,868,070, respectively. See Note 5.

^b Cost of foreign currencies: $186,483, $493,152, $1,063,181 and $5,474, respectively.

^c $0.001 par value, number of shares authorized: 500 million, 255 million, 400 million and 200 million, respectively.

See notes to financial statements.

50 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI
	Brazil Index Fund			BRIC Index Fund			Canada Index Fund			Chile Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	229,640,985		$	4,727,135		$	37,058,043		$	4,934,078
Interest from affiliated issuers (Note 2)		31,370			643			1,770			924
Securities lending income from affiliated issuers (Note 2)		115,096			118,351			12,523			–
Interest from affiliate (Note 2)		202,198			865			61,546			559
Total investment income		229,989,649			4,846,994			37,133,882			4,935,561
EXPENSES
Investment advisory fees (Note 2)		37,144,779			1,342,844			8,045,646			1,223,935
Foreign taxes (Note 1)		–			–			2,647			–
Total expenses		37,144,779			1,342,844			8,048,293			1,223,935
Net investment income		192,844,870			3,504,150			29,085,589			3,711,626
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(966,983,543	)		(17,535,795	)		(130,780,450	)		(21,906,472	)
In-kind redemptions		–			28,138			42,179,958			–
Foreign currency transactions		3,709,324			58,270			(64,888	)		63,861
Net realized loss		(963,274,219	)		(17,449,387	)		(88,665,380	)		(21,842,611	)
Net change in unrealized appreciation (depreciation) on:
Investments		236,653,772			15,986,069			(320,304,868	)		41,660,146
Translation of assets and liabilities in foreign currencies		1,523,504			14,546			29,272			(243	)
Net change in unrealized appreciation (depreciation)		238,177,276			16,000,615			(320,275,596	)		41,659,903
Net realized and unrealized gain (loss)		(725,096,943	)		(1,448,772	)		(408,940,976	)		19,817,292
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(532,252,073	)	$	2,055,378		$	(379,855,387	)	$	23,528,918

^a Net of foreign withholding tax of $16,381,092, $384,996, $6,538,576 and $1,740,144, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 51

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI
	Israel Capped Investable Market Index Fund			Mexico Investable Market Index Fund			South Africa Index Fund			Turkey Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	3,341,215		$	9,158,822		$	17,571,976		$	2,499,826
Interest from affiliated issuers (Note 2)		431			852			371			341
Securities lending income from affiliated issuers (Note 2)		144,631			426,787			9,329			678,779
Interest from affiliate (Note 2)		506			49,220			24,520			313
Total investment income		3,486,783			9,635,681			17,606,196			3,179,259
EXPENSES
Investment advisory fees (Note 2)		692,048			2,962,618			2,109,421			680,004
Total expenses		692,048			2,962,618			2,109,421			680,004
Net investment income		2,794,735			6,673,063			15,496,775			2,499,255
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(14,793,418	)		(112,684,788	)		(41,624,499	)		(15,513,679	)
In-kind redemptions		(17,382,150	)		(153,865,339	)		(10,357,558	)		9,734,589
Foreign currency transactions		30,349			(277,498	)		372,386			139
Net realized loss		(32,145,219	)		(266,827,625	)		(51,609,671	)		(5,778,951	)
Net change in unrealized appreciation (depreciation) on:
Investments		2,012,777			12,188,628			22,379,479			4,881,902
Translation of assets and liabilities in foreign currencies		2,288			13,790			(9,145	)		(2,269	)
Net change in unrealized appreciation (depreciation)		2,015,065			12,202,418			22,370,334			4,879,633
Net realized and unrealized loss		(30,130,154	)		(254,625,207	)		(29,239,337	)		(899,318	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(27,335,419	)	$	(247,952,144	)	$	(13,742,562	)	$	1,599,937

^a Net of foreign withholding tax of $721,049, $–, $– and $251,218, respectively.

See notes to financial statements.

52 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Brazil Index Fund						iShares MSCI BRIC Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Period from November 12, 2007a to August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	192,844,870		$	177,141,014		$	3,504,150		$	1,398,623
Net realized gain (loss)		(963,274,219	)		6,541,539			(17,449,387	)		(1,479,711	)
Net change in unrealized appreciation (depreciation)		238,177,276			603,064,052			16,000,615			(38,561,175	)
Net increase (decrease) in net assets resulting from operations		(532,252,073	)		786,746,605			2,055,378			(38,642,263	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(222,728,833	)		(134,522,596	)		(3,193,491	)		(531,173	)
From net realized gain		–			(39,856,665	)		–			–
Total distributions to shareholders		(222,728,833	)		(174,379,261	)		(3,193,491	)		(531,173	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		3,187,809,782			2,833,440,415			340,101,221			205,181,301
Cost of shares redeemed		(897,722,395	)		(637,881,395	)		(2,215,782	)		(4,916,318	)
Net increase in net assets from capital share transactions		2,290,087,387			2,195,559,020			337,885,439			200,264,983
INCREASE IN NET ASSETS		1,535,106,481			2,807,926,364			336,747,326			161,091,547
NET ASSETS
Beginning of period		7,242,260,002			4,434,333,638			161,091,547			–
End of period	$	8,777,366,483		$	7,242,260,002		$	497,838,873		$	161,091,547
Undistributed net investment income included in net assets at end of period	$	71,899,211		$	96,234,801		$	1,242,283		$	873,068
SHARES ISSUED AND REDEEMED
Shares sold		69,150,000			35,200,000			9,700,000			3,750,000
Shares redeemed		(17,350,000	)		(8,350,000	)		(100,000	)		(100,000	)
Net increase in shares outstanding		51,800,000			26,850,000			9,600,000			3,650,000

^a Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 53

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Canada Index Fund						iShares MSCI Chile Investable Market Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Period from November 12, 2007a to August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	29,085,589		$	28,262,646		$	3,711,626		$	1,031,995
Net realized gain (loss)		(88,665,380	)		226,766,651			(21,842,611	)		(1,749,702	)
Net change in unrealized appreciation (depreciation)		(320,275,596	)		(314,958,113	)		41,659,903			(7,532,218	)
Net increase (decrease) in net assets resulting from operations		(379,855,387	)		(59,928,816	)		23,528,918			(8,249,925	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(29,274,634	)		(30,808,204	)		(3,316,556	)		(923,618	)
Total distributions to shareholders		(29,274,634	)		(30,808,204	)		(3,316,556	)		(923,618	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,115,573,096			1,696,598,321			234,309,554			85,331,722
Cost of shares redeemed		(383,866,414	)		(857,922,549	)		(67,475,216	)		–
Net increase in net assets from capital share transactions		731,706,682			838,675,772			166,834,338			85,331,722
INCREASE IN NET ASSETS		322,576,661			747,938,752			187,046,700			76,158,179
NET ASSETS
Beginning of period		2,071,060,895			1,323,122,143			76,158,179			–
End of period	$	2,393,637,556		$	2,071,060,895		$	263,204,879		$	76,158,179
Undistributed net investment income included in net assets at end of period	$	9,728,466		$	9,982,399		$	553,151		$	94,220
SHARES ISSUED AND REDEEMED
Shares sold		50,600,000			51,400,000			5,850,000			1,700,000
Shares redeemed		(17,400,000	)		(27,900,000	)		(1,650,000	)		–
Net increase in shares outstanding		33,200,000			23,500,000			4,200,000			1,700,000

^a Commencement of operations.

See notes to financial statements.

54 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI Israel Capped Investable Market Index Fund						iShares MSCI Mexico Investable Market Index Fund
	Year ended August 31, 2009			Period from March 26, 2008a to August 31, 2008			Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,794,735		$	391,358		$	6,673,063		$	33,095,718
Net realized gain (loss)		(32,145,219	)		(725,469	)		(266,827,625	)		92,956,713
Net change in unrealized appreciation (depreciation)		2,015,065			(24,397,311	)		12,202,418			(246,927,980	)
Net decrease in net assets resulting from operations		(27,335,419	)		(24,731,422	)		(247,952,144	)		(120,875,549	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(2,877,576	)		–			(9,905,910	)		(35,045,653	)
Total distributions to shareholders		(2,877,576	)		–			(9,905,910	)		(35,045,653	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,502,612			246,546,176			800,186,831			1,921,692,035
Cost of shares redeemed		(67,698,624	)		(17,613,722	)		(803,735,494	)		(2,192,896,147	)
Net increase (decrease) in net assets from capital share transactions		(66,196,012	)		228,932,454			(3,548,663	)		(271,204,112	)
INCREASE (DECREASE) IN NET ASSETS		(96,409,007	)		204,201,032			(261,406,717	)		(427,125,314	)
NET ASSETS
Beginning of period		204,201,032			–			955,684,336			1,382,809,650
End of period	$	107,792,025		$	204,201,032		$	694,277,619		$	955,684,336
Undistributed net investment income included in net assets at end of period	$	339,150		$	386,993		$	2,841,028		$	6,351,373
SHARES ISSUED AND REDEEMED
Shares sold		50,000			4,550,000			22,900,000			33,000,000
Shares redeemed		(1,950,000	)		(350,000	)		(25,000,000	)		(38,300,000	)
Net increase (decrease) in shares outstanding		(1,900,000	)		4,200,000			(2,100,000	)		(5,300,000	)

^a Commencement of operations.

See notes to financial statements.

FINANCIAL STATEMENTS 55

Statements of Changes in Net Assets (Continued)

iSHARES^®, INC.

	iShares MSCI South Africa Index Fund						iShares MSCI Turkey Investable Market Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008			Year ended August 31, 2009			Period from March 26, 2008a to August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	15,496,775		$	21,715,225		$	2,499,255		$	889,219
Net realized gain (loss)		(51,609,671	)		18,841,989			(5,778,951	)		(461,842	)
Net change in unrealized appreciation (depreciation)		22,370,334			(115,088,724	)		4,879,633			1,258,718
Net increase (decrease) in net assets resulting from operations		(13,742,562	)		(74,531,510	)		1,599,937			1,686,095
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(16,108,974	)		(25,634,161	)		(3,253,085	)		–
Total distributions to shareholders		(16,108,974	)		(25,634,161	)		(3,253,085	)		–
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		240,171,487			405,639,896			172,031,636			152,861,063
Cost of shares redeemed		(151,246,258	)		(342,759,905	)		(79,964,959	)		(2,525,878	)
Net increase in net assets from capital share transactions		88,925,229			62,879,991			92,066,677			150,335,185
INCREASE (DECREASE) IN NET ASSETS		59,073,693			(37,285,680	)		90,413,529			152,021,280
NET ASSETS
Beginning of period		429,654,576			466,940,256			152,021,280			–
End of period	$	488,728,269		$	429,654,576		$	242,434,809		$	152,021,280
Undistributed net investment income included in net assets at end of period	$	2,312,820		$	2,552,633		$	181,540		$	911,749
SHARES ISSUED AND REDEEMED
Shares sold		5,600,000			5,800,000			4,250,000			2,950,000
Shares redeemed		(3,900,000	)		(5,600,000	)		(2,100,000	)		(50,000	)
Net increase in shares outstanding		1,700,000			200,000			2,150,000			2,900,000

^a Commencement of operations.

See notes to financial statements.

56 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Brazil Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	73.27		$	61.59		$	39.09		$	28.18		$	16.96
Income from investment operations:
Net investment incomea		1.56			1.93			1.09			1.00			0.89
Net realized and unrealized gain (loss)b		(14.63	)		11.59			22.35			10.49			10.79
Total from investment operations		(13.07	)		13.52			23.44			11.49			11.68
Less distributions from:
Net investment income		(1.94	)		(1.41	)		(0.94	)		(0.58	)		(0.46	)
Net realized gain		–			(0.43	)		–			–			–
Total distributions		(1.94	)		(1.84	)		(0.94	)		(0.58	)		(0.46	)
Net asset value, end of year	$	58.26		$	73.27		$	61.59		$	39.09		$	28.18
Total return		(16.05	)%		21.58	%		60.82	%		41.13	%		69.72	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	8,777,366		$	7,242,260		$	4,434,334		$	2,468,295		$	552,285
Ratio of expenses to average net assets		0.65	%		0.63	%		0.69	%		0.70	%		0.74	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			0.63	%		0.68	%		n/a			n/a
Ratio of net investment income to average net assets		3.38	%		2.37	%		2.17	%		2.65	%		3.94	%
Portfolio turnover ratec		30	%		30	%		22	%		15	%		48	%

^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, 2009, August 31, 2008, August 31, 2007, August 31, 2006 and August 31, 2005 would have been 14%, 19%, 6%, 13% and 9%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 57

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI BRIC Index Fund
	Year ended Aug. 31, 2009			Period from Nov. 12, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	44.13		$	56.50
Income from investment operations:
Net investment incomeb		0.58			0.72
Net realized and unrealized lossc		(6.60	)		(12.93	)
Total from investment operations		(6.02	)		(12.21	)
Less distributions from:
Net investment income		(0.54	)		(0.16	)
Total distributions		(0.54	)		(0.16	)
Net asset value, end of period	$	37.57		$	44.13
Total return		(13.08	)%		(21.65	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	497,839		$	161,092
Ratio of expenses to average net assetse		0.72	%		0.72	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			0.72	%
Ratio of net investment income to average net assetse		1.87	%		1.74	%
Portfolio turnover ratef		7	%		9	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

^f Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the year ended August 31, 2009 and the period ended August 31, 2008 would have been 6% and 2%, respectively. See Note 4.

See notes to financial statements.

58 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Canada Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	30.55		$	29.87		$	24.69		$	20.30		$	14.33
Income from investment operations:
Net investment incomea		0.41			0.47			0.35			0.25			0.17
Net realized and unrealized gain (loss)b		(6.84	)		0.72			5.11			4.29			6.00
Total from investment operations		(6.43	)		1.19			5.46			4.54			6.17
Less distributions from:
Net investment income		(0.42	)		(0.51	)		(0.28	)		(0.15	)		(0.20	)
Total distributions		(0.42	)		(0.51	)		(0.28	)		(0.15	)		(0.20	)
Net asset value, end of year	$	23.70		$	30.55		$	29.87		$	24.69		$	20.30
Total return		(20.51	)%		3.88	%		22.33	%		22.46	%		43.35	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	2,393,638		$	2,071,061		$	1,323,122		$	1,101,161		$	420,301
Ratio of expenses to average net assets		0.55	%		0.52	%		0.52	%		0.54	%		0.57	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.55	%		n/a			0.52	%		n/a			n/a
Ratio of net investment income to average net assets		2.00	%		1.46	%		1.32	%		1.09	%		1.00	%
Portfolio turnover ratec		6	%		11	%		8	%		20	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 59

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Chile Investable Market Index Fund
	Year ended Aug. 31, 2009			Period from Nov. 12, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	44.80		$	48.84
Income from investment operations:
Net investment incomeb		0.76			0.92
Net realized and unrealized lossc		(0.42	)		(4.38	)
Total from investment operations		0.34			(3.46	)
Less distributions from:
Net investment income		(0.53	)		(0.58	)
Total distributions		(0.53	)		(0.58	)
Net asset value, end of period	$	44.61		$	44.80
Total return		0.89	%		(7.15	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	263,205		$	76,158
Ratio of expenses to average net assetse		0.65	%		0.63	%
Ratio of net investment income to average net assetse		1.98	%		2.38	%
Portfolio turnover ratef		53	%		16	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

^f Portfolio turnover rates include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units solely for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the year ended August 31, 2009 and the period ended August 31, 2008 would have been 14% and 16%, respectively. See Note 4.

See notes to financial statements.

60 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Israel Capped Investable Market Index Fund
	Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	48.62		$	50.33
Income from investment operations:
Net investment incomeb		0.98			0.21
Net realized and unrealized lossc		(1.75	)		(1.92	)
Total from investment operations		(0.77	)		(1.71	)
Less distributions from:
Net investment income		(0.98	)		–
Total distributions		(0.98	)		–
Net asset value, end of period	$	46.87		$	48.62
Total return		(0.63	)%		(3.40	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	107,792		$	204,201
Ratio of expenses to average net assetse		0.66	%		0.63	%
Ratio of net investment income to average net assetse		2.66	%		0.93	%
Portfolio turnover ratef		27	%		8	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

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

See notes to financial statements.

FINANCIAL HIGHLIGHTS 61

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Mexico Investable Market Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	51.94		$	58.35		$	41.30		$	29.04		$	19.35
Income from investment operations:
Net investment incomea		0.43			1.40			0.64			0.76			0.42
Net realized and unrealized gain (loss)b		(9.17	)		(6.21	)		16.87			11.98			9.55
Total from investment operations		(8.74	)		(4.81	)		17.51			12.74			9.97
Less distributions from:
Net investment income		(0.61	)		(1.60	)		(0.46	)		(0.48	)		(0.28	)
Total distributions		(0.61	)		(1.60	)		(0.46	)		(0.48	)		(0.28	)
Net asset value, end of year	$	42.59		$	51.94		$	58.35		$	41.30		$	29.04
Total return		(16.50	)%		(8.44	)%		42.58	%		44.11	%		51.77	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	694,278		$	955,684		$	1,382,810		$	764,107		$	255,557
Ratio of expenses to average net assets		0.55	%		0.52	%		0.51	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		1.25	%		2.42	%		1.19	%		2.06	%		1.70	%
Portfolio turnover ratec		13	%		13	%		14	%		12	%		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.

See notes to financial statements.

62 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI South Africa Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a			Year ended Aug. 31, 2005a
Net asset value, beginning of year	$	55.80		$	62.26		$	48.84		$	41.50		$	29.96
Income from investment operations:
Net investment incomeb		1.94			2.28			1.50			1.44			0.96
Net realized and unrealized gain (loss)c		(3.84	)		(6.02	)		13.18			6.89			11.18
Total from investment operations		(1.90	)		(3.74	)		14.68			8.33			12.14
Less distributions from:
Net investment income		(1.91	)		(2.72	)		(1.26	)		(0.99	)		(0.60	)
Total distributions		(1.91	)		(2.72	)		(1.26	)		(0.99	)		(0.60	)
Net asset value, end of year	$	51.99		$	55.80		$	62.26		$	48.84		$	41.50
Total return		(2.23	)%		(6.18	)%		30.34	%		20.06	%		40.62	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	488,728		$	429,655		$	466,940		$	297,898		$	153,530
Ratio of expenses to average net assets		0.66	%		0.63	%		0.68	%		0.70	%		0.74	%
Ratio of net investment income to average net assets		4.81	%		3.61	%		2.58	%		2.79	%		2.62	%
Portfolio turnover rated		16	%		21	%		8	%		7	%		32	%

^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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 63

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Turkey Investable Market Index Fund
	Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	52.42		$	50.30
Income from investment operations:
Net investment incomeb		0.78			0.83
Net realized and unrealized gain (loss)c		(4.22	)		1.29
Total from investment operations		(3.44	)		2.12
Less distributions from:
Net investment income		(0.97	)		–
Total distributions		(0.97	)		–
Net asset value, end of period	$	48.01		$	52.42
Total return		(5.56	)%		4.22	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	242,435		$	152,021
Ratio of expenses to average net assetse		0.65	%		0.63	%
Ratio of net investment income to average net assetse		2.39	%		3.78	%
Portfolio turnover ratef		16	%		27	%

^a Commencement of operations.

^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 Not annualized.

^e Annualized for periods of less than one year.

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

See notes to financial statements.

64 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements

iSHARES^®, INC.

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

These financial statements relate only to the iShares MSCI Brazil, iShares MSCI BRIC, iShares MSCI Canada, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI Mexico Investable Market, iShares MSCI South Africa and iShares MSCI Turkey Investable Market Index Funds (each, a “Fund,” collectively, the “Funds”).

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

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of each Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”). Effective September 1, 2008, the Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to

NOTES TO FINANCIAL STATEMENTS 65

Notes to Financial Statements (Continued)

iSHARES^®, INC.

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”);

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”);

• Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”).

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.

The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and

66 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Funds in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds’ results of operations.

Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn, could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

As of August 31, 2009, the values of each Fund’s investments were classified as Level 1 Prices. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a rate different from the rates used by MSCI may adversely affect a Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

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

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of August 31, 2009, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

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

NOTES TO FINANCIAL STATEMENTS 67

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2009, the tax year-end of the Funds, the components of net distributable earnings (accumulated losses) on a tax basis were as follows:

iShares MSCI Index Fund	Undistributed Ordinary Income		Unrealized Appreciation (Depreciation)			Capital Losses and Other Losses			Net Distributable Earnings (Accumulated Losses)
Brazil	$	186,944,880	$	1,960,161,121		$	(512,319,672	)	$	1,634,786,329
BRIC		1,791,521		(30,148,532	)		(12,118,464	)		(40,475,475	)
Canada		9,676,888		(419,845,407	)		(110,590,307	)		(520,758,826	)
Chile Investable Market		552,592		23,617,169			(13,131,501	)		11,038,260
Israel Capped Investable Market		573,424		(24,222,515	)		(11,639,312	)		(35,288,403	)
Mexico Investable Market		2,791,808		(227,001,173	)		(18,775,075	)		(242,984,440	)
South Africa		2,502,953		(80,056,097	)		(33,564,049	)		(111,117,193	)
Turkey Investable Market		839,167		1,590,175			(6,703,373	)		(4,274,031	)

For the years ended August 31, 2009 and August 31, 2008, the tax characterization of distributions paid for each Fund was equal to the book characterization of distributions paid except for the iShares MSCI Brazil Index Fund. The tax character of distributions paid during the years ended August 31, 2009 and August 31, 2008 for the iShares MSCI Brazil Index Fund was as follows:

	2009		2008
Distributions paid from:
Ordinary income	$	222,728,833	$	146,451,597
Long-term capital gain		–		27,927,664
Total Distributions	$	222,728,833	$	174,379,261

The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for all Funds.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carry forwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2009.

68 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

From November 1, 2008 to August 31, 2009, the Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2010 as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Brazil	$	483,032,219
BRIC		10,577,724
Canada		69,301,014
Chile Investable Market		11,244,620

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Israel Capped Investable Market	$	10,854,833
Mexico Investable Market		2,789,472
South Africa		14,856,365
Turkey Investable Market		5,982,737

The Funds had tax basis net capital loss carry forwards as of August 31, 2009, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund

Expiring 2010

Expiring 2011

Expiring 2012

Expiring 2013

Expiring 2014

Expiring 2015

Expiring 2016

Expiring 2017

Total

Brazil

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

29,287,453

$

29,287,453

BRIC

–

–

–

–

–

–

–

1,540,740

1,540,740

Canada

–

–

–

2,931,648

–

5,363,291

5,107,471

27,886,883

41,289,293

Chile Investable Market

–

–

–

–

–

–

–

1,886,881

1,886,881

Israel Capped Investable Market

–

–

–

–

–

–

–

784,479

784,479

Mexico Investable Market

47,326

2,329,290

3,136,171

12,912

632,766

–

853,150

8,973,988

15,985,603

South Africa

–

–

527,613

–

260,738

1,607,845

972,024

15,339,464

18,707,684

Turkey Investable Market

–

–

–

–

–

–

–

720,636

720,636

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

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

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

NOTES TO FINANCIAL STATEMENTS 69

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2009, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

iShares MSCI Index Fund	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Brazil	$	6,793,031,312	$	2,011,165,402	$	(52,493,565	)	$	1,958,671,837
BRIC		544,798,807		13,238,909		(43,401,582	)		(30,162,673	)
Canada		2,818,377,883		–		(419,782,577	)		(419,782,577	)
Chile Investable Market		239,773,671		23,977,825		(360,669	)		23,617,156
Israel Capped Investable Market		143,602,699		5,334,095		(29,561,286	)		(24,227,191	)
Mexico Investable Market		950,079,287		–		(226,985,285	)		(226,985,285	)
South Africa		570,414,545		–		(80,055,780	)		(80,055,780	)
Turkey Investable Market		266,799,257		10,121,511		(8,532,295	)		1,589,216

Management has reviewed the tax positions as of August 31, 2009, inclusive of the prior three open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

For its investment advisory services to the iShares MSCI Canada and iShares MSCI Mexico Investable Market Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.59%	First $7 billion
0.54	Over $7 billion, up to and including $11 billion
0.49	Over $11 billion, up to and including $24 billion
0.44	Over $24 billion, up to and including $48 billion
0.40	Over $48 billion

70 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

For its investment advisory services to the iShares MSCI Brazil, iShares MSCI Chile Investable Market, iShares MSCI Israel Capped Investable Market, iShares MSCI South Africa and iShares MSCI Turkey Investable Market Index Funds, BGFA is entitled to an annual investment advisory fee based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.74%	First $2 billion
0.69	Over $2 billion, up to and including $4 billion
0.64	Over $4 billion, up to and including $8 billion
0.57	Over $8 billion, up to and including $16 billion
0.51	Over $16 billion

For its investment advisory services to the iShares MSCI BRIC Index Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.75%	First $14 billion
0.68	Over $14 billion, up to and including $28 billion
0.61	Over $28 billion

Under the terms of the Investment Advisory Agreement, the Funds are required to remit payment of accrued fees to BGFA on a quarterly basis. BGFA has determined that in certain cases such payments to BGFA by the Funds were made earlier than provided for under the Investment Advisory Agreement. BGFA will reimburse the Funds for interest that would have been earned had such payments been made on a quarterly basis. The amounts to be reimbursed are included under receivables and investment income as “Interest from affiliate” in the Statements of Assets and Liabilities and Statements of Operations, respectively. The reimbursements do not have a material effect on net asset value per share or the total return shown in the Financial Highlights.

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Funds. BarCap and BGI are affiliates of BGFA, the Funds’ investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended August 31, 2009, BGI earned securities lending agent fees as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Brazil	$	115,096
BRIC		118,351
Canada		12,523
Israel Capped Investable Market		144,631
Mexico Investable Market		426,787
South Africa		9,329
Turkey Investable Market		678,779

NOTES TO FINANCIAL STATEMENTS 71

Notes to Financial Statements (Continued)

iSHARES^®, INC.

Cross trades for the year ended August 31, 2009, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

Each Fund may invest in certain money market funds managed by BGFA, the Funds’ investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. These money market funds seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2009 were as follows:

iShares MSCI Index Fund	Purchases		Sales
Brazil	$	3,996,665,118	$	1,756,894,885
BRIC		123,415,820		13,444,682
Canada		103,851,187		99,098,486
Chile Investable Market		264,444,582		97,344,027
Israel Capped Investable Market		29,823,274		29,643,071
Mexico Investable Market		71,691,505		74,949,711
South Africa		54,057,827		53,924,515
Turkey Investable Market		26,948,893		18,747,391

72 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

In-kind transactions (see Note 4) for the year ended August 31, 2009 were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
BRIC	$	228,624,505	$	1,439,655
Canada		1,108,587,910		381,288,412
Israel Capped Investable Market		1,493,955		67,383,457
Mexico Investable Market		798,376,981		802,271,196
South Africa		239,104,614		150,621,191
Turkey Investable Market		153,492,024		76,076,302

4. CAPITAL SHARE TRANSACTIONS

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

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the corresponding MSCI Index and an amount of cash (except for the iShares MSCI Brazil, iShares MSCI BRIC and iShares MSCI Chile Investable Market Index Funds which are offered in Creation Units solely or partially for cash in U.S. dollars). Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash pay an additional variable charge to compensate the relevant Fund for brokerage and market impact expenses relating to investing in portfolio securities.

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

5. LOANS OF PORTFOLIO SECURITIES

Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Funds of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a Fund or through one or more joint accounts or money market funds, including those managed by BGFA; such reinvestments are subject to investment risk.

As of August 31, 2009, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BGFA. The market value of the securities on loan as of August 31, 2009 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of

NOTES TO FINANCIAL STATEMENTS 73

Notes to Financial Statements (Continued)

iSHARES^®, INC.

Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

6. BLACKROCK TRANSACTION

On June 16, 2009, Barclays PLC, the ultimate parent company of BGFA and BGI, accepted a binding offer and entered into an agreement to sell its interests in BGFA, BGI and certain affiliated companies, to BlackRock, Inc., (the “BlackRock Transaction”). The BlackRock Transaction is subject to certain regulatory approvals, as well as other conditions to closing.

Under the 1940 Act, completion of the BlackRock Transaction will cause the automatic termination of each Fund’s current investment advisory agreement with BGFA. In order for the management of each Fund to continue uninterrupted, the Board approved a new investment advisory agreement for each Fund subject to shareholder approval. A special meeting of shareholders of the Funds is scheduled to be held on November 4, 2009. Each shareholder of record as of the close of business on August 25, 2009 will receive notice of and be entitled to vote at the meeting.

7. REVIEW OF SUBSEQUENT EVENTS

In connection with the preparation of the financial statements of the Funds as of and for the year ended August 31, 2009, events and transactions through October 23, 2009, the date the financial statements are available to be issued, have been evaluated by the Funds’ management for possible adjustment and/or disclosure. No subsequent events requiring financial statement disclosure have been identified.

74 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Brazil Index Fund, iShares MSCI BRIC Index Fund, iShares MSCI Canada Index Fund, iShares MSCI Chile Investable Market Index Fund, iShares MSCI Israel Capped Investable Market Index Fund, iShares MSCI Mexico Investable Market Index Fund, iShares MSCI South Africa Index Fund, and iShares MSCI Turkey Investable Market Index Fund, each a portfolio of the iShares MSCI Series (the “Funds”), at August 31, 2009, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 23, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 75

Tax Information (Unaudited)

iSHARES^®, INC.

For the fiscal year ended August 31, 2009, certain Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”) as follows:

iShares MSCI Index Fund	Foreign Source Income Earned		Foreign Taxes Paid
Brazil	$	246,022,077	$	15,261,417
BRIC		5,112,131		378,011
Canada		43,596,619		6,399,747
Chile Investable Market		6,674,222		1,733,849
Israel Capped Investable Market		4,062,264		721,014
Turkey Investable Market		2,751,044		250,270

Under Section 854(b)(2) of the Code, certain Funds hereby designate the following maximum amounts as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2009:

iShares MSCI Index Fund	Qualified Dividend Income
Brazil	$	8,503,096
BRIC		1,632,493
Canada		29,274,634
Israel Capped Investable Market		2,877,576

iShares MSCI Index Fund	Qualified Dividend Income
Mexico Investable Market	$	8,148,710
South Africa		16,108,974
Turkey Investable Market		2,174,278

In January 2010, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2009. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

76 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory

Contract (Unaudited)

iSHARES^®, INC.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Funds. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 16-17, 2009, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such Fund’s applicable peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Funds, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three-, five- and ten-year periods, as applicable, and the “last quarter” period ended March 31, 2009, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 77

Board Review and Approval of Current Investment Advisory

Contract (Unaudited) (Continued)

iSHARES^®, INC.

