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, 2010

Date of reporting period: August 31, 2010

Item 1.    Reports to Stockholders.

2010 ANNUAL REPORT TO SHAREHOLDERS

iSHARES^® MSCI SERIES

AUGUST 31, 2010

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iShares MSCI Austria Investable Market Index Fund  |  EWO  |  NYSE Arca

iShares MSCI Belgium Investable Market Index Fund  |  EWK  |  NYSE Arca

iShares MSCI Emerging Markets Eastern Europe Index Fund  |  ESR  |  NYSE Arca

iShares MSCI EMU Index Fund  |  EZU  |  NYSE Arca

iShares MSCI France Index Fund  |  EWQ  |  NYSE Arca

iShares MSCI Germany Index Fund  |  EWG  |  NYSE Arca

iShares MSCI Italy Index Fund  |  EWI  |  NYSE Arca

iShares MSCI Netherlands Investable Market Index Fund  |  EWN  |  NYSE Arca

iShares MSCI Spain Index Fund  |  EWP  |  NYSE Arca

iShares MSCI Sweden Index Fund  |  EWD  |  NYSE Arca

iShares MSCI Switzerland Index Fund  |  EWL  |  NYSE Arca

iShares MSCI United Kingdom Index Fund  |  EWU  |  NYSE Arca

Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	37
Schedules of Investments	39
iShares MSCI Austria Investable Market Index Fund	39
iShares MSCI Belgium Investable Market Index Fund	41
iShares MSCI Emerging Markets Eastern Europe Index Fund	43
iShares MSCI EMU Index Fund	44
iShares MSCI France Index Fund	49
iShares MSCI Germany Index Fund	52
iShares MSCI Italy Index Fund	54
iShares MSCI Netherlands Investable Market Index Fund	56
iShares MSCI Spain Index Fund	58
iShares MSCI Sweden Index Fund	60
iShares MSCI Switzerland Index Fund	62
iShares MSCI United Kingdom Index Fund	64
Financial Statements	67
Financial Highlights	79
Notes to Financial Statements	91
Report of Independent Registered Public Accounting Firm	101
Tax Information (Unaudited)	102
Supplemental Information (Unaudited)	103
Director and Officer Information (Unaudited)	115
The iShares Family of Funds	120

Management’s Discussion of Fund Performance

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.07)%	(12.28)%	(11.56)%	(5.44)%	(5.78)%	(6.44)%	10.63%	10.37%	10.27%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.07)%	(12.28)%	(11.56)%	(24.41)%	(25.74)%	(28.30)%	174.53%	168.24%	165.79%

“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 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 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		38.94	%
Industrial		19.12
Energy		12.07
Basic Materials		8.95
Communications		8.85
Utilities		4.90
Consumer Cyclical		3.83
Consumer Non-Cyclical		2.19
Short-Term and Other Net Assets		1.15
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Erste Group Bank AG		15.06	%
OMV AG		10.65
Telekom Austria AG		8.85
voestalpine AG		7.29
IMMOFINANZ AG		7.03
Verbund AG		4.90
Andritz AG		4.76
Raiffeisen International Bank Holding AG		4.71
Vienna Insurance Group AG		4.38
Wienerberger AG		3.61
TOTAL		71.24	%

The iShares MSCI Austria Investable Market Index Fund (the “Fund”) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the 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, 2010 (the “reporting period”), the total return for the Fund was (11.07)%, while the total return for the Index was (11.56)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Austria’s equity market, as represented by the Index, finished the reporting period in negative territory. Because Austria relies on its European neighbors for the vast majority of its exports, it is vulnerable to the economic health of the constituent markets of the European Union, particularly Germany. During the reporting period, Austria’s economy emerged from the recession that had accompanied the global economic downturn of 2008. Following five consecutive quarters of contraction, Austrian GDP grew for the first two quarters of 2010. However, Austria’s banking sector, which has strong relationships with peripheral European countries, suffered exposure to the sovereign debt crisis and required government intervention to remain stable during the reporting period.

2 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

The Fund’s ten largest holdings as of August 31, 2010 represented approximately 71% of Fund net assets. Eight of the Fund’s ten largest holdings declined for the reporting period. Wienerberger AG, the world’s largest producer of bricks, suffered the steepest decline, followed by Verbund AG, Austria’s largest electricity provider, and telecommunications company Telekom Austria AG. Banks also experienced double-digit declines, including Raiffeisen International Bank Holding AG and Erste Group Bank AG, the Fund’s largest holding. On the positive side, plant engineering company Andritz AG logged solid gains and property developer IMMOFINANZ AG posted a modest gain for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(0.60)%	(1.37)%	1.41%	(5.50)%	(5.75)%	(6.05)%	2.10%	1.97%	0.73%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(0.60)%	(1.37)%	1.41%	(24.66)%	(25.64)%	(26.82)%	23.13%	21.58%	7.51%

“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 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.

4 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Non-Cyclical		41.84	%
Financial		19.49
Basic Materials		10.66
Diversified		9.22
Communications		8.97
Industrial		6.45
Consumer Cyclical		1.59
Technology		0.48
Short-Term and Other Net Assets		1.30
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Anheuser-Busch InBev NV		24.40	%
Delhaize Group SA		6.61
KBC Groep NV		6.24
Groupe Bruxelles Lambert SA		5.70
Ageas		5.11
Belgacom SA		4.81
Solvay SA		4.75
Colruyt SA		4.48
Umicore		3.99
UCB SA		3.19
TOTAL		69.28	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (0.60)%, while the total return for the Index was 1.41%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Belgium’s equity market, as represented by the Index, delivered a slight gain during the reporting period. With few natural resources, Belgium imports raw materials and exports end products, making the country highly sensitive to the economic state of its trading partners. During the reporting period, Belgium’s economy emerged from the recession that had accompanied the global economic downturn of 2008. Following five consecutive quarters of contraction, Belgian GDP was flat during the first quarter of 2010 and grew during the second quarter of 2010, as it benefited from improvement in neighboring countries, particularly Germany. Beginning in February 2010, industrial production expanded for the first time since September 2008. The depreciating euro, caused by concerns about

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

European sovereign debt, lowered prices of Belgian goods for non-European countries, helping Belgium’s export demand. However, unemployment remained a problem, climbing to 8.9% in August 2010.

The ten largest holdings as of August 31, 2010 accounted for approximately 69% of the net assets of the Fund. Six of the ten largest Fund holdings delivered positive results for the reporting period. Materials technology company Umicore SA logged solid gains, as did brewer Anheuser-Busch InBev NV, the Fund’s largest holding. Retailer Colruyt SA also posted positive returns. Financial companies among the Fund’s ten largest holdings delivered mixed results: KBC Groep NV logged sound gains, but banking group UCB SA lost ground. Insurance company Ageas also declined for the reporting period.

6 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND

Performance as of August 31, 2010

Cumulative Total Return
Inception to 8/31/10
NAV	MARKET	INDEX
4.68%	4.39%	4.31%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and is calculated from an inception date of 9/30/09.

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 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 (10/2/09), the NAV of the Fund is used as a proxy for the Market Price to calculated 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 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Energy		45.65	%
Financial		22.01
Basic Materials		12.49
Communications		9.04
Consumer Non-Cyclical		4.81
Utilities		4.40
Industrial		0.68
Short-Term and Other Net Assets		0.92
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
OAO Gazprom SP ADR (Russia)		19.70	%
LUKOIL SP ADR (Russia)		9.47
Sberbank GDR (Russia)		8.31
MMC Norilsk Nickel SP ADR (Russia)		5.02
Mobile TeleSystems SP ADR (Russia)		4.23
OJSC Rosneft Oil Co. SP GDR (Russia)		3.66
Surgutneftegaz SP ADR (Russia)		3.08
OAO Tatneft SP ADR (Russia)		2.87
CEZ AS (Czech Republic)		2.86
Powszechna Kasa Oszczednosci Bank Polski SA (Poland)		2.84
TOTAL		62.04	%

The iShares MSCI Emerging Markets Eastern Europe 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 Eastern Europe Index^SM (the “Index”). The Index is a free float-adjusted market capitalization weighted index designed to measure the equity performance of the following four emerging market countries: the Czech Republic, Hungary, Poland and Russia. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from September 30, 2009 (inception date of the Fund) through August 31, 2010 (the “reporting period”), the total return for the Fund was 4.68%, while the total return for the Index was 4.31%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The emerging markets of Eastern Europe, as represented by the Index, collectively achieved positive returns for the reporting period. As was the case with many emerging markets, the Russian equity market struggled as the economic crises in Southern European markets eroded investors’ appetite for risk. However, the equity market delivered moderately positive returns as the Central Bank of Russia

8 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND

successfully lowered rates to stimulate the economy. The European debt crisis affected Hungary more than any other emerging market. Hungarian stocks declined, driven almost as much by the drop in its currency, the forint, as by underlying equity performance. With Hungary’s high government debt balances and weak economy, investors have seen parallels between Hungary and Greece. The Czech Republic’s economy, by comparison, was relatively resilient to the effects of the sovereign debt crisis. The country’s equity market gained ground as export growth lifted economic activity. Poland, the sole country in the 27-nation European Union not to fall into recession in 2009, delivered stock market gains as its economy expanded.

The Fund’s ten largest holdings as of August 31, 2010 represented approximately 62% of Fund net assets. Six of the Fund’s ten largest holdings delivered positive returns for the reporting period. Russian nickel producer MMC Norilsk Nickel and Russian bank Sberbank both logged solid gains. Russian oil company OAO Tatneft and Polish bank Powszechna Kasa Oszczednosci Bank Polski SA also performed well. On the negative side, Czech electric company CEZ AS and Russian oil company OJSC Rosneft Oil Co. declined, as did the Fund’s largest holding, Russian natural gas company OAO Gazprom.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI EMU INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.19)%	(12.07)%	(11.17)%	(0.61)%	(0.93)%	(0.45)%	0.08%	(0.01)%	0.32%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(11.19)%	(12.07)%	(11.17)%	(3.03)%	(4.55)%	(2.24)%	0.85%	(0.07)%	3.25%

“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 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.

10 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMU INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		24.08	%
Consumer Non-Cyclical		15.26
Communications		12.47
Industrial		12.33
Utilities		8.84
Basic Materials		8.08
Energy		7.47
Consumer Cyclical		7.10
Technology		2.67
Diversified		1.46
Short-Term and Other Net Assets		0.24
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Total SA (France)		3.55	%
Banco Santander SA (Spain)		3.47
Telefonica SA (Spain)		3.27
Siemens AG Registered (Germany)		2.69
Sanofi-Aventis (France)		2.18
BNP Paribas (France)		2.13
Eni SpA (Italy)		1.86
E.ON AG (Germany)		1.82
Bayer AG (Germany)		1.81
BASF SE (Germany)		1.74
TOTAL		24.52	%

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 European Monetary Union (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, 2010 (the “reporting period”), the total return for the Fund was (11.19)%, while the total return for the Index was (11.17)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The collective equity markets of the European Monetary Union, as represented by the Index, declined for the period. Countries across the European Monetary Union grappled with economic recovery as the sovereign debt crisis unfolded. France emerged from recession, as the French government’s massive fiscal stimulus plan appeared to lift economic activity. In the first half of 2010, France’s economy expanded. Unemployment levels remained a problem, however, climbing to 10%. Germany’s economy recovered from recession at an accelerating pace. Following five quarters of declines, GDP grew for the first two quarters of 2010. The depreciating euro helped spur export demand

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMU INDEX FUND

for German goods, particularly automobiles. As a result, unemployment levels dropped from a high of 8.3% in August 2009 to 7.6% by August 2010.

The Spanish economy continued to struggle. Economic activity continued to contract, the jobless rate climbed to 20%, household debt grew to unprecedented levels, and corporate debt climbed to 150% of GDP. As economic conditions worsened, government attempts to stimulate activity resulted in a budget deficit that represented 11.4% of GDP. Consequently, two of the three major international rating agencies downgraded Spain’s long-term sovereign debt rating. Italy struggled with affects from the sovereign debt crisis. After contracting for five consecutive quarters, GDP levels grew for the first two quarters of 2010. Although the debt crisis in Greece had no direct impact on Italy, concerns grew that investor perception of a contagion among Mediterranean countries would put pressure on Italy’s banking system.

The Fund’s ten largest holdings as of August 31, 2010 represented approximately 25% of Fund net assets. Seven of the Fund’s ten largest holdings declined for the reporting period. German utility company E.ON AG, Spanish bank Banco Santander SA, and French banking group BNP Paribas were among the weakest performers. The Fund’s largest holding, French oil company Total SA, also detracted meaningfully from returns. On the positive side, German engineering company Siemens AG posted a gain.

12 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI FRANCE INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(10.98)%	(11.96)%	(10.82)%	(0.85)%	(1.09)%	(0.66)%	(0.40)%	(0.50)%	(0.15)%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(10.98)%	(11.96)%	(10.82)%	(4.18)%	(5.35)%	(3.26)%	(3.90)%	(4.88)%	(1.45)%

“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 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 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Non-Cyclical		20.92	%
Financial		18.51
Industrial		13.79
Energy		11.81
Communications		10.92
Utilities		6.71
Basic Materials		6.12
Consumer Cyclical		5.92
Diversified		3.13
Technology		1.97
Short-Term and Other Net Assets		0.20
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Total SA		10.83	%
Sanofi-Aventis		6.60
BNP Paribas		6.50
GDF Suez		4.22
France Telecom SA		4.13
Societe Generale		3.51
Danone SA		3.44
L’Air Liquide SA		3.22
Vivendi SA		3.15
LVMH Moet Hennessy Louis Vuitton SA		3.13
TOTAL		48.73	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (10.98)%, while the total return for the Index was (10.82)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The French equity market, as represented by the Index, registered declines for the reporting period. France emerged from recession during the reporting period, as the French government’s massive fiscal stimulus plan appeared to lift economic activity. In the first half of 2010, France’s economy expanded, as evidenced by GDP figures of 1.2% and 1.7% for the first and second quarters, respectively. Industrial production turned positive in 2010 for the first time since May 2008. Unemployment levels remained a problem, however, climbing to 10%

14 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

late in the reporting period. Consequently, consumer confidence fell amid worries over unemployment. In addition, concerns began to grow about the sustainability of economic growth once fiscal stimulus measures were phased out.

The ten largest Fund holdings represented approximately 49% of the net assets of the Fund as of August 31, 2010. Seven of the Fund’s ten largest holdings declined for the reporting period. Financial companies among the ten largest holdings were among the negative performers: both investment bank Societe Generale and banking group BNP Paribas posted double-digit declines. Energy companies GDF Suez, a natural gas producer, and the Fund’s largest holding, oil company Total SA, both declined for the reporting period, as did media conglomerate Vivendi SA and pharmaceutical company Sanofi-Aventis. On the positive side, LVMH Moet Henessey Louis Vuitton SA delivered double-digit gains for the reporting period. Industrial gas producer L’Air Liquide SA also posted a gain.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI GERMANY INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(5.35)%	(6.31)%	(5.44)%	2.95%	2.59%	3.07%	1.23%	1.12%	1.39%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(5.35)%	(6.31)%	(5.44)%	15.64%	13.63%	16.33%	13.04%	11.79%	14.75%

“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 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.

16 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/2010
Sector	Percentage of Net Assets
Financial		18.49	%
Industrial		18.01
Basic Materials		17.09
Consumer Cyclical		15.25
Utilities		11.32
Consumer Non-Cyclical		8.07
Communications		5.56
Technology		5.47
Diversified		0.48
Short-Term and Other Net Assets		0.26
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Siemens AG Registered		10.57	%
E.ON AG		7.15
Bayer AG		7.12
BASF SE		6.84
Allianz SE Registered		6.62
Daimler AG Registered		6.18
Deutsche Telekom AG Registered		5.30
Deutsche Bank AG Registered		4.90
SAP AG		4.59
RWE AG		3.85
TOTAL		63.12	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (5.35)%, while the total return for the Index was (5.44)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Germany’s equity market, as represented by the Index, finished the reporting period in negative territory, due largely to the dampening effects of the sovereign debt crisis. The German economy recovered from recession at an accelerating pace during the reporting period. Following five quarters of declining GDP levels, GDP grew for the first two quarters of 2010. The depreciating euro helped spur export demand for German goods, particularly automobiles. As a result, unemployment levels dropped more quickly than analysts had anticipated, falling from a high of 8.3% in August 2009 to 7.6% by August 2010. Industrial production expanded sharply in 2010,

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

following 20 months of declines. However, equity markets suffered setbacks during the reporting period amid concerns that the debt crisis in Mediterranean European countries would cause a contagion effect and hinder economic growth in Europe.

The ten largest Fund holdings represented approximately 63% of the net assets of the Fund as of August 31, 2010. Five of the Fund’s ten largest holdings delivered positive returns for the reporting period. Car maker Daimler AG and engineering conglomerate Siemens AG, the Fund’s largest holding, both logged positive returns. Telecommunications company Deutsche Telekom AG also delivered gains for the reporting period. On the negative side, utility companies E.ON AG and RWE AG experienced the most significant declines among the Fund’s ten largest holdings. Financial companies Allianz SE and Deutsche Bank AG also declined for the reporting period.

18 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI ITALY INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(19.11)%	(19.95)%	(18.70)%	(6.75)%	(7.02)%	(6.76)%	(1.03)%	(1.17)%	(1.22)%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(19.11)%	(19.95)%	(18.70)%	(29.50)%	(30.51)%	(29.51)%	(9.85)%	(11.11)%	(11.52)%

“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 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 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ITALY INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		35.30	%
Energy		22.12
Utilities		16.10
Communications		7.12
Industrial		6.85
Consumer Non-Cyclical		6.84
Consumer Cyclical		4.92
Diversified		0.63
Short-Term and Other Net Assets		0.12
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Eni SpA		18.34	%
UniCredit SpA		11.56
Enel SpA		10.71
Intesa Sanpaolo SpA		7.58
Assicurazioni Generali SpA		4.88
Terna SpA		3.87
Saipem SpA		3.78
Telecom Italia SpA		3.53
Fiat SpA		3.48
Tenaris SA		3.44
TOTAL		71.17	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (19.11)%, while the total return for the Index was (18.70)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Italy’s equity market, as represented by the Index, finished the reporting period in negative territory. Like many European countries, Italy struggled to recover from the recession early in the reporting period. After contracting for five consecutive quarters, GDP levels grew for the first two quarters of 2010. In February 2010, industrial production grew for the first time since April 2008. Just as the country began to experience improved economic activity, however, the sovereign debt crisis dealt it a second blow. Although the debt crisis in Greece had no direct impact on Italy, concerns grew that investor perception of a contagion among Mediterranean countries would put pressure on Italy’s banking system. In May 2010, Italy cut its economic growth outlook for 2011 from 2.0% to 1.5%, and raised its debt forecast for 2011

20 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ITALY INDEX FUND

to 118.4% of GDP. However, at 5.3% of GDP, Italy’s budget deficit remained substantially that of its Mediterranean neighbors associated with the sovereign debt crisis.

The ten largest Fund holdings represented 71% of the net assets of the Fund as of August 31, 2010. For the reporting period, six of the Fund’s ten largest holdings declined. Financial companies Assicurazioni Generali SpA, UniCredit SpA, and Intesa Sanpaolo SpA all detracted significantly from Fund performance. The Fund’s largest holding, utility company Eni SpA, posted a double-digit decline, as did Enel SpA, Italy’s largest power company. On the positive side, oil and gas industry contractor Saipem SpA gained ground for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(1.44)%	(2.33)%	(1.17)%	2.09%	1.81%	2.70%	(0.33)%	(0.48)%	0.45%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(1.44)%	(2.33)%	(1.17)%	10.88%	9.36%	14.26%	(3.21)%	(4.66)%	4.61%

“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 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.

22 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Non-Cyclical		30.92	%
Financial		20.27
Industrial		18.04
Communications		14.55
Basic Materials		7.15
Technology		4.98
Energy		2.38
Diversified		0.81
Consumer Cyclical		0.52
Short-Term and Other Net Assets		0.38
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Unilever NV CVA		16.78	%
ING Groep NV CVA		12.71
Koninklijke Philips Electronics NV		10.32
Koninklijke KPN NV		9.20
Akzo Nobel NV		4.65
Koninklijke Ahold NV		4.50
ASML Holding NV		4.04
Heineken NV		3.67
TNT NV		3.62
Reed Elsevier NV		3.24
TOTAL		72.73	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (1.44)%, while the total return for the Index was (1.17)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The Netherlands equity market, as represented by the Index, registered declines for the reporting 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. Sluggish economic conditions in Europe as well as the U.S. had hampered the Netherlands’ economy during the global economic downturn that began in 2008, and the economy fell into deep recession. The Dutch financial sector, which had significant exposure to U.S. mortgage debt, had also suffered significant losses and required government intervention to stabilize. During the reporting period, though, the Dutch economy began to emerge from recession. Following five

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

consecutive quarters of contraction, Dutch GDP grew for the first two quarters of 2010 as it benefited from economic improvement in neighboring countries, particularly Germany. Industrial production enjoyed renewed strength as export levels trended upward. Government stimulus programs also boosted economic activity during the period.

The ten largest Fund holdings accounted for approximately 73% of the net assets of the Fund as of August 31, 2010. Five of the ten largest holdings delivered positive returns for the reporting period. Koninklijke Philips Electronics NV delivered the strongest gains among the Fund’s ten largest holdings. Global publisher Reed Elsevier NV also gained ground, as did beer maker Heineken NV. On the negative side, financial company ING Groep NV, the Fund’s second largest holding, detracted from Fund returns. Technology company ASML Holding NV and Akzo Nobel NV, the world’s largest manufacturer of powder coatings, also declined.

24 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SPAIN INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.91)%	(18.53)%	(17.65)%	4.50%	4.24%	4.76%	6.74%	6.62%	6.23%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.91)%	(18.53)%	(17.65)%	24.59%	23.07%	26.21%	92.00%	89.82%	83.07%

“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 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 25

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		46.40	%
Communications		18.43
Utilities		10.80
Consumer Non-Cyclical		5.71
Energy		5.65
Consumer Cyclical		5.45
Industrial		5.06
Technology		1.21
Basic Materials		1.16
Short-Term and Other Net Assets		0.13
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Banco Santander SA		23.60	%
Telefonica SA		17.59
Banco Bilbao Vizcaya Argentaria SA		8.56
Iberdrola SA		4.94
Industria de Diseno Textil SA		4.81
Repsol YPF SA		4.68
Criteria CaixaCorp SA		3.85
Abertis Infraestructuras SA		3.60
Mapfre SA		2.95
Banco Popular Espanol SA		2.79
TOTAL		77.37	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (17.91)%, while the total return for the Index was (17.65)%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The Spanish equity market, as represented by the Index, declined for the reporting period. While many of its European neighbors began to recover from the economic slowdown that had begun in 2008, Spain continued to struggle. Economic activity, as measured by GDP, continued to contract throughout the reporting period. The jobless rate climbed, reaching 20% by June 2010. Household debt grew to unprecedented levels, and corporate debt climbed to 150% of GDP. As economic conditions worsened, government attempts to stimulate activity resulted in a budget deficit that represented 11.4% of GDP. As a result, two of the three major international rating agencies downgraded Spain’s long-term sovereign debt rating. Although the Spanish government was able to pass an austerity plan that would

26 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

include spending cuts and labor reforms, the narrowness of the victory caused concern about its ability to enact such measures. Worries grew that Spain might require a bailout similar to Greece’s, but on a much larger scale, as Spain is the eurozone’s fourth largest economy.

The ten largest Fund holdings represented 77% of the net assets of the Fund as of August 31, 2010. Nine of the ten largest holdings declined for the reporting period. Financial companies were the largest detractors from Fund performance, including Banco Bilbao Vizcaya Argentaria SA, Banco Popular Espanol SA, and the Fund’s largest holding, Banco Santander SA. Electric utility company Iberdrola SA and telephone company Telefonica SA also declined for the reporting period. On the positive side, clothing retailer Industria de Diseno Textil SA delivered double-digit gains.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 27

Management’s Discussion of Fund Performance

iSHARES^® MSCI SWEDEN INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
9.70%	8.68%	9.82%	5.93%	5.58%	5.93%	2.08%	1.97%	1.65%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
9.70%	8.68%	9.82%	33.39%	31.17%	33.36%	22.84%	21.58%	17.74%

“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 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.

28 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		26.45	%
Industrial		24.44
Communications		22.04
Consumer Cyclical		15.91
Basic Materials		5.64
Consumer Non-Cyclical		5.35
Short-Term and Other Net Assets		0.17
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Hennes & Mauritz AB Class B		12.10	%
Telefonaktiebolaget LM Ericsson Class B		10.57
Nordea Bank AB		10.49
TeliaSonera AB		5.84
Svenska Handelsbanken AB Class A		4.62
Volvo AB Class B		4.57
Sandvik AB		4.32
Atlas Copco AB Class A		3.69
Skandinaviska Enskilda Banken AB Class A		3.18
Swedbank AB Class A		2.90
TOTAL		62.28	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 9.70%, while the total return for the Index was 9.82%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Sweden’s equity market, as represented by the Index, delivered positive returns for the reporting period. Because Sweden’s economy relies heavily on exports, it is sensitive to the economic health of its export partners. Sluggish economic conditions in Europe and the U.S., Sweden’s largest export destinations, had hampered the Swedish economy during the global economic downturn that began in 2008. Driven by weak export and consumption levels, Sweden experienced its deepest recession since World War II. As the reporting period progressed, though, Sweden’s economy rebounded. Following five consecutive quarters of contraction, Swedish GDP grew 2.8% and 4.5% in the first and second quarters of 2010, respectively. Escalating export demand, particularly to China and other emerging markets, drove

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 29

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

economic recovery. Personal consumption within Sweden also climbed, further fueling economic growth. Sweden’s budget deficit remained distinctly lower than that of many of its European neighbors, projected to be a modest 2.1% of GDP for 2010. Unemployment levels, though, remained stubbornly high, nearing 8%.

The ten largest Fund holdings represented 62% of the net assets of the Fund as of August 31, 2010. Eight of the Fund’s ten largest holdings delivered positive returns for the reporting period. Automaker Volvo AB and clothing retailer Hennes & Mauritz AB, the Fund’s largest holding, both achieved double-digit gains. Industrial equipment manufacturer Atlas Copco AB also performed well. Banks among the ten largest holdings delivered mixed results: Swedbank AB posted sound positive returns, while Nordea Bank AB declined.

30 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SWITZERLAND INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
6.35%	5.93%	6.08%	5.81%	5.67%	5.02%	4.37%	4.25%	4.63%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
6.35%	5.93%	6.08%	32.62%	31.75%	27.75%	53.33%	51.55%	57.25%

“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 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 31

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Non-Cyclical		54.84	%
Financial		20.74
Industrial		9.57
Basic Materials		5.78
Consumer Cyclical		5.74
Communications		1.90
Technology		0.34
Short-Term and Other Net Assets		1.09
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Nestle SA Registered		21.71	%
Novartis AG Registered		12.93
Roche Holding AG Genusschein		11.36
UBS AG Registered		4.79
Credit Suisse Group AG Registered		4.70
ABB Ltd. Registered		4.58
Zurich Financial Services AG Registered		4.44
Compagnie Financiere Richemont SA Class A Bearer Units		3.62
Syngenta AG Registered		3.33
Swiss Reinsurance Co. Registered		2.27
TOTAL		73.73	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 6.35%, while the total return for the Index was 6.08%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

Switzerland’s equity market, as represented by the Index, delivered positive results for the reporting period. Switzerland is an export-driven economy, with exports accounting for more than 50% of Swiss GDP. Because it relies on countries in the eurozone and the U.S. for the majority of its exports, Switzerland’s economy is sensitive to the financial health of its trading partners. Sluggish economic conditions in Europe and the U.S. had hampered the Swiss economy during the global economic downturn that began in 2008. During the reporting period though, improving economic conditions led to increased demand for Swiss exports. As export levels rebounded, economic activity

32 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

within Switzerland accelerated. Following five consecutive quarters of contraction, Swiss GDP grew 1.9% and 3.4% in the first two quarters of 2010, respectively. In May, the KOF economic indicators that aim to predict the economy’s direction several months in advance, posted a jump of 2.2%, marking its thirteenth consecutive monthly advance. Although Swiss banks have relatively low direct exposure to Greece, Switzerland is exposed to indirect contagion and exchange rate risk. As the Swiss franc appreciated relative to the euro, the Swiss National Bank took steps to weaken the franc, in an effort to maintain prices of Swiss export goods.

The ten largest Fund holdings accounted for 74% of the net assets of the Fund as of August 31, 2010. Five of the ten largest holdings delivered gains for the reporting period. The Fund’s largest holding, packaged foods company Nestle SA posted solid gains, as did luxury goods company Compagnie Financiere Richemont SA. Pharmaceutical company Roche Holding AG and financial company Credit Suisse Group AG were among the detractors from Fund performance.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 33

Management’s Discussion of Fund Performance

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
2.87%	2.56%	3.48%	(0.48)%	(0.72)%	0.11%	1.04%	0.92%	1.75%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
2.87%	2.56%	3.48%	(2.38)%	(3.53)%	0.54%	10.90%	9.58%	18.92%

“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 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.

34 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Non-Cyclical		25.52	%
Financial		22.36
Energy		17.46
Basic Materials		12.26
Communications		9.71
Utilities		4.40
Consumer Cyclical		3.73
Industrial		2.84
Technology		0.85
Diversified		0.21
Short-Term and Other Net Assets		0.66
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
HSBC Holdings PLC		8.40	%
Vodafone Group PLC		6.17
BP PLC		5.33
GlaxoSmithKline PLC		4.72
Royal Dutch Shell PLC Class A		4.58
Rio Tinto PLC		3.57
AstraZeneca PLC		3.47
Royal Dutch Shell PLC Class B		3.35
British American Tobacco PLC		3.30
BHP Billiton PLC		3.01
TOTAL		45.90	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 2.87%, while the total return for the Index was 3.48%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. As the reporting period progressed, however, stock markets reversed course. Triggered by Greece’s inability to repay loans, concerns about large levels of sovereign debt spread to other peripheral European countries with massive debt burdens, including Italy, Ireland, Portugal, and Spain.

In response to the European sovereign debt crisis, the European Union and International Monetary Fund agreed on a $1 trillion emergency package of standby funds to be available to Greece and other eurozone countries in financial distress. As other eurozone nations evaluated their fiscal conditions, many proposed austerity measures and tax increases that ran the risk of severely impeding economic recovery. Many international markets declined sharply amid investor concern about the dampened potential for economic growth throughout Europe, as well as the impact that a slowdown in Europe would have on the global economy. European markets experienced the most significant pullbacks, although most markets did not erase all gains achieved earlier in the reporting period. As concerns about the creditworthiness of peripheral eurozone countries mounted, the euro depreciated relative to the U.S. dollar. This hurt revenues for companies with significant European exposure, but did benefit certain eurozone countries with export-driven economies.

The United Kingdom’s equity market, as represented by the Index, delivered positive returns for the reporting period. As with many of its European neighbors, the UK grappled with recession early in the reporting period, struggling to emerge from the global economic slowdown that had begun in 2008. As the period progressed, the UK economy recovered more quickly than analysts had anticipated. After contracting by more than 6% during the recession, the UK economy expanded by 1.7% in the second quarter 2010, its largest increase since 1999. Largely driving the growth was a sharp increase in construction activity, as evidenced by an 8.5% increase for the second

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 35

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

quarter 2010. Following 22 consecutive months of decline, industrial production began to grow in March 2010. However, with unemployment continuing to hover near 8%, consumer confidence remained low. Although the UK has little direct exposure to countries already involved in the sovereign debt crisis, it is susceptible to regional contagion.

The ten largest Fund holdings represented approximately 46% of the net assets of the Fund as of August 31, 2010. Seven of the Fund’s ten largest holdings logged gains for the reporting period. Metals and mining company Rio Tinto PLC delivered solid results, as did wireless telecommunications company Vodafone Group PLC and British American Tobacco PLC. Oil company BP PLC detracted from Fund performance, as did the Fund’s largest holding, financial company HSBC Holdings PLC.

36 2010 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, 2010 to August 31, 2010.

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 (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During  Perioda (3/1/10 to 8/31/10)
Austria Investable Market
Actual		$1,000.00		$946.40		0.53	%		$2.60
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Belgium Investable Market
Actual		1,000.00		951.90		0.53			2.61
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Emerging Markets Eastern Europe
Actual		1,000.00		992.50		0.69			3.47
Hypothetical (5% return before expenses)		1,000.00		1,021.70		0.69			3.52
EMU
Actual		1,000.00		933.20		0.54			2.63
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.54			2.75

SHAREHOLDER EXPENSES 37

Shareholder Expenses (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Index Fund	Beginning Account Value (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During  Perioda (3/1/10 to 8/31/10)
France
Actual		$1,000.00		$910.40		0.54	%		$2.60
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.54			2.75
Germany
Actual		1,000.00		980.70		0.53			2.65
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Italy
Actual		1,000.00		895.80		0.53			2.53
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Netherlands Investable Market
Actual		1,000.00		953.3		0.53			2.61
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Spain
Actual		1,000.00		939.50		0.53			2.59
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Sweden
Actual		1,000.00		1,048.80		0.53			2.74
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Switzerland
Actual		1,000.00		1,006.10		0.53			2.68
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
United Kingdom
Actual		1,000.00		1,000.80		0.53			2.67
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70

^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).

38 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.85%
AUTO MANUFACTURERS – 0.53%
Rosenbauer International AG		14,656	$	588,149
				588,149
BANKS – 19.77%
Erste Group Bank AG		457,088		16,638,007
Raiffeisen International Bank Holding AGa		127,040		5,207,133
				21,845,140
BIOTECHNOLOGY – 1.70%
Intercell AGb		101,824		1,876,492
				1,876,492
BUILDING MATERIALS – 3.61%
Wienerberger AGb		306,944		3,986,929
				3,986,929
COMMERCIAL SERVICES – 0.49%
Kapsch TrafficCom AGb		12,338		543,973
				543,973
ELECTRIC – 4.90%
Verbund AG		151,936		5,416,541
				5,416,541
ELECTRICAL COMPONENTS & EQUIPMENT – 1.15%
Zumtobel AG		76,096		1,266,473
				1,266,473
ELECTRONICS – 0.37%
Austria Technologie & Systemtechnik AG		30,784		404,747
				404,747
ENGINEERING & CONSTRUCTION – 1.54%
Flughafen Wien AG		29,056		1,698,721
				1,698,721
ENTERTAINMENT – 3.30%
bwin Interactive Entertainment AG		76,160		3,650,644
				3,650,644
ENVIRONMENTAL CONTROL – 0.72%
BWT AG		34,624		790,777
				790,777
FOREST PRODUCTS & PAPER – 1.66%
Mayr-Melnhof Karton AG		19,200		1,833,340
				1,833,340

Security	Shares		Value
INSURANCE – 4.38%
Vienna Insurance Group AG		102,528	$	4,840,941
				4,840,941
IRON & STEEL – 7.29%
voestalpine AG		270,720		8,058,157
				8,058,157
MACHINERY – 4.96%
Andritz AG		86,336		5,266,980
A-TEC Industries AGb		30,272		217,033
				5,484,013
MACHINERY – CONSTRUCTION & MINING – 0.76%
Palfinger AGb		39,872		841,717
				841,717
MANUFACTURING – 3.97%
RHI AGb		68,160		1,824,818
Semperit AG Holding		27,008		892,471
Strabag SE		79,296		1,666,418
				4,383,707
OIL & GAS – 10.65%
OMV AG		364,480		11,775,455
				11,775,455
OIL & GAS SERVICES – 1.42%
Schoeller-Bleckmann Oilfield Equipment AG		29,888		1,574,526
				1,574,526
REAL ESTATE – 14.79%
Atrium European Real Estate Ltd.		524,928		2,768,035
CA Immobilien Anlagen AGb		208,000		2,458,526
conwert Immobilien Invest SE		196,032		2,275,458
IMMOEAST AG Escrowb,c		998,769		127
IMMOFINANZ AGb		2,368,801		7,767,419
IMMOFINANZ AG Escrowb,c		897,599		114
Sparkassen Immobilien AGb		163,712		1,081,963
				16,351,642
TELECOMMUNICATIONS – 8.85%
Telekom Austria AG		762,752		9,781,444
				9,781,444

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
TRANSPORTATION – 2.04%
Oesterreichische Post AG		86,848	$	2,251,741
				2,251,741
TOTAL COMMON STOCKS
(Cost: $183,256,977)				109,245,269
SHORT-TERM INVESTMENTS – 0.65%
MONEY MARKET FUNDS – 0.65%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.31%d,e,f		467,158		467,158
BlackRock Cash Funds: Prime, SL Agency Shares
0.30%d,e,f		90,779		90,779
BlackRock Cash Funds: Treasury, SL Agency Shares
0.13%d,e		165,061		165,061
				722,998
TOTAL SHORT-TERM INVESTMENTS
(Cost: $722,998)				722,998
TOTAL INVESTMENTS IN SECURITIES – 99.50%
(Cost: $183,979,975)				109,968,267
Other Assets, Less Liabilities – 0.50%				551,394
NET ASSETS – 100.00%			$	110,519,661

^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 in accordance with management’s fair valuation policy. 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.

40 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.70%
AGRICULTURE – 0.62%
SIPEF NV		5,500	$	363,492
				363,492
BANKS – 13.58%
Ageas		1,185,750		3,012,551
Dexia SAa,b		313,876		1,312,050
KBC Groep NVa		88,250		3,674,405
				7,999,006
BEVERAGES – 24.40%
Anheuser-Busch InBev NV		275,500		14,371,772
				14,371,772
BIOTECHNOLOGY – 0.23%
Ablynx NVa		9,375		85,432
Devgen NVa		5,524		48,794
				134,226
BUILDING MATERIALS – 0.13%
Deceuninck NVa		35,082		76,690
				76,690
CHEMICALS – 5.62%
Recticel SA		15,250		137,612
Solvay SA		30,750		2,794,733
Tessenderlo Chemie NV		13,250		375,534
				3,307,879
COMPUTERS – 0.16%
Econocom Group SA		6,625		91,778
				91,778
DIVERSIFIED FINANCIAL SERVICES – 0.57%
KBC Ancora SCAa		16,500		337,208
				337,208
ELECTRICAL COMPONENTS & EQUIPMENT – 2.83%
NV Bekaert SA		8,194		1,666,266
				1,666,266
ELECTRONICS – 0.98%
Barco NVa		6,250		288,665
EVS Broadcast Equipment SA		5,750		290,857
				579,522
ENGINEERING & CONSTRUCTION – 0.55%
Compagnie d’Entreprises CFE SA		5,152		253,405

Security	Shares		Value
Hamon & Cie (International) SA		2,125	$	71,516
				324,921
ENTERTAINMENT – 0.36%
Kinepolis Group NV		3,750		209,707
				209,707
FOOD – 11.09%
Colruyt SA		10,625		2,638,651
Delhaize Group SA		57,875		3,892,596
				6,531,247
HEALTH CARE – PRODUCTS – 0.17%
Ion Beam Applications SAa		10,128		99,759
				99,759
HOLDING COMPANIES – DIVERSIFIED – 9.22%
Ackermans & van Haaren NV		14,875		1,011,627
Compagnie Nationale a Portefeuille SA		23,500		1,064,471
Groupe Bruxelles Lambert SA		45,375		3,356,933
				5,433,031
INVESTMENT COMPANIES – 0.65%
RHJ International SAa		47,244		380,684
				380,684
MANUFACTURING – 1.00%
Agfa-Gevaert NVa		85,875		589,371
				589,371
MEDIA – 0.08%
Roularta Media Group NVa		2,125		50,099
				50,099
MINING – 5.04%
Nyrstar NV		57,500		617,523
Umicore		67,500		2,353,196
				2,970,719
PHARMACEUTICALS – 5.33%
Arseus NV		17,375		206,474
Galapagos NVa		20,125		272,660
Omega Pharma SA		11,625		423,372
ThromboGenics NVa,b		17,276		361,411
UCB SA		65,656		1,878,358
				3,142,275

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Continued)

iSHARES^® MSCI BELGIUM INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
REAL ESTATE – 0.21%
Atenor Group SA		2,812	$	121,906
				121,906
REAL ESTATE INVESTMENT TRUSTS – 3.65%
Befimmo SCA		8,875		665,501
Cofinimmo SA		6,875		824,410
Intervest Offices NV		4,750		135,531
Leasinvest Real Estate SCA		1,125		88,649
Warehouses De Pauw SCA		6,764		300,885
Wereldhave Belgium NV		1,750		136,764
				2,151,740
RETAIL – 1.23%
SA D’Ieteren NV		1,541		726,420
				726,420
SEMICONDUCTORS – 0.32%
Melexis NVa		15,086		189,051
				189,051
TELECOMMUNICATIONS – 8.89%
Belgacom SA		79,250		2,832,325
Mobistar SA		20,546		1,154,584
Telenet Group Holding NVa		41,640		1,246,322
				5,233,231
TRANSPORTATION – 0.96%
Compagnie Maritime Belge SA		9,750		264,936
Euronav SA		17,000		297,733
				562,669
VENTURE CAPITAL – 0.83%
GIMV NV		10,155		488,511
				488,511
TOTAL COMMON STOCKS
(Cost: $86,354,837)				58,133,180
SHORT-TERM INVESTMENTS – 0.71%
MONEY MARKET FUNDS – 0.71%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.31%c,d,e		322,826		322,826
BlackRock Cash Funds: Prime, SL Agency Shares
0.30%c,d,e		62,732		62,732

Security	Shares		Value
BlackRock Cash Funds: Treasury, SL Agency Shares
0.13%c,d		30,565	$	30,565
				416,123
TOTAL SHORT-TERM INVESTMENTS
(Cost: $416,123)				416,123
TOTAL INVESTMENTS IN SECURITIES – 99.41%
(Cost: $86,770,960)				58,549,303
Other Assets, Less Liabilities – 0.59%				346,874
NET ASSETS – 100.00%			$	58,896,177

^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.

42 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.08%
CZECH REPUBLIC – 5.13%
Central European Media Enterprises Ltd. Class Aa		1,420	$	30,246
CEZ AS		8,730		366,963
Komercni Banka AS		700		135,445
Telefonica O2 Czech Republic AS		5,570		125,471
				658,125
HUNGARY – 4.74%
MOL Hungarian Oil and Gas Nyrta		2,320		215,526
OTP Bank Nyrta		10,240		216,984
Richter Gedeon Nyrt		850		176,354
				608,864
POLAND – 17.00%
Bank Handlowy w Warszawie SA		1,620		40,099
Bank Millennium SAa		16,361		22,978
Bank Pekao SA		5,590		273,004
Bank Zachodni WBK SA		1,090		65,078
BRE Bank SAa		680		54,881
Cyfrowy Polsat SA		5,520		24,854
Getin Holding SAa		16,130		49,203
Globe Trade Centre SAa		5,270		38,079
Grupa Lotos SAa		2,690		25,480
ING Bank Slaski SAa		180		46,185
Kernel Holding SAa		2,450		48,032
KGHM Polska Miedz SA		5,470		185,801
PBG SA		520		37,507
Polska Grupa Energetyczna SAa		16,040		116,459
Polski Koncern Naftowy Orlen SAa		16,270		201,052
Polskie Gornictwo Naftowe i Gazownictwo SA		74,170		82,957
Powszechna Kasa Oszczednosci Bank Polski SA		30,100		364,396
Powszechny Zaklad Ubezpieczen SA		1,790		214,767
Tauron Polska Energia SAa		47,150		80,452
Telekomunikacja Polska SA		31,350		170,738
TVN SA		7,180		39,195
				2,181,197
RUSSIA – 72.21%
Cherepovets MK Severstal SP GDRa,b		11,482		138,243
LUKOIL SP ADR		22,800		1,215,240
Magnit OJSC SP GDRb		14,960		318,648
Mechel OAO SP ADR		7,310		166,303
MMC Norilsk Nickel SP ADR		38,000		644,100
Mobile TeleSystems SP ADR		26,020		542,777

Security	Shares		Value
Novolipetsk Steel SP GDRb		4,620	$	134,442
OAO Gazprom SP ADR		122,125		2,527,988
OAO NovaTek SP GDRb		4,850		355,990
OAO Tatneft SP ADR		12,340		368,719
OAO TMK SP GDRa,b		3,190		49,700
OJSC Comstar United Telesystems SP GDRa		13,600		87,992
OJSC Rosneft Oil Co. SP GDRa,b		74,026		469,325
Polyus Gold SP ADR		5,815		142,758
Sberbank GDRb		3,730		1,066,645
Sistema JSFC SP GDRb		5,410		139,308
Surgutneftegaz SP ADR		41,997		394,772
Uralkali SP GDRb		8,188		189,552
VTB Bank OJSC SP GDRb		46,000		237,360
Wimm-Bill-Dann Foods OJSC SP ADR		4,110		75,336
				9,265,198
TOTAL COMMON STOCKS
(Cost: $12,973,390)				12,713,384
SHORT-TERM INVESTMENTS – 0.06%
MONEY MARKET FUNDS – 0.06%
BlackRock Cash Funds: Treasury, SL Agency Shares
0.13%c,d		7,712		7,712
				7,712
TOTAL SHORT-TERM INVESTMENTS
(Cost: $7,712)				7,712
TOTAL INVESTMENTS IN SECURITIES – 99.14%
(Cost: $12,981,102)				12,721,096
Other Assets, Less Liabilities – 0.86%				110,504
NET ASSETS – 100.00%			$	12,831,600

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

^a Non-income earning security.

^b This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^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 43

Schedule of Investments

iSHARES^® MSCI EMU INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.03%
AUSTRIA – 1.05%
Erste Group Bank AG		55,112	$	2,006,077
IMMOEAST AG Escrowa,b		105,078		13
IMMOFINANZ AGa		285,836		937,271
IMMOFINANZ AG Escrowa,b		68,575		9
OMV AG		44,756		1,445,957
Raiffeisen International Bank Holding AGc		17,164		703,520
Telekom Austria AG		94,256		1,208,728
Verbund AGc		22,244		793,002
Vienna Insurance Group AG		12,596		594,730
voestalpine AG		32,160		957,263
				8,646,570
BELGIUM – 3.25%
Ageas		670,804		1,704,264
Anheuser-Busch InBev NV		212,256		11,072,577
Belgacom SA		45,024		1,609,118
Colruyt SA		5,092		1,264,566
Compagnie Nationale a Portefeuille SA		9,112		412,743
Delhaize Group SA		29,748		2,000,811
Dexia SAa		176,793		739,022
Groupe Bruxelles Lambert SA		24,924		1,843,927
KBC Groep NVa		47,168		1,963,902
Mobistar SA		7,504		421,688
Solvay SA		17,420		1,583,228
UCB SA		30,427		870,489
Umicore		35,660		1,243,185
				26,729,520
FINLAND – 3.53%
Elisa OYJa		35,376		703,192
Fortum OYJ		128,662		2,971,212
Kesko OYJ Class B		20,005		779,033
Kone OYJ Class B		45,024		2,076,632
Metso OYJ		38,324		1,404,248
Neste Oil OYJ		36,984		499,191
Nokia OYJ		1,106,036		9,481,557
Nokian Renkaat OYJ		32,964		947,678
Orion OYJ Class B		28,408		520,636
Outokumpu OYJ		38,860		637,120
Pohjola Bank PLC		41,004		450,526

Security	Shares		Value
Rautaruukki OYJ		25,996	$	457,599
Sampo OYJ Class A		120,868		2,920,263
Sanoma OYJ		25,838		479,447
Stora Enso OYJ Class R		173,396		1,340,998
UPM-Kymmene OYJ		157,496		2,167,836
Wartsila OYJ Class B		23,584		1,261,309
				29,098,477
FRANCE – 32.71%
Accor SA		43,148		1,327,651
Aeroports de Paris		8,845		625,930
Air France-KLMa		38,056		501,569
Alcatel-Lucenta		683,668		1,767,359
ALSTOM		61,372		2,935,948
ArcelorMittal		252,724		7,395,620
Atos Origin SAa		14,204		550,964
AXA		508,932		7,933,335
BioMerieux SA		3,484		356,232
BNP Paribas		280,328		17,589,685
Bouygues SA		69,412		2,826,101
Bureau Veritas SA		14,204		866,524
Cap Gemini SA		43,416		1,840,790
Carrefour SA		177,148		8,066,990
Casino Guichard-Perrachon SA		16,348		1,327,474
Christian Dior SA		18,492		1,875,962
CNP Assurances SA		43,952		748,535
Compagnie de Saint-Gobain		113,632		4,193,974
Compagnie Generale de Geophysique-Veritasa		41,808		709,364
Compagnie Generale des Etablissements Michelin Class B		43,684		3,254,038
Credit Agricole SA		276,576		3,495,809
Danone SA		172,860		9,316,227
Dassault Systemes SA		18,224		1,102,154
Edenred SAa		39,785		687,681
Eiffage SAc		12,596		576,160
Electricite de France		75,308		3,008,250
Eramet		1,608		409,044
Essilor International SA		60,300		3,670,591
Eurazeo		8,576		501,494
European Aeronautic Defence and Space Co.a		119,952		2,647,346
Eutelsat Communications		27,068		975,987

44 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2010

Security	Shares		Value
Fonciere des Regions		7,504	$	701,939
France Telecom SA		543,772		11,085,357
GDF Suez		367,696		11,419,043
Gecina SA		5,628		562,791
Groupe Eurotunnel SA		131,613		980,725
Hermes International		15,812		2,873,765
Icade		6,432		611,635
Iliad SA		4,288		404,378
Imerys SA		10,988		547,226
Ipsen SA		7,504		257,028
JCDecaux SAa		18,500		443,330
Klepierre		26,800		820,711
Lafarge SA		59,764		2,761,419
Lagardere SCA		35,912		1,297,384
L’Air Liquide SA		82,813		8,636,912
Legrand SA		37,252		1,134,633
L’Oreal SA		70,484		7,032,159
LVMH Moet Hennessy Louis Vuitton SA		72,360		8,439,714
M6-Metropole Television		19,832		414,756
Natixisa		254,064		1,388,481
Neopost SA		9,648		683,736
PagesJaunes Groupe SA		34,433		328,176
Pernod Ricard SA		58,156		4,559,716
PPR SA		22,512		2,939,845
PSA Peugeot Citroen SAa		45,828		1,207,421
Publicis Groupe SA		35,376		1,485,965
Renault SAa		56,280		2,293,222
Safran SA		52,260		1,287,881
Sanofi-Aventis		311,684		17,933,021
Schneider Electric SA		71,020		7,554,099
SCOR SE		51,992		1,134,250
SES SA FDR		86,587		1,993,515
Societe BIC		7,504		551,632
Societe Generale		186,260		9,511,697
Societe Television Francaise 1		35,916		533,847
Sodexo		28,140		1,621,743
STMicroelectronics NV		184,920		1,236,227
Suez Environnement SA		80,936		1,306,393
Technip SA		29,212		1,919,094
Thales SA		25,996		833,589
Total SA		623,636		29,223,537
Unibail-Rodamco SE		26,800		5,068,345

Security	Shares		Value
Vallourec SA		32,696	$	2,817,012
Veolia Environnement		102,912		2,402,723
Vinci SA		128,908		5,672,808
Vivendi SA		363,408		8,503,089
				269,500,757
GERMANY – 24.19%
Adidas AG		60,568		3,091,857
Allianz SE Registered		134,536		13,839,811
BASF SE		271,216		14,351,667
Bayer AG		244,148		14,950,249
Bayerische Motoren Werke AG		97,820		5,179,973
Beiersdorf AG		29,748		1,594,940
Celesio AG		21,440		435,987
Commerzbank AGa,c		216,168		1,706,677
Continental AGa		14,740		893,602
Daimler AG Registereda		266,124		12,974,514
Deutsche Bank AG Registered		183,312		11,551,168
Deutsche Boerse AG		57,620		3,531,254
Deutsche Lufthansa AG Registereda		66,196		1,047,862
Deutsche Post AG Registered		252,656		4,143,965
Deutsche Postbank AGa		24,924		757,242
Deutsche Telekom AG Registered		832,944		10,999,167
E.ON AG		532,516		15,028,371
Fraport AG		9,916		516,964
Fresenius Medical Care AG & Co. KGaA		58,960		3,348,105
Fresenius SE		7,772		553,059
GEA Group AG		48,370		1,007,589
Hannover Rueckversicherung AG Registered		18,760		834,625
HeidelbergCement AG		42,076		1,692,531
Henkel AG & Co. KGaA		37,252		1,501,087
Hochtief AG		12,596		835,824
Infineon Technologies AGa		319,724		1,788,360
K+S AG		42,880		2,249,691
Linde AG		49,580		5,601,918
MAN SE		31,892		2,751,795
Merck KGaA		19,564		1,704,238
METRO AG		37,523		1,915,940
Muenchener Rueckversicherungs- Gesellschaft AG Registered		58,156		7,450,467

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2010

Security	Shares		Value
Puma AG		1,608	$	437,758
QIAGEN NVa		71,020		1,279,476
RWE AG		124,396		8,170,665
Salzgitter AG		13,132		799,206
SAP AG		253,260		11,090,403
Siemens AG Registered		242,808		22,151,080
Suedzucker AG		20,636		377,280
ThyssenKrupp AG		99,790		2,738,853
TUI AGa		42,538		430,131
United Internet AG Registered		37,254		478,925
Volkswagen AG		9,112		830,929
Wacker Chemie AG		4,692		713,807
				199,329,012
GREECE – 1.05%
Alpha Bank AEa		128,430		832,463
Bank of Cyprus Public Co. Ltd.		135,713		722,710
Coca-Cola Hellenic Bottling Co. SA SP ADR		71,292		1,665,381
EFG Eurobank Ergasias SAa		74,494		486,646
Hellenic Telecommunications Organization SA SP ADR		327,886		1,098,418
National Bank of Greece SA SP ADRa		877,993		2,168,643
OPAP SA		59,440		902,766
Piraeus Bank SAa		78,525		409,185
Public Power Corp. SA		27,000		385,022
				8,671,234
IRELAND – 0.82%
Anglo Irish Bank Corp. Ltd.b		446,666		57
Bank of Irelanda		1,018,936		997,163
CRH PLC		206,628		3,223,585
Elan Corp. PLCa		147,672		653,139
Kerry Group PLC Class A		40,736		1,341,708
Ryanair Holdings PLCa		43,520		211,844
Ryanair Holdings PLC SP ADRa		12,482		353,865
				6,781,361
ITALY – 9.22%
A2A SpA		214,692		300,695
Assicurazioni Generali SpA		349,740		6,343,044
Atlantia SpA		66,673		1,260,055
Autogrill SpAa		35,108		406,047
Banca Carige SpA		209,308		445,051

Security	Shares		Value
Banca Monte dei Paschi di Siena SpAa		709,407	$	851,130
Banca Popolare di Milano Scrl		141,605		617,307
Banco Popolare SpA		198,200		1,117,816
Enel SpA		1,928,796		9,217,276
Eni SpA		769,964		15,334,439
Exor SpA		23,265		429,632
Fiat SpA		228,604		2,686,082
Finmeccanica SpA		125,500		1,264,071
Intesa Sanpaolo SpA		2,295,152		6,461,207
Luxottica Group SpA		32,318		749,200
Mediaset SpA		208,236		1,294,175
Mediobanca SpAa		134,698		1,063,117
Mediolanum SpA		52,796		195,935
Parmalat SpA		475,603		1,147,884
Pirelli & C. SpA		66,144		440,504
Prysmian SpA		49,149		772,703
Saipem SpA		76,994		2,702,770
Snam Rete Gas SpA		436,036		2,025,528
Telecom Italia SpA		2,699,832		3,661,252
Tenaris SA		140,802		2,394,382
Terna SpA		402,000		1,620,900
UniCredit SpA		4,042,780		9,515,893
Unione di Banche Italiane ScpA		186,260		1,638,152
				75,956,247
NETHERLANDS – 8.60%
AEGON NVa		464,712		2,384,947
Akzo Nobel NV		69,147		3,661,619
ASML Holding NV		127,568		3,189,958
Corio NV		16,080		925,382
Delta Lloyd NV		18,224		311,642
Fugro NV CVA		20,535		1,159,316
Heineken Holding NV		30,284		1,169,309
Heineken NV		74,236		3,334,338
ING Groep NV CVAa		1,131,764		10,094,800
Koninklijke Ahold NV		353,492		4,364,664
Koninklijke DSM NV		44,294		1,846,210
Koninklijke KPN NV		475,968		6,920,417
Koninklijke Philips Electronics NV		291,316		8,186,185
Randstad Holding NVa		31,088		1,158,669
Reed Elsevier NV		202,876		2,437,411

46 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2010

Security	Shares		Value
Royal Boskalis Westminster NV CVA		21,247	$	794,994
Royal Vopak NV		19,832		798,888
SBM Offshore NV		52,260		797,370
TNT NV		109,756		2,794,073
Unilever NV CVA		481,596		12,936,405
Wolters Kluwer NV		85,224		1,595,486
				70,862,083
PORTUGAL – 0.97%
Banco Comercial Portugues SA Registered		885,698		709,177
Banco Espirito Santo SA Registered		154,490		668,569
BRISA – Auto-estradas de Portugal SA		53,639		338,136
CIMPOR – Cimentos de Portugal SGPS SA		63,248		389,064
EDP Renovaveis SAa		71,020		396,254
Energias de Portugal SA		534,928		1,631,680
Galp Energia SGPS SA Class B		68,608		1,117,870
Jeronimo Martins SGPS SA		65,151		721,800
Portugal Telecom SGPS SA Registered		171,681		2,016,149
				7,988,699
SPAIN – 12.64%
Abertis Infraestructuras SA		86,987		1,446,074
Acciona SA		7,785		616,319
Acerinox SA		29,212		462,045
Actividades de Construcciones y Servicios SA		39,537		1,644,416
Banco Bilbao Vizcaya Argentaria SA		1,054,312		12,751,229
Banco de Sabadell SAc		290,378		1,407,948
Banco de Valencia SAc		60,196		319,795
Banco Popular Espanol SA		274,261		1,640,380
Banco Santander SA		2,431,296		28,573,745
Bankinter SA		91,120		594,216
Criteria CaixaCorp SA		258,084		1,215,284
Enagas SA		55,819		989,657
Ferrovial SA		121,297		1,068,962
Fomento de Construcciones y Contratas SA		11,364		268,280
Gamesa Corporacion Tecnologica SAa		58,424		393,546

Security	Shares		Value
Gas Natural SDG SA		68,270	$	1,035,573
Gestevision Telecinco SA		31,892		323,860
Grifols SA		39,800		464,815
Iberdrola Renovables SA		252,016		826,694
Iberdrola SA		1,167,944		8,253,255
Iberia Lineas Aereas de Espana SAa		139,896		452,503
Indra Sistemas SA		28,140		472,271
Industria de Diseno Textil SA		64,052		4,286,073
Mapfre SA		221,424		637,976
Red Electrica Corporacion SA		35,914		1,484,372
Repsol YPF SA		217,080		4,970,299
Telefonica SA		1,210,288		26,918,772
Zardoya Otis SA		40,871		639,443
				104,157,802
TOTAL COMMON STOCKS
(Cost: $1,210,381,524)				807,721,762
PREFERRED STOCKS – 1.73%
GERMANY – 1.43%
Bayerische Motoren Werke AG		16,348		607,326
Fresenius SE		23,852		1,701,867
Henkel AG & Co. KGaA		53,332		2,514,724
Porsche Automobil Holding SE		26,814		1,251,901
RWE AG NVS		12,060		744,541
Volkswagen AG		50,116		5,001,963
				11,822,322
ITALY – 0.30%
Intesa Sanpaolo SpA RNC		270,412		614,500
Telecom Italia SpA RNC		1,675,268		1,849,194
				2,463,694
TOTAL PREFERRED STOCKS
(Cost: $20,233,641)				14,286,016
SHORT-TERM INVESTMENTS – 0.48%
MONEY MARKET FUNDS – 0.48%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.31%d,e,f		3,003,998		3,003,998

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI EMU INDEX FUND

August 31, 2010

Security	Shares		Value
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%d,e,f		583,738	$	583,738
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%d,e		338,258		338,258
				3,925,994
TOTAL SHORT-TERM INVESTMENTS
(Cost: $3,925,994)				3,925,994
TOTAL INVESTMENTS IN SECURITIES – 100.24%
(Cost: $1,234,541,159)				825,933,772
Other Assets, Less Liabilities – (0.24)%				(1,961,735)
NET ASSETS – 100.00%			$	823,972,037

FDR – Fiduciary Depositary Receipts

NVS – Non-Voting Shares

SP ADR – Sponsored American Depositary Receipts

^a Non-income earning security.