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

The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in their respective Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

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

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

ECONOMIES OF SCALE

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board noted that the Advisory Contract already provided for breakpoints in the investment advisory fee rates for each of the Funds as the assets of such Funds, on an aggregated basis with the assets of certain other iShares funds, increase, and that extended breakpoints were implemented for the Funds (except the iShares MSCI BRIC Index Fund) the previous year. The Board noted that the asset size of each of the Funds except the iShares MSCI BRIC Index Fund, the iShares MSCI Chile Investable Market Index Fund and the iShares MSCI Turkey Investable Market Index Fund decreased over the past twelve months. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark index comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, reflects appropriate sharing of economies of scale with the Funds’ shareholders.

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

The Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate

78 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory

Contract (Unaudited) (Continued)

iSHARES^®, INC.

of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for the Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as any of the Funds. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract for the coming year.

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 79

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)

iSHARES^®, INC.

On June 16, 2009, Barclays Bank PLC (“Barclays”) entered into an agreement to sell its interest in the Barclays Global Investors asset management business, which includes BGI and BGI’s business of advising, sponsoring and distributing exchange-traded funds, to BlackRock, Inc. (“BlackRock”). Assuming receipt of the requisite regulatory approvals and the satisfaction of other conditions to the closing, the subsidiaries of Barclays operating the BGI business, including BGFA (the “Adviser”), will be sold to BlackRock (the “Transaction”) for cash and BlackRock stock.

The Adviser currently serves as the investment adviser to each Fund pursuant to an investment advisory agreement with the Company (the “Current Advisory Agreement”). Under the 1940 Act, the Transaction, if consummated, will result in the automatic termination of the Current Advisory Agreement. In order for the management of each Fund to continue uninterrupted, the Board approved interim and new investment advisory agreements (the “New Advisory Agreements”) with the Company, subject to shareholder approval.

BOARD CONSIDERATIONS IN APPROVING THE NEW ADVISORY AGREEMENTS

At an in-person Board meeting held on August 13, 2009, the Board, including the Independent Directors, unanimously approved the New Advisory Agreements between the Adviser and the Company, on behalf of its Funds after consideration of all factors determined to be relevant to the Board’s deliberations, including those discussed below.

The Approval Process – At telephonic and in-person meetings held in June, July and August of this year, the Board, including the Independent Directors, discussed the Transaction and the New Advisory Agreements for the Funds.

In preparation for their consideration of the New Advisory Agreements, the Directors received, in response to a written due diligence request prepared by the Board and its independent counsel and provided to BlackRock, BGI and the Adviser, comprehensive written information covering a range of issues and received, in response to their additional requests, further information in advance of and at the August 13, 2009 in-person Board meeting. To assist the Board in its consideration of the New Advisory Agreements, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and the Adviser provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.

In June 2009, the Board had performed a full annual review of, or initially approved, as applicable, the current Investment Advisory Agreement between the Adviser and the Company, on behalf of its Funds for each Fund as required by the 1940 Act and, after reviewing, among other things, the investment capabilities, resources and personnel of the Adviser, determined that the nature, extent and quality of the services provided by the Adviser under the Current Advisory Agreements were appropriate. The Board also determined that the advisory fees paid by each Fund, taking into account any applicable agreed-upon fee waivers and breakpoints, were fair and reasonable in light of the services provided, the costs to the Adviser of providing those services, economies of scale, the fees and other expenses paid by similar funds (including information provided by Lipper, Inc. (“Lipper”)), and such other circumstances as the Directors considered relevant in the exercise of their reasonable judgment. The Board approved the Current Advisory Agreements on June 17, 2009.

In advance of the June 2009 Board meeting, the Board requested and received materials specifically relating to each Fund’s Current Advisory Agreement. These materials were prepared for each Fund, and included information (i) compiled by Lipper on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (ii) prepared by the Adviser discussing market conditions generally; (iii) on the profitability to the Adviser of the Current Advisory Agreements and other payments received by the Adviser and its affiliates from the Funds; and (iv) provided by the Adviser concerning services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to the Adviser and its affiliates from their relationship with the Fund.

80 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited) (Continued)

iSHARES^®, INC.

At the June 17, July 29 and August 13, 2009 Board meetings, the Directors discussed with representatives of BGI, the Adviser and BlackRock, the management, investment, risk management and compliance capabilities and processes, and financial condition of BlackRock, the Transaction and its rationale, and BlackRock’s general plans and intentions regarding the Adviser and the Funds. At these Board meetings, representatives of BGI, the Adviser and BlackRock made various presentations to, and responded to questions from, the Board. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of the Adviser in connection with the Transaction, including the anticipated senior management structure of the Adviser following the completion of the Transaction. The Independent Directors also conferred separately and with their independent legal counsel about the Transaction and other matters related to the Transaction on a number of occasions. After the presentations and after reviewing the written materials provided, the Independent Directors met in executive sessions with their independent legal counsel at the June, July and August 2009 Board meetings to consider the Transaction, its expected impact on the Adviser and the Funds, and the New Advisory Agreements.

In connection with the Board’s review of the New Advisory Agreements, BGI, the Adviser and/or BlackRock, as applicable, provided the Board with information about a variety of matters. The Board considered, among other things, the following information:

• the reputation, financial strength and resources of BlackRock and its investment advisory subsidiaries and the anticipated financial strength and resources of the combined company;

• that there is not expected to be any diminution in the nature, quality and extent of services provided to the Funds and their shareholders by the Adviser, including portfolio management and compliance services;

• that the Adviser and BlackRock have no present intention to alter the advisory fee rates and expense arrangements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction;

• that it is expected that substantially all of the current employees of the Adviser will remain employees of the Adviser and will continue to provide services to the Funds following the Transaction;

• that the Funds may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including investment tools, provided under the BlackRock Solutions^® brand name;

• that the Funds are expected to continue to be sold through existing distribution channels;

• that the Funds will have access to greater distribution resources through BlackRock’s relationships with third party brokers and retirement plan platforms;

• that the parties to the Transaction Agreement have agreed to conduct their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act in relation to the Funds;

• that Barclays or one of its affiliates has agreed to pay all expenses of the Funds in connection with the Board’s consideration of the New Advisory Agreements and all costs of seeking shareholder approval of the New Advisory Agreements; and

• that Barclays and BlackRock would derive benefits from the Transaction and that, as a result, they may have a different financial interest in the matters that were being considered than do Fund shareholders.

The Board did not identify any particular information that was all-important or controlling, and each Director may have attributed different weights to the various factors discussed below. The Directors evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. In their deliberations, the Directors considered information received

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 81

Board Review and Approval of New Investment Advisory

Agreements (Unaudited) (Continued)

iSHARES^®, INC.

in connection with their most recent approval or continuation of each Current Advisory Agreement at the June 2009 Board meeting, in addition to information provided by BGI, the Adviser and BlackRock regarding BlackRock and the Transaction, in connection with their evaluation of the terms and conditions of the New Advisory Agreements. The Directors, including a majority of the Independent Directors, concluded that the terms of the New Advisory Agreements are appropriate, that the fees to be paid are reasonable in light of the services to be provided to each Fund, and that the New Advisory Agreements should be approved and recommended to Fund shareholders. In voting to approve the New Advisory Agreements in respect of each Fund, the Board considered in particular the following factors:

The nature, extent and quality of services to be provided by the Adviser and its affiliates – In connection with their consideration of the New Advisory Agreements, the Board considered representations by the Adviser, BGI and BlackRock that there would be no diminution in the scope of services required of or provided by the Adviser under the New Advisory Agreements for each Fund as compared to the scope of services provided by the Adviser under the Current Advisory Agreement. In reviewing the scope of these services at the June and August 2009 Board meetings, the Board considered the Adviser’s investment philosophy and experience, noting that the Adviser and its affiliates have committed significant resources over time, including over the past year, including investments in technology and increasing the number of their employees supporting the Funds. The Board also considered the Adviser’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that the Adviser reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board noted that it expects that these reports and discussions will continue following the consummation of the Transaction. In addition to the above considerations, the Board considered the Adviser’s investment processes and strategies, and matters related to the Adviser’s portfolio transaction policies and procedures. The Board further took into account that, with respect to most of the Funds, the Adviser does not serve as investment adviser for other series of registered investment companies with substantially similar investment objectives and strategies; therefore, directly comparable performance information was generally not available for most Funds. The Board also considered each Fund’s record of performing in accordance with its investment objective.

In connection with the investment advisory services to be provided under the New Advisory Agreements, the Board took into account detailed discussions with representatives of the Adviser at the June 2009 Board meeting and at prior Board meetings regarding the management of each Fund. In addition to the investment advisory services to be provided to the Funds, the Board, at the August 2009 Board meeting, considered that the Adviser also will continue to provide management and administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements and other services necessary for the operation of the Funds, and that these services were expected to be consistent with the services the Adviser currently performs under the Current Advisory Agreements.

The Board noted the representations of the Adviser, BGI and BlackRock that the Transaction was not expected to have any adverse effect on the resources and strengths of the Adviser in managing the Funds. The Board also considered that the Funds and their shareholders may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. The Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business. The Board also discussed the Adviser’s anticipated financial condition following the completion of the Transaction. The Board discussed BlackRock’s current ownership structure and expected ownership structure following the completion of the Transaction. The Board was advised that BlackRock operates as an independent firm, with its own Board of Directors and no majority shareholder. The Board was also advised that while BlackRock’s largest shareholders, Merrill Lynch, a wholly owned subsidiary of Bank of America, and PNC, are important clients and strategic partners of BlackRock, they are not involved in the firm’s day-to-day management or operations.

82 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Based on the discussions held and the materials presented at the June, July and August 2009 Board meetings and prior Board meetings, the Board determined that the Transaction would not likely cause an adverse change in the nature, extent and quality of the services to be provided by the Adviser under the New Advisory Agreements compared with the services provided by the Adviser under the Current Advisory Agreements and that the Board expects that the quality of such services will continue to be appropriate.

Funds’ expenses and performance of the Funds – The Board received and reviewed statistical information prepared by Lipper at the June 2009 meeting and also received information at prior meetings regarding the expense ratio components of the Funds, including advisory fees, waivers and reimbursements, and gross and net total expenses, in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising a Fund’s peer group pursuant to Lipper’s proprietary methodology and, for certain Funds, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of the Adviser (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by most of the Funds, the Lipper Groups sometimes included mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to certain Funds.

The Board noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the Funds in their Lipper Groups with respect to the Current and New Advisory Agreements. The Board took into account that the fee rates for each Fund under the New Advisory Agreements are identical to the fee rates under the respective Current Advisory Agreements. Further, the Board noted that representatives of the Adviser and BlackRock had confirmed that there is no present intention to alter the advisory fee rates, expense waivers or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction.

In addition to reviewing the fees and expenses, the Board noted that it regularly reviews each Fund’s performance and at the June 2009 meeting reviewed statistical information prepared by Lipper regarding the performance of each Fund for the quarter-end, one-, three-, five-and ten-year periods, as applicable, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of the relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their performance benchmark indices over the relevant periods. In considering this information, the Board took into account that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indices. This comparative performance information was also considered by the Board. The Board considered the Adviser’s substantial investment advisory experience and capabilities, as well as the possibility of additional resources and support from BlackRock following the completion of the Transaction, but noted that the effect, if any, the consummation of the Transaction would have on the future performance of the Funds could not be predicted.

Based on this review, the Board had concluded that the investment advisory fee rates and expense levels and the historical performance of each Fund, as compared to the investment advisory fee rates and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Current Advisory Agreements and concluded that these comparisons continued to be satisfactory for the purpose of approving the New Advisory Agreements.

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Board Review and Approval of New Investment Advisory

Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Cost of services provided and profits realized by the Adviser from the relationship with each Fund – The Board considered that at the June 2009 Board meeting and at prior meetings, it had reviewed information about the profitability of the Adviser with respect to the Funds based on the fees payable to the Adviser and its affiliates (including fees under the Current Advisory Agreements), and all other sources of revenue and expense to the Adviser and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Companies (including any securities lending by the Funds). The Board also discussed the Adviser’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below).

In evaluating the costs of the services to be provided by the Adviser under the New Advisory Agreements, the Board considered, among other things, whether advisory fee rates or other expenses would change as a result of the Transaction. The Board noted that the New Advisory Agreements are similar to the Current Advisory Agreements, including the fact that the fee rates under the Agreements are identical and that representatives of the Adviser and BlackRock represented that there is no present intention due to the Transaction to alter the advisory fee rates, expense waiver or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction. It was noted that it was not possible to predict how the Transaction would affect the Adviser’s profitability from its relationship with the Funds. Potential cost savings had been described by BlackRock representatives that may be achieved by BlackRock immediately following the Transaction, but even if all of such savings were realized by the Adviser in connection with the management of the Funds, the Adviser’s profitability in respect of the Funds was not expected to increase in a significant respect. The Adviser, BlackRock and the Board discussed how profitability will be calculated and presented to the Board following the Transaction, and the Board reviewed BlackRock’s 2008 profitability methodology with respect to its registered funds. The Board expects to receive profitability information from the Adviser on at least an annual basis following the completion of the Transaction and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.

The extent to which economies of scale would be realized as a Fund grows and whether fee levels would reflect such economies of scale – In connection with its review of the Funds’ profitability analysis at the June 2009 meeting, the Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets. At the June 2009 Board meeting, the Board also reviewed the Adviser’s historic profitability as investment adviser to the iShares fund complex and noted that the Adviser had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that the Adviser had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. The Board further noted that the Current and New Advisory Agreements provide for breakpoints in certain Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other Funds, increase and that breakpoints were implemented the previous year for certain Funds. The Board noted that for certain other Funds, the Current and New Advisory Agreements do not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase; however, the Board further noted that possible future economies of scale for those Funds had, in many cases, been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders may have received from a fee structure with declining breakpoints where the initial fee was higher. At the June 2009 Board meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fee rates, with the breakpoints for certain Funds, reflected appropriate sharing of economies of scale with the Funds’ shareholders.

The Board noted representations from the Adviser and BlackRock that the Adviser will continue to make significant investments in the iShares fund complex and the infrastructure supporting the Funds. The Board determined that changes to the fee structure were not currently necessary and that the Funds appropriately participate in economies of scale. It was noted that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale. The Board expects to consider economies of scale on at least an annual basis following completion of the Transaction and thus be in a position to evaluate additional economies of scale, if any.

84 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Fees and services provided for other comparable funds/accounts managed by the Adviser and its Affiliates – At the June 2009 Board meeting, the Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Current Advisory Agreements in comparison to the investment advisory/management fee rates for other funds/accounts for which the Adviser or BGI provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for many of the Funds, as the Adviser and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as many of the Funds. The Board noted, however, that the Adviser provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Furthermore, in reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Current Advisory Agreements for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which the Adviser or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Current and New Advisory Agreements do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Current and New Advisory Agreements are fair and reasonable.

Other benefits to the Adviser and its affiliates, including fall-out benefits – In evaluating the fall-out and any other ancillary benefits received by the Adviser under the Current Advisory Agreements, the Board reviewed any ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser or its affiliates, such as any payment of revenue to BGI, the Company’s current securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to the Adviser and BGI in connection with any investments by the Funds in other funds for which the Adviser provides investment advisory services and/or BGI provides administration services. The Board noted that while revenue to BGI in connection with securities lending agency services to the Funds increased overall as against the previous year, overall revenue increased by approximately the same percentage as overall expenses. The Board noted that the Adviser does not use soft dollars or consider the value of research or other services that may be provided to the Adviser (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Adviser or purchased from an underwriting syndicate in which an Adviser affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. Any fall-out or ancillary benefits as a result of the Transaction were difficult to quantify with certainty at this time, and the Board indicated that it would continue to evaluate them going forward.

Conclusion – The Board examined the totality of the information they were provided at the June, July and August 2009 Board meetings, and information they received at other meetings held during the past year, and did not identify any single factor discussed previously as controlling. Based on this analysis, the Board determined that the New Advisory Agreements, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to unanimously approve the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 85

Supplemental Information (Unaudited)

iSHARES^®, INC.

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

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

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

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

iShares MSCI Brazil Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.0%	3	0.22	%
Greater than 3.5% and Less than 4.0%	1	0.07
Greater than 3.0% and Less than 3.5%	3	0.22
Greater than 2.5% and Less than 3.0%	5	0.36
Greater than 2.0% and Less than 2.5%	5	0.36
Greater than 1.5% and Less than 2.0%	13	0.94
Greater than 1.0% and Less than 1.5%	27	1.95
Greater than 0.5% and Less than 1.0%	113	8.18
Between 0.5% and –0.5%	1,040	75.26
Less than –0.5% and Greater than –1.0%	117	8.47
Less than –1.0% and Greater than –1.5%	19	1.37
Less than –1.5% and Greater than –2.0%	15	1.09
Less than –2.0% and Greater than –2.5%	7	0.51
Less than –2.5% and Greater than –3.0%	3	0.22
Less than –3.0% and Greater than –3.5%	2	0.14
Less than –3.5% and Greater than –4.0%	4	0.29
Less than –4.0% and Greater than –4.5%	1	0.07
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0%	2	0.14
	1,382	100.00	%

86 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI BRIC Index Fund

Period Covered: January 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 5.5%	3	0.80	%
Greater than 5.0% and Less than 5.5%	1	0.27
Greater than 4.5% and Less than 5.0%	2	0.53
Greater than 4.0% and Less than 4.5%	2	0.53
Greater than 3.5% and Less than 4.0%	2	0.53
Greater than 3.0% and Less than 3.5%	5	1.33
Greater than 2.5% and Less than 3.0%	8	2.13
Greater than 2.0% and Less than 2.5%	19	5.05
Greater than 1.5% and Less than 2.0%	23	6.12
Greater than 1.0% and Less than 1.5%	38	10.11
Greater than 0.5% and Less than 1.0%	71	18.88
Between 0.5% and –0.5%	123	32.70
Less than –0.5% and Greater than –1.0%	40	10.64
Less than –1.0% and Greater than –1.5%	16	4.26
Less than –1.5% and Greater than –2.0%	5	1.33
Less than –2.0% and Greater than –2.5%	8	2.13
Less than –2.5% and Greater than –3.0%	1	0.27
Less than –3.5% and Greater than –4.0%	2	0.53
Less than –4.0% and Greater than –4.5%	2	0.53
Less than –4.5% and Greater than –5.0%	2	0.53
Less than –5.0% and Greater than –5.5%	1	0.27
Less than –5.5%	2	0.53
	376	100.00	%

iShares MSCI Canada Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.0%	1	0.07	%
Greater than 3.5% and Less than 4.0%	1	0.07
Greater than 3.0% and Less than 3.5%	1	0.07
Greater than 2.5% and Less than 3.0%	2	0.14
Greater than 2.0% and Less than 2.5%	3	0.22
Greater than 1.5% and Less than 2.0%	3	0.22
Greater than 1.0% and Less than 1.5%	23	1.66
Greater than 0.5% and Less than 1.0%	148	10.71
Between 0.5% and –0.5%	1,102	79.75
Less than –0.5% and Greater than –1.0%	75	5.43
Less than –1.0% and Greater than –1.5%	18	1.30
Less than –1.5% and Greater than –2.0%	3	0.22
Less than –2.0%	2	0.14
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 87

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Chile Investable Market Index Fund

Period Covered: January 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.0%	3	0.80	%
Greater than 3.5% and Less than 4.0%	2	0.53
Greater than 3.0% and Less than 3.5%	1	0.27
Greater than 2.5% and Less than 3.0%	4	1.06
Greater than 2.0% and Less than 2.5%	7	1.86
Greater than 1.5% and Less than 2.0%	11	2.93
Greater than 1.0% and Less than 1.5%	39	10.37
Greater than 0.5% and Less than 1.0%	98	26.06
Between 0.5% and –0.5%	138	36.70
Less than –0.5% and Greater than –1.0%	36	9.57
Less than –1.0% and Greater than –1.5%	13	3.46
Less than –1.5% and Greater than –2.0%	11	2.93
Less than –2.0% and Greater than –2.5%	3	0.80
Less than –2.5% and Greater than –3.0%	4	1.06
Less than –3.5% and Greater than –4.0%	3	0.80
Less than –4.0% and Greater than –4.5%	1	0.27
Less than –5.0% and Greater than –5.5%	2	0.53
	376	100.00	%

88 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Israel Capped Investable Market Index Fund

Period Covered: April 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.5%	2	0.63	%
Greater than 4.0% and Less than 4.5%	3	0.95
Greater than 3.5% and Less than 4.0%	1	0.32
Greater than 3.0% and Less than 3.5%	5	1.59
Greater than 2.5% and Less than 3.0%	4	1.27
Greater than 2.0% and Less than 2.5%	8	2.54
Greater than 1.5% and Less than 2.0%	16	5.08
Greater than 1.0% and Less than 1.5%	26	8.25
Greater than 0.5% and Less than 1.0%	41	13.02
Between 0.5% and –0.5%	119	37.79
Less than –0.5% and Greater than –1.0%	32	10.16
Less than –1.0% and Greater than –1.5%	16	5.08
Less than –1.5% and Greater than –2.0%	21	6.67
Less than –2.0% and Greater than –2.5%	4	1.27
Less than –2.5% and Greater than –3.0%	5	1.59
Less than –3.0% and Greater than –3.5%	2	0.63
Less than –3.5% and Greater than –4.0%	1	0.32
Less than –4.0% and Greater than –4.5%	1	0.32
Less than –4.5% and Greater than –5.0%	2	0.63
Less than –5.0% and Greater than –5.5%	2	0.63
Less than –5.5% and Greater than –6.0%	2	0.63
Less than –6.0%	2	0.63
	315	100.00	%

SUPPLEMENTAL INFORMATION 89

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Mexico Investable Market Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 3.5%	2	0.14	%
Greater than 3.0% and Less than 3.5%	3	0.22
Greater than 2.5% and Less than 3.0%	3	0.22
Greater than 2.0% and Less than 2.5%	1	0.07
Greater than 1.5% and Less than 2.0%	10	0.72
Greater than 1.0% and Less than 1.5%	24	1.74
Greater than 0.5% and Less than 1.0%	143	10.35
Between 0.5% and –0.5%	959	69.40
Less than –0.5% and Greater than –1.0%	169	12.23
Less than –1.0% and Greater than –1.5%	41	2.97
Less than –1.5% and Greater than –2.0%	13	0.94
Less than –2.0% and Greater than –2.5%	5	0.36
Less than –2.5% and Greater than –3.0%	6	0.43
Less than –3.0% and Greater than –3.5%	2	0.14
Less than –3.5%	1	0.07
	1,382	100.00	%

90 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI South Africa Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.5%	10	0.72	%
Greater than 4.0% and Less than 4.5%	4	0.29
Greater than 3.5% and Less than 4.0%	4	0.29
Greater than 3.0% and Less than 3.5%	12	0.87
Greater than 2.5% and Less than 3.0%	13	0.94
Greater than 2.0% and Less than 2.5%	34	2.46
Greater than 1.5% and Less than 2.0%	60	4.34
Greater than 1.0% and Less than 1.5%	125	9.04
Greater than 0.5% and Less than 1.0%	236	17.08
Between 0.5% and –0.5%	574	41.54
Less than –0.5% and Greater than –1.0%	120	8.68
Less than –1.0% and Greater than –1.5%	69	4.99
Less than –1.5% and Greater than –2.0%	46	3.33
Less than –2.0% and Greater than –2.5%	25	1.81
Less than –2.5% and Greater than –3.0%	14	1.01
Less than –3.0% and Greater than –3.5%	15	1.09
Less than –3.5% and Greater than –4.0%	3	0.22
Less than –4.0% and Greater than –4.5%	4	0.29
Less than –4.5% and Greater than –5.0%	1	0.07
Less than –5.0% and Greater than –5.5%	2	0.14
Less than –5.5% and Greater than –6.0%	3	0.22
Less than –6.0%	8	0.58
	1,382	100.00	%

SUPPLEMENTAL INFORMATION 91

Supplemental Information (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Turkey Investable Market Index Fund

Period Covered: April 1, 2008 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 6.0%	7	2.22	%
Greater than 5.5% and Less than 6.0%	3	0.95
Greater than 5.0% and Less than 5.5%	1	0.32
Greater than 4.5% and Less than 5.0%	2	0.63
Greater than 4.0% and Less than 4.5%	3	0.95
Greater than 3.5% and Less than 4.0%	1	0.32
Greater than 3.0% and Less than 3.5%	8	2.54
Greater than 2.5% and Less than 3.0%	14	4.44
Greater than 2.0% and Less than 2.5%	12	3.81
Greater than 1.5% and Less than 2.0%	14	4.44
Greater than 1.0% and Less than 1.5%	31	9.84
Greater than 0.5% and Less than 1.0%	39	12.38
Between 0.5% and –0.5%	70	22.24
Less than –0.5% and Greater than –1.0%	23	7.30
Less than –1.0% and Greater than –1.5%	29	9.21
Less than –1.5% and Greater than –2.0%	18	5.71
Less than –2.0% and Greater than –2.5%	10	3.17
Less than –2.5% and Greater than –3.0%	5	1.59
Less than –3.0% and Greater than –3.5%	5	1.59
Less than –3.5% and Greater than –4.0%	5	1.59
Less than –4.0% and Greater than –4.5%	2	0.63
Less than –4.5% and Greater than –5.0%	1	0.32
Less than –5.0% and Greater than –5.5%	1	0.32
Less than –5.5% and Greater than –6.0%	4	1.27
Less than –6.0%	7	2.22
	315	100.00	%

92 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited)

iSHARES^®, INC.

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

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 183 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

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

Interested Directors and Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss, 48	Director and Chairman (since 2003).	Non-Executive Chairman (since 2009), iShares; Global Chief Executive Officer (2008-2009) of iShares /Intermediary Groups of BGI; Chief Executive Officer (2005-2008) of iShares Intermediary Index and Market Group of BGI; Chief Executive Officer (2003-2005) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director (since 2005) of BGFA; Director, President and Chief Executive Officer (since 2005) of Barclays Global Investors International, Inc.; Director and Chairman (since 2005) of Barclays Global Investors Services.	Trustee (since 2003) of iShares Trust; Trustee (since 2001) of BGlF and MIP.

* Lee T. Kranefuss is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI.

DIRECTOR AND OFFICER INFORMATION 93

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
George G.C. Parker, 70	Director (since 2002); Lead Independent Director (since 2006).	Dean Witter Distinguished Professor of Finance (since 1994), Emeritus, Stanford University: Graduate School of Business.	Trustee (since 2000) of iShares Trust; Lead Independent Trustee (since 2006) of iShares Trust; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2004) of Threshold Pharmaceuticals; Director (since 2007) of NETGEAR, Inc.
J. Darrell Duffie, 55	Director (since 2008).	Professor (since 1984) of Stanford University: Graduate School of Business.	Trustee (since 2008) of iShares Trust; Director (since 2008) of Moody’s Corp.
Cecilia H. Herbert, 60	Director (since 2005).	Chair (1994-2005) of Investment Committee, Archdiocese of San Francisco; Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee (2004-2005) of Pacific Select Funds; Trustee (since 2002) and Chair (2006-2007) of the Finance and Investment Committees (since 2006) of the Thacher School.	Trustee (since 2005) of iShares Trust; Advisory Board Member (since 2009) of Forward Funds.
Charles A. Hurty, 66	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of ProMark Absolute Return Strategies Fund LLC (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio); Director (since 2005) of CSFB Alternative Investments Fund (6 portfolios).
John E. Kerrigan, 54	Director (since 2005).	Chief Investment Officer (since 2002) of Santa Clara University.	Trustee (since 2005) of iShares Trust.
*John E. Martinez, 48	Director (since 2003).	Director (since 2005) of Equity Rock Capital Management; Director (since 2003) of Larkin Street Youth Services.	Trustee (since 2003) of iShares Trust; Chairman (since 2007) of Independent Review Committee, Canadian iShares Funds.

94 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors (Continued)
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Robert H. Silver, 54	Director (since 2007).	President and Co-Founder (since 2006) of The Bravitas Group, Inc.; Member (since 2006) of Non-Investor Advisory Board of Russia Partners II, LP; Director and member (2006-2009) of the Audit and Compensation Committee of EPAM Systems, Inc.; President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer (1999-2005) of UBS Services USA, LLC; Managing Director (2000-2005) of UBS America, Inc.; Director and Vice Chairman (since 2001) of the YMCA of Greater NYC; Broadway Producer (since 2006); Co-Founder and Vice President (since 2008) of Parent giving Inc.	Trustee (since 2007) of iShares Trust.

* Prior to August 13, 2009, John E. Martinez was deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI. Effective August 13, 2009, John E. Martinez is a non-interested person notwithstanding his former affiliation with BGFA and its affiliates prior to 2002.

Officers
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham, 44	President (since 2007).	Head (since 2007) of Americas iShares, BGI; Chief Operating Officer (2003-2007) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director and Chief Financial Officer (since 2005) of Barclays Global Investors International, Inc.	None.

DIRECTOR AND OFFICER INFORMATION 95

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Geoffrey D. Flynn, 52	Executive Vice President and Chief Operating Officer (since 2008).	Chief Operating Officer (since 2008) of U.S. iShares, BGI; Director (2007-2008) of Mutual Fund Operations of BGI; President (2003-2007) of Van Kampen Investors Services; Managing Director (2002-2007) of Morgan Stanley; President (2002-2007) of Morgan Stanley Trust, FSB.	None.
Jack Gee, 50	Treasurer and Chief Financial Officer (since 2008).	Senior Director (since 2009) of Fund Administration of Intermediary Investor Business of BGI; Director (2004-2009) of Fund Administration of Intermediary Investor Business of BGI; Treasurer and Chief Financial Officer (2004) of Parnassus Investments.	None.
Eilleen M. Clavere, 57	Secretary (since 2007).	Director (since 2006) of Legal Administration of Intermediary Investors Business of BGI; Legal Counsel and Vice President (2005-2006) of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc.; Counsel (2001-2005) of Kirkpatrick & Lockhart LLP.	None.
Ira P. Shapiro, 46	Vice President and Chief Legal Officer (since 2007).	Associate General Counsel (since 2004) of BGI; First Vice President (1993-2004) of Merrill Lynch Investment Managers.	None.
Amy Schioldager, 47	Executive Vice President (since 2007).	Global Head (since 2008) of Index Equity, BGI; Global Head (2006-2008) of U.S. Indexing, BGI; Head (2001-2006) of Domestic Equity Portfolio Management, BGI.	None.
Patrick O’Connor, 42	Vice President (since 2007).	Head (since 2006) of iShares Portfolio Management, BGI; Senior Portfolio Manager (1999-2006) of BGI.	None.

96 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Lee Sterne, 44	Vice President (since 2007).	Head (since 2007) of U.S. Fixed Income Index and iShares, BGI; Senior Portfolio Manager (2004-2007) of BGI; Portfolio Manager (2001-2004) of BGI.	None.
Matt Tucker, 37	Vice President (since 2007).	Director (since 2009) of Fixed Income Investment Strategy, BGI; Head (2005-2008) of U.S. Fixed Income Investment Solutions, BGI; Fixed Income Investment Strategist (2003-2005) of BGI.	None.

DIRECTOR AND OFFICER INFORMATION 97

Notes:

98 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 99

The iShares^® Family of Funds

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

	Trading Symbol
iShares Russell Domestic Index Funds
iShares Russell 3000	IWV
iShares Russell 3000 Growth	IWZ
iShares Russell 3000 Value	IWW
iShares Russell Top 200	IWL
iShares Russell Top 200 Growth	IWY
iShares Russell Top 200 Value	IWX
iShares Russell 1000	IWB
iShares Russell 1000 Growth	IWF
iShares Russell 1000 Value	IWD
iShares Russell Midcap	IWR
iShares Russell Midcap Growth	IWP
iShares Russell Midcap Value	IWS
iShares Russell 2000	IWM
iShares Russell 2000 Growth	IWO
iShares Russell 2000 Value	IWN
iShares Russell Microcap	IWC
iShares S&P Domestic Index Funds
iShares S&P 1500	ISI
iShares S&P 100	OEF
iShares S&P 500	IVV
iShares S&P 500 Growth	IVW
iShares S&P 500 Value	IVE
iShares S&P MidCap 400	IJH
iShares S&P MidCap 400 Growth	IJK
iShares S&P MidCap 400 Value	IJJ
iShares S&P SmallCap 600	IJR
iShares S&P SmallCap 600 Growth	IJT
iShares S&P SmallCap 600 Value	IJS
iShares Morningstar Domestic Index Funds
iShares Morningstar Large Core	JKD
iShares Morningstar Large Growth	JKE
iShares Morningstar Large Value	JKF
iShares Morningstar Mid Core	JKG
iShares Morningstar Mid Growth	JKH
iShares Morningstar Mid Value	JKI
iShares Morningstar Small Core	JKJ
iShares Morningstar Small Growth	JKK
iShares Morningstar Small Value	JKL
iShares Dow Jones Domestic Index Funds
iShares Dow Jones U.S.	IYY
iShares KLD Socially Responsible Index Funds
iShares FTSE KLD 400 Social	DSI
iShares FTSE KLD Select Social	KLD
iShares NYSE Domestic Index Funds
iShares NYSE Composite	NYC
iShares NYSE 100	NY

	Trading Symbol
iShares Domestic Specialty Index Funds
iShares S&P U.S. Preferred Stock	PFF
iShares Dow Jones Select Dividend	DVY
iShares North American Sector/Subsector Index Funds
iShares S&P North American Technology Sector	IGM
iShares S&P North American Technology-Multimedia Networking	IGN
iShares S&P North American Technology-Semiconductors	IGW
iShares S&P North American Technology-Software	IGV
iShares S&P North American Natural Resources Sector	IGE
iShares Domestic Sector Index Funds
iShares Dow Jones U.S. Basic Materials Sector	IYM
iShares Dow Jones U.S. Consumer Goods Sector	IYK
iShares Dow Jones U.S. Consumer Services Sector	IYC
iShares Dow Jones U.S. Energy Sector	IYE
iShares Dow Jones U.S. Financial Sector	IYF
iShares Dow Jones U.S. Healthcare Sector	IYH
iShares Dow Jones U.S. Industrial Sector	IYJ
iShares Dow Jones U.S. Technology Sector	IYW
iShares Dow Jones U.S. Telecommunications Sector	IYZ
iShares Dow Jones U.S. Utilities Sector	IDU
iShares Domestic Subsector Index Funds
iShares Dow Jones Transportation Average	IYT
iShares Dow Jones U.S. Aerospace & Defense	ITA
iShares Dow Jones U.S. Broker-Dealers	IAI
iShares Dow Jones U.S. Financial Services	IYG
iShares Dow Jones U.S. Healthcare Providers	IHF
iShares Dow Jones U.S. Home Construction	ITB
iShares Dow Jones U.S. Insurance	IAK
iShares Dow Jones U.S. Medical Devices	IHI
iShares Dow Jones U.S. Oil & Gas Exploration & Production	IEO
iShares Dow Jones U.S. Oil Equipment & Services	IEZ
iShares Dow Jones U.S. Pharmaceuticals	IHE
iShares Dow Jones U.S. Regional Banks	IAT
iShares Nasdaq Biotechnology	IBB
iShares Domestic Real Estate Index Funds
iShares Cohen & Steers Realty Majors	ICF
iShares Dow Jones U.S. Real Estate	IYR
iShares FTSE NAREIT Real Estate 50	FTY
iShares FTSE NAREIT Industrial/Office Capped	FIO
iShares FTSE NAREIT Mortgage Plus Capped	REM
iShares FTSE NAREIT Residential Plus Capped	REZ
iShares FTSE NAREIT Retail Capped	RTL
iShares Target Risk Index Funds
iShares S&P Conservative Allocation	AOK
iShares S&P Moderate Allocation	AOM
iShares S&P Growth Allocation	AOR
iShares S&P Aggressive Allocation	AOA

100 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds (Continued)

	Trading Symbol
iShares International Country Index Funds
iShares FTSE China (HK Listed)	FCHI
iShares FTSE/Xinhua China 25	FXI
iShares MSCI Australia	EWA
iShares MSCI Austria Investable Market	EWO
iShares MSCI Belgium Investable Market	EWK
iShares MSCI Brazil	EWZ
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares MSCI Israel Capped Investable Market	EIS
iShares MSCI Italy	EWI
iShares MSCI Japan	EWJ
iShares MSCI Japan Small Cap	SCJ
iShares S&P/TOPIX 150	ITF
iShares MSCI Malaysia	EWM
iShares MSCI Mexico Investable Market	EWW
iShares MSCI Netherlands Investable Market	EWN
iShares MSCI All Peru Capped	EPU
iShares MSCI Singapore	EWS
iShares MSCI South Africa	EZA
iShares MSCI South Korea	EWY
iShares MSCI Spain	EWP
iShares MSCI Sweden	EWD
iShares MSCI Switzerland	EWL
iShares MSCI Taiwan	EWT
iShares MSCI Thailand Investable Market	THD
iShares MSCI Turkey Investable Market	TUR
iShares MSCI United Kingdom	EWU
iShares International Index Funds
iShares MSCI ACWI ex US	ACWX
iShares MSCI EAFE	EFA
iShares MSCI EAFE Growth	EFG
iShares MSCI EAFE Value	EFV
iShares MSCI EAFE Small Cap	SCZ
iShares FTSE Developed Small Cap ex-North America	IFSM
iShares MSCI Emerging Markets	EEM
iShares MSCI Emerging Markets Eastern Europe	ESR
iShares S&P Emerging Markets Infrastructure	EMIF
iShares MSCI BRIC	BKF
iShares MSCI EMU	EZU
iShares MSCI All Country Asia ex Japan	AAXJ
iShares MSCI Pacific ex-Japan	EPP
iShares S&P Asia 50	AIA
iShares S&P Europe 350	IEV
iShares S&P Latin America 40	ILF
iShares International/Global Real Estate Index Funds
iShares S&P Developed ex-U.S. Property	WPS
iShares FTSE EPRA/NAREIT Developed Real Estate ex-U.S.	IFGL
iShares FTSE EPRA/NAREIT Developed Asia	IFAS
iShares FTSE EPRA/NAREIT Developed Europe	IFEU
iShares FTSE EPRA/NAREIT North America	IFNA
iShares International Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV

	Trading Symbol
iShares Target Date Index Funds
iShares S&P Target Date Retirement Income	TGR
iShares S&P Target Date 2010	TZD
iShares S&P Target Date 2015	TZE
iShares S&P Target Date 2020	TZG
iShares S&P Target Date 2025	TZI
iShares S&P Target Date 2030	TZL
iShares S&P Target Date 2035	TZO
iShares S&P Target Date 2040	TZV
iShares Global Index Funds
iShares MSCI ACWI	ACWI
iShares S&P Global 100	IOO
iShares MSCI Kokusai	TOK
iShares Global Sector Index Funds
iShares S&P Global Consumer Discretionary Sector	RXI
iShares S&P Global Consumer Staples Sector	KXI
iShares S&P Global Energy Sector	IXC
iShares S&P Global Financials Sector	IXG
iShares S&P Global Healthcare Sector	IXJ
iShares S&P Global Industrials Sector	EXI
iShares S&P Global Materials Sector	MXI
iShares S&P Global Technology Sector	IXN
iShares S&P Global Telecommunications Sector	IXP
iShares S&P Global Utilities Sector	JXI
iShares Global Theme Based Index Funds
iShares S&P Global Clean Energy	ICLN
iShares S&P Global Infrastructure	IGF
iShares S&P Global Nuclear Energy	NUCL
iShares S&P Global Timber & Forestry	WOOD
iShares U.S. Multisector Bond Funds
iShares Barclays Aggregate	AGG
iShares Barclays Government/Credit	GBF
iShares Barclays Intermediate Government/Credit	GVI
iShares U.S. Government Bond Funds
iShares Barclays Short Treasury	SHV
iShares Barclays 1-3 Year Treasury	SHY
iShares Barclays 3-7 Year Treasury	IEI
iShares Barclays 7-10 Year Treasury	IEF
iShares Barclays 10-20 Year Treasury	TLH
iShares Barclays 20+ Year Treasury	TLT
iShares Barclays TIPS	TIP
iShares Barclays Agency	AGZ
iShares U.S. Credit Bond Funds
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares iBoxx $ High Yield Corporate	HYG
iShares U.S. Securitized Bond Funds
iShares Barclays MBS	MBB

iSHARES FAMILY OF FUNDS 101

The iShares^® Family of Funds (Continued)

	Trading Symbol
iShares AMT-Free Municipal Bond Funds
iShares S&P National AMT-Free Municipal	MUB
iShares S&P Short Term National AMT-Free Municipal	SUB
iShares S&P California AMT-Free Municipal	CMF
iShares S&P New York AMT-Free Municipal	NYF

	Trading Symbol
iShares International Bond Funds
iShares JPMorgan USD Emerging Markets	EMB
iShares S&P/Citigroup International Treasury	IGOV
iShares S&P/Citigroup 1-3 Year International Treasury	ISHG

iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Frank Russell Company or Standard & Poor’s, nor are they sponsored or endorsed by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above except Barclays Capital, which is an affiliate of BGI. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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

This advertising section does not constitute part of the 2009 Annual Report.

iS-1437-1009

102 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

For more information: WWW.iSHARES.COM 1-800-iShares (1-800-474-2737)

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

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the company listed above.

©2009 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

Investing involves risk, including possible loss of principal.

A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a monthly basis on the Funds’ website.

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

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

BGI-AR-84-0809 iShares® LET’S BUILD A BETTER INVESTMENT WORLD®. BARCLAYS GLOBAL INVESTORS

2009 ANNUAL REPORT TO SHAREHOLDERS

ISHARES® MSCI SERIES

AUGUST 31, 2009

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

iShares MSCI Japan Index Fund

Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses (Unaudited)	4
Schedule of Investments	5
Financial Statements	12
Financial Highlights	15
Notes to Financial Statements	16
Report of Independent Registered Public Accounting Firm	23
Tax Information (Unaudited)	24
Board Review and Approval of Current Investment Advisory Contract (Unaudited)	25
Board Review and Approval of New Investment Advisory Agreements (Unaudited)	28
Supplemental Information (Unaudited)	34
Director and Officer Information (Unaudited)	35
iShares Family of Funds	40

Management’s Discussion of Fund Performance

iSHARES^® MSCI JAPAN INDEX FUND

(TICKER: EWJ)

INVESTMENT OBJECTIVE

The iShares MSCI Japan Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the aggregate in the Japanese market, as measured by the MSCI Japan Index^SM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (10.68)%, while the total return for the Index was (10.17)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

Japan’s economy was among the weakest in Asia, as the country experienced high unemployment, lagging business investment and deflation fears. Accordingly, the broad Japanese equity market performed relatively poorly compared to its Asian counterparts during the reporting period. In particular, large capitalization stocks significantly lagged small capitalization stocks.

Although Japan’s gross domestic product (“GDP”) rose 3.7% in the second quarter of 2009 compared to the year ago quarter, it declined a record 13.5% during the fourth quarter of 2008 and 14.2% in the first quarter of 2009. Even though GDP has shown signs of stabilizing, other economic statistics did not rebound.

Business investment contracted at a 4.8% annual rate in the second quarter of 2009. Core machinery orders dropped 9.3% in July, hitting the lowest level since recordkeeping began in April 1987. According to the Ministry of Internal Affairs, unemployment reached 5.7% in July, a post-World War II record. Household spending decreased 2% compared to the same month a year ago. Deflation was also a major concern, as Japan’s wholesale prices fell 8.5% in August compared to a year ago.

One of Japan’s most important economic activities is exporting, particularly to the rest of Asia as well as to the U.S. However, Japan’s exports dropped about 50% in the first half of 2009. Trouble continued into the second half of the year, as exports shrank for the 10th straight month in July, down 38% year over year, while imports posted the second-largest contraction since records began in 1986, dropping by 41%. At the end of the period the country’s public debt stood at about 170% of GDP, the worst ratio in the industrialized world.

In the midst of this economic environment, there was a major shift in the political environment during the reporting period. Japan elected a more liberal new government during the reporting period, one that promised increased social benefits and favored policies that were seen as disadvantageous to large corporations. The Democratic Party of Japan was elected into power, beating the Liberal Democratic Party that had ruled Japan since World War II. Yukio Hatoyama, the new Japanese Prime Minister, has promised to reverse Japan’s weak economy, blaming the government bureaucracy for the country’s woes. Meanwhile, the global economic environment began to improve at the end of the reporting period, which was a positive development for a country so dependent on exports.

The ten largest holdings of the Fund represented approximately 21% of Fund net assets as of August 31, 2009. Performance for all ten holdings was negative for the reporting period. Toyota Motor Corp., Honda Motor Co. Ltd. and The Tokyo Electric Power Co. Inc. posted the least negative returns. Shares of Mizuho Financial Group Inc. and Nintendo Co. Ltd. declined the most in value.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(10.68)%	(9.45)%	(10.17)%	1.59%	1.37%	2.11%	(1.70)%	(1.83)%	(1.26)%
Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Ten Years Ended 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(10.68)%	(9.45)%	(10.17)%	8.22%	7.03%	11.00%	(15.77)%	(16.87)%	(11.91)%

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

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

2 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector	Percentage of Net Assets
Consumer Cyclical	26.08	%
Industrial	21.54
Financial	17.29
Consumer Non-Cyclical	10.62
Basic Materials	7.26
Utilities	5.83
Communications	5.32
Technology	4.65
Energy	1.29
Short-Term and Other Net Assets	0.12
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Toyota Motor Corp.	5.46	%
Mitsubishi UFJ Financial Group Inc.	2.78
Honda Motor Co. Ltd.	2.42
Canon Inc.	1.88
Sumitomo Mitsui Financial Group Inc.	1.83
Tokyo Electric Power Co. Inc. (The)	1.49
Panasonic Corp.	1.41
Mizuho Financial Group Inc.	1.38
Takeda Pharmaceutical Co. Ltd.	1.38
Nintendo Co. Ltd.	1.32
TOTAL	21.35	%

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 3

Shareholder Expenses (Unaudited)

iSHARES^® MSCI JAPAN INDEX FUND

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2009 to August 31, 2009.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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

	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Actual	$1,000.00	$1,356.40	0.56	%	$3.33
Hypothetical (5% return before expenses)	1,000.00	1,022.40	0.56		2.85

^a Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days).

4 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 99.88%
ADVERTISING – 0.21%
Dentsu Inc.	401,200	$	9,276,926
Hakuhodo DY Holdings Inc.	70,210		3,912,960
			13,189,886
AGRICULTURE – 0.62%
Japan Tobacco Inc.	13,039		37,937,003
			37,937,003
AIRLINES – 0.19%
All Nippon Airways Co. Ltd.	2,008,000		6,212,430
Japan Airlines Corp.a,b	3,009,000		5,416,946
			11,629,376
APPAREL – 0.28%
ASICS Corp.	1,003,000		9,893,225
Onward Holdings Co. Ltd.	1,003,000		7,341,530
			17,234,755
AUTO MANUFACTURERS – 9.82%
Fuji Heavy Industries Ltd.	2,006,000		8,693,063
Hino Motors Ltd.	1,003,000		4,162,723
Honda Motor Co. Ltd.	4,714,100		149,149,824
Isuzu Motors Ltd.	3,009,000		7,006,349
Mazda Motor Corp.	3,009,000		8,368,695
Mitsubishi Motors Corp.a,b	10,030,000		18,272,732
Nissan Motor Co. Ltd.	7,021,000		49,195,817
Suzuki Motor Corp.	1,003,000		24,003,234
Toyota Motor Corp.	7,823,900		336,520,894
			605,373,331
AUTO PARTS & EQUIPMENT – 2.14%
Aisin Seiki Co. Ltd.	501,700		12,601,315
Bridgestone Corp.	1,705,100		31,265,834
Denso Corp.	1,404,200		40,946,057
JTEKT Corp.	401,200		5,189,888
NGK Spark Plug Co. Ltd.	428,000		5,402,770
NHK Spring Co. Ltd.	1,003,000		7,417,215
NOK Corp.	300,900		4,112,987
Sumitomo Rubber Industries Inc.	401,200		3,862,142
Toyoda Gosei Co. Ltd.	200,600		5,817,000
Toyota Boshoku Corp.	100,300		1,776,456
Toyota Industries Corp.	501,500		13,569,396
			131,961,060

Security	Shares	Value
BANKS – 9.56%
Aozora Bank Ltd.a	1,003,000	$	1,492,093
Bank of Kyoto Ltd. (The)	1,003,000		9,774,290
Bank of Yokohama Ltd. (The)	4,012,000		22,705,762
Chiba Bank Ltd. (The)	2,006,000		12,671,978
Chuo Mitsui Trust Holdings Inc.	3,009,000		12,715,227
Fukuoka Financial Group Inc.	2,012,000		9,066,092
Gunma Bank Ltd.	1,003,000		5,687,253
Hachijuni Bank Ltd. (The)	1,003,000		5,773,751
Hiroshima Bank Ltd. (The)	1,003,000		4,292,470
Hokuhoku Financial Group Inc.	4,017,000		10,046,289
Iyo Bank Ltd. (The)	1,003,000		9,871,600
Joyo Bank Ltd. (The)	2,006,000		10,293,279
Mitsubishi UFJ Financial Group Inc.	26,780,180		171,480,913
Mizuho Financial Group Inc.	34,703,800		85,295,816
Mizuho Trust & Banking Co. Ltd.a	5,015,000		6,487,361
Nishi-Nippon City Bank Ltd. (The)	2,006,000		5,362,884
Resona Holdings Inc.b	1,504,500		20,581,151
Sapporo Hokuyo Holdings Inc.a	1,006,000		3,665,477
Seven Bank Ltd.	1,003		2,552,776
77 Bank Ltd. (The)	1,003,000		6,076,495
Shinsei Bank Ltd.a	3,009,000		5,125,015
Shizuoka Bank Ltd. (The)	2,006,000		20,997,424
Sumitomo Mitsui Financial Group Inc.b	2,607,800		112,728,702
Sumitomo Trust and Banking Co. Ltd. (The)	4,012,000		24,608,721
Suruga Bank Ltd.	1,003,000		9,860,788
			589,213,607
BEVERAGES – 0.98%
Asahi Breweries Ltd.	1,003,000		17,494,249
Coca-Cola West Co. Ltd.	200,600		3,907,554
ITO EN Ltd.	200,600		3,691,308
Kirin Holdings Co. Ltd.	2,006,000		29,474,241
Sapporo Holdings Ltd.	1,003,000		5,752,126
			60,319,478
BUILDING MATERIALS – 1.48%
Asahi Glass Co. Ltd.	3,009,000		26,273,810
Daikin Industries Ltd.	709,100		25,072,473

SCHEDULE OF INVESTMENTS 5

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
JS Group Corp.	702,100	$	12,473,032
Nippon Sheet Glass Co. Ltd.	2,006,000		7,049,598
Panasonic Electric Works Co. Ltd.	1,003,000		12,055,679
Rinnai Corp.	100,300		4,995,268
Taiheiyo Cement Corp.	2,006,000		3,481,550
			91,401,410
CHEMICALS – 3.55%
Asahi Kasei Corp.	3,009,000		14,531,687
Daicel Chemical Industries Ltd.	1,003,000		6,508,985
Denki Kagaku Kogyo Kabushiki Kaisha	2,006,000		8,520,067
DIC Corp.	2,006,000		3,135,558
Hitachi Chemical Co. Ltd.	200,600		4,154,073
JSR Corp.	501,500		8,849,841
Kaneka Corp.	1,003,000		7,406,403
Mitsubishi Chemical Holdings Corp.	3,510,500		16,007,562
Mitsubishi Gas Chemical Co. Inc.	1,003,000		5,914,310
Mitsui Chemicals Inc.	2,006,000		7,611,837
Nitto Denko Corp.	501,500		15,245,297
Shin-Etsu Chemical Co. Ltd.	1,103,300		65,414,219
Showa Denko K.K.	3,009,000		6,519,798
Sumitomo Chemical Co. Ltd.	4,012,000		19,289,085
Taiyo Nippon Sanso Corp.	1,003,000		10,650,084
Tokuyama Corp.	1,003,000		7,027,974
Tosoh Corp.	1,003,000		2,919,312
Ube Industries Ltd.	3,009,000		9,341,799
			219,047,891
COMMERCIAL SERVICES – 1.10%
Benesse Corp.	200,600		9,882,412
Dai Nippon Printing Co. Ltd.	2,006,000		29,387,743
Kamigumi Co. Ltd.	1,003,000		8,509,254
Toppan Printing Co. Ltd.	2,008,000		19,892,761
			67,672,170
COMPUTERS – 0.91%
Fujitsu Ltd.	5,015,000		33,842,397
Itochu Techno-Solutions Corp.	100,300		2,962,561
OBIC Co. Ltd.	10,030		1,644,546
TDK Corp.	300,900		17,548,310
			55,997,814

Security	Shares	Value
COSMETICS & PERSONAL CARE – 1.02%
Kao Corp.	1,415,200	$	36,003,579
Shiseido Co. Ltd.	1,003,000		17,710,494
Uni-Charm Corp.	100,300		9,017,431
			62,731,504
DISTRIBUTION & WHOLESALE – 4.02%
Canon Marketing Japan Inc.	100,300		1,692,120
Hitachi High-Technologies Corp.	100,300		2,025,138
ITOCHU Corp.	4,012,000		28,544,386
Marubeni Corp.	5,015,000		25,030,399
Mitsubishi Corp.	3,811,400		77,448,273
Mitsui & Co. Ltd.	4,914,700		64,211,895
Sojitz Corp.	3,309,900		7,100,416
Sumitomo Corp.	3,109,300		31,942,682
Toyota Tsusho Corp.	601,900		9,804,031
			247,799,340
DIVERSIFIED FINANCIAL SERVICES – 2.24%
Acom Co. Ltd.b	120,368		2,482,229
AEON Credit Service Co. Ltd.	200,670		2,275,695
Credit Saison Co. Ltd.	501,500		6,746,854
Daiwa Securities Group Inc.	5,015,000		31,031,208
Mitsubishi UFJ Lease & Finance Co. Ltd.	160,480		5,112,040
Mizhuo Securities Co. Ltd.	1,003,000		3,784,294
Nomura Holdings Inc.	7,021,000		62,289,473
ORIX Corp.	290,870		22,419,237
Promise Co. Ltd.b	200,600		1,972,158
			138,113,188
ELECTRIC – 4.96%
Chubu Electric Power Co. Inc.	1,905,700		44,476,263
Chugoku Electric Power Co. Inc. (The)	702,200		15,479,966
Electric Power Development Co. Ltd.	401,200		12,217,862
Hokkaido Electric Power Co. Inc.	501,500		10,374,371
Hokuriku Electric Power Co.	501,500		12,190,832
Kansai Electric Power Co. Inc. (The)	2,206,600		50,904,156
Kyushu Electric Power Co. Inc.	1,103,300		24,441,131
Shikoku Electric Power Co. Inc.	501,500		15,569,665
Tohoku Electric Power Co. Inc.	1,303,900		28,322,735

6 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
Tokyo Electric Power Co. Inc. (The)	3,510,500	$	91,769,121
			305,746,102
ELECTRICAL COMPONENTS & EQUIPMENT – 3.94%
Brother Industries Ltd.	601,800		6,059,195
Casio Computer Co. Ltd.	601,800		5,974,859
Furukawa Electric Co. Ltd. (The)	2,006,000		8,909,308
GS Yuasa Corp.b	1,003,000		8,768,749
Hitachi Ltd.	9,027,000		31,917,814
Mitsubishi Electric Corp.	5,015,000		37,410,446
SANYO Electric Co. Ltd.a,b	5,015,000		13,569,396
Sharp Corp.	3,009,000		34,869,563
Stanley Electric Co. Ltd.	402,400		8,137,793
Sumitomo Electric Industries Ltd.	1,905,700		24,693,057
Toshiba Corp.	11,033,000		56,850,903
Ushio Inc.	300,900		5,562,912
			242,723,995
ELECTRONICS – 5.13%
Advantest Corp.	401,200		10,033,784
Fanuc Ltd.	501,500		41,032,556
Hirose Electric Co. Ltd.	100,300		12,423,296
Hoya Pentax HD Corp.	1,203,600		27,246,914
IBIDEN Co. Ltd.	401,200		14,315,442
Keyence Corp.	100,351		21,267,727
Kyocera Corp.	501,500		41,897,537
Mabuchi Motor Co. Ltd.	100,300		5,125,015
Minebea Co. Ltd.	1,003,000		4,670,900
Mitsumi Electric Co. Ltd.	200,600		4,670,900
Murata Manufacturing Co. Ltd.	601,800		28,544,386
NEC Corp.a	6,024,000		21,819,263
NGK Insulators Ltd.	1,003,000		23,462,620
Nippon Electric Glass Co. Ltd.	1,003,500		10,449,857
Omron Corp.	601,800		10,295,441
Secom Co. Ltd.	601,800		27,246,914
Yaskawa Electric Corp.	1,003,000		7,265,844
Yokogawa Electric Corp.	501,500		4,324,907
			316,093,303
ENGINEERING & CONSTRUCTION – 0.83%
JGC Corp.	1,003,000		18,672,786
Kajima Corp.	3,009,000		8,466,005
Obayashi Corp.	2,006,000		9,060,680

Security	Shares	Value
Shimizu Corp.	2,006,000	$	8,303,821
Taisei Corp.	3,009,000		6,617,108
			51,120,400
ENTERTAINMENT – 0.30%
Oriental Land Co. Ltd.	200,600		13,601,833
Toho Co. Ltd.	300,900		5,056,898
			18,658,731
ENVIRONMENTAL CONTROL – 0.16%
Kurita Water Industries Ltd.	300,900		10,055,409
			10,055,409
FOOD – 1.22%
Ajinomoto Co. Inc.	2,006,000		20,521,684
Kikkoman Corp.	1,003,000		12,466,545
Meiji Holdings Co. Ltd.a	200,628		8,218,471
Nippon Meat Packers Inc.	1,003,000		12,174,613
Nisshin Seifun Group Inc.	503,500		6,703,202
Nissin Foods Holdings Co. Ltd.	301,700		9,984,574
Yakult Honsha Co. Ltd.	200,600		4,973,643
			75,042,732
FOREST PRODUCTS & PAPER – 0.30%
Nippon Paper Group Inc.	301,800		8,898,000
Oji Paper Co. Ltd.	2,006,000		9,493,171
			18,391,171
GAS – 0.87%
Osaka Gas Co. Ltd.	6,018,000		20,889,301
Toho Gas Co. Ltd.	1,003,000		4,670,900
Tokyo Gas Co. Ltd.	7,021,000		28,230,830
			53,791,031
HAND & MACHINE TOOLS – 0.99%
Fuji Electric Holdings Co. Ltd.	1,003,000		1,924,584
Makita Corp.	300,900		8,530,879
Nidec Corp.	300,900		21,700,221
SMC Corp.	200,600		23,462,621
THK Co. Ltd.b	301,500		5,668,259
			61,286,564
HEALTH CARE - PRODUCTS – 0.43%
Terumo Corp.	501,500		26,490,055
			26,490,055
HOME BUILDERS – 0.44%
Daiwa House Industry Co. Ltd.	1,003,000		11,212,321

SCHEDULE OF INVESTMENTS 7

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
Sekisui Chemical Co. Ltd.	1,003,000	$	6,422,487
Sekisui House Ltd.	1,003,000		9,666,167
			27,300,975
HOME FURNISHINGS – 2.73%
Panasonic Corp.	5,416,215		86,995,746
Sony Corp.	2,808,400		76,139,988
Yamaha Corp.	401,200		5,168,264
			168,303,998
HOUSEWARES – 0.11%
TOTO Ltd.	1,003,000		7,006,349
			7,006,349
INSURANCE – 2.50%
Aioi Insurance Co. Ltd.	1,003,000		4,973,643
Mitsui Sumitomo Insurance Group Holdings Inc.	1,203,600		34,058,643
Nipponkoa Insurance Co. Ltd.	2,006,000		12,520,606
Sompo Japan Insurance Inc.	2,006,000		13,731,580
Sony Financial Holdings Inc.	2,006		6,111,094
T&D Holdings Inc.	651,950		19,643,187
Tokio Marine Holdings Inc.	2,106,300		62,894,960
			153,933,713
INTERNET – 1.78%
Dena Co. Ltd.	1,003		3,185,294
Matsui Securities Co. Ltd.	401,200		3,728,070
Rakuten Inc.	19,179		11,619,251
SBI Holdings Inc.	47,141		10,600,563
SoftBank Corp.	2,106,300		47,341,513
Trend Micro Inc.	501,500		19,786,450
Yahoo! Japan Corp.	39,117		13,346,123
			109,607,264
IRON & STEEL – 2.62%
Daido Steel Co. Ltd.	1,003,000		4,054,600
JFE Holdings Inc.	1,404,250		49,197,569
Kobe Steel Ltd.	7,021,000		13,017,970
Nippon Steel Corp.	15,045,000		59,197,165
Nisshin Steel Co. Ltd.	2,006,000		4,087,037
Sumitomo Metal Industries Ltd.	10,030,000		25,192,583
Tokyo Steel Manufacturing Co. Ltd.	301,500		3,981,432
Yamato Kogyo Co. Ltd.	100,300		3,005,810
			161,734,166