^b Security valued using Level 3 inputs in accordance with management’s fair valuation policy. 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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.80%
ADVERTISING – 0.87%
JCDecaux SAa		17,328	$	415,244
PagesJaunes Groupe SAb		33,402		318,350
Publicis Groupe SA		32,433		1,362,345
				2,095,939
AEROSPACE & DEFENSE – 1.75%
European Aeronautic Defence and
Space Co.a		106,939		2,360,149
Safran SA		43,838		1,080,331
Thales SA		23,313		747,556
				4,188,036
AIRLINES – 0.19%
Air France-KLMa		35,226		464,270
				464,270
APPAREL – 1.05%
Hermes International		13,851		2,517,362
				2,517,362
AUTO MANUFACTURERS – 1.30%
PSA Peugeot Citroen SAa		40,019		1,054,372
Renault SAa		50,449		2,055,628
				3,110,000
AUTO PARTS & EQUIPMENT – 1.20%
Compagnie Generale des Etablissements Michelin Class B		38,589		2,874,509
				2,874,509
BANKS – 11.82%
BNP Paribas		248,349		15,583,105
Credit Agricole SA		243,105		3,072,749
Natixisa		229,625		1,254,920
Societe Generale		164,908		8,421,319
				28,332,093
BEVERAGES – 1.70%
Pernod Ricard SA		51,929		4,071,488
				4,071,488
BUILDING MATERIALS – 2.77%
Compagnie de Saint-Gobain		100,951		3,725,939
Imerys SA		9,804		488,261
Lafarge SA		52,554		2,428,278
				6,642,478

Security	Shares		Value
CHEMICALS – 3.22%
L’Air Liquide SA		74,100	$	7,728,197
				7,728,197
COMMERCIAL SERVICES – 0.60%
Bureau Veritas SA		12,768		778,919
Edenred SAa		38,418		664,052
				1,442,971
COMPUTERS – 0.87%
Atos Origin SAa		11,799		457,676
Cap Gemini SA		38,589		1,636,131
				2,093,807
COSMETICS & PERSONAL CARE – 3.32%
Christian Dior SA		16,703		1,694,473
L’Oreal SA		62,759		6,261,439
				7,955,912
ELECTRIC – 1.13%
Electricite de France		67,773		2,707,257
				2,707,257
ELECTRICAL COMPONENTS & EQUIPMENT – 0.44%
Legrand SA		34,314		1,045,147
				1,045,147
ENGINEERING & CONSTRUCTION – 3.55%
Aeroports de Paris		7,752		548,582
Bouygues SA		60,425		2,460,198
Eiffage SAb		10,602		484,951
Vinci SA		114,175		5,024,458
				8,518,189
FOOD – 6.91%
Carrefour SA		157,041		7,151,355
Casino Guichard-Perrachon SA		14,478		1,175,628
Danone SA		152,988		8,245,232
				16,572,215
FOOD SERVICE – 0.60%
Sodexo		24,795		1,428,966
				1,428,966
GAS – 4.22%
GDF Suez		325,934		10,122,097
				10,122,097

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2010

Security	Shares		Value
HAND & MACHINE TOOLS – 2.79%
Schneider Electric SA		62,985	$	6,699,450
				6,699,450
HEALTH CARE – PRODUCTS – 1.34%
Essilor International SA		52,782		3,212,954
				3,212,954
HEALTH CARE – SERVICES – 0.13%
BioMerieux SA		3,135		320,547
				320,547
HOLDING COMPANIES – DIVERSIFIED – 3.13%
LVMH Moet Hennessy Louis Vuitton SA		64,241		7,492,754
				7,492,754
HOUSEHOLD PRODUCTS & WARES – 0.21%
Societe BIC		6,954		511,201
				511,201
INSURANCE – 3.60%
AXA		450,549		7,023,249
CNP Assurances SA		38,760		660,111
SCOR SE		43,833		956,254
				8,639,614
INTERNET – 0.17%
Iliad SA		4,275		403,152
				403,152
INVESTMENT COMPANIES – 0.19%
Eurazeo		7,605		444,713
				444,713
IRON & STEEL – 2.75%
ArcelorMittal		225,160		6,588,997
				6,588,997
LODGING – 0.49%
Accor SA		38,537		1,185,772
				1,185,772
MACHINERY – 1.08%
ALSTOM		53,926		2,579,742
				2,579,742
MEDIA – 3.95%
Lagardere SCA		30,837		1,114,041
M6-Metropole Television		16,758		350,468
Societe Television Francaise 1		30,723		456,659

Security	Shares		Value
Vivendi SA		322,175	$	7,538,312
				9,459,480
MEDICAL – DRUGS – 0.11%
Ipsen SA		7,809		267,475
				267,475
METAL FABRICATE & HARDWARE – 1.02%
Vallourec SA		28,500		2,455,494
				2,455,494
MINING – 0.15%
Eramet		1,368		347,993
				347,993
OFFICE & BUSINESS EQUIPMENT – 0.24%
Neopost SA		8,208		581,686
				581,686
OIL & GAS – 11.10%
Compagnie Generale de Geophysique-Veritasa		37,563		637,338
Total SA		553,999		25,960,352
				26,597,690
OIL & GAS SERVICES – 0.71%
Technip SA		25,881		1,700,263
				1,700,263
PHARMACEUTICALS – 6.60%
Sanofi-Aventis		274,911		15,817,254
				15,817,254
REAL ESTATE – 2.41%
Gecina SA		4,959		495,892
Klepierre		24,852		761,056
Unibail-Rodamco SE		23,940		4,527,470
				5,784,418
REAL ESTATE INVESTMENT TRUSTS – 0.49%
Fonciere des Regions		6,327		591,840
Icade		6,042		574,549
				1,166,389
RETAIL – 1.09%
PPR SA		19,952		2,605,534
				2,605,534
SEMICONDUCTORS – 0.47%
STMicroelectronics NV		167,254		1,118,126
				1,118,126

50 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI FRANCE INDEX FUND

August 31, 2010

Security	Shares		Value
SOFTWARE – 0.39%
Dassault Systemes SA		15,561	$	941,101
				941,101
TELECOMMUNICATIONS – 5.93%
Alcatel-Lucenta		608,182		1,572,219
Eutelsat Communications		25,821		931,024
France Telecom SA		485,878		9,905,127
SES SA FDR		78,660		1,811,010
				14,219,380
TRANSPORTATION – 0.39%
Groupe Eurotunnel SA		124,545		928,057
				928,057
WATER – 1.36%
Suez Environnement SA		70,281		1,134,410
Veolia Environnement		90,637		2,116,134
				3,250,544
TOTAL COMMON STOCKS
(Cost: $365,296,893)				239,230,713
SHORT-TERM INVESTMENTS – 0.24%
MONEY MARKET FUNDS – 0.24%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		440,966		440,966
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		85,689		85,689
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		34,919		34,919
				561,574
TOTAL SHORT-TERM INVESTMENTS
(Cost: $561,574)				561,574
TOTAL INVESTMENTS IN SECURITIES – 100.04%
(Cost: $365,858,467)				239,792,287
Other Assets, Less Liabilities – (0.04)%				(85,853)
NET ASSETS – 100.00%			$	239,706,434

FDR – Fiduciary 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 51

Schedule of Investments

iSHARES^® MSCI GERMANY INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 94.10%
AIRLINES – 0.53%
Deutsche Lufthansa
AG Registereda		497,250	$	7,871,310
				7,871,310
APPAREL – 1.74%
Adidas AG		440,895		22,506,679
Puma AG		12,558		3,418,758
				25,925,437
AUTO MANUFACTURERS – 9.04%
Bayerische Motoren Werke AG		696,660		36,891,025
Daimler AG Registereda		1,885,725		91,935,962
Volkswagen AGb		62,339		5,684,735
				134,511,722
AUTO PARTS & EQUIPMENT – 0.44%
Continental AGa		107,610		6,523,782
				6,523,782
BANKS – 6.12%
Commerzbank AGa,b		1,539,435		12,154,057
Deutsche Bank AG Registered		1,156,935		72,902,756
Deutsche Postbank AGa		198,477		6,030,140
				91,086,953
BIOTECHNOLOGY – 0.57%
QIAGEN NVa		475,065		8,558,636
				8,558,636
BUILDING MATERIALS – 0.81%
HeidelbergCement AG		298,605		12,011,556
				12,011,556
CHEMICALS – 15.41%
BASF SE		1,924,995		101,863,042
Bayer AG		1,730,940		105,993,022
K+S AG		305,490		16,027,477
Wacker Chemie AG		35,955		5,469,932
				229,353,473
COSMETICS & PERSONAL CARE – 0.70%
Beiersdorf AG		194,055		10,404,264
				10,404,264
DIVERSIFIED FINANCIAL SERVICES – 1.73%
Deutsche Boerse AG		420,750		25,785,752
				25,785,752

Security	Shares		Value
ELECTRIC – 11.00%
E.ON AG		3,771,705	$	106,442,964
RWE AG		870,825		57,198,134
				163,641,098
ENGINEERING & CONSTRUCTION – 3.32%
Fraport AG		86,445		4,506,756
Hochtief AG		100,554		6,672,391
Linde AG		338,385		38,233,260
				49,412,407
FOOD – 1.09%
METRO AG		262,395		13,397,998
Suedzucker AG		153,255		2,801,902
				16,199,900
HEALTH CARE – PRODUCTS – 1.86%
Fresenius Medical Care AG &
Co. KGaA		410,040		23,284,550
Fresenius SE		62,730		4,463,898
				27,748,448
HOLDING COMPANIES – DIVERSIFIED – 0.48%
GEA Group AG		347,055		7,229,458
				7,229,458
HOUSEHOLD PRODUCTS & WARES – 0.76%
Henkel AG & Co. KGaA		280,245		11,292,604
				11,292,604
INSURANCE – 10.64%
Allianz SE Registered		957,015		98,448,796
Hannover Rueckversicherung
AG Registered		137,955		6,137,563
Muenchener
Rueckversicherungs-
Gesellschaft AG Registered		418,965		53,674,344
				158,260,703
INTERNET – 0.26%
United Internet AG Registered		298,350		3,835,486
				3,835,486
IRON & STEEL – 1.68%
Salzgitter AG		87,720		5,338,590
ThyssenKrupp AG		715,020		19,624,557
				24,963,147

52 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI GERMANY INDEX FUND

August 31, 2010

Security	Shares		Value
LEISURE TIME – 0.22%
TUI AGa		325,635	$	3,292,716
				3,292,716
MACHINERY – DIVERSIFIED – 1.32%
MAN SE		226,977		19,584,664
				19,584,664
MANUFACTURING – 10.57%
Siemens AG Registered		1,723,800		157,260,190
				157,260,190
PHARMACEUTICALS – 1.05%
Celesio AG		171,105		3,479,454
Merck KGaA		139,995		12,195,092
				15,674,546
SEMICONDUCTORS – 0.88%
Infineon Technologies AGa		2,333,250		13,050,919
				13,050,919
SOFTWARE – 4.59%
SAP AG		1,558,305		68,239,083
				68,239,083
TELECOMMUNICATIONS – 5.30%
Deutsche Telekom
AG Registered		5,967,765		78,805,354
				78,805,354
TRANSPORTATION – 1.99%
Deutsche Post AG Registered		1,806,420		29,628,196
				29,628,196
TOTAL COMMON STOCKS
(Cost: $1,669,076,485)				1,400,151,804
PREFERRED STOCKS – 5.64%
AUTO MANUFACTURERS – 3.28%
Bayerische Motoren Werke AG		119,340		4,433,465
Porsche Automobil Holding SE		188,190		8,786,280
Volkswagen AG		357,000		35,631,350
				48,851,095
ELECTRIC – 0.32%
RWE AG NVS		75,735		4,675,606
				4,675,606

Security	Shares		Value
HEALTH CARE – SERVICES – 0.83%
Fresenius SE		173,145	$	12,354,092
				12,354,092
HOUSEHOLD PRODUCTS & WARES – 1.21%
Henkel AG & Co. KGaA		383,010		18,059,782
				18,059,782
TOTAL PREFERRED STOCKS
(Cost: $91,355,640)				83,940,575
SHORT-TERM INVESTMENTS – 1.11%
MONEY MARKET FUNDS – 1.11%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		13,493,716		13,493,716
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		2,622,105		2,622,105
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		323,992		323,992
				16,439,813
TOTAL SHORT-TERM INVESTMENTS
(Cost: $16,439,813)				16,439,813
TOTAL INVESTMENTS IN SECURITIES – 100.85%
(Cost: $1,776,871,938)				1,500,532,192
Other Assets, Less Liabilities – (0.85)%				(12,651,190)
NET ASSETS – 100.00%			$	1,487,881,002

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 53

Schedule of Investments

iSHARES^® MSCI ITALY INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.08%
AEROSPACE & DEFENSE – 2.13%
Finmeccanica SpA		161,490	$	1,626,572
				1,626,572
AUTO MANUFACTURERS – 3.48%
Fiat SpA		226,450		2,660,772
				2,660,772
AUTO PARTS & EQUIPMENT – 0.65%
Pirelli & C. SpA		74,712		497,565
				497,565
BANKS – 26.75%
Banca Carige SpA		325,430		691,962
Banca Monte dei Paschi di
Siena SpAa		948,124		1,137,537
Banca Popolare di Milano Scrl		189,947		828,047
Banco Popolare SpA		224,049		1,263,601
Intesa Sanpaolo SpA		2,059,414		5,797,568
UniCredit SpA		3,755,395		8,839,446
Unione di Banche Italiane ScpA		216,716		1,906,012
				20,464,173
COMMERCIAL SERVICES – 2.80%
Atlantia SpA		113,563		2,146,230
				2,146,230
DIVERSIFIED FINANCIAL SERVICES – 2.05%
Mediobanca SpAa		199,240		1,572,522
				1,572,522
ELECTRIC – 16.10%
A2A SpA		831,600		1,164,728
Enel SpA		1,714,620		8,193,778
Terna SpA		733,040		2,955,682
				12,314,188
ELECTRICAL COMPONENTS & EQUIPMENT – 1.28%
Prysmian SpA		62,475		982,210
				982,210
FOOD – 2.29%
Parmalat SpA		726,425		1,753,252
				1,753,252

Security	Shares		Value
HEALTH CARE – PRODUCTS – 1.75%
Luxottica Group SpA		57,630	$	1,335,986
				1,335,986
HOLDING COMPANIES – DIVERSIFIED – 0.63%
Exor SpA		26,025		480,601
				480,601
INSURANCE – 6.11%
Assicurazioni Generali SpA		205,765		3,731,848
Mediolanum SpAb		253,190		939,632
				4,671,480
MEDIA – 2.18%
Mediaset SpA		268,660		1,669,707
				1,669,707
METAL FABRICATE & HARDWARE – 3.44%
Tenaris SA		154,972		2,635,347
				2,635,347
OIL & GAS – 18.34%
Eni SpA		704,515		14,030,970
				14,030,970
OIL & GAS SERVICES – 3.78%
Saipem SpA		82,285		2,888,503
				2,888,503
RETAIL – 0.79%
Autogrill SpAa		52,115		602,744
				602,744
TELECOMMUNICATIONS – 3.53%
Telecom Italia SpA		1,989,260		2,697,643
				2,697,643
TOTAL COMMON STOCKS
(Cost: $133,903,238)				75,030,465
PREFERRED STOCKS – 1.80%
BANKS – 0.39%
Intesa Sanpaolo SpA RNC		131,852		299,628
				299,628
TELECOMMUNICATIONS – 1.41%
Telecom Italia SpA RNC		974,576		1,075,757
				1,075,757
TOTAL PREFERRED STOCKS
(Cost: $1,845,008)				1,375,385

54 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI ITALY INDEX FUND

August 31, 2010

Security	Shares		Value
SHORT-TERM INVESTMENTS – 0.26%
MONEY MARKET FUNDS – 0.26%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		165,366	$	165,366
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		32,134		32,134
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		995		995
				198,495
TOTAL SHORT-TERM INVESTMENTS
(Cost: $198,495)				198,495
TOTAL INVESTMENTS IN SECURITIES – 100.14%
(Cost: $135,946,741)				76,604,345
Other Assets, Less Liabilities – (0.14)%				(104,293)
NET ASSETS – 100.00%			$	76,500,052

^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 NETHERLANDS INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.62%
BANKS – 0.21%
SNS REAAL NVa		72,105	$	305,626
				305,626
BEVERAGES – 4.83%
Heineken Holding NV		44,385		1,713,770
Heineken NV		120,615		5,417,468
				7,131,238
BIOTECHNOLOGY – 0.46%
Crucell NVa		36,135		681,079
				681,079
BUILDING MATERIALS – 0.19%
Wavin NVa		25,029		277,070
				277,070
CHEMICALS – 7.15%
Akzo Nobel NV		129,690		6,867,621
Koninklijke DSM NV		88,605		3,693,128
				10,560,749
COMMERCIAL SERVICES – 1.92%
Brunel International NV		5,775		147,529
Randstad Holding NVa		59,400		2,213,874
USG People NVa		36,465		464,842
				2,826,245
DIVERSIFIED FINANCIAL SERVICES – 0.32%
BinckBank NV		26,235		339,436
KAS Bank NV CVA		9,405		136,267
				475,703
ELECTRICAL COMPONENTS & EQUIPMENT – 0.39%
Draka Holding NVa		16,005		209,721
TKH Group NV		18,645		367,301
				577,022
ELECTRONICS – 10.32%
Koninklijke Philips Electronics NV		542,190		15,235,921
				15,235,921
ENGINEERING & CONSTRUCTION – 1.64%
Arcadis NV		28,875		587,913
Koninklijke BAM Groep NV		92,565		464,700
Royal Boskalis Westminster
NV CVA		36,630		1,370,576
				2,423,189

Security	Shares		Value
FOOD – 23.31%
CSM NV CVA		39,270	$	1,024,157
Koninklijke Ahold NV		538,230		6,645,676
Koninklijke Wessanen NVa		47,600		154,268
Nutreco NV		20,790		1,209,912
Sligro Food Group NV		20,460		601,724
Unilever NV CVA		922,185		24,771,298
				34,407,035
HOLDING COMPANIES – DIVERSIFIED – 0.81%
Imtech NV		40,095		1,129,500
Ordina NVa		22,440		67,479
				1,196,979
HOUSEWARES – 0.10%
Hunter Douglas NV		4,290		147,269
				147,269
INSURANCE – 16.32%
AEGON NVa		859,320		4,410,113
Delta Lloyd NV		53,790		919,843
ING Groep NV CVAa		2,102,925		18,757,097
				24,087,053
INVESTMENT COMPANIES – 0.10%
Kardan NVa		33,000		145,075
				145,075
LEISURE TIME – 0.13%
Accell Group NV		4,477		188,198
				188,198
MANUFACTURING – 0.76%
Aalberts Industries NV		51,810		735,851
Koninklijke Ten Cate NV		15,345		389,469
				1,125,320
MEDIA – 5.35%
Reed Elsevier NV		398,475		4,787,394
Wolters Kluwer NV		166,320		3,113,692
				7,901,086
METAL FABRICATE & HARDWARE – 0.04%
Advanced Metallurgical Group NVa		6,435		55,369
				55,369
OIL & GAS SERVICES – 2.38%
Fugro NV CVA		37,290		2,105,229

56 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
SBM Offshore NV		92,400	$	1,409,817
				3,515,046
PHARMACEUTICALS – 0.40%
Mediq NV		35,735		587,474
				587,474
REAL ESTATE INVESTMENT TRUSTS – 3.32%
Corio NV		33,495		1,927,591
Eurocommercial Properties NV		20,955		808,837
Nieuwe Steen Investments NV		19,470		355,096
VastNed Offices/ Industrial NV		8,910		128,529
VastNed Retail NV		10,725		581,769
Wereldhave NV		13,200		1,091,482
				4,893,304
RETAIL – 0.29%
Beter Bed Holding NV		11,220		236,931
Macintosh Retail Group NV		9,592		187,131
				424,062
SEMICONDUCTORS – 4.38%
ASM International NVa		22,935		508,217
ASML Holding NV		238,260		5,957,916
				6,466,133
SOFTWARE – 0.60%
Exact Holding NV		9,185		212,169
TomTom NVa,b		66,589		356,890
Unit 4 NV		14,442		320,663
				889,722
TELECOMMUNICATIONS – 9.20%
Koninklijke KPN NV		934,395		13,585,793
				13,585,793
TRANSPORTATION – 4.70%
Royal Vopak NV		39,600		1,595,197
TNT NV		210,045		5,347,143
				6,942,340
TOTAL COMMON STOCKS
(Cost: $193,452,008)				147,051,100

Security	Shares		Value
SHORT-TERM INVESTMENTS – 0.27%
MONEY MARKET FUNDS – 0.27%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		299,968	$	299,968
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		58,290		58,290
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		32,472		32,472
				390,730
TOTAL SHORT-TERM INVESTMENTS
(Cost: $390,730)				390,730
TOTAL INVESTMENTS IN SECURITIES – 99.89%
(Cost: $193,842,738)				147,441,830
Other Assets, Less Liabilities – 0.11%				168,677
NET ASSETS – 100.00%			$	147,610,507

^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 SPAIN INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.87%
AIRLINES – 0.64%
Iberia Lineas Aereas de Espana SAa		384,790	$	1,244,629
				1,244,629
BANKS – 39.60%
Banco Bilbao Vizcaya Argentaria SA		1,375,570		16,636,639
Banco de Sabadell SAb		956,482		4,637,670
Banco de Valencia SAb		343,591		1,825,352
Banco Popular Espanol SAb		906,570		5,422,277
Banco Santander SA		3,902,780		45,867,323
Bankinter SA		394,940		2,575,500
				76,964,761
COMMERCIAL SERVICES – 5.14%
Abertis Infraestructuras SA		421,149		7,001,192
Ferrovial SA		339,150		2,988,850
				9,990,042
COMPUTERS – 1.21%
Indra Sistemas SA		139,580		2,342,556
				2,342,556
DIVERSIFIED FINANCIAL SERVICES – 3.85%
Criteria CaixaCorp SA		1,589,840		7,486,350
				7,486,350
ELECTRIC – 7.40%
Iberdrola SA		1,357,510		9,592,820
Red Electrica Corporacion SA		115,689		4,781,576
				14,374,396
ENERGY – ALTERNATE SOURCES – 0.97%
Gamesa Corporacion
Tecnologica SAa		280,560		1,889,862
				1,889,862
ENGINEERING & CONSTRUCTION – 4.45%
Acciona SA		29,120		2,305,357
Actividades de Construcciones y
Servicios SAb		129,341		5,379,530
Fomento de Construcciones y
Contratas SA		40,740		961,786
				8,646,673
GAS – 3.40%
Enagas SA		166,530		2,952,536

Security	Shares		Value
Gas Natural SDG SA		241,150	$	3,657,953
				6,610,489
INSURANCE – 2.95%
Mapfre SA		1,989,654		5,732,678
				5,732,678
IRON & STEEL – 1.16%
Acerinox SA		142,120		2,247,908
				2,247,908
MACHINERY – 0.61%
Zardoya Otis SA		76,313		1,193,947
				1,193,947
MEDIA – 0.84%
Gestevision Telecinco SA		160,230		1,627,118
				1,627,118
OIL & GAS – 4.68%
Repsol YPF SA		397,670		9,105,118
				9,105,118
PHARMACEUTICALS – 0.57%
Grifols SA		94,850		1,107,730
				1,107,730
RETAIL – 4.81%
Industria de Diseno Textil SA		139,790		9,354,120
				9,354,120
TELECOMMUNICATIONS – 17.59%
Telefonica SA		1,537,480		34,196,054
				34,196,054
TOTAL COMMON STOCKS
(Cost: $294,678,951)				194,114,431
SHORT-TERM INVESTMENTS – 5.53%
MONEY MARKET FUNDS – 5.53%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		8,901,269		8,901,269
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		1,729,699		1,729,699

58 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SPAIN INDEX FUND

August 31, 2010

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		111,481	$	111,481
				10,742,449
TOTAL SHORT-TERM INVESTMENTS
(Cost: $10,742,449)				10,742,449
TOTAL INVESTMENTS IN SECURITIES – 105.40%
(Cost: $305,421,400)				204,856,880
Other Assets, Less Liabilities – (5.40)%				(10,495,358)
NET ASSETS – 100.00%			$	194,361,522

^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 SWEDEN INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.83%
AGRICULTURE – 1.93%
Swedish Match AB		207,944	$	4,804,806
				4,804,806
AUTO MANUFACTURERS – 2.14%
Scania AB Class B		288,048		5,330,821
				5,330,821
BANKS – 21.19%
Nordea Bank AB		2,910,944		26,165,833
Skandinaviska Enskilda Banken AB
Class A		1,269,560		7,939,164
Svenska Handelsbanken AB
Class A		440,504		11,535,117
Swedbank AB Class Aa		643,008		7,236,817
				52,876,931
COMMERCIAL SERVICES – 1.04%
Securitas AB Class B		281,792		2,601,786
				2,601,786
DIVERSIFIED FINANCIAL SERVICES – 1.43%
Kinnevik Investment AB Class B		195,432		3,561,119
				3,561,119
ENGINEERING & CONSTRUCTION – 2.22%
Skanska AB Class B		359,448		5,540,248
				5,540,248
FOREST PRODUCTS & PAPER – 3.26%
Holmen AB Class B		47,600		1,263,254
Svenska Cellulosa AB Class B		515,712		6,878,212
				8,141,466
HAND & MACHINE TOOLS – 4.32%
Sandvik AB		907,664		10,781,920
				10,781,920
HEALTH CARE – PRODUCTS – 1.45%
Getinge AB Class B		180,200		3,628,303
				3,628,303
HOME FURNISHINGS – 1.67%
Electrolux AB Class B		215,968		4,175,602
				4,175,602
HOUSEHOLD PRODUCTS & WARES – 0.93%
Husqvarna AB Class B		366,656		2,308,794
				2,308,794

Security	Shares		Value
INVESTMENT COMPANIES – 3.83%
Investor AB Class B		410,040	$	7,098,911
Ratos AB Class B		91,392		2,450,248
				9,549,159
IRON & STEEL – 1.26%
SSAB AB Class A		162,520		2,231,527
SSAB AB Class B		74,800		907,306
				3,138,833
MACHINERY – 11.32%
Atlas Copco AB Class A		604,384		9,217,096
Atlas Copco AB Class B		351,288		4,832,992
Hexagon AB Class B		171,224		2,806,380
Volvo AB Class Ba		979,472		11,389,055
				28,245,523
MANUFACTURING – 1.79%
Alfa Laval AB		303,960		4,462,298
				4,462,298
MEDIA – 1.05%
Modern Times Group MTG AB
Class B		45,424		2,619,940
				2,619,940
METAL FABRICATE & HARDWARE – 4.79%
Assa Abloy AB Class B		280,840		5,628,003
SKF AB Class B		350,744		6,315,038
				11,943,041
MINING – 1.12%
Boliden AB		246,160		2,797,159
				2,797,159
RETAIL – 12.10%
Hennes & Mauritz AB Class B		920,312		30,192,997
				30,192,997
TELECOMMUNICATIONS – 20.99%
Millicom International Cellular
SA SDR		68,408		6,297,549
Tele2 AB Class B		284,104		5,126,770
Telefonaktiebolaget LM Ericsson
Class B		2,710,752		26,370,829

60 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SWEDEN INDEX FUND

August 31, 2010

Security	Shares		Value
TeliaSonera AB		2,020,960	$	14,573,901
				52,369,049
TOTAL COMMON STOCKS
(Cost: $300,548,076)				249,069,795
SHORT-TERM INVESTMENTS – 0.01%
MONEY MARKET FUNDS – 0.01%
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%b,c		32,861		32,861
				32,861
TOTAL SHORT-TERM INVESTMENTS
(Cost: $32,861)				32,861
TOTAL INVESTMENTS IN SECURITIES – 99.84%
(Cost: $300,580,937)				249,102,656
Other Assets, Less Liabilities – 0.16%				388,532
NET ASSETS – 100.00%			$	249,491,188

SDR – Swedish Depositary Receipts

^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 61

Schedule of Investments

iSHARES^® MSCI SWITZERLAND INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.91%
BANKS – 7.84%
Baloise Holding AG Registered		39,600	$	3,210,178
Credit Suisse Group AG Registered		433,350		19,056,288
GAM Holding AGa		259,650		3,239,223
Julius Baer Group Ltd.		178,249		6,294,967
				31,800,656
BUILDING MATERIALS – 3.02%
Geberit AG Registered		19,660		3,171,969
Holcim Ltd. Registered		146,700		8,839,615
Sika AG Bearer		150		263,905
				12,275,489
CHEMICALS – 5.78%
Givaudan SA Registered		6,512		6,229,428
Lonza Group AG Registered		44,850		3,726,442
Syngenta AG Registered		58,419		13,504,353
				23,460,223
COMMERCIAL SERVICES – 2.41%
Adecco SA Registered		78,902		3,683,650
SGS SA Registered		4,200		6,088,757
				9,772,407
COMPUTERS – 0.34%
Logitech International SA Registereda		92,250		1,372,833
				1,372,833
DIVERSIFIED FINANCIAL SERVICES – 4.79%
UBS AG Registereda		1,146,134		19,418,720
				19,418,720
ENGINEERING & CONSTRUCTION – 4.58%
ABB Ltd. Registereda		961,500		18,604,172
				18,604,172
FOOD – 24.02%
Aryzta AG		62,850		2,696,228
Lindt & Spruengli AG
Participation Certificates		1,145		2,685,217
Lindt & Spruengli AG Registered		150		3,966,716
Nestle SA Registered		1,698,400		88,102,405
				97,450,566

Security	Shares		Value
HAND & MACHINE TOOLS – 1.17%
Schindler Holding AG
Participation Certificates		31,730	$	3,166,742
Schindler Holding AG Registered		15,900		1,567,263
				4,734,005
HEALTH CARE – PRODUCTS – 3.30%
Nobel Biocare Holding
AG Registered		84,938		1,336,894
Sonova Holding AG Registered		37,200		4,765,562
Straumann Holding AG Registered		7,813		1,648,898
Synthes Inc.		51,150		5,649,704
				13,401,058
INSURANCE – 7.33%
Swiss Life Holding AG Registereda		24,000		2,506,509
Swiss Reinsurance Co. Registered		221,850		9,210,932
Zurich Financial Services
AG Registered		80,700		18,018,225
				29,735,666
INVESTMENT COMPANIES – 0.78%
Pargesa Holding SA Bearer		48,369		3,157,818
				3,157,818
PHARMACEUTICALS – 25.11%
Actelion Ltd. Registereda		77,259		3,315,889
Novartis AG Registered		997,050		52,458,203
Roche Holding AG Genusschein		338,700		46,095,266
				101,869,358
RETAIL – 5.74%
Compagnie Financiere Richemont
SA Class A Bearer Units		377,550		14,692,429
Swatch Group AG (The) Bearer		19,112		6,159,568
Swatch Group AG (The) Registered		41,328		2,449,520
				23,301,517
TELECOMMUNICATIONS – 1.90%
Swisscom AG Registered		19,800		7,709,112
				7,709,112
TRANSPORTATION – 0.80%
Kuehne & Nagel International
AG Registered		31,205		3,258,984
				3,258,984
TOTAL COMMON STOCKS
(Cost: $424,867,406)				401,322,584

62 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SWITZERLAND INDEX FUND

August 31, 2010

Security	Shares		Value
SHORT-TERM INVESTMENTS – 0.05%
MONEY MARKET FUNDS – 0.05%
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%b,c		200,001	$	200,001
				200,001
TOTAL SHORT-TERM INVESTMENTS
(Cost: $200,001)				200,001
TOTAL INVESTMENTS IN SECURITIES – 98.96% (Cost: $425,067,407)				401,522,585
Other Assets, Less Liabilities – 1.04%				4,232,025
NET ASSETS – 100.00%			$	405,754,610

^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 63

Schedule of Investments

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.34%
AEROSPACE & DEFENSE – 1.70%
BAE Systems PLC		1,554,960	$	7,042,794
Cobham PLC		518,010		1,663,911
Rolls-Royce Group PLCa		835,450		7,113,377
				15,820,082
AGRICULTURE – 4.66%
British American Tobacco PLC		900,550		30,670,665
Imperial Tobacco Group PLC		459,420		12,709,487
				43,380,152
AIRLINES – 0.09%
British Airways PLCa,b		259,780		842,430
				842,430
APPAREL – 0.28%
Burberry Group PLC		196,540		2,567,530
				2,567,530
BANKS – 16.34%
Barclays PLC		5,160,880		23,985,632
HSBC Holdings PLC		7,898,180		78,136,895
Lloyds Banking Group PLCa		18,421,440		19,673,947
Royal Bank of Scotland Group PLCa		7,841,760		5,372,782
Standard Chartered PLC		924,110		24,833,327
				152,002,583
BEVERAGES – 3.29%
Diageo PLC		1,130,260		18,395,853
SABMiller PLC		428,110		12,218,359
				30,614,212
CHEMICALS – 0.25%
Johnson Matthey PLC		97,030		2,369,603
				2,369,603
COMMERCIAL SERVICES – 2.06%
Aggreko PLC		118,420		2,582,576
Babcock International Group PLC		162,130		1,259,593
Bunzl PLC		147,560		1,612,441
Capita Group PLC		278,070		3,004,381
Experian PLC		464,070		4,432,719
G4S PLC		636,740		2,470,001
Intertek Group PLC		71,920		1,861,390
Serco Group PLC		221,340		1,979,833
				19,202,934

Security	Shares		Value
DISTRIBUTION & WHOLESALE – 0.27%
Wolseley PLCa		128,030	$	2,477,326
				2,477,326
DIVERSIFIED FINANCIAL SERVICES – 1.31%
ICAP PLC		250,170		1,576,394
Investec PLC		217,930		1,575,207
London Stock Exchange Group PLC		68,510		695,460
Man Group PLC		773,450		2,474,905
Old Mutual PLC		2,453,030		4,799,289
Schroders PLC		51,150		1,079,349
				12,200,604
ELECTRIC – 2.63%
International Power PLC		688,510		3,930,047
National Grid PLC		1,567,360		13,224,727
Scottish & Southern Energy PLC		416,950		7,337,280
				24,492,054
ENGINEERING & CONSTRUCTION – 0.35%
AMEC PLC		150,040		2,114,570
Balfour Beatty PLC		307,210		1,131,746
				3,246,316
FOOD – 4.87%
J Sainsbury PLC		542,500		3,044,922
Tesco PLC		3,618,320		22,630,473
Unilever PLC		579,080		15,325,594
Wm Morrison Supermarkets PLC		957,590		4,267,988
				45,268,977
FOOD SERVICE – 1.03%
Associated British Foods PLC		161,200		2,621,177
Compass Group PLC		849,090		6,961,996
				9,583,173
GAS – 1.25%
Centrica PLC		2,322,830		11,613,072
				11,613,072
HEALTH CARE – PRODUCTS – 0.36%
Smith & Nephew PLC		401,450		3,344,078
				3,344,078
HOLDING COMPANIES – DIVERSIFIED – 0.21%
Tomkins PLC		395,560		1,969,713
				1,969,713

64 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2010

Security	Shares		Value
HOUSEHOLD PRODUCTS & WARES – 1.50%
Reckitt Benckiser Group PLC		278,070	$	13,944,945
				13,944,945
INSURANCE – 3.15%
Admiral Group PLC		89,900		2,102,906
Aviva PLC		1,265,110		7,369,077
Legal & General Group PLC		2,649,260		3,772,382
Prudential PLC		1,143,900		9,950,619
RSA Insurance Group PLC		1,544,730		2,922,512
Standard Life PLC		1,021,140		3,198,417
				29,315,913
INVESTMENT COMPANIES – 0.27%
Resolution Ltd.		654,410		2,546,591
				2,546,591
LEISURE TIME – 0.48%
Carnival PLC		78,120		2,541,726
Thomas Cook Group PLC		391,840		1,094,232
TUI Travel PLC		256,370		793,152
				4,429,110
LODGING – 0.21%
InterContinental Hotels Group PLC		129,890		1,960,346
				1,960,346
MANUFACTURING – 0.47%
Invensys PLC		361,150		1,277,728
Smiths Group PLC		175,460		3,087,658
				4,365,386
MEDIA – 2.43%
British Sky Broadcasting Group PLC		514,910		5,598,909
ITV PLCa		1,690,120		1,454,625
Pearson PLC		366,730		5,481,276
Reed Elsevier PLC		548,080		4,413,883
WPP PLC		566,990		5,629,289
				22,577,982
MINING – 12.01%
Anglo American PLC		594,580		21,383,154
Antofagasta PLC		177,010		2,807,522
BHP Billiton PLC		995,720		28,027,849
Eurasian Natural Resources Corp. PLC		116,250		1,515,076

Security	Shares		Value
Fresnillo PLC		82,150	$	1,376,194
Kazakhmys PLC		96,720		1,718,382
Lonmin PLCa		72,850		1,710,797
Randgold Resources Ltd.		40,610		3,794,741
Rio Tinto PLC		654,100		33,174,448
Vedanta Resources PLC		53,630		1,556,988
Xstrata PLC		928,140		14,635,463
				111,700,614
OIL & GAS – 17.19%
BG Group PLC		1,525,200		24,601,118
BP PLC		8,474,780		49,572,729
Cairn Energy PLCa		632,400		4,542,827
Royal Dutch Shell PLC Class A		1,599,290		42,596,253
Royal Dutch Shell PLC Class B		1,216,130		31,185,436
Tullow Oil PLC		399,900		7,485,905
				159,984,268
OIL & GAS SERVICES – 0.27%
Petrofac Ltd.		116,870		2,516,441
				2,516,441
PACKAGING & CONTAINERS – 0.20%
Rexam PLC		396,180		1,842,498
				1,842,498
PHARMACEUTICALS – 8.78%
AstraZeneca PLC		650,380		32,266,088
GlaxoSmithKline PLC		2,342,360		43,955,671
Shire PLC		254,200		5,492,960
				81,714,719
REAL ESTATE – 0.76%
British Land Co. PLC		392,150		2,750,702
Capital Shopping Centres Group PLC		212,970		1,084,717
Land Securities Group PLC		342,550		3,219,334
				7,054,753
REAL ESTATE INVESTMENT TRUSTS – 0.34%
Hammerson PLC		319,920		1,768,099
SEGRO PLC		338,520		1,406,814
				3,174,913
RETAIL – 1.37%
Home Retail Group PLC		384,400		1,291,455
Kingfisher PLC		1,067,330		3,354,576
Marks & Spencer Group PLC		714,550		3,800,842

SCHEDULES OF INVESTMENTS 65

Schedule of Investments (Continued)

iSHARES^® MSCI UNITED KINGDOM INDEX FUND

August 31, 2010

Security	Shares		Value
Next PLC		85,250	$	2,594,210
Whitbread PLC		78,430		1,682,725
				12,723,808
SEMICONDUCTORS – 0.36%
ARM Holdings PLC		591,790		3,336,127
				3,336,127
SOFTWARE – 0.49%
Autonomy Corp. PLCa		97,650		2,341,221
Sage Group PLC (The)		594,580		2,237,921
				4,579,142
TELECOMMUNICATIONS – 7.28%
BT Group PLC		3,502,380		7,169,900
Cable & Wireless Worldwide PLC		1,166,220		1,197,299
Inmarsat PLC		196,540		2,020,797
Vodafone Group PLC		23,758,090		57,381,450
				67,769,446
TRANSPORTATION – 0.12%
FirstGroup PLC		216,070		1,155,299
				1,155,299
VENTURE CAPITAL – 0.19%
3i Group PLC		435,550		1,744,448
				1,744,448
WATER – 0.52%
Severn Trent PLC		106,020		2,110,101
United Utilities Group PLC		308,140		2,701,776
				4,811,877
TOTAL COMMON STOCKS
(Cost: $1,127,518,022)				924,243,465
SHORT-TERM INVESTMENTS – 0.11%
MONEY MARKET FUNDS – 0.11%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		777,523		777,523
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		151,088		151,088

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		124,450	$	124,450
				1,053,061
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,053,061)				1,053,061
TOTAL INVESTMENTS IN SECURITIES – 99.45%
(Cost: $1,128,571,083)				925,296,526
Other Assets, Less Liabilities – 0.55%				5,115,123
NET ASSETS – 100.00%			$	930,411,649

^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.

66 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Austria Investable Market Index Fund			iShares MSCI Belgium Investable Market Index Fund			iShares MSCI Emerging Markets Eastern Europe Index Fund			iShares MSCI EMU Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	183,256,977		$	86,354,837		$	12,973,390		$	1,230,615,165
Affiliated issuers (Note 2)		722,998			416,123			7,712			3,925,994
Total cost of investments	$	183,979,975		$	86,770,960		$	12,981,102		$	1,234,541,159
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	109,245,269		$	58,133,180		$	12,713,384		$	822,007,778
Affiliated issuers (Note 2)		722,998			416,123			7,712			3,925,994
Total fair value of investments		109,968,267			58,549,303			12,721,096			825,933,772
Foreign currencies, at valueb		44,383			42,564			12,636			1,036,665
Receivables:
Investment securities sold		146,229			290,528			150,459			2,000,426
Dividends and interest		1,221,108			707,098			102,888			1,282,760
Total Assets		111,379,987			59,589,493			12,987,079			830,253,623
LIABILITIES
Payables:
Investment securities purchased		252,149			280,807			147,901			2,295,352
Collateral for securities on loan (Note 5)		557,937			385,558			–			3,587,736
Investment advisory fees (Note 2)		50,240			26,951			7,578			398,498
Total Liabilities		860,326			693,316			155,479			6,281,586
NET ASSETS	$	110,519,661		$	58,896,177		$	12,831,600		$	823,972,037
Net assets consist of:
Paid-in capital	$	236,901,049		$	122,432,589		$	13,261,092		$	1,371,974,824
Undistributed net investment income		197,221			75,785			39,362			596,192
Accumulated net realized loss		(52,400,940	)		(35,245,088	)		(208,846	)		(139,914,210	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(74,177,669	)		(28,367,109	)		(260,008	)		(408,684,769	)
NET ASSETS	$	110,519,661		$	58,896,177		$	12,831,600		$	823,972,037
Shares outstandingc		6,400,000			5,000,000			500,000			26,800,000
Net asset value per share	$	17.27		$	11.78		$	25.66		$	30.75

^a Securities on loan with values of $519,156, $364,726, $ – and $3,411,544, respectively. See Note 5.

^b Cost of foreign currencies: $45,941, $42,530, $12,717 and $1,059,843, respectively.

^c $0.001 par value, number of shares authorized: 100 million, 136.2 million, 200 million and 1 billion, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	iShares MSCI France Index Fund			iShares MSCI Germany Index Fund			iShares MSCI Italy Index Fund			iShares MSCI Netherlands Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	365,296,893		$	1,760,432,125		$	135,748,246		$	193,452,008
Affiliated issuers (Note 2)		561,574			16,439,813			198,495			390,730
Total cost of investments	$	365,858,467		$	1,776,871,938		$	135,946,741		$	193,842,738
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	239,230,713		$	1,484,092,379		$	76,405,850		$	147,051,100
Affiliated issuers (Note 2)		561,574			16,439,813			198,495			390,730
Total fair value of investments		239,792,287			1,500,532,192			76,604,345			147,441,830
Foreign currencies, at valueb		189,869			1,748,641			59,305			301,160
Cash		–			–			–			1,604
Receivables:
Investment securities sold		233,761			–			1,552,218			–
Due from custodian (Note 4)		–			–			–			15,077
Dividends and interest		361,283			2,410,430			9			293,928
Total Assets		240,577,200			1,504,691,263			78,215,877			148,053,599
LIABILITIES
Payables:
Investment securities purchased		229,894			–			1,418,954			15,077
Collateral for securities on loan (Note 5)		526,655			16,115,821			197,500			358,258
Capital shares redeemed		–			–			61,889			–
Investment advisory fees (Note 2)		114,217			694,440			37,482			69,757
Total Liabilities		870,766			16,810,261			1,715,825			443,092
NET ASSETS	$	239,706,434		$	1,487,881,002		$	76,500,052		$	147,610,507
Net assets consist of:
Paid-in capital	$	386,549,486		$	1,887,751,662		$	173,560,598		$	233,352,537
Undistributed (distributions in excess of) net investment income		346,395			–			(452	)		396,156
Accumulated net realized loss		(21,123,855	)		(123,550,885	)		(37,715,991	)		(39,727,370	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(126,065,592	)		(276,319,775	)		(59,344,103	)		(46,410,816	)
NET ASSETS	$	239,706,434		$	1,487,881,002		$	76,500,052		$	147,610,507
Shares outstandingc		11,400,000			76,500,000			5,100,000			8,250,000
Net asset value per share	$	21.03		$	19.45		$	15.00		$	17.89

^a Securities on loan with values of $496,770, $15,325,053, $185,559 and $345,967, respectively. See Note 5.

^b Cost of foreign currencies: $189,907, $1,702,206, $61,053 and $306,460, respectively.

^c $0.001 par value, number of shares authorized: 340.2 million, 382.2 million, 63.6 million and 255 million, respectively.

See notes to financial statements.

68 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Spain Index Fund			iShares MSCI Sweden Index Fund			iShares MSCI Switzerland Index Fund			iShares MSCI United Kingdom Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	294,678,951		$	300,548,076		$	424,867,406		$	1,127,518,022
Affiliated issuers (Note 2)		10,742,449			32,861			200,001			1,053,061
Total cost of investments	$	305,421,400		$	300,580,937		$	425,067,407		$	1,128,571,083
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	194,114,431		$	249,069,795		$	401,322,584		$	924,243,465
Affiliated issuers (Note 2)		10,742,449			32,861			200,001			1,053,061
Total fair value of investments		204,856,880			249,102,656			401,522,585			925,296,526
Foreign currencies, at valueb		159,709			94,601			149,251			2,227,669
Receivables:
Investment securities sold		1,160,472			3,214,480			2,479,722			2,166,243
Dividends and interest		80,912			–			4,040,716			5,421,674
Total Assets		206,257,973			252,411,737			408,192,274			935,112,112
LIABILITIES
Payables:
Investment securities purchased		1,169,700			2,805,259			2,255,395			3,339,515
Collateral for securities on loan (Note 5)		10,630,968			–			–			928,611
Investment advisory fees (Note 2)		95,783			115,290			182,269			432,337
Total Liabilities		11,896,451			2,920,549			2,437,664			4,700,463
NET ASSETS	$	194,361,522		$	249,491,188		$	405,754,610		$	930,411,649
Net assets consist of:
Paid-in capital	$	326,270,923		$	336,048,150		$	472,915,698		$	1,264,623,900
Undistributed (distributions in excess of) net investment income		1,264,766			(2,828	)		–			5,184,563
Accumulated net realized loss		(32,606,648	)		(35,080,190	)		(43,836,668	)		(135,961,906	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(100,567,519	)		(51,473,944	)		(23,324,420	)		(203,434,908	)
NET ASSETS	$	194,361,522		$	249,491,188		$	405,754,610		$	930,411,649
Shares outstandingc		5,250,000			10,200,000			18,750,000			62,000,000
Net asset value per share	$	37.02		$	24.46		$	21.64		$	15.01

^a Securities on loan with values of $10,119,716, $ –, $ – and $883,095, respectively. See Note 5.

^b Cost of foreign currencies: $161,274, $90,264, $144,980 and $2,283,777, respectively.

^c $0.001 par value, number of shares authorized: 127.8 million, 63.6 million, 318.625 million and 934.2 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Austria Investable Market Index Fund			iShares MSCI Belgium Investable Market Index Fund			iShares MSCI Emerging Markets Eastern Europe Index Funda			iShares MSCI EMU Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersb	$	3,839,764		$	1,507,115		$	169,696		$	23,463,682
Interest from affiliated issuers (Note 2)		104			48			7			483
Securities lending income from affiliated issuers (Note 2)		356,492			8,159			876			148,678
Total investment income		4,196,360			1,515,322			170,579			23,612,843
EXPENSES
Investment advisory fees (Note 2)		822,617			389,142			67,428			4,463,524
Foreign taxes (Note 1)		–			–			–			6,208
Total expenses		822,617			389,142			67,428			4,469,732
Net investment income		3,373,743			1,126,180			103,151			19,143,111
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(16,644,648	)		(22,247,306	)		(204,004	)		(47,532,171	)
In-kind redemptions		8,493,770			12,230,298			–			32,507,786
Foreign currency transactions		(51,011	)		(59,088	)		561			(410,544	)
Net realized loss		(8,201,889	)		(10,076,096	)		(203,443	)		(15,434,929	)
Net change in unrealized appreciation (depreciation) on:
Investments		(14,300,063	)		14,469,611			(260,006	)		(93,899,880	)
Translation of assets and liabilities in foreign currencies		(119,225	)		(94,964	)		(2	)		(100,079	)
Net change in unrealized appreciation (depreciation)		(14,419,288	)		14,374,647			(260,008	)		(93,999,959	)
Net realized and unrealized gain (loss)		(22,621,177	)		4,298,551			(463,451	)		(109,434,888	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(19,247,434	)	$	5,424,731		$	(360,300	)	$	(90,291,777	)

^a For the period from September 30, 2009 (commencement of operations) to August 31, 2010.

^b Net of foreign withholding tax of $472,243, $234,912, $27,809 and $3,763,458, respectively.

See notes to financial statements.

70 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI France Index Fund			iShares MSCI Germany Index Fund			iShares MSCI Italy Index Fund			iShares MSCI Netherlands Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	9,510,202		$	23,546,320		$	3,143,623		$	3,175,266
Interest from affiliated issuers (Note 2)		180			639			64			77
Securities lending income from affiliated issuers (Note 2)		12,357			358,732			5,423			19,311
Total investment income		9,522,739			23,905,691			3,149,110			3,194,654
EXPENSES
Investment advisory fees (Note 2)		1,568,843			5,468,927			623,082			599,732
Foreign taxes (Note 1)		7,136			–			–			–
Total expenses		1,575,979			5,468,927			623,082			599,732
Net investment income		7,946,760			18,436,764			2,526,028			2,594,922
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(13,874,817	)		(42,280,143	)		(12,344,751	)		(5,622,865	)
In-kind redemptions		5,367,408			44,894,150			4,569,172			1,761,019
Foreign currency transactions		(101,486	)		(117,254	)		(15,889	)		(211,372	)
Net realized gain (loss)		(8,608,895	)		2,496,753			(7,791,468	)		(4,073,218	)
Net change in unrealized appreciation (depreciation) on:
Investments		(40,527,458	)		(95,595,703	)		(14,932,371	)		(4,938,301	)
Translation of assets and liabilities in foreign currencies		(380	)		(99,385	)		(1,902	)		(10,749	)
Net change in unrealized appreciation (depreciation)		(40,527,838	)		(95,695,088	)		(14,934,273	)		(4,949,050	)
Net realized and unrealized loss		(49,136,733	)		(93,198,335	)		(22,725,741	)		(9,022,268	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(41,189,973	)	$	(74,761,571	)	$	(20,199,713	)	$	(6,427,346	)

^a Net of foreign withholding tax of $1,618,838, $3,448,041, $545,643 and $557,210, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 71

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Spain Index Fund			iShares MSCI Sweden Index Fund			iShares MSCI Switzerland Index Fund			iShares MSCI United Kingdom Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	10,090,929		$	5,163,440		$	7,796,880		$	32,630,701
Dividends from affiliated issuers (Note 2)		–			–			–			77,129
Interest from affiliated issuers (Note 2)		162			75			311			470
Securities lending income from affiliated issuers (Note 2)		229,266			12,102			37			9,718
Total investment income		10,320,357			5,175,617			7,797,228			32,718,018
EXPENSES
Investment advisory fees (Note 2)		1,298,278			1,105,743			1,783,191			4,977,068
Total expenses		1,298,278			1,105,743			1,783,191			4,977,068
Net investment income		9,022,079			4,069,874			6,014,037			27,740,950
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(12,011,619	)		(10,098,629	)		(8,754,001	)		(42,066,328	)
Investments in affiliated issuers (Note 2)		–			–			–			1,499,143
In-kind redemptions		(22,617,839	)		7,553,416			5,641,249			44,629,732
Foreign currency transactions		(107,010	)		(115,865	)		(36,464	)		(380,967	)
Net realized gain (loss)		(34,736,468	)		(2,661,078	)		(3,149,216	)		3,681,580
Net change in unrealized appreciation (depreciation) on:
Investments		(22,170,236	)		9,085,803			13,478,956			(20,555,177	)
Translation of assets and liabilities in foreign currencies		(2,184	)		1,946			187,120			(82,494	)
Net change in unrealized appreciation (depreciation)		(22,172,420	)		9,087,749			13,666,076			(20,637,671	)
Net realized and unrealized gain (loss)		(56,908,888	)		6,426,671			10,516,860			(16,956,091	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(47,886,809	)	$	10,496,545		$	16,530,897		$	10,784,859

^a Net of foreign withholding tax of $1,536,283, $911,196, $1,870,939 and $417,186, respectively.

See notes to financial statements.

72 2010 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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	3,373,743		$	3,099,628		$	1,126,180		$	1,365,882
Net realized loss		(8,201,889	)		(87,858,013	)		(10,076,096	)		(47,188,282	)
Net change in unrealized appreciation (depreciation)		(14,419,288	)		5,402,819			14,374,647			7,864,840
Net increase (decrease) in net assets resulting from operations		(19,247,434	)		(79,355,566	)		5,424,731			(37,957,560	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(5,965,890	)		(4,361,827	)		(1,145,981	)		(1,992,257	)
Total distributions to shareholders		(5,965,890	)		(4,361,827	)		(1,145,981	)		(1,992,257	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		154,605,120			153,297,660			122,747,250			71,837,760
Cost of shares redeemed		(178,538,062	)		(103,516,511	)		(121,172,070	)		(98,800,329	)
Net increase (decrease) in net assets from capital share transactions		(23,932,942	)		49,781,149			1,575,180			(26,962,569	)
INCREASE (DECREASE) IN NET ASSETS		(49,146,266	)		(33,936,244	)		5,853,930			(66,912,386	)
NET ASSETS
Beginning of year		159,665,927			193,602,171			53,042,247			119,954,633
End of year	$	110,519,661		$	159,665,927		$	58,896,177		$	53,042,247
Undistributed net investment income included in net assets at end of year	$	197,221		$	1,306,425		$	75,785		$	124,156
SHARES ISSUED AND REDEEMED
Shares sold		7,600,000			8,000,000			10,160,000			7,480,000
Shares redeemed		(9,100,000	)		(6,600,000	)		(9,560,000	)		(9,880,000	)
Net increase (decrease) in shares outstanding		(1,500,000	)		1,400,000			600,000			(2,400,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 73

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI Emerging Markets Eastern Europe Index Fund			iShares MSCI EMU Index Fund
	Period from September 30, 2009a to August 31, 2010			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	103,151		$	19,143,111		$	21,630,080
Net realized loss		(203,443	)		(15,434,929	)		(230,656,541	)
Net change in unrealized appreciation (depreciation)		(260,008	)		(93,999,959	)		(85,463,372	)
Net decrease in net assets resulting from operations		(360,300	)		(90,291,777	)		(294,489,833	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(64,350	)		(21,378,328	)		(28,747,455	)
From net realized gain		(4,842	)		–			–
Total distributions to shareholders		(69,192	)		(21,378,328	)		(28,747,455	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		13,261,092			616,111,927			245,678,933
Cost of shares redeemed		–			(421,739,675	)		(472,979,784	)
Net increase (decrease) in net assets from capital share transactions		13,261,092			194,372,252			(227,300,851	)
INCREASE (DECREASE) IN NET ASSETS		12,831,600			82,702,147			(550,538,139	)
NET ASSETS
Beginning of period		–			741,269,890			1,291,808,029
End of period	$	12,831,600		$	823,972,037		$	741,269,890
Undistributed net investment income included in net assets at end of period	$	39,362		$	596,192		$	3,153,761
SHARES ISSUED AND REDEEMED
Shares sold		500,000			18,100,000			8,100,000
Shares redeemed		–			(12,100,000	)		(15,400,000	)
Net increase (decrease) in shares outstanding		500,000			6,000,000			(7,300,000	)

^a Commencement of operations.

See notes to financial statements.

74 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI France Index Fund						iShares MSCI Germany Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	7,946,760		$	5,159,611		$	18,436,764		$	13,569,608
Net realized gain (loss)		(8,608,895	)		(62,251,944	)		2,496,753			(135,012,966	)
Net change in unrealized appreciation (depreciation)		(40,527,838	)		(18,839,973	)		(95,695,088	)		(22,143,511	)
Net decrease in net assets resulting from operations		(41,189,973	)		(75,932,306	)		(74,761,571	)		(143,586,869	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(8,068,942	)		(6,641,215	)		(20,484,235	)		(14,693,409	)
Total distributions to shareholders		(8,068,942	)		(6,641,215	)		(20,484,235	)		(14,693,409	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		358,661,968			138,974,524			1,389,774,707			443,092,148
Cost of shares redeemed		(254,208,011	)		(99,092,138	)		(426,285,646	)		(334,626,102	)
Net increase in net assets from capital share transactions		104,453,957			39,882,386			963,489,061			108,466,046
INCREASE (DECREASE) IN NET ASSETS		55,195,042			(42,691,135	)		868,243,255			(49,814,232	)
NET ASSETS
Beginning of year		184,511,392			227,202,527			619,637,747			669,451,979
End of year	$	239,706,434		$	184,511,392		$	1,487,881,002		$	619,637,747
Undistributed net investment income included in net assets at end of year	$	346,395		$	559,560		$	–		$	487,996
SHARES ISSUED AND REDEEMED
Shares sold		15,000,000			5,600,000			67,200,000			23,400,000
Shares redeemed		(11,200,000	)		(5,400,000	)		(20,400,000	)		(18,000,000	)
Net increase in shares outstanding		3,800,000			200,000			46,800,000			5,400,000

See notes to financial statements.

FINANCIAL STATEMENTS 75

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI Italy Index Fund						iShares MSCI Netherlands Investable Market Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	2,526,028		$	2,932,100		$	2,594,922		$	2,396,987
Net realized loss		(7,791,468	)		(71,721,832	)		(4,073,218	)		(62,756,045	)
Net change in unrealized appreciation (depreciation)		(14,934,273	)		17,636,967			(4,949,050	)		(4,703,274	)
Net decrease in net assets resulting from operations		(20,199,713	)		(51,152,765	)		(6,427,346	)		(65,062,332	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(3,028,440	)		(3,732,985	)		(2,418,715	)		(4,230,257	)
From return of capital		(96,798	)		–			–			–
Total distributions to shareholders		(3,125,238	)		(3,732,985	)		(2,418,715	)		(4,230,257	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		87,900,548			100,094,796			94,430,557			43,167,203
Cost of shares redeemed		(113,791,470	)		(163,647,572	)		(21,325,132	)		(100,176,018	)
Net increase (decrease) in net assets from capital share transactions		(25,890,922	)		(63,552,776	)		73,105,425			(57,008,815	)
INCREASE (DECREASE) IN NET ASSETS		(49,215,873	)		(118,438,526	)		64,259,364			(126,301,404	)
NET ASSETS
Beginning of year		125,715,925			244,154,451			83,351,143			209,652,547
End of year	$	76,500,052		$	125,715,925		$	147,610,507		$	83,351,143
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(452	)	$	481,431		$	396,156		$	431,321
SHARES ISSUED AND REDEEMED
Shares sold		5,250,000			5,850,000			4,850,000			2,350,000
Shares redeemed		(6,750,000	)		(9,000,000	)		(1,100,000	)		(6,450,000	)
Net increase (decrease) in shares outstanding		(1,500,000	)		(3,150,000	)		3,750,000			(4,100,000	)

See notes to financial statements.

76 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI Spain Index Fund						iShares MSCI Sweden Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	9,022,079		$	10,459,303		$	4,069,874		$	3,182,626
Net realized loss		(34,736,468	)		(75,719,084	)		(2,661,078	)		(52,284,424	)
Net change in unrealized appreciation (depreciation)		(22,172,420	)		22,806,027			9,087,749			18,464,900
Net increase (decrease) in net assets resulting from operations		(47,886,809	)		(42,453,754	)		10,496,545			(30,636,898	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(11,300,415	)		(13,662,798	)		(4,773,557	)		(3,282,327	)
Total distributions to shareholders		(11,300,415	)		(13,662,798	)		(4,773,557	)		(3,282,327	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		185,418,132			168,127,511			136,592,737			119,540,017
Cost of shares redeemed		(210,603,819	)		(154,625,074	)		(83,157,268	)		(122,941,857	)
Net increase (decrease) in net assets from capital share transactions		(25,185,687	)		13,502,437			53,435,469			(3,401,840	)
INCREASE (DECREASE) IN NET ASSETS		(84,372,911	)		(42,614,115	)		59,158,457			(37,321,065	)
NET ASSETS
Beginning of year		278,734,433			321,348,548			190,332,731			227,653,796
End of year	$	194,361,522		$	278,734,433		$	249,491,188		$	190,332,731
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	1,264,766		$	3,516,332		$	(2,828	)	$	299,283
SHARES ISSUED AND REDEEMED
Shares sold		4,800,000			4,200,000			5,400,000			6,675,000
Shares redeemed		(5,400,000	)		(4,725,000	)		(3,525,000	)		(7,650,000	)
Net increase (decrease) in shares outstanding		(600,000	)		(525,000	)		1,875,000			(975,000	)

See notes to financial statements.

FINANCIAL STATEMENTS 77

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI Switzerland Index Fund						iShares MSCI United Kingdom Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	6,014,037		$	3,684,012		$	27,740,950		$	22,176,317
Net realized gain (loss)		(3,149,216	)		(66,136,127	)		3,681,580			(108,752,296	)
Net change in unrealized appreciation (depreciation)		13,666,076			(2,696,547	)		(20,637,671	)		(66,350,023	)
Net increase (decrease) in net assets resulting from operations		16,530,897			(65,148,662	)		10,784,859			(152,926,002	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(6,459,032	)		(4,322,291	)		(27,007,036	)		(25,389,028	)
Total distributions to shareholders		(6,459,032	)		(4,322,291	)		(27,007,036	)		(25,389,028	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		150,874,722			105,041,546			352,106,687			148,897,281
Cost of shares redeemed		(27,046,917	)		(130,240,566	)		(144,597,222	)		(113,959,957	)
Net increase (decrease) in net assets from capital share transactions		123,827,805			(25,199,020	)		207,509,465			34,937,324
INCREASE (DECREASE) IN NET ASSETS		133,899,670			(94,669,973	)		191,287,288			(143,377,706	)
NET ASSETS
Beginning of year		271,854,940			366,524,913			739,124,361			882,502,067
End of year	$	405,754,610		$	271,854,940		$	930,411,649		$	739,124,361
Undistributed net investment income included in net assets at end of year	$	–		$	373,773		$	5,184,563		$	4,727,610
SHARES ISSUED AND REDEEMED
Shares sold		6,875,000			5,125,000			22,200,000			12,400,000
Shares redeemed		(1,250,000	)		(7,875,000	)		(9,400,000	)		(8,800,000	)
Net increase (decrease) in shares outstanding		5,625,000			(2,750,000	)		12,800,000			3,600,000

See notes to financial statements.

78 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	20.21		$	29.78		$	37.28		$	31.08		$	26.62
Income from investment operations:
Net investment incomea		0.43			0.51			0.56			0.51			0.44
Net realized and unrealized gain (loss)b		(2.62	)		(9.36	)		(6.98	)		6.42			4.31
Total from investment operations		(2.19	)		(8.85	)		(6.42	)		6.93			4.75
Less distributions from:
Net investment income		(0.75	)		(0.72	)		(1.08	)		(0.73	)		(0.29	)
Total distributions		(0.75	)		(0.72	)		(1.08	)		(0.73	)		(0.29	)
Net asset value, end of year	$	17.27		$	20.21		$	29.78		$	37.28		$	31.08
Total return		(11.07	)%		(28.52	)%		(17.64	)%		22.35	%		18.00	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	110,520		$	159,666		$	193,602		$	473,514		$	391,637
Ratio of expenses to average net assets		0.54	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		2.20	%		3.25	%		1.57	%		1.36	%		1.48	%
Portfolio turnover ratec		11	%		26	%		26	%		21	%		32	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 Belgium Investable Market Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	12.06		$	17.64		$	25.89		$	22.83		$	18.94
Income from investment operations:
Net investment incomea		0.19			0.22			0.78			0.76			0.75
Net realized and unrealized gain (loss)b		(0.27	)		(5.46	)		(7.27	)		2.74			3.95
Total from investment operations		(0.08	)		(5.24	)		(6.49	)		3.50			4.70
Less distributions from:
Net investment income		(0.20	)		(0.34	)		(1.76	)		(0.44	)		(0.81	)
Total distributions		(0.20	)		(0.34	)		(1.76	)		(0.44	)		(0.81	)
Net asset value, end of year	$	11.78		$	12.06		$	17.64		$	25.89		$	22.83
Total return		(0.60	)%		(29.15	)%		(26.21	)%		15.36	%		25.66	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	58,896		$	53,042		$	119,955		$	303,483		$	152,484
Ratio of expenses to average net assets		0.54	%		0.56	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		1.55	%		2.23	%		3.32	%		2.90	%		3.60	%
Portfolio turnover ratec		17	%		33	%		31	%		12	%		10	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout the period)

iShares MSCI Emerging Markets Eastern Europe Index  Fund

	Period from Sep. 30, 2009a to Aug. 31, 2010
Net asset value, beginning of period	$	24.65
Income from investment operations:
Net investment incomeb		0.26
Net realized and unrealized gainc		0.89
Total from investment operations		1.15
Less distributions from:
Net investment income		(0.13	)
Net realized gain		(0.01	)d
Total distributions		(0.14	)
Net asset value, end of period	$	25.66
Total return		4.68	%e
Ratios/Supplemental data:
Net assets, end of period (000s)	$	12,832
Ratio of expenses to average net assetsf		0.69	%
Ratio of net investment income to average net assetsf		1.05	%
Portfolio turnover rateg		13	%

^a Commencement of operations.

^b Based on average shares outstanding throughout the period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^d Represents all short-term capital gain distributions. Short-term capital gain distributions are treated as ordinary income dividends for tax purposes.

^e Not annualized.

^f Annualized for periods of less than one year.

^g Portfolio turnover rate excludes 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 EMU Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a
Net asset value, beginning of year	$	35.64		$	45.97		$	57.15		$	46.14		$	37.49
Income from investment operations:
Net investment incomeb		0.80			0.93			1.71			1.40			1.37
Net realized and unrealized gain (loss)c		(4.76	)		(9.97	)		(9.59	)		10.54			7.94
Total from investment operations		(3.96	)		(9.04	)		(7.88	)		11.94			9.31
Less distributions from:
Net investment income		(0.93	)		(1.29	)		(3.30	)		(0.93	)		(0.66	)
Total distributions		(0.93	)		(1.29	)		(3.30	)		(0.93	)		(0.66	)
Net asset value, end of year	$	30.75		$	35.64		$	45.97		$	57.15		$	46.14
Total return		(11.19	)%		(19.05	)%		(14.52	)%		26.10	%		25.18	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	823,972		$	741,270		$	1,291,808		$	2,971,565		$	1,794,921
Ratio of expenses to average net assets		0.54	%		0.56	%		0.52	%		0.51	%		0.54	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.54	%		0.56	%		n/a			n/a			n/a
Ratio of net investment income to average net assets		2.29	%		3.07	%		3.06	%		2.60	%		3.23	%
Portfolio turnover rated		5	%		8	%		27	%		5	%		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 for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

82 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI France Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	24.28		$	30.70		$	36.53		$	31.16		$	25.41
Income from investment operations:
Net investment incomea		0.65			0.66			0.93			0.77			0.55
Net realized and unrealized gain (loss)b		(3.30	)		(6.13	)		(5.17	)		5.06			5.52
Total from investment operations		(2.65	)		(5.47	)		(4.24	)		5.83			6.07
Less distributions from:
Net investment income		(0.60	)		(0.95	)		(1.59	)		(0.46	)		(0.32	)
Total distributions		(0.60	)		(0.95	)		(1.59	)		(0.46	)		(0.32	)
Net asset value, end of year	$	21.03		$	24.28		$	30.70		$	36.53		$	31.16
Total return		(10.98	)%		(17.11	)%		(11.96	)%		18.83	%		24.13	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	239,706		$	184,511		$	227,203		$	445,696		$	211,886
Ratio of expenses to average net assets		0.54	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.53	%		n/a			n/a			n/a			n/a
Ratio of net investment income to average net assets		2.71	%		3.18	%		2.60	%		2.17	%		1.95	%
Portfolio turnover ratec		6	%		6	%		10	%		6	%		10	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 Germany Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	20.86		$	27.55		$	32.18		$	23.68		$	19.08
Income from investment operations:
Net investment incomea		0.38			0.58			0.88			0.68			0.57
Net realized and unrealized gain (loss)b		(1.49	)		(6.65	)		(3.84	)		8.33			4.15
Total from investment operations		(1.11	)		(6.07	)		(2.96	)		9.01			4.72
Less distributions from:
Net investment income		(0.30	)		(0.62	)		(1.67	)		(0.51	)		(0.12	)
Total distributions		(0.30	)		(0.62	)		(1.67	)		(0.51	)		(0.12	)
Net asset value, end of year	$	19.45		$	20.86		$	27.55		$	32.18		$	23.68
Total return		(5.35	)%		(21.62	)%		(9.81	)%		38.47	%		24.82	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,487,881		$	619,638		$	669,452		$	1,641,245		$	802,795
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		1.80	%		3.18	%		2.72	%		2.32	%		2.62	%
Portfolio turnover ratec		5	%		15	%		11	%		4	%		12	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Italy Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	19.05		$	25.04		$	33.82		$	30.48		$	25.77
Income from investment operations:
Net investment incomea		0.39			0.47			1.53			1.35			1.07
Net realized and unrealized gain (loss)b		(3.99	)		(5.82	)		(7.71	)		2.66			4.15
Total from investment operations		(3.60	)		(5.35	)		(6.18	)		4.01			5.22
Less distributions from:
Net investment income		(0.44	)		(0.64	)		(2.60	)		(0.67	)		(0.51	)
Return of capital		(0.01	)		–			–			–			–
Total distributions		(0.45	)		(0.64	)		(2.60	)		(0.67	)		(0.51	)
Net asset value, end of year	$	15.00		$	19.05		$	25.04		$	33.82		$	30.48
Total return		(19.11	)%		(20.78	)%		(19.43	)%		13.20	%		20.61	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	76,500		$	125,716		$	244,154		$	172,495		$	146,324
Ratio of expenses to average net assets		0.54	%		0.59	%		0.52	%		0.52	%		0.54	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			0.55	%		n/a			n/a			n/a
Ratio of net investment income to average net assets		2.17	%		2.85	%		5.06	%		4.02	%		3.87	%
Portfolio turnover ratec		12	%		18	%		29	%		16	%		15	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities

^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

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Netherlands Investable Market Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	18.52		$	24.38		$	29.75		$	24.17		$	19.10
Income from investment operations:
Net investment incomea		0.45			0.35			1.10			0.98			0.60
Net realized and unrealized gain (loss)b		(0.70	)		(5.55	)		(4.68	)		5.05			4.95
Total from investment operations		(0.25	)		(5.20	)		(3.58	)		6.03			5.55
Less distributions from:
Net investment income		(0.38	)		(0.66	)		(1.79	)		(0.45	)		(0.48	)
Total distributions		(0.38	)		(0.66	)		(1.79	)		(0.45	)		(0.48	)
Net asset value, end of year	$	17.89		$	18.52		$	24.38		$	29.75		$	24.17
Total return		(1.44	)%		(20.59	)%		(12.67	)%		25.22	%		29.53	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	147,611		$	83,351		$	209,653		$	251,354		$	109,991
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		2.31	%		2.24	%		3.86	%		3.50	%		2.78	%
Portfolio turnover ratec		9	%		15	%		26	%		8	%		17	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

86 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Spain Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	47.65		$	50.41		$	58.06		$	44.81		$	35.70
Income from investment operations:
Net investment incomea		1.64			1.75			1.98			1.30			1.07
Net realized and unrealized gain (loss)b		(10.01	)		(2.14	)		(7.33	)		12.33			8.78
Total from investment operations		(8.37	)		(0.39	)		(5.35	)		13.63			9.85
Less distributions from:
Net investment income		(2.26	)		(2.37	)		(2.30	)		(0.38	)		(0.74	)
Total distributions		(2.26	)		(2.37	)		(2.30	)		(0.38	)		(0.74	)
Net asset value, end of year	$	37.02		$	47.65		$	50.41		$	58.06		$	44.81
Total return		(17.91	)%		0.64	%		(9.76	)%		30.47	%		28.09	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	194,362		$	278,734		$	321,349		$	522,556		$	178,130
Ratio of expenses to average net assets		0.54	%		0.56	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		3.72	%		4.70	%		3.28	%		2.36	%		2.67	%
Portfolio turnover ratec		9	%		19	%		22	%		12	%		6	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 87

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Sweden Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	22.86		$	24.48		$	34.57		$	25.88		$	21.58
Income from investment operations:
Net investment incomea		0.48			0.40			0.91			1.15			0.76
Net realized and unrealized gain (loss)b		1.73			(1.56	)		(8.63	)		7.88			3.96
Total from investment operations		2.21			(1.16	)		(7.72	)		9.03			4.72
Less distributions from:
Net investment income		(0.61	)		(0.46	)		(2.37	)		(0.34	)		(0.42	)
Total distributions		(0.61	)		(0.46	)		(2.37	)		(0.34	)		(0.42	)
Net asset value, end of year	$	24.46		$	22.86		$	24.48		$	34.57		$	25.88
Total return		9.70	%		(4.04	)%		(23.16	)%		35.01	%		22.16	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	249,491		$	190,333		$	227,654		$	573,026		$	151,427
Ratio of expenses to average net assets		0.53	%		0.55	%		0.51	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		1.97	%		2.34	%		2.91	%		3.42	%		3.13	%
Portfolio turnover ratec		10	%		9	%		17	%		7	%		14	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

88 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Switzerland Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	20.71		$	23.09		$	25.78		$	22.49		$	17.63
Income from investment operations:
Net investment incomea		0.39			0.25			0.49			0.36			0.27
Net realized and unrealized gain (loss)b		0.90			(2.30	)		(2.51	)		3.12			4.71
Total from investment operations		1.29			(2.05	)		(2.02	)		3.48			4.98
Less distributions from:
Net investment income		(0.36	)		(0.33	)		(0.67	)		(0.19	)		(0.12	)
Total distributions		(0.36	)		(0.33	)		(0.67	)		(0.19	)		(0.12	)
Net asset value, end of year	$	21.64		$	20.71		$	23.09		$	25.78		$	22.49
Total return		6.35	%		(8.63	)%		(7.97	)%		15.53	%		28.36	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	405,755		$	271,855		$	366,525		$	318,998		$	188,319
Ratio of expenses to average net assets		0.53	%		0.56	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		1.80	%		1.42	%		1.93	%		1.42	%		1.34	%
Portfolio turnover ratec		7	%		16	%		11	%		5	%		11	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 89

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI United Kingdom Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	15.02		$	19.35		$	24.73		$	21.92		$	18.74
Income from investment operations:
Net investment incomea		0.46			0.50			0.83			0.84			0.97
Net realized and unrealized gain (loss)b		(0.03	)		(4.26	)		(4.89	)		2.78			2.79
Total from investment operations		0.43			(3.76	)		(4.06	)		3.62			3.76
Less distributions from:
Net investment income		(0.44	)		(0.57	)		(1.32	)		(0.81	)		(0.58	)
Total distributions		(0.44	)		(0.57	)		(1.32	)		(0.81	)		(0.58	)
Net asset value, end of year	$	15.01		$	15.02		$	19.35		$	24.73		$	21.92
Total return		2.87	%		(18.68	)%		(17.16	)%		16.77	%		20.61	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	930,412		$	739,124		$	882,502		$	1,127,738		$	872,409
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		2.98	%		3.90	%		3.64	%		3.51	%		4.81	%
Portfolio turnover ratec		7	%		11	%		14	%		8	%		10	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

90 2010 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 Austria Investable Market, iShares MSCI Belgium Investable Market, iShares MSCI Emerging Markets Eastern Europe, 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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

Each Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This 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”) using 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

NOTES TO FINANCIAL STATEMENTS 91

Notes to Financial Statements (Continued)

iSHARES^® , INC.

liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy 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.

92 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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, 2010, the value of each of the Funds’ investments was classified as a Level 1 Price. 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. 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, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are generally declared and paid semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid once a year. Distributions are determined on

NOTES TO FINANCIAL STATEMENTS 93

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010, the tax year-end of the Funds, the components of net accumulated losses on a tax basis were as follows:

iShares MSCI Index Fund	Undistributed Ordinary Income		Unrealized Depreciation			Capital and Other Losses			Net Accumulated Losses
Austria Investable Market	$	202,354	$	(76,981,933	)	$	(49,601,809	)	$	(126,381,388	)
Belgium Investable Market		93,113		(29,103,344	)		(34,526,181	)		(63,536,412	)
Emerging Markets Eastern Europe		39,362		(265,368	)		(203,486	)		(429,492	)
EMU		784,220		(428,900,694	)		(119,886,313	)		(548,002,787	)
France		346,683		(131,148,544	)		(16,041,191	)		(146,843,052	)
Germany		–		(301,606,472	)		(98,264,188	)		(399,870,660	)
Italy		–		(64,858,953	)		(32,201,593	)		(97,060,546	)
Netherlands Investable Market		396,443		(49,808,593	)		(36,329,880	)		(85,742,030	)
Spain		1,355,500		(103,141,330	)		(30,123,571	)		(131,909,401	)
Sweden		–		(56,105,341	)		(30,451,621	)		(86,556,962	)
Switzerland		–		(31,277,705	)		(35,883,383	)		(67,161,088	)
United Kingdom		5,263,710		(257,622,146	)		(81,853,815	)		(334,212,251	)

The tax character of distributions paid during the years ended August 31, 2010 and August 31, 2009 were as follows:

iShares MSCI Index Fund	2010		2009
Austria Investable Market
Distributions paid from: Ordinary income	$	5,965,890	$	4,361,827
Total Distributions	$	5,965,890	$	4,361,827
Belgium Investable Market
Distributions paid from: Ordinary income	$	1,145,981	$	1,992,257
Total Distributions	$	1,145,981	$	1,992,257
Emerging Markets Eastern Europea
Distributions paid from: Ordinary income	$	69,192	$	–
Total Distributions	$	69,192	$	–
EMU
Distributions paid from: Ordinary income	$	21,378,328	$	28,747,455
Total Distributions	$	21,378,328	$	28,747,455

94 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

iShares MSCI Index Fund	2010		2009
France
Distributions paid from: Ordinary income	$	8,068,942	$	6,641,215
Total Distributions	$	8,068,942	$	6,641,215
Germany
Distributions paid from: Ordinary income	$	20,484,235	$	14,693,409
Total Distributions	$	20,484,235	$	14,693,409
Italy
Distributions paid from: Ordinary income	$	3,028,440	$	3,732,985
Return of capital		96,798		–
Total Distributions	$	3,125,238	$	3,732,985
Netherlands Investable Market
Distributions paid from: Ordinary income	$	2,418,715	$	4,230,257
Total Distributions	$	2,418,715	$	4,230,257
Spain
Distributions paid from: Ordinary income	$	11,300,415	$	13,662,798
Total Distributions	$	11,300,415	$	13,662,798
Sweden
Distributions paid from: Ordinary income	$	4,773,557	$	3,282,327
Total Distributions	$	4,773,557	$	3,282,327
Switzerland
Distributions paid from: Ordinary income	$	6,459,032	$	4,322,291
Total Distributions	$	6,459,032	$	4,322,291
United Kingdom
Distributions paid from: Ordinary income	$	27,007,036	$	25,389,028
Total Distributions	$	27,007,036	$	25,389,028

^a Commencement of operations on September 30, 2009.

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

NOTES TO FINANCIAL STATEMENTS 95

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010.

From November 1, 2009 to August 31, 2010, the Funds incurred net realized capital and net foreign currency losses. As permitted by tax regulations, the Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2011, as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital/Net Foreign Currency Losses
Austria Investable Market	$	12,232,287
Belgium Investable Market		15,720,926
Emerging Markets Eastern Europe		203,486
EMU		22,672,960
France		2,492,526
Germany		17,992,610

iShares MSCI Index Fund	Deferred Net Realized Capital/Net Foreign Currency Losses
Italy	$	8,898,333
Netherlands Investable Market		2,287,033
Spain		8,060,301
Sweden		5,346,672
Switzerland		6,954,489
United Kingdom		22,590,373

Certain Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund	Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Expiring 2017		Expiring 2018		Total
Austria Investable Market	$	370,948	$	855,364	$	–	$	–	$	9,795,917	$	2,587,916	$	7,102,366	$	16,657,011	$	37,369,522
Belgium Investable Market		117,767		175,781		33,969		–		–		1,698,444		5,953,120		10,826,174		18,805,255
EMU		–		659,648		1,873,963		–		–		–		26,644,200		68,035,542		97,213,353
France		236,944		2,400,550		–		–		158,472		335,795		3,408,374		7,008,530		13,548,665
Germany		5,469,732		8,656,712		2,241,687		–		4,227,713		3,394,735		27,790,050		28,490,949		80,271,578
Italy		848,408		541,980		527,327		–		–		472,268		2,743,650		18,169,627		23,303,260
Netherlands Investable Market		1,497,810		2,481,175		129,137		403,525		260,715		1,195,162		5,819,153		22,256,170		34,042,847
Spain		–		995,671		–		–		–		–		5,946,927		15,120,672		22,063,270
Sweden		1,577,551		1,149,514		–		107,613		–		100,015		13,686,746		8,483,510		25,104,949
Switzerland		1,018,305		2,149,171		354,252		–		–		–		2,837,786		22,569,380		28,928,894
United Kingdom		6,448,554		4,272,059		1,517,783		7,063,063		–		261,754		16,140,312		23,559,917		59,263,442

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.

96 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

As of August 31, 2010, 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	$	186,784,239	$	32,946	$	(76,848,918	)	$	(76,815,972	)
Belgium Investable Market		87,507,195		1,543,102		(30,500,994	)		(28,957,892	)
Emerging Markets Eastern Europe		12,986,462		604,909		(870,275	)		(265,366	)
EMU		1,254,757,084		4,022,780		(432,846,092	)		(428,823,312	)
France		370,941,419		534,882		(131,684,014	)		(131,149,132	)
Germany		1,802,158,635		5,784,609		(307,411,052	)		(301,626,443	)
Italy		141,461,591		–		(64,857,246	)		(64,857,246	)
Netherlands Investable Market		197,240,515		384,649		(50,183,334	)		(49,798,685	)
Spain		307,995,211		85,874		(103,224,205	)		(103,138,331	)
Sweden		305,212,334		1,799,983		(57,909,661	)		(56,109,678	)
Switzerland		433,020,692		18,000,241		(49,498,348	)		(31,498,107	)
United Kingdom		1,182,758,321		21,531,110		(278,992,905	)		(257,461,795	)

Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.

Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.

Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA 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 97

Notes to Financial Statements (Continued)

iSHARES^® , INC.

For its investment advisory services to the Funds except for the iShares MSCI Emerging Markets Eastern Europe Index Fund, BFA 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

For its investment advisory services to the iShares MSCI Emerging Markets Eastern Europe Index Fund, BFA 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

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Funds as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Austria Investable Market	$	220,506
Belgium Investable Market		5,212
Emerging Markets Eastern Europe		471
EMU		99,681
France		8,039
Germany		214,080

iShares MSCI Index Fund	Securities Lending Agent Fees
Italy	$	3,285
Netherlands Investable Market		10,618
Spain		170,209
Sweden		11,775
Switzerland		36
United Kingdom		5,521

Cross trades for the year ended August 31, 2010, 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 BFA (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 its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.

98 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

Investments in issuers considered to be an affiliate of the iShares MSCI United Kingdom Index Fund (excluding short-term investments) for the period September 1, 2009 to November 30, 2009, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)		Gross Additions (in 000s)		Gross Reductions (in 000s)			Number of Shares Held as of 11/30/09 (in 000s)		Value as of 11/30/09		Dividend Income		Net Realized Gain
Barclays PLC		4,025		1,003		(313	)		4,715	$	22,623,237	$	77,129	$	1,499,143

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	Purchases		Sales
Austria Investable Market	$	16,165,103	$	18,466,596
Belgium Investable Market		11,942,900		14,424,982
Emerging Markets Eastern Europe		1,928,669		1,352,696
EMU		41,888,618		50,699,640
France		18,523,104		18,241,799
Germany		52,800,271		53,096,566
Italy		16,429,720		13,824,265
Netherlands Investable Market		10,214,648		10,521,153
Spain		21,766,008		25,174,045
Sweden		20,959,384		22,469,890
Switzerland		39,636,633		24,015,246
United Kingdom		67,198,810		62,580,461

In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
Austria Investable Market	$	152,292,545	$	176,706,123
Belgium Investable Market		116,411,746		112,323,126
Emerging Markets Eastern Europe		12,601,421		–
EMU		609,833,394		409,464,082
France		357,089,602		253,073,419
Germany		1,385,028,404		425,014,375
Italy		79,952,382		108,961,556
Netherlands Investable Market		93,755,141		20,741,603

NOTES TO FINANCIAL STATEMENTS 99

Notes to Financial Statements (Continued)

iSHARES^® , INC.

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
Spain	$	183,636,556	$	208,666,374
Sweden		136,448,607		82,401,394
Switzerland		132,886,475		26,383,926
United Kingdom		345,937,583		143,394,085

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 Bank and Trust Company, 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 current 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 value of the securities on loan. The risks 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 BFA or its affiliates; such reinvestments are subject to investment risk.

As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 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, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

100 2010 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 Austria Investable Market Index Fund, iShares MSCI Belgium Investable Market Index Fund, iShares MSCI Emerging Markets Eastern Europe 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 Series (the “Funds”) at August 31, 2010, 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 22, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING  FIRM 101

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, 2010 qualified for the dividends-received deduction.

For the fiscal year ended August 31, 2010, the 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	$	4,312,007	$	469,813
Belgium Investable Market		1,742,027		231,540
Emerging Markets Eastern Europe		197,505		27,420
EMU		27,227,140		3,723,541
France		11,129,040		1,572,116
Germany		26,994,361		3,448,041
Italy		3,689,266		533,847
Netherlands Investable Market		3,732,476		557,122
Spain		11,627,212		1,536,283
Sweden		6,074,636		906,885
Switzerland		9,581,811		1,870,010
United Kingdom		33,125,016		417,186

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, 2010:

iShares MSCI Index Fund	Qualified Dividend Income
Austria Investable Market	$	3,011,360
Belgium Investable Market		1,145,981
Emerging Markets Eastern Europe		69,192
EMU		21,378,328
France		8,068,942
Germany		20,484,235

iShares MSCI Index Fund	Qualified Dividend Income
Italy	$	3,028,440
Netherlands Investable Market		2,418,715
Spain		11,091,843
Sweden		4,773,557
Switzerland		6,459,032
United Kingdom		27,007,036

Under Section 871(k)(2)(C) of the Code, the iShares MSCI Emerging Markets Eastern Europe Index Fund designates $4,842 as short-term capital gain dividends for the fiscal year ended August 31, 2010.

In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

102 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® , INC.

Section 19(a) Notices

The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report distributions for federal income tax purposes.

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year
iShares MSCI Index Fund	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Share		Net Investment Income			Net Realized Capital Gains			Return of Capital			Total Per Share
Emerging Markets Eastern Europe	$	0.12870	$	0.00968	$	–	$	0.13838		93	%		7	%		–	%		100	%

Premium/Discount Information

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 fair 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.

SUPPLEMENTAL INFORMATION 103

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Austria Investable Market Index Fund

Period Covered: January 1, 2005 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total  Days
Greater than 5.5%		5		0.36	%
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%		12		0.87
Greater than 1.5% and Less than 2.0%		20		1.45
Greater than 1.0% and Less than 1.5%		75		5.43
Greater than 0.5% and Less than 1.0%		192		13.89
Between 0.5% and –0.5%		750		54.28
Less than –0.5% and Greater than –1.0%		158		11.43
Less than –1.0% and Greater than –1.5%		79		5.72
Less than –1.5% and Greater than –2.0%		30		2.17
Less than –2.0% and Greater than –2.5%		22		1.59
Less than –2.5% and Greater than –3.0%		6		0.43
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%		2		0.14
Less than –4.5%		5		0.36
		1,382		100.00	%

104 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Belgium Investable Market Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		6		0.43
Greater than 2.0% and Less than 2.5%		10		0.72
Greater than 1.5% and Less than 2.0%		22		1.59
Greater than 1.0% and Less than 1.5%		61		4.41
Greater than 0.5% and Less than 1.0%		190		13.75
Between 0.5% and –0.5%		822		59.49
Less than –0.5% and Greater than –1.0%		149		10.78
Less than –1.0% and Greater than –1.5%		59		4.27
Less than –1.5% and Greater than –2.0%		26		1.88
Less than –2.0% and Greater than –2.5%		7		0.51
Less than –2.5% and Greater than –3.0%		6		0.43
Less than –3.0% and Greater than –3.5%		4		0.29
Less than –3.5% and Greater than –4.0%		4		0.29
Less than –4.0%		5		0.36
		1,382		100.00	%

iShares MSCI Emerging Markets Eastern Europe Index Fund

Period Covered: October 1, 2009 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total  Days
Greater than 3.0%		1		0.53	%
Greater than 2.5% and Less than 3.0%		1		0.53
Greater than 2.0% and Less than 2.5%		1		0.53
Greater than 1.5% and Less than 2.0%		13		6.95
Greater than 1.0% and Less than 1.5%		19		10.16
Greater than 0.5% and Less than 1.0%		56		29.95
Between 0.5% and –0.5%		65		34.78
Less than –0.5% and Greater than –1.0%		12		6.42
Less than –1.0% and Greater than –1.5%		8		4.28
Less than –1.5% and Greater than –2.0%		6		3.21
Less than –2.0% and Greater than –2.5%		3		1.60
Less than –2.5% and Greater than –3.0%		1		0.53
Less than –3.0% and Greater than –3.5%		1		0.53
		187		100.00	%

SUPPLEMENTAL INFORMATION 105

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI EMU Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		25		1.81
Greater than 1.0% and Less than 1.5%		54		3.91
Greater than 0.5% and Less than 1.0%		198		14.33
Between 0.5% and –0.5%		840		60.79
Less than –0.5% and Greater than –1.0%		133		9.62
Less than –1.0% and Greater than –1.5%		57		4.12
Less than –1.5% and Greater than –2.0%		22		1.59
Less than –2.0% and Greater than –2.5%		7		0.51
Less than –2.5% and Greater than –3.0%		6		0.43
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%		3		0.22
Less than –4.5% and Greater than –5.0%		1		0.07
Less than –5.0%		2		0.14
		1,382		100.00	%

106 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI France Index Fund

Period Covered: January 1, 2005 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		4		0.29	%
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%		6		0.43
Greater than 2.0% and Less than 2.5%		8		0.58
Greater than 1.5% and Less than 2.0%		24		1.74
Greater than 1.0% and Less than 1.5%		57		4.12
Greater than 0.5% and Less than 1.0%		168		12.16
Between 0.5% and –0.5%		891		64.49
Less than –0.5% and Greater than –1.0%		115		8.32
Less than –1.0% and Greater than –1.5%		52		3.76
Less than –1.5% and Greater than –2.0%		24		1.74
Less than –2.0% and Greater than –2.5%		8		0.58
Less than –2.5% and Greater than –3.0%		8		0.58
Less than –3.0% and Greater than –3.5%		1		0.07
Less than –3.5% and Greater than –4.0%		3		0.22
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 107

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Germany Index Fund

Period Covered: January 1, 2005 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		6		0.43	%
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%		12		0.87
Greater than 1.5% and Less than 2.0%		13		0.94
Greater than 1.0% and Less than 1.5%		61		4.41
Greater than 0.5% and Less than 1.0%		169		12.23
Between 0.5% and –0.5%		892		64.57
Less than –0.5% and Greater than –1.0%		129		9.33
Less than –1.0% and Greater than –1.5%		54		3.91
Less than –1.5% and Greater than –2.0%		12		0.87
Less than –2.0% and Greater than –2.5%		11		0.80
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%		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	%

108 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Italy Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		3		0.22
Greater than 2.0% and Less than 2.5%		12		0.87
Greater than 1.5% and Less than 2.0%		23		1.66
Greater than 1.0% and Less than 1.5%		67		4.85
Greater than 0.5% and Less than 1.0%		149		10.78
Between 0.5% and –0.5%		873		63.19
Less than –0.5% and Greater than –1.0%		134		9.70
Less than –1.0% and Greater than –1.5%		56		4.05
Less than –1.5% and Greater than –2.0%		21		1.52
Less than –2.0% and Greater than –2.5%		10		0.72
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%		4		0.29
Less than –4.5%		2		0.14
		1,382		100.00	%

SUPPLEMENTAL INFORMATION 109

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Netherlands Investable Market Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		6		0.43
Greater than 2.0% and Less than 2.5%		11		0.80
Greater than 1.5% and Less than 2.0%		21		1.52
Greater than 1.0% and Less than 1.5%		59		4.27
Greater than 0.5% and Less than 1.0%		203		14.69
Between 0.5% and –0.5%		826		59.79
Less than –0.5% and Greater than –1.0%		137		9.91
Less than –1.0% and Greater than –1.5%		60		4.34
Less than –1.5% and Greater than –2.0%		21		1.52
Less than –2.0% and Greater than –2.5%		8		0.58
Less than –2.5% and Greater than –3.0%		7		0.51
Less than –3.0% and Greater than –3.5%		6		0.43
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	%

110 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Spain Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		20		1.45
Greater than 1.0% and Less than 1.5%		59		4.27
Greater than 0.5% and Less than 1.0%		161		11.65
Between 0.5% and –0.5%		853		61.73
Less than –0.5% and Greater than –1.0%		156		11.29
Less than –1.0% and Greater than –1.5%		54		3.91
Less than –1.5% and Greater than –2.0%		23		1.66
Less than –2.0% and Greater than –2.5%		11		0.80
Less than –2.5% and Greater than –3.0%		7		0.51
Less than –3.0% and Greater than –3.5%		2		0.14
Less than –3.5% and Greater than –4.0%		3		0.22
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 111

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Sweden Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		1		0.07
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%		5		0.36
Greater than 2.5% and Less than 3.0%		9		0.65
Greater than 2.0% and Less than 2.5%		11		0.80
Greater than 1.5% and Less than 2.0%		30		2.17
Greater than 1.0% and Less than 1.5%		76		5.50
Greater than 0.5% and Less than 1.0%		204		14.76
Between 0.5% and –0.5%		738		53.41
Less than –0.5% and Greater than –1.0%		146		10.56
Less than –1.0% and Greater than –1.5%		71		5.14
Less than –1.5% and Greater than –2.0%		34		2.46
Less than –2.0% and Greater than –2.5%		16		1.16
Less than –2.5% and Greater than –3.0%		9		0.65
Less than –3.0% and Greater than –3.5%		5		0.36
Less than –3.5% and Greater than –4.0%		4		0.29
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	%

112 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Switzerland Index Fund

Period Covered: January 1, 2005 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 4.0%		6		0.43	%
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%		1		0.07
Greater than 2.0% and Less than 2.5%		5		0.36
Greater than 1.5% and Less than 2.0%		22		1.59
Greater than 1.0% and Less than 1.5%		59		4.27
Greater than 0.5% and Less than 1.0%		247		17.87
Between 0.5% and –0.5%		847		61.30
Less than –0.5% and Greater than –1.0%		103		7.45
Less than –1.0% and Greater than –1.5%		45		3.26
Less than –1.5% and Greater than –2.0%		15		1.09
Less than –2.0% and Greater than –2.5%		14		1.01
Less than –2.5% and Greater than –3.0%		4		0.29
Less than –3.0%		6		0.43
		1,382		100.00	%

SUPPLEMENTAL INFORMATION 113

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI United Kingdom Index Fund

Period Covered: January 1, 2005 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 3.0%		14		1.01	%
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%		37		2.68
Greater than 1.0% and Less than 1.5%		122		8.83
Greater than 0.5% and Less than 1.0%		316		22.87
Between 0.5% and –0.5%		686		49.64
Less than –0.5% and Greater than –1.0%		111		8.03
Less than –1.0% and Greater than –1.5%		39		2.82
Less than –1.5% and Greater than –2.0%		20		1.45
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%		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	%

114 2010 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 BFA 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, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. 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 the Past 5 Years	Other Directorships Held
Robert S. Kapitoa (53)	Director (since 2009).	President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007).
Michael Lathamb (45)	Director (since 2010); President (since 2007).	Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007).	Trustee of iShares Trust (since 2010).

a Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc.

b Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates.

DIRECTOR AND OFFICER INFORMATION 115

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Independent Directors

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held
George G.C. Parker (71)	Director (since 2000); Independent Chairman (since 2010).	Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994).	Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007).
Darrell Duffie (56)	Director (since 2008).	Professor, Stanford University: Graduate School of Business (since 1984).	Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008).
Cecilia H. Herbert (61)	Director (since 2005).	Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005).	Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009).
Charles A. Hurty (67)	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002).
John E. Kerrigan (55)	Director (since 2005).	Chief Investment Officer, Santa Clara University (since 2002).	Trustee of iShares Trust (since 2005).
John E. Martinez (49)	Director (since 2003).	Director of Real Estate Equity Exchange (since 2005).	Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007).

116 2010 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 the Past 5 Years	Other Directorships Held
Robert H. Silver (55)	Director (since 2007).	President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009).	Trustee of iShares Trust (since 2007).

DIRECTOR AND OFFICER INFORMATION 117

Director and Officer Information (Unaudited)(Continued)

iSHARES^®, INC.

Officers

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years
Geoffrey D. Flynn (53)	Executive Vice President and Chief Operating Officer (since 2008).	Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007).
Eilleen M. Clavere (58)	Secretary (since 2007).	Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005).
Jack Gee (51)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009).
Patrick O’Connor (43)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006).
Amy Schioldager (48)	Executive Vice President (since 2007).	Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).
Ira P. Shapiro (47)	Vice President and Chief Legal Officer (since 2007).	Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009).
Lee Sterne (45)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007).
Matt Tucker (38)	Vice President (since 2007).	Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005).

118 2010 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 Fund
iShares Dow Jones U.S.	IYY
iShares MSCI Domestic Index Fund
iShares MSCI USA	EUSA
iShares MSCI Socially Responsible Index Funds
iShares MSCI KLD 400 Social	DSI
iShares MSCI USA ESG 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

120 2010 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 Brazil Small Cap	EWZS
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI China Small Cap	ECNS
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares S&P India Nifty 50	INDY
iShares MSCI Indonesia Investable Market	EIDO
iShares MSCI Ireland Capped Investable Market	EIRL
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 New Zealand Investable Market	ENZL
iShares MSCI All Peru Capped	EPU
iShares MSCI Philippines Investable Market	EPHE
iShares MSCI Poland Investable Market	EPOL
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 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 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 International/Global Sector Index Funds
iShares MSCI ACWI ex US Consumer Discretionary Sector	AXDI
iShares MSCI ACWI ex US Consumer Staples Sector	AXSL
iShares MSCI ACWI ex US Energy Sector	AXEN
iShares MSCI ACWI ex US Financials Sector	AXFN
iShares MSCI ACWI ex US Health Care Sector	AXHE
iShares MSCI ACWI ex US Industrials Sector	AXID
iShares MSCI ACWI ex US Information Technology
Sector	AXIT
iShares MSCI ACWI ex US Materials Sector	AXMT
iShares MSCI ACWI ex US Telecommunication Services
Sector	AXTE
iShares MSCI ACWI ex US Utilities Sector	AXUT
iShares MSCI Emerging Markets Financials Sector	EMFN
iShares MSCI Emerging Markets Materials Sector	EMMT
iShares MSCI Europe Financials Sector	EUFN
iShares MSCI Far East Financials Sector	FEFN
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 International/Global Theme Based and Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV
iShares S&P Emerging Markets Infrastructure	EMIF
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 10+ Year Government/Credit	GLJ
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

THE iSHARES FAMILY OF FUNDS 121

The iShares^® Family of Funds (Continued)

iShares U.S. Credit Bond Funds	Trading Symbol
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares 10+ Year Credit	CLY
iShares iBoxx $ High Yield Corporate	HYG

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 2012 S&P AMT-Free Municipal Series	MUAA
iShares 2013 S&P AMT-Free Municipal Series	MUAB
iShares 2014 S&P AMT-Free Municipal Series	MUAC
iShares 2015 S&P AMT-Free Municipal Series	MUAD
iShares 2016 S&P AMT-Free Municipal Series	MUAE
iShares 2017 S&P AMT-Free Municipal Series	MUAF
iShares U.S. Securitized Bond Fund
iShares Barclays MBS	MBB
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

The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. The 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^®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed 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.

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 2010 Annual Report.

iS-3594-1010

122 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Dear iShares Shareholder:

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

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

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

1.   Go to www.icsdelivery.com.

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

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

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

Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

For more information:

WWW.iSHARES.COM

1-800-iShares (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.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by SEI Investments Distribution Co. (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 BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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 ending 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.

©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.

iS-AR-82-0810

2010 ANNUAL REPORT TO SHAREHOLDERS

iSHARES^® MSCI SERIES

AUGUST 31, 2010

»  Would you prefer to receive materials like this electronically?

See inside back cover for details.

iShares MSCI Brazil Index Fund  |  EWZ  |  NYSE Arca

iShares MSCI BRIC Index Fund  |  BKF  |  NYSE Arca

iShares MSCI Canada Index Fund  |  EWC  |  NYSE Arca

iShares MSCI Chile Investable Market Index Fund  |  ECH  |  NYSE Arca

iShares MSCI Israel Capped Investable Market Index Fund  |  EIS  |  NYSE Arca

iShares MSCI Mexico Investable Market Index Fund  |  EWW  |  NYSE Arca

iShares MSCI South Africa Index Fund  |  EZA  |  NYSE Arca

iShares MSCI Turkey Investable Market Index Fund  |  TUR  |  NYSE Arca

iShares MSCI USA Index Fund  |  EUSA  |  NYSE Arca

Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	27
Schedules of Investments	29
iShares MSCI Brazil Index Fund	29
iShares MSCI BRIC Index Fund	32
iShares MSCI Canada Index Fund	37
iShares MSCI Chile Investable Market Index Fund	40
iShares MSCI Israel Capped Investable Market Index Fund	42
iShares MSCI Mexico Investable Market Index Fund	45
iShares MSCI South Africa Index Fund	47
iShares MSCI Turkey Investable Market Index Fund	49
iShares MSCI USA Index Fund	52
Financial Statements	62
Financial Highlights	73
Notes to Financial Statements	82
Report of Independent Registered Public Accounting Firm	93
Tax Information (Unaudited)	94
Board Review and Approval of Investment Advisory Contract (Unaudited)	95
Supplemental Information (Unaudited)	98
Director and Officer Information (Unaudited)	105
The iShares Family of Funds	112

Management’s Discussion of Fund Performance

iSHARES^® MSCI BRAZIL INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
21.12%	20.64%	21.16%	22.92%	22.83%	23.97%	16.41%	16.10%	18.35%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
21.12%	20.64%	21.16%	180.63%	179.59%	192.86%	356.82%	344.96%	439.21%

“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 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 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Basic Materials		25.16	%
Financial		24.91
Energy		19.68
Consumer Non-Cyclical		11.16
Utilities		5.61
Diversified		4.30
Communications		3.32
Consumer Cyclical		2.54
Industrial		2.28
Short-Term and Other Net Assets		1.04
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Vale SA Class A Preferred		9.29	%
Itau Unibanco Holding
SA Preferred		9.21
Petroleo Brasileiro SA Preferred		9.11
Petroleo Brasileiro SA		7.53
Vale SA SP ADR		6.78
Banco Bradesco SA Preferred		4.79
Itausa – Investimentos Itau
SA Preferred		3.32
Companhia de Bebidas das
Americas Preferred		3.23
OGX Petroleo e Gas
Participacoes SA		3.04
BM&F Bovespa SA		2.81
TOTAL		59.11	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 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, 2010 (the “reporting period”), the total return for the Fund was 21.12%, while the total return for the Index was 21.16%.

As represented by the Index, the Brazilian stock market advanced for the reporting period. Much of the Index’s advance occurred early in the reporting period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for energy and other commodities – which comprise two-thirds of Brazil’s exports – provided a lift to South America’s largest economy. For the 12 months ended June 30, 2010, Brazil’s GDP grew by 8.8%, surpassing expectations. Despite the strong GDP growth rate, inflation in Brazil rose by 4.5% for the reporting period, low by historical standards and in line with the Brazilian central bank’s inflation target. To help keep inflation in check, the central bank embarked on a series of interest rate hikes in mid-2010, raising short-term rates from a record low of 8.75% to 10.75% between April and July.

Healthy economic growth provided a strong boost to Brazil’s stock market; the Index rallied by more than 40% during the first three months of the reporting period. However, after peaking in late 2009, the Index gave back some ground over the remaining months of the reporting period. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that Brazilian exports would weaken.

Financial and basic materials companies comprised just over half of the Fund and were the sectors that contributed the most to performance while consumer stocks contributed more modestly to Fund returns. Energy holdings were the weakest component of the Fund.

2 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

Eight of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The top contributor was energy exploration and production company OGX Petroleo e Gas Participacoes SA, returning triple-digits. Beverage maker Companhia de Bebidas das Americas Preferred (known more commonly as AmBev) and investment holding company Itausa – Investimentos Itau SA Preferred were also strong performers. The only two stocks among the top ten holdings to decline for the reporting period were the common and preferred shares of energy producer Petroleo Brasileiro SA.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI BRIC INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
15.95%	17.13%	16.73%	(8.07)%	(7.93)%	(8.30)%	(21.04)%	(20.69)%	(21.55)%

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 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 calculated 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.

4 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRIC INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		29.38	%
Energy		23.65
Basic Materials		12.20
Communications		8.75
Consumer Non-Cyclical		7.85
Technology		5.12
Industrial		3.92
Consumer Cyclical		3.26
Diversified		3.01
Utilities		2.37
Short-Term and Other Net Assets		0.49
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
China Mobile Ltd. (China)		4.03	%
OAO Gazprom SP ADR (Russia)		3.54
Vale SA Class A Preferred (Brazil)		3.30
Petroleo Brasileiro SA
Preferred (Brazil)		3.18
Infosys Technologies Ltd. SP
ADR (India)		3.02
Itau Unibanco Holding SA
Preferred (Brazil)		3.01
Reliance Industries Ltd. SP
GDR (India)		2.89
HDFC Bank Ltd. SP ADR (India)		2.72
Petroleo Brasileiro SA (Brazil)		2.59
Vale SA (Brazil)		2.36
TOTAL		30.64	%

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 a free float-adjusted market capitalization index that 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, 2010 (the “reporting period”), the total return for the Fund was 15.95%, while the total return for the Index was 16.73%.

As represented by the Index, the stock markets in the BRIC countries (Brazil, Russia, India, and China) posted double-digit gains, as a group, for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. As many developed countries around the world returned to positive GDP growth in the latter half of 2009, rising global demand for exports provided a lift to many emerging economies, including the four countries represented in the Index. In particular, Brazil and Russia benefited from growing demand for energy and commodities, which helped their economies grow by 8.8% and 5.2%, respectively, for the 12 months ended June 30, 2010. Strength in agricultural and industrial exports helped India’s GDP grow by 8.8% for the same 12-month period. Although China’s GDP expanded by 10.3% over the same period – fastest among the four BRIC countries – this represented a slowdown in year-over-year growth from the prior two quarters.

Thanks to the improving economic environment, the Index rallied by more than 30% in the first seven months of the reporting period. However, after peaking in early April 2010, the Index gave back some ground over the last several months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that exports in BRIC countries and other emerging markets would weaken.

Three of the four markets represented in the Index – Brazil, Russia, and India – generated returns of just over 20% for the reporting period, based on MSCI country indexes. In contrast, China (the largest country weighting in the Index) returned 9% for the reporting period, reflecting evidence of a slowdown in economic activity. In addition, China’s economy remained resilient through the severe global

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI BRIC INDEX FUND

economic downturn in late 2008 and early 2009, and its stock market also held up well during that time. As a result, the Chinese market did not experience as sharp of a rebound as the other three markets did when global economic activity began to recover.

Seven of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The best performers were Brazilian firms Vale SA, a metals and mining company, and Itau Unibanco Holding SA, as well as Indian firms Infosys Technologies Ltd., a technology services firm, and commercial bank HDFC Bank Ltd. The only stocks among the top ten holdings to decline for the reporting period were energy companies – Indian energy conglomerate Reliance Industries Ltd. and Brazilian energy producer Petroleo Brasileiro SA.

6 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI CANADA INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
11.91%	11.39%	12.20%	6.72%	6.56%	6.97%	5.82%	5.80%	5.37%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
11.91%	11.39%	12.20%	38.45%	37.42%	40.08%	76.13%	75.72%	68.78%

“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 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 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CANADA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Financial		30.93	%
Energy		24.58
Basic Materials		23.07
Industrial		5.68
Communications		4.97
Consumer Cyclical		3.00
Technology		2.56
Consumer Non-Cyclical		2.27
Diversified		1.67
Utilities		1.22
Short-Term and Other Net Assets		0.05
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Royal Bank of Canada		6.40	%
Toronto-Dominion Bank (The)		5.54
Bank of Nova Scotia		4.64
Suncor Energy Inc.		4.45
Barrick Gold Corp.		4.35
Potash Corp. of Saskatchewan Inc.		4.11
Canadian Natural Resources Ltd.		3.30
Goldcorp Inc.		3.07
Bank of Montreal		2.91
Canadian National Railway Co.		2.70
TOTAL		41.47	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 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, 2010 (the “reporting period”), the total return for the Fund was 11.91%, while the total return for the Index was 12.20%.

As represented by the Index, the Canadian stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. As many developed countries around the world returned to positive GDP growth in the latter half of 2009, rising global demand for energy and other commodities – Canada is one of the few developed nations that is a net exporter of energy – provided a lift to the Canadian economy. For the 12-months ended June 30, 2010, Canadian GDP grew by 3.9%, while inflation remained at a modest 1% over the same period. Despite the benign inflationary environment, the Bank of Canada (the country’s central bank) raised short-term interest rates twice late in the period, its first rate hikes in three years.

Improving economic activity provided a boost to Canada’s stock market – the Index rallied by more than 20% during the first eight months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries – particularly in the U.S., by far Canada’s largest trading partner – led to concerns that Canadian exports would weaken.

8 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CANADA INDEX FUND

Basic materials companies provided the strongest contribution to performance. Financial and energy stocks, which were the largest sectors of the Fund, contributed more modestly to returns. Technology holdings did not fare as well, as the sector was the only one to detract from performance.

Nine of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. By far, the top contributor was fertilizer producer Potash Corp. of Saskatchewan Inc. Other strong performers included gold producer Barrick Gold Corp. and railroad operator Canadian National Railway Co. The only decliner among the top ten holdings was Royal Bank of Canada.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
52.88%	54.09%	54.65%	13.66%	13.80%	14.06%	43.22%	43.73%	44.54%

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.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculated 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.

10 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Utilities		24.76	%
Basic Materials		18.70
Consumer Non-Cyclical		12.87
Consumer Cyclical		12.86
Diversified		12.77
Financial		10.92
Industrial		3.65
Communications		2.70
Technology		0.79
Short-Term and Other Net Assets		(0.02	)
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Empresas Copec SA		12.77	%
Enersis SA		9.26
Empresa Nacional de Electricidad SA		8.97
Cencosud SA		8.80
Empresas CMPC SA		8.24
Banco Santander (Chile) SA		4.98
LAN Airlines SA		4.92
CAP SA		4.90
Sociedad Quimica y Minera de Chile SA Series B		4.86
S.A.C.I. Falabella SA		4.12
TOTAL		71.82	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 IndexSM (the “Index”). The Index is a free float-adjusted market capitalization index that 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, 2010 (the “reporting period”), the total return for the Fund was 52.88%, while the total return for the Index was 54.65%.