Security	Shares	Value
LEISURE TIME – 0.65%
Namco Bandai Holdings Inc.	501,598	$	5,342,304
Sankyo Co. Ltd.	200,600		12,671,978
Sega Sammy Holdings Inc.	501,500		6,563,046
Shimano Inc.	200,600		8,584,940
Yamaha Motor Co. Ltd.	601,800		7,116,635
			40,278,903
MACHINERY – 0.30%
Hitachi Construction Machinery Co. Ltd.	303,900		6,188,402
Japan Steel Works Ltd. (The)	1,003,000		12,498,981
			18,687,383
MACHINERY - CONSTRUCTION & MINING – 0.74%
Komatsu Ltd.	2,507,500		45,357,463
			45,357,463
MACHINERY - DIVERSIFIED – 0.68%
Amada Co. Ltd.	1,003,000		7,060,411
Kubota Corp.	3,009,000		24,943,901
Sumitomo Heavy Industries Ltd.	2,006,000		10,185,156
			42,189,468
MANUFACTURING – 2.31%
FUJIFILM Holdings Corp.	1,404,200		42,005,660
IHI Corp.a	4,012,000		8,217,324
Kawasaki Heavy Industries Ltd.	4,012,000		10,682,520
Konica Minolta Holdings Inc.	1,504,500		14,272,193
Mitsubishi Heavy Industries Ltd.	8,024,000		33,301,784
Nikon Corp.	1,003,000		17,310,440
Olympus Corp.	601,800		16,413,022
			142,202,943
MEDIA – 0.16%
Fuji Media Holdings Inc.	1,655		2,608,322
Jupiter Telecommunications Co. Ltd.	6,018		5,254,762
Tokyo Broadcasting System Holdings Inc.	100,300		1,752,669
			9,615,753
METAL FABRICATE & HARDWARE – 0.22%
Maruichi Steel Tube Ltd.	100,300		2,099,742
NSK Ltd.	1,003,000		6,584,671
NTN Corp.	1,003,000		4,692,524
			13,376,937

8 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
MINING – 0.79%
Dowa Holdings Co. Ltd.	1,003,000	$	5,676,440
Mitsubishi Materials Corp.	3,009,000		9,212,052
Mitsui Mining & Smelting Co. Ltd.a	2,006,000		5,752,126
OSAKA Titanium technologies Co. Ltd.b	100,300		3,405,864
Sumitomo Metal Mining Co. Ltd.	1,577,000		24,394,923
			48,441,405
OFFICE & BUSINESS EQUIPMENT – 2.45%
Canon Inc.	3,009,050		115,801,310
Ricoh Co. Ltd.	2,006,000		28,998,502
Seiko Epson Corp.	401,200		5,955,397
			150,755,209
OIL & GAS – 1.29%
Cosmo Oil Co. Ltd.	2,006,000		6,184,617
Idemitsu Kosan Co. Ltd.	100,300		8,314,634
INPEX Corp.	2,006		16,434,647
Japan Petroleum Exploration Co. Ltd.	100,300		5,254,762
Nippon Mining Holdings Inc.	2,507,500		12,542,230
Nippon Oil Corp.	3,009,500		17,259,247
Showa Shell Sekiyu K.K.	401,200		4,199,485
TonenGeneral Sekiyu K.K.	1,003,000		9,622,918
			79,812,540
PACKAGING & CONTAINERS – 0.14%
Toyo Seikan Kaisha Ltd.	401,200		8,398,969
			8,398,969
PHARMACEUTICALS – 5.25%
Alfresa Holdings Corp.	100,300		4,551,965
Astellas Pharma Inc.	1,303,930		52,429,892
Chugai Pharmaceutical Co. Ltd.	601,800		12,325,985
Daiichi Sankyo Co. Ltd.	1,905,769		40,779,944
Dainippon Pharmaceutical Co. Ltd.	300,900		3,409,108
Eisai Co. Ltd.	702,100		25,808,883
Hisamitsu Pharmaceutical Co. Inc.	100,300		3,881,604
Kyowa Hakko Kirin Co. Ltd.	1,003,000		12,217,863
Mediceo Paltac Holdings Co. Ltd.	401,200		5,756,451

Security	Shares	Value
Mitsubishi Tanabe Pharma Corp.	1,003,000	$	13,201,779
Ono Pharmaceutical Co. Ltd.	200,600		9,882,413
Santen Pharmaceutical Co. Ltd.	200,600		6,768,479
Shionogi & Co. Ltd.	1,003,000		24,651,970
Suzuken Co. Ltd.	200,600		6,638,732
Taisho Pharmaceutical Co. Ltd.	654,000		12,880,483
Takeda Pharmaceutical Co. Ltd.	2,106,300		85,146,607
Tsumura & Co.	101,100		3,596,507
			323,928,665
REAL ESTATE – 2.42%
AEON Mall Co. Ltd.	200,600		4,746,585
Daito Trust Construction Co. Ltd.	200,600		9,601,294
Leopalace21 Corp.	401,200		3,641,572
Mitsubishi Estate Co. Ltd.	3,009,000		50,049,987
Mitsui Fudosan Co. Ltd.	2,112,000		40,024,751
Nomura Real Estate Holdings Inc.	300,900		5,287,199
NTT Urban Development Corp.	4,012		3,978,914
Sumitomo Realty & Development Co. Ltd.	1,003,000		21,181,232
Tokyo Tatemono Co. Ltd.	1,003,000		5,946,747
Tokyu Land Corp.	1,003,000		4,714,149
			149,172,430
REAL ESTATE INVESTMENT TRUSTS – 0.52%
Japan Prime Realty Investment Corp.	1,003		2,405,729
Japan Real Estate Investment Corp.	1,003		8,195,699
Japan Retail Fund Investment Corp.	1,003		5,362,885
Nippon Building Fund Inc.	1,003		8,866,059
Nomura Real Estate Office Fund Inc.	1,003		6,973,913
			31,804,285
RETAIL – 3.04%
ABC-Mart Inc.	100,300		2,919,312
AEON Co. Ltd.	1,705,100		18,141,904
Citizen Watch Co. Ltd.	702,100		4,230,840
FamilyMart Co. Ltd.	200,600		6,227,866
Fast Retailing Co. Ltd.	100,300		12,055,678

SCHEDULE OF INVESTMENTS 9

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
Isetan Mitsukoshi Holdings Ltd.b	902,760	$	9,994,444
J. Front Retailing Co. Ltd.	2,006,000		11,396,130
Lawson Inc.	200,600		8,714,688
Marui Group Co. Ltd.	601,800		4,190,835
McDonald’s Holdings Co. (Japan) Ltd.	200,600		3,762,669
Nitori Co. Ltd.	100,300		7,784,833
Seven & I Holdings Co. Ltd.	2,206,680		53,522,664
Shimamura Co. Ltd.	100,300		9,006,619
Takashimaya Co. Ltd.	1,003,000		8,433,568
UNY Co. Ltd.	702,100		5,964,047
USS Co. Ltd.	80,240		5,068,791
Yamada Denki Co. Ltd.	230,690		15,766,449
			187,181,337
SEMICONDUCTORS – 1.01%
Elpida Memory Inc.a,b	300,900		4,719,555
Rohm Co. Ltd.	301,300		20,364,911
Shinko Electric Industries Co. Ltd.	200,600		3,754,019
Sumco Corp.	300,900		6,162,993
Tokyo Electron Ltd.	501,552		27,357,873
			62,359,351
SHIPBUILDING – 0.09%
Mitsui Engineering & Shipbuilding Co. Ltd.	2,006,000		5,471,007
			5,471,007
SOFTWARE – 0.28%
Konami Corp.	300,900		5,945,666
Nomura Research Institute Ltd.	200,600		4,800,647
Oracle Corp.	100,300		4,173,535
Square Enix Holdings Co. Ltd.	100,300		2,589,538
			17,509,386
STORAGE & WAREHOUSING – 0.07%
Mitsubishi Logistics Corp.	319,000		4,209,087
			4,209,087
TELECOMMUNICATIONS – 3.17%
Hikari Tsushin Inc.	100,300		2,173,266
KDDI Corp.	8,024		45,757,516

Security	Shares	Value
Nippon Telegraph and Telephone Corp.	1,509,000	$	67,670,350
NTT Data Corp.	3,009		10,282,467
NTT DoCoMo Inc.	45,135		69,722,907
			195,606,506
TEXTILES – 0.97%
Kuraray Co. Ltd.	1,003,000		10,974,452
Mitsubishi Rayon Co. Ltd.	1,003,000		3,319,366
Nisshinbo Holdings Inc.	1,003,000		11,752,935
Teijin Ltd.	3,009,000		9,958,098
Toray Industries Inc.b	4,012,000		23,527,494
			59,532,345
TOYS, GAMES & HOBBIES – 1.32%
Nintendo Co. Ltd.	300,900		81,610,995
			81,610,995
TRANSPORTATION – 4.53%
Central Japan Railway Co.	5,021		34,045,265
East Japan Railway Co.	1,006,000		65,935,213
Hankyu Hanshin Holdings Inc.	3,014,800		14,494,699
Kawasaki Kisen Kaisha Ltd.	2,006,000		8,844,435
Keihin Electric Express Railway Co. Ltd.	1,007,000		8,369,503
Keio Corp.	2,006,000		13,601,833
Kintetsu Corp.b	5,019,000		21,804,096
Mitsui O.S.K. Lines Ltd.	3,009,000		19,299,897
Nippon Express Co. Ltd.	2,006,000		8,995,807
Nippon Yusen Kabushiki Kaisha	3,009,000		13,072,031
Odakyu Electric Railway Co. Ltd.	1,003,000		9,039,056
Tobu Railway Co. Ltd.	2,006,000		12,650,353
Tokyu Corp.	3,009,000		14,823,619
West Japan Railway Co.	5,015		17,407,751
Yamato Holdings Co. Ltd.	1,003,000		16,650,892
			279,034,450
VENTURE CAPITAL – 0.05%
JAFCO Co. Ltd.	100,300		3,395,052
			3,395,052
TOTAL COMMON STOCKS
(Cost: $7,346,859,712)			6,156,839,640

10 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2009

Security	Shares	Value
SHORT-TERM INVESTMENTS – 2.46%
MONEY MARKET FUNDS – 2.46%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26% c,d,e	131,379,800	$	131,379,800
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%c,d,e	18,533,190		18,533,190
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%c,d	1,585,728		1,585,728
			151,498,718
TOTAL SHORT-TERM INVESTMENTS
(Cost: $151,498,718)			151,498,718
TOTAL INVESTMENTS IN SECURITIES – 102.34%
(Cost: $7,498,358,430)			6,308,338,358
Other Assets, Less Liabilities – (2.34)%			(144,168,117	)
NET ASSETS – 100.00%		$	6,164,170,241

^a Non-income earning security.

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

^c Affiliated issuer. See Note 2.

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

^e All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULE OF INVESTMENTS 11

Statement of Assets and Liabilities

iSHARES^®, INC.

August 31, 2009

	iShares MSCI Japan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	7,346,859,712
Affiliated issuers (Note 2)		151,498,718
Total cost of investments	$	7,498,358,430
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	6,156,839,640
Affiliated issuers (Note 2)		151,498,718
Total fair value of investments		6,308,338,358
Foreign currency, at valueb		4,238,264
Receivables:
Dividends and interest		3,137,545
Capital shares sold		1,322,273
Interest from affiliate (Note 2)		662,420
Total Assets		6,317,698,860
LIABILITIES
Payables:
Investment securities purchased		631,912
Collateral for securities on loan (Note 5)		149,912,990
Capital shares redeemed		264,335
Investment advisory fees (Note 2)		2,719,382
Total Liabilities		153,528,619
NET ASSETS	$	6,164,170,241
Net assets consist of:
Paid-in capital	$	7,928,579,076
Undistributed net investment income		11,285,164
Accumulated net realized loss		(585,837,043	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(1,189,856,956	)
NET ASSETS	$	6,164,170,241
Shares outstandingc		601,800,000
Net asset value per share	$	10.24

^a Securities on loan with a value of $142,751,312. See Note 5.

^b Cost of foreign currency: $4,164,422.

^c $0.001 par value, number of shares authorized: 2,124,600,000.

See notes to financial statements.

12 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statement of Operations

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI Japan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	105,129,906
Interest from affiliated issuers (Note 2)		4,907
Securities lending income from affiliated issuers (Note 2)		1,996,868
Interest from affiliate (Note 2)		662,420
Total investment income		107,794,101
EXPENSES
Investment advisory fees (Note 2)		29,763,035
Total expenses		29,763,035
Net investment income		78,031,066
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(230,732,438	)
In-kind redemptions		(249,251,461	)
Foreign currency transactions		8,678,914
Net realized loss		(471,304,985	)
Net change in unrealized appreciation (depreciation) on:
Investments		(579,675,166	)
Translation of assets and liabilities in foreign currencies		141,239
Net change in unrealized appreciation (depreciation)		(579,533,927	)
Net realized and unrealized loss		(1,050,838,912	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(972,807,846	)

^a Net of foreign withholding tax of $7,831,522.

See notes to financial statements.

FINANCIAL STATEMENTS 13

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Japan Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	78,031,066		$	101,126,035
Net realized gain (loss)		(471,304,985	)		632,241,422
Net change in unrealized appreciation (depreciation)		(579,533,927	)		(2,458,735,947	)
Net decrease in net assets resulting from operations		(972,807,846	)		(1,725,368,490	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(73,264,843	)		(145,335,547	)
Total distributions to shareholders		(73,264,843	)		(145,335,547	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,197,765,511			1,033,469,389
Cost of shares redeemed		(2,487,058,899	)		(3,443,234,963	)
Net decrease in net assets from capital share transactions		(289,293,388	)		(2,409,765,574	)
DECREASE IN NET ASSETS		(1,335,366,077	)		(4,280,469,611	)
NET ASSETS
Beginning of year		7,499,536,318			11,780,005,929
End of year	$	6,164,170,241		$	7,499,536,318
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	11,285,164		$	(4,799,303	)
SHARES ISSUED AND REDEEMED
Shares sold		239,400,000			79,200,000
Shares redeemed		(283,200,000	)		(270,600,000	)
Net decrease in shares outstanding		(43,800,000	)		(191,400,000	)

See notes to financial statements.

14 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Japan Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006			Year ended Aug. 31, 2005
Net asset value, beginning of year	$	11.62		$	14.07		$	13.80		$	10.99		$	9.89
Income from investment operations:
Net investment incomea		0.13			0.14			0.10			0.06			0.06
Net realized and unrealized gain (loss)b		(1.39	)		(2.39	)		0.27			2.81			1.08
Total from investment operations		(1.26	)		(2.25	)		0.37			2.87			1.14
Less distributions from:
Net investment income		(0.12	)		(0.20	)		(0.10	)		(0.06	)		(0.04	)
Total distributions		(0.12	)		(0.20	)		(0.10	)		(0.06	)		(0.04	)
Net asset value, end of year	$	10.24		$	11.62		$	14.07		$	13.80		$	10.99
Total return		(10.68	)%		(16.13	)%		2.68	%		26.10	%		11.58	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	6,164,170		$	7,499,536		$	11,780,006		$	13,724,590		$	7,248,107
Ratio of expenses to average net assets		0.56	%		0.52	%		0.52	%		0.54	%		0.57	%
Ratio of net investment income to average net assets		1.46	%		1.11	%		0.68	%		0.48	%		0.59	%
Portfolio turnover ratec		4	%		4	%		3	%		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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 15

Notes to Financial Statements

iSHARES^®, INC.

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

These financial statements relate only to the iShares MSCI Japan Index Fund (the “Fund”).

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

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of the Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”). Effective September 1, 2008, the Fund adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”);

16 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”);

• Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”).

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.

The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Fund does not adjust the quoted price for such instruments, even in situations where the Fund holds a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Fund uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

The inputs used by the Fund in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Fund in the absence of market information. The fair value measurement of Level 3 Prices does not include

NOTES TO FINANCIAL STATEMENTS 17

Notes to Financial Statements (Continued)

iSHARES^®, INC.

transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Fund’s results of operations.

Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

As of August 31, 2009, the value of each of the Fund’s investments was classified as a Level 1 Price. The breakdown of the Fund’s investments into major categories is disclosed in the Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a rate different from the rates used by MSCI may adversely affect the Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

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

DISTRIBUTIONS TO SHAREHOLDERS

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

As of August 31, 2009, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $15,301,373, unrealized depreciation of $1,287,320,427, and capital and other losses of $493,052,201, for net accumulated losses of $1,765,071,255.

For the years ended August 31, 2009 and August 31, 2008, the tax characterization of distributions paid for the Fund represents ordinary income. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for the Fund.

18 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

FEDERAL INCOME TAXES

It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2009.

From November 1, 2008 to August 31, 2009, the Fund incurred net realized capital losses of $155,850,799. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2010.

As of August 31, 2009, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $62,572,173, $3,621,148, $5,594,562, $8,733,802, $68,122,871, $27,817,841, $44,443,527 and $116,295,478 expiring in 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.

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

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

As of August 31, 2009, the cost of investments for federal income tax purposes was $7,595,821,901. Net unrealized depreciation was $1,287,483,543, of which $59,671,536 represented gross unrealized appreciation on securities and $1,347,155,079 represented gross unrealized depreciation on securities.

Management has reviewed the tax positions as of August 31, 2009, inclusive of the prior three open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

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

NOTES TO FINANCIAL STATEMENTS 19

Notes to Financial Statements (Continued)

iSHARES^®, INC.

For its investment advisory services to the Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.59%	First $7 billion
0.54	Over $7 billion, up to and including $11 billion
0.49	Over $11 billion, up to and including $24 billion
0.44	Over $24 billion, up to and including $48 billion
0.40	Over $48 billion

Under the terms of the Investment Advisory Agreement, the Fund is required to remit payment of accrued fees to BGFA on a quarterly basis. BGFA has determined that in certain cases such payments to BGFA by the Fund were made earlier than provided for under the Investment Advisory Agreement. BGFA will reimburse the Fund for interest that would have been earned had such payments been made on a quarterly basis. The amount to be reimbursed is included under receivables and investment income as “Interest from affiliate” in the Statement of Assets and Liabilities and Statement of Operations, respectively. The reimbursement does not have a material effect on net asset value per share or the total return shown in the Financial Highlights.

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund is permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Fund. BarCap and BGI are affiliates of BGFA, the Fund’s investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended August 31, 2009, BGI earned securities lending agent fees of $1,996,868.

Cross trades for the year ended August 31, 2009 were executed by the Fund pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

The Fund may invest in certain money market funds managed by BGFA, the Fund’s investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. These money market funds seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily

20 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statement of Operations. Income distributions earned by the Fund from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statement of Operations.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2009, aggregated $239,941,816 and $232,558,866, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2009, aggregated $2,133,523,288 and $2,416,440,479, respectively.

4. CAPITAL SHARE TRANSACTIONS

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

The consideration for the purchase of Creation Units of the Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the securities involved in the Fund’s underlying index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

The Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by the Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of the Fund or through one or more joint accounts or money market funds, including those managed by BGFA; such reinvestments are subject to investment risk.

As of August 31, 2009, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BGFA. The market value of the securities on loan as of August 31, 2009 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Fund’s Statement of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

NOTES TO FINANCIAL STATEMENTS 21

Notes to Financial Statements (Continued)

iSHARES^®, INC.

6. BLACKROCK TRANSACTION

On June 16, 2009, Barclays PLC, the ultimate parent company of BGI and BGFA, accepted a binding offer and entered into an agreement to sell its interests in BGFA, BGI and certain affiliated companies, to BlackRock, Inc., (the “BlackRock Transaction”). The BlackRock Transaction is subject to certain regulatory approvals, as well as other conditions to closing.

Under the 1940 Act, completion of the BlackRock Transaction will cause the automatic termination of the Fund’s current investment advisory agreement with BGFA. In order for the management of the Fund to continue uninterrupted, the Board approved a new investment advisory agreement for the Fund subject to shareholder approval. A special meeting of shareholders of the Fund is scheduled to be held on November 4, 2009. Each shareholder of record as of the close of business on August 25, 2009 will receive notice of and be entitled to vote at the meeting.

7. REVIEW OF SUBSEQUENT EVENTS

In connection with the preparation of the financial statements of the Fund as of and for the year ended August 31, 2009, events and transactions through October 23, 2009, the date the financial statements are available to be issued, have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement disclosure have been identified.

22 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Japan Index Fund, a portfolio of the iShares MSCI Series (the “Fund”), at August 31, 2009, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 23, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 23

Tax Information (Unaudited)

iSHARES^®, INC.

For the fiscal year ended August 31, 2009, the Fund earned foreign source income of $112,961,426 and paid foreign taxes of $7,826,643 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).

Under Section 854(b)(2) of the Code, the Fund hereby designates the maximum amount of $73,264,843 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2009.

In January 2010, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2009. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

24 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory

Contract (Unaudited)

iSHARES^®, INC.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Fund. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 16-17, 2009, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Fund, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUND’S EXPENSES AND PERFORMANCE OF THE FUND

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising the Fund’s peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the Lipper Group and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Group, the statistical information may or may not provide meaningful direct comparisons to the Fund. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five- and ten-year, and “last quarter” periods ended March 31, 2009, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 25

Board Review and Approval of Current Investment Advisory

Contract (Unaudited)(Continued)

iSHARES^®, INC.

periods. The Board noted that the Fund performed in line with its performance benchmark index over relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Fund’s performance in comparison with its relevant benchmark index. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expenses for the Fund were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in its respective Lipper Group. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in its Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO THE FUND AND PROFITS REALIZED BY BGFA AND AFFILIATES

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

ECONOMIES OF SCALE

In connection with its review of the Fund’s profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase, and that extended breakpoints were implemented for the Fund the previous year. The Board also discussed the substantial growth in assets of certain iShares funds, including the Fund, over the last few years. The Board noted that the Fund’s asset size decreased over the past twelve months. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Fund, had not yet reached scale. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of economies of scale with the Fund’s shareholders.

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

The Board received and considered certain information regarding the Fund’s annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). In reviewing the comparative investment advisory/management fee information, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided

26 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory

Contract (Unaudited)(Continued)

iSHARES^®, INC.

to the Fund in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Fund and the Other Accounts under differing regulatory requirements and client guidelines. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates there under, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Fund and its shareholders to approve the Advisory Contract for the coming year.

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 27

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)

iSHARES^®, INC.

On June 16, 2009, Barclays Bank PLC (“Barclays”) entered into an agreement to sell its interest in the Barclays Global Investors asset management business, which includes BGI and BGI’s business of advising, sponsoring and distributing exchange-traded funds, to BlackRock, Inc. (“BlackRock”). Assuming receipt of the requisite regulatory approvals and the satisfaction of other conditions to the closing, the subsidiaries of Barclays operating the BGI business, including BGFA (the “Adviser”), will be sold to BlackRock (the “Transaction”) for cash and BlackRock stock.

The Adviser currently serves as the investment adviser to each Fund pursuant to an investment advisory agreement with the Company (the “Current Advisory Agreement”). Under the 1940 Act, the Transaction, if consummated, will result in the automatic termination of the Current Advisory Agreement. In order for the management of each Fund to continue uninterrupted, the Board approved interim and new investment advisory agreements (the “New Advisory Agreements”) with the Company, subject to shareholder approval.

BOARD CONSIDERATIONS IN APPROVING THE NEW ADVISORY AGREEMENTS

At an in-person Board meeting held on August 13, 2009, the Board, including the Independent Directors, unanimously approved the New Advisory Agreements between the Adviser and the Company, on behalf of its Funds after consideration of all factors determined to be relevant to the Board’s deliberations, including those discussed below.

The Approval Process – At telephonic and in-person meetings held in June, July and August of this year, the Board, including the Independent Directors, discussed the Transaction and the New Advisory Agreements for the Funds.

In preparation for their consideration of the New Advisory Agreements, the Directors received, in response to a written due diligence request prepared by the Board and its independent counsel and provided to BlackRock, BGI and the Adviser, comprehensive written information covering a range of issues and received, in response to their additional requests, further information in advance of and at the August 13, 2009 in-person Board meeting. To assist the Board in its consideration of the New Advisory Agreements, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and the Adviser provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.

In June 2009, the Board had performed a full annual review of, or initially approved, as applicable, the current Investment Advisory Agreement between the Adviser and the Company, on behalf of its Funds for each Fund as required by the 1940 Act and, after reviewing, among other things, the investment capabilities, resources and personnel of the Adviser, determined that the nature, extent and quality of the services provided by the Adviser under the Current Advisory Agreements were appropriate. The Board also determined that the advisory fees paid by each Fund, taking into account any applicable agreed-upon fee waivers and breakpoints, were fair and reasonable in light of the services provided, the costs to the Adviser of providing those services, economies of scale, the fees and other expenses paid by similar funds (including information provided by Lipper, Inc. (“Lipper”)), and such other circumstances as the Directors considered relevant in the exercise of their reasonable judgment. The Board approved the Current Advisory Agreements on June 17, 2009.

In advance of the June 2009 Board meeting, the Board requested and received materials specifically relating to each Fund’s Current Advisory Agreement. These materials were prepared for each Fund, and included information (i) compiled by Lipper on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (ii) prepared by the Adviser discussing market conditions generally; (iii) on the profitability to the Adviser of the Current Advisory Agreements and other payments received by the Adviser and its affiliates from the Funds; and (iv) provided by the Adviser concerning services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to the Adviser and its affiliates from their relationship with the Fund.

28 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)(Continued)

iSHARES^®, INC.

At the June 17, July 29 and August 13, 2009 Board meetings, the Directors discussed with representatives of BGI, the Adviser and BlackRock, the management, investment, risk management and compliance capabilities and processes, and financial condition of BlackRock, the Transaction and its rationale, and BlackRock’s general plans and intentions regarding the Adviser and the Funds. At these Board meetings, representatives of BGI, the Adviser and BlackRock made various presentations to, and responded to questions from, the Board. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of the Adviser in connection with the Transaction, including the anticipated senior management structure of the Adviser following the completion of the Transaction. The Independent Directors also conferred separately and with their independent legal counsel about the Transaction and other matters related to the Transaction on a number of occasions. After the presentations and after reviewing the written materials provided, the Independent Directors met in executive sessions with their independent legal counsel at the June, July and August 2009 Board meetings to consider the Transaction, its expected impact on the Adviser and the Funds, and the New Advisory Agreements.

In connection with the Board’s review of the New Advisory Agreements, BGI, the Adviser and/or BlackRock, as applicable, provided the Board with information about a variety of matters. The Board considered, among other things, the following information:

• the reputation, financial strength and resources of BlackRock and its investment advisory subsidiaries and the anticipated financial strength and resources of the combined company;

• that there is not expected to be any diminution in the nature, quality and extent of services provided to the Funds and their shareholders by the Adviser, including portfolio management and compliance services;

• that the Adviser and BlackRock have no present intention to alter the advisory fee rates and expense arrangements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction;

• that it is expected that substantially all of the current employees of the Adviser will remain employees of the Adviser and will continue to provide services to the Funds following the Transaction;

• that the Funds may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including investment tools, provided under the BlackRock Solutions^® brand name;

• that the Funds are expected to continue to be sold through existing distribution channels;

• that the Funds will have access to greater distribution resources through BlackRock’s relationships with third party brokers and retirement plan platforms;

• that the parties to the Transaction Agreement have agreed to conduct their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act in relation to the Funds;

• that Barclays or one of its affiliates has agreed to pay all expenses of the Funds in connection with the Board’s consideration of the New Advisory Agreements and all costs of seeking shareholder approval of the New Advisory Agreements; and

• that Barclays and BlackRock would derive benefits from the Transaction and that, as a result, they may have a different financial interest in the matters that were being considered than do Fund shareholders.

The Board did not identify any particular information that was all-important or controlling, and each Director may have attributed different weights to the various factors discussed below. The Directors evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. In their deliberations, the Directors considered information received

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 29

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)(Continued)

iSHARES^®, INC.

in connection with their most recent approval or continuation of each Current Advisory Agreement at the June 2009 Board meeting, in addition to information provided by BGI, the Adviser and BlackRock regarding BlackRock and the Transaction, in connection with their evaluation of the terms and conditions of the New Advisory Agreements. The Directors, including a majority of the Independent Directors, concluded that the terms of the New Advisory Agreements are appropriate, that the fees to be paid are reasonable in light of the services to be provided to each Fund, and that the New Advisory Agreements should be approved and recommended to Fund shareholders. In voting to approve the New Advisory Agreements in respect of each Fund, the Board considered in particular the following factors:

The nature, extent and quality of services to be provided by the Adviser and its affiliates – In connection with their consideration of the New Advisory Agreements, the Board considered representations by the Adviser, BGI and BlackRock that there would be no diminution in the scope of services required of or provided by the Adviser under the New Advisory Agreements for each Fund as compared to the scope of services provided by the Adviser under the Current Advisory Agreement. In reviewing the scope of these services at the June and August 2009 Board meetings, the Board considered the Adviser’s investment philosophy and experience, noting that the Adviser and its affiliates have committed significant resources over time, including over the past year, including investments in technology and increasing the number of their employees supporting the Funds. The Board also considered the Adviser’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that the Adviser reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board noted that it expects that these reports and discussions will continue following the consummation of the Transaction. In addition to the above considerations, the Board considered the Adviser’s investment processes and strategies, and matters related to the Adviser’s portfolio transaction policies and procedures. The Board further took into account that, with respect to most of the Funds, the Adviser does not serve as investment adviser for other series of registered investment companies with substantially similar investment objectives and strategies; therefore, directly comparable performance information was generally not available for most Funds. The Board also considered each Fund’s record of performing in accordance with its investment objective.

In connection with the investment advisory services to be provided under the New Advisory Agreements, the Board took into account detailed discussions with representatives of the Adviser at the June 2009 Board meeting and at prior Board meetings regarding the management of each Fund. In addition to the investment advisory services to be provided to the Funds, the Board, at the August 2009 Board meeting, considered that the Adviser also will continue to provide management and administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements and other services necessary for the operation of the Funds, and that these services were expected to be consistent with the services the Adviser currently performs under the Current Advisory Agreements.