As represented by the Index, the Chilean stock market posted strong gains for the reporting period. Chile’s equity market rallied steadily throughout the period as the country’s GDP grew at its fastest pace in five years. For the 12 months ended June 30, 2010, Chile’s GDP grew by 6.5%, after contracting by 4.5% during the prior 12-month period. The recovery in the Chilean economy was driven by robust demand for commodities and other exports as many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. In particular, Chile is the world’s largest exporter of copper, and rising demand for the metal helped boost economic activity. State ownership of copper production and a government mandate to run a fiscal surplus enabled Chile to establish and support a sovereign wealth fund that is used to support the economy in lean times.

In late February, the Chilean economic recovery was disrupted by a massive earthquake that caused $30 billion in damage to the central-southern coastal area of the country. However, the reconstruction effort in the wake of the earthquake, led by the construction and transportation industries, was a key factor in getting the recovery back on track. Chile’s renewed recovery, which was in contrast to evidence of a broad slowdown in many developed economies, sparked concerns about rising inflation. The Chilean inflation rate was 2.6% as of August 2010, below the Chilean central bank’s 3% target rate, but higher than the 2% inflation rate for calendar year 2009. To head off this trend, Chile’s central bank raised short-term interest rates three times in the last three months of the reporting period, from 0.5% to 2.0%, removing some of its accommodative monetary policy at a measured pace.

All sectors within the Fund increased more than 20% for the reporting period with industrial, basic materials, financial and consumer stocks contributing the most.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

Each of the Fund’s ten largest holdings as of August 31, 2010 posted double-digit gains for the reporting period, with the top three performers returned triple-digit gains. Reflecting the robust returns of consumer stocks, the best contributor was diversified retailer Cencosud SA, followed by airline operator LAN Airlines SA and retailer S.A.C.I. Falabella SA. Banco Santander Chile SA, iron and steel firm CAP SA and forest products and paper company Empresas CMPC SA also had strong returns. Electric power producer Empresa Nacional de Electricidad SA and specialty minerals and chemicals producer Sociedad Quimica y Minera de Chile SA were the only stocks of the top ten holdings to return less than 30% for the reporting period.

12 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
8.57%	8.47%	9.62%	1.71%	1.71%	2.70%	4.21%	4.21%	6.69%

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 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 calculated 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 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Financial		29.30	%
Consumer Non-Cyclical		27.79
Communications		15.26
Basic Materials		11.83
Industrial		5.23
Energy		3.93
Diversified		3.69
Technology		2.05
Consumer Cyclical		0.81
Short-Term and Other Net Assets		0.11
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Teva Pharmaceutical Industries Ltd.		23.10	%
Israel Chemicals Ltd.		9.21
Bank Leumi le-Israel		7.92
Bank Hapoalim Ltd.		5.88
Bezeq The Israel Telecommunication Corp. Ltd.		4.80
NICE Systems Ltd.		3.15
Partner Communications Co. Ltd.		2.90
Israel Corp. Ltd. (The)		2.78
Cellcom Israel Ltd.		2.31
Elbit Systems Ltd.		2.28
TOTAL		64.33	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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, 2010 (the “reporting period”), the total return for the Fund was 8.57%, while the total return for the Index was 9.62%.

As represented by the Index, the Israel stock market gained ground for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries – led by the U.S., Israel’s largest trading partner – returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for exports – which comprise almost half of Israel’s GDP – provided a lift to the country’s economy. For the 12 months ended June 30, 2010, Israel’s GDP grew by 4.8%, compared with a growth rate of just 0.1% for the prior 12-month period. Better economic conditions led Israel’s central bank to raise short-term interest rates from 0.5% to 1.75% during the reporting period.

The improving global economic environment provided a boost to Israel’s stock market – the Index rallied by more than 25% during the first seven months of the reporting period. However, after peaking in April 2010, the Index retraced most of its gains over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries, particularly in the U.S., led to concerns that Israel’s exports would weaken.

14 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

All sectors of the Fund had positive performance for the reporting period where financials and basic materials contributed the most.

Six of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The top performer was energy and chemicals conglomerate, The Israel Corp. Ltd., which posted double-digit gain for the reporting period. Two commercial banks, Bank Hapoalim Ltd. and Bank Leumi le-Israel, were also among the better performers. The most significant decliner among the Fund’s top ten holdings was aerospace and defense company Elbit Systems Ltd., which recorded a double-digit decline for the reporting period.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.83%	14.96%	14.16%	12.52%	12.33%	11.86%	13.00%	13.00%	13.22%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.83%	14.96%	14.16%	80.40%	78.84%	75.17%	239.51%	239.32%	246.27%

“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.

16 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Communications		34.41	%
Consumer Cyclical		15.93
Basic Materials		13.79
Consumer Non-Cyclical		13.57
Industrial		9.06
Financial		8.37
Diversified		4.78
Short-Term and Other Net Assets		0.09
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
America Movil SAB de CV Series L		24.25	%
Wal-Mart de Mexico SAB de CV Series V		10.29
Grupo Mexico SAB de CV Series B		6.33
Fomento Economico Mexicano SAB de CV BD Units		6.18
Grupo Televisa SA CPO		4.76
Cemex SAB de CV CPO		4.76
Grupo Financiero Banorte SAB de CV Series O		3.70
Telefonos de Mexico SAB de CV Series L		3.50
Kimberly-Clark de Mexico SAB de CV Series A		3.20
Grupo Modelo SAB de CV Series C		3.15
TOTAL		70.12	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 Mexican market, as measured by the MSCI Mexico Investable Market IndexSM (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, 2010 (the “reporting period”), the total return for the Fund was 14.83%, while the total return for the Index was 14.16%.

As represented by the Index, the Mexican stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. In particular, the United States – Mexico’s largest trading partner, where more than 80% of the country’s exports are distributed – was one of the first developed nations to return to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. Furthermore, rising global demand for oil, Mexico’s largest export, provided an additional lift to the country’s economy. For the 12 months ended June 30, 2010, Mexican GDP grew by 7.6%, compared with a 10.3% contraction for the previous 12-month period. Domestic demand, however, remained tepid amid sluggish consumer spending and weak tourism.

The improving global economic environment provided a boost to Mexico’s stock market – the Index rallied by more than 30% during the first seven months of the reporting period. However, after peaking in mid-April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries – especially in the U.S. – led to concerns that Mexican exports would weaken.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

Every sector within the Fund advanced for the reporting period. By far, the best performing sector was consumer holdings followed by communications.

Eight of the Fund’s ten largest holdings as of August 31, 2010 gained ground for the reporting period. The best performer was metals and mining company Grupo Mexico SAB de CV, which recorded strong double-digit gains for the reporting period. Other top contributors included brewery Grupo Modelo SAB de CV and paper products maker Kimberly-Clark de Mexico SAB de CV. The only two stocks among the Fund’s top ten holdings to decline for the reporting period were cement producer Cemex SAB de CV and telecom services provider Telefonos de Mexico SAB de CV. Wireless telecom services firm America Movil SAB de CV, the Fund’s largest holding as of August 31, 2010, posted a modest gain for the reporting period.

18 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
15.80%	14.66%	16.53%	10.69%	10.13%	11.87%	18.89%	18.80%	20.22%
			Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
15.80%	14.66%	16.53%	66.16%	62.02%	75.22%	270.90%	268.71%	303.37%

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 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 calculated 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 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Basic Materials		25.52	%
Financial		23.69
Communications		19.96
Energy		9.31
Consumer Cyclical		6.50
Consumer Non-Cyclical		5.89
Diversified		5.82
Industrial		3.09
Short-Term and Other Net Assets		0.22
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
MTN Group Ltd.		11.51	%
Sasol Ltd.		9.31
Standard Bank Group Ltd.		7.15
Naspers Ltd. Class N		6.62
AngloGold Ashanti Ltd.		6.61
Impala Platinum Holdings Ltd.		5.07
Gold Fields Ltd.		4.31
FirstRand Ltd.		3.15
Sanlam Ltd.		2.54
Remgro Ltd.		2.49
TOTAL		58.76	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 South African market, as measured by the MSCI South Africa IndexSM (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, 2010 (the “reporting period”), the total return for the Fund was 15.80%, while the total return for the Index was 16.53%.

As represented by the Index, the South African stock market posted a double-digit gain for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. As a result, rising global demand for commodities – a major component of South Africa’s exports – provided a lift to the country’s economy. For the 12 months ended June 30, 2010, South Africa’s GDP grew by 3.0%, compared with a contraction of 2.7% for the prior 12-month period (the country’s first recession since 1992). Despite the improvement in South Africa’s GDP growth rate, inflation decelerated – South Africa’s inflation rate for the 12 months ended June 30, 2010, was 4.2%, down from 6.9% for the previous 12 months.

Healthy economic growth provided a strong boost to South Africa’s stock market – the Index rallied by more than 20% during the first seven months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that South African exports would weaken. In response, the South African central bank lowered interest rates from 7% to 6.5% to help stimulate additional economic activity.

20 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

All sectors within the Fund returned positive performance for the reporting period, led by financial, consumer and basic materials.

Each of the Fund’s ten largest holdings as of August 31, 2010 advanced for the reporting period. The best performers were financial services firms FirstRand Ltd., which posted double-digit gains for the reporting period, and Sanlam Ltd. Other top contributors included electronic media company Naspers Ltd. and industrial conglomerate Remgro Ltd. Laggards among the Fund’s top ten holdings included wireless telecommunications company MTN Group Ltd. along with energy producer Sasol Ltd. and metals and mining company Impala Platinum Holdings Ltd.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 21

Management’s Discussion of Fund Performance

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
29.55%	28.05%	29.99%	10.49%	10.28%	10.79%	27.51%	26.92%	28.27%

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 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 calculated 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.

22 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Financial		48.10	%
Communications		11.03
Consumer Non-Cyclical		10.56
Diversified		9.76
Consumer Cyclical		6.16
Industrial		5.02
Basic Materials		4.56
Energy		4.10
Utilities		0.63
Short-Term and Other Net Assets		0.08
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Turkiye Garanti Bankasi AS		14.87	%
Akbank TAS		9.30
Turkiye Is Bankasi AS		8.44
Turkcell Iletisim Hizmetleri AS		7.11
Turkiye Petrol Rafinerileri AS		4.10
Haci Omer Sabanci Holding AS		4.05
Anadolu Efes Biracilik ve Malt Sanayii AS		3.97
Yapi ve Kredi Bankasi AS		3.79
Turkiye Halk Bankasi AS		3.71
KOC Holding AS		3.44
TOTAL		62.78	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

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 IndexSM (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, 2010 (the “reporting period”), the total return for the Fund was 29.55%, while the total return for the Index was 29.99%.

As represented by the Index, the Turkish stock market advanced for the reporting period. Much of the Index’s advance occurred during the first half of the period as investors grew increasingly confident about a robust global economic recovery after the sharp downturn in late 2008 and early 2009. Many developed countries around the world returned to positive GDP growth in the latter half of 2009 after several quarters of economic contraction. In particular, evidence of a recovery in Europe – where half of Turkey’s exports are distributed – provided a lift to the country’s economy. Furthermore, the Turkish central bank slashed interest rates from 16.75% in late 2008 to 6.50% by the beginning of 2010 to help stimulate domestic economic activity. As a result, Turkey’s GDP grew by 10.3% for the 12 months ended June 30, 2010, a dramatic improvement over a contraction of 7% for the prior 12-month period.

The improving economic environment provided a strong boost to Turkey’s stock market – the Index rallied by as much as 35% during the first eight months of the reporting period. However, after peaking in April 2010, the Index gave back some ground over the last few months of the period as market conditions grew increasingly volatile. A sovereign debt crisis in Greece spread to other European countries facing sizable budget shortfalls, and with memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled riskier markets. In addition, evidence of a slowdown in the pace of economic recovery in many developed countries led to concerns that Turkish exports would weaken.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

Each sector within the Fund advanced for the reporting period, led by financial stocks, which represented almost 48% of the Fund and made the most substantial contribution to performance.

Each of the Fund’s ten largest holdings advanced for the reporting period. The top performers included oil producer Turkiye Petrol Rafinerileri AS, along with commercial bank Turkiye Halk Bankasi AS and industrial conglomerate KOC Holding AS. Each of these stocks posted double-digit gain for the reporting period. Wireless telecommunication services provider Turkcell Iletisim Hizmitleri AS was the only stock among the Fund’s top ten holdings to post a single-digit gain.

24 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI USA INDEX FUND

Performance as of August 31, 2010

Cumulative Total Returns
Inception to 8/31/10
NAV	MARKET	INDEX
(9.37)%	(9.41)%	(9.36)%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and is calculated from an inception date of 5/5/10.

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 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 (5/7/10), the NAV of the Fund is used as a proxy for the Market Price to calculated 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) 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.

As of the fiscal year ended 8/31/10, the Fund did not have six months of performance and therefore line graphs are not presented.

PORTFOLIO ALLOCATION As of 8/31/10
Sector*	Percentage of Net Assets
Consumer Non-cyclical		22.88	%
Financial		15.11
Technology		12.46
Communications		11.60
Energy		11.25
Industrial		10.75
Consumer Cyclical		8.40
Utilities		3.69
Basic Materials		3.48
Diversified		0.04
Short-term And Other Net Assets		0.34
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Exxon Mobil Corp.		3.03	%
Apple Inc.		2.21
Microsoft Corp.		1.87
Procter & Gamble Co. (The)		1.74
AT&T Inc.		1.61
International Business Machines Corp.		1.59
Johnson & Johnson		1.59
General Electric Co.		1.56
Chevron Corp.		1.50
JPMorgan Chase & Co.		1.46
TOTAL		18.16	%

* Sector classifications used to describe the Fund’s portfolio may differ from sector classifications used to describe the Fund’s corresponding index elsewhere in this report.

The iShares MSCI USA 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 USA IndexSM (the “Index”). The Index is a market capitalization weighted index designed to measure the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from May 5, 2010 (inception date of the Fund) through August 31, 2010 (the “reporting period”), the total return for the Fund was (9.37)%, while the total return for the Index was (9.36)%.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 25

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI USA INDEX FUND

As represented by the Index, the U.S. stock market declined for the reporting period in an increasingly volatile market environment. One contributing factor was a sovereign debt crisis in Greece, which spread to other European countries facing sizable budget shortfalls. With memories of the 2008 credit crisis still fresh, these fiscal problems led to a significant flight to quality as investors fled stocks for the relative safety of bonds. Although the European Central Bank provided liquidity to Greece and other fiscally challenged countries, investors remained concerned about the risk of default, as well as the potential impact that could have on the European financial sector.

In addition, evidence of a slowdown in the pace of economic recovery put downward pressure on the U.S. equity market. Persistently high unemployment, sluggish retail sales, and fresh deterioration in the housing market all contributed to concerns about the sustainability of the U.S. economic expansion. These concerns, in turn, sparked renewed speculation about additional fiscal stimulus from Congress or the Federal Reserve. As a result, the Index generally declined throughout the reporting period, though it enjoyed a modest rebound in July before resuming its downward trajectory in August.

Communications and utilities were the only two sectors that contributed positively to Fund performance for the reporting period while financial and technology holdings were hardest hit.

Nine of the Fund’s ten largest holdings as of August 31, 2010 declined for the reporting period. The biggest decliners included software maker Microsoft Corp. and industrial conglomerate General Electric Co., both of which recorded a double-digit decline for the reporting period. Investment bank JPMorgan Chase & Co. and healthcare company Johnson & Johnson also posted double-digit declines overall. Energy producer Exxon Mobil Corp., the Fund’s largest holding as of August 31, 2010 was another notable decliner. The lone stock among the top ten holdings to advance for the reporting period was diversified telecommunication services company AT&T Inc.

26 2010 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, 2010 to August 31, 2010.

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  Valuea (3/1/10)		Ending Account Valuea (8/31/10)		Annualized Expense Ratio			Expenses Paid During Periodb (3/1/10 to 8/31/10)
Brazil
Actual		$1,000.00		$996.50		0.61	%		$3.07
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11
BRIC
Actual		1,000.00		1,010.30		0.69			3.50
Hypothetical (5% return before expenses)		1,000.00		1,021.70		0.69			3.52
Canada
Actual		1,000.00		1,017.00		0.53			2.69
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Chile Investable Market
Actual		1,000.00		1,206.70		0.61			3.39
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11

SHAREHOLDER EXPENSES 27

Shareholder Expenses (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI Index Fund	Beginning Account  Valuea (3/1/10)		Ending Account  Valuea (8/31/10)		Annualized Expense Ratio			Expenses Paid During Periodb (3/1/10 to 8/31/10)
Israel Capped Investable Market
Actual		$1,000.00		$916.10		0.61	%		$2.95
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11
Mexico Investable Market
Actual		1,000.00		992.30		0.53			2.66
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
South Africa
Actual		1,000.00		1,092.90		0.61			3.22
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11
Turkey Investable Market
Actual		1,000.00		1,242.70		0.61			3.45
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11
USA
Actual		1,000.00		906.30		0.15			0.46
Hypothetical (5% return before expenses)		1,000.00		1,024.40		0.15			0.77

^a Account values are based on a start date of May 5, 2010 (commencement of operations) for the iShares MSCI USA Index Fund.

^b Except for the actual expenses of the iShares MSCI USA Index Fund, actual and hypothetical 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). Actual expenses for the iShares MSCI USA Index Fund, which commenced operations on May 5, 2010, are calculated using the Fund’s annualized expenses ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (118 days) and divided by the number of days in the year (365 days).

28 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 44.72%
AEROSPACE & DEFENSE – 0.60%
Empresa Brasileira de Aeronautica SA		8,959,532	$	55,104,183
				55,104,183
AGRICULTURE – 0.81%
Souza Cruz SA		1,629,000		75,095,416
				75,095,416
BANKS – 3.43%
Banco do Brasil SA		10,588,597		171,733,054
Banco Santander (Brasil) SA		11,403,041		144,810,828
				316,543,882
BUILDING MATERIALS – 0.42%
Duratex SA		3,801,000		38,529,499
				38,529,499
COMMERCIAL SERVICES – 2.19%
Cielo SA		11,131,500		95,086,845
Companhia de Concessoes Rodoviarias		3,529,500		81,001,623
Localiza Rent A Car SA		1,900,500		26,516,088
				202,604,556
COSMETICS & PERSONAL CARE – 0.85%
Natura Cosmeticos SA		3,258,000		78,481,435
				78,481,435
DIVERSIFIED FINANCIAL SERVICES – 3.69%
BM&F Bovespa SA		35,566,500		259,254,670
Redecard SA		5,973,000		81,635,535
				340,890,205
ELECTRIC – 1.57%
Centrais Eletricas Brasileiras SA		4,072,599		49,562,324
CPFL Energia SA		1,900,550		43,887,986
EDP Energias do Brasil SA		1,086,000		23,185,729
Tractebel Energia SA		2,172,000		28,733,235
				145,369,274
ENGINEERING & CONSTRUCTION – 0.22%
Multiplan Empreendimentos Imobiliarios SA		1,086,000		20,594,419
				20,594,419
FOOD – 2.73%
BRF – Brasil Foods SA		11,674,550		156,569,278

Security	Shares		Value
Cosan SA Industria e Comercio		2,172,090	$	28,313,861
JBS SA		9,119,722		38,691,304
Marfrig Alimentos SA		2,986,500		28,912,585
				252,487,028
FOREST PRODUCTS & PAPER – 0.50%
Fibria Celulose SAa		2,986,526		46,022,434
				46,022,434
HOME BUILDERS – 0.68%
Brookfield Incorporacoes SA		3,801,000		19,611,082
MRV Engenharia e Participacoes SA		5,158,547		43,036,853
				62,647,935
INSURANCE – 0.37%
Porto Seguro SA		2,172,000		26,469,704
SulAmerica SA		814,500		7,954,826
				34,424,530
INTERNET – 0.19%
B2W Companhia Global do Varejo		1,086,030		17,317,107
				17,317,107
IRON & STEEL – 2.86%
Companhia Siderurgica Nacional SA		13,575,054		207,954,984
MMX Mineracao e Metalicos SAa		1,900,500		13,582,731
Usinas Siderurgicas de Minas Gerais SA		1,629,000		42,802,995
				264,340,710
MINING – 6.78%
Vale SA SP ADR		23,428,454		626,711,145
				626,711,145
OIL & GAS – 10.57%
OGX Petroleo e Gas Participacoes SAa		23,620,500		280,863,348
Petroleo Brasileiro SA		41,268,044		695,399,443
				976,262,791
PHARMACEUTICALS – 0.70%
Hypermarcas SAa		4,887,000		64,371,475
				64,371,475

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2010

Security	Shares		Value
REAL ESTATE – 3.01%
BR Malls Participacoes SA		2,443,500	$	38,266,657
Cyrela Brazil Realty SA		5,430,000		67,503,929
Gafisa SA		6,787,500		46,770,359
PDG Realty SA Empreendimentos e Participacoes		9,502,500		97,622,494
Rossi Residencial SA		3,258,000		28,127,153
				278,290,592
RETAIL – 0.76%
Lojas Renner SA		2,172,000		70,132,346
				70,132,346
TELECOMMUNICATIONS – 0.25%
Tele Norte Leste Participacoes SA		1,357,538		23,540,451
				23,540,451
TRANSPORTATION – 1.04%
ALL – America Latina Logistica SA		7,602,000		70,089,055
LLX Logistica SAa		5,158,500		26,145,017
				96,234,072
WATER – 0.50%
Companhia de Saneamento Basico do Estado de Sao Paulo		2,443,500		46,490,510
				46,490,510
TOTAL COMMON STOCKS
(Cost: $2,554,704,765)				4,132,485,995
PREFERRED STOCKS – 54.24%
AIRLINES – 0.55%
GOL Linhas Aereas Inteligentes SA		1,900,500		24,567,967
TAM SA		1,357,500		26,485,165
				51,053,132
BANKS – 14.41%
Banco Bradesco SA		25,521,044		442,694,191
Banco do Estado do Rio Grande do Sul SA		4,344,010		38,294,576
Itau Unibanco Holding SA		39,500,549		850,746,448
				1,331,735,215

Security	Shares		Value
BEVERAGES – 3.26%
Companhia de Bebidas das Americas		2,713,180	$	298,959,680
Companhia de Bebidas das Americas Newa		25,274		2,669,890
				301,629,570
CHEMICALS – 1.32%
Braskem SA Class A		2,715,036		23,934,372
Fertilizantes Fosfatados SAa		2,443,580		23,559,117
Ultrapar Participacoes SA		1,357,500		74,600,655
				122,094,144
ELECTRIC – 3.54%
AES Tiete SA		1,956,000		23,748,246
Centrais Eletricas Brasileiras SA Class B		3,529,500		50,972,734
Companhia de Transmissao de Energia Eletrica Paulista		824,776		23,390,572
Companhia Energetica de Minas Gerais		6,877,235		109,659,784
Companhia Energetica de Sao Paulo Class B		3,258,070		47,368,182
Companhia Paranaense de Energia Class B		1,900,500		41,614,023
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B		1,629,020		30,613,702
				327,367,243
FOOD – 0.62%
Companhia Brasileira de Distribuicao Grupo Pao de Acucar		1,629,028		57,424,165
				57,424,165
FOREST PRODUCTS & PAPER – 0.66%
Klabin SA		11,131,500		31,061,703
Suzano Bahia Sul Papel e Celulose SA		3,258,207		29,613,316
				60,675,019
HOLDING COMPANIES – DIVERSIFIED – 4.30%
Bradespar SA		4,344,000		90,541,230
Itausa – Investimentos Itau SA		43,737,384		306,360,947
				396,902,177

30 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRAZIL INDEX FUND

August 31, 2010

Security	Shares		Value
IRON & STEEL – 3.75%
Gerdau SA		11,946,046	$	158,917,787
Metalurgica Gerdau SA		4,887,090		78,399,388
Usinas Siderurgicas de Minas Gerais SA Class A		4,344,000		108,921,595
				346,238,770
MEDIA – 0.45%
Net Servicos de Comunicacao SAa		3,258,082		41,338,307
				41,338,307
MINING – 9.29%
Vale SA Class A		36,381,000		858,351,270
				858,351,270
OIL & GAS – 9.11%
Petroleo Brasileiro SA		56,743,550		842,105,304
				842,105,304
RETAIL – 0.55%
Lojas Americanas SA		5,973,000		50,307,899
				50,307,899
TELECOMMUNICATIONS – 2.43%
Brasil Telecom SAa		6,787,515		42,943,788
Tele Norte Leste Participacoes SA		4,887,039		66,514,938
Telemar Norte Leste SA Class A		543,000		13,763,627
TIM Participacoes SA		10,588,519		29,908,345
Vivo Participacoes SA		2,986,580		71,773,164
				224,903,862
TOTAL PREFERRED STOCKS
(Cost: $2,761,432,332)				5,012,126,077
RIGHTS – 0.00%
FOOD – 0.00%
Marfrig Alimentos SAa		2,154		797
				797
TOTAL RIGHTS
(Cost: $0)				797

Security	Shares		Value
SHORT-TERM INVESTMENTS – 0.00%
MONEY MARKET FUNDS – 0.00%
BlackRock Cash Funds: Treasury, SL Agency Shares 0.13%b,c		1,000	$	1,000
				1,000
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,000)				1,000
TOTAL INVESTMENTS IN SECURITIES – 98.96%
(Cost: $5,316,138,097)				9,144,613,869
Other Assets, Less Liabilities – 1.04%				95,838,647
NET ASSETS – 100.00%			$	9,240,452,516

SP ADR – Sponsored American Depositary Receipts

^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 31

Schedule of Investments

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 80.62%
BRAZIL – 14.24%
ALL – America Latina
Logistica SA		308,700	$	2,846,158
B2W Companhia Global
do Varejo		44,100		703,189
Banco do Brasil SA		314,989		5,108,705
Banco Santander (Brasil) SA		308,737		3,920,749
BM&F Bovespa SA		1,015,369		7,401,323
BR Malls Participacoes SA		88,200		1,381,264
BRF – Brasil Foods SA		308,700		4,140,026
Centrais Eletricas Brasileiras SA		176,400		2,146,736
Cielo SA		338,200		2,888,952
Companhia de Concessoes Rodoviarias		132,300		3,036,270
Companhia Siderurgica Nacional SA		529,200		8,106,765
Cosan SA Industria e Comercio		88,200		1,149,714
CPFL Energia SA		88,200		2,036,737
Cyrela Brazil Realty SA		176,400		2,192,945
Duratex SA		176,400		1,788,109
Empresa Brasileira de Aeronautica SA		352,800		2,169,841
Fibria Celulose SAa		143,441		2,210,429
Gafisa SA		176,400		1,215,513
Hypermarcas SAa		132,300		1,742,653
JBS SA		264,652		1,122,812
LLX Logistica SAa		176,400		894,055
Lojas Renner SA		44,100		1,423,958
Marfrig Alimentos SA		132,300		1,280,809
MMX Mineracao e
Metalicos SAa		88,200		630,359
MRV Engenharia e Participacoes SA		220,500		1,839,593
Multiplan Empreendimentos Imobiliarios SA		44,100		836,293
OGX Petroleo e Gas Participacoes SAa		705,600		8,390,050
PDG Realty SA Empreendimentos e Participacoes		220,500		2,265,273
Petroleo Brasileiro SA		1,455,300		24,522,965
Redecard SA		220,500		3,013,667
Rossi Residencial SA		132,300		1,142,180
Souza Cruz SA		88,200		4,065,940
Tele Norte Leste
Participacoes SA		44,100		764,718

Security	Shares		Value
Tractebel Energia SA		132,300	$	1,750,187
Usinas Siderurgicas de Minas Gerais SA		88,200		2,317,510
Vale SA		837,900		22,369,449
				134,815,896
CHINA – 38.63%
Agile Property Holdings Ltd.b		1,764,000		2,061,421
Agricultural Bank of China Ltd. Class Ha		5,292,000		2,394,786
Air China Ltd. Class Ha		1,764,000		1,882,265
Alibaba.com Ltd.b		882,000		1,721,252
Aluminum Corp. of China Ltd. Class Ha,b		2,646,000		2,102,241
Angang New Steel Co. Ltd. Class Hb		882,000		1,247,284
Anhui Conch Cement Co. Ltd. Class H		76,000		270,155
Anta Sports Products Ltd.		441,040		903,796
Bank of China Ltd. Class H		35,721,000		17,955,790
Bank of Communications Co.
Ltd. Class H		3,969,000		4,209,584
BBMG Corp. Class H		1,102,500		1,417,368
Beijing Capital International Airport Co. Ltd. Class H		882,000		426,344
Belle International Holdings Ltd.		3,087,000		5,389,402
BYD Co. Ltd. Class Hb		441,000		2,539,924
Chaoda Modern Agriculture (Holdings) Ltd.		1,086,556		810,185
China Agri-Industries Holdings Ltd.b		1,764,000		2,145,329
China CITIC Bank Class H		3,528,000		2,290,467
China Coal Energy Co. Class H		2,646,000		3,728,246
China Communications Construction Co. Ltd. Class H		3,087,000		2,730,419
China Construction Bank Corp. Class H		25,137,000		20,746,871
China COSCO Holdings Co.
Ltd. Class Ha,b		1,764,000		1,834,642
China Dongxiang (Group) Co. Ltd.		2,646,000		1,394,691
China Everbright Ltd.b		882,000		1,945,763
China High Speed Transmission Equipment Group Co. Ltd.		882,000		1,966,173

32 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2010

Security	Shares		Value
China Life Insurance Co. Ltd.
Class H		4,851,000	$	18,522,170
China Longyuan Power Group
Corp. Ltd. Class Ha,b		882,000		890,107
China Mengniu Dairy Co. Ltd.		882,000		2,437,874
China Merchants Bank Co. Ltd.
Class H		2,425,797		6,252,778
China Merchants Holdings
(International) Co. Ltd.		882,000		2,976,474
China Minsheng Banking Corp.
Ltd. Class H		1,850,000		1,681,494
China Mobile Ltd.		3,748,500		38,142,802
China National Building
Material Co. Ltd. Class Hb		882,000		1,612,398
China Oilfield Services Ltd.
Class H		1,764,000		2,256,451
China Overseas Land &
Investment Ltd.		2,646,800		5,648,503
China Pacific Insurance (Group)
Co. Ltd. Class H		176,400		633,847
China Petroleum & Chemical
Corp. Class H		10,584,000		8,381,750
China Railway Construction
Corp. Ltd. Class H		1,764,000		2,249,647
China Railway Group Ltd. Class H		2,646,000		1,925,353
China Resources Enterprise Ltd.b		882,000		3,673,819
China Resources Land Ltd.b		1,764,000		3,374,471
China Resources Power
Holdings Co. Ltd.		916,200		2,021,211
China Shenhua Energy Co. Ltd.
Class H		1,984,500		7,232,831
China Shipping Container Lines
Co. Ltd. Class Ha,b		2,646,000		911,651
China Shipping Development
Co. Ltd. Class Hb		882,000		1,167,912
China Taiping Insurance
Holdings Co. Ltd.a		441,000		1,369,178
China Telecom Corp. Ltd. Class H		7,938,000		3,837,100
China Unicom (Hong Kong) Ltd.		3,555,900		4,900,591
China Yurun Food Group Ltd.		882,000		3,203,252
China Zhongwang Holdings Ltd.b		830,800		491,313
CITIC Pacific Ltd.		882,000		1,802,893
CNOOC Ltd.		10,584,000		18,287,454

Security	Shares		Value
CNPC (Hong Kong) Ltd.		2,646,000	$	3,275,822
COSCO Pacific Ltd.		882,000		1,161,108
Country Garden Holdings Co. Ltd.		1,323,000		396,296
CSR Corp Ltd.		1,323,000		1,114,052
Datang International Power
Generation Co. Ltd. Class H		1,764,000		698,479
Dongfeng Motor Group Co.
Ltd. Class H		1,764,000		2,739,490
Fosun International Ltd.		2,425,500		1,852,217
Franshion Properties (China) Ltd.b		2,646,000		761,977
Fushan International Energy
Group Ltd.		2,646,000		1,384,485
Geely Automobile Holdings Ltd.b		4,410,000		1,445,716
GOME Electrical Appliances
Holdings Ltd.a		5,292,400		1,605,716
Greentown China Holdings Ltd.		441,000		472,834
Guangdong Investment Ltd.		2,646,000		1,289,238
Guangzhou Automobile Group
Co. Ltd. Class Ha		2,090,454		2,450,979
Guangzhou R&F Properties
Co. Ltd. Class H		705,600		1,023,226
Hengan International Group
Co. Ltd.		882,000		7,818,204
Hidili Industry International
Development Ltd.		882,000		722,291
Hopson Development
Holdings Ltd.b		882,000		1,029,576
Huabao International
Holdings Ltd.		441,000		644,052
Huaneng Power International
Inc. Class H		2,646,000		1,588,586
Industrial and Commercial Bank
of China Ltd. Class H		29,547,000		21,461,792
Jiangsu Expressway Co. Ltd.
Class H		1,764,000		1,721,252
Jiangxi Copper Co. Ltd. Class Hb		1,323,000		2,871,022
Kingboard Chemical Holdings
Co. Ltd.		220,500		1,041,766
Lee & Man Paper
Manufacturing Ltd.		441,000		306,152
Lenovo Group Ltd.		2,646,000		1,517,151
Li Ning Co. Ltd.		882,000		2,840,406
Longfor Properties Co. Ltd.		1,543,500		1,726,355

SCHEDULES OF INVESTMENTS 33

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2010

Security	Shares		Value
Maanshan Iron & Steel Co. Ltd. Class H		1,764,000	$	900,312
Metallurgical Corp. of China Ltd. Class Ha		2,646,000		1,149,769
Nine Dragons Paper
(Holdings) Ltd.b		882,000		1,211,000
Parkson Retail Group Ltd.b		661,500		1,098,744
PetroChina Co. Ltd. Class H		13,230,000		14,355,107
PICC Property and Casualty
Co. Ltd. Class Ha,b		1,764,000		2,018,333
Ping An Insurance (Group) Co. of China Ltd. Class Hc		1,075,000		8,893,263
Poly (Hong Kong)
Investments Ltd.		1,331,984		1,421,285
Renhe Commercial Holdings
Co. Ltd.		2,646,000		523,859
Semiconductor Manufacturing
International Corp.a		3,528,000		224,511
Shanghai Electric Group Co. Ltd. Class Ha		2,646,000		1,173,581
Shanghai Industrial Holdings Ltd.b		441,000		2,148,730
Shimao Property Holdings Ltd.		1,323,000		2,146,463
Shui On Land Ltd.		3,087,000		1,357,272
Sinofert Holdings Ltd.a		1,764,000		918,455
Sino-Ocean Land Holdings Ltd.		2,866,500		2,008,411
Sinopharm Group Co. Ltd. Class H		176,400		672,400
Soho China Ltd.		2,646,000		1,694,039
Tencent Holdings Ltd.		529,200		9,681,193
Tingyi (Cayman Islands)
Holding Corp.		1,764,000		4,458,474
Want Want China Holdings Ltd.		2,205,000		1,783,049
Weichai Power Co. Ltd. Class H		441,000		3,668,149
Yanzhou Coal Mining Co. Ltd. Class H		882,000		1,809,696
Zhejiang Expressway Co. Ltd. Class H		1,764,000		1,567,042
Zijin Mining Group Co. Ltd. Class H		2,254,000		1,558,979
ZTE Corp. Class H		88,200		327,696
				365,729,774

Security	Shares		Value
INDIA – 14.54%
Dr. Reddy’s Laboratories Ltd.
SP ADRb		438,795	$	12,641,684
HDFC Bank Ltd. SP ADRb		160,965		25,722,207
ICICI Bank Ltd. SP ADR		535,815		22,134,518
Infosys Technologies Ltd. SP ADR		498,330		28,549,326
Mahanagar Telephone Nigam
Ltd. SP ADRb		285,241		750,184
Reliance Industries Ltd. SP GDRb,d		699,426		27,340,562
Satyam Computer Services
Ltd. SP ADRa		933,597		4,219,858
Tata Communications Ltd.
SP ADRa		164,566		2,320,381
Wipro Ltd. SP ADR		1,091,463		14,003,470
				137,682,190
RUSSIA – 13.21%
Cherepovets MK Severstal
SP GDRa,e		238,581		2,872,515
JSC MMC Norilsk Nickel SP ADR		589,111		9,985,431
LUKOIL SP ADR		331,191		17,652,480
Magnit OJSC SP GDRe		148,176		3,156,149
Mechel OAO SP ADRb		120,834		2,748,974
Mobile TeleSystems SP ADR		330,750		6,899,445
Novolipetsk Steel SP GDRe		78,498		2,284,292
OAO Gazprom SP ADR		1,621,071		33,556,170
OAO NovaTek SP GDRe		65,268		4,790,671
OAO Tatneft SP ADRe		162,323		4,850,211
OAO TMK SP GDRa,e		61,299		955,038
OJSC Comstar United
Telesystems SP GDRa		185,220		1,198,373
OJSC Rosneft Oil Co. SP GDRa,e		925,218		5,865,882
Polyus Gold SP ADR		54,684		1,342,492
Sberbank GDRe		50,274		14,376,542
Sistema JSFC SP GDRe		83,349		2,146,237
Surgutneftegaz SP ADR		480,690		4,518,486
Uralkali SP GDRe		106,281		2,460,405
VTB Bank OJSC SP GDRe		436,149		2,250,529
Wimm-Bill-Dann Foods OJSC
SP ADR		67,032		1,228,697
				125,139,019
TOTAL COMMON STOCKS
(Cost: $732,423,298)				763,366,879

34 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2010

Security	Shares		Value
PREFERRED STOCKS – 18.89%
BRAZIL – 18.89%
AES Tiete SA		44,100	$	535,428
Banco Bradesco SA		1,212,376		21,030,167
Banco do Estado do Rio Grande do Sul SA		44,100		388,763
Bradespar SA		176,400		3,676,674
Brasil Telecom SAa		163,098		1,031,902
Braskem SA Class A		132,300		1,166,289
Centrais Eletricas Brasileiras SA Class B		132,300		1,910,665
Companhia de Bebidas das Americas		89,295		9,839,231
Companhia de Bebidas das Americas Newa		968		102,257
Companhia de Transmissao de Energia Eletrica Paulista		44,271		1,255,521
Companhia Energetica de Minas Gerais		242,193		3,861,847
Companhia Energetica de Sao Paulo Class B		132,300		1,923,473
Companhia Paranaense de Energia Class B		88,200		1,931,259
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B		44,100		828,759
Fertilizantes Fosfatados SAa		88,220		850,549
Gerdau SA		485,100		6,453,266
GOL Linhas Aereas Inteligentes SA		44,100		570,085
Itau Unibanco Holding SA		1,323,067		28,495,669
Itausa – Investimentos Itau SA		1,608,817		11,269,048
Klabin SA		352,800		984,465
Lojas Americanas SA		264,600		2,228,607
Metalurgica Gerdau SA		183,200		2,938,920
Net Servicos de Comunicacao SAa		132,640		1,682,927
Petroleo Brasileiro SA		2,028,600		30,105,533
Suzano Bahia Sul Papel e Celulose SA		44,100		400,818
TAM SA		44,100		860,402
Tele Norte Leste Participacoes SA		176,400		2,400,888

Security	Shares		Value
Telemar Norte Leste SA Class A		44,100	$	1,117,820
TIM Participacoes SA		397,057		1,121,528
Usinas Siderurgicas de Minas Gerais SA Class A		178,550		4,476,969
Vale SA Class A		1,323,000		31,214,060
Vivo Participacoes SA		90,519		2,175,343
				178,829,132
TOTAL PREFERRED STOCKS
(Cost: $168,558,465)				178,829,132
RIGHTS – 0.00%
BRAZIL – 0.00%
Marfrig Alimentos SAa		93		35
				35
TOTAL RIGHTS
(Cost: $0)				35
WARRANTS – 0.00%
CHINA – 0.00%
Kingboard Chemical Holdings Ltd. (Expires 10/31/12)a		20,200		8,881
				8,881
TOTAL WARRANTS
(Cost: $0)				8,881
SHORT-TERM INVESTMENTS – 5.80%
MONEY MARKET FUNDS – 5.80%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%f,g,h		45,558,546		45,558,546
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%f,g,h		8,852,957		8,852,957
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%f,g		494,565		494,565
				54,906,068
TOTAL SHORT-TERM INVESTMENTS
(Cost: $54,906,068)				54,906,068

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Continued)

iSHARES^® MSCI BRIC INDEX FUND

August 31, 2010

	Value
TOTAL INVESTMENTS
IN SECURITIES – 105.31%
(Cost: $955,887,831)	$	997,110,995
Other Assets, Less Liabilities – (5.31)%		(50,296,541)
NET ASSETS – 100.00%	$	946,814,454

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 Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1.

^d This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^e This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^f Affiliated issuer. See Note 2.

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

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

See notes to financial statements.

36 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.95%
AEROSPACE & DEFENSE – 0.23%
CAE Inc.		831,195	$	7,833,741
				7,833,741
APPAREL – 0.30%
Gildan Activewear Inc.a		372,709		10,223,415
				10,223,415
AUTO PARTS & EQUIPMENT – 0.78%
Magna International Inc. Class A		345,920		26,937,869
				26,937,869
BANKS – 22.86%
Bank of Montreal		1,818,543		100,447,492
Bank of Nova Scotia		3,329,281		160,009,051
Canadian Imperial Bank of Commerce		1,261,230		85,749,683
National Bank of Canada		526,215		30,388,071
Royal Bank of Canada		4,613,512		220,649,048
Toronto-Dominion Bank (The)		2,822,102		190,945,430
				788,188,775
CHEMICALS – 5.14%
Agrium Inc.		511,158		35,591,955
Potash Corp. of Saskatchewan Inc.		961,402		141,548,379
				177,140,334
COMMERCIAL SERVICES – 0.16%
Ritchie Bros. Auctioneers Inc.b		309,422		5,678,613
				5,678,613
COMPUTERS – 2.33%
CGI Group Inc. Class Aa		817,228		11,296,423
Research In Motion Ltd.a		1,613,649		69,155,305
				80,451,728
DIVERSIFIED FINANCIAL SERVICES – 0.89%
CI Financial Corp.		523,782		9,725,591
IGM Financial Inc.		385,057		14,461,980
TMX Group Inc.		240,673		6,403,051
				30,590,622
ELECTRIC – 0.86%
Fortis Inc.		559,008		15,459,414
TransAlta Corp.		707,368		14,016,679
				29,476,093

Security	Shares		Value
ENGINEERING & CONSTRUCTION – 0.66%
SNC-Lavalin Group Inc.		489,344	$	22,646,529
				22,646,529
FOOD – 1.80%
Empire Co. Ltd. Class A		95,112		4,855,720
George Weston Ltd.		168,259		12,877,214
Loblaw Companies Ltd.		359,782		14,673,343
Metro Inc. Class A		346,379		14,662,679
Saputo Inc.		472,523		15,035,125
				62,104,081
FOREST PRODUCTS & PAPER – 0.39%
Sino-Forest Corp. Class Aa		789,507		13,600,829
				13,600,829
GAS – 0.36%
Canadian Utilities Ltd. Class A		278,668		12,465,385
				12,465,385
HAND & MACHINE TOOLS – 0.31%
Finning International Inc.		553,468		10,692,025
				10,692,025
HOLDING COMPANIES – DIVERSIFIED – 1.67%
Brookfield Asset Management Inc. Class A		1,675,123		43,105,336
Onex Corp.		313,367		8,251,836
Sherritt International Corp.		946,828		6,082,217
				57,439,389
INSURANCE – 6.56%
Fairfax Financial Holdings Ltd.		64,698		25,657,746
Great-West Lifeco Inc.		918,970		21,113,860
Industrial Alliance Insurance and
Financial Services Inc.		271,100		7,652,375
Intact Financial Corp.		374,859		15,601,109
Manulife Financial Corp.		5,709,979		63,560,229
Power Corp. of Canada		1,129,077		27,836,484
Power Financial Corp.		800,595		21,374,726
Sun Life Financial Inc.		1,838,502		43,171,651
				225,968,180
IRON & STEEL – 0.16%
Gerdau Ameristeel Corp.a		486,660		5,335,073
				5,335,073

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2010

Security	Shares		Value
MANUFACTURING – 0.56%
Bombardier Inc. Class B		4,656,032	$	19,386,489
				19,386,489
MEDIA – 3.47%
Rogers Communications Inc. Class B		1,452,876		50,425,227
Shaw Communications Inc. Class B		1,127,052		23,114,950
Thomson Reuters Corp.		1,213,000		42,122,558
Yellow Pages Income Fund		838,835		4,059,069
				119,721,804
MINING – 17.38%
Agnico-Eagle Mines Ltd.		542,146		35,304,186
Barrick Gold Corp.		3,198,043		149,802,830
Cameco Corp.		1,276,991		31,159,850
Eldorado Gold Corp.		1,748,880		34,342,896
First Quantum Minerals Ltd.		260,822		15,037,592
Franco-Nevada Corp.		371,301		11,076,180
Goldcorp Inc.		2,382,691		105,688,830
IAMGOLD Corp.		1,144,269		21,461,415
Inmet Mining Corp.		163,708		7,840,360
Ivanhoe Mines Ltd.a		860,049		15,324,172
Kinross Gold Corp.		2,281,519		38,576,253
Pan American Silver Corp.		330,896		8,226,242
Red Back Mining Inc.a		789,449		23,564,647
Silver Wheaton Corp.a		1,053,743		23,765,667
Teck Resources Ltd. Class B		1,599,934		53,518,681
Yamana Gold Inc.		2,404,409		24,351,871
				599,041,672
OIL & GAS – 20.59%
ARC Energy Trust		444,761		8,262,499
Athabasca Oil Sands Corp.a		629,760		6,136,078
Bonavista Energy Trust		216,316		4,998,383
Canadian Natural Resources Ltd.		3,534,730		113,697,416
Canadian Oil Sands Trust		769,240		18,092,127
Cenovus Energy Inc.		2,441,073		65,676,733
Crescent Point Energy Corp.		723,304		25,470,123
EnCana Corp.		2,400,623		65,849,133
Enerplus Resources Fund		573,873		13,142,007
Ensign Energy Services Inc.		421,286		4,570,994
Husky Energy Inc.		826,219		19,246,289
Imperial Oil Ltd.		963,943		35,543,901

Security	Shares		Value
Nexen Inc.		1,700,797	$	31,500,671
Niko Resources Ltd.		148,695		14,676,371
Pacific Rubiales Energy Corp.a		810,878		19,124,660
Penn West Energy Trust		1,383,058		25,978,948
PetroBakken Energy Ltd. Class A		243,920		4,604,595
Petrobank Energy and Resources Ltd.a		326,330		11,316,813
Progress Energy Resources Corp.		589,941		6,494,966
Provident Energy Trust		866,471		5,427,886
Suncor Energy Inc.		5,068,505		153,573,776
Talisman Energy Inc.		3,307,167		52,010,307
Vermilion Energy Trust		130,311		4,358,975
				709,753,651
PHARMACEUTICALS – 0.31%
Biovail Corp.		464,414		10,622,270
				10,622,270
PIPELINES – 3.99%
Enbridge Inc.		1,166,298		58,022,327
TransCanada Corp.		2,230,754		79,494,211
				137,516,538
REAL ESTATE – 0.40%
Brookfield Properties Corp.		973,318		13,946,921
				13,946,921
REAL ESTATE INVESTMENT TRUSTS – 0.22%
RioCan Real Estate Investment Trust		385,988		7,557,959
				7,557,959
RETAIL – 1.92%
Alimentation Couche-Tard Inc.
Class B		405,473		8,703,781
Canadian Tire Corp. Ltd. Class A		254,885		13,220,509
Shoppers Drug Mart Corp.		704,596		23,992,011
Tim Hortons Inc.		568,137		20,139,334
				66,055,635
SOFTWARE – 0.23%
Open Text Corp.a		183,062		8,058,264
				8,058,264
TELECOMMUNICATIONS – 1.50%
BCE Inc.		820,412		25,673,699
TELUS Corp.		186,158		7,681,298

38 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CANADA INDEX FUND

August 31, 2010

Security	Shares		Value
TELUS Corp. NVS		469,109	$	18,498,648
				51,853,645
TRANSPORTATION – 3.92%
Canadian National Railway Co.		1,527,911		93,235,025
Canadian Pacific Railway Ltd.		547,698		32,260,432
Viterra Inc.a		1,210,780		9,537,724
				135,033,181
TOTAL COMMON STOCKS
(Cost: $3,730,000,989)				3,445,320,710
SHORT-TERM INVESTMENTS – 0.18%
MONEY MARKET FUNDS – 0.18%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.31%c,d,e		4,899,739		4,899,739
BlackRock Cash Funds: Prime, SL Agency Shares
0.30%c,d,e		952,119		952,119
BlackRock Cash Funds: Treasury, SL Agency Shares
0.13%c,d		453,081		453,081
				6,304,939
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,304,939)				6,304,939
TOTAL INVESTMENTS IN SECURITIES – 100.13%
(Cost: $3,736,305,928)				3,451,625,649
Other Assets, Less Liabilities – (0.13)%				(4,383,152)
NET ASSETS – 100.00%			$	3,447,242,497

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 39

Schedule of Investments

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 100.02%
AIRLINES – 4.92%
LAN Airlines SA		1,233,601	$	32,999,072
				32,999,072
APPAREL – 0.34%
Forus SA		965,548		2,267,924
				2,267,924
BANKS – 9.84%
Banco de Credito e Inversiones		389,642		21,155,980
Banco Santander (Chile) SA		401,718,514		33,356,697
CorpBanca SA		948,748,611		11,432,914
				65,945,591
BEVERAGES – 4.07%
Compania Cervecerias Unidas SA		1,357,976		15,799,840
Vina Concha y Toro SA		4,944,155		11,505,879
				27,305,719
BUILDING MATERIALS – 0.72%
SalfaCorp SA		1,842,939		4,801,611
				4,801,611
CHEMICALS – 4.86%
Sociedad Quimica y Minera de Chile SA Series B		760,976		32,615,419
				32,615,419
COMPUTERS – 0.79%
Sonda SA		3,018,850		5,313,608
				5,313,608
ELECTRIC – 23.62%
AES Gener SA		25,658,065		14,186,440
Colbun SA		74,636,542		20,767,010
Empresa Electrica Pilmaiquen SA		263,675		1,127,488
Empresa Nacional de Electricidad SA		34,953,554		60,132,904
Enersis SA		140,010,828		62,097,086
				158,310,928
ENGINEERING & CONSTRUCTION – 0.48%
Socovesa SA		5,782,741		3,254,804
				3,254,804

Security	Shares		Value
FOOD – 8.80%
Cencosud SA		9,837,366	$	58,988,979
				58,988,979
FOREST PRODUCTS & PAPER – 8.94%
Empresas CMPC SA		1,207,731		55,265,463
Masisa SAa		28,590,131		4,662,670
				59,928,133
HOLDING COMPANIES – DIVERSIFIED – 12.77%
Empresas Copec SA		4,919,280		85,607,995
				85,607,995
IRON & STEEL – 4.90%
CAP SA		829,631		32,835,435
				32,835,435
METAL FABRICATE & HARDWARE – 0.40%
Madeco SA		44,882,858		2,673,512
				2,673,512
REAL ESTATE – 1.08%
Parque Arauco SA		4,458,993		7,227,684
				7,227,684
RETAIL – 7.60%
La Polar SA		2,454,665		16,842,869
Ripley Corp. SA		5,141,165		6,522,572
S.A.C.I. Falabella SA		3,304,992		27,594,186
				50,959,627
TELECOMMUNICATIONS – 2.70%
Empresa Nacional de Telecomunicaciones SA		1,126,738		18,106,689
				18,106,689
TRANSPORTATION – 2.05%
Compania SudAmericana de Vapores SAa		10,565,507		13,763,737
				13,763,737
WATER – 1.14%
Inversiones Aguas Metropolitanas SA		5,468,122		7,612,739
				7,612,739
TOTAL COMMON STOCKS
(Cost: $486,780,244)				670,519,206

40 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI CHILE INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
SHORT-TERM INVESTMENTS – 0.12%
MONEY MARKET FUNDS – 0.12%
BlackRock Cash Funds: Treasury, SL Agency Shares 0.13%b,c		782,832	$	782,832
				782,832
TOTAL SHORT-TERM INVESTMENTS
(Cost: $782,832)				782,832
TOTAL INVESTMENTS IN SECURITIES – 100.14%
(Cost: $487,563,076)				671,302,038
Other Assets, Less Liabilities – (0.14)%				(951,632)
NET ASSETS – 100.00%			$	670,350,406

^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 41

Schedule of Investments

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.89%
AEROSPACE & DEFENSE – 2.28%
Elbit Systems Ltd.		58,604	$	2,924,428
				2,924,428
BANKS – 18.48%
Bank Hapoalim Ltd.a		1,846,208		7,549,694
Bank Leumi le-Israela		2,457,728		10,173,025
Israel Discount Bank Ltd. Class Aa,b		1,468,064		2,594,897
Mizrahi Tefahot Bank Ltd.		352,612		2,894,058
Union Bank of Israela		127,296		527,573
				23,739,247
BIOTECHNOLOGY – 0.13%
Clal Biotechnology Industries Ltd.a		37,024		161,126
				161,126
CHEMICALS – 11.47%
Frutaromb		109,148		960,330
Israel Chemicals Ltd.		935,844		11,829,855
Makhteshim-Agan Industries Ltd.		566,748		1,949,941
				14,740,126
COMMERCIAL SERVICES – 0.72%
AL-ROV (Israel) Ltd.a		11,128		283,497
Nitsba Holdings 1995 Ltd.a		75,400		647,163
				930,660
COMPUTERS – 0.34%
MATRIX IT Ltd.		86,216		440,647
				440,647
DIVERSIFIED FINANCIAL SERVICES – 0.80%
FIBI Holdings Ltd.a		28,704		580,262
Mivtach Shamir Holdings Ltd.a,c		14,910		442,111
				1,022,373
ELECTRICAL COMPONENTS & EQUIPMENT – 0.27%
Electra (Israel) Ltd.a		3,640		348,943
				348,943
ELECTRONICS – 0.59%
Elron Electronic Industries Ltd.a		45,552		219,894
Ituran Location and Control Ltd.		39,885		541,577
				761,471
ENGINEERING & CONSTRUCTION – 0.74%
Shikun & Binui Ltd.		472,524		947,034
				947,034

Security	Shares		Value
FOOD – 3.38%
Blue Square-Israel Ltd.		40,508	$	432,688
Osem Investment Ltd.		83,304		1,184,744
Rami Levi Chain Stores Hashikma Marketing 2006 Ltd.		26,572		646,801
Shufersal Ltd.		161,096		924,477
Strauss Group Ltd.		82,955		1,154,943
				4,343,653
FOREST PRODUCTS & PAPER – 0.36%
Hadera Paper Ltd.a		6,604		459,808
				459,808
HEALTH CARE – PRODUCTS – 0.46%
Given Imaging Ltd.a		41,808		590,308
				590,308
HOLDING COMPANIES – DIVERSIFIED – 3.69%
Clal Industries and Investments Ltd.		92,664		588,961
Elco Holdings Ltd.a		24,290		321,017
Granite Hacarmel Investments Ltd.		135,304		262,008
Israel Corp. Ltd. (The)a,b		4,420		3,563,861
				4,735,847
HOME BUILDERS – 0.14%
Bayside Land Corp. Ltd.		52		11,917
Property & Building Corp. Ltd.		2,132		164,289
				176,206
INSURANCE – 2.52%
Clal Insurance Enterprises Holdings Ltd.a		33,332		720,041
Harel Insurance Investments & Financial Services Ltd.b		25,428		1,175,398
Menorah Mivtachim Holdings Ltd.a		78,468		840,221
Phoenix Holdings Ltd.a		195,313		502,555
				3,238,215
INTERNET – 0.34%
Internet Gold-Golden Lines Ltd.a		8,268		151,810
NetVision Ltd.		27,612		283,481
				435,291
INVESTMENT COMPANIES – 3.14%
Delek Group Ltd. (The)b		9,776		2,457,159
Discount Investment Corp. Ltd.		32,708		616,964
Elbit Imaging Ltd.a		33,956		428,073

42 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
Koor Industries Ltd.		26,520	$	536,320
				4,038,516
MACHINERY – 0.91%
Ormat Industries Ltd.b		158,704		1,175,431
				1,175,431
MANUFACTURING – 0.44%
FMS Enterprises Migun Ltd.		11,752		297,141
Plasson Industries Ltd.		11,908		262,148
				559,289
MEDIA – 0.36%
Hot Telecommunication
Systems Ltd.a		46,488		463,354
				463,354
OIL & GAS – 3.93%
Delek Drilling LPa,b		461,656		1,600,488
Delek Energy Systems Ltd.a		1,456		493,300
Delek Israeli Fuel Corp. Ltd.		4,548		137,007
Jerusalem Oil Exploration Ltd.a		20,671		326,176
Naphtha Israel Petroleum
Corp. Ltd.a		61,564		225,559
Oil Refineries Ltd.		2,374,164		1,190,979
Paz Oil Co. Ltd.		7,644		1,079,897
				5,053,406
PHARMACEUTICALS – 23.10%
Teva Pharmaceutical Industries Ltd.		585,988		29,672,616
				29,672,616
REAL ESTATE – 4.36%
Africa Israel Investments Ltd.a,b		96,460		506,683
Africa Israel Properties Ltd.a		27,249		308,805
Airport City Ltd.a		74,360		308,572
Alony Hetz Properties &
Investments Ltd.		156,988		721,547
Amot Investments Ltd.		192,504		497,957
Azorim-Investment Development & Construction Co. Ltd.a		25,595		102,111
British Israel Investments Ltd.		124,436		364,402
Delek Real Estate Ltd.a,b		188,708		81,778
Electra Real Estate Ltd.a		25,272		167,001
Gazit Globe Ltd.b		142,636		1,399,575
Gazit Inc.		14,196		318,371
Jerusalem Economy Ltd.a		33,484		244,479

Security	Shares		Value
Melisron Ltd.		25,480	$	575,115
				5,596,396
RETAIL – 0.67%
Delek Automotive Systems Ltd.		79,040		863,576
				863,576
SEMICONDUCTORS – 1.35%
Mellanox Technologies Ltd.a		68,068		1,101,423
Tower Semiconductor Ltd.a		453,076		636,865
				1,738,288
SOFTWARE – 0.36%
Retalix Ltd.a		38,792		464,485
				464,485
TELECOMMUNICATIONS – 14.56%
012 Smile.Communications Ltd.a		21,372		465,890
Alvarion Ltd.a		130,072		246,001
AudioCodes Ltd.a		79,924		204,517
Bezeq The Israel Telecommunication Corp. Ltd.		2,790,060		6,169,275
Cellcom Israel Ltd.		106,392		2,970,314
Ceragon Networks Ltd.a		66,825		562,681
Gilat Satellite Networks Ltd.a		57,370		268,957
NICE Systems Ltd.a		150,228		4,040,275
Partner Communications Co. Ltd.		223,236		3,722,457
Suny Electronic Inc. Ltd.a		6,064		52,032
				18,702,399
TOTAL COMMON STOCKS
(Cost: $152,236,948)				128,323,139
SHORT-TERM INVESTMENTS – 3.56%
MONEY MARKET FUNDS – 3.56%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%d,e,f		3,755,686		3,755,686
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%d,e,f		729,807		729,807

SCHEDULES OF INVESTMENTS 43

Schedule of Investments (Continued)

iSHARES^® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%d,e		90,194	$	90,194
				4,575,687
TOTAL SHORT-TERM INVESTMENTS
(Cost: $4,575,687)				4,575,687
TOTAL INVESTMENTS IN SECURITIES – 103.45%
(Cost: $156,812,635)				132,898,826
Other Assets, Less Liabilities – (3.45)%				(4,426,122)
NET ASSETS – 100.00%			$	128,472,704

^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 in accordance with management’s fair valuation policy. 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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.91%
BANKS – 1.42%
Banco Compartamos SAa		3,723,400	$	20,569,489
				20,569,489
BEVERAGES – 9.33%
Fomento Economico Mexicano
SAB de CV BD Units		18,240,608		89,583,973
Grupo Modelo SAB de CV
Series C		8,578,556		45,703,111
				135,287,084
BUILDING MATERIALS – 4.76%
Cemex SAB de CV CPOa,b		88,283,380		68,954,360
				68,954,360
CHEMICALS – 1.74%
Mexichem SAB de CV		9,800,031		25,301,163
				25,301,163
DIVERSIFIED FINANCIAL SERVICES – 6.95%
Bolsa Mexicana de Valores SAB de CVa		4,515,000		7,052,946
Financiera Independencia SAB
de CVa,b		1,355,568		1,249,315
Grupo Financiero Banorte SAB
de CV Series O		14,884,500		53,706,405
Grupo Financiero Inbursa SAB
de CV Series O		10,444,700		38,710,379
				100,719,045
ENGINEERING & CONSTRUCTION – 4.11%
Carso Infraestructura y
Construccion SAB de CV
Series B1a,b		10,655,400		6,233,761
Empresas ICA SAB de CVa,b		6,471,574		14,839,485
Grupo Aeroportuario del Centro Norte SAB de CVa		2,408,000		3,602,399
Grupo Aeroportuario del Pacifico SAB de CV Series B		6,832,700		19,021,181
Grupo Aeroportuario del
Sureste SAB de CV Series B
SP ADR		382,452		15,883,232
				59,580,058
FOOD – 3.36%
Alsea SAB de CVa		4,876,245		4,582,947

Security	Shares		Value
Gruma SAB de CV Series Ba,b		3,130,469	$	4,181,364
Grupo Bimbo SAB de CV Series A		5,809,300		39,971,448
				48,735,759
FOREST PRODUCTS & PAPER – 3.23%
Bio Pappel SAB de CVa,b		511,700		414,052
Kimberly-Clark de Mexico SAB
de CV Series A		8,006,600		46,476,258
				46,890,310
HOLDING COMPANIES - DIVERSIFIED – 4.78%
Alfa SAB de CV Series A		4,153,800		28,621,649
Grupo Carso SAB de CV Series A1		9,180,530		40,749,189
				69,370,838
HOME BUILDERS – 3.10%
Consorcio ARA SAB de CVa		10,775,800		6,230,513
Corporacion Geo SAB de CV Series Bb		4,966,960		12,857,379
Desarrolladora Homex SAB de CVb		2,618,730		12,095,185
Sare Holding SAB de CV Series Ba,b		1,715,700		333,711
Urbi Desarrollos Urbanos SAB
de CVb		7,103,600		13,395,839
				44,912,627
IRON & STEEL – 0.26%
Compania Minera Autlan SAB
de CV Series Ba,b		711,800		1,313,636
Grupo Simec SAB de CV Series Ba,b		1,053,500		2,462,928
				3,776,564
MACHINERY – 0.62%
Industrias CH SAB de CV Series Ba,b		2,528,400		8,942,421
				8,942,421
MEDIA – 6.08%
Grupo Televisa SA CPO		18,541,699		68,973,235
Megacable Holdings SAB de CV CPOa,b		3,250,800		7,970,377
TV Azteca SAB de CV CPOa		17,307,500		11,203,755
				88,147,367

SCHEDULES OF INVESTMENTS 45

Schedule of Investments (Continued)

iSHARES^® MSCI MEXICO INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
MINING – 8.13%
Grupo Mexico SAB de CV
Series B		35,698,610	$	91,784,918
Industrias Penoles SAB de CV		1,232,300		26,081,038
				117,865,956
PHARMACEUTICALS – 0.88%
Genomma Lab Internacional
SAB de CV Series Ba,b		6,953,100		12,821,473
				12,821,473
RETAIL – 12.83%
Controladora Comercial Mexicana SA de CV BC Unitsa,b		8,064,800		6,770,887
Grupo Elektra SA de CVa		830,760		26,662,412
Grupo Famsa SAB de CV Series Aa,b		3,040,115		3,333,082
Wal-Mart de Mexico SAB de
CV Series V		66,551,100		149,215,559
				185,981,940
TELECOMMUNICATIONS – 28.33%
America Movil SAB de CV
Series L		150,138,885		351,572,974
Axtel SAB de CV CPOa,b		14,417,900		7,405,227
Maxcom Telecomunicaciones
SAB de CVa,b		2,252,400		1,064,451
Telefonos de Mexico SAB de
CV Series L		72,691,500		50,756,165
				410,798,817
TOTAL COMMON STOCKS (Cost: $1,658,371,574)				1,448,655,271
SHORT-TERM INVESTMENTS – 4.91%
MONEY MARKET FUNDS – 4.91%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		59,606,860		59,606,860
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		11,582,832		11,582,832

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		25,314	$	25,314
				71,215,006
TOTAL SHORT-TERM INVESTMENTS
(Cost: $71,215,006)				71,215,006
TOTAL INVESTMENTS IN SECURITIES – 104.82%
(Cost: $1,729,586,580)				1,519,870,277
Other Assets, Less Liabilities – (4.82)%				(69,831,706)
NET ASSETS – 100.00%			$	1,450,038,571

CPO – Certificates of Participation (Ordinary)

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.

46 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.78%
BANKS – 14.05%
Absa Group Ltd.		695,998	$	11,630,241
FirstRand Ltd.		6,067,730		15,902,006
Nedbank Group Ltd.		384,162		7,310,576
Standard Bank Group Ltd.		2,548,524		36,117,983
				70,960,806
BUILDING MATERIALS – 0.92%
Pretoria Portland Cement Co. Ltd.		1,134,168		4,617,709
				4,617,709
DIVERSIFIED FINANCIAL SERVICES – 3.48%
African Bank Investments Ltd.		1,555,912		6,834,769
Investec Ltd.		492,522		3,701,386
RMB Holdings Ltd.		1,559,610		7,047,663
				17,583,818
ELECTRONICS – 0.59%
Reunert Ltd.		383,474		2,988,973
				2,988,973
ENGINEERING & CONSTRUCTION – 1.58%
Aveng Ltd.		808,056		4,163,119
Murray & Roberts Holdings Ltd.		677,250		3,810,579
				7,973,698
FOOD – 3.81%
Shoprite Holdings Ltd.		878,060		10,761,838
Tiger Brands Ltd.		347,010		8,503,821
				19,265,659
FOREST PRODUCTS & PAPER – 1.08%
Sappi Ltd.a		1,154,722		5,471,652
				5,471,652
HEALTH CARE - PRODUCTS – 1.26%
Aspen Pharmacare Holdings Ltd.a		555,818		6,337,565
				6,337,565
HEALTH CARE - SERVICES – 0.82%
Netcare Ltd.a		2,305,574		4,135,545
				4,135,545
HOLDING COMPANIES - DIVERSIFIED – 5.82%
Bidvest Group Ltd.		637,432		11,770,768
Imperial Holdings Ltd.		366,360		5,071,397
Remgro Ltd.		932,412		12,578,381
				29,420,546

Security	Shares		Value
HOME FURNISHINGS – 1.28%
Steinhoff International Holdings Ltd.a		2,538,720	$	6,470,927
				6,470,927
INSURANCE – 3.49%
Discovery Holdings Ltd.		575,254		2,732,081
Liberty Holdings Ltd.		216,290		2,052,713
Sanlam Ltd.		4,061,952		12,820,695
				17,605,489
IRON & STEEL – 2.40%
ArcelorMittal South Africa Ltd.		383,044		4,279,270
Kumba Iron Ore Ltd.		172,774		7,853,566
				12,132,836
MEDIA – 6.62%
Naspers Ltd. Class N		828,438		33,446,398
				33,446,398
MINING – 22.04%
African Rainbow Minerals Ltd.		228,158		4,772,425
Anglo Platinum Ltd.a		141,556		11,716,766
AngloGold Ashanti Ltd.		778,988		33,416,507
Exxaro Resources Ltd.		268,578		4,167,178
Gold Fields Ltd.		1,516,180		21,789,659
Harmony Gold Mining Co. Ltd.b		827,234		8,575,441
Impala Platinum Holdings Ltd.		1,085,750		25,613,734
Northam Platinum Ltd.b		233,576		1,274,641
				111,326,351
OIL & GAS – 9.31%
Sasol Ltd.		1,235,734		47,053,641
				47,053,641
REAL ESTATE – 2.67%
Growthpoint Properties Ltd.		3,326,824		7,600,174
Redefine Properties Ltd.		5,447,928		5,901,630
				13,501,804
RETAIL – 5.22%
Foschini Ltd.		439,202		4,227,820
Massmart Holdings Ltd.		411,338		6,829,468
Pick’n Pay Stores Ltd.		466,894		2,809,308
Truworths International Ltd.		930,176		7,383,901
Woolworths Holdings Ltd.		1,541,292		5,140,600
				26,391,097

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH AFRICA INDEX FUND

August 31, 2010

Security	Shares		Value
TELECOMMUNICATIONS – 13.34%
MTN Group Ltd.		3,558,508	$	58,136,490
Telkom South Africa Ltd.		562,870		2,564,137
Vodacom Group (Proprietary) Ltd.		799,714		6,688,724
				67,389,351
TOTAL COMMON STOCKS
(Cost: $540,229,937)				504,073,865
SHORT-TERM INVESTMENTS – 1.12%
MONEY MARKET FUNDS – 1.12%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		4,708,194		4,708,194
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		914,899		914,899
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		18,200		18,200
				5,641,293
TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,641,293)				5,641,293
TOTAL INVESTMENTS IN SECURITIES – 100.90%
(Cost: $545,871,230)				509,715,158
Other Assets, Less Liabilities – (0.90)%				(4,524,420)
NET ASSETS – 100.00%			$	505,190,738

^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.

48 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.92%
AEROSPACE & DEFENSE – 0.29%
Aselsan Elektronik Sanayi ve TASa		415,008	$	1,757,700
				1,757,700
AIRLINES – 1.84%
Turk Hava Yollari Anonim Ortakligib		3,507,372		11,054,820
				11,054,820
AUTO MANUFACTURERS – 0.12%
Otokar Otomotiv Ve Savunma
Sanayi ASa		74,052		739,110
				739,110
BANKS – 45.50%
Akbank TAS		10,528,650		55,999,780
Albaraka Turk Katilim Bankasi ASa		1,656,468		2,762,774
Asya Katilim Bankasi AS		3,951,288		8,769,685
Sekerbank TASa		2,304,918		2,330,799
Tekstil Bankasi ASb		928,224		633,891
Turkiye Garanti Bankasi AS		18,428,454		89,546,628
Turkiye Halk Bankasi AS		2,741,904		22,325,569
Turkiye Is Bankasi AS		13,818,816		50,814,479
Turkiye Vakiflar Bankasi TAO		6,579,738		17,887,002
Yapi ve Kredi Bankasi ASb		7,628,743		22,842,647
				273,913,254
BEVERAGES – 4.95%
Anadolu Efes Biracilik ve Malt
Sanayii AS		1,776,654		23,915,823
Coca-Cola Icecek ASa		558,360		5,866,281
				29,782,104
BUILDING MATERIALS – 2.31%
Adana Cimento Sanayii TAS
Class A		502,128		1,641,999
Afyon Cimento Sanayi TAS		6,336		744,727
Akcansa Cimento Sanayi ve TASa		420,354		2,083,967
Baticim Bati Anodolu Cimento
Sanayii AS		279,576		1,358,502
Bolu Cimento Sanayii AS		618,552		633,621
Bursa Cimento Fabrikasi AS		417,978		1,262,525
Cimsa Cimento Sanayi ve TASa		355,806		2,207,871
Goltas Goller Bolgesi Cimento
Sanayi ve TAS		25,344		1,031,800

Security	Shares		Value
Konya Cimento Sanayii AS		8,514	$	771,510
Mardin Cimento Sanayii ve TAS		432,828		2,145,808
				13,882,330
CHEMICALS – 1.50%
Aksa Akrilik Kimya Sanayii AS		730,620		1,285,745
Bagfas Bandirma Gubre
Fabrikalari ASa,b		15,840		1,237,744
Gubre Fabrikalari TASa,b		183,348		1,444,730
Petkim Petrokimya Holding ASa,b		3,512,322		5,050,880
				9,019,099
COMMERCIAL SERVICES – 0.57%
Ihlas Holding ASa,b		2,608,452		1,250,358
Koza Anadolu Metal Madencilik
Isletmeleri ASa,b		851,994		2,204,253
				3,454,611
DISTRIBUTION & WHOLESALE – 0.57%
Aygaz AS		790,218		3,450,620
				3,450,620
DIVERSIFIED FINANCIAL SERVICES – 0.93%
Finans Finansal Kiralama ASb		259,657		494,455
Is Finansal Fabrikasi ASb		1,165,626		872,555
Is Yatirim Menkul Degerler AS		527,472		682,330
Turkiye Sinai Kalkinma Bankasi ASa		2,469,131		3,534,510
				5,583,850
ELECTRIC – 0.63%
Akenerji Elektrik Uretim ASa,b		990,000		2,301,267
Zorlu Enerji Elektrik Uretim ASa,b		864,666		1,498,928
				3,800,195
ENGINEERING & CONSTRUCTION – 1.52%
Enka Insaat ve Sanayi AS		2,511,235		9,151,851
				9,151,851
ENTERTAINMENT – 0.38%
Fenerbahce Sportif Hizmetler Sanayi ve TAS		33,066		1,139,907
Galatasaray Sportif Sinai ve Ticari
Yatirimlar AS		7,173		1,153,973
				2,293,880
FOOD – 4.17%
Banvit Bandirma Vitaminli Yem Sanayii ASa,b		220,572		760,393

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
BIM Birlesik Magazalar ASa		732,600	$	20,084,083
Pinar Sut Mamulleri Sanayii AS		158,202		1,033,627
Tat Konserve Sanayii ASa,b		412,632		872,464
Ulker Biskuvi Sanayi ASa		825,462		2,330,742
				25,081,309
FOREST PRODUCTS & PAPER – 0.51%
Ipek Matbaacilik Sanayi ve TASb		456,192		976,549
Kartonsan Karton Sanayi ve TAS		16,236		1,343,316
Tire Kutu Ve Kagit Sanayii ASb		705,870		741,606
				3,061,471
HOLDING COMPANIES - DIVERSIFIED – 9.76%
Alarko Holding ASa		589,248		1,253,637
Dogan Sirketler Grubu
Holdings AS		7,529,545		4,944,215
Eczacibasi Yatirim Holding Ortakligi AS		273,240		882,751
Haci Omer Sabanci Holding AS		5,374,908		24,352,791
KOC Holding AS		5,297,688		20,698,172
Tekfen Holding ASa		1,137,114		4,181,390
Yazicilar Holding AS		351,252		2,421,791
				58,734,747
HOME FURNISHINGS – 1.58%
Arcelik ASa		1,483,416		7,062,030
Vestel Beyaz Esya Sanayi ve TASa		584,100		1,373,089
Vestel Elektronik Sanayi ve TASa,b		729,234		1,082,192
				9,517,311
HOUSEWARES – 0.95%
Anadolu Cam Sanayii ASb		760,914		1,219,141
Turk Sise ve Cam Fabrikalari ASa,b		3,013,560		4,511,732
				5,730,873
INSURANCE – 1.05%
Aksigorta ASa		1,074,942		1,334,060
Anadolu Anonim Turk Sigorta Sirketia		1,981,114		1,456,988
Anadolu Hayat Emeklilik AS		438,372		1,306,855
Gunes Sigorta ASa,b		323,334		399,152
Yapi Kredi Sigorta ASa,b		245,916		1,840,858
				6,337,913
IRON & STEEL – 2.40%
Eregli Demir ve Celik Fabrikalari TASb		3,512,322		10,194,015

Security	Shares		Value
Izmir Demir Celik Sanayi ASb		331,254	$	511,161
Kardemir Karabuk Demir Celik
Sanayi ve TAS Class Ab		1,609,938		1,110,010
Kardemir Karabuk Demir Celik
Sanayi ve TAS Class Bb		811,998		575,847
Kardemir Karabuk Demir Celik
Sanayi ve TAS Class Da,b		5,009,400		2,039,417
				14,430,450
LODGING – 0.20%
Net Holding ASa,b		1,935,252		1,181,814
				1,181,814
MACHINERY – 0.22%
Turk Traktor ve Ziraat Makineleri ASa		117,216		1,308,472
				1,308,472
MANUFACTURING – 0.44%
Trakya Cam Sanayii ASa,b		1,588,949		2,639,728
				2,639,728
MEDIA – 0.64%
Dogan Gazetecilik ASb		273,473		492,033
Dogan Yayin Holding ASa,b		2,195,226		1,830,676
Hurriyet Gazetecilik ve Matbaacilik ASa		1,694,682		1,557,919
				3,880,628
METAL FABRICATE & HARDWARE – 0.15%
Borusan Mannesmann Boru Sanayi ve TAS		75,042		891,891
				891,891
MINING – 0.15%
Park Elektrik Madencilik Sanayi ve TASa,b		581,922		920,896
				920,896
OIL & GAS – 4.10%
Turkiye Petrol Rafinerileri AS		1,098,702		24,709,793
				24,709,793
PHARMACEUTICALS – 0.87%
Deva Holding ASb		714,384		1,341,610
EIS Eczacibasi Ilac Sanayi ve TASa		1,444,014		2,294,644
Selcuk Ecza Deposu Ticaret ve Sanayi AS		1,087,614		1,578,322
				5,214,576

50 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI TURKEY INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
REAL ESTATE INVESTMENT TRUSTS – 0.62%
Is Gayrimenkul Yatirim Ortakligi ASa		1,975,644	$	2,062,692
Sinpas Gayrimenkul Yatirim Ortakligi ASa,b		1,543,125		1,651,647
				3,714,339
RETAIL – 0.52%
Dogus Otomotiv Servis ve TASb		337,986		1,842,067
Turcas Petrolculuk ASa		359,568		1,310,397
				3,152,464
TELECOMMUNICATIONS – 10.39%
Nortel Networks Netas Telekomunikasyon AS		20,196		709,492
Turk Telekomunikasyon AS		4,606,074		19,054,610
Turkcell Iletisim Hizmetleri AS		6,755,958		42,809,767
				62,573,869
TRANSPORTATION – 0.09%
Celebi Hava Servisi AS		53,262		573,575
				573,575
TOTAL COMMON STOCKS (Cost: $548,973,892)				601,539,543
SHORT-TERM INVESTMENTS – 4.08%
MONEY MARKET FUNDS – 4.08%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%c,d,e		20,330,266		20,330,266
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%c,d,e		3,950,587		3,950,587
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		269,858		269,858
				24,550,711
TOTAL SHORT-TERM INVESTMENTS
(Cost: $24,550,711)				24,550,711

	Value
TOTAL INVESTMENTS
IN SECURITIES – 104.00%
(Cost: $573,524,603)	$	626,090,254
Other Assets, Less Liabilities – (4.00)%		(24,102,115)
NET ASSETS – 100.00%	$	601,988,139

^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 51

Schedule of Investments

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.66%
ADVERTISING – 0.16%
Interpublic Group of Companies Inc. (The)a		108	$	921
Omnicom Group Inc.		74		2,591
				3,512
AEROSPACE & DEFENSE – 2.00%
Boeing Co. (The)		157		9,597
General Dynamics Corp.		76		4,246
Goodrich Corp.		28		1,917
L-3 Communications Holdings Inc.		26		1,732
Lockheed Martin Corp.		72		5,006
Northrop Grumman Corp.		66		3,572
Raytheon Co.		88		3,865
Rockwell Collins Inc.		34		1,834
United Technologies Corp.		202		13,172
				44,941
AGRICULTURE – 2.23%
Altria Group Inc.		470		10,490
Archer-Daniels-Midland Co.		146		4,494
Bunge Ltd.		30		1,590
Lorillard Inc.		36		2,736
Monsanto Co.		124		6,529
Philip Morris International Inc.		426		21,913
Reynolds American Inc.		42		2,291
				50,043
AIRLINES – 0.04%
Delta Air Lines Inc.a		44		460
Southwest Airlines Co.		40		442
				902
APPAREL – 0.48%
Coach Inc.		70		2,509
Nike Inc. Class B		86		6,020
Polo Ralph Lauren Corp.		12		909
VF Corp.		20		1,412
				10,850
AUTO MANUFACTURERS – 0.48%
Ford Motor Co.a		670		7,564
PACCAR Inc.		76		3,115
				10,679

Security	Shares		Value
AUTO PARTS & EQUIPMENT – 0.26%
BorgWarner Inc.a		26	$	1,135
Goodyear Tire & Rubber Co. (The)a		50		462
Johnson Controls Inc.		156		4,139
				5,736
BANKS – 4.34%
Bank of America Corp.		2,266		28,212
Bank of New York Mellon Corp. (The)		274		6,650
BB&T Corp.		160		3,539
Comerica Inc.		38		1,307
Fifth Third Bancorp		182		2,011
KeyCorp		194		1,430
M&T Bank Corp.		20		1,713
Marshall & Ilsley Corp.		110		720
Northern Trust Corp.		48		2,215
PNC Financial Services Group Inc. (The)b		118		6,013
Regions Financial Corp.		262		1,685
State Street Corp.		116		4,069
SunTrust Banks Inc.		112		2,519
U.S. Bancorp		434		9,027
Wells Fargo & Co.		1,112		26,188
				97,298
BEVERAGES – 2.57%
Brown-Forman Corp. Class B NVS		18		1,103
Coca-Cola Co. (The)		468		26,171
Coca-Cola Enterprises Inc.		64		1,821
Constellation Brands Inc. Class Aa		44		733
Dr Pepper Snapple Group Inc.		56		2,062
Hansen Natural Corp.a		16		721
Molson Coors Brewing Co. Class B NVS		34		1,481
PepsiCo Inc.		368		23,618
				57,710
BIOTECHNOLOGY – 1.35%
Amgen Inc.a		218		11,127
Biogen Idec Inc.a		60		3,228
Celgene Corp.a		106		5,461
Charles River Laboratories International Inc.a		14		395
Genzyme Corp.a		62		4,347
Human Genome Sciences Inc.a		44		1,280
Illumina Inc.a		28		1,201
Life Technologies Corp.a		40		1,711

52 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
Vertex Pharmaceuticals Inc.a		48	$	1,600
				30,350
BUILDING MATERIALS – 0.07%
Martin Marietta Materials Inc.		10		732
Masco Corp.		80		839
				1,571
CHEMICALS – 1.89%
Air Products and Chemicals Inc.		50		3,702
Airgas Inc.		16		1,053
Celanese Corp. Series A		32		854
CF Industries Holdings Inc.		16		1,480
Dow Chemical Co. (The)		260		6,336
E.I. du Pont de Nemours and Co.		206		8,399
Eastman Chemical Co.		16		985
Ecolab Inc.		52		2,465
FMC Corp.		16		997
International Flavors & Fragrances Inc.		18		822
Lubrizol Corp.		16		1,493
Mosaic Co. (The)		34		1,994
PPG Industries Inc.		40		2,633
Praxair Inc.		70		6,022
Sherwin-Williams Co. (The)		22		1,548
Sigma-Aldrich Corp.		30		1,595
				42,378
COAL – 0.26%
Alpha Natural Resources Inc.a		26		965
Arch Coal Inc.		36		810
CONSOL Energy Inc.		48		1,546
Peabody Energy Corp.		60		2,568
				5,889
COMMERCIAL SERVICES – 1.35%
Alliance Data Systems Corp.a		12		674
Apollo Group Inc. Class Aa		32		1,359
DeVry Inc.		14		534
Equifax Inc.		28		825
H&R Block Inc.		74		951
Iron Mountain Inc.		40		811
ITT Educational Services Inc.a		8		426
Lender Processing Services Inc.		22		645
Manpower Inc.		18		765
MasterCard Inc. Class A		22		4,364
McKesson Corp.		60		3,483

Security	Shares		Value
Moody’s Corp.		44	$	930
Pharmaceutical Product Development Inc.		24		551
Quanta Services Inc.a		46		825
R.R. Donnelley & Sons Co.		46		697
Robert Half International Inc.		32		691
SAIC Inc.a		88		1,310
Verisk Analytics Inc. Class Aa		24		668
Visa Inc. Class A		108		7,450
Western Union Co.		152		2,383
				30,342
COMPUTERS – 6.19%
Accenture PLC Class A		144		5,270
Apple Inc.a		204		49,648
Cognizant Technology Solutions Corp.
Class Aa		66		3,802
Computer Sciences Corp.a		34		1,354
Dell Inc.a		398		4,684
EMC Corp.a		462		8,427
Hewlett-Packard Co.		532		20,471
IHS Inc. Class Aa		10		618
International Business Machines Corp.		290		35,737
NetApp Inc.a		74		2,993
SanDisk Corp.a		50		1,662
Seagate Technology PLCa		110		1,114
Synopsys Inc.a		32		732
Teradata Corp.a		38		1,244
Western Digital Corp.a		50		1,208
				138,964
COSMETICS & PERSONAL CARE – 2.31%
Avon Products Inc.		96		2,794
Colgate-Palmolive Co.		114		8,418
Estee Lauder Companies Inc. (The) Class A		24		1,346
Procter & Gamble Co. (The)		656		39,143
				51,701
DISTRIBUTION & WHOLESALE – 0.19%
Fastenal Co.c		30		1,358
Genuine Parts Co.		36		1,510
W.W. Grainger Inc.		14		1,481
				4,349
DIVERSIFIED FINANCIAL SERVICES – 5.27%
American Express Co.		242		9,649

SCHEDULES OF INVESTMENTS 53

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
Ameriprise Financial Inc.		56	$	2,441
BlackRock Inc.b		8		1,136
Capital One Financial Corp.		106		4,013
Charles Schwab Corp. (The)		230		2,935
CIT Group Inc.a		44		1,614
Citigroup Inc.a		5,566		20,706
CME Group Inc.		16		3,969
Discover Financial Services		120		1,741
Eaton Vance Corp.		24		624
Franklin Resources Inc.		36		3,474
Goldman Sachs Group Inc. (The)		110		15,063
IntercontinentalExchange Inc.a		14		1,338
Invesco Ltd.		94		1,701
Jefferies Group Inc.		22		495
JPMorgan Chase & Co.		898		32,651
Legg Mason Inc.		36		912
Morgan Stanley		286		7,061
NASDAQ OMX Group Inc. (The)a		32		573
NYSE Euronext Inc.		58		1,609
SLM Corp.a		104		1,149
T. Rowe Price Group Inc.		60		2,627
TD AMERITRADE Holding Corp.a		58		847
				118,328
ELECTRIC – 3.46%
AES Corp. (The)a		148		1,516
Allegheny Energy Inc.		38		857
Alliant Energy Corp.		24		840
Ameren Corp.		52		1,460
American Electric Power Co. Inc.		106		3,753
Calpine Corp.a		78		992
CenterPoint Energy Inc.		82		1,213
Consolidated Edison Inc.		66		3,137
Constellation Energy Group Inc.		40		1,173
Dominion Resources Inc.		138		5,901
DTE Energy Co.		36		1,687
Duke Energy Corp.		300		5,157
Edison International		68		2,295
Entergy Corp.		42		3,311
Exelon Corp.		152		6,189
FirstEnergy Corp.		68		2,484
FPL Group Inc.		90		4,836
Integrys Energy Group Inc.		16		775

Security	Shares		Value
MDU Resources Group Inc.		40	$	752
Northeast Utilities		38		1,101
NRG Energy Inc.a		56		1,138
NSTAR		24		913
Pepco Holdings Inc.		48		862
PG&E Corp.		82		3,834
Pinnacle West Capital Corp.		24		956
PPL Corp.		105		2,852
Progress Energy Inc.		62		2,660
Public Service Enterprise Group Inc.		112		3,580
SCANA Corp.		26		1,015
Southern Co.		182		6,678
Wisconsin Energy Corp.		26		1,449
Xcel Energy Inc.		100		2,231
				77,597
ELECTRICAL COMPONENTS & EQUIPMENT – 0.44%
AMETEK Inc.		24		1,032
Emerson Electric Co.		172		8,024
Energizer Holdings Inc.a		14		882
				9,938
ELECTRONICS – 0.71%
Agilent Technologies Inc.a		76		2,050
Amphenol Corp. Class A		38		1,547
Arrow Electronics Inc.a		26		595
Avnet Inc.a		34		779
Dolby Laboratories Inc. Class Aa		12		665
Flextronics International Ltd.a,c		180		887
FLIR Systems Inc.a		34		854
Garmin Ltd.		26		692
Thermo Fisher Scientific Inc.a		94		3,959
Tyco Electronics Ltd.		102		2,501
Waters Corp.a		24		1,453
				15,982
ENERGY - ALTERNATE SOURCES – 0.07%
First Solar Inc.a		12		1,534
				1,534
ENGINEERING & CONSTRUCTION – 0.22%
Fluor Corp.		40		1,787
Foster Wheeler AGa,c		28		597
Jacobs Engineering Group Inc.a		28		971
KBR Inc.		36		835

54 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
URS Corp.a		18	$	642
				4,832
ENTERTAINMENT – 0.04%
International Game Technology		66		964
				964
ENVIRONMENTAL CONTROL – 0.32%
Republic Services Inc.		84		2,472
Stericycle Inc.a		18		1,179
Waste Management Inc.		108		3,574
				7,225
FOOD – 2.07%
Campbell Soup Co.		46		1,714
ConAgra Foods Inc.		98		2,116
Dean Foods Co.a		40		409
General Mills Inc.		152		5,496
H.J. Heinz Co.		70		3,237
Hershey Co. (The)		36		1,673
Hormel Foods Corp.		16		690
J.M. Smucker Co. (The)		26		1,521
Kellogg Co.		62		3,080
Kraft Foods Inc. Class A		396		11,860
Kroger Co. (The)		140		2,762
McCormick & Co. Inc. NVS		26		1,037
Ralcorp Holdings Inc.a		12		716
Safeway Inc.		90		1,692
Sara Lee Corp.		146		2,108
SUPERVALU Inc.		46		447
Sysco Corp.		138		3,794
Tyson Foods Inc. Class A		64		1,048
Whole Foods Market Inc.a		32		1,113
				46,513
FOREST PRODUCTS & PAPER – 0.25%
International Paper Co.		90		1,842
MeadWestvaco Corp.		38		827
Plum Creek Timber Co. Inc.c		36		1,241
Rayonier Inc.		18		851
Weyerhaeuser Co.		46		722
				5,483
GAS – 0.20%
Energen Corp.		16		683
NiSource Inc.		60		1,040

Security	Shares		Value
Sempra Energy		52	$	2,648
				4,371
HAND & MACHINE TOOLS – 0.08%
Stanley Black & Decker Inc.		34		1,824
				1,824
HEALTH CARE - PRODUCTS – 3.50%
Baxter International Inc.		136		5,788
Beckman Coulter Inc.		16		730
Becton, Dickinson and Co.		52		3,546
Boston Scientific Corp.a		334		1,734
C.R. Bard Inc.		22		1,690
CareFusion Corp.a		42		906
Covidien PLC		116		4,099
DENTSPLY International Inc.		32		890
Edwards Lifesciences Corp.a		28		1,612
Henry Schein Inc.a		20		1,056
Hologic Inc.a		56		795
Intuitive Surgical Inc.a		9		2,385
Johnson & Johnson		624		35,581
Medtronic Inc.		252		7,933
Patterson Companies Inc.		20		506
St. Jude Medical Inc.a		74		2,558
Stryker Corp.		66		2,851
Varian Medical Systems Inc.a		28		1,491
Zimmer Holdings Inc.a		48		2,264
				78,415
HEALTH CARE - SERVICES – 1.05%
Aetna Inc.		96		2,565
Covance Inc.a		14		531
Coventry Health Care Inc.a		32		619
DaVita Inc.a		22		1,422
Humana Inc.a		38		1,816
Laboratory Corp. of America Holdingsa		24		1,743
Quest Diagnostics Inc.		34		1,479
UnitedHealth Group Inc.		264		8,374
WellPoint Inc.a		102		5,067
				23,616
HOLDING COMPANIES - DIVERSIFIED – 0.04%
Leucadia National Corp.a		42		897
				897

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
HOME BUILDERS – 0.08%
D.R. Horton Inc.		64	$	657
Pulte Homes Inc.a		76		610
Toll Brothers Inc.a		30		518
				1,785
HOME FURNISHINGS – 0.06%
Whirlpool Corp.		18		1,335
				1,335
HOUSEHOLD PRODUCTS & WARES – 0.51%
Avery Dennison Corp.		22		715
Church & Dwight Co. Inc.		16		980
Clorox Co. (The)		30		1,945
Fortune Brands Inc.		34		1,523
Kimberly-Clark Corp.		96		6,182
				11,345
HOUSEWARES – 0.04%
Newell Rubbermaid Inc.		62		931
				931
INSURANCE – 3.77%
ACE Ltd.		78		4,171
Aflac Inc.		106		5,009
Allstate Corp. (The)		114		3,146
American International Group Inc.a		26		882
Aon Corp.		54		1,957
Arch Capital Group Ltd.a		12		958
Assurant Inc.		26		951
Axis Capital Holdings Ltd.		30		926
Berkshire Hathaway Inc. Class Ba		186		14,653
Chubb Corp.		76		4,189
CIGNA Corp.		60		1,933
Cincinnati Financial Corp.		34		907
Everest Re Group Ltd.		14		1,108
Fidelity National Financial Inc. Class A		48		696
Genworth Financial Inc. Class Aa		108		1,170
Hartford Financial Services Group Inc. (The)		92		1,855
Lincoln National Corp.		66		1,542
Loews Corp.		76		2,671
Marsh & McLennan Companies Inc.		116		2,752
MetLife Inc.		202		7,595
Old Republic International Corp.		54		690
PartnerRe Ltd.		14		1,042

Security	Shares		Value
Principal Financial Group Inc.		70	$	1,614
Progressive Corp. (The)		142		2,812
Prudential Financial Inc.		106		5,360
RenaissanceRe Holdings Ltd.		14		795
Torchmark Corp.		18		888
Transatlantic Holdings Inc.		14		667
Travelers Companies Inc. (The)		118		5,780
Unum Group		74		1,484
Validus Holdings Ltd.		20		509
W.R. Berkley Corp.		32		843
White Mountains Insurance Group Ltd.		2		607
Willis Group Holdings PLC		38		1,105
XL Group PLC		76		1,361
				84,628
INTERNET – 2.67%
Akamai Technologies Inc.a		38		1,751
Amazon.com Inc.a		80		9,986
eBay Inc.a		268		6,228
Expedia Inc.		44		1,006
F5 Networks Inc.a		18		1,574
Google Inc. Class Aa		55		24,751
Liberty Media Corp. - Liberty Interactive Group Series Aa		126		1,329
McAfee Inc.a		34		1,600
Netflix Inc.a		10		1,255
Priceline.com Inc.a		10		2,915
Symantec Corp.a		180		2,453
VeriSign Inc.a		42		1,224
Yahoo! Inc.a		300		3,924
				59,996
IRON & STEEL – 0.29%
Allegheny Technologies Inc.		20		814
Cliffs Natural Resources Inc.		30		1,836
Nucor Corp.		70		2,575
United States Steel Corp.		32		1,360
				6,585
LEISURE TIME – 0.24%
Carnival Corp.		108		3,367
Harley-Davidson Inc.		52		1,265
Royal Caribbean Cruises Ltd.a		30		737
				5,369

56 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
LODGING – 0.37%
Las Vegas Sands Corp.a		72	$	2,040
Marriott International Inc. Class A		66		2,113
MGM Resorts Internationala		58		522
Starwood Hotels & Resorts Worldwide Inc.		42		1,963
Wynn Resorts Ltd.		20		1,612
				8,250
MACHINERY – 1.08%
AGCO Corp.a		20		661
Bucyrus International Inc.		18		1,035
Caterpillar Inc.		142		9,253
Cummins Inc.		46		3,423
Deere & Co.		94		5,947
Flowserve Corp.		12		1,073
Joy Global Inc.		22		1,248
Rockwell Automation Inc.		32		1,636
				24,276
MANUFACTURING – 3.75%
3M Co.		152		11,940
Cooper Industries PLC		38		1,599
Danaher Corp.		128		4,650
Dover Corp.		42		1,880
Eaton Corp.		38		2,640
General Electric Co.		2,412		34,926
Harsco Corp.		18		359
Honeywell International Inc.		166		6,489
Illinois Tool Works Inc.		100		4,126
Ingersoll-Rand PLC		76		2,472
ITT Corp.		38		1,615
Leggett & Platt Inc.		32		613
Pall Corp.		26		889
Parker Hannifin Corp.		36		2,130
Pentair Inc.		20		602
Roper Industries Inc.		20		1,162
SPX Corp.		10		561
Textron Inc.c		60		1,024
Tyco International Ltd.		118		4,399
				84,076
MEDIA – 2.94%
Cablevision NY Group Class A		54		1,355
CBS Corp. Class B NVS		142		1,962

Security	Shares		Value
Comcast Corp. Class A		468	$	8,012
Comcast Corp. Class A Special		174		2,796
DIRECTV Class Aa		206		7,812
Discovery Communications Inc. Series Aa		30		1,132
Discovery Communications Inc. Series Ca		32		1,082
DISH Network Corp. Class A		46		826
Liberty Global Inc. Series Aa		28		771
Liberty Global Inc. Series Ca		26		716
McGraw-Hill Companies Inc. (The)		70		1,935
News Corp. Class A NVS		416		5,229
News Corp. Class B		98		1,382
Scripps Networks Interactive Inc. Class A		20		804
Time Warner Cable Inc.		82		4,232
Time Warner Inc.		258		7,735
Viacom Inc. Class B NVSa		128		4,022
Walt Disney Co. (The)		414		13,492
Washington Post Co. (The) Class B		2		720
				66,015
METAL FABRICATE & HARDWARE – 0.16%
Precision Castparts Corp.		32		3,622
				3,622
MINING – 0.77%
Alcoa Inc.		234		2,389
Freeport-McMoRan Copper & Gold Inc.		98		7,054
Newmont Mining Corp.		110		6,745
Vulcan Materials Co.		28		1,030
				17,218
OFFICE & BUSINESS EQUIPMENT – 0.15%
Pitney Bowes Inc.		46		885
Xerox Corp.		296		2,498
				3,383
OIL & GAS – 8.89%
Anadarko Petroleum Corp.		112		5,151
Apache Corp.		82		7,368
Cabot Oil & Gas Corp.		22		612
Chesapeake Energy Corp.		148		3,061
Chevron Corp.		454		33,669
Cimarex Energy Co.		18		1,178
ConocoPhillips		320		16,778
Denbury Resources Inc.a		84		1,238
Devon Energy Corp.		98		5,907
Diamond Offshore Drilling Inc.		16		931

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
EOG Resources Inc.		58	$	5,038
EQT Corp.		30		978
Exxon Mobil Corp.		1,150		68,034
Helmerich & Payne Inc.		24		889
Hess Corp.		66		3,317
Marathon Oil Corp.		164		5,000
Murphy Oil Corp.		40		2,142
Nabors Industries Ltd.a		62		972
Newfield Exploration Co.a		30		1,440
Noble Corp.a		58		1,805
Noble Energy Inc.		42		2,931
Occidental Petroleum Corp.		184		13,447
Petrohawk Energy Corp.a		66		998
Pioneer Natural Resources Co.		26		1,503
Plains Exploration & Production Co.a		30		716
Pride International Inc.a		38		895
QEP Resources Inc.		38		1,103
Range Resources Corp.		40		1,352
Rowan Companies Inc.a		26		668
Southwestern Energy Co.a		76		2,487
Sunoco Inc.		26		876
Transocean Ltd.a		74		3,767
Ultra Petroleum Corp.a		34		1,326
Valero Energy Corp.		124		1,956
				199,533
OIL & GAS SERVICES – 1.61%
Baker Hughes Inc.		101		3,796
Cameron International Corp.a		54		1,986
FMC Technologies Inc.a		26		1,608
Halliburton Co.		208		5,868
National Oilwell Varco Inc.		98		3,684
Schlumberger Ltd.		313		16,692
Weatherford International Ltd.a		166		2,475
				36,109
PACKAGING & CONTAINERS – 0.21%
Ball Corp.		20		1,122
Crown Holdings Inc.a		36		1,003
Owens-Illinois Inc.a		38		952
Pactiv Corp.a		30		963
Sealed Air Corp.		36		738
				4,778

Security	Shares		Value
PHARMACEUTICALS – 5.55%
Abbott Laboratories		350	$	17,269
Allergan Inc.		68		4,176
AmerisourceBergen Corp.		64		1,746
Bristol-Myers Squibb Co.		388		10,119
Cardinal Health Inc.		80		2,397
Cephalon Inc.a		16		906
Eli Lilly and Co.		234		7,853
Express Scripts Inc.a		120		5,112
Forest Laboratories Inc.a		66		1,801
Gilead Sciences Inc.a		204		6,499
Hospira Inc.a		36		1,849
Mead Johnson Nutrition Co. Class A		46		2,401
Medco Health Solutions Inc.a		106		4,609
Merck & Co. Inc.		692		24,331
Mylan Inc.a		68		1,167
Omnicare Inc.		26		499
Perrigo Co.		18		1,026
Pfizer Inc.		1,828		29,120
Warner Chilcott PLC Class Aa		24		682
Watson Pharmaceuticals Inc.a		22		947
				124,509
PIPELINES – 0.41%
El Paso Corp.		154		1,754
Kinder Morgan Management LLCa		18		1,063
ONEOK Inc.		22		944
Spectra Energy Corp.		146		2,970
Williams Companies Inc. (The)		138		2,502
				9,233
REAL ESTATE INVESTMENT TRUSTS – 1.65%
AMB Property Corp.		36		856
Annaly Capital Management Inc.		150		2,607
AvalonBay Communities Inc.		18		1,894
Boston Properties Inc.		34		2,768
Duke Realty Corp.		50		561
Equity Residential		62		2,842
Federal Realty Investment Trust		14		1,110
HCP Inc.		64		2,254
Health Care REIT Inc.		28		1,286
Host Hotels & Resorts Inc.		140		1,838
Kimco Realty Corp.		88		1,312
Liberty Property Trust		24		729

58 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
Macerich Co. (The)		30	$	1,243
ProLogis		104		1,128
Public Storage		34		3,333
Regency Centers Corp.		20		729
Simon Property Group Inc.		64		5,789
Ventas Inc.		34		1,717
Vornado Realty Trust		36		2,918
				36,914
RETAIL – 5.93%
Abercrombie & Fitch Co. Class A		20		692
Advance Auto Parts Inc.		20		1,089
American Eagle Outfitters Inc.		42		531
AutoNation Inc.a		16		361
AutoZone Inc.a		6		1,259
Bed Bath & Beyond Inc.a		58		2,086
Best Buy Co. Inc.		80		2,511
CarMax Inc.a		50		996
Costco Wholesale Corp.		100		5,655
CVS Caremark Corp.		314		8,478
Darden Restaurants Inc.		30		1,238
Dollar General Corp.a		20		546
Dollar Tree Inc.a		30		1,360
Family Dollar Stores Inc.		30		1,284
GameStop Corp. Class Aa		34		609
Gap Inc. (The)		108		1,824
Home Depot Inc. (The)		386		10,735
J.C. Penney Co. Inc.		46		920
Kohl’s Corp.a		68		3,195
Limited Brands Inc.		60		1,416
Lowe’s Companies Inc.		330		6,699
Macy’s Inc.		94		1,827
McDonald’s Corp.		244		17,827
Nordstrom Inc.		44		1,272
O’Reilly Automotive Inc.a		30		1,418
PetSmart Inc.		28		893
Ross Stores Inc.		28		1,390
Sears Holdings Corp.a,c		10		619
Staples Inc.		164		2,914
Starbucks Corp.		172		3,954
Target Corp.		162		8,288
Tiffany & Co.		28		1,110
TJX Companies Inc. (The)		94		3,731

Security	Shares		Value
Urban Outfitters Inc.a		28	$	849
Wal-Mart Stores Inc.		462		23,165
Walgreen Co.		224		6,021
Yum! Brands Inc.		104		4,337
				133,099
SAVINGS & LOANS – 0.17%
Hudson City Bancorp Inc.		104		1,199
New York Community Bancorp Inc.		88		1,398
People’s United Financial Inc.		82		1,043
TFS Financial Corp.		20		184
				3,824
SEMICONDUCTORS – 2.38%
Advanced Micro Devices Inc.a		126		708
Altera Corp.		66		1,628
Analog Devices Inc.		64		1,784
Applied Materials Inc.		310		3,221
Broadcom Corp. Class A		102		3,057
Cree Inc.a		22		1,178
Intel Corp.		1,250		22,150
KLA-Tencor Corp.		38		1,064
Lam Research Corp.a		28		1,011
Linear Technology Corp.		50		1,433
LSI Corp.a		144		579
Marvell Technology Group Ltd.a		116		1,849
Maxim Integrated Products Inc.		68		1,079
MEMC Electronic Materials Inc.a		50		515
Microchip Technology Inc.		40		1,108
Micron Technology Inc.a		188		1,215
National Semiconductor Corp.		52		656
NVIDIA Corp.a		122		1,138
Texas Instruments Inc.		284		6,541
Xilinx Inc.		62		1,497
				53,411
SOFTWARE – 4.30%
Activision Blizzard Inc.		126		1,347
Adobe Systems Inc.a		116		3,220
Autodesk Inc.a		50		1,387
Automatic Data Processing Inc.		118		4,556
BMC Software Inc.a		40		1,442
CA Inc.		92		1,657
Cerner Corp.a		16		1,166
Citrix Systems Inc.a		40		2,318

SCHEDULES OF INVESTMENTS 59

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

Security	Shares		Value
Dun & Bradstreet Corp. (The)		12	$	791
Electronic Arts Inc.a		72		1,097
Fidelity National Information Services Inc.		70		1,809
Fiserv Inc.a		34		1,701
Intuit Inc.a		66		2,825
Microsoft Corp.		1,784		41,888
Nuance Communications Inc.a		46		675
Oracle Corp.		908		19,867
Paychex Inc.		72		1,792
Red Hat Inc.a		42		1,451
Salesforce.com Inc.a		28		3,077
SEI Investments Co.		30		531
Total System Services Inc.		38		540
VMware Inc. Class Aa		16		1,257
				96,394
TELECOMMUNICATIONS – 5.86%
American Tower Corp. Class Aa		94		4,405
AT&T Inc.		1,336		36,112
CenturyLink Inc.		66		2,387
Cisco Systems Inc.a		1,294		25,945
Corning Inc.		352		5,519
Crown Castle International Corp.a		64		2,632
Frontier Communications Corp.		221		1,708
Harris Corp.		30		1,262
Juniper Networks Inc.a		116		3,155
Level 3 Communications Inc.a		372		383
MetroPCS Communications Inc.a		54		483
Motorola Inc.a		524		3,946
NII Holdings Inc.a		36		1,305
QUALCOMM Inc.		378		14,481
Qwest Communications International Inc.		344		1,944
SBA Communications Corp. Class Aa		24		859
Sprint Nextel Corp.a		666		2,717
Telephone and Data Systems Inc.		12		347
Verizon Communications Inc.		644		19,004
Virgin Media Inc.		72		1,498
Windstream Corp.		123		1,419
				131,511
TEXTILES – 0.06%
Cintas Corp.		30		764
Mohawk Industries Inc.a		12		532
				1,296

Security	Shares		Value
TOYS, GAMES & HOBBIES – 0.13%
Hasbro Inc.		28	$	1,130
Mattel Inc.		80		1,679
				2,809
TRANSPORTATION – 1.70%
C.H. Robinson Worldwide Inc.		38		2,469
CSX Corp.		90		4,490
Expeditors International of Washington Inc.		52		2,059
FedEx Corp.		68		5,307
J.B. Hunt Transport Services Inc.		20		655
Norfolk Southern Corp.		82		4,402
Union Pacific Corp.		116		8,461
United Parcel Service Inc. Class B		160		10,208
				38,051
WATER – 0.04%
American Water Works Co. Inc.		38		858
				858
TOTAL COMMON STOCKS
(Cost: $2,482,481)				2,235,877
SHORT-TERM INVESTMENTS – 0.28%
MONEY MARKET FUNDS – 0.28%
BlackRock Cash Funds: Institutional,
SL Agency Shares
0.31%b,d,e		3,697		3,697
BlackRock Cash Funds: Prime,
SL Agency Shares
0.30%b,d,e		718		718
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%b,d		1,977		1,977
				6,392
TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,392)				6,392

60 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI USA INDEX FUND

August 31, 2010

	Value
TOTAL INVESTMENTS IN SECURITIES – 99.94%
(Cost: $2,488,873)	$	2,242,269
Other Assets, Less Liabilities – 0.06%		1,291
NET ASSETS – 100.00%	$	2,243,560

NVS – Non-Voting Shares

^a Non-income earning security.

^b Affiliated issuer. See Note 2.

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

^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 61

Statements of Assets and Liabilities

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Brazil Index Fund			iShares MSCI BRIC Index Fund			iShares MSCI Canada Index Fund			iShares MSCI Chile Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	5,316,137,097		$	900,981,763		$	3,730,000,989		$	486,780,244
Affiliated issuers (Note 2)		1,000			54,906,068			6,304,939			782,832
Total cost of investments	$	5,316,138,097		$	955,887,831		$	3,736,305,928		$	487,563,076
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	9,144,612,869		$	942,204,927		$	3,445,320,710		$	670,519,206
Affiliated issuers (Note 2)		1,000			54,906,068			6,304,939			782,832
Total fair value of investments		9,144,613,869			997,110,995			3,451,625,649			671,302,038
Foreign currencies, at valueb		31,803,026			1,793,491			5,960,619			–
Cash		–			–			8,528			–
Receivables:
Investment securities sold		47,521,174			–			4,251,542			11,754,666
Dividends and interest		47,226,621			2,878,033			4,200,890			15,472
Capital shares sold		–			–			297,203			10,081,691
Total Assets		9,271,164,690			1,001,782,519			3,466,344,431			693,153,867
LIABILITIES
Payables:
Investment securities purchased		25,824,413			–			11,674,652			22,486,074
Collateral for securities on loan (Note 5)		–			54,411,503			5,851,858			–
Investment advisory fees (Note 2)		4,887,761			556,562			1,575,424			317,387
Total Liabilities		30,712,174			54,968,065			19,101,934			22,803,461
NET ASSETS	$	9,240,452,516		$	946,814,454		$	3,447,242,497		$	670,350,406
Net assets consist of:
Paid-in capital	$	6,142,982,705		$	936,345,256		$	3,914,294,994		$	513,094,985
Undistributed (distributions in excess of) net investment income		(43,826,642	)		617,952			11,237,296			–
Accumulated net realized loss		(688,433,503	)		(31,409,074	)		(193,413,952	)		(26,483,064	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		3,829,729,956			41,260,320			(284,875,841	)		183,738,485
NET ASSETS	$	9,240,452,516		$	946,814,454		$	3,447,242,497		$	670,350,406
Shares outstandingc		135,750,000			22,050,000			132,100,000			9,950,000
Net asset value per share	$	68.07		$	42.94		$	26.10		$	67.37

^a Securities on loan with market values of $ –, $51,452,981, $5,622,785 and $ –, respectively. See Note 5.

^b Cost of foreign currencies: $31,664,437, $1,794,283, $6,094,341 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.

62 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	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
ASSETS
Investments, at cost:
Unaffiliated issuers	$	152,236,948		$	1,658,371,574		$	540,229,937		$	548,973,892
Affiliated issuers (Note 2)		4,575,687			71,215,006			5,641,293			24,550,711
Total cost of investments	$	156,812,635		$	1,729,586,580		$	545,871,230		$	573,524,603
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	128,323,139		$	1,448,655,271		$	504,073,865		$	601,539,543
Affiliated issuers (Note 2)		4,575,687			71,215,006			5,641,293			24,550,711
Total fair value of investments		132,898,826			1,519,870,277			509,715,158			626,090,254
Foreign currencies, at valueb		105,633			2,058,891			1,261,138			188,077
Cash		–			50,717			703			–
Receivables:
Investment securities sold		3,789,155			44,222,300			662,658			6,581,706
Dividends and interest		151,309			67,417			196,362			57,146
Capital shares sold		–			9,314			–			6,819
Total Assets		136,944,923			1,566,278,916			511,836,019			632,924,002
LIABILITIES
Payables:
Investment securities purchased		3,906,552			44,347,641			757,964			6,358,399
Collateral for securities on loan (Note 5)		4,485,493			71,189,692			5,623,093			24,280,853
Capital shares redeemed		–			7,892			–			–
Investment advisory fees (Note 2)		80,174			695,120			264,224			296,611
Total Liabilities		8,472,219			116,240,345			6,645,281			30,935,863
NET ASSETS	$	128,472,704		$	1,450,038,571		$	505,190,738		$	601,988,139
Net assets consist of:
Paid-in capital	$	171,931,475		$	1,718,265,416		$	589,474,214		$	564,662,074
Undistributed (distributions in excess of) net investment income		236,701			1,975,060			1,244,736			(557,958	)
Accumulated net realized loss		(19,781,507	)		(60,419,117	)		(49,372,809	)		(14,688,285	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		(23,913,965	)		(209,782,788	)		(36,155,403	)		52,572,308
NET ASSETS	$	128,472,704		$	1,450,038,571		$	505,190,738		$	601,988,139
Shares outstandingc		2,600,000			30,100,000			8,600,000			9,900,000
Net asset value per share	$	49.41		$	48.17		$	58.74		$	60.81

^a Securities on loan with market values of $4,231,812, $67,739,685, $5,414,630 and $22,970,904, respectively. See Note 5.

^b Cost of foreign currencies: $106,007, $2,125,359, $1,259,330 and $181,409, 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.

FINANCIAL STATEMENTS 63

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	iShares MSCI USA Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	2,473,141
Affiliated issuers (Note 2)		15,732
Total cost of investments	$	2,488,873
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	2,228,728
Affiliated issuers (Note 2)		13,541
Total fair value of investments		2,242,269
Receivables:
Investment securities sold		7,066
Dividends and interest		6,672
Total Assets		2,256,007
LIABILITIES
Payables:
Investment securities purchased		7,736
Collateral for securities on loan (Note 5)		4,415
Investment advisory fees (Note 2)		296
Total Liabilities		12,447
NET ASSETS	$	2,243,560
Net assets consist of:
Paid-in capital	$	2,482,623
Undistributed net investment income		9,975
Accumulated net realized loss		(2,434	)
Net unrealized depreciation		(246,604	)
NET ASSETS	$	2,243,560
Shares outstandingb		100,000
Net asset value per share	$	22.44

^a Securities on loan with a value of $4,316. See Note 5.

^b $0.001 par value, number of shares authorized: 500 million.

See notes to financial statements.