The Board noted the representations of the Adviser, BGI and BlackRock that the Transaction was not expected to have any adverse effect on the resources and strengths of the Adviser in managing the Funds. The Board also considered that the Funds and their shareholders may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. The Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business. The Board also discussed the Adviser’s anticipated financial condition following the completion of the Transaction. The Board discussed BlackRock’s current ownership structure and expected ownership structure following the completion of the Transaction. The Board was advised that BlackRock operates as an independent firm, with its own Board of Directors and no majority shareholder. The Board was also advised that while BlackRock’s largest shareholders, Merrill Lynch, a wholly owned subsidiary of Bank of America, and PNC, are important clients and strategic partners of BlackRock, they are not involved in the firm’s day-to-day management or operations.

30 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)(Continued)

iSHARES^®, INC.

Based on the discussions held and the materials presented at the June, July and August 2009 Board meetings and prior Board meetings, the Board determined that the Transaction would not likely cause an adverse change in the nature, extent and quality of the services to be provided by the Adviser under the New Advisory Agreements compared with the services provided by the Adviser under the Current Advisory Agreements and that the Board expects that the quality of such services will continue to be appropriate.

Funds’ expenses and performance of the Funds – The Board received and reviewed statistical information prepared by Lipper at the June 2009 meeting and also received information at prior meetings regarding the expense ratio components of the Funds, including advisory fees, waivers and reimbursements, and gross and net total expenses, in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising a Fund’s peer group pursuant to Lipper’s proprietary methodology and, for certain Funds, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of the Adviser (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by most of the Funds, the Lipper Groups sometimes included mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to certain Funds.

The Board noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the Funds in their Lipper Groups with respect to the Current and New Advisory Agreements. The Board took into account that the fee rates for each Fund under the New Advisory Agreements are identical to the fee rates under the respective Current Advisory Agreements. Further, the Board noted that representatives of the Adviser and BlackRock had confirmed that there is no present intention to alter the advisory fee rates, expense waivers or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction.

In addition to reviewing the fees and expenses, the Board noted that it regularly reviews each Fund’s performance and at the June 2009 meeting reviewed statistical information prepared by Lipper regarding the performance of each Fund for the quarter-end, one-, three-, five- and ten-year periods, as applicable, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of the relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their performance benchmark indices over the relevant periods. In considering this information, the Board took into account that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indices. This comparative performance information was also considered by the Board. The Board considered the Adviser’s substantial investment advisory experience and capabilities, as well as the possibility of additional resources and support from BlackRock following the completion of the Transaction, but noted that the effect, if any, the consummation of the Transaction would have on the future performance of the Funds could not be predicted.

Based on this review, the Board had concluded that the investment advisory fee rates and expense levels and the historical performance of each Fund, as compared to the investment advisory fee rates and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Current Advisory Agreements and concluded that these comparisons continued to be satisfactory for the purpose of approving the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 31

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)(Continued)

iSHARES^®, INC.

Cost of services provided and profits realized by the Adviser from the relationship with each Fund – The Board considered that at the June 2009 Board meeting and at prior meetings, it had reviewed information about the profitability of the Adviser with respect to the Funds based on the fees payable to the Adviser and its affiliates (including fees under the Current Advisory Agreements), and all other sources of revenue and expense to the Adviser and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Companies (including any securities lending by the Funds). The Board also discussed the Adviser’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below).

In evaluating the costs of the services to be provided by the Adviser under the New Advisory Agreements, the Board considered, among other things, whether advisory fee rates or other expenses would change as a result of the Transaction. The Board noted that the New Advisory Agreements are similar to the Current Advisory Agreements, including the fact that the fee rates under the Agreements are identical and that representatives of the Adviser and BlackRock represented that there is no present intention due to the Transaction to alter the advisory fee rates, expense waiver or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction. It was noted that it was not possible to predict how the Transaction would affect the Adviser’s profitability from its relationship with the Funds. Potential cost savings had been described by BlackRock representatives that may be achieved by BlackRock immediately following the Transaction, but even if all of such savings were realized by the Adviser in connection with the management of the Funds, the Adviser’s profitability in respect of the Funds was not expected to increase in a significant respect. The Adviser, BlackRock and the Board discussed how profitability will be calculated and presented to the Board following the Transaction, and the Board reviewed BlackRock’s 2008 profitability methodology with respect to its registered funds. The Board expects to receive profitability information from the Adviser on at least an annual basis following the completion of the Transaction and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.

The extent to which economies of scale would be realized as a Fund grows and whether fee levels would reflect such economies of scale – In connection with its review of the Funds’ profitability analysis at the June 2009 meeting, the Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets. At the June 2009 Board meeting, the Board also reviewed the Adviser’s historic profitability as investment adviser to the iShares fund complex and noted that the Adviser had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that the Adviser had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. The Board further noted that the Current and New Advisory Agreements provide for breakpoints in certain Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other Funds, increase and that breakpoints were implemented the previous year for certain Funds. The Board noted that for certain other Funds, the Current and New Advisory Agreements do not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase; however, the Board further noted that possible future economies of scale for those Funds had, in many cases, been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders may have received from a fee structure with declining breakpoints where the initial fee was higher. At the June 2009 Board meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fee rates, with the breakpoints for certain Funds, reflected appropriate sharing of economies of scale with the Funds’ shareholders.

The Board noted representations from the Adviser and BlackRock that the Adviser will continue to make significant investments in the iShares fund complex and the infrastructure supporting the Funds. The Board determined that changes to the fee structure were not currently necessary and that the Funds appropriately participate in economies of scale. It was noted that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale. The Board expects to consider economies of scale on at least an annual basis following completion of the Transaction and thus be in a position to evaluate additional economies of scale, if any.

32 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory

Agreements (Unaudited)(Continued)

iSHARES^®, INC.

Fees and services provided for other comparable funds/accounts managed by the Adviser and its Affiliates – At the June 2009 Board meeting, the Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Current Advisory Agreements in comparison to the investment advisory/management fee rates for other funds/accounts for which the Adviser or BGI provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for many of the Funds, as the Adviser and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as many of the Funds. The Board noted, however, that the Adviser provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Furthermore, in reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Current Advisory Agreements for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which the Adviser or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Current and New Advisory Agreements do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Current and New Advisory Agreements are fair and reasonable.

Other benefits to the Adviser and its affiliates, including fall-out benefits – In evaluating the fall-out and any other ancillary benefits received by the Adviser under the Current Advisory Agreements, the Board reviewed any ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser or its affiliates, such as any payment of revenue to BGI, the Company’s current securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to the Adviser and BGI in connection with any investments by the Funds in other funds for which the Adviser provides investment advisory services and/or BGI provides administration services. The Board noted that while revenue to BGI in connection with securities lending agency services to the Funds increased overall as against the previous year, overall revenue increased by approximately the same percentage as overall expenses. The Board noted that the Adviser does not use soft dollars or consider the value of research or other services that may be provided to the Adviser (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Adviser or purchased from an underwriting syndicate in which an Adviser affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. Any fall-out or ancillary benefits as a result of the Transaction were difficult to quantify with certainty at this time, and the Board indicated that it would continue to evaluate them going forward.

Conclusion – The Board examined the totality of the information they were provided at the June, July and August 2009 Board meetings, and information they received at other meetings held during the past year, and did not identify any single factor discussed previously as controlling. Based on this analysis, the Board determined that the New Advisory Agreements, including the investment advisory fee rates there under, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to unanimously approve the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 33

Supplemental Information (Unaudited)

iSHARES^®, INC.

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

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

The following information shows the frequency distributions of premiums and discounts for the Fund. The information shown for the Fund is for five calendar years through the date of the most recent calendar quarter-end.

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

iShares MSCI Japan Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 6.0%	2	0.14	%
Greater than 5.5% and Less than 6.0%	1	0.07
Greater than 5.0% and Less than 5.5%	2	0.14
Greater than 4.5% and Less than 5.0%	3	0.22
Greater than 4.0% and Less than 4.5%	4	0.29
Greater than 3.5% and Less than 4.0%	8	0.58
Greater than 3.0% and Less than 3.5%	5	0.36
Greater than 2.5% and Less than 3.0%	11	0.80
Greater than 2.0% and Less than 2.5%	16	1.16
Greater than 1.5% and Less than 2.0%	50	3.62
Greater than 1.0% and Less than 1.5%	99	7.16
Greater than 0.5% and Less than 1.0%	225	16.28
Between 0.5% and –0.5%	604	43.73
Less than –0.5% and Greater than –1.0%	153	11.07
Less than –1.0% and Greater than –1.5%	81	5.86
Less than –1.5% and Greater than –2.0%	47	3.40
Less than –2.0% and Greater than –2.5%	26	1.88
Less than –2.5% and Greater than –3.0%	14	1.01
Less than –3.0% and Greater than –3.5%	8	0.58
Less than –3.5% and Greater than –4.0%	6	0.43
Less than –4.0% and Greater than –4.5%	6	0.43
Less than –4.5% and Greater than –5.0%	2	0.14
Less than –5.0% and Greater than –5.5%	4	0.29
Less than –5.5%	5	0.36
	1,382	100.00	%

34 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited)

iSHARES^®, INC.

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

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 183 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

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

Interested Directors and Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss, 48	Director and Chairman (since 2003).	Non-Executive Chairman (since 2009), iShares; Global Chief Executive Officer (2008-2009) of iShares/Intermediary Groups of BGI; Chief Executive Officer (2005-2008) of iShares Intermediary Index and Market Group of BGI; Chief Executive Officer (2003-2005) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director (since 2005) of BGFA; Director, President and Chief Executive Officer (since 2005) of Barclays Global Investors International, Inc.; Director and Chairman (since 2005) of Barclays Global Investors Services.	Trustee (since 2003) of iShares Trust; Trustee (since 2001) of BGlF and MIP.

* Lee T. Kranefuss is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI.

DIRECTOR AND OFFICER INFORMATION 35

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
George G.C. Parker, 70	Director (since 2002); Lead Independent Director (since 2006).	Dean Witter Distinguished Professor of Finance (since 1994), Emeritus, Stanford University: Graduate School of Business.	Trustee (since 2000) of iShares Trust; Lead Independent Trustee (since 2006) of iShares Trust; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2004) of Threshold Pharmaceuticals; Director (since 2007) of NETGEAR, Inc.
J. Darrell Duffie, 55	Director (since 2008).	Professor (since 1984) of Stanford University: Graduate School of Business.	Trustee (since 2008) of iShares Trust; Director (since 2008) of Moody’s Corp.
Cecilia H. Herbert, 60	Director (since 2005).	Chair (1994-2005) of Investment Committee, Archdiocese of San Francisco; Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee (2004-2005) of Pacific Select Funds; Trustee (since 2002) and Chair (2006-2007) of the Finance and Investment Committees (since 2006) of the Thacher School.	Trustee (since 2005) of iShares Trust; Advisory Board Member (since 2009) of Forward Funds.
Charles A. Hurty, 66	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of ProMark Absolute Return Strategies Fund LLC (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio); Director (since 2005) of CSFB Alternative Investments Fund (6 portfolios).
John E. Kerrigan, 54	Director (since 2005).	Chief Investment Officer (since 2002) of Santa Clara University.	Trustee (since 2005) of iShares Trust.
*John E. Martinez, 48	Director (since 2003).	Director (since 2005) of EquityRock Capital Management; Director (since 2003) of Larkin Street Youth Services.	Trustee (since 2003) of iShares Trust; Chairman (since 2007) of Independent Review Committee, Canadian iShares Funds.

36 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Robert H. Silver, 54	Director (since 2007).	President and Co-Founder (since 2006) of The Bravitas Group, Inc.; Member (since 2006) of Non-Investor Advisory Board of Russia Partners II, LP; Director and member (2006-2009) of the Audit and Compensation Committee of EPAM Systems, Inc.; President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer (1999-2005) of UBS Services USA, LLC; Managing Director (2000-2005) of UBS America, Inc.; Director and Vice Chairman (since 2001) of the YMCA of Greater NYC; Broadway Producer (since 2006); Co-Founder and Vice President (since 2008) of Parentgiving Inc.	Trustee (since 2007) of iShares Trust.

* Prior to August 13, 2009, John E. Martinez was deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI. Effective August 13, 2009, John E. Martinez is a non-interested person notwithstanding his former affiliation with BGFA and its affiliates prior to 2002.

Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham, 44	President (since 2007).	Head (since 2007) of Americas iShares, BGI; Chief Operating Officer (2003-2007) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director and Chief Financial Officer (since 2005) of Barclays Global Investors International, Inc.	None.

DIRECTOR AND OFFICER INFORMATION 37

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Geoffrey D. Flynn, 52	Executive Vice President and Chief Operating Officer (since 2008).	Chief Operating Officer (since 2008) of U.S. iShares, BGI; Director (2007-2008) of Mutual Fund Operations of BGI; President (2003-2007) of Van Kampen Investors Services; Managing Director (2002-2007) of Morgan Stanley; President (2002-2007) of Morgan Stanley Trust, FSB.	None.
Jack Gee, 50	Treasurer and Chief Financial Officer (since 2008).	Senior Director (since 2009) of Fund Administration of Intermediary Investor Business of BGI; Director (2004-2009) of Fund Administration of Intermediary Investor Business of BGI; Treasurer and Chief Financial Officer (2004) of Parnassus Investments.	None.
Eilleen M. Clavere, 57	Secretary (since 2007).	Director (since 2006) of Legal Administration of Intermediary Investors Business of BGI; Legal Counsel and Vice President (2005-2006) of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc.; Counsel (2001-2005) of Kirkpatrick & Lockhart LLP.	None.
Ira P. Shapiro, 46	Vice President and Chief Legal Officer (since 2007).	Associate General Counsel (since 2004) of BGI; First Vice President (1993-2004) of Merrill Lynch Investment Managers.	None.
Amy Schioldager, 47	Executive Vice President (since 2007).	Global Head (since 2008) of Index Equity, BGI; Global Head (2006-2008) of U.S. Indexing, BGI; Head (2001-2006) of Domestic Equity Portfolio Management, BGI.	None.
Patrick O’Connor, 42	Vice President (since 2007).	Head (since 2006) of iShares Portfolio Management, BGI; Senior Portfolio Manager (1999-2006) of BGI.	None.

38 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Lee Sterne, 44	Vice President (since 2007).	Head (since 2007) of U.S. Fixed Income Index and iShares, BGI; Senior Portfolio Manager (2004-2007) of BGI; Portfolio Manager (2001-2004) of BGI.	None.
Matt Tucker, 37	Vice President (since 2007).	Director (since 2009) of Fixed Income Investment Strategy, BGI; Head (2005-2008) of U.S. Fixed Income Investment Solutions, BGI; Fixed Income Investment Strategist (2003-2005) of BGI.	None.

DIRECTOR AND OFFICER INFORMATION 39

The iShares^® Family of Funds

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

	Trading Symbol
iShares Russell Domestic Index Funds
iShares Russell 3000	IWV
iShares Russell 3000 Growth	IWZ
iShares Russell 3000 Value	IWW
iShares Russell Top 200	IWL
iShares Russell Top 200 Growth	IWY
iShares Russell Top 200 Value	IWX
iShares Russell 1000	IWB
iShares Russell 1000 Growth	IWF
iShares Russell 1000 Value	IWD
iShares Russell Midcap	IWR
iShares Russell Midcap Growth	IWP
iShares Russell Midcap Value	IWS
iShares Russell 2000	IWM
iShares Russell 2000 Growth	IWO
iShares Russell 2000 Value	IWN
iShares Russell Microcap	IWC
iShares S&P Domestic Index Funds
iShares S&P 1500	ISI
iShares S&P 100	OEF
iShares S&P 500	IVV
iShares S&P 500 Growth	IVW
iShares S&P 500 Value	IVE
iShares S&P MidCap 400	IJH
iShares S&P MidCap 400 Growth	IJK
iShares S&P MidCap 400 Value	IJJ
iShares S&P SmallCap 600	IJR
iShares S&P SmallCap 600 Growth	IJT
iShares S&P SmallCap 600 Value	IJS
iShares Morningstar Domestic Index Funds
iShares Morningstar Large Core	JKD
iShares Morningstar Large Growth	JKE
iShares Morningstar Large Value	JKF
iShares Morningstar Mid Core	JKG
iShares Morningstar Mid Growth	JKH
iShares Morningstar Mid Value	JKI
iShares Morningstar Small Core	JKJ
iShares Morningstar Small Growth	JKK
iShares Morningstar Small Value	JKL
iShares Dow Jones Domestic Index Funds
iShares Dow Jones U.S.	IYY
iShares KLD Socially Responsible Index Funds
iShares FTSE KLD 400 Social	DSI
iShares FTSE KLD Select Social	KLD
iShares NYSE Domestic Index Funds
iShares NYSE Composite	NYC
iShares NYSE 100	NY

	Trading Symbol
iShares Domestic Specialty Index Funds
iShares S&P U.S. Preferred Stock	PFF
iShares Dow Jones Select Dividend	DVY
iShares North American Sector/Subsector Index Funds
iShares S&P North American Technology Sector	IGM
iShares S&P North American Technology-Multimedia Networking	IGN
iShares S&P North American Technology- Semiconductors	IGW
iShares S&P North American Technology-Software	IGV
iShares S&P North American Natural Resources Sector	IGE
iShares Domestic Sector Index Funds
iShares Dow Jones U.S. Basic Materials Sector	IYM
iShares Dow Jones U.S. Consumer Goods Sector	IYK
iShares Dow Jones U.S. Consumer Services Sector	IYC
iShares Dow Jones U.S. Energy Sector	IYE
iShares Dow Jones U.S. Financial Sector	IYF
iShares Dow Jones U.S. Healthcare Sector	IYH
iShares Dow Jones U.S. Industrial Sector	IYJ
iShares Dow Jones U.S. Technology Sector	IYW
iShares Dow Jones U.S. Telecommunications Sector	IYZ
iShares Dow Jones U.S. Utilities Sector	IDU
iShares Domestic Subsector Index Funds
iShares Dow Jones Transportation Average	IYT
iShares Dow Jones U.S. Aerospace & Defense	ITA
iShares Dow Jones U.S. Broker-Dealers	IAI
iShares Dow Jones U.S. Financial Services	IYG
iShares Dow Jones U.S. Healthcare Providers	IHF
iShares Dow Jones U.S. Home Construction	ITB
iShares Dow Jones U.S. Insurance	IAK
iShares Dow Jones U.S. Medical Devices	IHI
iShares Dow Jones U.S. Oil & Gas Exploration & Production	IEO
iShares Dow Jones U.S. Oil Equipment & Services	IEZ
iShares Dow Jones U.S. Pharmaceuticals	IHE
iShares Dow Jones U.S. Regional Banks	IAT
iShares Nasdaq Biotechnology	IBB
iShares Domestic Real Estate Index Funds
iShares Cohen & Steers Realty Majors	ICF
iShares Dow Jones U.S. Real Estate	IYR
iShares FTSE NAREIT Real Estate 50	FTY
iShares FTSE NAREIT Industrial/Office Capped	FIO
iShares FTSE NAREIT Mortgage Plus Capped	REM
iShares FTSE NAREIT Residential Plus Capped	REZ
iShares FTSE NAREIT Retail Capped	RTL
iShares Target Risk Index Funds
iShares S&P Conservative Allocation	AOK
iShares S&P Moderate Allocation	AOM
iShares S&P Growth Allocation	AOR
iShares S&P Aggressive Allocation	AOA

40 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds (Continued)

	Trading Symbol
iShares International Country Index Funds
iShares FTSE China (HK Listed)	FCHI
iShares FTSE/Xinhua China 25	FXI
iShares MSCI Australia	EWA
iShares MSCI Austria Investable Market	EWO
iShares MSCI Belgium Investable Market	EWK
iShares MSCI Brazil	EWZ
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares MSCI Israel Capped Investable Market	EIS
iShares MSCI Italy	EWI
iShares MSCI Japan	EWJ
iShares MSCI Japan Small Cap	SCJ
iShares S&P/TOPIX 150	ITF
iShares MSCI Malaysia	EWM
iShares MSCI Mexico Investable Market	EWW
iShares MSCI Netherlands Investable Market	EWN
iShares MSCI All Peru Capped	EPU
iShares MSCI Singapore	EWS
iShares MSCI South Africa	EZA
iShares MSCI South Korea	EWY
iShares MSCI Spain	EWP
iShares MSCI Sweden	EWD
iShares MSCI Switzerland	EWL
iShares MSCI Taiwan	EWT
iShares MSCI Thailand Investable Market	THD
iShares MSCI Turkey Investable Market	TUR
iShares MSCI United Kingdom	EWU
iShares International Index Funds
iShares MSCI ACWI ex US	ACWX
iShares MSCI EAFE	EFA
iShares MSCI EAFE Growth	EFG
iShares MSCI EAFE Value	EFV
iShares MSCI EAFE Small Cap	SCZ
iShares FTSE Developed Small Cap ex-North America	IFSM
iShares MSCI Emerging Markets	EEM
iShares MSCI Emerging Markets Eastern Europe	ESR
iShares S&P Emerging Markets Infrastructure	EMIF
iShares MSCI BRIC	BKF
iShares MSCI EMU	EZU
iShares MSCI All Country Asia ex Japan	AAXJ
iShares MSCI Pacific ex-Japan	EPP
iShares S&P Asia 50	AIA
iShares S&P Europe 350	IEV
iShares S&P Latin America 40	ILF
iShares International/Global Real Estate Index Funds
iShares S&P Developed ex-U.S. Property	WPS
iShares FTSE EPRA/NAREIT Developed Real Estate ex-U.S.	IFGL
iShares FTSE EPRA/NAREIT Developed Asia	IFAS
iShares FTSE EPRA/NAREIT Developed Europe	IFEU
iShares FTSE EPRA/NAREIT North America	IFNA
iShares International Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV

	Trading Symbol
iShares Target Date Index Funds
iShares S&P Target Date Retirement Income	TGR
iShares S&P Target Date 2010	TZD
iShares S&P Target Date 2015	TZE
iShares S&P Target Date 2020	TZG
iShares S&P Target Date 2025	TZI
iShares S&P Target Date 2030	TZL
iShares S&P Target Date 2035	TZO
iShares S&P Target Date 2040	TZV
iShares Global Index Funds
iShares MSCI ACWI	ACWI
iShares S&P Global 100	IOO
iShares MSCI Kokusai	TOK
iShares Global Sector Index Funds
iShares S&P Global Consumer Discretionary Sector	RXI
iShares S&P Global Consumer Staples Sector	KXI
iShares S&P Global Energy Sector	IXC
iShares S&P Global Financials Sector	IXG
iShares S&P Global Healthcare Sector	IXJ
iShares S&P Global Industrials Sector	EXI
iShares S&P Global Materials Sector	MXI
iShares S&P Global Technology Sector	IXN
iShares S&P Global Telecommunications Sector	IXP
iShares S&P Global Utilities Sector	JXI
iShares Global Theme Based Index Funds
iShares S&P Global Clean Energy	ICLN
iShares S&P Global Infrastructure	IGF
iShares S&P Global Nuclear Energy	NUCL
iShares S&P Global Timber & Forestry	WOOD
iShares U.S. Multisector Bond Funds
iShares Barclays Aggregate	AGG
iShares Barclays Government/Credit	GBF
iShares Barclays Intermediate Government/Credit	GVI
iShares U.S. Government Bond Funds
iShares Barclays Short Treasury	SHV
iShares Barclays 1-3 Year Treasury	SHY
iShares Barclays 3-7 Year Treasury	IEI
iShares Barclays 7-10 Year Treasury	IEF
iShares Barclays 10-20 Year Treasury	TLH
iShares Barclays 20+ Year Treasury	TLT
iShares Barclays TIPS	TIP
iShares Barclays Agency	AGZ
iShares U.S. Credit Bond Funds
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares iBoxx $ High Yield Corporate	HYG
iShares U.S. Securitized Bond Funds
iShares Barclays MBS	MBB

iSHARES FAMILY OF FUNDS 41

The iShares^® Family of Funds (Continued)

	Trading Symbol
iShares AMT-Free Municipal Bond Funds
iShares S&P National AMT-Free Municipal	MUB
iShares S&P Short Term National AMT-Free Municipal	SUB
iShares S&P California AMT-Free Municipal	CMF
iShares S&P New York AMT-Free Municipal	NYF

	Trading Symbol
iShares International Bond Funds
iShares JPMorgan USD Emerging Markets	EMB
iShares S&P/Citigroup International Treasury	IGOV
iShares S&P/Citigroup 1-3 Year International Treasury	ISHG

iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Frank Russell Company or Standard & Poor’s, nor are they sponsored or endorsed by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above except Barclays Capital, which is an affiliate of BGI. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and servicemark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and servicemark of Xinhua Financial Network Limited. “NAREIT^®” is a trademark of NAREIT; “EPRA^®” is a trademark of EPRA.

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

This advertising section does not constitute part of the 2009 Annual Report.

iS-1437-1009

42 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses (Unaudited)	4
Schedule of Investments	5
Financial Statements	12
Financial Highlights	15
Notes to Financial Statements	16
Report of Independent Registered Public Accounting Firm	23
Tax Information (Unaudited)	24
Board Review and Approval of Current Investment Advisory Contract (Unaudited)	25
Board Review and Approval of New Investment Advisory Agreements (Unaudited)	28
Supplemental Information (Unaudited)	34
Director and Officer Information (Unaudited)	35
iShares Family of Funds	40

Management’s Discussion of Fund Performance

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

(TICKER: EEM)

INVESTMENT OBJECTIVE

The iShares MSCI Emerging Markets Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index^SM (the “Index”). The Index is designed to measure equity market performance in the global emerging markets. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended August 31, 2009 (the “reporting period”), the total return for the Fund was (9.47)%, while the total return for the Index was (9.95)%.

MARKET OVERVIEW AND DISCUSSION OF PERFORMANCE

Emerging markets stocks declined overall for the reporting period in a volatile investment environment. Stock markets in developing countries retracted during the first two months of the reporting period amid one of the worst global economic downturns since World War II and a credit crisis that led to the near-collapse of some of the world’s largest financial institutions. The global economic slowdown began in the U.S., and then spread to the larger nations in Europe and Asia. Emerging market countries felt the effects of the global slowdown as commodity prices declined and exports to developed countries slowed. As investors grew increasingly risk-averse, emerging markets declined during the first two months of the reporting period.

Emerging markets continued to trend lower in late 2008 and early 2009 amid uncertainty about the efforts of governments around the world to arrest the economic downturn and ease the credit crunch. However, in the last six months of the reporting period, emerging markets enjoyed a tremendous recovery. Initial signs of economic stabilization, mainly in the U.S., appeared to boost investor confidence and revive hope of a rebound in exports. In addition, countries such as China were able to maintain their healthy economic growth rate by implementing domestic stimulus plans to offset the drop in exports.

Every region represented in the Index experienced an equity market decline during the reporting period, but markets in Asia generally held up the best. China, the largest country weighting in the Index, posted a modestly positive return, reflecting the country’s efforts to stimulate economic growth. Other positive performers included markets in the Philippines and Indonesia, while Taiwan and South Korea declined modestly.

In Latin America, the two largest markets, Brazil and Mexico, experienced larger market declines. Brazil fell as the prices of oil and other commodities declined during the reporting period, while Mexico declined as U.S. exports weakened and the H1N1 virus outbreak had a negative effect on the tourism industry.

Eastern European markets experienced the largest market declines. Many Eastern European countries were hit hard by the global economic downturn as exports to developed European countries contracted, leading to rising fiscal deficits in several countries. Markets in Russia, which came under pressure as commodity prices slumped, and Hungary declined the most. In the Middle East/Africa, Israel and South Africa held up well as both markets posted small declines.

Seven of the Fund’s ten largest holdings as of August 31, 2009 generated negative returns for the reporting period, led by energy producers OAO Gazprom of Russia and Petroleo Brasileiro SA of Brazil. Other notable decliners included Chinese wireless provider China Mobile Ltd. and South Korean steel producer POSCO. On the positive side, the best performer was South Korean electronics manufacturer Samsung Electronics Co. Ltd., the Fund’s largest holding as of August 31, 2009. The other two positive performers were Taiwan Semiconductor Manufacturing Co. Ltd. and Brazilian commercial bank Itau Unibanco Holding SA.

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

Performance as of August 31, 2009

Average Annual Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.47)%	(9.72)%	(9.95)%	16.47%	16.44%	16.59%	21.31%	21.23%	21.15%

Cumulative Total Returns
Year Ended 8/31/09			Five Years Ended 8/31/09			Inception to 8/31/09
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(9.47)%	(9.72)%	(9.95)%	114.35%	114.09%	115.43%	244.55%	242.97%	242.09%

Total returns for the period since inception are calculated from the inception date of the Fund (4/7/03). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (4/11/03), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown in the table(s) and chart(s) above assumes reinvestment of all dividends and capital gain distributions and does 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.

2 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/09
Sector/Investment Type	Percentage of Net Assets
Financial	23.86	%
Energy	14.86
Communications	13.26
Basic Materials	13.03
Technology	12.60
Industrial	6.80
Consumer Non-Cyclical	5.55
Utilities	4.16
Consumer Cyclical	3.25
Diversified	1.73
Exchange-Traded Funds	0.45
Short-Term and Other Net Assets	0.45
TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/09
Security	Percentage of Net Assets
Samsung Electronics Co. Ltd. SP GDR (South Korea)	4.28	%
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR (Taiwan)	3.36
Petroleo Brasileiro SA Preferred SP ADR (Brazil)	2.43
Itau Unibanco Holding SA SP ADR (Brazil)	2.43
POSCO SP ADR (South Korea)	2.30
Petroleo Brasileiro SA SP ADR (Brazil)	2.19
China Mobile Ltd. (China)	2.10
Chunghwa Telecom Co. Ltd. SP ADR (Taiwan)	2.03
OAO Gazprom SP ADR (Russia)	1.78
KB Financial Group Inc. SP ADR (South Korea)	1.69
TOTAL	24.59	%

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE 3

Shareholder Expenses (Unaudited)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2009 to August 31, 2009.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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

	Beginning Account Value (3/1/09)	Ending Account Value (8/31/09)	Annualized Expense Ratio		Expenses Paid During Perioda (3/1/09 to 8/31/09)
Actual	$1,000.00	$1,671.40	0.71	%	$4.78
Hypothetical (5% return before expenses)	1,000.00	1,021.60	0.71		3.62

^a Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days).

4 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
COMMON STOCKS – 91.58%
BRAZIL – 7.04%
Aracruz Celulose SA SP ADRa,b	1,880,055	$	39,706,762
BRF – Brasil Foods SA SP ADRa,b	282,915		12,499,185
Centrais Eletricas Brasileiras SA SP ADR	1,006,776		14,487,507
Companhia de Saneamento Basico do Estado de Sao Paulo SP ADR	747,024		27,341,078
Companhia Siderurgica Nacional SA SP ADRb	4,605,384		120,154,469
CPFL Energia SA SP ADRb	379,200		19,847,328
Empresa Brasileira de Aeronautica SA SP ADR	4,669,848		99,187,571
Itau Unibanco Holding SA SP ADR	43,870,596		734,832,483
Petroleo Brasileiro SA SP ADR	16,751,160		664,015,982
TIM Participacoes SA SP ADRb	180,335		3,833,922
Vale SA SP ADRb	17,837,568		342,659,681
Vivo Participacoes SA SP ADR	948,000		21,576,480
Votorantim Celulose e Papel SA SP ADRa,b	1,935,854		30,605,852
			2,130,748,300
CHILE – 2.55%
Banco Santander Chile SA SP ADR	3,608,088		184,625,863
Empresa Nacional de Electricidad SA SP ADR	58,776		2,710,161
Enersis SA SP ADR	10,167,252		175,995,132
LAN Airlines SA SP ADR	4,809,161		56,988,558
Sociedad Quimica y Minera de Chile SA Series B SP ADR	10,072,336		350,819,463
			771,139,177
CHINA – 18.23%
Agile Property Holdings Ltd.b	37,920,000		43,102,862
Air China Ltd. Class Ha,b	49,296,000		29,002,698
Aluminum Corp. of China Ltd. Class Hb	45,504,000		48,259,550
Angang New Steel Co. Ltd. Class Hb	26,545,320		50,346,255

Security	Shares	Value
Anhui Conch Cement Co. Ltd. Class Hb	3,792,000	$	23,997,678
Bank of China Ltd. Class H	426,600,000		207,502,856
Bank of Communications Co. Ltd. Class H	89,218,000		105,210,856
Beijing Capital International Airport Co. Ltd. Class Ha,b	30,340,000		16,871,540
Beijing Enterprises Holdings Ltd.b	7,584,000		37,378,646
Belle International Holdings Ltd.b	30,336,000		27,358,820
Chaoda Modern Agriculture (Holdings) Ltd.	11,729,942		6,961,704
China Agri-Industries Holdings Ltd.	26,544,000		18,630,613
China CITIC Bank Class Hb	26,544,000		15,993,559
China Coal Energy Co. Class H	32,232,000		40,796,052
China Communications Construction Co. Ltd. Class Hb	53,088,000		60,686,482
China Construction Bank Class Hb	426,309,000		321,767,550
China COSCO Holdings Co. Ltd. Class Hb	43,608,000		52,831,584
China Everbright Ltd.b	41,940,000		98,807,765
China High Speed Transmission Equipment Group Co. Ltd.b	3,792,000		8,180,248
China Life Insurance Co. Ltd. Class H	96,696,000		407,960,520
China Mengniu Dairy Co. Ltd.a	13,272,000		31,439,159
China Merchants Bank Co. Ltd. Class Hb	39,489,900		86,004,337
China Merchants Holdings (International) Co. Ltd.b	15,168,000		49,218,478
China Mobile Ltd.	65,412,000		636,342,087
China National Building Material Co. Ltd. Class Hb	22,752,000		48,083,420

SCHEDULE OF INVESTMENTS 5

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
China Overseas Land & Investment Ltd.b	55,028,960	$	111,894,669
China Petroleum & Chemical Corp. Class H	235,104,000		196,257,460
China Railway Construction Corp. Class Hb	18,012,000		26,632,285
China Railway Group Ltd. Class Ha,b	37,920,000		32,730,777
China Resources Enterprise Ltd.	26,558,000		62,294,703
China Resources Land Ltd.b	56,880,000		119,034,352
China Resources Power Holdings Co. Ltd.	20,986,999		51,231,061
China Shenhua Energy Co. Ltd. Class H	26,544,000		107,023,282
China Shipping Container Lines Co. Ltd. Class Ha,b	89,112,000		32,307,577
China Shipping Development Co. Ltd. Class Hb	34,146,000		42,778,046
China Telecom Corp. Ltd. Class H	53,088,000		27,192,475
China Travel International Investment Hong Kong Ltd.b	170,640,951		33,464,837
China Unicom (Hong Kong) Ltd.b	45,504,000		63,993,807
China Yurun Food Group Ltd.b	3,792,000		6,546,155
CITIC Pacific Ltd.b	26,544,000		70,892,222
CNOOC Ltd.	218,040,000		286,382,072
COSCO Pacific Ltd.b	11,376,000		17,113,940
Datang International Power Generation Co. Ltd. Class Hb	30,352,000		16,134,162
Denway Motors Ltd.b	75,840,000		33,758,201
Dongfang Electric Corp. Ltd. Class H	7,584,000		36,987,246
Dongfeng Motor Group Co. Ltd. Class Hb	30,336,000		31,390,234
Fosun International Ltd.	9,480,000		7,289,814
GOME Electrical Appliances Holdings Ltd.a	77,141,200		20,502,909
Guangdong Investment Ltd.	26,548,110		13,598,343

Security	Shares	Value
Guangshen Railway Co. Ltd. Class Hb	121,414,363	$	52,791,237
Guangzhou R&F Properties Co. Ltd. Class Hb	16,684,800		27,253,142
Harbin Power Equipment Co. Ltd. Class Hb	11,376,000		11,301,658
Hengan International Group Co. Ltd.b	3,792,000		20,988,794
Huaneng Power International Inc. Class Hb	41,712,000		29,222,860
Industrial and Commercial Bank of China Ltd. Class H	494,856,000		337,750,800
Jiangsu Expressway Co. Ltd. Class H	11,382,000		8,987,355
Jiangxi Copper Co. Ltd. Class Hb	37,938,000		79,198,111
Lenovo Group Ltd.b	94,800,000		39,996,129
Li Ning Co. Ltd.b	7,584,000		21,086,644
Maanshan Iron & Steel Co. Ltd. Class Ha,b	53,088,000		32,740,562
Parkson Retail Group Ltd.	4,740,000		6,910,646
PetroChina Co. Ltd. Class H	208,560,000		230,338,565
PICC Property and Casualty Co. Ltd. Class Ha,b	26,544,000		16,678,508
Ping An Insurance (Group) Co. of China Ltd. Class H	21,222,500		158,813,132
Shanghai Industrial Holdings Ltd.b	7,588,000		36,321,444
Shimao Property Holdings Ltd.b	21,804,000		32,464,136
Shui On Land Ltd.b	58,776,450		32,532,880
Sinofert Holdings Ltd.b	62,166,000		28,152,821
Sino-Ocean Land Holdings Ltd.b	50,244,000		45,507,523
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha,b	45,528,000		19,384,490
Tencent Holdings Ltd.b	9,480,000		141,026,108
Tingyi (Cayman Islands) Holding Corp.	3,792,000		6,790,780

6 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
Yanzhou Coal Mining Co. Ltd. Class Hb	41,712,800	$	59,307,936
Zhejiang Expressway Co. Ltd. Class Hb	41,712,000		39,663,440
Zijin Mining Group Co. Ltd. Class Hb	98,592,000		82,428,720
			5,517,804,369
COLOMBIA – 0.40%
Bancolombia SA SP ADR	3,379,170		120,095,702
			120,095,702
CZECH REPUBLIC – 1.44%
CEZ ASb	6,432,697		336,743,873
Komercni Banka AS	523,296		100,070,425
			436,814,298
EGYPT – 0.58%
Orascom Construction Industries Co. SP GDRb	2,702,690		112,107,581
Orascom Telecom Holding SAE SP GDRb,c	1,924,676		63,706,776
			175,814,357
HUNGARY – 1.27%
Magyar Telekom Telecommunications PLC	4,621,875		18,751,785
MOL Hungarian Oil and Gas Nyrta,b	1,062,930		83,558,190
OTP Bank Nyrta,b	4,829,136		124,842,831
Richter Gedeon Nyrtb	781,152		156,815,253
			383,968,059
INDIA – 6.46%
HDFC Bank Ltd. SP ADRb	4,806,360		473,474,524
ICICI Bank Ltd. SP ADR	11,241,384		343,087,040
Infosys Technologies Ltd. SP ADRb	9,023,525		390,086,986
Mahanagar Telephone Nigam Ltd. SP ADRb	6,872,700		26,528,622
Reliance Industries Ltd. SP GDRa,b,d	4,535,232		385,494,720
Tata Communications Ltd. SP ADRb	8,028,372		163,698,505
Wipro Ltd. SP ADRb	10,993,008		173,139,876
			1,955,510,273

Security	Shares	Value
INDONESIA – 2.31%
PT Aneka Tambang Tbk	239,844,000	$	54,131,457
PT Astra Agro Lestari Tbk	4,740,000		10,110,119
PT Astra International Tbk	30,336,000		90,737,143
PT Bank Central Asia Tbk	170,710,000		71,975,942
PT Bank Danamon Indonesia Tbk	38,868,487		18,123,203
PT Bank Mandiri Tbk	103,332,000		42,029,881
PT Bank Rakyat Indonesia Tbk	87,216,061		65,758,141
PT Bumi Resources Tbk	362,136,000		104,185,951
PT Indofood Sukses Makmur Tbk	53,088,000		13,166,666
PT Indosat Tbk	1,960,060		1,020,865
PT International Nickel Indonesia Tbka	14,220,000		5,960,268
PT Perusahaan Gas Negara Tbk	180,122,500		62,095,802
PT Semen Gresik (Persero) Tbk	13,272,000		7,834,167
PT Telekomunikasi Indonesia Tbk	117,552,500		97,960,416
PT Unilever Indonesia Tbk	948,000		949,881
PT United Tractors Tbk	40,935,150		54,823,862
			700,863,764
ISRAEL – 3.60%
Bank Hapoalim Ltd.a	20,277,720		65,317,012
Bank Leumi le-Israela	26,894,760		92,241,038
Check Point Software Technologies Ltd.a	1,708,296		47,610,209
Discount Investment Corp. Ltd.	111,864		2,601,743
Elbit Systems Ltd.b	1,351,848		88,124,428
Israel Chemicals Ltd.b	11,504,928		128,642,561
Israel Corp. Ltd. (The)b	32,232		19,317,925
Israel Discount Bank Ltd. Class A	31,564,608		55,420,368
Makhteshim-Agan Industries Ltd.b	5,543,904		25,469,024
Mizrahi Tefahot Bank Ltd.a,b	10,063,968		76,712,015
NICE Systems Ltd.a	293,880		8,116,131
Teva Pharmaceutical Industries Ltd.	8,921,635		460,273,922

SCHEDULE OF INVESTMENTS 7

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
Teva Pharmaceutical Industries Ltd. SP ADR	390,576	$	20,114,664
			1,089,961,040
MALAYSIA – 0.34%
AMMB Holdings Bhd	9,752,175		11,381,922
Bumiputra-Commerce Holdings Bhd	2,034,000		5,747,068
Bursa Malaysia Bhd	2,930,800		6,491,620
Gamuda Bhd	12,166,000		10,606,168
Genting Bhd	3,359,400		6,372,509
Genting Malaysia Bhd	19,905,500		15,770,650
IGB Corp. Bhd	4,577,800		2,352,923
IJM Corp. Bhd	3,701,200		6,285,156
IOI Corp. Bhd	5,265,000		7,639,969
MMC Corp. Bhd	3,896,000		2,599,915
Sime Darby Bhd	1,501,673		3,518,047
SP Setia Bhd	4,821,300		6,133,586
Tenaga Nasional Bhd	3,152,700		7,180,081
YTL Corp. Bhd	4,480,400		9,364,119
YTL Power International Bhd	306,160		192,138
			101,635,871
MEXICO – 4.97%
Alfa SAB de CV Series Ab	7,801,700		34,056,051
America Movil SAB de CV Series L	181,068,000		409,066,490
Cemex SAB de CV CPOa	93,323,371		123,810,358
Desarrolladora Homex SAB de CVa	1,928,300		11,398,426
Fomento Economico Mexicano SAB de CV BD Units	34,317,600		124,939,310
Grupo Bimbo SAB de CV Series Ab	568,800		3,315,699
Grupo Carso SAB de CV Series A1b	1,708,041		5,510,534
Grupo Financiero Banorte SAB de CV Series O	20,108,856		59,168,783
Grupo Mexico SAB de CV Series Ba	62,256,363		90,447,117
Grupo Modelo SAB de CV Series Ca	23,320,898		84,938,885
Grupo Televisa SA CPO	36,972,000		129,523,237
Industrias Penoles SAB de CV	1,896,088		29,482,791

Security	Shares	Value
Kimberly-Clark de Mexico SAB de CV Series A	13,471,300	$	58,167,833
Telefonos de Mexico SAB de CV Series L	81,338,400		75,787,472
Telmex Internacional SAB de CV Series Lb	86,855,200		56,473,373
Urbi Desarrollos Urbanos SAB de CVa	6,491,800		12,472,842
Wal-Mart de Mexico SAB de CV Series Vb	55,552,800		197,411,509
			1,505,970,710
PERU – 0.77%
Compania de Minas Buenaventura SA SP ADR	5,746,776		145,221,030
Southern Copper Corp.b	3,094,272		87,444,127
			232,665,157
PHILIPPINE ISLANDS – 1.37%
Ayala Corp.	8,247,603		51,975,365
Ayala Land Inc.	64,876,200		14,292,840
Bank of the Philippine Islands	52,708,840		48,609,444
Globe Telecom Inc.	872,160		18,052,702
Jollibee Foods Corp.e	68,445,600		72,239,951
Manila Electric Co.	17,174,202		70,745,253
Metropolitan Bank & Trust Co.	948,040		757,732
Philippine Long Distance Telephone Co.	1,086,050		56,088,657
SM Investments Corp.	3,641,611		24,814,749
SM Prime Holdings Inc.	262,104,820		56,401,283
			413,977,976
RUSSIA – 5.70%
JSC MMC Norilsk Nickel SP ADRa	8,066,465		89,537,761
LUKOIL SP ADR	5,475,648		277,067,789
Mechel OAO SP ADR	3,380,568		41,276,735
Mobile TeleSystems SP ADR	2,155,752		93,516,522
Novolipetsk Steel SP GDRa,c	1,061,760		25,482,240
OAO Gazprom SP ADR	25,377,960		538,012,752
OAO NovaTek SP GDRc	906,288		35,879,942
OAO Tatneft SP ADR	2,853,482		71,337,050
OJSC Comstar United Telesystems SP GDR	426,640		2,111,868
OJSC Rosneft Oil Co. SP GDR	11,677,602		75,320,533

8 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
Polyus Gold SP ADR	2,277,894	$	45,831,227
Rostelecom SP ADR	1,357,539		41,024,829
Sberbank GDRb,c	743,378		126,573,993
Surgutneftegaz SP ADR	6,455,880		55,520,568
Uralkali SP GDRa,c	1,875,713		35,826,118
Vimpel-Communications SP ADRa	6,772,512		104,567,585
VTB Bank OJSC SP GDRb,c	12,895,474		36,107,327
Wimm-Bill-Dann Foods OJSC SP ADRa,b	480,221		30,402,791
			1,725,397,630
SOUTH AFRICA – 8.85%
Absa Group Ltd.	621,888		10,120,145
African Bank Investments Ltd.	19,665,323		72,840,608
African Rainbow Minerals Ltd.	472,104		9,758,661
Anglo Platinum Ltd.a	800,847		70,945,574
AngloGold Ashanti Ltd.	2,244,864		85,902,503
ArcelorMittal South Africa Ltd.	5,365,374		80,458,050
Aveng Ltd.	2,844,000		15,043,659
Bidvest Group Ltd.	4,247,381		61,620,657
Exxaro Resources Ltd.	2,756,784		32,704,037
FirstRand Ltd.	49,497,430		100,915,949
Foschini Ltd.	9,294,248		72,777,905
Gold Fields Ltd.	7,233,240		87,972,528
Harmony Gold Mining Co. Ltd.a	4,279,272		40,101,435
Impala Platinum Holdings Ltd.	6,827,496		159,360,980
Imperial Holdings Ltd.	5,278,464		50,217,193
Investec Ltd.	6,437,397		48,209,089
Kumba Iron Ore Ltd.	705,312		22,773,441
Liberty Holdings Ltd.	1,356,774		11,235,538
Massmart Holdings Ltd.	802,008		7,980,077
MTN Group Ltd.	17,324,642		283,596,661
Murray & Roberts Holdings Ltd.	3,579,648		25,277,241
Naspers Ltd. Class N	6,095,640		199,174,510
Nedbank Group Ltd.b	5,419,103		80,199,260
Netcare Ltd.a	30,004,210		39,831,751
Northam Platinum Ltd.	485,557		2,497,341
Pick’n Pay Stores Ltd.	8,583,692		41,547,236
Pretoria Portland Cement Co. Ltd.	6,386,214		26,343,948
Remgro Ltd.	1,551,101		17,126,365
Reunert Ltd.	2,677,750		17,464,671

Security	Shares	Value
Sanlam Ltd.	30,277,663	$	79,689,825
Sappi Ltd.	1,722,347		6,678,120
Sasol Ltd.	7,630,189		287,041,306
Shoprite Holdings Ltd.	18,990,336		141,387,957
Standard Bank Group Ltd.	15,042,876		194,099,134
Steinhoff International Holdings Ltd.b	3,187,176		7,128,216
Tiger Brands Ltd.	3,226,992		64,408,504
Truworths International Ltd.	15,793,771		79,791,611
Woolworths Holdings Ltd.	21,357,039		43,186,525
			2,677,408,211
SOUTH KOREA – 12.28%
Daewoo Shipbuilding & Marine Engineering Co. Ltd.	29,030		464,889
Doosan Corp.	21,770		1,452,031
Doosan Heavy Industries & Construction Co. Ltd.	231,790		11,766,744
GS Engineering & Construction Corp.	132,720		10,169,993
Hanjin Heavy Industries & Construction Co. Ltd.	24,190		534,586
Hynix Semiconductor Inc.a	1,367,100		24,027,420
Hyundai Engineering & Construction Co. Inc.	325,410		15,685,549
Hyundai Heavy Industries Co. Ltd.	375,500		57,276,603
Hyundai Mipo Dockyard Co. Ltd.	9,675		956,732
Hyundai Motor Co. Ltd.	60,955		5,173,537
KB Financial Group Inc. SP ADRa,b	12,577,396		512,780,435
Korea Electric Power Corp. SP ADRa,b	25,336,248		312,902,663
KT Corp. SP ADRb	14,392,720		224,094,650
LG Corp.	151,680		9,242,412
LG Display Co. Ltd. SP ADRb	12,447,240		180,236,035
NHN Corp.a	187,575		25,532,669
POSCO SP ADRb	7,619,712		696,898,859
Samsung C&T Corp.	417,120		18,703,435
Samsung Electronics Co. Ltd. SP GDRb,c	4,218,600		1,295,110,200
Samsung Engineering Co. Ltd.	187,990		12,222,586

SCHEDULE OF INVESTMENTS 9

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
Samsung Heavy Industries Co. Ltd.	2,036,070	$	47,849,031
Shinhan Financial Group Co. Ltd. SP ADR	682,369		44,572,343
SK Telecom Co. Ltd. SP ADR	13,105,152		203,916,165
STX Offshore & Shipbuilding Co. Ltd.	60,670		721,394
STX Pan Ocean Co. Ltd.	72,570		644,989
Taihan Electric Wire Co. Ltd.	272,080		4,978,003
			3,717,913,953
TAIWAN – 10.29%
Asia Cement Corp.	3,331,081		3,552,047
AU Optronics Corp. SP ADRb	26,352,207		259,832,761
Catcher Technology Co. Ltd.	3,521,100		9,092,507
Cheng Shin Rubber Industry Co. Ltd.	3,859,515		7,363,406
Chunghwa Telecom Co. Ltd. SP ADR	35,941,836		614,605,396
CMC Magnetics Corp.a	8,136,000		1,767,272
Compal Communications Inc.a	2,598,750		2,309,281
Epistar Corp.	2,314,345		6,798,936
Evergreen Marine Corp. Ltd.a	10,170,000		6,148,375
Far Eastern Textile Ltd.	5,290,434		5,271,710
Foxconn Technology Co. Ltd.	165,272		421,760
HannStar Display Corp.a	11,767,963		2,466,816
Hon Hai Precision Industry Co. Ltd.	74,893,762		252,554,420
HTC Corp.	4,266,990		42,907,772
Macronix International Co. Ltd.	23,056,276		10,962,001
MediaTek Inc.	3,182,802		46,219,354
MiTAC International Corp.	7,403,728		3,013,989
Siliconware Precision Industries Co. SP ADRb	48,894,397		308,034,701
Synnex Technology International Corp.	4,922,280		8,598,457
Taiwan Cement Corp.	7,190,190		7,798,210
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR	94,942,434		1,015,884,044
Tatung Co. Ltd.a	14,763,000		3,143,974

Security	Shares	Value
U-Ming Marine Transport Corp.	2,034,000	$	3,293,552
Uni-President Enterprises Co.	6,689,012		6,929,513
United Microelectronics Corp. SP ADRa,b	139,822,416		454,422,852
Yang Ming Marine Transport Corp.	16,238,978		6,043,397
Yuanta Financial Holding Co. Ltd.	38,829,000		24,005,291
			3,113,441,794
THAILAND – 1.65%
Bangkok Bank PCL	7,972,800		25,903,981
Banpu PCL	2,511,000		29,458,659
IRPC PCL	137,270,400		15,498,922
Kasikornbank PCL	16,172,200		35,901,238
Krung Thai Bank PCL	66,170,400		16,732,297
PTT Aromatics & Refining PCL	39,065,286		24,925,513
PTT Chemical PCL	12,012,768		23,312,046
PTT Exploration and Production PCL	29,061,800		118,349,288
PTT PCL	16,892,000		121,189,297
Ratchaburi Electricity Generating Holding PCL	61,639,900		68,418,296
Siam Cement PCL	2,544,600		14,776,786
Thai Oil PCL NVDR	2,654,400		3,160,929
TMB Bank PCL NVDRa	26,164,800		815,486
			498,442,738
TURKEY – 1.48%
Akbank TASb	8,365,625		47,946,934
Anadolu Efes Biracilik ve Malt Sanayii ASb	398,683		4,357,482
Asya Katilim Bankasi ASa,b	20,503,344		37,986,869
BIM Birlesik Magazalar ASb	144,118		5,378,613
Enka Insaat ve Sanayi ASb	283,420		1,142,744
Eregli Demir ve Celik Fabrikalari TASa,b	7,212,869		28,601,512
Migros TASa	1		8
Petkim Petrokimya Holding ASa,b	4,599,485		21,916,906
Turk Sise ve Cam Fabrikalari ASa,b	25,858,759		27,401,151
Turkcell Iletisim Hizmetleri ASb	3,365,408		21,867,863
Turkiye Garanti Bankasi ASa,b	26,547,967		98,194,746
Turkiye Is Bankasi ASb	8,123,369		32,211,960

10 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2009

Security	Shares	Value
Turkiye Petrol Rafinerileri ASb	1,401,779	$	21,019,678
Turkiye Vakiflar Bankasi TAOa,b	28,017,429		61,991,246
Yapi ve Kredi Bankasi ASa,b	18,202,770		38,334,391
			448,352,103
TOTAL COMMON STOCKS (Cost: $30,195,879,437)			27,717,925,482
PREFERRED STOCKS – 7.52%
BRAZIL – 7.52%
Banco Bradesco SA SP ADR	29,803,224		483,110,261
Brasil Telecom Participacoes SA SP ADR	1,055,250		45,945,585
Centrais Eletricas Brasileiras SA SP ADR	240,792		3,111,033
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A SP ADRb	2,049,576		99,957,821
Companhia de Bebidas das Americas SP ADRb	3,238,368		241,485,102
Companhia Energetica de Minas Gerais SP ADR	3,587,232		52,409,459
Companhia Paranaense de Energia SP ADR	568,800		8,765,208
Gerdau SA SP ADR	7,817,208		91,852,194
Net Servicos de Comunicacao SA SP ADRb	2,844,084		30,033,527
Petroleo Brasileiro SA SP ADR	22,183,200		736,482,240
Tele Norte Leste Participacoes SA SP ADR	3,372,984		53,765,365
Vale SA SP ADR	25,004,448		430,326,550
			2,277,244,345
TOTAL PREFERRED STOCKS (Cost: $2,309,861,306)			2,277,244,345
EXCHANGE-TRADED FUNDS – 0.45%
iShares MSCI Malaysia Index Fundb,e	1,158,614		11,215,383
iShares MSCI South Korea Index Fundb,e	1,317,976		54,814,622

Security	Shares	Value
iShares MSCI Taiwan Index Funde	6,425,952	$	69,657,320
TOTAL EXCHANGE-TRADED FUNDS (Cost: $149,075,598)			135,687,325
SHORT-TERM INVESTMENTS – 4.44%
MONEY MARKET FUNDS – 4.44%
Barclays Global Investors Funds Institutional Money Market Fund, SL Agency Shares 0.26%e,f,g	1,129,160,428		1,129,160,428
Barclays Global Investors Funds Prime Money Market Fund, SL Agency Shares 0.21%e,f,g	159,285,868		159,285,868
Barclays Global Investors Funds Treasury Money Market Fund, SL Agency Shares 0.08%e,f	56,273,131		56,273,131
			1,344,719,427
TOTAL SHORT-TERM INVESTMENTS (Cost: $1,344,719,427)			1,344,719,427
TOTAL INVESTMENTS IN SECURITIES – 103.99% (Cost: $33,999,535,768)			31,475,576,579
Other Assets, Less Liabilities – (3.99)%			(1,207,455,171	)
NET ASSETS – 100.00%		$	30,268,121,408

GDR – Global Depositary Receipts

NVDR – Non-Voting Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

^a Non-income earning security.

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

^c This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^d This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^e Affiliated issuer. See Note 2.

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

^g All or a portion of this security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.

SCHEDULE OF INVESTMENTS 11

Statement of Assets and Liabilities

iSHARES^®, INC.

August 31, 2009

	iShares MSCI Emerging Markets Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	32,432,779,270
Affiliated issuers (Note 2)		1,566,756,498
Total cost of investments	$	33,999,535,768
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	29,922,929,876
Affiliated issuers (Note 2)		1,552,646,703
Total fair value of investments		31,475,576,579
Foreign currencies, at valueb		47,018,397
Cash		3,066,445
Receivables:
Investment securities sold		22,705,246
Dividends and interest		94,181,769
Interest from affiliate (Note 2)		960,499
Total Assets		31,643,508,935
LIABILITIES
Payables:
Investment securities purchased		68,279,796
Collateral for securities on loan (Note 5)		1,288,446,296
Foreign taxes (Note 1)		141,467
Investment advisory fees (Note 2)		18,519,968
Total Liabilities		1,375,387,527
NET ASSETS	$	30,268,121,408
Net assets consist of:
Paid-in capital	$	34,349,923,645
Undistributed net investment income		199,251,752
Accumulated net realized loss		(1,757,320,600	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(2,523,733,389	)
NET ASSETS	$	30,268,121,408
Shares outstandingc		853,200,000
Net asset value per share	$	35.48

^a Securities on loan with a value of $1,227,267,702. See Note 5.

^b Cost of foreign currencies: $46,736,399.

^c $0.001 par value, number of shares authorized: 1,500,000,000.

See notes to financial statements.

12 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statement of Operations

iSHARES^®, INC.

Year ended August 31, 2009

	iShares MSCI Emerging Markets Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	653,900,077
Dividends from affiliated issuers (Note 2)b		4,507,754
Interest from unaffiliated issuers		10,208
Interest from affiliated issuers (Note 2)		88,918
Securities lending income from affiliated issuers (Note 2)		18,160,629
Interest from affiliate (Note 2)		960,499
Total investment income		677,628,085
EXPENSES
Investment advisory fees (Note 2)		160,371,985
Foreign taxes (Note 1)		835,824
Total expenses		161,207,809
Less investment advisory fees waived (Note 2)		(567,958	)
Net expenses		160,639,851
Net investment income		516,988,234
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(1,449,883,182	)
Investments in affiliated issuers (Note 2)		(14,467,033	)
In-kind redemptions		966,166,288
Foreign currency transactions		1,848,096
Net realized loss		(496,335,831	)
Net change in unrealized appreciation (depreciation) on:
Investments		806,846,178
Translation of assets and liabilities in foreign currencies		1,061,271
Net change in unrealized appreciation (depreciation)		807,907,449
Net realized and unrealized gain		311,571,618
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	828,559,852

^a Net of foreign withholding tax of $75,401,049.

^b Net of foreign withholding tax of $269,575.

See notes to financial statements.

FINANCIAL STATEMENTS 13

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Emerging Markets Index Fund
	Year ended August 31, 2009			Year ended August 31, 2008
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	516,988,234		$	564,087,379
Net realized gain (loss)		(496,335,831	)		4,192,101,297
Net change in unrealized appreciation (depreciation)		807,907,449			(7,412,430,109	)
Net increase (decrease) in net assets resulting from operations		828,559,852			(2,656,241,433	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(487,478,088	)		(602,951,708	)
Total distributions to shareholders		(487,478,088	)		(602,951,708	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		18,716,077,957			19,099,692,233
Cost of shares redeemed		(9,091,794,756	)		(13,736,113,781	)
Net increase in net assets from capital share transactions		9,624,283,201			5,363,578,452
INCREASE IN NET ASSETS		9,965,364,965			2,104,385,311
NET ASSETS
Beginning of year		20,302,756,443			18,198,371,132
End of year	$	30,268,121,408		$	20,302,756,443
Undistributed net investment income included in net assets at end of year	$	199,251,752		$	167,889,884
SHARES ISSUED AND REDEEMED
Shares sold		691,200,000			393,300,000
Shares redeemed		(344,700,000	)		(292,950,000	)
Net increase in shares outstanding		346,500,000			100,350,000

See notes to financial statements.