64 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Brazil Index Fund			iShares MSCI BRIC Index Fund			iShares MSCI Canada Index Fund			iShares MSCI Chile Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	290,593,540		$	17,723,523		$	68,879,911		$	5,860,940
Interest from affiliated issuers (Note 2)		6,183			527			1,301			681
Securities lending income from affiliated issuers (Note 2)		27,898			344,968			101,613			–
Total investment income		290,627,621			18,069,018			68,982,825			5,861,621
EXPENSES
Investment advisory fees (Note 2)		62,208,369			5,634,510			17,081,917			2,148,159
Total expenses		62,208,369			5,634,510			17,081,917			2,148,159
Net investment income		228,419,252			12,434,508			51,900,908			3,713,462
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		368,372,227			(12,252,741	)		(78,047,718	)		(2,773,934	)
In-kind redemptions		–			–			186,832,607			–
Foreign currency transactions		4,444,155			(229,716	)		219,606			(67,001	)
Net realized gain (loss)		372,816,382			(12,482,457	)		109,004,495			(2,840,935	)
Net change in unrealized appreciation (depreciation) on:
Investments		1,246,267,635			63,797,865			93,475,647			149,611,290
Translation of assets and liabilities in foreign currencies		(235,100	)		23,015			(132,732	)		(490	)
Net change in unrealized appreciation (depreciation)		1,246,032,535			63,820,880			93,342,915			149,610,800
Net realized and unrealized gain		1,618,848,917			51,338,423			202,347,410			146,769,865
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,847,268,169		$	63,772,931		$	254,248,318		$	150,483,327

^a Net of foreign withholding tax of $29,621,449, $1,702,706, $12,144,978 and $2,295,882, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	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
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	5,726,705		$	23,110,648		$	13,884,705		$	9,120,581
Interest from affiliated issuers (Note 2)		123			610			145			405
Securities lending income from affiliated issuers (Note 2)		177,023			743,404			36,327			789,907
Total investment income		5,903,851			23,854,662			13,921,177			9,910,893
EXPENSES
Investment advisory fees (Note 2)		1,106,791			6,401,000			3,137,352			2,492,426
Total expenses		1,106,791			6,401,000			3,137,352			2,492,426
Net investment income		4,797,060			17,453,662			10,783,825			7,418,467
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(10,729,401	)		(43,573,745	)		(9,372,462	)		(9,647,140	)
In-kind redemptions		10,828,730			72,820,613			40,224,814			34,943,768
Foreign currency transactions		(28,980	)		186,943			49,959			(22,159	)
Net realized gain		70,349			29,433,811			30,902,311			25,274,469
Net change in unrealized appreciation (depreciation) on:
Investments		(1,526,887	)		(1,646,195	)		23,526,400			46,428,259
Translation of assets and liabilities in foreign currencies		(4,832	)		(50,597	)		986			5,698
Net change in unrealized appreciation (depreciation)		(1,531,719	)		(1,696,792	)		23,527,386			46,433,957
Net realized and unrealized gain (loss)		(1,461,370	)		27,737,019			54,429,697			71,708,426
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	3,335,690		$	45,190,681		$	65,213,522		$	79,126,893

^a Net of foreign withholding tax of $964,279, $ –, $ – and $1,238,305, respectively.

See notes to financial statements.

66 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI USA Index Funda
NET INVESTMENT INCOME
Dividends from unaffiliated issuersb	$	17,676
Dividends from affiliated issuers (Note 2)		28
Interest from affiliated issuers (Note 2)		2
Securities lending income from affiliated issuers (Note 2)		22
Total investment income		17,728
EXPENSES
Investment advisory fees (Note 2)		1,127
Total expenses		1,127
Net investment income		16,601
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(2,434	)
Net realized loss		(2,434	)
Net change in unrealized appreciation (depreciation)		(246,604	)
Net realized and unrealized loss		(249,038	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(232,437	)

^a For the period from May 5, 2010 (commencement of operations) to August 31, 2010.

^b Net of foreign withholding tax of $4.

See notes to financial statements.

FINANCIAL STATEMENTS 67

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Brazil Index Fund						iShares MSCI BRIC Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	228,419,252		$	192,844,870		$	12,434,508		$	3,504,150
Net realized gain (loss)		372,816,382			(963,274,219	)		(12,482,457	)		(17,449,387	)
Net change in unrealized appreciation (depreciation)		1,246,032,535			238,177,276			63,820,880			16,000,615
Net increase (decrease) in net assets resulting from operations		1,847,268,169			(532,252,073	)		63,772,931			2,055,378
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(384,786,885	)		(222,728,833	)		(12,829,123	)		(3,193,491	)
Total distributions to shareholders		(384,786,885	)		(222,728,833	)		(12,829,123	)		(3,193,491	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		6,659,059			3,187,809,782			398,031,773			340,101,221
Cost of shares redeemed		(1,006,054,310	)		(897,722,395	)		–			(2,215,782	)
Net increase (decrease) in net assets from capital share transactions		(999,395,251	)		2,290,087,387			398,031,773			337,885,439
INCREASE IN NET ASSETS		463,086,033			1,535,106,481			448,975,581			336,747,326
NET ASSETS
Beginning of year		8,777,366,483			7,242,260,002			497,838,873			161,091,547
End of year	$	9,240,452,516		$	8,777,366,483		$	946,814,454		$	497,838,873
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(43,826,642	)	$	71,899,211		$	617,952		$	1,242,283
SHARES ISSUED AND REDEEMED
Shares sold		100,000			69,150,000			8,800,000			9,700,000
Shares redeemed		(15,000,000	)		(17,350,000	)		–			(100,000	)
Net increase (decrease) in shares outstanding		(14,900,000	)		51,800,000			8,800,000			9,600,000

See notes to financial statements.

68 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	51,900,908		$	29,085,589		$	3,713,462		$	3,711,626
Net realized gain (loss)		109,004,495			(88,665,380	)		(2,840,935	)		(21,842,611	)
Net change in unrealized appreciation (depreciation)		93,342,915			(320,275,596	)		149,610,800			41,659,903
Net increase (decrease) in net assets resulting from operations		254,248,318			(379,855,387	)		150,483,327			23,528,918
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(50,623,009	)		(29,274,634	)		(4,266,725	)		(3,316,556	)
Return of capital		–			–			(214,415	)		–
Total distributions to shareholders		(50,623,009	)		(29,274,634	)		(4,481,140	)		(3,316,556	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,858,101,617			1,115,573,096			378,631,231			234,309,554
Cost of shares redeemed		(1,008,121,985	)		(383,866,414	)		(117,487,891	)		(67,475,216	)
Net increase in net assets from capital share transactions		849,979,632			731,706,682			261,143,340			166,834,338
INCREASE IN NET ASSETS		1,053,604,941			322,576,661			407,145,527			187,046,700
NET ASSETS
Beginning of year		2,393,637,556			2,071,060,895			263,204,879			76,158,179
End of year	$	3,447,242,497		$	2,393,637,556		$	670,350,406		$	263,204,879
Undistributed net investment income included in net assets at end of year	$	11,237,296		$	9,728,466		$	–		$	553,151
SHARES ISSUED AND REDEEMED
Shares sold		69,800,000			50,600,000			6,350,000			5,850,000
Shares redeemed		(38,700,000	)		(17,400,000	)		(2,300,000	)		(1,650,000	)
Net increase in shares outstanding		31,100,000			33,200,000			4,050,000			4,200,000

See notes to financial statements.

FINANCIAL STATEMENTS 69

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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	4,797,060		$	2,794,735		$	17,453,662		$	6,673,063
Net realized gain (loss)		70,349			(32,145,219	)		29,433,811			(266,827,625	)
Net change in unrealized appreciation (depreciation)		(1,531,719	)		2,015,065			(1,696,792	)		12,202,418
Net increase (decrease) in net assets resulting from operations		3,335,690			(27,335,419	)		45,190,681			(247,952,144	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(5,130,542	)		(2,877,576	)		(18,506,573	)		(9,905,910	)
Total distributions to shareholders		(5,130,542	)		(2,877,576	)		(18,506,573	)		(9,905,910	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		136,885,872			1,502,612			1,412,598,195			800,186,831
Cost of shares redeemed		(114,410,341	)		(67,698,624	)		(683,521,351	)		(803,735,494	)
Net increase (decrease) in net assets from capital share transactions		22,475,531			(66,196,012	)		729,076,844			(3,548,663	)
INCREASE (DECREASE) IN NET ASSETS		20,680,679			(96,409,007	)		755,760,952			(261,406,717	)
NET ASSETS
Beginning of year		107,792,025			204,201,032			694,277,619			955,684,336
End of year	$	128,472,704		$	107,792,025		$	1,450,038,571		$	694,277,619
Undistributed net investment income included in net assets at end of year	$	236,701		$	339,150		$	1,975,060		$	2,841,028
SHARES ISSUED AND REDEEMED
Shares sold		2,550,000			50,000			28,100,000			22,900,000
Shares redeemed		(2,250,000	)		(1,950,000	)		(14,300,000	)		(25,000,000	)
Net increase (decrease) in shares outstanding		300,000			(1,900,000	)		13,800,000			(2,100,000	)

See notes to financial statements.

70 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	10,783,825		$	15,496,775		$	7,418,467		$	2,499,255
Net realized gain (loss)		30,902,311			(51,609,671	)		25,274,469			(5,778,951	)
Net change in unrealized appreciation (depreciation)		23,527,386			22,370,334			46,433,957			4,879,633
Net increase (decrease) in net assets resulting from operations		65,213,522			(13,742,562	)		79,126,893			1,599,937
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(12,009,132	)		(16,108,974	)		(8,702,771	)		(3,253,085	)
Total distributions to shareholders		(12,009,132	)		(16,108,974	)		(8,702,771	)		(3,253,085	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		215,358,696			240,171,487			471,556,198			172,031,636
Cost of shares redeemed		(252,100,617	)		(151,246,258	)		(182,426,990	)		(79,964,959	)
Net increase (decrease) in net assets from capital share transactions		(36,741,921	)		88,925,229			289,129,208			92,066,677
INCREASE IN NET ASSETS		16,462,469			59,073,693			359,553,330			90,413,529
NET ASSETS
Beginning of year		488,728,269			429,654,576			242,434,809			152,021,280
End of year	$	505,190,738		$	488,728,269		$	601,988,139		$	242,434,809
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	1,244,736		$	2,312,820		$	(557,958	)	$	181,540
SHARES ISSUED AND REDEEMED
Shares sold		3,800,000			5,600,000			8,350,000			4,250,000
Shares redeemed		(4,600,000	)		(3,900,000	)		(3,500,000	)		(2,100,000	)
Net increase (decrease) in shares outstanding		(800,000	)		1,700,000			4,850,000			2,150,000

See notes to financial statements.

FINANCIAL STATEMENTS 71

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI USA Index Fund
	Period from May 5, 2010a to August 31, 2010
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	16,601
Net realized loss		(2,434	)
Net change in unrealized appreciation (depreciation)		(246,604	)
Net decrease in net assets resulting from operations		(232,437	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(6,626	)
Total distributions to shareholders		(6,626	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,482,623
Net increase in net assets from capital share transactions		2,482,623
INCREASE IN NET ASSETS		2,243,560
NET ASSETS
Beginning of period		–
End of period	$	2,243,560
Undistributed net investment income included in net assets at end of period	$	9,975
SHARES ISSUED
Shares sold		100,000
Net increase in shares outstanding		100,000

^a Commencement of operations.

See notes to financial statements.

72 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	58.26		$	73.27		$	61.59		$	39.09		$	28.18
Income from investment operations:
Net investment incomea		1.56			1.56			1.93			1.09			1.00
Net realized and unrealized gain (loss)b		10.83			(14.63	)		11.59			22.35			10.49
Total from investment operations		12.39			(13.07	)		13.52			23.44			11.49
Less distributions from:
Net investment income		(2.58	)		(1.94	)		(1.41	)		(0.94	)		(0.58	)
Net realized gain		–			–			(0.43	)		–			–
Total distributions		(2.58	)		(1.94	)		(1.84	)		(0.94	)		(0.58	)
Net asset value, end of year	$	68.07		$	58.26		$	73.27		$	61.59		$	39.09
Total return		21.12	%		(16.05	)%		21.58	%		60.82	%		41.13	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	9,240,453		$	8,777,366		$	7,242,260		$	4,434,334		$	2,468,295
Ratio of expenses to average net assets		0.61	%		0.65	%		0.63	%		0.69	%		0.70	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			n/a			0.63	%		0.68	%		n/a
Ratio of net investment income to average net assets		2.24	%		3.38	%		2.37	%		2.17	%		2.65	%
Portfolio turnover ratec		13	%		30	%		30	%		22	%		15	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 13%, 14%, 19%, 6% and 13%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL STATEMENTS 73

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI BRIC Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Period from Nov. 12, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	37.57		$	44.13		$	56.50
Income from investment operations:
Net investment incomeb		0.66			0.58			0.72
Net realized and unrealized gain (loss)c		5.35			(6.60	)		(12.93	)
Total from investment operations		6.01			(6.02	)		(12.21	)
Less distributions from:
Net investment income		(0.64	)		(0.54	)		(0.16	)
Total distributions		(0.64	)		(0.54	)		(0.16	)
Net asset value, end of period	$	42.94		$	37.57		$	44.13
Total return		15.95	%		(13.08	)%		(21.65	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	946,814		$	497,839		$	161,092
Ratio of expenses to average net assetse		0.69	%		0.72	%		0.72	%
Ratio of expenses to average net assets exclusive of foreign taxese		n/a			n/a			0.72	%
Ratio of net investment income to average net assetse		1.52	%		1.87	%		1.74	%
Portfolio turnover ratef		9	%		7	%		9	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 8%, 6%, and 2%, respectively. See Note 4.

See notes to financial statements.

74 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	23.70		$	30.55		$	29.87		$	24.69		$	20.30
Income from investment operations:
Net investment incomea		0.43			0.41			0.47			0.35			0.25
Net realized and unrealized gain (loss)b		2.39			(6.84	)		0.72			5.11			4.29
Total from investment operations		2.82			(6.43	)		1.19			5.46			4.54
Less distributions from:
Net investment income		(0.42	)		(0.42	)		(0.51	)		(0.28	)		(0.15	)
Total distributions		(0.42	)		(0.42	)		(0.51	)		(0.28	)		(0.15	)
Net asset value, end of year	$	26.10		$	23.70		$	30.55		$	29.87		$	24.69
Total return		11.91	%		(20.51	)%		3.88	%		22.33	%		22.46	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,447,242		$	2,393,638		$	2,071,061		$	1,323,122		$	1,101,161
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.52	%		0.54	%
Ratio of expenses to average net assets exclusive of foreign taxes		n/a			0.55	%		n/a			0.52	%		n/a
Ratio of net investment income to average net assets		1.63	%		2.00	%		1.46	%		1.32	%		1.09	%
Portfolio turnover ratec		6	%		6	%		11	%		8	%		20	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 Chile Investable Market Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Period from Nov. 12, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	44.61		$	44.80		$	48.84
Income from investment operations:
Net investment incomeb		0.59			0.76			0.92
Net realized and unrealized gain (loss)c		22.86			(0.42	)		(4.38	)
Total from investment operations		23.45			0.34			(3.46	)
Less distributions from:
Net investment income		(0.66	)		(0.53	)		(0.58	)
Return of capital		(0.03	)		–			–
Total distributions		(0.69	)		(0.53	)		(0.58	)
Net asset value, end of period	$	67.37		$	44.61		$	44.80
Total return		52.88	%		0.89	%		(7.15	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	670,350		$	263,205		$	76,158
Ratio of expenses to average net assetse		0.61	%		0.65	%		0.63	%
Ratio of net investment income to average net assetse		1.05	%		1.98	%		2.38	%
Portfolio turnover ratef		42	%		53	%		16	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 9%, 14% and 16%, respectively. See Note 4.

See notes to financial statements.

76 2010 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, 2010			Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	46.87		$	48.62		$	50.33
Income from investment operations:
Net investment incomeb		1.40			0.98			0.21
Net realized and unrealized gain (loss)c		2.63			(1.75	)		(1.92	)
Total from investment operations		4.03			(0.77	)		(1.71	)
Less distributions from:
Net investment income		(1.49	)		(0.98	)		–
Total distributions		(1.49	)		(0.98	)		–
Net asset value, end of period	$	49.41		$	46.87		$	48.62
Total return		8.57	%		(0.63	)%		(3.40	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	128,473		$	107,792		$	204,201
Ratio of expenses to average net assetse		0.61	%		0.66	%		0.63	%
Ratio of net investment income to average net assetse		2.64	%		2.66	%		0.93	%
Portfolio turnover ratef		21	%		27	%		8	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 77

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Mexico Investable Market Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	42.59		$	51.94		$	58.35		$	41.30		$	29.04
Income from investment operations:
Net investment incomea		0.72			0.43			1.40			0.64			0.76
Net realized and unrealized gain (loss)b		5.61			(9.17	)		(6.21	)		16.87			11.98
Total from investment operations		6.33			(8.74	)		(4.81	)		17.51			12.74
Less distributions from:
Net investment income		(0.75	)		(0.61	)		(1.60	)		(0.46	)		(0.48	)
Total distributions		(0.75	)		(0.61	)		(1.60	)		(0.46	)		(0.48	)
Net asset value, end of year	$	48.17		$	42.59		$	51.94		$	58.35		$	41.30
Total return		14.83	%		(16.50	)%		(8.44	)%		42.58	%		44.11	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,450,039		$	694,278		$	955,684		$	1,382,810		$	764,107
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		1.46	%		1.25	%		2.42	%		1.19	%		2.06	%
Portfolio turnover ratec		11	%		13	%		13	%		14	%		12	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the fund’s underlying securities.

^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 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a
Net asset value, beginning of year	$	51.99		$	55.80		$	62.26		$	48.84		$	41.50
Income from investment operations:
Net investment incomeb		1.18			1.94			2.28			1.50			1.44
Net realized and unrealized gain (loss)c		6.92			(3.84	)		(6.02	)		13.18			6.89
Total from investment operations		8.10			(1.90	)		(3.74	)		14.68			8.33
Less distributions from:
Net investment income		(1.35	)		(1.91	)		(2.72	)		(1.26	)		(0.99	)
Total distributions		(1.35	)		(1.91	)		(2.72	)		(1.26	)		(0.99	)
Net asset value, end of year	$	58.74		$	51.99		$	55.80		$	62.26		$	48.84
Total return		15.80	%		(2.23	)%		(6.18	)%		30.34	%		20.06	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	505,191		$	488,728		$	429,655		$	466,940		$	297,898
Ratio of expenses to average net assets		0.61	%		0.66	%		0.63	%		0.68	%		0.70	%
Ratio of net investment income to average net assets		2.09	%		4.81	%		3.61	%		2.58	%		2.79	%
Portfolio turnover rated		5	%		16	%		21	%		8	%		7	%

^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 for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities

^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 79

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Turkey Investable Market Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	48.01		$	52.42		$	50.30
Income from investment operations:
Net investment incomeb		1.00			0.78			0.83
Net realized and unrealized gain (loss)c		13.02			(4.22	)		1.29
Total from investment operations		14.02			(3.44	)		2.12
Less distributions from:
Net investment income		(1.22	)		(0.97	)		–
Total distributions		(1.22	)		(0.97	)		–
Net asset value, end of period	$	60.81		$	48.01		$	52.42
Total return		29.55	%		(5.56	)%		4.22	%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	601,988		$	242,435		$	152,021
Ratio of expenses to average net assetse		0.61	%		0.65	%		0.63	%
Ratio of net investment income to average net assetse		1.81	%		2.39	%		3.78	%
Portfolio turnover ratef		13	%		16	%		27	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

80 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout the period)

	iShares MSCI USA Index Fund
	Period from May 5, 2010a to Aug. 31, 2010
Net asset value, beginning of period	$	24.83
Income from investment operations:
Net investment incomeb		0.17
Net realized and unrealized loss		(2.49	)
Total from investment operations		(2.32	)
Less distributions from:
Net investment income		(0.07	)
Total distributions		(0.07	)
Net asset value, end of period	$	22.44
Total return		(9.37	)%c
Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,244
Ratio of expenses to average net assetsd		0.15	%
Ratio of net investment income to average net assetsd		2.21	%
Portfolio turnover ratee		1	%

^a Commencement of operations.

^b Based on average shares outstanding throughout the period.

^c Not annualized.

^d Annualized for periods of less than one year.

^e 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 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, iShares MSCI Turkey Investable Market and iShares MSCI USA Index Funds (each, a “Fund,” collectively, the “Funds”). The iShares MSCI USA Index Fund commenced operations on May 5, 2010.

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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

Each Fund, except for the iShares MSCI USA Index Fund, invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This 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”) using 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

82 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy 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.

The following table summarizes the values of each Fund’s investments according to the fair value hierarchy as of August 31, 2010. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.

	Investments in Securities
iShares MSCI Index Fund	Level 1		Level 2		Level 3		Total
Brazil	$	9,144,613,869	$	–	$	–	$	9,144,613,869
BRIC
Common Stocks	$	754,473,616	$	–	$	8,893,263	$	763,366,879
Preferred Stocks		178,829,132		–		–		178,829,132
Rights		35		–		–		35
Warrants		8,881		–		–		8,881
Short-Term Investments		54,906,068		–		–		54,906,068
	$	988,217,732	$	–	$	8,893,263	$	997,110,995
Canada	$	3,451,625,649	$	–	$	–	$	3,451,625,649
Chile Investable Market	$	671,302,038	$	–	$	–	$	671,302,038
Israel Capped Investable Market	$	132,898,826	$	–	$	–	$	132,898,826
Mexico Investable Market	$	1,519,870,277	$	–	$	–	$	1,519,870,277
South Africa	$	509,715,158	$	–	$	–	$	509,715,158
Turkey Investable Market	$	626,090,254	$	–	$	–	$	626,090,254
USA	$	2,242,269	$	–	$	–	$	2,242,269

84 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

The following table provides the reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the year ended August 31, 2010:

iShares MSCI Index Fund	Balance at Beginning of Year		Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation)		Net Purchases (Sales)		Net Transfers In (Out)a			Balance at End of Year		Net Change in Unrealized Appreciation (Depreciation) from Investments Still Held at End of Year
BRIC
Common Stocks	$	–	$	298,041	$	5,175,380	$	3,419,842	b	$	8,893,263	$	298,041

^a The Funds’ policy is to recognize transfers in and transfers out as of the beginning of the period in which the event occurred.

^b Represents the transfer in of Ping An Insurance (Group) Company of China, Ltd. (“Ping An”) Class H shares from Level 1 to Level 3. At the request of Ping An, shares of its stock were suspended from trading on the Hong Kong Stock Exchange beginning June 30, 2010 pending the release of an announcement in relation to a potential transaction.

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. 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, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

NOTES TO FINANCIAL STATEMENTS 85

Notes to Financial Statements (Continued)

iSHARES^® , INC.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are generally declared and paid at least semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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, 2010, 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)
Brazil	$	243,268,643	$	3,098,800,505		$	(244,599,337	)	$	3,097,469,811
BRIC		4,425,959		24,792,158			(18,748,919	)		10,469,198
Canada		15,978,886		(353,007,101	)		(130,024,282	)		(467,052,497	)
Chile Investable Market		–		171,712,492			(14,457,071	)		157,255,421
Israel Capped Investable Market		404,129		(25,626,346	)		(18,236,554	)		(43,458,771	)
Mexico Investable Market		1,975,060		(238,441,963	)		(31,759,942	)		(268,226,845	)
South Africa		4,013,683		(48,641,393	)		(39,655,766	)		(84,283,476	)
Turkey Investable Market		1,160,723		46,705,977			(10,540,635	)		37,326,065
USA		9,975		(248,373	)		(665	)		(239,063	)

For the years ended August 31, 2010 and August 31, 2009, 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 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, 2010.

86 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

From November 1, 2009 to August 31, 2010, certain Funds incurred net realized capital losses and net foreign currency 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, 2011 as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital/Net Foreign Currency Losses
BRIC	$	5,940,093
Canada		19,806,312
Chile Investable Market		858,100
Israel Capped Investable Market		6,650,884

iShares MSCI Index Fund	Deferred Net Realized Capital/Net Foreign Currency Losses
Mexico Investable Market	$	13,032,194
South Africa		6,091,717
Turkey Investable Market		3,837,262
USA		665

Certain Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund	Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Expiring 2017		Expiring 2018		Total
Brazil	$	–	$	–	$	–	$	–	$	–	$	–	$	29,287,453	$	215,311,884	$	244,599,337
BRIC		–		–		–		–		–		–		1,540,740		11,268,086		12,808,826
Canada		–		–		2,931,648		–		5,363,291		5,107,471		27,886,883		68,928,677		110,217,970
Chile Investable Market		–		–		–		–		–		–		1,886,881		11,712,090		13,598,971
Israel Capped Investable Market		–		–		–		–		–		–		784,479		10,801,191		11,585,670
Mexico Investable Market		2,329,290		3,136,171		12,912		632,766		–		853,150		8,973,988		2,789,471		18,727,748
South Africa		–		527,613		–		260,738		1,607,845		972,024		15,339,464		14,856,365		33,564,049
Turkey Investable Market		–		–		–		–		–		–		720,636		5,982,737		6,703,373

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.

NOTES TO FINANCIAL STATEMENTS 87

Notes to Financial Statements (Continued)

iSHARES^® , INC.

As of August 31, 2010, 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	$	6,047,067,548	$	3,875,619,595	$	(778,073,274	)	$	3,097,546,321
BRIC		972,355,993		100,421,968		(75,666,966	)		24,755,002
Canada		3,804,437,188		169,862,303		(522,673,842	)		(352,811,539	)
Chile Investable Market		499,589,069		171,712,969		–			171,712,969
Israel Capped Investable Market		158,525,016		1,822,650		(27,448,840	)		(25,626,190	)
Mexico Investable Market		1,758,245,755		23,235,601		(261,611,079	)		(238,375,478	)
South Africa		558,357,220		29,182,099		(77,824,161	)		(48,642,062	)
Turkey Investable Market		579,390,934		59,788,534		(13,089,214	)		46,699,320
USA		2,490,642		29,261		(277,634	)		(248,373	)

Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.

Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.

Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA 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.

88 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

For its investment advisory services to the iShares MSCI Canada and iShares MSCI Mexico Investable Market Index Funds, BFA 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

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, BFA 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, BFA 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

For its investment advisory services to the iShares MSCI USA Index Fund, BFA is entitled to an annual investment advisory fee of 0.15% of the average daily net assets of the Fund.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC

NOTES TO FINANCIAL STATEMENTS 89

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010, BTC earned securities lending agent fees from the Funds as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Brazil	$	16,665
BRIC		204,584
Canada		61,367
Israel Capped Investable Market		103,210

iShares MSCI Index Fund	Securities Lending Agent Fees
Mexico Investable Market	$	432,133
South Africa		20,303
Turkey Investable Market		464,373
USA		10

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.

Investments in issuers considered to be an affiliate of the Funds (excluding short-term investments) for the period May 5, 2010 to August 31, 2010, for the purposes of Section 2(a)(3) of the 1940 Act, were as follows:

iShares Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period		Gross Additions		Gross Reductions		Number of Shares Held End of Period		Value at End of Period		Dividend Income		Net Realized Gain
MSCI USA
BlackRock Inc.		–		8		–		8	$	1,136	$	16	$	–
PNC Financial Services Group Inc. (The)		–		118		–		118		6,013		12		–
									$	7,149	$	28	$	–

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	Purchases		Sales
Brazil	$	1,274,928,741	$	2,460,716,045
BRIC		204,648,201		68,245,976
Canada		199,957,098		187,986,739
Chile Investable Market		412,135,393		151,392,914
Israel Capped Investable Market		35,582,801		35,791,526
Mexico Investable Market		189,847,645		131,590,118
South Africa		25,885,966		26,744,235
Turkey Investable Market		63,193,786		54,173,734
USA		114,654		29,842

90 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
BRIC	$	258,019,810	$	–
Canada		1,847,162,513		1,002,116,858
Israel Capped Investable Market		135,518,033		112,879,849
Mexico Investable Market		1,407,217,454		682,310,813
South Africa		214,140,028		251,737,355
Turkey Investable Market		459,486,094		175,246,388
USA		2,401,432		–

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 Bank and Trust Company, 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 certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) 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 current 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 value of the securities on loan. The risks 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 BFA or its affiliates; such reinvestments are subject to investment risk.

As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 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, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.

NOTES TO FINANCIAL STATEMENTS 91

Notes to Financial Statements (Continued)

iSHARES^® , INC.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

92 2010 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, iShares MSCI Turkey Investable Market Index Fund and iShares MSCI USA Index Fund, each a portfolio of the iShares MSCI Series (the “Funds”), at August 31, 2010, 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 22, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 93

Tax Information (Unaudited)

iSHARES^® INC.

For corporate shareholders, 100% of the income dividends paid by the iShares MSCI USA Index Fund during the fiscal period ended August 31, 2010 qualified for the dividends-received deduction.

For the fiscal year ended August 31, 2010, 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	$	320,214,989	$	29,620,138
BRIC		19,426,229		1,694,560
Canada		81,024,889		12,132,596
Chile Investable Market		8,156,822		2,285,598
Israel Capped Investable Market		6,690,984		934,861
Turkey Investable Market		10,358,886		1,231,213

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, 2010:

iShares MSCI Index Fund	Qualified Dividend Income
Brazil	$	14,222,394
BRIC		7,175,525
Canada		50,623,009
Israel Capped Investable Market		5,130,542

iShares MSCI Index Fund	Qualified Dividend Income
Mexico Investable Market	$	18,506,573
South Africa		12,009,132
Turkey Investable Market		8,702,771
USA		6,626

In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

94 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract (Unaudited)

iSHARES^® MSCI USA Index Fund

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 to consider and approve the Fund entering into an Investment Advisory Contract with BlackRock Fund Advisors (“BFA”) (the “Advisory Contract”). As required by Section 15(c), the Board requested, and BFA provided, such information as the Board deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract.

On December 1, 2009, BlackRock, Inc. (“BlackRock”) completed a transaction whereby it acquired from Barclays Bank PLC (“Barclays”) the interests in BFA, formerly known as Barclays Global Fund Advisors, and certain affiliated companies, including BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A. (the “Transaction”).

At a meeting held on September 16-17, 2009, the Board approved the selection of BFA and the Advisory Contract for the Fund, based on its review of qualitative and quantitative information provided by BFA, BTC and BlackRock, as applicable, at the September 2009 Board meeting and at prior Board meetings. In that regard, at telephonic and in-person meetings held in June, July and August 2009, the Board, including the Independent Directors, discussed the Transaction and its potential impact on BFA. The Board received, in response to a written due diligence request prepared by the Board and its independent counsel, comprehensive written information from BFA, BTC and BlackRock, as applicable, covering a range of issues and received, in response to additional requests, further information in advance of and at an August 13, 2009 in-person Board meeting. To assist the Board, BlackRock provided materials and information about itself, including its history, management, investment, risk management and compliance capabilities and processes, and financial condition, and BFA 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 selecting BFA 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 to be provided by BFA – The Board reviewed the scope of services to be provided by BFA under the Advisory Contract. In reviewing the scope of services to be provided to the Fund by BFA, the Board considered BFA’s investment philosophy and experience, noting that over the past several years BFA and its affiliates have committed significant resources to the support of the other iShares funds. The Board considered in particular that BFA’s services for the other iShares funds capitalize on BFA’s core competencies, including the effective use of its proprietary investment models analyzing securities market risk, asset class correlations and expected returns. The Board also considered services provided by BFA and its affiliates in connection with the review of counterparty and issuer credit risk and securities lending opportunities and the oversight of intermediaries that provide shareholder support and processing functions.

The Board also considered BFA’s compliance program and its compliance record with respect to the other iShares funds. The Board noted that BFA 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, similar to the other iShares funds. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment processes and strategies, and matters related to BFA’s portfolio transaction policies and procedures. The Board noted that BFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Fund; therefore, comparative performance information was generally not available.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 95

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

iSHARES^® MSCI USA Index Fund

The Board noted the representations of BFA, BTC and BlackRock made at the June, July and August 2009 Board meetings that the Transaction was not expected to have any adverse effect on the resources and strengths of BFA in managing the Fund. The Board also considered that the Fund and its shareholders may benefit from having direct access to BlackRock’s technology and risk management analytic tools, including the investment tools provided under the BlackRock Solutions^® brand name. At the prior Board meetings, the Board discussed BlackRock’s current financial condition, its anticipated financial condition following the completion of the Transaction and its lines of business, and its current ownership structure and expected ownership structure following the completion of the Transaction. The Board also discussed BFA’s anticipated financial condition following the completion of the Transaction.

Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BFA to the Fund under the Advisory Contract were appropriate and supported the Board’s selection of BFA as investment adviser to the Fund.

Fund expenses – The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual 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 applicable peer group pursuant to Lipper’s proprietary methodology and any registered funds that would otherwise have been excluded from Lipper’s comparison group because of their size or other differentiating factors, but were nonetheless included at the request of BFA (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 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 Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund. The Board noted that the investment advisory fee rates 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 Groups.

Based on this review, the Board concluded that the investment advisory fee and expense level of the Fund, as proposed to be managed by BFA, as compared to the investment advisory fees and expense levels of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract.

Costs of services to be provided to the fund and profits to be realized by BFA and affiliates – The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Contract or revenue to be received by BFA or its affiliates in connection with services to be provided to the Fund since the proposed relationships had not yet commenced. The Board noted that it expects to receive profitability information from BFA on at least an annual basis following the expiration of the Advisory Contract’s initial two year term and thus be in a position to evaluate whether any adjustments in Fund fees would be 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 did not provide for any breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund increase. However, the Board further noted that possible future economies of scale for the Fund had been taken into consideration by fixing the investment advisory fee rate 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 structuring with declining breakpoints where the initial fee was higher. The Board also reviewed BFA’s historic profitability as investment adviser to the iShares fund complex and noted that BFA had continued to make significant investments in the iShares fund complex and that expenses had grown at a pace similar to the growth in revenue. The Board

96 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

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

iSHARES^® MSCI USA Index Fund

noted representations from BFA and BlackRock at the June, July and August 2009 Board meetings that BFA will continue to make significant investments in the iShares fund complex and the infrastructure supporting the iShares funds. It was noted at the prior Board meetings that it was not possible to evaluate how the Transaction would create opportunities for additional economies of scale.

Based on this review, as well as the discussions described above in connection with the Lipper Group comparisons, the Board, recognizing its responsibility to consider this issue at least annually following an initial two-year period, concluded that the structure of the investment advisory fee reflects the sharing of potential economies of scale with the Fund’s shareholders.

Fees and services provided for other comparable funds/accounts managed by BFA and its affiliates – The Board considered certain information regarding the Fund’s annual investment advisory fee rate under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts with substantially similar investment objectives and strategies, for which BFA (or its affiliate, BTC) provides investment advisory/management services, including collective funds and separate accounts (together, the “Other Accounts”). The Board noted that directly comparative investment advisory/management fee information was available for the Fund, as BFA and its affiliates do manage Other Accounts with substantially similar investment objectives and strategies as the Fund. In reviewing the comparative investment advisory/management fee information for the Fund, the Board considered the general structure of the investment advisory/management fee in relation to the nature and extent of services to be provided to the Fund in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Fund and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for the Other Accounts for which BFA or BTC provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided to the Fund as compared to the Other Accounts. Based on this review, as well as the discussions described above in connection with the Lipper Group comparisons, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute a fee that is 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 rate under the Advisory Contract, is fair and reasonable.

Other benefits to BFA and/or its affiliates – Except as noted below, the Board did not consider any ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, the Board noted that BFA would not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board also considered the potential for revenue to BTC, the Company’s securities lending agent, in the event of any loaning of portfolio securities of the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rate thereunder, is fair and reasonable in light of all relevant circumstances.

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT 97

Supplemental Information (Unaudited)

iSHARES^® , INC.

Premium/Discount Information

The tables that follow present information about the differences between the daily market price on secondary markets for shares of a Fund and that Fund’s net asset value. Net asset value, or “NAV,” is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of such Fund is listed for trading as of the time that the Fund’s NAV is calculated. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the fair 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, except for the iShares MSCI USA Index Fund, 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, 2005 through June 30, 2010

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%		6		0.43
Greater than 2.0% and Less than 2.5%		10		0.72
Greater than 1.5% and Less than 2.0%		21		1.52
Greater than 1.0% and Less than 1.5%		48		3.47
Greater than 0.5% and Less than 1.0%		107		7.74
Between 0.5% and –0.5%		1,037		75.05
Less than –0.5% and Greater than –1.0%		99		7.16
Less than –1.0% and Greater than –1.5%		16		1.16
Less than –1.5% and Greater than –2.0%		11		0.80
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%		1		0.07
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	%

98 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)(Continued)

iSHARES^®, INC.

iShares MSCI BRIC Index Fund

Period Covered: January 1, 2008 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.5%		3		0.48	%
Greater than 5.0% and Less than 5.5%		1		0.16
Greater than 4.5% and Less than 5.0%		2		0.32
Greater than 4.0% and Less than 4.5%		2		0.32
Greater than 3.5% and Less than 4.0%		2		0.32
Greater than 3.0% and Less than 3.5%		5		0.80
Greater than 2.5% and Less than 3.0%		8		1.27
Greater than 2.0% and Less than 2.5%		22		3.50
Greater than 1.5% and Less than 2.0%		41		6.53
Greater than 1.0% and Less than 1.5%		102		16.24
Greater than 0.5% and Less than 1.0%		129		20.54
Between 0.5% and –0.5%		206		32.81
Less than –0.5% and Greater than –1.0%		56		8.92
Less than –1.0% and Greater than –1.5%		20		3.18
Less than –1.5% and Greater than –2.0%		10		1.59
Less than –2.0% and Greater than –2.5%		8		1.27
Less than –2.5% and Greater than –3.0%		1		0.16
Less than –3.5%		10		1.59
		628		100.00	%

iShares MSCI Canada Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		22		1.59
Greater than 0.5% and Less than 1.0%		137		9.91
Between 0.5% and –0.5%		1,092		79.03
Less than –0.5% and Greater than –1.0%		93		6.73
Less than –1.0% and Greater than –1.5%		21		1.52
Less than –1.5% and Greater than –2.0%		3		0.22
Less than –2.0% and Greater than –2.5%		1		0.07
Less than –2.5%		2		0.14
		1,382		100.00	%

SUPPLEMENTAL INFORMATION 99

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Chile Investable Market Index Fund

Period Covered: January 1, 2008 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 4.0%		4		0.64	%
Greater than 3.5% and Less than 4.0%		2		0.32
Greater than 3.0% and Less than 3.5%		1		0.16
Greater than 2.5% and Less than 3.0%		4		0.64
Greater than 2.0% and Less than 2.5%		7		1.11
Greater than 1.5% and Less than 2.0%		11		1.75
Greater than 1.0% and Less than 1.5%		45		7.17
Greater than 0.5% and Less than 1.0%		150		23.89
Between 0.5% and –0.5%		269		42.82
Less than –0.5% and Greater than –1.0%		89		14.17
Less than –1.0% and Greater than –1.5%		22		3.50
Less than –1.5% and Greater than –2.0%		11		1.75
Less than –2.0% and Greater than –2.5%		3		0.48
Less than –2.5% and Greater than –3.0%		4		0.64
Less than –3.0%		6		0.96
		628		100.00	%

100 2010 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, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		3		0.53	%
Greater than 4.5% and Less than 5.0%		1		0.18
Greater than 4.0% and Less than 4.5%		3		0.53
Greater than 3.5% and Less than 4.0%		1		0.18
Greater than 3.0% and Less than 3.5%		5		0.88
Greater than 2.5% and Less than 3.0%		4		0.71
Greater than 2.0% and Less than 2.5%		9		1.59
Greater than 1.5% and Less than 2.0%		24		4.23
Greater than 1.0% and Less than 1.5%		45		7.94
Greater than 0.5% and Less than 1.0%		96		16.93
Between 0.5% and –0.5%		242		42.66
Less than –0.5% and Greater than –1.0%		50		8.82
Less than –1.0% and Greater than –1.5%		31		5.47
Less than –1.5% and Greater than –2.0%		26		4.59
Less than –2.0% and Greater than –2.5%		6		1.06
Less than –2.5% and Greater than –3.0%		7		1.23
Less than –3.0% and Greater than –3.5%		3		0.53
Less than –3.5% and Greater than –4.0%		1		0.18
Less than –4.0% and Greater than –4.5%		1		0.18
Less than –4.5% and Greater than –5.0%		3		0.53
Less than –5.0% and Greater than –5.5%		2		0.35
Less than –5.5% and Greater than –6.0%		2		0.35
Less than –6.0%		2		0.35
		567		100.00	%

SUPPLEMENTAL INFORMATION 101

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Mexico Investable Market Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		11		0.80
Greater than 1.0% and Less than 1.5%		25		1.81
Greater than 0.5% and Less than 1.0%		130		9.41
Between 0.5% and –0.5%		959		69.40
Less than –0.5% and Greater than –1.0%		177		12.81
Less than –1.0% and Greater than –1.5%		43		3.11
Less than –1.5% and Greater than –2.0%		14		1.01
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	%

102 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI South Africa Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		45		3.26
Greater than 1.5% and Less than 2.0%		68		4.92
Greater than 1.0% and Less than 1.5%		131		9.48
Greater than 0.5% and Less than 1.0%		230		16.64
Between 0.5% and –0.5%		509		36.84
Less than –0.5% and Greater than –1.0%		137		9.91
Less than –1.0% and Greater than –1.5%		72		5.21
Less than –1.5% and Greater than –2.0%		61		4.41
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%		20		1.45
Less than –3.5% and Greater than –4.0%		4		0.29
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 103

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Turkey Investable Market Index Fund

Period Covered: April 1, 2008 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 6.0%		7		1.23	%
Greater than 5.5% and Less than 6.0%		3		0.53
Greater than 5.0% and Less than 5.5%		1		0.18
Greater than 4.5% and Less than 5.0%		2		0.35
Greater than 4.0% and Less than 4.5%		3		0.53
Greater than 3.5% and Less than 4.0%		1		0.18
Greater than 3.0% and Less than 3.5%		8		1.41
Greater than 2.5% and Less than 3.0%		15		2.65
Greater than 2.0% and Less than 2.5%		18		3.17
Greater than 1.5% and Less than 2.0%		27		4.76
Greater than 1.0% and Less than 1.5%		66		11.64
Greater than 0.5% and Less than 1.0%		80		14.11
Between 0.5% and –0.5%		168		29.62
Less than –0.5% and Greater than –1.0%		45		7.94
Less than –1.0% and Greater than –1.5%		42		7.41
Less than –1.5% and Greater than –2.0%		29		5.11
Less than –2.0% and Greater than –2.5%		15		2.65
Less than –2.5% and Greater than –3.0%		9		1.59
Less than –3.0% and Greater than –3.5%		6		1.06
Less than –3.5% and Greater than –4.0%		5		0.88
Less than –4.0% and Greater than –4.5%		3		0.53
Less than –4.5% and Greater than –5.0%		2		0.35
Less than –5.0% and Greater than –5.5%		1		0.18
Less than –5.5% and Greater than –6.0%		4		0.71
Less than –6.0%		7		1.23
		567		100.00	%

104 2010 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 BFA 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, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. 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 the Past 5 Years	Other Directorships Held
Robert S. Kapitoa (53)	Director (since 2009).	President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007).
Michael Lathamb (45)	Director (since 2010); President (since 2007).	Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007).	Trustee of iShares Trust (since 2010).

^a Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc.

^b Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates.

DIRECTOR AND OFFICER INFORMATION 105

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Independent Directors
Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held
George G.C. Parker (71)	Director (since 2000); Independent Chairman (since 2010).	Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994).	Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007).
Darrell Duffie (56)	Director (since 2008).	Professor, Stanford University: Graduate School of Business (since 1984).	Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008).
Cecilia H. Herbert (61)	Director (since 2005).	Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005).	Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009).
Charles A. Hurty (67)	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002).
John E. Kerrigan (55)	Director (since 2005).	Chief Investment Officer, Santa Clara University (since 2002).	Trustee of iShares Trust (since 2005).
John E. Martinez (49)	Director (since 2003).	Director of Real Estate Equity Exchange (since 2005).	Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007).

106 2010 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 the Past 5 Years	Other Directorships Held
Robert H. Silver (55)	Director (since 2007).	President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009).	Trustee of iShares Trust (since 2007).

DIRECTOR AND OFFICER INFORMATION 107

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Officers

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years
Geoffrey D. Flynn (53)	Executive Vice President and Chief Operating Officer (since 2008).	Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007).
Eilleen M. Clavere (58)	Secretary (since 2007).	Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005).
Jack Gee (51)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009).
Patrick O’Connor (43)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006).
Amy Schioldager (48)	Executive Vice President (since 2007).	Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).
Ira P. Shapiro (47)	Vice President and Chief Legal Officer (since 2007).	Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009).
Lee Sterne (45)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007).
Matt Tucker (38)	Vice President (since 2007).	Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005).

108 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 109

Notes:

110 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 111

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 Fund
iShares Dow Jones U.S.	IYY
iShares MSCI Domestic Index Fund
iShares MSCI USA	EUSA
iShares MSCI Socially Responsible Index Funds
iShares MSCI KLD 400 Social	DSI
iShares MSCI USA ESG 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

112 2010 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 Brazil Small Cap	EWZS
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI China Small Cap	ECNS
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares S&P India Nifty 50	INDY
iShares MSCI Indonesia Investable Market	EIDO
iShares MSCI Ireland Capped Investable Market	EIRL
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 New Zealand Investable Market	ENZL
iShares MSCI All Peru Capped	EPU
iShares MSCI Philippines Investable Market	EPHE
iShares MSCI Poland Investable Market	EPOL
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 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 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 International/Global Sector Index Funds
iShares MSCI ACWI ex US Consumer Discretionary Sector	AXDI
iShares MSCI ACWI ex US Consumer Staples Sector	AXSL
iShares MSCI ACWI ex US Energy Sector	AXEN
iShares MSCI ACWI ex US Financials Sector	AXFN
iShares MSCI ACWI ex US Health Care Sector	AXHE
iShares MSCI ACWI ex US Industrials Sector	AXID
iShares MSCI ACWI ex US Information Technology Sector	AXIT
iShares MSCI ACWI ex US Materials Sector	AXMT
iShares MSCI ACWI ex US Telecommunication Services Sector	AXTE
iShares MSCI ACWI ex US Utilities Sector	AXUT
iShares MSCI Emerging Markets Financials Sector	EMFN
iShares MSCI Emerging Markets Materials Sector	EMMT
iShares MSCI Europe Financials Sector	EUFN
iShares MSCI Far East Financials Sector	FEFN
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 International/Global Theme Based and Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV
iShares S&P Emerging Markets Infrastructure	EMIF
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 10+ Year Government/Credit	GLJ
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

THE iSHARES FAMILY OF FUNDS 113

The iShares^® Family of Funds (Continued)

iShares U.S. Credit Bond Funds	Trading Symbol
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares 10+ Year Credit	CLY
iShares iBoxx $ High Yield Corporate	HYG

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 2012 S&P AMT-Free Municipal Series	MUAA
iShares 2013 S&P AMT-Free Municipal Series	MUAB
iShares 2014 S&P AMT-Free Municipal Series	MUAC
iShares 2015 S&P AMT-Free Municipal Series	MUAD
iShares 2016 S&P AMT-Free Municipal Series	MUAE
iShares 2017 S&P AMT-Free Municipal Series	MUAF
iShares U.S. Securitized Bond Fund
iShares Barclays MBS	MBB
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

The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. The 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^®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed 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.

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 2010 Annual Report.

iS-3594-1010

114 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Dear iShares Shareholder:

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

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

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

1.   Go to www.icsdelivery.com.

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

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

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

Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

For more information:

WWW.iSHARES.COM

1-800-iShares (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.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by SEI Investments Distribution Co. (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 BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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 ending 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.

©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.

iS-AR-84-0810

2010 ANNUAL REPORT TO SHAREHOLDERS

iSHARES^® MSCI SERIES

AUGUST 31, 2010

»  Would you prefer to receive materials like this electronically?

See inside back cover for details.

iShares MSCI Australia Index Fund  |  EWA  |  NYSE Arca

iShares MSCI Hong Kong Index Fund  |  EWH  |  NYSE Arca

iShares MSCI Japan Small Cap Index Fund  |  SCJ  |  NYSE Arca

iShares MSCI Malaysia Index Fund  |  EWM  |  NYSE Arca

iShares MSCI Pacific ex-Japan Index Fund  |  EPP  |  NYSE Arca

iShares MSCI Singapore Index Fund  |  EWS  |  NYSE Arca

iShares MSCI South Korea Index Fund  |  EWY  |  NYSE Arca

iShares MSCI Taiwan Index Fund  |  EWT  |  NYSE Arca

iShares MSCI Thailand Investable Market Index Fund  |  THD  |  NYSE Arca

Table of Contents

Management’s Discussions of Fund Performance	1
Shareholder Expenses (Unaudited)	27
Schedules of Investments	29
iShares MSCI Australia Index Fund	29
iShares MSCI Hong Kong Index Fund	32
iShares MSCI Japan Small Cap Index Fund	34
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	54
iShares MSCI Thailand Investable Market Index Fund	57
Financial Statements	60
Financial Highlights	71
Notes to Financial Statements	80
Report of Independent Registered Public Accounting Firm	89
Tax Information (Unaudited)	90
Supplemental Information (Unaudited)	91
Director and Officer Information (Unaudited)	101
The iShares Family of Funds	108

Management’s Discussion of Fund Performance

iSHARES^® MSCI AUSTRALIA INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
6.86%	7.72%	7.45%	7.68%	7.59%	7.38%	11.68%	11.66%	11.27%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
6.86%	7.72%	7.45%	44.79%	44.16%	42.79%	201.73%	201.30%	190.82%

“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 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 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		43.09	%
Basic Materials		24.08
Consumer Non-Cyclical		11.60
Industrial		9.38
Energy		5.74
Consumer Cyclical		2.06
Communications		1.69
Utilities		0.88
Technology		0.48
Short-Term and Other Net Assets		1.00
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
BHP Billiton Ltd.		14.00	%
Commonwealth Bank of Australia		8.77
Westpac Banking Corp.		7.28
Australia and New Zealand Banking Group Ltd.		6.45
National Australia Bank Ltd.		5.54
Woolworths Ltd.		3.88
Wesfarmers Ltd.		3.62
Rio Tinto Ltd.		3.44
Newcrest Mining Ltd.		3.21
Westfield Group		3.09
TOTAL		59.28	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 6.86%, while the total return for the Index was 7.45%.

Australia’s economy remained relatively calm through the global financial crisis and into the early part of the reporting period, and then gained momentum as the reporting period progressed. GDP grew 3.3% in the second quarter of 2010 versus the year-ago quarter. Driven by international trade and rising metals prices, it was Australia’s strongest quarter in three years. Export volumes rose 5.6% during the second quarter, driven by a boom in mining as China continued its strong demand for steel and energy products. Coal exports grew in value by about $4 billion as prices rose 25% and volumes increased by 22%. Metal ore exports increased $5 billion as prices rose nearly 40%.

Noting the strength in the Australian economy, the Reserve Bank of Australia (“RBA”), boosted short-term interest rates to 4.5%, up from 3.0% a year ago in an effort to contain inflation. Household consumption remained strong in the face of higher borrowing costs, and the RBA indicated that the economy was growing at close to full capacity. Discretionary spending also grew, as spending in cafes and restaurants was up 5% in the second quarter versus a year ago. Meanwhile, housing construction rebounded during the summer, snapping a contraction in recent months, as employment and wages grew steadily.

In agriculture, Australia temporarily replaced Russia as a leading supplier of wheat to the world. Australia, already a major exporter of agricultural products, produced significantly more wheat than expected during the one-year period ended March 31, 2010, up 36% from its five-year average due to above-normal rainfall. Combined with sharply higher global grain prices, this boost in volume has added billions of dollars to Australia’s export revenue. In Russia, by contrast, wheat production fell sharply after a drought destroyed its wheat crop, prompting the government to halt grain exports. Australia remains a major agricultural supplier to Asia, especially Indonesia, the world’s fourth largest wheat importer behind Egypt, Brazil and the European Union.

2 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by manufacturing conglomerate Wesfarmers Ltd., mining firm Rio Tinto Ltd., and international gold producer Newcrest Mining Ltd. Two of the Fund’s top ten holdings, National Australia Bank Ltd. and Westpac Banking Corp., recorded losses.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 3

Management’s Discussion of Fund Performance

iSHARES^® MSCI HONG KONG INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.85%	14.64%	15.63%	7.61%	7.48%	8.22%	4.46%	4.27%	5.26%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.85%	14.64%	15.63%	44.29%	43.44%	48.46%	54.74%	51.88%	67.03%

“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 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.

4 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		51.76	%
Diversified		14.11
Utilities		13.81
Consumer Cyclical		13.67
Industrial		3.39
Communications		1.65
Technology		0.67
Basic Materials		0.49
Short-Term and Other Net Assets		0.45
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Sun Hung Kai Properties Ltd.		8.17	%
Cheung Kong (Holdings) Ltd.		7.33
Hong Kong Exchanges and Clearing Ltd.		6.52
Hutchison Whampoa Ltd.		6.36
CLP Holdings Ltd.		6.05
Li & Fung Ltd.		4.55
Hang Seng Bank Ltd.		4.34
Hong Kong and China Gas Co. Ltd. (The)		4.22
BOC Hong Kong (Holdings) Ltd.		4.05
Swire Pacific Ltd. Class A		4.01
TOTAL		55.60	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 14.85%, while the total return for the Index was 15.63%.

Hong Kong’s economy remained buoyant throughout the reporting period, expanding 6.3% during the second quarter of 2010 versus the year-ago quarter as the city’s jobless rate fell to 4.2%, the lowest level in nearly two years. Exports rose 22% during the first quarter and 20% during the second quarter. Meanwhile, tourism reached record levels, with a record 16.9 million visitors, including 10.5 million from China, entering the city in the first six months of 2010.

Hong Kong’s closest business partner is mainland China whose GDP continued to advance at a 10.3% annual rate. Through August, industrial production was up 13.9% from the prior year, accelerating from 13.4% in July. China’s currency, the yuan, controlled by the People’s Bank of China, continued to increase in value against other currencies since the central bank ended fixed exchange rates in June.

Commercial rents in Hong Kong have nearly doubled since the beginning of the financial crisis in late 2007. Home prices rose 30% in 2009 and another 13% through August 2010. In particular, Hong Kong’s real estate market was supported by capital inflows from wealthy mainland Chinese residents who bought property for investment purposes. In addition, Hong Kong pegs its interest rates to the U.S., which continue to be at historically low levels. The Hong Kong Monetary Authority has kept its base interest rate at a record low of 0.5% since December 2008. That has made real estate financing extremely attractive to borrowers.

To cool the city’s hot real estate market, the government raised the tax on high-end transactions. It also banned sales contracts on new condominiums “flipped” before the buildings were completed. The Hong Kong Monetary Authority ordered banks to “stress-test” mortgage applications to ensure borrowers can withstand a two-percentage point increase in interest rates. Indeed, some developers are beginning to shy away, preferring land prices in mainland China.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 5

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by exporter Li & Fung Ltd., major bank holding company BOC Hong Kong (Holdings) Ltd. and The Hong Kong and China Gas Co. Ltd., all of which posted solid double-digit gains. Only one top ten holding, Hong Kong Exchanges and Clearing Ltd., the stock exchange of Hong Kong, recorded a loss.

6 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(6.25)%	(5.81)%	(6.01)%	(4.98)%	(5.05)%	(4.73)%	(12.88)%	(13.05)%	(12.25)%

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 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 calculated 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 7

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Industrial		25.00	%
Consumer Cyclical		24.74
Financial		18.12
Consumer Non-Cyclical		14.09
Basic Materials		10.46
Communications		4.20
Technology		2.33
Utilities		0.69
Energy		0.06
Short-Term and Other Net Assets		0.31
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Sotetsu Holdings Inc.		0.59	%
Miraca Holdings Inc.		0.57
Sawai Pharmaceutical Co. Ltd.		0.50
Rengo Co. Ltd.		0.49
Ebara Corp.		0.49
Yamatake Corp.		0.48
Misumi Group Inc.		0.48
Awa Bank Ltd. (The)		0.48
Nippon Kayaku Co. Ltd.		0.46
Shiga Bank Ltd. (The)		0.46
TOTAL		5.00	%

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, which consists of stocks traded primarily on the Tokyo Stock Exchange. MSCI defines the small-cap universe as all listed securities that have a market capitalization in the range of $202 —$1,723 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, 2010 (the “reporting period”), the total return for the Fund was (6.25)%, while the total return for the Index was (6.01)%.

Japanese small capitalization stocks performed in line with the broad Japanese equity market, but underperformed other Asian small cap markets for the reporting period. After showing signs of recovery early in the reporting period, Japan’s economy slowed sharply as the reporting period came to a close. GDP rose just 0.4% in the most recent quarter against the year-ago period, down from growth of 4.4% in the quarter ended March 31. In many ways, 2010 echoed back to 2009: weak consumer spending, concerns of deflation, soaring federal debt and weak demand for Japanese exports. Consumer spending, which accounts for 60% of Japan’s economy, was flat during the first half of 2010. Persistent deflation created a drag on economic growth, as consumers waited for prices to drop before buying goods and services. Inflation was a negative 1.9% in the most recent quarter, a slight improvement over the prior quarter, when prices fell 2.8%. Japan’s federal debt is nearly 200% of annual GDP, and the International Monetary Fund recently warned that Japan was reaching a point at which markets become concerned about the threat of default.

Despite these concerns, Japan’s currency continued to strengthen, reaching a 15-year high against the U.S. dollar, dampening demand for Japanese exports. In response, as the reporting period came to a close, the Japanese government was considering options to weaken the yen by intervening in the market. Still, the strong yen has had its advantages, elevating Japan’s buying power in other countries. Through August 2010, Japanese corporations have already spent more money acquiring foreign companies than in all of 2009 with major acquisitions having taken place in telecommunications, convenience stores and e-commerce.

However, the Japanese government, which last intervened in 2004, faced resistance from the U.S. and Europe, because a weaker Japanese currency translates into a potentially stronger dollar and euro, which in turn could dampen U.S. and European exports. Political resistance was also felt from within Japan. The Democratic Party of Japan, which took power from the long-ruling Liberal Democratic Party, announced plans to cut Japan’s top corporate tax rate, the highest in the industrialized world, from 40% to 25%. However, political

8 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

concerns make such a move difficult to accomplish. Already, Prime Minister Naoto Kan has had to fend off a challenge to his power from within his own party.