14 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Emerging Markets Index Fund
	Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a			Year ended Aug. 31, 2005a
Net asset value, beginning of year	$	40.07		$	44.78		$	32.48		$	25.97		$	17.99
Income from investment operations:
Net investment incomeb		0.66			1.10			0.63			0.55			0.55
Net realized and unrealized gain (loss)c		(4.66	)		(4.64	)		12.19			6.29			8.23
Total from investment operations		(4.00	)		(3.54	)		12.82			6.84			8.78
Less distributions from:
Net investment income		(0.59	)		(1.17	)		(0.52	)		(0.33	)		(0.80	)
Total distributions		(0.59	)		(1.17	)		(0.52	)		(0.33	)		(0.80	)
Net asset value, end of year	$	35.48		$	40.07		$	44.78		$	32.48		$	25.97
Total return		(9.47	)%		(8.36	)%		39.86	%		26.44	%		46.17	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	30,268,121		$	20,302,756		$	18,198,371		$	11,969,380		$	7,000,858
Ratio of expenses to average net assets prior to waived fees		0.72	%		0.72	%		0.74	%		0.77	%		0.78	%
Ratio of expenses to average net assets after waived fees		0.72	%		0.72	%		0.74	%		0.77	%		0.77	%
Ratio of expenses to average net assets after waived fees and exclusive of foreign taxes		0.72	%		0.72	%		0.74	%		0.75	%		0.74	%
Ratio of net investment income to average net assets		2.32	%		2.32	%		1.63	%		1.77	%		2.40	%
Portfolio turnover rated		5	%		11	%		5	%		12	%		9	%

^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.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 15

Notes to Financial Statements

iSHARES^®, INC.

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

These financial statements relate only to the iShares MSCI Emerging Markets Index Fund (the “Fund”).

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

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of the Fund are valued pursuant to the pricing policy and procedures approved by the Board of Directors of the Company (the “Board”). Effective September 1, 2008, the Fund adopted Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). The hierarchy gives the highest priority to

16 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are as follows:

• Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date (a “Level 1 Price”);

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (a “Level 2 Price”);

• Level 3 – Inputs that are unobservable for the asset or liability (a “Level 3 Price”).

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.

The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Fund’s perceived risk of that instrument.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Fund does not adjust the quoted price for such instruments, even in situations where the Fund holds a large position and a sale could reasonably impact the quoted price.

Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Fund uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.

NOTES TO FINANCIAL STATEMENTS 17

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The inputs used by the Fund in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 Prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Fund in the absence of market information. The fair value measurement of Level 3 Prices does not include transaction costs that may have been capitalized as part of the security’s cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Fund’s results of operations.

Fair value pricing could result in a difference between the prices used to calculate the Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.

As of August 31, 2009, the value of each of the Fund’s investments was classified as a Level 1 Price. The breakdown of the Fund’s investments into major categories is disclosed in the Schedule of Investments.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Dividend income is recognized on the ex-dividend date, net of any foreign taxes withheld at source, and interest income is accrued daily. Non-cash dividends received in the form of stock in an elective dividend, if any, are recorded as dividend income at fair value. Distributions received by the Fund may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Realized gains and losses on investment transactions are determined using the specific identification method.

FOREIGN CURRENCY TRANSLATION

The accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Any use of a rate different from the rates used by MSCI may adversely affect the Fund’s ability to track its underlying index. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.

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

FOREIGN TAXES

The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are disclosed in the Statement of Operations. Foreign taxes payable as of August 31, 2009, if any, are reflected in the Fund’s Statement of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

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

18 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

As of August 31, 2009, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $198,291,253, unrealized depreciation of $2,801,110,332, and capital and other losses of $1,479,943,657, for net accumulated losses of $4,082,762,736.

For the years ended August 31, 2009 and August 31, 2008, the tax characterization of distributions paid for the Fund represents ordinary income. The total distributions and distributions per share are disclosed in the accompanying Statements of Changes in Net Assets and the Financial Highlights for the Fund.

FEDERAL INCOME TAXES

It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2009.

From November 1, 2008 to August 31, 2009, the Fund incurred net realized capital losses of $1,175,552,001. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2010.

As of August 31, 2009, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $840,778, $20,296,564, $11,239,258, $29,973,301, $13,844,901 and $228,196,854 expiring in 2012, 2013, 2014, 2015, 2016 and 2017, respectively. Such losses may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.

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

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

As of August 31, 2009, the cost of investments for federal income tax purposes was $34,276,912,711. Net unrealized depreciation was $2,801,336,132, of which $1,259,877,211 represented gross unrealized appreciation on securities and $4,061,213,343 represented gross unrealized depreciation on securities.

Management has reviewed the tax positions as of August 31, 2009, inclusive of the prior three open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Agreement with the Company, Barclays Global Fund Advisors (“BGFA”) manages the investment of the Fund’s assets. BGFA is a California corporation indirectly owned by Barclays Bank PLC. Under the Investment Advisory Agreement, BGFA is responsible for all expenses (“Covered Expenses”) of the Company, including the cost of transfer agency, custody, fund

NOTES TO FINANCIAL STATEMENTS 19

Notes to Financial Statements (Continued)

iSHARES^®, INC.

administration, legal, audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees and extraordinary expenses.

For its investment advisory services to the Fund, BGFA is entitled to an annual investment advisory fee based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares Funds as follows:

Investment Advisory Fee	Aggregate Average Daily Net Assets
0.75%	First $14 billion
0.68	Over $14 billion, up to and including $28 billion
0.61	Over $28 billion

Effective August 11, 2008, BGFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through December 31, 2009 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds. Prior to August 11, 2008, the investment advisory fee waiver was voluntary.

Under the terms of the Investment Advisory Agreement, the Fund is required to remit payment of accrued fees to BGFA on a quarterly basis. BGFA has determined that in certain cases such payments to BGFA by the Fund were made earlier than provided for under the Investment Advisory Agreement. BGFA will reimburse the Fund for interest that would have been earned had such payments been made on a quarterly basis. The amount to be reimbursed is included under receivables and investment income as “Interest from affiliate” in the Statement of Assets and Liabilities and Statement of Operations, respectively. The reimbursement does not have a material effect on net asset value per share or the total return shown in the Financial Highlights.

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund is permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Fund. BarCap and BGI are affiliates of BGFA, the Fund’s investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the year ended August 31, 2009, BGI earned securities lending agent fees of $18,160,629.

The Fund may invest in certain money market funds managed by BGFA, the Fund’s investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. These money market funds seek to achieve their investment objectives by investing in high-quality, short-term money market instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Fund from temporary cash investments are

20 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^®, INC.

recorded as interest from affiliated issuers in the accompanying Statement of Operations. Income distributions earned by the Fund from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statement of Operations.

The Fund, in order to improve its portfolio liquidity and its ability to track the MSCI Emerging Markets Index, may invest in shares of other iShares Funds that invest in securities in the Fund’s underlying index. As of August 31, 2009, the Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.

For the year ended August 31, 2009, the Fund had direct investment (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:

Name of Affiliated Issuer	Number of Shares Held Beginning of Year (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Year (in 000s)	Value at End of Year		Dividend Income			Net Realized Gain (Loss)
iShares MSCI Malaysia
Index Fund	1,209	302	352	1,159	$	11,215,383	$	283,125		$	(392,131	)
iShares MSCI South Korea
Index Fund	750	1,085	517	1,318		54,814,622		445,564			(5,832,590	)
iShares MSCI Taiwan
Index Fund	3,464	5,869	2,907	6,426		69,657,320		2,970,339			(9,238,227	)
Jollibee Foods Corp.	40,673	55,450	27,677	68,446		72,239,951		808,726	a		995,915
					$	207,927,276	$	4,507,754		$	(14,467,033	)

^a Net of foreign withholding tax of $269,575.

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

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2009, aggregated $1,635,848,910 and $1,143,079,011, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2009, aggregated $17,885,220,023 and $8,718,277,689, respectively.

4. CAPITAL SHARE TRANSACTIONS

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

NOTES TO FINANCIAL STATEMENTS 21

Notes to Financial Statements (Continued)

iSHARES^®, INC.

The consideration for the purchase of Creation Units of the Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the securities involved in the Fund’s underlying Index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

5. LOANS OF PORTFOLIO SECURITIES

The Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by the Fund is required to have a value of at least 102% of the market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan. The risks to the Fund of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of the Fund or through one or more joint accounts or money market funds, including those managed by BGFA; such reinvestments are subject to investment risk.

As of August 31, 2009, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BGFA. The market value of the securities on loan as of August 31, 2009 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Fund’s Statement of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.

6. BLACKROCK TRANSACTION

On June 16, 2009, Barclays PLC, the ultimate parent company of BGI and BGFA, accepted a binding offer and entered into an agreement to sell its interests in BGFA, BGI and certain affiliated companies, to BlackRock, Inc., (the “BlackRock Transaction”). The BlackRock Transaction is subject to certain regulatory approvals, as well as other conditions to closing.

Under the 1940 Act, completion of the BlackRock Transaction will cause the automatic termination of the Fund’s current investment advisory agreement with BGFA. In order for the management of the Fund to continue uninterrupted, the Board approved a new investment advisory agreement for the Fund subject to shareholder approval. A special meeting of shareholders of the Fund is scheduled to be held on November 4, 2009. Each shareholder of record as of the close of business on August 25, 2009 will receive notice of and be entitled to vote at the meeting.

7. REVIEW OF SUBSEQUENT EVENTS

In connection with the preparation of the financial statements of the Fund as of and for the year ended August 31, 2009, events and transactions through October 23, 2009, the date the financial statements are available to be issued, have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement disclosure have been identified.

22 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

iShares, Inc.:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares MSCI Emerging Markets Index Fund, a portfolio of the iShares MSCI Series (the “Fund”), at August 31, 2009, the results of its operations, the changes in its net assets and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2009 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 23, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 23

Tax Information (Unaudited)

iSHARES^®, INC.

For corporate shareholders, 0.42% of the income dividends paid by the Fund during the fiscal year ended August 31, 2009 qualified for the dividends-received deduction.

For the fiscal year ended August 31, 2009, the Fund earned foreign source income of $728,311,699 and paid foreign taxes of $74,298,254 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code (the “Code”).

Under Section 854(b)(2) of the Code, the Fund hereby designates the maximum amount of $487,478,088 as qualified dividend income for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended August 31, 2009.

In January 2010, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2009. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

24 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory Contract (Unaudited)

iSHARES^® INC.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BGFA (the “Advisory Contract”) on behalf of the Fund. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 16-17, 2009, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Fund, the Board, including the Independent Directors, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUND’S EXPENSES AND PERFORMANCE OF THE FUND

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising the Fund’s peer group pursuant to Lipper’s proprietary methodology and any registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to that tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the Lipper Group and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Group, the statistical information may or may not provide meaningful direct comparisons to the Fund. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, and five-year periods, and “last quarter” period ended March 31, 2009 and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 25

Board Review and Approval of Current Investment Advisory Contract (Unaudited) (Continued)

iSHARES^® INC.

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

The Board also noted that the investment advisory fees and overall expenses for the Fund were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in the Lipper Group. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in its Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO THE FUND AND PROFITS REALIZED BY BGFA AND AFFILIATES

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

ECONOMIES OF SCALE

In connection with its review of the Fund’s profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets. The Board noted that the Advisory Contract already provided for breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Fund, had not yet reached scale. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of economies of scale with the Fund’s shareholders.

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

The Board received and considered certain information regarding the Fund’s annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for the Fund, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as the Fund. However, the Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Fund. Based on this

26 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Current Investment Advisory Contract (Unaudited) (Continued)

iSHARES^® INC.

review, the Board determined that the investment advisory fee rates under the Advisory Contract, do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Fund and its shareholders to approve the Advisory Contract for the coming year.

BOARD REVIEW AND APPROVAL OF CURRENT INVESTMENT ADVISORY CONTRACT 27

Board Review and Approval of New Investment Advisory Agreements (Unaudited)

iSHARES^®, INC.

On June 16, 2009, Barclays Bank PLC (“Barclays”) entered into an agreement to sell its interest in the Barclays Global Investors asset management business, which includes BGI and BGI’s business of advising, sponsoring and distributing exchange-traded funds, to BlackRock, Inc. (“BlackRock”). Assuming receipt of the requisite regulatory approvals and the satisfaction of other conditions to the closing, the subsidiaries of Barclays operating the BGI business, including BGFA (the “Adviser”), will be sold to BlackRock (the “Transaction”) for cash and BlackRock stock.

The Adviser currently serves as the investment adviser to each Fund pursuant to an investment advisory agreement with the Company (the “Current Advisory Agreement”). Under the 1940 Act, the Transaction, if consummated, will result in the automatic termination of the Current Advisory Agreement. In order for the management of each Fund to continue uninterrupted, the Board approved interim and new investment advisory agreements (the “New Advisory Agreements”) with the Company, subject to shareholder approval.

BOARD CONSIDERATIONS IN APPROVING THE NEW ADVISORY AGREEMENTS

At an in-person Board meeting held on August 13, 2009, the Board, including the Independent Directors, unanimously approved the New Advisory Agreements between the Adviser and the Company, on behalf of its Funds after consideration of all factors determined to be relevant to the Board’s deliberations, including those discussed below.

The Approval Process – At telephonic and in-person meetings held in June, July and August of this year, the Board, including the Independent Directors, discussed the Transaction and the New Advisory Agreements for the Funds.

In preparation for their consideration of the New Advisory Agreements, the Directors received, in response to a written due diligence request prepared by the Board and its independent counsel and provided to BlackRock, BGI and the Adviser, comprehensive written information covering a range of issues and received, in response to their additional requests, further information in advance of and at the August 13, 2009 in-person Board meeting. To assist the Board in its consideration of the New Advisory Agreements, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and the Adviser provided materials and information about the Transaction. In addition, the Independent Directors consulted with their independent legal counsel and Fund counsel on numerous occasions, discussing, among other things, the legal standards and certain other considerations relevant to the Board’s deliberations.

In June 2009, the Board had performed a full annual review of, or initially approved, as applicable, the current Investment Advisory Agreement between the Adviser and the Company, on behalf of its Funds for each Fund as required by the 1940 Act and, after reviewing, among other things, the investment capabilities, resources and personnel of the Adviser, determined that the nature, extent and quality of the services provided by the Adviser under the Current Advisory Agreements were appropriate. The Board also determined that the advisory fees paid by each Fund, taking into account any applicable agreed-upon fee waivers and breakpoints, were fair and reasonable in light of the services provided, the costs to the Adviser of providing those services, economies of scale, the fees and other expenses paid by similar funds (including information provided by Lipper, Inc. (“Lipper”)), and such other circumstances as the Directors considered relevant in the exercise of their reasonable judgment. The Board approved the Current Advisory Agreements on June 17, 2009.

In advance of the June 2009 Board meeting, the Board requested and received materials specifically relating to each Fund’s Current Advisory Agreement. These materials were prepared for each Fund, and included information (i) compiled by Lipper on the fees and expenses and the investment performance of the Fund as compared to a comparable group of funds as classified by Lipper; (ii) prepared by the Adviser discussing market conditions generally; (iii) on the profitability to the Adviser of the Current Advisory Agreements and other payments received by the Adviser and its affiliates from the Funds; and (iv) provided by the Adviser concerning services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to the Adviser and its affiliates from their relationship with the Fund.

28 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

At the June 17, July 29 and August 13, 2009 Board meetings, the Directors discussed with representatives of BGI, the Adviser and BlackRock, the management, investment, risk management and compliance capabilities and processes, and financial condition of BlackRock, the Transaction and its rationale, and BlackRock’s general plans and intentions regarding the Adviser and the Funds. At these Board meetings, representatives of BGI, the Adviser and BlackRock made various presentations to, and responded to questions from, the Board. The Board also inquired about the plans for, and anticipated roles and responsibilities of, the employees and officers of the Adviser in connection with the Transaction, including the anticipated senior management structure of the Adviser following the completion of the Transaction. The Independent Directors also conferred separately and with their independent legal counsel about the Transaction and other matters related to the Transaction on a number of occasions. After the presentations and after reviewing the written materials provided, the Independent Directors met in executive sessions with their independent legal counsel at the June, July and August 2009 Board meetings to consider the Transaction, its expected impact on the Adviser and the Funds, and the New Advisory Agreements.

In connection with the Board’s review of the New Advisory Agreements, BGI, the Adviser and/or BlackRock, as applicable, provided the Board with information about a variety of matters. The Board considered, among other things, the following information:

• the reputation, financial strength and resources of BlackRock and its investment advisory subsidiaries and the anticipated financial strength and resources of the combined company;

• that there is not expected to be any diminution in the nature, quality and extent of services provided to the Funds and their shareholders by the Adviser, including portfolio management and compliance services;

• that the Adviser and BlackRock have no present intention to alter the advisory fee rates and expense arrangements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction;

• that it is expected that substantially all of the current employees of the Adviser will remain employees of the Adviser and will continue to provide services to the Funds following the Transaction;

• that the Funds may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including investment tools, provided under the BlackRock Solutions^® brand name;

• that the Funds are expected to continue to be sold through existing distribution channels;

• that the Funds will have access to greater distribution resources through BlackRock’s relationships with third party brokers and retirement plan platforms;

• that the parties to the Transaction Agreement have agreed to conduct their respective businesses in compliance with the conditions of Section 15(f) of the 1940 Act in relation to the Funds;

• that Barclays or one of its affiliates has agreed to pay all expenses of the Funds in connection with the Board’s consideration of the New Advisory Agreements and all costs of seeking shareholder approval of the New Advisory Agreements; and

• that Barclays and BlackRock would derive benefits from the Transaction and that, as a result, they may have a different financial interest in the matters that were being considered than do Fund shareholders.

The Board did not identify any particular information that was all-important or controlling, and each Director may have attributed different weights to the various factors discussed below. The Directors evaluated all information available to them on a Fund-by-Fund basis, and their determinations were made separately in respect of each Fund. In their deliberations, the Directors considered information received

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 29

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

in connection with their most recent approval or continuation of each Current Advisory Agreement at the June 2009 Board meeting, in addition to information provided by BGI, the Adviser and BlackRock regarding BlackRock and the Transaction, in connection with their evaluation of the terms and conditions of the New Advisory Agreements. The Directors, including a majority of the Independent Directors, concluded that the terms of the New Advisory Agreements are appropriate, that the fees to be paid are reasonable in light of the services to be provided to each Fund, and that the New Advisory Agreements should be approved and recommended to Fund shareholders. In voting to approve the New Advisory Agreements in respect of each Fund, the Board considered in particular the following factors:

The nature, extent and quality of services to be provided by the Adviser and its affiliates – In connection with their consideration of the New Advisory Agreements, the Board considered representations by the Adviser, BGI and BlackRock that there would be no diminution in the scope of services required of or provided by the Adviser under the New Advisory Agreements for each Fund as compared to the scope of services provided by the Adviser under the Current Advisory Agreement. In reviewing the scope of these services at the June and August 2009 Board meetings, the Board considered the Adviser’s investment philosophy and experience, noting that the Adviser and its affiliates have committed significant resources over time, including over the past year, including investments in technology and increasing the number of their employees supporting the Funds. The Board also considered the Adviser’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that the Adviser reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board noted that it expects that these reports and discussions will continue following the consummation of the Transaction. In addition to the above considerations, the Board considered the Adviser’s investment processes and strategies, and matters related to the Adviser’s portfolio transaction policies and procedures. The Board further took into account that, with respect to most of the Funds, the Adviser does not serve as investment adviser for other series of registered investment companies with substantially similar investment objectives and strategies; therefore, directly comparable performance information was generally not available for most Funds. The Board also considered each Fund’s record of performing in accordance with its investment objective.

In connection with the investment advisory services to be provided under the New Advisory Agreements, the Board took into account detailed discussions with representatives of the Adviser at the June 2009 Board meeting and at prior Board meetings regarding the management of each Fund. In addition to the investment advisory services to be provided to the Funds, the Board, at the August 2009 Board meeting, considered that the Adviser also will continue to provide management and administrative services, shareholder services, oversight of Fund accounting, marketing services, assistance in meeting legal and regulatory requirements and other services necessary for the operation of the Funds, and that these services were expected to be consistent with the services the Adviser currently performs under the Current Advisory Agreements.

The Board noted the representations of the Adviser, BGI and BlackRock that the Transaction was not expected to have any adverse effect on the resources and strengths of the Adviser in managing the Funds. The Board also considered that the Funds and their shareholders may benefit from having direct access to BlackRock’s state of the art technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. The Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business. The Board also discussed the Adviser’s anticipated financial condition following the completion of the Transaction. The Board discussed BlackRock’s current ownership structure and expected ownership structure following the completion of the Transaction. The Board was advised that BlackRock operates as an independent firm, with its own Board of Directors and no majority shareholder. The Board was also advised that while BlackRock’s largest shareholders, Merrill Lynch, a wholly owned subsidiary of Bank of America, and PNC, are important clients and strategic partners of BlackRock, they are not involved in the firm’s day-to-day management or operations.

30 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Based on the discussions held and the materials presented at the June, July and August 2009 Board meetings and prior Board meetings, the Board determined that the Transaction would not likely cause an adverse change in the nature, extent and quality of the services to be provided by the Adviser under the New Advisory Agreements compared with the services provided by the Adviser under the Current Advisory Agreements and that the Board expects that the quality of such services will continue to be appropriate.

Funds’ expenses and performance of the Funds – The Board received and reviewed statistical information prepared by Lipper at the June 2009 meeting and also received information at prior meetings regarding the expense ratio components of the Funds, including advisory fees, waivers and reimbursements, and gross and net total expenses, in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising a Fund’s peer group pursuant to Lipper’s proprietary methodology and, for certain Funds, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of the Adviser (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by most of the Funds, the Lipper Groups sometimes included mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to certain Funds.

The Board noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the Funds in their Lipper Groups with respect to the Current and New Advisory Agreements. The Board took into account that the fee rates for each Fund under the New Advisory Agreements are identical to the fee rates under the respective Current Advisory Agreements. Further, the Board noted that representatives of the Adviser and BlackRock had confirmed that there is no present intention to alter the advisory fee rates, expense waivers or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction.

In addition to reviewing the fees and expenses, the Board noted that it regularly reviews each Fund’s performance and at the June 2009 meeting reviewed statistical information prepared by Lipper regarding the performance of each Fund for the quarter-end, one-, three-, five- and ten-year periods, as applicable, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Groups track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of the relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their performance benchmark indices over the relevant periods. In considering this information, the Board took into account that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indices. This comparative performance information was also considered by the Board. The Board considered the Adviser’s substantial investment advisory experience and capabilities, as well as the possibility of additional resources and support from BlackRock following the completion of the Transaction, but noted that the effect, if any, the consummation of the Transaction would have on the future performance of the Funds could not be predicted.

Based on this review, the Board had concluded that the investment advisory fee rates and expense levels and the historical performance of each Fund, as compared to the investment advisory fee rates and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Current Advisory Agreements and concluded that these comparisons continued to be satisfactory for the purpose of approving the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 31

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Cost of services provided and profits realized by the Adviser from the relationship with each Fund – The Board considered that at the June 2009 Board meeting and at prior meetings, it had reviewed information about the profitability of the Adviser with respect to the Funds based on the fees payable to the Adviser and its affiliates (including fees under the Current Advisory Agreements), and all other sources of revenue and expense to the Adviser and its affiliates from the Funds’ operations for the last calendar year. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by the Companies (including any securities lending by the Funds). The Board also discussed the Adviser’s profit margin as reflected in the Funds’ profitability analysis and reviewed information regarding economies of scale (as discussed below).

In evaluating the costs of the services to be provided by the Adviser under the New Advisory Agreements, the Board considered, among other things, whether advisory fee rates or other expenses would change as a result of the Transaction. The Board noted that the New Advisory Agreements are similar to the Current Advisory Agreements, including the fact that the fee rates under the Agreements are identical and that representatives of the Adviser and BlackRock represented that there is no present intention due to the Transaction to alter the advisory fee rates, expense waiver or expense reimbursements currently in effect for the Funds for a period of two years from the date of the closing of the Transaction. It was noted that it was not possible to predict how the Transaction would affect the Adviser’s profitability from its relationship with the Funds. Potential cost savings had been described by BlackRock representatives that may be achieved by BlackRock immediately following the Transaction, but even if all of such savings were realized by the Adviser in connection with the management of the Funds, the Adviser’s profitability in respect of the Funds was not expected to increase in a significant respect. The Adviser, BlackRock and the Board discussed how profitability will be calculated and presented to the Board following the Transaction, and the Board reviewed BlackRock’s 2008 profitability methodology with respect to its registered funds. The Board expects to receive profitability information from the Adviser on at least an annual basis following the completion of the Transaction and thus be in a position to evaluate whether any adjustments in Fund fees would be appropriate.

The extent to which economies of scale would be realized as a Fund grows and whether fee levels would reflect such economies of scale – In connection with its review of the Funds’ profitability analysis at the June 2009 meeting, the Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets. At the June 2009 Board meeting, the Board also reviewed the Adviser’s historic profitability as investment adviser to the iShares fund complex and noted that the Adviser had continued to make significant investments in the iShares fund complex, that expenses had grown at a pace similar to the growth in revenue, and that the Adviser had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. The Board further noted that the Current and New Advisory Agreements provide for breakpoints in certain Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other Funds, increase and that breakpoints were implemented the previous year for certain Funds. The Board noted that for certain other Funds, the Current and New Advisory Agreements do not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase; however, the Board further noted that possible future economies of scale for those Funds had, in many cases, been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders may have received from a fee structure with declining breakpoints where the initial fee was higher. At the June 2009 Board meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fee rates, with the breakpoints for certain Funds, reflected appropriate sharing of economies of scale with the Funds’ shareholders.

The Board noted representations from the Adviser and BlackRock that the Adviser will continue to make significant investments in the iShares fund complex and the infrastructure supporting the Funds. The Board determined that changes to the fee structure were not currently necessary and that the Funds appropriately participate in economies of scale. It was noted that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale. The Board expects to consider economies of scale on at least an annual basis following completion of the Transaction and thus be in a position to evaluate additional economies of scale, if any.

32 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of New Investment Advisory Agreements (Unaudited) (Continued)

iSHARES^®, INC.

Fees and services provided for other comparable funds/accounts managed by the Adviser and its Affiliates – At the June 2009 Board meeting, the Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Current Advisory Agreements in comparison to the investment advisory/management fee rates for other funds/accounts for which the Adviser or BGI provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparable investment advisory/management fee information was not available for many of the Funds, as the Adviser and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as many of the Funds. The Board noted, however, that the Adviser provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Furthermore, in reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Current Advisory Agreements for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which the Adviser or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Current and New Advisory Agreements do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Current and New Advisory Agreements are fair and reasonable.

Other benefits to the Adviser and its affiliates, including fall-out benefits – In evaluating the fall-out and any other ancillary benefits received by the Adviser under the Current Advisory Agreements, the Board reviewed any ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser or its affiliates, such as any payment of revenue to BGI, the Company’s current securities lending agent, for loaning any portfolio securities, and payment of advisory fees and/or administration fees to the Adviser and BGI in connection with any investments by the Funds in other funds for which the Adviser provides investment advisory services and/or BGI provides administration services. The Board noted that while revenue to BGI in connection with securities lending agency services to the Funds increased overall as against the previous year, overall revenue increased by approximately the same percentage as overall expenses. The Board noted that the Adviser does not use soft dollars or consider the value of research or other services that may be provided to the Adviser (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through an affiliate of the Adviser or purchased from an underwriting syndicate in which an Adviser affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. Any fall-out or ancillary benefits as a result of the Transaction were difficult to quantify with certainty at this time, and the Board indicated that it would continue to evaluate them going forward.

Conclusion – The Board examined the totality of the information they were provided at the June, July and August 2009 Board meetings, and information they received at other meetings held during the past year, and did not identify any single factor discussed previously as controlling. Based on this analysis, the Board determined that the New Advisory Agreements, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to unanimously approve the New Advisory Agreements.

BOARD REVIEW AND APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS 33

Supplemental Information (Unaudited)

iSHARES^®, INC.

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

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

The following information shows the frequency distributions of premiums and discounts for the Fund. The information shown for the Fund is for five calendar years through the date of the most recent calendar quarter-end.

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

iShares MSCI Emerging Markets Index Fund

Period Covered: January 1, 2004 through June 30, 2009

Premium/Discount Range	Number of Days	Percentage of Total Days
Greater than 4.0%	4	0.29	%
Greater than 3.5% and Less than 4.0%	3	0.22
Greater than 3.0% and Less than 3.5%	1	0.07
Greater than 2.5% and Less than 3.0%	8	0.58
Greater than 2.0% and Less than 2.5%	10	0.72
Greater than 1.5% and Less than 2.0%	31	2.24
Greater than 1.0% and Less than 1.5%	74	5.35
Greater than 0.5% and Less than 1.0%	273	19.75
Between 0.5% and –0.5%	691	50.02
Less than –0.5% and Greater than –1.0%	157	11.36
Less than –1.0% and Greater than –1.5%	73	5.28
Less than –1.5% and Greater than –2.0%	31	2.24
Less than –2.0% and Greater than –2.5%	12	0.87
Less than –2.5% and Greater than –3.0%	2	0.14
Less than –3.0% and Greater than –3.5%	4	0.29
Less than –3.5% and Greater than –4.0%	1	0.07
Less than –4.0% and Greater than –4.5%	4	0.29
Less than –4.5%	3	0.22
	1,382	100.00	%

34 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited)

iSHARES^®, INC.

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

iShares, Inc., iShares Trust, Barclays Global Investors Funds (“BGIF”) and Master Investment Portfolio (“MIP”) are considered to be members of the same fund complex, as defined in Form N-1A under the 1940 Act. Each Director of iShares, Inc. also serves as a Trustee for iShares Trust and oversees 183 portfolios within the fund complex. In addition, Lee T. Kranefuss serves as a Trustee for BGIF and MIP and oversees an additional 26 portfolios within the fund complex.

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

Interested Directors and Officers

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
*Lee T. Kranefuss, 48	Director and Chairman (since 2003).	Non-Executive Chairman (since 2009), iShares; Global Chief Executive Officer (2008-2009) of iShares/Intermediary Groups of BGI; Chief Executive Officer (2005-2008) of iShares Intermediary Index and Market Group of BGI; Chief Executive Officer (2003-2005) of the Intermediary Invest or and Exchange Traded Products Business of BGI; Director (since 2005) of BGFA; Director, President and Chief Executive Officer (since 2005) of Barclays Global Investors International, Inc.; Director and Chairman (since 2005) of Barclays Global Investors Services.	Trustee (since 2003) of iShares Trust; Trustee (since 2001) of BGlF and MIP.

* Lee T. Kranefuss is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI.

DIRECTOR AND OFFICER INFORMATION 35

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
George G.C. Parker, 70	Director (since 2002); Lead Independent Director (since 2006).	Dean Witter Distinguished Professor of Finance (since 1994), Emeritus, Stanford University: Graduate School of Business.	Trustee (since 2000) of iShares Trust; Lead Independent Trustee (since 2006) of iShares Trust; Director (since 1995) of Community First Financial Group; Director (since 1999) of Tejon Ranch Company; Director (since 2004) of Threshold Pharmaceuticals; Director (since 2007) of NETGEAR, Inc.
J. Darrell Duffie, 55	Director (since 2008).	Professor (since 1984) of Stanford University: Graduate School of Business.	Trustee (since 2008) of iShares Trust; Director (since 2008) of Moody’s Corp.
Cecilia H. Herbert, 60	Director (since 2005).	Chair (1994-2005) of Investment Committee, Archdiocese of San Francisco; Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee (2004-2005) of Pacific Select Funds; Trustee (since 2002) and Chair (2006-2007) of the Finance and Investment Committees (since 2006) of the Thacher School.	Trustee (since 2005) of iShares Trust; Advisory Board Member (since 2009) of Forward Funds.
Charles A. Hurty, 66	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee (since 2005) of iShares Trust; Director (since 2002) of ProMark Absolute Return Strategies Fund LLC (1 portfolio); Director (since 2002) of Citigroup Alternative Investments Multi- Adviser Hedge Fund Portfolios LLC (1 portfolio); Director (since 2005) of CSFB Alternative Investments Fund (6 portfolios).
John E. Kerrigan, 54	Director (since 2005).	Chief Investment Officer (since 2002) of Santa Clara University.	Trustee (since 2005) of iShares Trust.
*John E. Martinez, 48	Director (since 2003).	Director (since 2005) of EquityRock Capital Management; Director (since 2003) of Larkin Street Youth Services.	Trustee (since 2003) of iShares Trust; Chairman (since 2007) of Independent Review Committee, Canadian iShares Funds.

36 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Independent Directors (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Robert H. Silver, 54	Director (since 2007).	President and Co-Founder (since 2006) of The Bravitas Group, Inc.; Member (since 2006) of Non-Investor Advisory Board of Russia Partners II, LP; Director and member (2006-2009) of the Audit and Compensation Committee of EPAM Systems, Inc.; President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer (1999-2005) of UBS Services USA, LLC; Managing Director (2000-2005) of UBS America, Inc.; Director and Vice Chairman (since 2001) of the YMCA of Greater NYC; Broadway Producer (since 2006); Co- Founder and Vice President (since 2008) of Parentgiving Inc.	Trustee (since 2007) of iShares Trust.

* Prior to August 13, 2009, John E. Martinez was deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BGFA, the Funds’ investment adviser; BGI, the parent company of BGFA; and Barclays Global Investors Services, an affiliate of BGFA and BGI. Effective August 13, 2009, John E. Martinez is a non-interested person notwithstanding his former affiliation with BGFA and its affiliates prior to 2002.

Officers
Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Michael A. Latham, 44	President (since 2007).	Head (since 2007) of Americas iShares, BGI; Chief Operating Officer (2003-2007) of the Intermediary Investor and Exchange Traded Products Business of BGI; Director and Chief Financial Officer (since 2005) of Barclays Global Investors International, Inc.	None.

DIRECTOR AND OFFICER INFORMATION 37

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Geoffrey D. Flynn, 52	Executive Vice President and Chief Operating Officer (since 2008).	Chief Operating Officer (since 2008) of U.S. iShares, BGI; Director (2007-2008) of Mutual Fund Operations of BGI; President (2003-2007) of Van Kampen Investors Services; Managing Director (2002-2007) of Morgan Stanley; President (2002-2007) of Morgan Stanley Trust, FSB.	None.
Jack Gee, 50	Treasurer and Chief Financial Officer (since 2008).	Senior Director (since 2009) of Fund Administration of Intermediary Investor Business of BGI; Director (2004-2009) of Fund Administration of Intermediary Investor Business of BGI; Treasurer and Chief Financial Officer (2004) of Parnassus Investments.	None.
Eilleen M. Clavere, 57	Secretary (since 2007).	Director (since 2006) of Legal Administration of Intermediary Investors Business of BGI; Legal Counsel and Vice President (2005-2006) of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc.; Counsel (2001-2005) of Kirkpatrick & Lockhart LLP.	None.
Ira P. Shapiro, 46	Vice President and Chief Legal Officer (since 2007).	Associate General Counsel (since 2004) of BGI; First Vice President (1993-2004) of Merrill Lynch Investment Managers.	None.
Amy Schioldager, 47	Executive Vice President (since 2007).	Global Head (since 2008) of Index Equity, BGI; Global Head (2006-2008) of U.S. Indexing, BGI; Head (2001-2006) of Domestic Equity Portfolio Management, BGI.	None.
Patrick O’Connor, 42	Vice President (since 2007).	Head (since 2006) of iShares Portfolio Management, BGI; Senior Portfolio Manager (1999-2006) of BGI.	None.

38 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^®, INC.

Officers (Continued)

Name, Age	Position(s), Length of Service	Principal Occupation(s) During Past 5 Years	Other Directorships Held
Lee Sterne, 44	Vice President (since 2007).	Head (since 2007) of U.S. Fixed Income Index and iShares, BGI; Senior Portfolio Manager (2004-2007) of BGI; Portfolio Manager (2001-2004) of BGI.	None.
Matt Tucker, 37	Vice President (since 2007).	Director (since 2009) of Fixed Income Investment Strategy, BGI; Head (2005-2008) of U.S. Fixed Income Investment Solutions, BGI; Fixed Income Investment Strategist (2003-2005) of BGI.	None.

DIRECTOR AND OFFICER INFORMATION 39

The iShares^® Family of Funds

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

iShares Russell Domestic Index Funds	Trading Symbol
iShares Russell 3000	IWV
iShares Russell 3000 Growth	IWZ
iShares Russell 3000 Value	IWW
iShares Russell Top 200	IWL
iShares Russell Top 200 Growth	IWY
iShares Russell Top 200 Value	IWX
iShares Russell 1000	IWB
iShares Russell 1000 Growth	IWF
iShares Russell 1000 Value	IWD
iShares Russell Midcap	IWR
iShares Russell Midcap Growth	IWP
iShares Russell Midcap Value	IWS
iShares Russell 2000	IWM
iShares Russell 2000 Growth	IWO
iShares Russell 2000 Value	IWN
iShares Russell Microcap	IWC
iShares S&P Domestic Index Funds
iShares S&P 1500	ISI
iShares S&P 100	OEF
iShares S&P 500	IVV
iShares S&P 500 Growth	IVW
iShares S&P 500 Value	IVE
iShares S&P MidCap 400	IJH
iShares S&P MidCap 400 Growth	IJK
iShares S&P MidCap 400 Value	IJJ
iShares S&P SmallCap 600	IJR
iShares S&P SmallCap 600 Growth	IJT
iShares S&P SmallCap 600 Value	IJS
iShares Morningstar Domestic Index Funds
iShares Morningstar Large Core	JKD
iShares Morningstar Large Growth	JKE
iShares Morningstar Large Value	JKF
iShares Morningstar Mid Core	JKG
iShares Morningstar Mid Growth	JKH
iShares Morningstar Mid Value	JKI
iShares Morningstar Small Core	JKJ
iShares Morningstar Small Growth	JKK
iShares Morningstar Small Value	JKL
iShares Dow Jones Domestic Index Funds
iShares Dow Jones U.S.	IYY
iShares KLD Socially Responsible Index Funds
iShares FTSE KLD 400 Social	DSI
iShares FTSE KLD Select Social	KLD
iShares NYSE Domestic Index Funds
iShares NYSE Composite	NYC
iShares NYSE 100	NY

iShares Domestic Specialty Index Funds	Trading Symbol
iShares S&P U.S. Preferred Stock	PFF
iShares Dow Jones Select Dividend	DVY
iShares North American Sector/Subsector Index Funds
iShares S&P North American Technology Sector	IGM
iShares S&P North American Technology-Multimedia Networking	IGN
iShares S&P North American Technology-Semiconductors	IGW
iShares S&P North American Technology-Software	IGV
iShares S&P North American Natural Resources Sector	IGE
iShares Domestic Sector Index Funds
iShares Dow Jones U.S. Basic Materials Sector	IYM
iShares Dow Jones U.S. Consumer Goods Sector	IYK
iShares Dow Jones U.S. Consumer Services Sector	IYC
iShares Dow Jones U.S. Energy Sector	IYE
iShares Dow Jones U.S. Financial Sector	IYF
iShares Dow Jones U.S. Healthcare Sector	IYH
iShares Dow Jones U.S. Industrial Sector	IYJ
iShares Dow Jones U.S. Technology Sector	IYW
iShares Dow Jones U.S. Telecommunications Sector	IYZ
iShares Dow Jones U.S. Utilities Sector	IDU
iShares Domestic Subsector Index Funds
iShares Dow Jones Transportation Average	IYT
iShares Dow Jones U.S. Aerospace & Defense	ITA
iShares Dow Jones U.S. Broker-Dealers	IAI
iShares Dow Jones U.S. Financial Services	IYG
iShares Dow Jones U.S. Healthcare Providers	IHF
iShares Dow Jones U.S. Home Construction	ITB
iShares Dow Jones U.S. Insurance	IAK
iShares Dow Jones U.S. Medical Devices	IHI
iShares Dow Jones U.S. Oil & Gas Exploration & Production	IEO
iShares Dow Jones U.S. Oil Equipment & Services	IEZ
iShares Dow Jones U.S. Pharmaceuticals	IHE
iShares Dow Jones U.S. Regional Banks	IAT
iShares Nasdaq Biotechnology	IBB
iShares Domestic Real Estate Index Funds
iShares Cohen & Steers Realty Majors	ICF
iShares Dow Jones U.S. Real Estate	IYR
iShares FTSE NAREIT Real Estate 50	FTY
iShares FTSE NAREIT Industrial/Office Capped	FIO
iShares FTSE NAREIT Mortgage Plus Capped	REM
iShares FTSE NAREIT Residential Plus Capped	REZ
iShares FTSE NAREIT Retail Capped	RTL
iShares Target Risk Index Funds
iShares S&P Conservative Allocation	AOK
iShares S&P Moderate Allocation	AOM
iShares S&P Growth Allocation	AOR
iShares S&P Aggressive Allocation	AOA

40 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds (Continued)

iShares International Country Index Funds	Trading Symbol
iShares FTSE China (HK Listed)	FCHI
iShares FTSE/Xinhua China 25	FXI
iShares MSCI Australia	EWA
iShares MSCI Austria Investable Market	EWO
iShares MSCI Belgium Investable Market	EWK
iShares MSCI Brazil	EWZ
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares MSCI Israel Capped Investable Market	EIS
iShares MSCI Italy	EWI
iShares MSCI Japan	EWJ
iShares MSCI Japan Small Cap	SCJ
iShares S&P/TOPIX 150	ITF
iShares MSCI Malaysia	EWM
iShares MSCI Mexico Investable Market	EWW
iShares MSCI Netherlands Investable Market	EWN
iShares MSCI All Peru Capped	EPU
iShares MSCI Singapore	EWS
iShares MSCI South Africa	EZA
iShares MSCI South Korea	EWY
iShares MSCI Spain	EWP
iShares MSCI Sweden	EWD
iShares MSCI Switzerland	EWL
iShares MSCI Taiwan	EWT
iShares MSCI Thailand Investable Market	THD
iShares MSCI Turkey Investable Market	TUR
iShares MSCI United Kingdom	EWU
iShares International Index Funds
iShares MSCI ACWI ex US	ACWX
iShares MSCI EAFE	EFA
iShares MSCI EAFE Growth	EFG
iShares MSCI EAFE Value	EFV
iShares MSCI EAFE Small Cap	SCZ
iShares FTSE Developed Small Cap ex-North America	IFSM
iShares MSCI Emerging Markets	EEM
iShares MSCI Emerging Markets Eastern Europe	ESR
iShares S&P Emerging Markets Infrastructure	EMIF
iShares MSCI BRIC	BKF
iShares MSCI EMU	EZU
iShares MSCI All Country Asia ex Japan	AAXJ
iShares MSCI Pacific ex-Japan	EPP
iShares S&P Asia 50	AIA
iShares S&P Europe 350	IEV
iShares S&P Latin America 40	ILF
iShares International/Global Real Estate Index Funds
iShares S&P Developed ex-U.S. Property	WPS
iShares FTSE EPRA/NAREIT Developed Real Estate ex-U.S.	IFGL
iShares FTSE EPRA/NAREIT Developed Asia	IFAS
iShares FTSE EPRA/NAREIT Developed Europe	IFEU
iShares FTSE EPRA/NAREIT North America	IFNA
iShares International Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV

iShares Target Date Index Funds	Trading Symbol
iShares S&P Target Date Retirement Income	TGR
iShares S&P Target Date 2010	TZD
iShares S&P Target Date 2015	TZE
iShares S&P Target Date 2020	TZG
iShares S&P Target Date 2025	TZI
iShares S&P Target Date 2030	TZL
iShares S&P Target Date 2035	TZO
iShares S&P Target Date 2040	TZV
iShares Global Index Funds
iShares MSCI ACWI	ACWI
iShares S&P Global 100	IOO
iShares MSCI Kokusai	TOK
iShares Global Sector Index Funds
iShares S&P Global Consumer Discretionary Sector	RXI
iShares S&P Global Consumer Staples Sector	KXI
iShares S&P Global Energy Sector	IXC
iShares S&P Global Financials Sector	IXG
iShares S&P Global Healthcare Sector	IXJ
iShares S&P Global Industrials Sector	EXI
iShares S&P Global Materials Sector	MXI
iShares S&P Global Technology Sector	IXN
iShares S&P Global Telecommunications Sector	IXP
iShares S&P Global Utilities Sector	JXI
iShares Global Theme Based Index Funds
iShares S&P Global Clean Energy	ICLN
iShares S&P Global Infrastructure	IGF
iShares S&P Global Nuclear Energy	NUCL
iShares S&P Global Timber & Forestry	WOOD
iShares U.S. Multi sector Bond Funds
iShares Barclays Aggregate	AGG
iShares Barclays Government/Credit	GBF
iShares Barclays Intermediate Government/Credit	GVI
iShares U.S. Government Bond Funds
iShares Barclays Short Treasury	SHV
iShares Barclays 1-3 Year Treasury	SHY
iShares Barclays 3-7 Year Treasury	IEI
iShares Barclays 7-10 Year Treasury	IEF
iShares Barclays 10-20 Year Treasury	TLH
iShares Barclays 20+ Year Treasury	TLT
iShares Barclays TIPS	TIP
iShares Barclays Agency	AGZ
iShares U.S. Credit Bond Funds
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares iBoxx $ High Yield Corporate	HYG
iShares U.S. Securitized Bond Funds
iShares Barclays MBS	MBB

ISHARES FAMILY OF FUNDS 41

The iShares^® Family of Funds (Continued)

iShares AMT-Free Municipal Bond Funds	Trading Symbol
iShares S&P National AMT-Free Municipal	MUB
iShares S&P Short Term National AMT-Free Municipal	SUB
iShares S&P California AMT-Free Municipal	CMF
iShares S&P New York AMT-Free Municipal	NYF

iShares International Bond Funds	Trading Symbol
iShares JPMorgan USD Emerging Markets	EMB
iShares S&P/Citigroup International Treasury	IGOV
iShares S&P/Citigroup 1-3 Year International Treasury	ISHG

iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate Association (“EPRA^®”), FTSE International Limited (“FTSE”), FTSE/Xinhua Index Limited (“FXI”), iBoxx^®, J.P. Morgan Securities Inc., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Frank Russell Company or Standard & Poor’s, nor are they sponsored or endorsed by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above except Barclays Capital, which is an affiliate of BGI. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSENAREIT Real Estate 50/Residential/Retail/Mortgage REITs or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSEEPRA/NAREIT Global Real Estate ex-US/North America/Europe/Asia Index; all rights vest in FTSE, NAREIT, and EPRA. All rights in the FTSE Developed Small Cap ex-North America Index vest in FTSE. “FTSE” is a trade- and service mark of London Stock Exchange and The Financial Times Limited; “Xinhua” is a trade- and service mark of Xinhua Financial Network Limited. “NAREIT^®” is a trade mark of NAREIT; “EPRA^®” is a trademark of EPRA.

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

This advertising section does not constitute part of the 2009 Annual Report.

iS-1437-1009

42 2009 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Item 2. Code of Ethics.

iShares, Inc. (the “Registrant”) has adopted a code of ethics that applies to persons appointed by the Registrant’s Board of Directors as the President and/or Chief Financial Officer, and any persons performing similar functions. For the fiscal year ended August 31, 2009, there were no amendments to any provision of this code of ethics, nor were there any waivers granted from any provision of this code of ethics. A copy of this code of ethics is filed with this Form N-CSR under Item 12(a)(1).

Item 3. Audit Committee Financial Expert.

The Registrant’s Board of Directors has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are Charles A. Hurty, John E. Kerrigan, George G.C. Parker and Robert H. Silver, all of whom are independent, as that term is defined under Item 3(a)(2).

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, were $476,772 for the fiscal year ended August 31, 2008 and $471,522 for the fiscal year ended August 31, 2009.

(b) Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2008 and August 31, 2009 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under (a) of this Item.

(c) Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for the review of the Registrant’s tax returns and excise tax calculations, were $107,520 for the fiscal year ended August 31, 2008 and $136,950 for the fiscal year ended August 31, 2009.

(d) All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2008 and August 31, 2009 for products and services provided by the principal accountant, other than the services reported in (a) through (c) of this Item.

(e) (1) The Registrant’s audit committee charter, as amended, provides that the audit committee is responsible for the approval, prior to appointment, of the engagement of the principal accountant to annually audit and provide their opinion on the Registrant’s financial statements. The audit committee must also approve, prior to appointment, the engagement of the principal accountant to provide non-audit services to the Registrant or to any entity controlling, controlled by or under common control with the Registrant’s investment adviser (“Adviser Affiliate”) that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant.

(2) There were no services described in (b) through (d) above (including services required by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) None of the hours expended on the principal accountant’s engagement to audit the Registrant’s financial statements for the fiscal year ended August 31, 2009 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g) The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Registrant’s, and rendered to the Registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the Registrant for the last two fiscal years, were $2,833,229 for the fiscal year ended August 31, 2008 and $3,697,425 for the fiscal year ended August 31, 2009.

(h) The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are George G.C. Parker, Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, Robert H. Silver and J. Darrell Duffie.

Item 6. Schedule of Investments.

(a) Schedules of investments are included as part of the reports to shareholders filed under Item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 10. Submission of Matters to a Vote of Security Holders.

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.

Item 11. Controls and Procedures.

(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.

(a) (2) Section 302 Certifications are attached.

(a) (3) Not applicable to the Registrant.

(b) Section 906 Certifications are attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

iShares, Inc.
By:	/s/ Michael A. Latham
	Michael A. Latham, President (Principal Executive Officer)
	Date: November 4, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ Michael A. Latham
	Michael A. Latham, President (Principal Executive Officer)
	Date: November 4, 2009

By:	/s/ Jack Gee
	Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer)
	Date: November 4, 2009

EX-99.CODEETHICS

N-CSR Exhibit for Item 12(a)(1): CODE OF ETHICS

iShares Trust and iShares, Inc.

CODE OF ETHICS FOR SENIOR OFFICERS

INTRODUCTION

Section 406 of the Sarbanes-Oxley Act of 2002 directed the Securities and Exchange Commission (the “SEC”) to adopt rules requiring companies to disclose whether or not they have adopted a code of ethics for senior financial officers, and if not, why not. The SEC has adopted rules requiring registered investment companies to make such disclosures. These rules extend coverage to chief executive officers as well as senior financial officers, and require disclosure of waivers or substantive changes in any code. This Code of Ethics (this “Code”) addresses these new requirements, and is different in nature and scope from the code of ethics that was previously adopted as required under Section 17(j) of the Investment Company Act of 1940 (the “1940 Act”) and Rule 17j-1 thereunder, which focuses on personal trading activities.

POLICY STATEMENT

It is the policy of iShares Trust and iShares, Inc. (collectively the “Funds” or each individually a “Fund”) to conduct its affairs in accordance with all applicable laws and governmental rules and regulations. This Code has been adopted by the Funds’ Board of Trustees and Board of Directors (together, the “Board”) and applies to the persons appointed by the Board as Chief Executive Officer, President, Chief Financial Officer, Treasurer and/or Chief Accounting Officer, and any persons performing similar functions, all as identified in Exhibit A, as modified from time to time (“Covered Officers”). Each Covered Officer is personally responsible for adhering to the standards and restrictions imposed by applicable laws, rules and regulations, including those relating to affiliated transactions, accounting and auditing matters. This Code is designed to promote:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund;

• compliance with applicable governmental laws, rules and regulations;

• prompt internal reporting to the appropriate person of violations of this Code; and

• accountability for adherence to this Code.

This Code covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide Covered Officers. In this regard, each Covered Officer must:

• act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Fund’s policies;

• observe both the form and spirit of laws and governmental rules and regulations, and accounting standards;

• adhere to high standards of business ethics; and

• place the interests of the Fund and its shareholders before the Covered Officer’s own personal interests.

All activities of Covered Officers should be guided by and adhere to these fiduciary standards. Covered Officers should not hesitate to use available resources whenever it is desirable to seek clarification. Covered

Officers are encouraged to consult with the Fund’s chief legal officer or, if none, legal counsel to the Fund’s investment adviser (“Adviser”) (“Legal Counsel”), or other appropriate resources, when in doubt about the best course of action in a particular situation.

CONFLICTS OF INTEREST

Covered Officers should handle ethically actual and apparent conflicts of interest. A “conflict of interest” occurs when an individual’s personal interests actually or potentially interfere with the interests of the Fund or its shareholders. A conflict of interest can arise when a Covered Officer takes actions or has interests that may make it difficult to perform his duties as a Fund officer objectively and effectively. Service to the Fund should never be subordinated to either a direct or indirect personal gain or advantage.

Certain conflicts of interests arise out of the relationships between Covered Officers and the Fund that already are subject to conflict of interest provisions in the 1940 Act and the Investment Advisers Act. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as “affiliated persons” of the Fund. The Funds’ and the Adviser’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Actual or apparent conflicts may arise from, or as a result of, the contractual relationship between the Fund and the Adviser, administrator or other service provider of which the Covered Officers are also officers or employees (the “Employer”). It is recognized by the Board that the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on the Employer and the Fund. The Board recognizes that the participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the Employer, and is consistent with the Board’s understanding of the performance by the Covered Officers of their duties as officers of the Fund. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of other investment companies advised or serviced by the Employer and the codes of those investment companies will apply to the Covered Officers acting in those distinct capacities. Nonetheless, each Covered Officer recognizes that, as an Officer of the Fund, he or she has a duty to act in the best interests of the Fund and its shareholders.

If a Covered Officer believes that his or her responsibilities as an officer or employee of the Employer are likely to materially compromise his or her objectivity or ability to perform the duties of his role as an officer of the Fund, he or she should consult with Legal Counsel, the Fund’s outside counsel, or counsel to the Directors who are not “interested persons” of the Fund as defined in the 1940 Act (“Independent Directors”), as appropriate. Under appropriate circumstances, a Covered Officer should also consider whether to present the matter to the Board or an appropriate committee thereof.

In addition, each Covered Officer must:

• avoid conflicts of interest wherever possible;

• not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;

• not engage in personal, business or professional relationships or dealings which would impair his or her independence of judgment or adversely affect the performance of his or her duties in the best interests of the Fund and its shareholders; and

• not cause the Fund to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit the Fund.

ACCURACY OF REPORTS, RECORDS AND ACCOUNTS

All Covered Officers are responsible for the accuracy of the records and reports that they are responsible for maintaining. Each Covered Officer shall seek to obtain additional resources if he believes that existing resources

are inadequate to enable the Fund to provide full, fair and accurate financial information and other disclosure to regulators and Fund shareholders. Accurate information is essential to the Fund’s ability to meet legal and regulatory obligations. The books and records of the Fund shall meet the highest standards and accurately reflect the true nature of the transactions they record. The Covered Officers must not create false or misleading documents or accounting, financial or electronic records for any purpose, and must not direct any other person to do so. If a Covered Officer becomes aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information, he shall promptly report it to Legal Counsel for a determination as to what, if any, corrective action is necessary or appropriate.

No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Fund’s books or records for any reason. No disbursement of Fund assets shall be made without adequate supporting documentation or for any purpose other than as described in the Fund’s documents or contracts.

FUNDS DISCLOSURE CONTROLS AND PROCEDURES

Each Covered Officer is required to be familiar, and comply, with the Fund’s disclosure controls and procedures. In addition, each Covered Officer having direct or supervisory authority regarding SEC filings or the Fund’s other public communications should, to the extent appropriate within his area of responsibility, consult with other Fund officers and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosure.

Each Covered Officer must:

• familiarize him- or herself with the disclosure requirements applicable to the Fund as well as the business and financial operations of the Fund;

• ensure that reasonable steps are taken within his or her areas of responsibility to promote full, fair, accurate, timely and understandable disclosure in all regulatory filings, as well as when communicating with the Fund’s shareholders or the general public, in accordance with applicable law;

• consistent with his or her responsibilities, exercise appropriate supervision over and assist relevant Fund service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner; and

• not knowingly misrepresent, conceal or omit required disclosures of, or cause others to do the same, facts about the Fund, whether to persons within or outside the Fund, including to outside counsel, independent auditors and governmental regulators.

CONFIDENTIAL INFORMATION

Covered Officers who have access to confidential information are not permitted to use or share that information for their personal benefit or for any other purpose except the conduct of the Fund’s business. Covered Officers should maintain the confidentiality of information entrusted to them by the Fund or its shareholders, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information, including information that might be of use to competitors, or harmful to the Fund or its shareholders if disclosed.

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly by the Fund. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board and its counsel.

COMPLIANCE, REPORTING AND RECORDKEEPING

Compliance

Any Covered Officer who violates the provisions of this Code will be subject to disciplinary action and appropriate sanctions, up to and including termination. Sanctions shall be imposed by the Audit Committee, subject

to review by the full Board, in their sole discretion. Depending on the nature and severity of the violation, the Fund may refer such violation to appropriate authorities for civil action or criminal prosecution.

All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by the law or this Code, such reports and records shall not be disclosed to anyone other than the Fund’s Adviser, the Directors, the Fund’s outside counsel or counsel to the Independent Directors.

Reporting

Each Covered Officer shall:

• upon receipt of the Code or upon becoming a Covered Officer, sign and submit an Initial Acknowledgement (form attached) confirming that he has received, read and understands the Code;

• annually, sign and submit an Annual Acknowledgement (form attached) confirming that he has complied with the requirements of the Code;

• not retaliate against any Covered Officer or other person for making reports of violations in good faith; and

• notify Legal Counsel, the Fund’s outside counsel or counsel to the Independent Directors, as appropriate, of any actual or potential violation of this Code. Failure to do so is itself a violation of this Code. The Fund will not retaliate against any Covered Officer for making reports of violations in good faith, but will not be precluded from taking appropriate disciplinary action for the violations themselves.

Except as described otherwise below, Legal Counsel is authorized to apply this Code to situations presented to it and has the authority to interpret this Code in any particular situation. Legal Counsel shall take all action it considers appropriate to investigate any actual or potential violations reported to it, and Legal Counsel is authorized and encouraged to consult, as appropriate, with the chair of the Audit Committee, the Fund’s outside counsel or counsel to the Independent Directors. The Fund’s Audit Committee is responsible for granting waivers from the terms and provisions of this Code, as it deems appropriate.

Recordkeeping

The Fund will maintain and preserve for a period of not less than six (6) years from the date such action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Board: (i) that provided the basis for any amendment or waiver to this Code, and (ii) relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the Audit Committee and/or Board.

EXHIBIT A

“Covered Officers” covered by this Code of Ethics for Senior Officers:

1. Michael A. Latham, President (Principal Executive Officer)

2. Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer)

Current as of: November 4, 2009

Form of

INITIAL ACKNOWLEDGEMENT

I acknowledge that I have received and read a copy of the Code of Ethics for Senior Officers (the “Code”) and that I understand it. I further acknowledge that I am responsible for understanding and complying with the policies set forth in the Code during my tenure as a Covered Officer, as defined in the Code.

I also acknowledge my responsibility to report any violation of the Code to Legal Counsel, as defined in the Code.

I further acknowledge that the policies contained in the Code are not intended to create any contractual rights or obligations, express or implied. I also understand that, consistent with applicable law, the Fund has the right to amend, interpret, modify or withdraw any of the provisions of the Code at any time in its sole discretion, with or without notice.

Covered Officer Name and Title:
	(please print)

Signature Date

Form of

ANNUAL ACKNOWLEDGEMENT

I acknowledge that I have received and read a copy of the Code of Ethics for Senior Officers (the “Code”) and that I understand it. I further acknowledge that I am responsible for understanding and complying with the policies set forth in the Code during my tenure as a Covered Officer, as defined in the Code.

I also acknowledge that I have fully complied with the terms and provisions of the Code during the period of time since the most recent Initial or Annual Acknowledgement provided by me.

I further acknowledge that the policies contained in the Code are not intended to create any contractual rights or obligations, express or implied. I also understand that, consistent with applicable law, the Fund has the right to amend, interpret, modify or withdraw any of the provisions of the Code at any time in its sole discretion, with or without notice.

Covered Officer Name and Title:
	(please print)

Signature Date

EX-99.CERT

N-CSR Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS EX-99.CERT

I, Michael A. Latham, certify that:

1. I have reviewed this report on Form N-CSR of iShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 4, 2009	/s/ Michael A. Latham	President (Principal Executive Officer)
	Michael A. Latham	[Title]
	[Signature]

N-CSR Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS EX-99.CERT

I, Jack Gee, certify that:

1. I have reviewed this report on Form N-CSR of iShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 4, 2009	/s/ Jack Gee	Treasurer and Chief Financial Officer (Principal Financial Officer)
	Jack Gee	[Title]
	[Signature]

EX-99.906.CERT

Ex.99.906 CERT

N-CSR Exhibit for Item 12(b): CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Michael A. Latham, President (Principal Executive Officer), and Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer), of iShares, Inc. (the “Registrant”), each certify that:

1. The Registrant’s periodic report on Form N-CSR for the period ended August 31, 2009 (the “Form N-CSR”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: November 4, 2009	/s/ Michael A. Latham	President (Principal Executive Officer)
	Michael A. Latham	[Title]
	[Signature]

Date: November 4, 2009	/s/ Jack Gee	Treasurer and Chief Financial Officer (Principal Financial Officer)
	Jack Gee	[Title]
	[Signature]