In this economic environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, including generic drug maker Sawai Pharmaceutical Co. Ltd., medical diagnostics company Miraca Holdings Inc. and conglomerate Sotetsu Holdings Inc., with interests in transportation, construction, real estate, supermarkets and leisure. Two of the top ten holdings to post losses for the reporting period were engineering firm Ebara Corp. and Shiga Bank Ltd.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 9

Management’s Discussion of Fund Performance

iSHARES^® MSCI MALAYSIA INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
35.76%	36.50%	36.44%	16.52%	16.22%	17.10%	10.82%	10.72%	11.72%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
35.76%	36.50%	36.44%	114.77%	112.04%	120.20%	179.25%	176.84%	202.80%

“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.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which 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.

10 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		31.03	%
Consumer Non-Cyclical		14.99
Consumer Cyclical		14.49
Communications		11.47
Industrial		9.62
Utilities		8.75
Diversified		7.74
Energy		0.85
Basic Materials		0.83
Short-Term and Other Net Assets		0.23
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
CIMB Group Holdings Bhd		9.71	%
Malayan Banking Bhd		8.57
Sime Darby Bhd		7.25
Genting Bhd		6.74
IOI Corp. Bhd		5.62
Tenaga Nasional Bhd		5.54
Public Bank Bhd Foreign		4.15
Maxis Communications Bhd		3.88
Axiata Group Bhd		3.63
AMMB Holdings Bhd		3.28
TOTAL		58.37	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 35.76%, while the total return for the Index was 36.44%.

After a difficult 2009, Malaysia’s economy became one of the fastest growing in the world although it slowed somewhat as the reporting period came to a close. Malaysia’s GDP grew 8.9% during the second quarter of 2010 compared to the year-earlier period, following growth of 10.1% in the first quarter of 2010, its fastest growth in 10 years. Meanwhile, inflation appeared under control. Consumer prices rose about 1.5% during the first seven months of 2010 versus the year-ago period.

In an effort to cut the country’s budget deficit, the government has pledged to reduce expensive state subsidies on such staples as food and energy. Subsidies on fuel and sugar are gradually phasing out in an effort to reduce the deficit and attract foreign investment. Malaysia, which had a budget deficit of 7% of GDP in 2009, is aiming for 5% in 2010, according to government pronouncements. Meanwhile, the country’s exports earnings grew by 22% in the second quarter and 31% in the first quarter compared to the year-ago quarters.

During 2010, China moved to facilitate trade between the two countries when it allowed the Chinese yuan to trade against the Malaysian ringgit. Just prior to this move, Malaysia’s central bank removed restrictions on the trading of its currency by outside investors. In this less regulated environment, the ringgit reached a 13-year high against the U.S. dollar in August.

Like many countries in Asia, Malaysia’s population has become wealthier as a whole, with a rising middle class, a strong banking system, an improving infrastructure and an emerging domestic economy that is becoming less dependent on international trade, particularly with the U.S. and Europe. In June, the government issued a Five-Year Economic Plan which calls for a focus on private-sector jobs in areas such as financial services, electronics, agriculture, tourism and green technology.

In this environment, all of the Fund’s top ten holdings as of August 31, 2010 recorded double-digit gains for the reporting period, led by CIMB Group Holdings Bhd, Malaysia’s second largest financial services provider and the Fund’s largest holding. Genting Bhd, a hotel and

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 11

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

resort company, Axiata Group Bhd, a mobile telecommunications firm, and AMMB Holdings Bhd, an investment holding company, all posted strong gains. Sime Darby Bhd, a multinational conglomerate and Maxis Communications Bhd, a mobile communications service provider, recorded more modest double-digit gains.

12 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
10.27%	10.30%	10.80%	8.18%	7.94%	8.13%	13.72%	13.73%	13.68%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
10.27%	10.30%	10.80%	48.19%	46.50%	47.84%	212.17%	212.25%	210.90%

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 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 calculated 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 13

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		45.72	%
Basic Materials		15.87
Consumer Non-Cyclical		9.09
Industrial		8.50
Consumer Cyclical		4.88
Diversified		3.76
Energy		3.76
Communications		3.65
Utilities		3.48
Technology		0.45
Short-Term and Other Net Assets		0.84
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
BHP Billiton Ltd. (Australia)		9.17	%
Commonwealth Bank of Australia (Australia)		5.74
Westpac Banking Corp. (Australia)		4.76
Australia and New Zealand Banking Group Ltd. (Australia)		4.22
National Australia Bank Ltd. (Australia)		3.63
Woolworths Ltd. (Australia)		2.54
Wesfarmers Ltd. (Australia)		2.37
Rio Tinto Ltd. (Australia)		2.25
Newcrest Mining Ltd. (Australia)		2.11
Westfield Group (Australia)		2.02
TOTAL		38.81	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 10.27%, while the total return for the Index was 10.80%.

As of the end of the reporting period, the majority of the Fund was invested in three countries: Australia, Hong Kong and Singapore, all of which recovered quickly from the global financial crisis that had abated as the reporting period began. Australia’s economy was relatively strong during the reporting period, as GDP grew 3.3% in the second quarter of 2010 versus the year-ago quarter. Driven by international trade and rising metals prices, it was Australia’s strongest quarter in three years. Export volumes rose 5.6% during the second quarter, driven by a boom in mining as China continued its strong demand for steel and energy products. Coal exports grew in value by about $4 billion as prices rose 25% and volumes increased by 22%. Metal ore exports increased $5 billion as prices rose nearly 40%.

Noting the strength in the Australian economy, the Reserve Bank of Australia (“RBA”), boosted short-term interest rates to 4.5%, up from 3.0% a year ago in an effort to contain inflation. Household consumption remained strong in the face of higher borrowing costs, and the RBA indicated that the economy is growing at close to full capacity. Meanwhile, housing construction rebounded during the summer, snapping a contraction in recent months, as employment and wages grew steadily. In agriculture, Australia temporarily replaced Russia as a leading supplier of wheat to the world. Australia, already a major exporter of agricultural products, produced significantly more wheat than expected during the one-year period ended March 31, 2010, up 36% from its five-year average due to above-normal rainfall. Combined with sharply higher global grain prices, this boost in volume has added billions of dollars to Australia’s export revenue.

Hong Kong’s economy was buoyant during the reporting period, as the city’s jobless rate fell to 4.2%. Commercial rents have nearly doubled since the beginning of the financial crisis in late 2007. Home prices rose 30% in 2009 and another 13% through August 2010. To cool the city’s hot real estate market, the government raised the tax on high-end transactions. It also banned sales contracts on new

14 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

condominiums “flipped” before the buildings were completed. The Hong Kong Monetary Authority ordered banks to “stress-test” mortgage applications to ensure borrowers can withstand a two-percentage point increase in interest rates.

Singapore’s economy was surging during the reporting period, with GDP rising 18.8% and 19.3% in the second and first quarters of 2010, respectively, compared to the same periods in 2009. According to Singapore’s Ministry of Trade and Industry, Singapore’s expansion in the first half of 2010 was the fastest on record.

In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 – all based in Australia – recorded gains for the reporting period, led by manufacturing conglomerate Wesfarmers Ltd., mining firm Rio Tinto Ltd., and international gold producer Newcrest Mining Ltd. The two negative performers were banks, National Australia Bank Ltd. and Westpac Banking Corp.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 15

Management’s Discussion of Fund Performance

iSHARES^® MSCI SINGAPORE INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
22.68%	22.57%	22.87%	13.75%	13.58%	13.95%	8.08%	7.95%	7.99%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
22.68%	22.57%	22.87%	90.41%	89.01%	92.16%	117.41%	114.86%	115.63%

“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 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.

16 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		51.50	%
Communications		14.48
Consumer Non-Cyclical		10.60
Industrial		9.78
Diversified		7.19
Consumer Cyclical		5.63
Short-Term and Other Net Assets		0.82
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Singapore Telecommunications Ltd.		11.02	%
DBS Group Holdings Ltd.		10.94
United Overseas Bank Ltd.		10.22
Oversea-Chinese Banking Corp. Ltd.		9.46
Keppel Corp. Ltd.		5.00
Genting Singapore PLC		4.71
Wilmar International Ltd.		4.69
CapitaLand Ltd.		4.03
Singapore Airlines Ltd.		3.66
Singapore Exchange Ltd.		3.19
TOTAL		66.92	%

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 Singapore 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, 2010 (the “reporting period”), the total return for the Fund was 22.68%, while the total return for the Index was 22.87%.

Singapore’s economy, which was among the hardest hit economies during the global financial crisis, surged during the reporting period, with GDP rising 18.8% and 19.3% in the second and first quarters of 2010 compared to the same periods in 2009. According to Singapore’s Ministry of Trade and Industry, Singapore’s expansion in the first half of 2010 was the fastest on record.

Exports were very strong late in the reporting period, particularly for electronics and pharmaceuticals to the U.S. and Europe. August 2010 exports to the European Union more than doubled from a year earlier, up from July’s 27% growth. Shipments to the U.S. were up 42% in August after rising 30% in July. Exports to China rose 36% in August versus the year-ago period and 34% in July.

The strong economy has led the Singapore government to introduce curbs on housing market speculation after prices reached record highs. Measures include requiring a higher down payment on home purchases as well as increased supply of housing and land for development. Meanwhile, the financial services sector grew strongly during the reporting period, particularly foreign-exchange trading and bank lending.

In 2010, the government lifted a 40-year ban on gaming, launching this industry in order to boost tourism and retail spending. Two casinos opened for business and produced earnings that beat market expectations. Visitor arrivals grew 24% in July 2010 compared to July 2009 to a record 1.1 million people.

In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by Genting Singapore PLC, a resorts and gaming company, Keppel Corp. Ltd., which manufactures offshore oil rigs and Singapore Airlines Ltd. The only top-ten holding posting a loss was Singapore Exchange Ltd., the stock exchange of Singapore.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 17

Management’s Discussion of Fund Performance

iSHARES^® MSCI SOUTH KOREA INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.65%	15.71%	15.16%	7.65%	7.88%	8.13%	10.94%	10.44%	11.73%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.65%	15.71%	15.16%	44.57%	46.10%	47.84%	182.45%	170.04%	203.24%

“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 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.

18 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Technology		21.74	%
Industrial		16.64
Consumer Cyclical		16.28
Financial		16.23
Basic Materials		13.52
Communications		5.08
Consumer Non-Cyclical		4.05
Energy		2.47
Diversified		2.08
Utilities		1.67
Short-Term and Other Net Assets		0.24
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Samsung Electronics Co. Ltd.		16.37	%
POSCO		6.28
Hyundai Motor Co. Ltd.		4.28
Shinhan Financial Group Co. Ltd.		3.62
LG Chem Ltd.		3.13
KB Financial Group Inc.		3.12
Hyundai Mobis Co. Ltd.		2.88
Samsung Electronics Co. Ltd. Preferred		2.23
Hynix Semiconductor Inc.		2.07
Hyundai Heavy Industries Co. Ltd.		1.93
TOTAL		45.91	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 14.65%, while the total return for the Index was 15.16%.

After recovering from the effects of the global financial crisis of 2008-2009, South Korea’s economy showed solid growth during the reporting period. GDP rose 7.2% during the second quarter of 2010 compared to the year-ago period, after rising 8.1% in the first quarter. Officials at South Korea’s central bank said that the country’s economy had recovered to pre-recession levels of growth.

The expansion was propelled by exports in a wide variety of industries ranging from automobiles to semiconductors. In July 2010, exports to the European Union, the U.S. and China rose 60%, 49% and 37%, respectively. As a result, South Korea’s trade surplus - the difference between exports and imports - approached record levels. Meanwhile, European governments approved a free trade agreement with South Korea calling for the removal of tariffs within three years. A similar U.S.-South Korea trade agreement is bogged down in the U.S. Congress.

Due to South Korea’s buoyant economic growth rates, the Bank of Korea (South Korea’s central bank) raised short-term interest rates from 2.0% to 2.25% during the summer of 2010, after keeping them steady for the prior year and a half. Consumer prices in South Korea rose about 2.6% in July from a year ago; the central bank’s target for inflation is 2% to 4%. As in the U.S., the central bank must balance the need to control inflation with concerns about sluggish economic growth. Higher interest rates tend to slow the economy while lower interest rates tend to create inflation when the economy grows too fast.

However, in contrast to buoyant real estate markets in the rest of Asia, South Korea’s housing market is in a slump, with prices down anywhere between 10% and 20% at the end of the reporting period from their highs prior to the global recession in 2008. Sagging demand reflects the actions of households, banks and the government, all of which are aggressively reducing debt rather than investing in new projects. The country’s major builders are focusing on better opportunities outside the country.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 19

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period. LG Chem Ltd., a chemicals and electronic materials maker, Hyundai Mobis Co. Ltd., an automobile parts manufacturer and shipbuilder Hyundai Heavy Industries Co. Ltd., all posted strong double-digit gains. The only top ten holding to post a loss was diversified financial services company KB Financial Group Inc.

20 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance

iSHARES^® MSCI TAIWAN INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
13.30%	13.86%	14.18%	4.25%	4.29%	5.09%	(1.32)%	(1.55)%	(0.43)%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
13.30%	13.86%	14.18%	23.13%	23.34%	28.17%	(12.42)%	(14.50)%	(4.24)%

“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 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 21

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Technology		36.66	%
Industrial		23.58
Financial		15.40
Basic Materials		11.12
Consumer Cyclical		5.06
Communications		4.65
Consumer Non-Cyclical		1.25
Energy		1.06
Short-Term and Other Net Assets		1.22
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Taiwan Semiconductor Manufacturing Co. Ltd.		13.12	%
Hon Hai Precision Industry Co. Ltd.		8.91
HTC Corp.		3.94
MediaTek Inc.		3.68
Chunghwa Telecom Co. Ltd.		2.85
China Steel Corp.		2.79
Cathay Financial Holding Co. Ltd.		2.79
Nan Ya Plastics Corp.		2.61
Formosa Plastics Corp.		2.55
AU Optronics Corp.		1.88
TOTAL		45.12	%

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 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, 2010 (the “reporting period”), the total return for the Fund was 13.30%, while the total return for the Index was 14.18%.

Taiwan’s economy began the reporting period under slow growth but gained momentum with each passing month, with GDP advancing 12.5% in the second quarter of 2010 versus the year-ago quarter. This followed a 13.7% increase in the first quarter of 2010. In August, the government raised its full-year 2010 forecast to 8.2%, up from a 6.1% projection earlier in the year. In addition, the government raised its growth forecasts for exports to 33% from a previous estimate of 24%. In this environment of strong growth, the Taiwan central bank raised short-term interest rates slightly during the second quarter of 2010 from 1.25% to 1.375%.

Manufacturing is a key component to Taiwan’s economy, as this is the location of many of the world’s largest manufacturers of semiconductors, telecommunications and PCs. Taiwan’s PC makers reported strong increases in net profit as demand for electronics products recovered. Although trade with the West is important for Taiwan, its number one trading partner is China, where the economy grew at a 10.3% pace in the second quarter.

In 2010, a major development took place between Taiwan and China that eased historic tensions between the two countries. In August, Taiwan’s legislature approved a broad trade agreement with China that will reduce tariffs between the two countries. In addition, Chinese companies are beginning to trade shares on the Taiwan stock exchange. Historically, the Hong Kong and Singapore stock exchanges were the most likely destinations for Chinese companies seeking listings outside of China.

22 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

In this environment, eight of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by smartphone manufacturer HTC Corp., Nan Ya Plastics Corp. and Formosa Plastics Corp., both plastic product manufacturing firms. Two top ten holdings, AU Optronics Corp., a maker of LCD screens and MediaTek Inc., a semiconductor manufacturer for wireless communications, recorded losses.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 23

Management’s Discussion of Fund Performance

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns						Cumulative Total Returns
Year Ended 8/31/10			Inception to 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
53.19%	53.36%	53.99%	7.22%	7.42%	7.64%	18.51%	19.03%	19.60%

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.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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

24 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Financial		36.39	%
Energy		25.67
Consumer Cyclical		8.00
Industrial		7.85
Communications		6.56
Consumer Non-Cyclical		6.42
Basic Materials		6.22
Utilities		2.04
Technology		0.32
Short-Term and Other Net Assets		0.53
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
PTT PCL NVDR		10.83	%
Bangkok Bank PCL NVDR		9.28
Kasikornbank PCL NVDR		8.54
PTT Exploration & Production PCL NVDR		8.06
Siam Commercial Bank PCL NVDR		6.93
Banpu PCL NVDR		4.43
Siam Cement PCL NVDR		4.36
Advanced Info Service PCL NVDR		4.00
CP All PCL NVDR		3.41
Charoen Pokphand Foods PCL NVDR		2.94
TOTAL		62.78	%

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, 2010 (the “reporting period”), the total return for the Fund was 53.19%, while the total return for the Index was 53.99%.

As the reporting period began, Thailand’s economy was beginning to bounce back from the global economic downturn, aided by strong exports and growing domestic demand. Despite a massive anti-government protest that paralyzed Bangkok during the spring, Thailand’s economy expanded 9.1% in the second quarter of 2010 versus the year-ago period. To protect against inflationary pressures, the country’s central bank raised short-term interest rates in July and August by a total of 50 basis points to 1.75%. Rates had been at 1.25% since April 2009. In June, exports posted a 46% increase from a year earlier to a record $18 billion, with particular strength in electronics, automobiles and agriculture.

Like many Asian countries, Thailand’s currency, the baht, has been rising in value against the U.S. dollar, as investors seek economies with strong growth prospects. As economies strengthen, central banks raise interest rates to keep inflation at bay, a move that often boosts currencies even higher. However, a stronger currency can make exports less competitive. At the end of the reporting period, the government urged the Thailand central bank to take action to stabilize the baht, because export growth during the summer began to slow down, particularly in the food/agricultural sectors.

Meanwhile, U.S. and Japanese automakers have increased operations in Thailand, making it a manufacturing hub for Southeast Asia. In June, Ford announced plans for a $450 million manufacturing facility, its first wholly-owned plant in the country. Toyota and General Motors have also announced their intentions to expand their manufacturing operations in the country. GM received loans from three Thai banks to finance its expansion plans in Thailand. Automakers are moving production to Thailand because labor costs are lower than Japan and the U.S.

MANAGEMENT’S DISCUSSIONS OF FUND PERFORMANCE 25

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

In this environment, all of the Fund’s top ten holdings recorded substantial gains. Charoen Pokphand Foods PCL, an agro-industrial and food conglomerate, and convenience store retailer CP All PCL, returned triple-digit gains for the reporting period. Siam Cement PCL, Banpu PCL and Kasikornbank PCL also performed well. Energy company PTT Exploration & Production PCL and state-owned oil and gas company PTT PCL posted the lowest double-digit gains among the top ten holdings.

26 2010 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, 2010 to August 31, 2010.

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 (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During Perioda (3/1/10 to 8/31/10)
Australia
Actual		$1,000.00		$952.00		0.53	%		$2.61
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Hong Kong
Actual		1,000.00		1,058.20		0.53			2.75
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Japan Small Cap
Actual		1,000.00		993.00		0.53			2.66
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
Malaysia
Actual		1,000.00		1,226.70		0.53			2.97
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70

SHAREHOLDER EXPENSES 27

Shareholder Expenses (Unaudited) (Continued)

iSHARES^®, INC.

iShares MSCI Index Fund	Beginning Account Value (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During Perioda (3/1/10 to 8/31/10)
Pacific ex-Japan
Actual		$1,000.00		$992.50		0.50	%		$2.51
Hypothetical (5% return before expenses)		1,000.00		1022.70		0.50			2.55
Singapore
Actual		1,000.00		1,116.70		0.53			2.83
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70
South Korea
Actual		1,000.00		1,055.40		0.61			3.16
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11
Taiwan
Actual		1,000.00		1,036.60		0.81			4.16
Hypothetical (5% return before expenses)		1,000.00		1,021.10		0.81			4.13
Thailand Investable Market
Actual		1,000.00		1,339.50		0.61			3.60
Hypothetical (5% return before expenses)		1,000.00		1,022.10		0.61			3.11

^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).

28 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.00%
AIRLINES – 0.31%
Qantas Airways Ltd.a		3,085,425	$	6,892,918
				6,892,918
APPAREL – 0.17%
Billabong International Ltd.		562,800		3,786,956
				3,786,956
BANKS – 29.59%
Australia and New Zealand Banking Group Ltd.		7,042,875		141,605,661
Bendigo and Adelaide Bank Ltd.		1,004,325		7,535,573
Commonwealth Bank of Australia		4,305,525		192,756,266
National Australia Bank Ltd.		5,896,275		121,753,126
Suncorp-Metway Ltd.		3,562,125		26,473,419
Westpac Banking Corp.		8,276,100		159,845,299
				649,969,344
BEVERAGES – 2.08%
Coca-Cola Amatil Ltd.		1,572,900		16,701,519
Foster’s Group Ltd.		5,366,550		28,945,577
				45,647,096
BIOTECHNOLOGY – 0.46%
Sonic Healthcare Ltd.		1,025,850		10,089,289
				10,089,289
BUILDING MATERIALS – 0.91%
Boral Ltd.		1,998,150		7,825,195
CSR Ltd.		4,211,550		6,391,176
James Hardie Industries SEa		1,208,025		5,730,830
				19,947,201
CHEMICALS – 0.62%
Incitec Pivot Ltd.		4,517,100		13,548,899
				13,548,899
COAL – 0.16%
Macarthur Coal Ltd.		353,325		3,547,300
				3,547,300
COMMERCIAL SERVICES – 2.01%
Brambles Ltd.		3,953,250		20,618,938
Intoll Group		6,287,400		8,254,248
Transurban Group		3,539,025		15,340,058
				44,213,244

Security	Shares		Value
COMPUTERS – 0.48%
Computershare Ltd.		1,235,850	$	10,438,699
				10,438,699
DIVERSIFIED FINANCIAL SERVICES – 2.02%
ASX Ltd.b		482,475		12,500,616
Macquarie Group Ltd.		957,600		31,927,603
				44,428,219
ELECTRIC – DISTRIBUTION – 0.88%
AGL Energy Ltd.		1,251,075		16,725,060
SP AusNet		3,760,050		2,677,306
				19,402,366
ENGINEERING & CONSTRUCTION – 0.92%
Leighton Holdings Ltd.		375,900		10,271,293
WorleyParsons Ltd.		532,350		9,841,202
				20,112,495
ENTERTAINMENT – 0.95%
Aristocrat Leisure Ltd.		1,111,950		3,681,651
Tabcorp Holdings Ltd.		1,703,100		9,686,244
Tatts Group Ltd.		3,563,700		7,580,772
				20,948,667
FOOD – 4.47%
Goodman Fielder Ltd.		3,837,225		4,576,532
Metcash Ltd.		2,128,350		8,316,143
Woolworths Ltd.		3,448,725		85,210,366
				98,103,041
HEALTH CARE – PRODUCTS – 0.44%
Cochlear Ltd.		156,975		9,668,319
				9,668,319
INSURANCE – 4.54%
AMP Ltd.		5,759,775		25,837,498
AXA Asia Pacific Holdings Ltd.		2,873,325		14,065,716
Insurance Australia Group Ltd.		5,779,200		17,694,593
QBE Insurance Group Ltd.		2,877,525		42,233,217
				99,831,024
IRON & STEEL – 0.87%
BlueScope Steel Ltd.a		5,068,350		9,653,722
OneSteel Ltd.		3,701,775		9,488,923
				19,142,645

SCHEDULES OF INVESTMENTS 29

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2010

Security	Shares		Value
LODGING – 0.42%
Crown Ltd.		1,256,850	$	9,262,499
				9,262,499
MANUFACTURING – 5.19%
Orica Ltd.		1,003,800		22,380,476
Wesfarmers Ltd.		2,794,050		79,479,541
Wesfarmers Ltd.
Partially Protected		422,100		12,085,951
				113,945,968
MEDIA – 0.34%
Fairfax Media Ltd.b		5,884,200		7,541,614
				7,541,614
METAL FABRICATE & HARDWARE – 0.30%
Sims Metal Management Ltd.		453,600		6,701,863
				6,701,863
MINING – 22.59%
Alumina Ltd.		6,783,525		10,354,615
BHP Billiton Ltd.		9,329,250		307,644,636
Energy Resources of Australia Ltd.		185,325		2,169,073
Fortescue Metals Group Ltd.a		3,454,500		14,389,492
Newcrest Mining Ltd.		2,125,200		70,459,651
OZ Minerals Ltd.a		8,677,200		9,422,233
Paladin Energy Ltd.a		1,893,675		6,253,077
Rio Tinto Ltd.		1,211,175		75,557,462
				496,250,239
OIL & GAS – 5.58%
Caltex Australia Ltd.		375,375		3,755,312
Origin Energy Ltd.		2,448,075		33,228,365
Santos Ltd.		2,316,825		29,281,679
Woodside Petroleum Ltd.		1,512,525		56,366,352
				122,631,708
PACKAGING & CONTAINERS – 0.93%
Amcor Ltd.		3,395,175		20,367,441
				20,367,441
PHARMACEUTICALS – 2.14%
CSL Ltd.		1,599,675		46,928,143
				46,928,143
REAL ESTATE – 6.56%
BGP Holdings PLCc		18,888,372		2,401
Dexus Property Group		13,401,150		9,899,986

Security	Shares		Value
Goodman Group		17,707,200	$	10,007,786
GPT Group		4,900,350		13,041,054
Lend Lease Group		1,493,625		9,226,043
Mirvac Group		9,079,875		10,829,267
Stockland Corp. Ltd.		6,624,450		23,230,602
Westfield Group		6,094,725		67,861,871
				144,099,010
REAL ESTATE INVESTMENT TRUSTS – 0.38%
CFS Retail Property Trustb		4,885,650		8,414,295
				8,414,295
RETAIL – 0.21%
Harvey Norman Holdings Ltd.		1,476,300		4,533,234
				4,533,234
TELECOMMUNICATIONS – 1.35%
Telstra Corp. Ltd.		12,106,500		29,632,323
				29,632,323
TRANSPORTATION – 1.13%
Asciano Groupa		8,134,350		12,126,963
MAp Group		1,034,775		2,726,164
Toll Holdings Ltd.		1,856,400		10,029,393
				24,882,520
TOTAL COMMON STOCKS (Cost: $2,375,791,874)				2,174,908,579
SHORT-TERM INVESTMENTS – 0.47%
MONEY MARKET FUNDS – 0.47%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%d,e,f		8,317,669		8,317,669
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%d,e,f		1,616,293		1,616,293
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%d,e		431,894		431,894
				10,365,856
TOTAL SHORT-TERM INVESTMENTS
(Cost: $10,365,856)				10,365,856

30 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI AUSTRALIA INDEX FUND

August 31, 2010

	Value
TOTAL INVESTMENTS IN SECURITIES – 99.47%
(Cost: $2,386,157,730)	$	2,185,274,435
Other Assets, Less Liabilities – 0.53%		11,542,709
NET ASSETS – 100.00%	$	2,196,817,144

^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 in accordance with management’s fair valuation policy. 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 31

Schedule of Investments

iSHARES^® MSCI HONG KONG INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.55%
AIRLINES – 1.23%
Cathay Pacific Airways Ltd.		9,870,000	$	24,337,160
				24,337,160
APPAREL – 0.96%
Yue Yuen Industrial (Holdings) Ltd.		5,757,500		18,874,622
				18,874,622
BANKS – 11.65%
Bank of East Asia Ltd. (The)a		12,502,110		47,012,498
BOC Hong Kong (Holdings) Ltd.		30,432,500		80,008,308
Hang Seng Bank Ltd.a		6,251,000		85,746,828
Wing Hang Bank Ltd.		1,645,000		17,383,686
				230,151,320
DISTRIBUTION & WHOLESALE – 7.21%
Esprit Holdings Ltd.		9,376,532		52,557,279
Li & Fung Ltd.		17,771,000		90,014,450
				142,571,729
DIVERSIFIED FINANCIAL SERVICES – 6.52%
Hong Kong Exchanges and Clearing Ltd.		8,225,000		128,897,281
				128,897,281
ELECTRIC – 9.59%
CLP Holdings Ltd.		15,627,700		119,641,259
Hongkong Electric Holdings Ltd.a		11,515,000		69,947,130
				189,588,389
ENGINEERING & CONSTRUCTION – 0.64%
Cheung Kong Infrastructure Holdings Ltd.		3,290,000		12,667,674
				12,667,674
GAS – 4.22%
Hong Kong and China Gas Co. Ltd. (The)		34,545,883		83,316,933
				83,316,933
HOLDING COMPANIES – DIVERSIFIED – 14.11%
Hutchison Whampoa Ltd.		17,005,800		125,709,777
NWS Holdings Ltd.		6,580,000		11,944,411
Swire Pacific Ltd. Class A		6,580,000		79,305,136

Security	Shares		Value
Wharf (Holdings) Ltd. (The)		11,515,500	$	61,955,862
				278,915,186
LODGING – 3.73%
Sands China Ltd.b		19,740,000		30,656,193
Shangri-La Asia Ltd.		9,870,000		21,570,997
Wynn Macau Ltd.b		12,502,000		21,569,305
				73,796,495
MEDIA – 0.52%
Television Broadcasts Ltd.		2,045,000		10,174,391
				10,174,391
MINING – 0.49%
Mongolia Energy Corp. Ltd.b		24,675,000		9,738,671
				9,738,671
REAL ESTATE – 30.92%
Cheung Kong (Holdings) Ltd.		11,515,000		144,927,492
Hang Lung Group Ltd.		6,580,000		39,335,347
Hang Lung Properties Ltd.		16,450,000		73,489,426
Henderson Land Development Co. Ltd.		8,725,332		53,394,074
Hopewell Holdings Ltd.		4,935,000		15,512,085
Hysan Development Co. Ltd.		4,935,000		15,638,973
Kerry Properties Ltd.		5,757,500		29,015,106
New World Development Co. Ltd.		19,740,800		31,672,583
Sino Land Co. Ltd.a		13,160,000		22,975,227
Sun Hung Kai Properties Ltd.		11,515,000		161,359,517
Wheelock and Co. Ltd.		8,225,000		23,738,671
				611,058,501
REAL ESTATE INVESTMENT TRUSTS – 2.67%
Link REIT (The)		18,095,000		52,806,646
				52,806,646
RETAIL – 0.54%
Lifestyle International Holdings Ltd.		4,935,000		10,683,988
				10,683,988
SEMICONDUCTORS – 0.67%
ASM Pacific Technology Ltd.		1,645,000		13,312,689
				13,312,689
TELECOMMUNICATIONS – 1.13%
Foxconn International Holdings Ltd.a,b		18,095,000		12,026,888

32 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI HONG KONG INDEX FUND

August 31, 2010

Security	Shares		Value
PCCW Ltd.		31,255,000	$	10,206,042
				22,232,930
TRANSPORTATION – 2.75%
MTR Corp. Ltd.		11,515,083		41,154,375
Orient Overseas International Ltd.b		1,645,200		13,176,829
				54,331,204
TOTAL COMMON STOCKS (Cost: $2,214,702,721)				1,967,455,809
SHORT-TERM INVESTMENTS – 3.43%
MONEY MARKET FUNDS – 3.43%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%c,d,e		55,829,526		55,829,526
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%c,d,e		10,848,819		10,848,819
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%c,d		1,143,229		1,143,229
				67,821,574
TOTAL SHORT-TERM INVESTMENTS
(Cost: $67,821,574)				67,821,574
TOTAL INVESTMENTS IN SECURITIES – 102.98% (Cost: $2,282,524,295)				2,035,277,383
Other Assets, Less Liabilities – (2.98)%				(58,960,559)
NET ASSETS – 100.00%			$	1,976,316,824

^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 33

Schedule of Investments

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.69%
ADVERTISING – 0.36%
Asatsu-DK Inc.		3,600	$	75,927
Moshi Moshi Hotline Inc.		2,700		54,984
				130,911
AEROSPACE & DEFENSE – 0.14%
Japan Aviation Electronics Industry Ltd.		9,000		49,303
				49,303
AGRICULTURE – 0.36%
Hokuto Corp.		2,700		60,932
Sakata Seed Corp.		5,400		71,897
				132,829
APPAREL – 1.41%
Descente Ltd.		9,000		54,341
Gunze Ltd.		18,000		59,164
Japan Wool Textile Co. Ltd. (The)		9,000		68,167
Katakura Industries Co. Ltd.		3,600		34,641
Onward Holdings Co. Ltd.		9,000		64,630
Sanyo Shokai Ltd.		9,000		36,227
Shikibo Ltd.		9,000		11,040
Tokyo Style Co. Ltd.		9,000		65,166
Wacoal Holdings Corp.		9,000		122,615
				515,991
AUTO MANUFACTURERS – 0.44%
Kanto Auto Works Ltd.		5,400		36,527
Nissan Shatai Co. Ltd.		9,000		61,736
ShinMaywa Industries Ltd.		18,000		62,594
				160,857
AUTO PARTS & EQUIPMENT – 3.92%
Aisan Industry Co. Ltd.		2,700		18,875
Akebono Brake Industry Co. Ltd.a		7,200		36,184
Calsonic Kansei Corp.b		18,000		50,589
Exedy Corp.		3,600		103,837
FCC Co. Ltd.		4,500		96,141
Futaba Industrial Co. Ltd.b		6,300		35,038
Kayaba Industry Co. Ltd.		18,000		82,529
Keihin Corp.		4,500		86,066
Musashi Seimitsu Industry Co. Ltd.		2,700		59,389
Nifco Inc.		4,500		100,054
Nissin Kogyo Co. Ltd.		4,500		65,595

Security	Shares		Value
Press Kogyo Co. Ltd.b		9,000	$	27,760
Riken Corp.		9,000		29,260
Sanden Corp.		18,000		59,164
Showa Corp.b		6,300		33,162
T.RAD Co. Ltd.		9,000		26,688
Tachi-S Co. Ltd.		1,800		22,015
Takata Corp.		3,600		77,213
Teikoku Piston Ring Co. Ltd.		900		6,056
Tokai Rika Co. Ltd.		5,400		84,116
Topre Corp.		6,300		44,566
Toyo Tire & Rubber Co. Ltd.		18,000		36,227
TS Tech Co. Ltd.		5,400		78,071
Unipres Corp.		3,600		55,777
Yokohama Rubber Co. Ltd. (The)		27,000		124,116
				1,438,488
BANKS – 9.56%
Aichi Bank Ltd. (The)		900		55,091
Akita Bank Ltd. (The)		27,000		88,424
Aomori Bank Ltd. (The)		18,000		45,659
Awa Bank Ltd. (The)		27,000		174,598
Bank of Iwate Ltd. (The)		1,800		83,708
Bank of Nagoya Ltd. (The)		18,000		63,022
Bank of Okinawa Ltd. (The)		2,700		103,859
Bank of Saga Ltd. (The)		18,000		51,233
Bank of the Ryukyus Ltd.		4,500		53,591
Chiba Kogyo Bank Ltd. (The)b		4,500		27,278
Chukyo Bank Ltd. (The)		18,000		58,092
Daishi Bank Ltd. (The)		36,000		129,046
Ehime Bank Ltd. (The)		18,000		46,945
Eighteenth Bank Ltd. (The)		18,000		52,519
FIDEA Holdings Co. Ltd.		10,800		21,479
Fukui Bank Ltd. (The)		27,000		92,926
Higashi-Nippon Bank Ltd. (The)		18,000		33,441
Higo Bank Ltd. (The)		18,000		96,463
Hokkoku Bank Ltd. (The)		27,000		116,077
Hokuetsu Bank Ltd. (The)		27,000		47,910
Hyakugo Bank Ltd. (The)		27,000		116,399
Hyakujushi Bank Ltd. (The)		27,000		102,572
Juroku Bank Ltd. (The)		36,000		120,043
Kagoshima Bank Ltd. (The)		18,000		109,325
Kansai Urban Banking Corp.		27,000		40,836
Keiyo Bank Ltd. (The)		27,000		137,621

34 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Kiyo Holdings Inc.		72,000	$	98,607
Michinoku Bank Ltd. (The)		18,000		36,870
Mie Bank Ltd. (The)		18,000		48,660
Minato Bank Ltd. (The)		18,000		28,939
Miyazaki Bank Ltd. (The)		18,000		48,875
Musashino Bank Ltd. (The)		3,600		109,711
Nanto Bank Ltd. (The)		27,000		156,592
Ogaki Kyoritsu Bank Ltd. (The)		27,000		83,923
Oita Bank Ltd. (The)		18,000		58,950
San-in Godo Bank Ltd. (The)		18,000		126,259
Shiga Bank Ltd. (The)		27,000		168,489
Shikoku Bank Ltd. (The)		18,000		57,878
Tochigi Bank Ltd. (The)		9,000		36,013
Toho Bank Ltd. (The)		27,000		77,170
Tokyo Tomin Bank Ltd. (The)		3,600		39,057
TOMONY Holdings Inc.b		9,000		27,331
Towa Bank Ltd. (The)		18,000		14,791
Tsukuba Bank Ltd.b		6,300		19,432
Yachiyo Bank Ltd. (The)		1,800		39,228
Yamagata Bank Ltd. (The)		18,000		87,031
Yamanashi Chuo Bank Ltd. (The)		18,000		73,098
				3,505,061
BEVERAGES – 0.69%
Kagome Co. Ltd.		8,100		158,392
Takara Holdings Inc.		18,000		93,462
				251,854
BIOTECHNOLOGY – 0.16%
AnGes MG Inc.b		18		22,551
OncoTherapy Science Inc.b		9		17,085
Takara Bio Inc.b		9		20,364
				60,000
BUILDING MATERIALS – 1.21%
Central Glass Co. Ltd.		18,000		65,380
Chofu Seisakusho Co. Ltd.		2,700		60,836
Nichias Corp.		9,000		37,192
Nichiha Corp.		900		5,927
Sanwa Holdings Corp.		27,000		79,421
Sumitomo Osaka Cement Co. Ltd.		45,000		74,491
Takara Standard Co. Ltd.		18,000		120,686
				443,933

Security	Shares		Value
CHEMICALS – 6.41%
Adeka Corp.		10,800	$	110,225
Aica Kogyo Co. Ltd.		8,100		90,675
Arisawa Manufacturing Co. Ltd.		1,800		10,997
C. Uyemura & Co. Ltd.		900		33,601
Chugoku Marine Paints Ltd.		9,000		61,308
Dai Nippon Toryo Co. Ltd.b		9,000		9,003
Dainichiseika Color & Chemicals Manufacturing Co. Ltd.		9,000		38,049
Daiso Co. Ltd.		9,000		24,544
DIC Corp.		63,000		103,537
Earth Chemical Co. Ltd.		1,800		57,320
Fujimi Inc.		2,700		36,945
Ishihara Sangyo Kaisha Ltd.b		45,000		32,690
Lintec Corp.		5,400		109,775
Nihon Nohyaku Co. Ltd.		9,000		49,196
Nihon Parkerizing Co. Ltd.		9,000		107,288
Nippon Carbon Co. Ltd.		18,000		53,162
Nippon Kayaku Co. Ltd.		18,000		169,561
Nippon Paint Co. Ltd.		27,000		166,238
Nippon Shokubai Co. Ltd.		9,000		78,457
Nippon Soda Co. Ltd.		18,000		58,307
Nippon Synthetic Chemical Industry Co. Ltd. (The)		9,000		47,588
NOF Corp.		18,000		74,169
Sakai Chemical Industry Co. Ltd.		9,000		34,084
Stella Chemifa Corp.		900		32,369
Sumitomo Bakelite Co. Ltd.		27,000		130,868
T. Hasegawa Co. Ltd.		900		14,898
Taiyo Ink Manufacturing Co. Ltd.		1,800		48,725
Takasago International Corp.		9,000		42,229
Tanaka Chemical Corp.		900		10,075
Toagosei Co. Ltd.		27,000		102,251
Tokai Carbon Co. Ltd.		18,000		104,609
Tokyo Ohka Kogyo Co. Ltd.		5,400		86,945
Toyo Ink Manufacturing Co. Ltd.		27,000		99,035
Zeon Corp.		18,000		121,329
				2,350,052
COMMERCIAL SERVICES – 1.88%
Aeon Delight Co. Ltd.		1,800		33,762
Daiseki Co. Ltd.		3,660		66,557
Future Architect Inc.		18		6,219

SCHEDULES OF INVESTMENTS 35

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Kyodo Printing Co. Ltd.		9,000	$	21,222
Meitec Corp.		4,500		74,116
Nichii Gakkan Co.		5,400		46,302
Nishio Rent All Co. Ltd.		2,700		16,367
PARK24 Co. Ltd.		11,700		126,377
Pasona Group Inc.		36		24,609
Pronexus Inc.		1,800		9,646
Sohgo Security Services Co. Ltd.		7,200		70,311
So-net M3 Inc.		9		40,836
Temp Holdings Co. Ltd.		900		7,856
TKC Corp.		2,700		48,778
Toppan Forms Co. Ltd.		7,200		68,081
Zenrin Co. Ltd.		2,700		28,457
				689,496
COMPUTERS – 0.70%
CSK Holdings Corp.b		8,100		26,527
DTS Corp.		3,600		36,570
Ferrotec Corp.		1,800		19,486
Ines Corp.		2,700		17,588
Japan Digital Laboratory Co. Ltd.		900		9,078
Melco Holdings Inc.		900		27,138
Net One Systems Co. Ltd.		54		62,251
NS Solutions Corp.		2,700		46,785
Roland DG Corp.		900		12,015
				257,438
COSMETICS & PERSONAL CARE – 1.31%
Aderans Holdings Co. Ltd.b		3,600		42,658
Dr. Ci:Labo Co. Ltd.		9		28,596
Fancl Corp.		5,400		88,039
Kose Corp.		3,600		84,673
Lion Corp.		18,000		96,892
Mandom Corp.		2,700		72,701
Pigeon Corp.		1,800		66,238
				479,797
DISTRIBUTION & WHOLESALE – 2.40%
Doshisha Co. Ltd.		2,700		63,987
F&A Aqua Holdings Inc.		3,600		33,312
Hakuto Co. Ltd.		900		7,578
Hanwa Co. Ltd.		27,000		97,749
Inaba Denki Sangyo Co. Ltd.		2,700		62,476
Inabata & Co. Ltd.		1,800		8,574
Itochu Enex Co. Ltd.		10,800		50,675

Security	Shares		Value
Iwatani Corp.		27,000	$	74,598
Japan Pulp & Paper Co. Ltd.		18,000		58,092
Japan Wind Development Co. Ltd.b		9		10,847
JFE Shoji Holdings Inc.		18,000		62,165
Kanematsu Corp.b		54,000		43,087
Matsuda Sangyo Co. Ltd.		1,860		26,670
Nagase & Co. Ltd.		9,000		97,535
Nippon Gas Co. Ltd.		5,400		85,531
Ryoyo Electro Corp.		900		8,167
Ship Healthcare Holdings Inc.		36		29,282
Sumikin Bussan Corp.		9,000		17,042
Trusco Nakayama Corp.		2,700		35,402
Yuasa Trading Co. Ltd.b		9,000		8,467
				881,236
DIVERSIFIED FINANCIAL SERVICES – 2.67%
AIFUL Corp.b		13,050		16,318
Cedyna Financial Corp.b		16,200		28,167
Century Tokyo Leasing Corp.		6,380		82,134
Fuyo General Lease Co. Ltd.		1,800		47,288
GCA Savvian Group Corp.b		9		8,307
Hitachi Capital Corp.		4,500		63,558
IBJ Leasing Co. Ltd.		2,700		54,855
Ichiyoshi Securities Co. Ltd.		5,400		36,077
Iwai Cosmo Holdings Inc.		900		7,245
Jaccs Co. Ltd.		18,000		33,012
Japan Securities Finance Co. Ltd.		9,900		56,238
Kenedix Inc.b		216		35,241
Marusan Securities Co. Ltd.		8,100		43,215
Mizuho Investors Securities Co. Ltd.b		36,000		36,442
Okasan Securities Group Inc.		18,000		64,309
Orient Corp.a,b		27,000		18,328
Osaka Securities Exchange Co. Ltd.		27		131,190
Promise Co. Ltd.		7,650		60,038
Ricoh Leasing Co. Ltd.		2,700		63,505
SPARX Group Co. Ltd.b		45		3,859
Takefuji Corp.a		7,290		17,537
Tokai Tokyo Financial Holdings Inc.		18,000		59,593
Toyo Securities Co. Ltd.		9,000		13,934
				980,390
ELECTRIC – 0.26%
Okinawa Electric Power Co. Inc. (The)		1,800		95,284
				95,284

36 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
ELECTRICAL COMPONENTS & EQUIPMENT – 1.38%
Fujikura Ltd.		36,000	$	156,484
Funai Electric Co. Ltd.		1,800		54,598
Hitachi Cable Ltd.		18,000		43,944
Icom Inc.		900		23,623
Nippon Signal Co. Ltd. (The)		4,500		32,047
NPC Inc.		900		17,910
Sinfonia Technology Co. Ltd.		18,000		35,155
SWCC Showa Holdings Co. Ltd.b		9,000		7,824
Takaoka Electric Manufacturing Co. Ltd.		9,000		28,617
Tokyo Rope Manufacturing Co. Ltd.		18,000		40,300
Toshiba Tec Corp.		18,000		64,523
				505,025
ELECTRONICS – 5.82%
Alps Electric Co. Ltd.b		18,000		124,116
Anritsu Corp.b		18,000		107,824
Chiyoda Integre Co. Ltd.		2,700		28,971
CMK Corp.a		5,400		24,180
Cosel Co. Ltd.		4,500		53,162
Dai-ichi Seiko Co. Ltd.		900		35,531
Dainippon Screen Manufacturing Co. Ltd.b		27,000		118,328
Eizo Nanao Corp.		2,700		52,669
Enplas Corp.		900		14,277
FDK Corp.b		9,000		12,326
Fujitsu General Ltd.		9,000		44,909
Furuno Electric Co. Ltd.		3,600		15,434
Futaba Corp.		4,500		69,561
HORIBA Ltd.		3,600		85,745
Hosiden Corp.		7,200		67,138
IDEC Corp.		900		8,221
JEOL Ltd.		9,000		27,010
Kaga Electronics Co. Ltd.		4,500		48,499
Koa Corp.		5,400		48,360
Kuroda Electric Co. Ltd.		3,600		40,943
Macnica Inc.		2,700		47,846
Meiko Electronics Co. Ltd.		900		14,695
Micronics Japan Co. Ltd.		1,800		18,864
Nichicon Corp.		8,100		86,817
Nihon Dempa Kogyo Co. Ltd.		1,800		23,408
Nippon Ceramic Co. Ltd.		900		13,773

Security	Shares		Value
Nippon Chemi-Con Corp.b		18,000	$	71,811
Nitto Kogyo Corp.		3,600		29,582
Ryosan Co. Ltd.		5,400		137,621
Sanshin Electronics Co. Ltd.		3,600		30,525
Sanyo Denki Co. Ltd.		9,000		34,512
SATO Corp.		900		10,868
Shinko Shoji Co. Ltd.		1,800		14,877
Star Micronics Co. Ltd.		5,400		46,367
Taiyo Yuden Co. Ltd.		9,000		99,250
Tamura Corp.		9,000		22,830
TOKO Inc.b		9,000		12,004
Tokyo Seimitsu Co. Ltd.b		4,500		55,145
Toyo Corp.		4,500		49,893
ULVAC Inc.		3,600		59,550
Wacom Co. Ltd.		45		50,589
Yamatake Corp.		7,200		176,206
				2,134,237
ENGINEERING & CONSTRUCTION – 3.52%
Chudenko Corp.		3,600		38,885
COMSYS Holdings Corp.		12,600		108,039
Japan Airport Terminal Co. Ltd.		4,500		77,063
Kandenko Co. Ltd.		9,000		53,162
Kyowa Exeo Corp.		9,000		78,671
Maeda Corp.		18,000		43,516
Maeda Road Construction Co. Ltd.		9,000		64,952
Nippo Corp.		9,000		59,057
Nippon Road Co. Ltd. (The)		9,000		17,149
Nishimatsu Construction Co. Ltd.		36,000		42,015
Okumura Corp.		18,000		59,593
Penta-Ocean Construction Co. Ltd.		31,500		41,640
Shinko Plantech Co. Ltd.		4,500		35,423
SHO-BOND Holdings Co. Ltd.		3,600		75,241
Taihei Kogyo Co. Ltd.		9,000		31,618
Taikisha Ltd.		4,500		70,525
Takasago Thermal Engineering Co. Ltd.		9,000		68,167
Takuma Co. Ltd.b		9,000		17,149
Toa Corp.		18,000		17,792
Toda Corp.		27,000		85,531
Tokyu Construction Co. Ltd.		11,340		29,981
Toshiba Plant Systems & Services Corp.		9,000		103,108
Toyo Construction Co. Ltd.		45,000		21,436

SCHEDULES OF INVESTMENTS 37

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Toyo Engineering Corp.		18,000	$	51,233
				1,290,946
ENTERTAINMENT – 0.79%
Avex Group Holdings Inc.		4,500		65,434
Resorttrust Inc.		4,500		65,863
Shochiku Co. Ltd.		9,000		61,415
Toei Co. Ltd.		9,000		39,550
Tokyotokeiba Co. Ltd.		18,000		25,509
Yomiuri Land Co. Ltd.		9,000		30,654
				288,425
ENVIRONMENTAL CONTROL – 0.13%
Asahi Holdings Inc.		2,700		48,071
				48,071
FOOD – 4.17%
Ariake Japan Co. Ltd.		2,700		41,704
Ezaki Glico Co. Ltd.		9,000		116,077
Fuji Oil Co. Ltd.		8,100		125,016
House Foods Corp.		7,200		112,240
Itoham Foods Inc.		18,000		63,666
J-Oil Mills Inc.		9,000		24,973
Kato Sangyo Co. Ltd.		2,700		40,772
Kewpie Corp.		10,800		136,592
Maruha Nichiro Holdings Inc.		45,000		72,883
MEGMILK SNOW BRAND Co. Ltd.		4,500		84,887
Mitsui Sugar Co. Ltd.		9,000		33,226
Morinaga & Co. Ltd.		36,000		84,887
Morinaga Milk Industry Co. Ltd.		27,000		116,720
Nichirei Corp.		36,000		153,483
Nippon Beet Sugar Manufacturing Co. Ltd.		18,000		39,657
Nippon Flour Mills Co. Ltd.		18,000		93,033
Nippon Suisan Kaisha Ltd.		26,100		82,369
Nisshin OilliO Group Ltd. (The)		18,000		85,316
Prima Meat Packers Ltd.		18,000		19,507
				1,527,008
FOREST PRODUCTS & PAPER – 1.31%
Daio Paper Corp.		9,000		64,309
Hokuetsu Kishu Paper Co. Ltd.		13,500		64,791
Mitsubishi Paper Mills Ltd.b		45,000		48,232
Rengo Co. Ltd.		27,000		180,707
Sumitomo Forestry Co. Ltd.		17,100		122,594
				480,633

Security	Shares		Value
GAS – 0.43%
Saibu Gas Co. Ltd.		45,000	$	130,761
Shizuoka Gas Co. Ltd.		4,500		28,457
				159,218
HAND & MACHINE TOOLS – 1.27%
DISCO Corp.		2,700		134,887
Hitachi Koki Co. Ltd.		6,300		54,019
Meidensha Corp.a		18,000		54,234
Mori Seiki Co. Ltd.		10,800		91,961
OSG Corp.		9,900		92,669
Union Tool Co.		1,800		38,928
				466,698
HEALTH CARE – PRODUCTS – 1.36%
Aloka Co. Ltd.		900		5,798
Hogy Medical Co. Ltd.		1,800		89,925
Nakanishi Inc.		900		93,462
Nihon Kohden Corp.		4,500		91,318
Nipro Corp.		6,300		124,169
Paramount Bed Co. Ltd.		2,700		64,244
Topcon Corp.		7,200		29,925
				498,841
HEALTH CARE – SERVICES – 0.06%
Message Co. Ltd.		9		21,425
				21,425
HOME BUILDERS – 0.51%
Haseko Corp.b		121,500		101,286
PanaHome Corp.		9,000		54,019
Token Corp.		1,080		29,621
				184,926
HOME FURNISHINGS – 1.44%
Alpine Electronics Inc.b		5,400		61,736
Canon Electronics Inc.		2,700		62,926
Daiwa Industries Ltd.		9,000		39,657
Foster Electric Co. Ltd.		2,700		57,910
France Bed Holdings Co. Ltd.		18,000		25,295
Hoshizaki Electric Co. Ltd.		1,800		32,090
Juki Corp.a,b		18,000		27,653
JVC KENWOOD Holdings Inc.a,b		7,740		18,988
Nidec Sankyo Corp.		9,000		65,488
Noritz Corp.		3,600		68,982

38 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Pioneer Corp.b		22,500	$	66,720
				527,445
HOUSEHOLD PRODUCTS & WARES – 0.14%
Pilot Corp.		27		49,389
				49,389
HOUSEWARES – 0.36%
Noritake Co. Ltd.		18,000		56,377
Sangetsu Co. Ltd.		3,600		76,913
				133,290
INTERNET – 2.07%
Access Co. Ltd.		27		36,752
CyberAgent Inc.		63		101,061
Digital Garage Inc.b		9		16,184
Dwango Co. Ltd.		9		17,899
eAccess Ltd.		153		111,511
En-Japan Inc.		18		25,702
GMO Internet Inc.		6,300		21,833
Gourmet Navigator Inc.a		18		24,137
Index Holdingsb		126		6,310
Internet Initiative Japan Inc.		18		47,374
kabu.com Securities Co. Ltd.		9,000		42,015
Kakaku.com Inc.		18		87,996
Macromill Inc.		9		13,891
Mixi Inc.		9		48,339
Monex Group Inc.		126		50,568
Opt Inc.		9		12,111
So-net Entertainment Corp.		18		46,517
Start Today Co. Ltd.		9		22,326
VeriSign Japan K.K.		36		13,248
Zappallas Inc.		9		12,165
				757,939
IRON & STEEL – 1.18%
Aichi Steel Corp.		18,000		81,672
Godo Steel Ltd.		18,000		38,585
Kyoei Steel Ltd.		1,800		24,759
Mitsubishi Steel Manufacturing Co. Ltd.		18,000		35,370
Nakayama Steel Works Ltd.b		18,000		24,437
Nippon Metal Industry Co. Ltd.		18,000		23,151
Nippon Yakin Kogyo Co. Ltd.a,b		13,500		39,228
Sanyo Special Steel Co. Ltd.b		9,000		41,479
TOPY Industries Ltd.		27,000		56,592

Security	Shares		Value
Yodogawa Steel Works Ltd.		18,000	$	68,167
				433,440
LEISURE TIME – 1.49%
Accordia Golf Co. Ltd.		63		62,122
Daiichikosho Co. Ltd.		5,400		83,022
Fields Corp.		18		22,551
GLOBERIDE Inc.		9,000		10,504
H.I.S. Co. Ltd.		2,700		57,685
Heiwa Corp.		5,400		66,817
Mars Engineering Corp.		900		15,113
Mizuno Corp.		9,000		40,407
PGM Holdings K.K.		63		40,439
Roland Corp.		2,700		26,817
Round One Corp.		5,400		23,408
Tokyo Dome Corp.		18,000		44,802
Universal Entertainment Corp.b		2,700		53,055
				546,742
LODGING – 0.11%
Fujita Kanko Inc.		9,000		41,693
				41,693
MACHINERY – 3.89%
Aida Engineering Ltd.		9,900		31,951
Chugai Ro Co. Ltd.		9,000		28,617
CKD Corp.		8,100		48,039
Daifuku Co. Ltd.		9,000		42,444
Daihen Corp.		18,000		74,169
Fuji Machine Manufacturing Co. Ltd.		4,500		71,275
Furukawa Co. Ltd.b		36,000		34,727
Harmonic Drive Systems Inc.		9		35,959
Iseki & Co. Ltd.a,b		18,000		48,017
Komori Corp.		7,200		68,939
Makino Milling Machine Co. Ltd.b		9,000		50,054
Max Co. Ltd.		9,000		105,895
Miura Co. Ltd.		3,600		76,399
Modec Inc.		2,700		35,273
Nabtesco Corp.		9,000		135,263
Nippon Sharyo Ltd.		9,000		38,907
Nippon Thompson Co. Ltd.		9,000		51,233
Obara Corp.		1,800		15,413
Okuma Corp.b		18,000		87,245
Shima Seiki Manufacturing Ltd.		2,700		50,482
Sintokogio Ltd.		7,200		48,274

SCHEDULES OF INVESTMENTS 39

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Tadano Ltd.		18,000	$	87,674
Takeuchi Manufacturing Co. Ltd.b		900		9,003
Toshiba Machine Co. Ltd.		18,000		57,663
Toyo Kanetsu K.K.		18,000		28,296
Tsubakimoto Chain Co.		18,000		65,595
				1,426,806
MACHINERY – DIVERSIFIED – 0.56%
Ebara Corp.b		45,000		178,457
Torishima Pump Manufacturing Co. Ltd.		1,800		26,581
				205,038
MANUFACTURING – 1.70%
Achilles Corp.		9,000		12,219
Amano Corp.		9,000		69,346
Glory Ltd.		7,200		153,741
Japan Cash Machine Co. Ltd.		900		6,270
JSP Corp.		900		9,271
Kureha Corp.		18,000		91,533
Nikkiso Co. Ltd.		9,000		58,842
Nippon Valqua Industries Ltd.		9,000		23,044
Nitta Corp.		3,600		48,532
Tamron Co. Ltd.		1,800		32,497
Tenma Corp.		3,600		35,841
Tokai Rubber Industries Ltd.		3,600		37,256
Toyo Tanso Co. Ltd.a		900		43,569
				621,961
MEDIA – 0.42%
Gakken Holdings Co. Ltd.		9,000		18,435
Kadokawa Group Holdings Inc.		2,700		60,032
SKY Perfect JSAT Holdings Inc.		180		63,408
Tohokushinsha Film Corp.		900		4,159
USEN Corp.b		11,880		7,781
				153,815
METAL FABRICATE & HARDWARE – 1.59%
Kitz Corp.		9,000		37,085
Misumi Group Inc.		9,000		175,241
Mitsui High-Tech Inc.b		900		4,759
Nachi-Fujikoshi Corp.		27,000		66,238
Neturen Co. Ltd.		5,400		37,235
Oiles Corp.		4,580		69,815
Onoken Co. Ltd.		1,800		13,591
Ryobi Ltd.b		18,000		61,093

Security	Shares		Value
Tocalo Co. Ltd.		1,800	$	25,466
Toho Zinc Co. Ltd.		18,000		63,237
Yamazen Corp.		8,100		29,325
				583,085
MINING – 1.56%
Nippon Coke & Engineering Co. Ltd.		18,000		24,437
Nippon Denko Co. Ltd.		9,000		67,203
Nippon Light Metal Co. Ltd.b		63,000		100,536
Nittetsu Mining Co. Ltd.		9,000		29,260
OSAKA Titanium technologies Co. Ltd.		1,800		82,851
Pacific Metals Co. Ltd.		18,000		129,475
Sumitomo Light Metal Industries Ltd.b		45,000		47,696
Toho Titanium Co. Ltd.		3,600		89,603
				571,061
OFFICE & BUSINESS EQUIPMENT – 0.06%
Riso Kagaku Corp.		1,800		21,672
				21,672
OFFICE FURNISHINGS – 0.36%
Kokuyo Co. Ltd.		10,800		82,830
Okamura Corp.		9,000		47,588
				130,418
OIL & GAS – 0.06%
AOC Holdings Inc.b		5,400		23,344
				23,344
PACKAGING & CONTAINERS – 0.41%
FP Corp.		1,800		97,535
Fuji Seal International Inc.		2,700		53,441
				150,976
PHARMACEUTICALS – 3.96%
EPS Co. Ltd.		18		45,145
Kaken Pharmaceutical Co. Ltd.		9,000		97,535
Kissei Pharmaceutical Co. Ltd.		900		17,728
Kobayashi Pharmaceutical Co. Ltd.		3,600		165,488
KYORIN Holdings Inc		9,000		129,260
Miraca Holdings Inc.		6,300		211,125
Mochida Pharmaceutical Co. Ltd.		9,000		90,032
Nichi-Iko Pharmaceutical Co. Ltd.		2,700		97,910
Nippon Shinyaku Co. Ltd.		9,000		115,970
Rohto Pharmaceutical Co. Ltd.		9,000		109,968
Sawai Pharmaceutical Co. Ltd.		1,800		184,566
Seikagaku Corp.		4,500		48,071

40 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
Taiko Pharmaceutical Co. Ltd.		900	$	10,236
Toho Holdings Co. Ltd.		4,500		64,898
Towa Pharmaceutical Co. Ltd.		900		53,805
Vital KSK Holdings Inc.		1,800		10,225
				1,451,962
REAL ESTATE – 1.29%
Airport Facilities Co. Ltd.		1,800		6,538
Arnest One Corp.		4,500		45,498
Daibiru Corp.		6,300		46,517
Daikyo Inc.b		27,000		37,942
Goldcrest Co. Ltd.		2,160		45,042
Heiwa Real Estate Co. Ltd.		22,500		53,859
Hulic Co. Ltd.		6,300		43,365
Iida Home Max Co. Ltd.		900		6,752
Leopalace21 Corp.b		11,700		25,220
Sankei Building Co. Ltd. (The)		3,600		19,721
Shoei Co. Ltd.		3,600		25,509
Sumitomo Real Estate Sales Co. Ltd.		900		37,996
TOC Co. Ltd.		9,000		36,549
Toho Real Estate Co. Ltd.		900		5,016
Tokyu Livable Inc.		2,700		30,161
Touei Housing Corp.		900		8,467
				474,152
REAL ESTATE INVESTMENT TRUSTS – 4.60%
Advance Residence Investment Corp.b		99		154,448
DA Office Investment Corp.		27		73,666
Frontier Real Estate Investment Corp.		18		140,407
Fukuoka REIT Corp.		9		57,556
Global One Real Estate Investment Corp. Ltd.		9		68,489
Hankyu REIT Inc.		9		38,800
Japan Excellent Inc.		18		86,174
Japan Logistics Fund Inc.a		18		136,334
Kenedix Realty Investment Corp.		27		94,534
MID REIT Inc.		18		38,821
Mori Hills REIT Investment Corp.		18		36,442
MORI TRUST Sogo REIT Inc.		9		74,491
Nippon Accommodations Fund Inc.		18		104,609
Nippon Commercial Investment Corp.		27		27,846
Nomura Real Estate Residential Fund Inc.		9		37,728
ORIX JREIT Inc.		27		127,492

Security	Shares		Value
Premier Investment Corp.		18	$	78,028
TOKYU REIT Inc.		18		97,964
Top REIT Inc.		18		96,570
United Urban Investment Corp.		18		116,613
				1,687,012
RETAIL – 9.61%
Alpen Co. Ltd.		1,800		28,382
Aoki Holdings Inc.		3,600		44,587
Aoyama Trading Co. Ltd.		7,200		99,207
Arcs Co. Ltd.		3,600		47,203
Askul Corp.		2,700		50,643
Autobacs Seven Co. Ltd.		3,600		134,834
Belluna Co. Ltd.		3,150		15,531
Best Denki Co. Ltd.b		9,000		21,115
BIC Camera Inc.a		81		31,013
Cawachi Ltd.		1,800		32,755
Chiyoda Co. Ltd.		3,600		40,943
Circle K Sunkus Co. Ltd.		6,300		86,206
cocokara fine HOLDINGS Inc.		900		18,671
Colowide Co. Ltd.		4,500		24,973
Culture Convenience Club Co. Ltd.a		10,800		47,331
Daiei Inc. (The)b		8,100		32,797
DCM Holdings Co. Ltd.		9,000		42,444
Don Quijote Co. Ltd.		5,400		131,897
Doutor Nichires Holdings Co. Ltd.		4,500		59,646
Duskin Co. Ltd.		6,300		112,915
EDION Corp.		9,000		62,058
Fuji Co. Ltd.		1,800		34,448
GEO Corp.		45		52,894
Gulliver International Co. Ltd.		450		17,524
H2O Retailing Corp.		9,000		54,126
Heiwado Co. Ltd.		4,500		53,430
Honeys Co. Ltd.		2,340		35,196
Izumi Co. Ltd.		6,300		77,803
Izumiya Co. Ltd.		9,000		36,656
Joshin Denki Co. Ltd.		9,000		84,244
Kasumi Co. Ltd.		900		4,802
Keiyo Co. Ltd.		4,500		24,062
Kisoji Co. Ltd.		3,600		78,285
Kohnan Shoji Co. Ltd.		2,700		28,778
Kojima Co. Ltd.		900		4,427
Komeri Co. Ltd.		3,600		82,872

SCHEDULES OF INVESTMENTS 41

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
K’s Holdings Corp.		5,400	$	116,720
Kura Corp.		900		15,531
Maruetsu Inc. (The)		9,000		36,763
Matsumotokiyoshi Co. Ltd.		4,500		85,477
Matsuya Co. Ltd.b		3,600		25,809
Megane Top Co. Ltd.		1,800		11,897
MOS Food Services Inc.		3,600		64,652
Nishimatsuya Chain Co. Ltd.		6,300		54,770
Nissen Holdings Co. Ltd.		6,300		27,085
Parco Co. Ltd.		5,400		41,543
Paris Miki Holdings Inc.		4,500		35,852
Plenus Co. Ltd.		3,600		55,863
Point Inc.		1,620		75,820
Right On Co. Ltd.		2,700		15,691
Ringer Hut Co. Ltd.		1,800		20,836
Ryohin Keikaku Co. Ltd.		2,700		94,469
Saint Marc Holdings Co. Ltd.		900		34,780
Saizeriya Co. Ltd.		3,600		70,139
San-A & Co. Ltd.		900		33,226
Sankyo-Tateyama Holdings Inc.b		45,000		48,767
Seiko Holdings Corp.b		9,000		25,831
Senshukai Co. Ltd.		5,400		31,768
Shimachu Co. Ltd.		5,400		106,238
Sugi Holdings Co. Ltd.		3,600		78,028
Sundrug Co. Ltd.		3,600		97,406
Toridoll Corp.		9		15,316
Tsuruha Holdings Inc.		1,800		74,062
Valor Co. Ltd.		4,500		33,119
Watami Co. Ltd.		3,600		70,525
Xebio Co. Ltd.		2,700		49,068
Yoshinoya Holdings Co. Ltd.		54		63,408
Zensho Co. Ltd.		8,100		76,592
				3,521,749
SEMICONDUCTORS – 0.37%
Megachips Corp.		1,800		32,197
Mimasu Semiconductor Industry Co. Ltd.		2,700		26,752
Sanken Electric Co. Ltd.b		9,000		28,510
Shindengen Electric Manufacturing Co. Ltd.b		9,000		29,904
Shinkawa Ltd.		900		9,861

Security	Shares		Value
THine Electronics Inc.		9	$	9,432
				136,656
SHIPBUILDING – 0.52%
Hitachi Zosen Corp.		94,500		128,296
Namura Shipbuilding Co. Ltd.		5,400		27,010
Sasebo Heavy Industries Co. Ltd.		18,000		36,013
				191,319
SOFTWARE – 1.20%
Capcom Co. Ltd.		5,400		78,714
Fuji Soft Inc.		3,600		54,577
NEC Mobiling Ltd.		900		24,759
Nihon Unisys Ltd.		7,200		49,218
NSD Co. Ltd.		4,500		48,499
Obic Business Consultants Co. Ltd.		900		46,141
Simplex Technology Inc.		18		11,768
Sumisho Computer Systems Corp.		2,700		41,672
Tecmo Koei Holdings Co. Ltd.		5,400		34,662
Trans Cosmos Inc.		3,600		29,239
Works Applications Co. Ltd.		45		21,517
				440,766
STORAGE & WAREHOUSING – 0.50%
Mitsui-Soko Co. Ltd.		18,000		64,952
Shibusawa Warehouse Co. Ltd. (The)		9,000		32,047
Sumitomo Warehouse Co. Ltd. (The)		18,000		86,174
				183,173
TELECOMMUNICATIONS – 1.35%
AIPHONE Co. Ltd.		900		14,341
Daimei Telecom Engineering Corp.		3,600		24,266
Denki Kogyo Co. Ltd.		9,000		40,622
Hikari Tsushin Inc.		2,700		47,717
Hitachi Kokusai Electric Inc.		9,000		67,846
IT Holdings Corp.		9,048		102,150
Japan Radio Co. Ltd.		9,000		20,686
MTI Ltd.		9		10,300
Oki Electric Industry Co. Ltd.b		90,000		69,668
Okinawa Cellular Telephone Co.		18		36,506
Telepark Corp.		27		42,315
Uniden Corp.b		9,000		19,293
				495,710

42 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN SMALL CAP INDEX FUND

August 31, 2010

Security	Shares		Value
TEXTILES – 0.96%
Daiwabo Holdings Co. Ltd.		18,000	$	37,513
Kurabo Industries Ltd.		27,000		42,444
Nitto Boseki Co. Ltd.		36,000		69,882
Seiren Co. Ltd.		7,200		42,358
Toyobo Co. Ltd.		72,000		110,611
Unitika Ltd.b		63,000		50,268
				353,076
TOYS, GAMES & HOBBIES – 0.44%
Sanrio Co. Ltd.		5,400		90,804
Tomy Co. Ltd.		9,000		69,453
				160,257
TRANSPORTATION – 2.86%
Daiichi Chuo Kisen Kaishab		9,000		22,079
Fukuyama Transporting Co. Ltd.		18,000		91,961
Hitachi Transport System Ltd.		5,400		78,842
Iino Kaiun Kaisha Ltd.		10,800		56,077
Inui Steamship Co. Ltd.		2,700		15,177
Kintetsu World Express Inc.		1,800		42,787
Nippon Konpo Unyu Soko Co. Ltd.		9,000		105,895
Nishi-Nippon Railroad Co. Ltd.		36,000		157,771
Sankyu Inc.		27,000		103,215
Seino Holdings Co. Ltd.		18,000		112,111
Shinwa Kaiun Kaisha Ltd.		9,000		22,401
Sotetsu Holdings Inc.		45,000		215,970
Yusen Air & Sea Service Co. Ltd.		1,800		25,123
				1,049,409
TOTAL COMMON STOCKS
(Cost: $39,920,860)				36,551,728
SHORT-TERM INVESTMENTS – 1.41%
MONEY MARKET FUNDS – 1.41%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%c,d,e		424,518		424,518
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%c,d,e		82,493		82,493

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%c,d		7,839	$	7,839
				514,850
TOTAL SHORT-TERM INVESTMENTS
(Cost: $514,850)				514,850
TOTAL INVESTMENTS
IN SECURITIES – 101.10%
(Cost: $40,435,710)				37,066,578
Other Assets, Less Liabilities – (1.10)%				(402,265)
NET ASSETS – 100.00%			$	36,664,313

^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, 2010

Security	Shares		Value
COMMON STOCKS – 99.77%
AGRICULTURE – 10.68%
British American Tobacco
(Malaysia) Bhd		1,060,800	$	15,245,313
Genting Plantations Bhd		1,795,200		4,170,294
IOI Corp. Bhd		26,683,230		44,639,981
Kuala Lumpur Kepong Bhd		3,835,200		20,727,177
				84,782,765
AIRLINES – 1.25%
AirAsia Bhda		9,955,200		5,329,489
Malaysian Airline System Bhda		6,691,800		4,584,666
				9,914,155
AUTO PARTS & EQUIPMENT – 1.21%
UMW Holdings Bhd		4,569,600		9,610,554
				9,610,554
BANKS – 28.86%
Alliance Financial Group Bhd		7,425,600		7,264,341
AMMB Holdings Bhd		14,443,237		26,049,973
CIMB Group Holdings Bhd		31,008,064		77,071,809
Hong Leong Bank Bhd		3,753,600		10,573,690
Malayan Banking Bhd		25,459,220		68,066,490
Public Bank Bhd Foreign		8,486,400		32,937,990
RHB Capital Bhd		3,427,200		7,262,521
				229,226,814
BUILDING MATERIALS – 0.81%
Lafarge Malayan Cement Bhd		2,692,860		6,418,620
				6,418,620
COMMERCIAL SERVICES – 2.02%
PLUS Expressways Bhd		11,995,200		16,053,994
				16,053,994
DIVERSIFIED FINANCIAL SERVICES – 1.32%
Bursa Malaysia Bhd		2,529,600		5,779,594
Hong Leong Financial Group Bhd		1,713,600		4,745,211
				10,524,805
ELECTRIC – 7.10%
Tenaga Nasional Bhd		15,585,650		44,003,269
YTL Power International Bhd		17,217,675		12,344,779
				56,348,048

Security	Shares		Value
ENGINEERING & CONSTRUCTION – 5.67%
Gamuda Bhd		12,892,800	$	14,215,091
IJM Corp. Bhd		8,486,440		13,494,363
MMC Corp. Bhd		6,038,400		4,868,203
YTL Corp. Bhd		5,304,021		12,439,684
				45,017,341
ENTERTAINMENT – 2.43%
Berjaya Sports Toto Bhd		5,385,650		7,105,011
Tanjong PLC		1,795,200		12,196,251
				19,301,262
FOOD – 2.29%
PPB Group Bhd		3,345,666		18,209,447
				18,209,447
GAS – 1.65%
Petronas Gas Bhd		3,916,800		13,105,301
				13,105,301
HOLDING COMPANIES – DIVERSIFIED – 7.74%
Berjaya Corp. Bhd		12,892,800		3,902,987
Sime Darby Bhd		21,624,025		57,537,278
				61,440,265
IRON & STEEL – 0.83%
Parkson Holdings Bhd		3,753,633		6,578,711
				6,578,711
LODGING – 9.60%
Genting Bhd		17,788,800		53,567,917
Genting Malaysia Bhd		23,582,400		22,694,533
				76,262,450
OIL & GAS – 0.85%
Petronas Dagangan Bhd		1,958,400		6,714,907
				6,714,907
REAL ESTATE – 0.85%
SP Setia Bhd		4,896,000		6,755,471
				6,755,471
TELECOMMUNICATIONS – 11.47%
Axiata Group Bhda		20,236,800		28,825,421
DiGi.Com Bhd		2,774,400		21,872,331
Maxis Communications Bhd		17,952,000		30,776,655
Telekom Malaysia Bhd		8,568,000		9,637,857
				91,112,264

44 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI MALAYSIA INDEX FUND

August 31, 2010

Security	Shares		Value
TRANSPORTATION – 3.14%
MISC Bhd		8,894,420	$	24,913,389
				24,913,389
TOTAL COMMON STOCKS
(Cost: $439,490,666)				792,290,563
SHORT-TERM INVESTMENTS – 0.05%
MONEY MARKET FUNDS – 0.05%
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%b,c		437,397		437,397
				437,397
TOTAL SHORT-TERM INVESTMENTS
(Cost: $437,397)				437,397
TOTAL INVESTMENTS
IN SECURITIES – 99.82%
(Cost: $439,928,063)				792,727,960
Other Assets, Less Liabilities – 0.18%				1,414,230
NET ASSETS – 100.00%			$	794,142,190

^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, 2010

Security	Shares		Value
COMMON STOCKS – 99.16%
AUSTRALIA – 64.80%
AGL Energy Ltd.		1,281,588	$	17,132,975
Alumina Ltd.		6,947,556		10,604,998
Amcor Ltd.		3,477,720		20,862,623
AMP Ltd.		5,900,736		26,469,828
Aristocrat Leisure Ltd.		1,139,092		3,771,518
Asciano Groupa		8,331,636		12,421,084
ASX Ltd.		489,684		12,687,397
Australia and New Zealand
Banking Group Ltd.		7,214,444		145,055,267
AXA Asia Pacific Holdings Ltd.		2,943,068		14,407,127
Bendigo and Adelaide Bank Ltd.		991,048		7,435,954
BGP Holdings PLCb		27,004,595		3,432
BHP Billiton Ltd.		9,556,576		315,141,019
Billabong International Ltd.		576,700		3,880,486
BlueScope Steel Ltd.a		5,191,176		9,887,669
Boral Ltd.		2,046,628		8,015,046
Brambles Ltd.		4,050,040		21,123,765
Caltex Australia Ltd.		384,564		3,847,241
CFS Retail Property Trust		5,004,296		8,618,633
Coca-Cola Amatil Ltd.		1,609,504		17,090,191
Cochlear Ltd.		160,892		9,909,573
Commonwealth Bank of Australia		4,410,368		197,450,036
Computershare Ltd.		1,266,404		10,696,776
Crown Ltd.		1,287,428		9,487,847
CSL Ltd.		1,639,288		48,090,232
CSR Ltd.		4,313,424		6,545,773
Dexus Property Group		13,728,380		10,141,724
Energy Resources of
Australia Ltd.		190,092		2,224,867
Fairfax Media Ltd.c		5,992,716		7,680,696
Fortescue Metals Group Ltd.a		3,538,164		14,737,989
Foster’s Group Ltd.		5,496,900		29,648,646
Goodman Fielder Ltd.		3,930,612		4,687,911
Goodman Group		17,980,192		10,162,076
GPT Group		5,019,188		13,357,312
Harvey Norman Holdings Ltd.		1,512,560		4,644,576
Incitec Pivot Ltd.		4,626,740		13,877,761
Insurance Australia Group Ltd.		5,919,716		18,124,821
Intoll Group		6,439,768		8,454,280

Security	Shares		Value
James Hardie Industries SEa		1,241,000	$	5,887,263
Leighton Holdings Ltd.		385,440		10,531,969
Lend Lease Group		1,529,788		9,449,419
Macarthur Coal Ltd.		361,788		3,632,266
Macquarie Group Ltd.		981,704		32,731,261
MAp Group		1,074,852		2,831,749
Metcash Ltd.		2,180,072		8,518,238
Mirvac Group		9,311,296		11,105,276
National Australia Bank Ltd.		6,040,020		124,721,339
Newcrest Mining Ltd.		2,187,956		72,540,286
OneSteel Ltd.		3,791,620		9,719,226
Orica Ltd.		1,028,132		22,922,977
Origin Energy Ltd.		2,507,988		34,041,580
OZ Minerals Ltd.a		8,887,312		9,650,386
Paladin Energy Ltd.a		1,939,756		6,405,240
Qantas Airways Ltd.a		3,160,024		7,059,574
QBE Insurance Group Ltd.		2,947,740		43,263,757
Rio Tinto Ltd.		1,240,708		77,399,837
Santos Ltd.		2,373,084		29,992,720
Sims Metal Management Ltd.		464,572		6,863,972
Sonic Healthcare Ltd.		1,048,572		10,312,761
SP AusNet		3,850,896		2,741,992
Stockland Corp. Ltd.		6,785,496		23,795,357
Suncorp-Metway Ltd.		3,649,124		27,119,989
Tabcorp Holdings Ltd.		1,744,408		9,921,180
Tatts Group Ltd.		3,650,292		7,764,972
Telstra Corp. Ltd.		12,401,240		30,353,740
Toll Holdings Ltd.		1,901,504		10,273,072
Transurban Group		3,625,764		15,716,032
Wesfarmers Ltd.		2,862,184		81,417,680
Wesfarmers Ltd.
Partially Protected		432,744		12,390,719
Westfield Group		6,242,668		69,509,146
Westpac Banking Corp.		8,477,636		163,737,782
Woodside Petroleum Ltd.		1,549,352		57,738,761
Woolworths Ltd.		3,532,908		87,290,342
WorleyParsons Ltd.		543,996		10,056,494
				2,227,787,503
HONG KONG – 20.09%
ASM Pacific Technology Ltd.		584,000		4,726,207
Bank of East Asia Ltd. (The)c		4,321,720		16,251,245
BOC Hong Kong (Holdings) Ltd.		10,512,000		27,636,485

46 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
Cathay Pacific Airways Ltd.		3,212,000	$	7,920,057
Cheung Kong (Holdings) Ltd.		4,088,000		51,451,463
Cheung Kong Infrastructure
Holdings Ltd.		1,168,000		4,497,217
CLP Holdings Ltd.		5,548,000		42,473,922
Esprit Holdings Ltd.		3,299,611		18,494,959
Foxconn International
Holdings Ltd.a,c		6,132,000		4,075,650
Hang Lung Group Ltd.		2,336,000		13,964,646
Hang Lung Properties Ltd.c		5,840,736		26,093,151
Hang Seng Bank Ltd.		2,190,000		30,040,882
Henderson Land Development
Co. Ltd.		3,212,056		19,655,958
Hong Kong and China Gas
Co. Ltd. (The)c		12,264,627		29,579,534
Hong Kong Exchanges and
Clearing Ltd.		2,920,000		45,760,494
Hongkong Electric Holdings Ltd.		3,942,000		23,945,427
Hopewell Holdings Ltd.c		1,606,000		5,048,107
Hutchison Whampoa Ltd.		6,132,000		45,328,791
Hysan Development Co. Ltd.		1,752,000		5,552,073
Kerry Properties Ltd.c		2,044,000		10,300,803
Li & Fung Ltd.c		6,425,600		32,547,231
Lifestyle International
Holdings Ltd.		1,606,000		3,476,897
Link REIT (The)		6,278,000		18,321,090
Mongolia Energy Corp. Ltd.a		8,760,000		3,457,376
MTR Corp. Ltd.		4,088,000		14,610,323
New World Development
Co. Ltd.		7,300,941		11,713,794
NWS Holdings Ltd.		2,336,000		4,240,447
Orient Overseas
International Ltd.a,c		584,000		4,677,406
PCCW Ltd.c		10,512,000		3,432,600
Sands China Ltd.a		6,891,200		10,702,024
Shangri-La Asia Ltd.		3,504,000		7,658,032
Sino Land Co. Ltd.		4,672,000		8,156,555
Sun Hung Kai Properties Ltd.		4,088,000		57,285,081
Swire Pacific Ltd. Class Ac		2,190,000		26,394,870
Television Broadcasts Ltd.		876,000		4,358,321
Wharf (Holdings) Ltd. (The)		3,796,000		20,423,295
Wheelock and Co. Ltd.		2,628,000		7,584,830
Wing Hang Bank Ltd.c		438,000		4,628,604

Security	Shares		Value
Wynn Macau Ltd.a		4,438,400	$	7,657,431
Yue Yuen Industrial
(Holdings) Ltd.		2,044,000		6,700,778
				690,824,056
NEW ZEALAND – 0.79%
Auckland International Airport Ltd.		2,611,940		3,659,589
Contact Energy Ltd.a		861,108		3,408,358
Fletcher Building Ltd.		1,728,348		9,105,172
Sky City Entertainment
Group Ltd.		1,637,536		3,292,395
Telecom Corp. of New
Zealand Ltd.		5,351,776		7,723,325
				27,188,839
SINGAPORE – 13.48%
Ascendas Real Estate
Investment Trustc		4,380,813		6,693,942
CapitaLand Ltd.		7,300,000		21,069,609
CapitaMall Trust
Management Ltd.		6,424,781		9,200,616
CapitaMalls Asia Ltd.		3,796,000		5,884,403
City Developments Ltd.		1,460,000		11,790,359
ComfortDelGro Corp. Ltd.		5,256,000		5,780,940
COSCO Corp. (Singapore) Ltd.c		2,920,104		3,405,746
DBS Group Holdings Ltd.		4,964,000		50,860,205
Fraser and Neave Ltd.		2,628,150		10,767,131
Genting Singapore PLCa		17,228,400		21,492,578
Golden Agri-Resources Ltd.		18,980,987		7,846,278
Jardine Cycle & Carriage Ltd.		292,000		7,009,552
Keppel Corp. Ltd.		3,504,000		23,149,627
Keppel Land Ltd.c		2,044,000		5,854,226
Neptune Orient Lines Ltd.a,c		2,628,750		3,706,291
Noble Group Ltd.		8,468,708		9,814,624
Olam International Ltd.		3,504,600		6,907,273
Oversea-Chinese Banking
Corp. Ltd.		7,008,600		44,854,626
SembCorp Industries Ltd.		2,920,240		9,183,009
SembCorp Marine Ltd.		2,336,200		6,570,401
Singapore Airlines Ltd.		1,460,800		16,282,631
Singapore Exchange Ltd.c		2,336,000		12,967,240
Singapore Press Holdings Ltd.		4,380,517		13,192,965

SCHEDULES OF INVESTMENTS 47

Schedule of Investments (Continued)

iSHARES^® MSCI PACIFIC EX-JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
Singapore Technologies
Engineering Ltd.		4,672,000	$	11,035,949
Singapore
Telecommunications Ltd.		22,776,328		51,783,487
StarHub Ltd.		1,752,000		3,181,457
United Overseas Bank Ltd.		3,504,000		48,420,226
UOL Group Ltd.		1,460,000		4,300,140
Wilmar International Ltd.c		5,548,000		25,637,027
Yangzijiang Shipbuilding
(Holdings) Ltd.		4,088,000		4,798,051
				463,440,609
TOTAL COMMON STOCKS
(Cost: $3,068,279,054)				3,409,241,007
SHORT-TERM INVESTMENTS – 1.53%
MONEY MARKET FUNDS – 1.53%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%d,e,f		43,685,525		43,685,525
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%d,e,f		8,488,991		8,488,991
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%d,e		297,340		297,340
				52,471,856
TOTAL SHORT-TERM INVESTMENTS
(Cost: $52,471,856)				52,471,856
TOTAL INVESTMENTS
IN SECURITIES – 100.69%
(Cost: $3,120,750,910)				3,461,712,863
Other Assets, Less Liabilities – (0.69)%				(23,564,193)
NET ASSETS – 100.00%			$	3,438,148,670

^a Non-income earning security.

^b Security valued using Level 3 inputs in accordance with management’s fair valuation policy. 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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SINGAPORE INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.18%
AGRICULTURE – 6.45%
Golden Agri-Resources Ltd.		73,892,628	$	30,545,414
Wilmar International Ltd.		17,546,000		81,079,176
				111,624,590
AIRLINES – 3.66%
Singapore Airlines Ltd.		5,684,467		63,361,225
				63,361,225
BANKS – 30.62%
DBS Group Holdings Ltd.		18,473,500		189,275,987
Oversea-Chinese Banking
Corp. Ltd.		25,578,000		163,697,690
United Overseas Bank Ltd.		12,789,000		176,725,533
				529,699,210
BEVERAGES – 2.69%
Fraser and Neave Ltd.		11,368,000		46,572,968
				46,572,968
DISTRIBUTION & WHOLESALE – 1.97%
Jardine Cycle & Carriage Ltd.		1,421,000		34,111,552
				34,111,552
DIVERSIFIED FINANCIAL SERVICES – 3.19%
Singapore Exchange Ltd.a		9,947,000		55,216,240
				55,216,240
ENGINEERING & CONSTRUCTION – 4.40%
SembCorp Industries Ltd.		11,368,000		35,747,900
Singapore Technologies
Engineering Ltd.		17,052,000		40,279,324
				76,027,224
FOOD – 1.46%
Olam International Ltd.a		12,789,000		25,206,046
				25,206,046
HOLDING COMPANIES – DIVERSIFIED – 7.19%
Keppel Corp. Ltd.		13,089,000		86,474,164
Noble Group Ltd.a		32,683,999		37,878,407
				124,352,571
MEDIA – 2.72%
Singapore Press Holdings Ltd.a		15,631,000		47,076,460
				47,076,460
REAL ESTATE – 14.18%
CapitaLand Ltd.		24,157,000		69,723,090

Security	Shares		Value
CapitaMalls Asia Ltd.		7,105,000	$	11,013,878
City Developments Ltd.		5,684,000		45,901,646
Genting Singapore PLCb		65,366,400		81,545,151
Keppel Land Ltd.		7,105,000		20,349,450
UOL Group Ltd.		5,684,000		16,741,094
				245,274,309
REAL ESTATE INVESTMENT TRUSTS – 3.51%
Ascendas Real Estate
Investment Trusta		17,052,335		26,056,199
CapitaMall Trust
Management Ltd.		24,157,800		34,595,211
				60,651,410
SHIPBUILDING – 2.54%
SembCorp Marine Ltd.a		8,526,000		23,978,785
Yangzijiang Shipbuilding (Holdings) Ltd.		17,052,000		20,013,789
				43,992,574
TELECOMMUNICATIONS – 11.76%
Singapore Telecommunications Ltd.		83,839,568		190,614,800
StarHub Ltd.		7,105,000		12,901,971
				203,516,771
TRANSPORTATION – 2.84%
ComfortDelGro Corp. Ltd.		19,894,000		21,880,903
COSCO Corp. (Singapore) Ltd.a		11,368,000		13,258,611
Neptune Orient Lines Ltd.a,b		9,947,499		14,025,041
				49,164,555
TOTAL COMMON STOCKS
(Cost: $1,596,447,705)				1,715,847,705
SHORT-TERM INVESTMENTS – 4.99%
MONEY MARKET FUNDS – 4.99%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%c,d,e		71,934,665		71,934,665
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%c,d,e		13,978,377		13,978,377

SCHEDULES OF INVESTMENTS 49

Schedule of Investments (Continued)

iSHARES^® MSCI SINGAPORE INDEX FUND

August 31, 2010

Security	Shares		Value
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%c,d		363,421	$	363,421
				86,276,463
TOTAL SHORT-TERM INVESTMENTS
(Cost: $86,276,463)				86,276,463
TOTAL INVESTMENTS
IN SECURITIES – 104.17%
(Cost: $1,682,724,168)				1,802,124,168
Other Assets, Less Liabilities – (4.17)%				(72,123,385)
NET ASSETS – 100.00%			$	1,730,000,783

^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.

50 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 96.79%
AGRICULTURE – 1.30%
KT&G Corp.		831,436	$	42,303,441
				42,303,441
AIRLINES – 0.51%
Korean Air Lines Co. Ltd.a		272,602		16,575,766
				16,575,766
AUTO MANUFACTURERS – 5.70%
Hyundai Motor Co. Ltd.b		1,180,358		139,311,583
Kia Motors Corp.		1,799,160		46,220,809
				185,532,392
AUTO PARTS & EQUIPMENT – 3.27%
Hankook Tire Co. Ltd.b		586,090		12,734,710
Hyundai Mobis Co. Ltd.		517,946		93,747,837
				106,482,547
BANKS – 1.81%
Busan Bank		1,131,292		12,031,006
Daegu Bank		954,100		11,101,589
Industrial Bank of Korea		1,253,960		15,165,919
Korea Exchange Bank		1,962,720		20,709,323
				59,007,837
BEVERAGES – 0.13%
Hite Brewery Co. Ltd.b		39,527		4,286,020
				4,286,020
BIOTECHNOLOGY – 0.22%
Celltrion Inc.a,b		417,078		7,183,803
				7,183,803
CHEMICALS – 5.91%
Hanwha Chemical Corp.b		640,610		14,346,800
Honam Petrochemical Corp.b		109,040		17,007,657
KCC Corp.b		40,890		10,163,667
Korea Zinc Co. Ltd.b		68,150		15,148,865
LG Chem Ltd.b		354,385		101,979,168
OCI Co. Ltd.		109,040		33,833,414
				192,479,571
COMMERCIAL SERVICES – 0.18%
S1 Corp.b		122,678		5,934,877
				5,934,877

Security	Shares		Value
COMPUTERS – 0.26%
SK C&C Co. Ltd.b		109,040	$	8,312,833
				8,312,833
COSMETICS & PERSONAL CARE – 0.77%
AmorePacific Corp.b		27,260		25,011,260
				25,011,260
DISTRIBUTION & WHOLESALE – 2.73%
Daewoo International Corp.b		381,643		10,616,226
Hanwha Corp.		340,750		12,661,950
Hyosung Corp.b		173,101		15,449,001
Samsung C&T Corp.		954,100		44,883,844
SK Networks Co. Ltd.		654,240		5,386,061
				88,997,082
DIVERSIFIED FINANCIAL SERVICES – 11.46%
Daewoo Securities Co. Ltd.		940,470		17,296,992
Hana Financial Group Inc.		1,458,411		37,527,716
Hyundai Securities Co. Ltd.		913,217		10,930,573
KB Financial Group Inc.		2,507,920		101,663,952
Korea Investment Holdings
Co. Ltd.		299,865		7,866,172
Mirae Asset Securities Co. Ltd.		177,199		8,395,115
Samsung Card Co. Ltd.		327,125		14,597,704
Samsung Securities Co. Ltd.		381,640		18,462,858
Shinhan Financial Group
Co. Ltd.		3,080,387		117,932,908
Tong Yang Securities Inc.		545,200		4,442,909
Woori Finance Holdings
Co. Ltd.		2,153,540		24,159,741
Woori Investment &
Securities Co. Ltd.		654,240		9,577,039
				372,853,679
ELECTRIC – 1.47%
Korea Electric Power Corp.a		1,962,720		47,721,485
				47,721,485
ELECTRICAL COMPONENTS & EQUIPMENT – 2.71%
LG Electronics Inc.b		722,396		58,085,724
LG Innotek Co. Ltd.b		68,150		7,503,378
LS Corp.		136,300		13,358,287
LS Industrial Systems Co. Ltd.b		113,129		9,115,240
				88,062,629

SCHEDULES OF INVESTMENTS 51

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2010

Security	Shares		Value
ELECTRONICS – 4.20%
LG Display Co. Ltd.b		1,785,532	$	49,593,974
Samsung Electro-Mechanics
Co. Ltd.b		457,968		43,546,878
Samsung SDI Co. Ltd.b		258,970		36,289,065
Seoul Semiconductor Co. Ltd.b		241,251		7,344,784
				136,774,701
ENGINEERING & CONSTRUCTION – 3.57%
Daelim Industrial Co. Ltd.		211,265		13,286,664
Daewoo Engineering &
Construction Co. Ltd.b		858,694		7,076,401
Doosan Heavy Industries &
Construction Co. Ltd.b		323,031		18,537,437
GS Engineering &
Construction Corp.		272,600		19,463,308
Hanjin Heavy Industries &
Construction Co. Ltd.b		231,714		5,556,575
Hyundai Engineering &
Construction Co. Inc.		509,762		27,212,251
Samsung Engineering Co. Ltd.b		228,984		25,211,350
				116,343,986
ENVIRONMENTAL CONTROL – 0.39%
Woongjin Coway Co. Ltd.		381,640		12,748,921
				12,748,921
FOOD – 0.48%
CJ CheilJedang Corp.		61,335		11,382,966
Lotte Confectionery Co. Ltd.b		4,200		4,319,460
				15,702,426
GAS – 0.20%
Korea Gas Corp.		177,190		6,384,693
				6,384,693
HOLDING COMPANIES – DIVERSIFIED – 2.08%
GS Holdings Corp.b		381,640		15,661,597
LG Corp.b		723,753		51,916,555
				67,578,152
HOME BUILDERS – 0.31%
Hyundai Development Co.		436,167		10,004,665
				10,004,665

Security	Shares		Value
HOUSEHOLD PRODUCTS & WARES – 0.70%
LG Household & Health
Care Ltd.b		68,150	$	22,851,197
				22,851,197
INSURANCE – 2.96%
Dongbu Insurance Co. Ltd.		327,120		9,208,691
Korea Life Insurance Co. Ltd.		1,335,740		8,924,245
Samsung Fire & Marine
Insurance Co. Ltd.		272,605		43,543,129
Samsung Life Insurance
Co. Ltd.		381,640		34,697,439
				96,373,504
INTERNET – 2.37%
NCsoft Corp.b		109,040		20,918,509
NHN Corp.a,b		312,127		51,157,691
SK Broadband Co. Ltd.a		1,117,663		4,940,874
				77,017,074
IRON & STEEL – 7.61%
Dongkuk Steel Mill Co. Ltd.		272,601		5,457,022
Hyundai Steel Co.b		418,441		37,694,243
POSCOb		504,310		204,643,269
				247,794,534
LODGING – 0.41%
Kangwon Land Inc.		736,022		13,475,422
				13,475,422
MACHINERY – 0.32%
Doosan Infracore Co. Ltd.a		640,610		10,312,597
				10,312,597
MANUFACTURING – 1.18%
Cheil Industries Inc.		346,202		30,176,086
Doosan Corp.b		81,780		8,185,504
				38,361,590
OIL & GAS – 2.47%
SK Energy Co. Ltd.b		463,422		49,283,764
SK Holdings Co. Ltd.		190,824		14,643,263
S-Oil Corp.		340,750		16,427,850
				80,354,877
PHARMACEUTICALS – 0.27%
Yuhan Corp.		59,972		8,904,009
				8,904,009

52 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI SOUTH KOREA INDEX FUND

August 31, 2010

Security	Shares		Value
RETAIL – 2.76%
Hyundai Department Store Co. Ltd.		109,040	$	10,914,005
Lotte Shopping Co. Ltd.		81,785		26,502,188
Shinsegae Co. Ltd.		109,040		52,478,172
				89,894,365
SEMICONDUCTORS – 19.25%
Hynix Semiconductor Inc.a,b		3,830,030		67,406,483
Samsung Electronics Co. Ltd.b		845,060		532,876,270
Samsung Techwin Co. Ltd.b		286,230		26,381,195
				626,663,948
SHIPBUILDING – 3.54%
Daewoo Shipbuilding & Marine Engineering Co. Ltd.b		722,390		14,039,275
Hyundai Heavy Industries
Co. Ltd.b		286,230		63,028,376
Hyundai Mipo Dockyard
Co. Ltd.		81,780		10,948,111
Samsung Heavy Industries
Co. Ltd.		1,226,700		27,267,958
				115,283,720
TELECOMMUNICATIONS – 2.71%
KT Corp.		763,282		27,917,187
KT Corp. SP ADRb		406,174		7,583,269
LG Uplus Corp.		1,758,275		10,984,636
SK Telecom Co. Ltd.		175,560		23,649,128
SK Telecom Co. Ltd. SP ADR		1,128,564		18,079,595
				88,213,815
TRANSPORTATION – 0.58%
GLOVIS Co. Ltd.		81,780		11,186,855
STX Pan Ocean Co. Ltd.b		817,830		7,810,621
				18,997,476
TOTAL COMMON STOCKS
(Cost: $1,981,414,397)				3,150,780,894
PREFERRED STOCKS – 2.97%
AUTO MANUFACTURERS – 0.59%
Hyundai Motor Co. Ltd.b		177,190		7,168,000
Hyundai Motor Co. Ltd.
Series 2		286,230		12,056,564
				19,224,564

Security	Shares		Value
ELECTRICAL COMPONENTS & EQUIPMENT – 0.15%
LG Electronics Inc.b		136,306	$	4,729,610
				4,729,610
SEMICONDUCTORS – 2.23%
Samsung Electronics Co. Ltd.		163,560		72,714,555
				72,714,555
TOTAL PREFERRED STOCKS
(Cost: $68,304,249)				96,668,729
SHORT-TERM INVESTMENTS – 11.57%
MONEY MARKET FUNDS – 11.57%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%c,d,e		310,450,098		310,450,098
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%c,d,e		60,326,804		60,326,804
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%c,d		5,646,730		5,646,730
				376,423,632
TOTAL SHORT-TERM INVESTMENTS
(Cost: $376,423,632)				376,423,632
TOTAL INVESTMENTS
IN SECURITIES – 111.33%
(Cost: $2,426,142,278)				3,623,873,255
Other Assets, Less Liabilities – (11.33)%				(368,705,636)
NET ASSETS – 100.00%			$	3,255,167,619

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 53

Schedule of Investments

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 98.78%
AIRLINES – 0.63%
China Airlines Ltd.a		15,624,752	$	9,316,125
EVA Airways Corp.a		11,160,193		7,925,779
				17,241,904
APPAREL – 0.90%
Pou Chen Corp.		18,230,103		14,710,875
Ruentex Industries Ltd.		3,348,000		9,887,020
				24,597,895
AUTO MANUFACTURERS – 0.30%
Yulon Motor Co. Ltd.		5,580,362		8,135,197
				8,135,197
AUTO PARTS & EQUIPMENT – 0.67%
Cheng Shin Rubber Industry Co. Ltd.		8,928,615		18,144,872
				18,144,872
BANKS – 6.73%
Chang Hwa Commercial
Bank Ltd.		29,016,446		16,485,588
Chinatrust Financial Holding Co. Ltd.		71,250,596		39,924,712
E.Sun Financial
Holding Co. Ltd.		25,564,368		11,451,854
First Financial Holding Co. Ltd.		38,933,386		22,484,474
Hua Nan Financial
Holdings Co. Ltd.		31,812,506		18,670,010
Mega Financial
Holding Co. Ltd.		61,380,136		37,076,407
Taishin Financial
Holdings Co. Ltd.a		32,249,117		13,187,970
Taiwan Business Bank Ltd.a		18,972,000		5,507,885
Taiwan Cooperative Bank
Co. Ltd.		29,471,915		18,400,397
				183,189,297
BUILDING MATERIALS – 1.53%
Asia Cement Corp.		14,956,353		13,446,431
Taiwan Cement Corp.		23,436,558		21,546,065
Taiwan Glass Industrial Corp.		6,907,414		6,684,455
				41,676,951

Security	Shares		Value
CHEMICALS – 7.96%
Eternal Chemical Co. Ltd.		4,697,561	$	4,589,925
Formosa Chemicals &
Fibre Corp.		22,320,204		49,609,744
Formosa Plastics Corp.		31,248,768		69,259,616
Nan Ya Plastics Corp.		36,828,860		71,050,245
Taiwan Fertilizer Co. Ltd.		5,580,000		17,070,613
TSRC Corp.		3,348,000		4,886,027
				216,466,170
COMPUTERS – 13.25%
Acer Inc.		20,109,841		47,145,192
Advantech Co. Ltd.		2,232,883		5,060,477
Chicony Electronics Co. Ltd.		3,523,515		6,324,596
Chimei Innolux Corp.		36,829,008		38,054,572
Clevo Co.		3,553,300		7,376,364
CMC Magnetics Corp.a		20,088,400		4,916,434
Compal Electronics Inc.		32,364,554		36,270,447
Foxconn Technology Co. Ltd.		5,102,742		14,622,954
HTC Corp.		5,872,080		107,235,025
Inotera Memories Inc.a		13,968,024		6,736,779
Inventec Co. Ltd.		14,508,752		7,133,447
Lite-On Technology Corp.		15,706,178		18,091,964
MiTAC International Corp.		8,928,585		3,316,793
Qisda Corp.a		12,276,211		6,936,362
Quanta Computer Inc.		18,972,240		28,783,507
Wistron Corp.		14,508,443		22,690,672
				360,695,585
DIVERSIFIED FINANCIAL SERVICES – 4.01%
Capital Securities Corp.		8,928,199		3,901,941
Fubon Financial Holding Co. Ltd.		40,176,979		46,844,296
KGI Securities Co. Ltd.		21,204,000		8,836,655
Polaris Securities Co. Ltd.		15,624,991		6,950,619
SinoPac Financial Holdings Co. Ltd.		43,524,193		15,285,234
Yuanta Financial Holding Co. Ltd.		47,988,076		27,264,250
				109,082,995
ELECTRICAL COMPONENTS & EQUIPMENT – 2.97%
Delta Electronics Inc.		13,392,180		50,794,464
Pacific Electric Wire & Cable Co. Ltd.b		197		–

54 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2010

Security	Shares		Value
Simplo Technology Co. Ltd.		1,383,930	$	6,761,099
Tatung Co. Ltd.a		37,944,120		6,348,894
Walsin Lihwa Corp.a		20,088,069		9,468,997
Young Fast Optoelectronics
Co. Ltd.		700,000		7,385,903
				80,759,357
ELECTRONICS – 17.09%
ASUSTeK Computer Inc.		4,839,670		32,255,402
AU Optronics Corp.		59,148,830		51,054,041
Cheng Uei Precision
Industry Co. Ltd.		2,256,239		3,648,411
Chunghwa Picture Tubes Ltd.a		34,826,621		5,381,525
Coretronic Corp.		4,464,000		5,978,198
HannStar Display Corp.a		36,828,675		6,748,590
Hon Hai Precision Industry
Co. Ltd.		68,760,926		242,554,306
Kinsus Interconnect Technology Corp.		2,232,043		4,459,348
Micro-Star International
Co. Ltd.		6,696,855		3,282,157
Nan Ya Printed Circuit Board Corp.		1,144,453		3,679,798
Pegatron Corp.a		13,008,037		16,283,395
Phison Electronics Corp.		1,350,698		5,418,140
Pixart Imaging Inc.		1,116,682		5,176,602
Prime View International
Co. Ltd.a		5,580,000		8,265,312
Synnex Technology International Corp.		9,847,538		20,227,508
Tripod Technology Corp.		3,348,488		11,498,211
Unimicron Technology Corp.		10,044,794		15,897,829
Wintek Corp.a		8,928,000		11,092,414
WPG Holdings Co. Ltd.		6,626,243		12,286,909
Ya Hsin Industrial Co. Ltd.b		6,845,461		21
				465,188,117
ENERGY – ALTERNATE SOURCES – 0.32%
Motech Industries Inc.		2,255,803		8,767,169
				8,767,169
FOOD – 1.25%
Uni-President Enterprises Co.		29,481,823		34,098,194
				34,098,194

Security	Shares		Value
HOME FURNISHINGS – 0.24%
Teco Electric and Machinery
Co. Ltd.		13,392,092	$	6,459,007
				6,459,007
INSURANCE – 3.55%
Cathay Financial Holding
Co. Ltd.		52,745,960		75,906,498
China Life Insurance Co. Ltd.		9,008,152		7,311,355
Shin Kong Financial Holding
Co. Ltd.a		40,176,343		13,356,997
				96,574,850
INTERNET – 0.10%
Chinese Gamer
International Corp.		356,000		2,822,751
				2,822,751
INVESTMENT COMPANIES – 0.73%
China Development Financial Holding Corp.		72,168,820		19,757,775
				19,757,775
IRON & STEEL – 3.16%
China Steel Corp.		80,352,467		76,002,989
Feng Hsin Iron & Steel Co. Ltd.		3,348,050		5,142,163
Tung Ho Steel Enterprise Corp.		5,580,882		4,825,823
				85,970,975
LEISURE TIME – 0.30%
Giant Manufacturing Co. Ltd.		2,232,800		8,085,309
				8,085,309
MANUFACTURING – 0.74%
Largan Precision Co. Ltd.		1,116,794		20,150,682
				20,150,682
METAL FABRICATE & HARDWARE – 0.27%
Catcher Technology Co. Ltd.		3,348,743		7,401,230
				7,401,230
OIL & GAS – 0.74%
Formosa Petrochemical Corp.		8,928,950		20,040,941
				20,040,941

SCHEDULES OF INVESTMENTS 55

Schedule of Investments (Continued)

iSHARES^® MSCI TAIWAN INDEX FUND

August 31, 2010

Security	Shares		Value
REAL ESTATE – 0.38%
Farglory Land Development
Co. Ltd.		2,232,000	$	4,821,577
Ruentex Development Co. Ltd.		3,393,000		5,465,406
				10,286,983
RETAIL – 0.86%
Far Eastern Department Stores Co. Ltd.		6,871,203		6,799,561
President Chain Store Corp.		4,464,215		16,514,000
				23,313,561
SEMICONDUCTORS – 23.41%
Advanced Semiconductor Engineering Inc.		38,057,755		26,196,338
Epistar Corp.		4,464,047		11,510,591
Everlight Electronics Co. Ltd.		2,232,784		5,736,346
Macronix International Co. Ltd.		25,668,527		13,661,996
MediaTek Inc.		7,360,632		100,297,055
Nanya Technology Corp.a		9,400,587		5,370,255
Novatek Microelectronics
Corp. Ltd.		3,348,544		7,986,163
Powerchip Technology Corp.a,b		70,183,901		10,516,411
Powertech Technology Inc.		4,464,760		13,240,688
Realtek Semiconductor Corp.		3,382,621		6,684,145
Richtek Technology Corp.		1,175,416		7,999,023
Siliconware Precision
Industries Co. Ltd.		23,436,214		21,106,786
Taiwan Semiconductor
Manufacturing Co. Ltd.		194,184,882		357,042,191
Transcend Information Inc.		1,116,905		2,876,464
United Microelectronics Corp.		97,092,501		39,401,964
Vanguard International
Semiconductor Corp.		5,580,416		2,229,797
Winbond Electronics Corp.a		21,204,000		5,341,708
				637,197,921
TELECOMMUNICATIONS – 4.55%
Chunghwa Telecom Co. Ltd.		37,944,560		77,585,337
Compal Communications Inc.		2,232,810		1,746,016
Far EasTone Telecommunications Co. Ltd.		12,276,259		15,903,875
Taiwan Mobile Co. Ltd.		14,508,677		28,533,641
				123,768,869

Security	Shares		Value
TEXTILES – 1.16%
Far Eastern New Century Corp.		22,776,201	$	26,591,431
Formosa Taffeta Co. Ltd.		6,696,515		5,006,603
				31,598,034
TRANSPORTATION – 0.98%
Evergreen International Storage & Transport Corp.		3,348,000		2,581,495
Evergreen Marine Corp. Ltd.a		10,044,467		6,663,074
U-Ming Marine Transport Corp.		3,348,800		6,470,960
Wan Hai Lines Ltd.a		7,812,433		4,999,528
Yang Ming Marine
Transport Corp.		10,044,305		5,957,476
				26,672,533
TOTAL COMMON STOCKS
(Cost: $2,017,848,733)				2,688,145,124
SHORT-TERM INVESTMENTS – 0.57%
MONEY MARKET FUNDS – 0.57%
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		15,647,864		15,647,864
				15,647,864
TOTAL SHORT-TERM INVESTMENTS
(Cost: $15,647,864)				15,647,864
TOTAL INVESTMENTS
IN SECURITIES – 99.35%
(Cost: $2,033,496,597)				2,703,792,988
Other Assets, Less Liabilities – 0.65%				17,645,545
NET ASSETS – 100.00%			$	2,721,438,533

^a Non-income earning security.

^b Security valued using Level 3 inputs in accordance with management’s fair valuation policy. 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.

56 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.45%
AGRICULTURE – 2.94%
Charoen Pokphand Foods
PCL NVDR		18,791,000	$	15,311,408
				15,311,408
BANKS – 30.21%
Bangkok Bank PCL Foreign		869,400		4,250,462
Bangkok Bank PCL NVDR		10,243,800		48,281,211
Bank of Ayudhya PCL NVDR		14,118,300		9,834,764
Kasikornbank PCL Foreign		529,200		1,927,746
Kasikornbank PCL NVDR		12,814,200		44,426,928
Kiatnakin Bank PCL NVDR		1,833,300		1,903,890
Krung Thai Bank PCL NVDR		22,850,100		10,514,186
Siam Commercial Bank
PCL NVDR		11,850,300		36,067,777
				157,206,964
BUILDING MATERIALS – 4.98%
Dynasty Ceramic PCL NVDR		1,323,000		1,860,106
Siam Cement PCL NVDR		2,400,300		22,702,949
TPI Polene PCL NVDR		3,345,300		1,368,265
				25,931,320
CHEMICALS – 4.88%
IRPC PCL NVDR		81,062,100		10,412,834
PTT Chemical PCL NVDR		2,948,400		9,986,592
Siam Gas and Petrochemicals PCL NVDR		2,740,500		1,296,035
Sri Trang Agro-Industry
PCL NVDR		3,591,000		2,432,631
Thai Plastic & Chemical
PCL NVDR		2,154,600		1,253,035
				25,381,127
COAL – 4.43%
Banpu PCL NVDR		1,178,000		23,036,779
				23,036,779
COMMERCIAL SERVICES – 0.36%
Bangkok Expressway PCL NVDR		3,099,600		1,871,943
				1,871,943
COMPUTERS – 0.32%
Cal-Comp Electronics (Thailand) PCL NVDR		13,853,700		1,655,627
				1,655,627

Security	Shares		Value
DIVERSIFIED FINANCIAL SERVICES – 2.09%
Kim Eng Securities (Thailand)
PCL NVDR		2,343,600	$	1,078,378
Phatra Securities PCL NVDR		926,100		799,000
Thanachart Capital PCL NVDR		5,443,200		6,000,652
TISCO Financial Group
PCL NVDR		2,721,600		3,000,326
				10,878,356
ELECTRIC – 1.69%
Electricity Generating PCL NVDR		1,058,400		3,170,634
Glow Energy PCL NVDR		3,990,000		5,609,842
				8,780,476
ELECTRONICS – 1.37%
Delta Electronics (Thailand)
PCL NVDR		3,515,400		3,229,517
Hana Microelectronics
PCL NVDR		4,649,400		3,899,880
				7,129,397
ENGINEERING & CONSTRUCTION – 0.65%
CH. Karnchang PCL NVDR		2,135,700		576,663
Italian-Thai Development
PCL NVDRa		10,848,600		1,185,563
Sino-Thai Engineering &
Construction PCL NVDR		4,195,800		1,608,870
				3,371,096
ENTERTAINMENT – 0.29%
Major Cineplex Group
PCL NVDR		3,439,800		1,494,848
				1,494,848
FOOD – 2.14%
GFPT PCL NVDR		5,871,000		1,650,896
Khon Kaen Sugar Industry
PCL NVDR		4,120,200		1,553,550
Thai Union Frozen Products
PCL NVDR		3,078,000		6,171,737
Thai Vegetable Oil PCL NVDR		2,249,180		1,775,196
				11,151,379
HEALTH CARE – SERVICES – 0.97%
Bangkok Chain Hospital
PCL NVDR		4,195,800		659,637

SCHEDULES OF INVESTMENTS 57

Schedule of Investments (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
Bangkok Dusit Medical Services PCL NVDR		2,060,100	$	2,172,337
Bumrungrad Hospital PCL NVDR		2,154,600		2,203,138
				5,035,112
HOME BUILDERS – 0.17%
Asian Property Development PCL NVDR		4,158,000		876,907
				876,907
IRON & STEEL – 1.34%
G J Steel PCL NVDRa		155,244,600		1,190,565
G Steel PCL NVDRa		34,927,200		636,156
Sahaviriya Steel Industries
PCL NVDRa		53,732,700		3,227,911
Tata Steel (Thailand) PCL NVDRa		15,176,700		897,169
Thainox Stainless PCL NVDRa		20,317,500		993,314
				6,945,115
LODGING – 0.81%
Central Plaza Hotel PCL NVDR		3,477,600		633,402
Minor International PCL NVDR		9,412,200		3,579,012
				4,212,414
MEDIA – 1.53%
BEC World PCL NVDR		7,238,700		7,343,944
MCOT PCL NVDR		756,000		640,166
				7,984,110
OIL & GAS – 21.24%
Bangchak Petroleum PCL NVDR		2,589,300		1,241,077
Esso (Thailand) PCL NVDR		8,448,300		1,754,719
PTT Exploration & Production PCL NVDR		9,147,600		41,945,378
PTT PCL NVDR		6,652,800		56,334,621
Thai Oil PCL NVDR		6,577,200		9,247,381
				110,523,176
REAL ESTATE – 4.09%
Amata Corp. PCL NVDR		3,194,100		1,449,312
Bangkok Land PCL NVDRa		50,784,300		1,590,306
Central Pattana PCL NVDR		4,365,900		4,185,237
Hemaraj Land and Development PCL NVDR		34,983,900		2,258,108
LPN Development PCL NVDR		4,139,100		1,276,316
Pruksa Real Estate PCL NVDR		4,800,600		3,681,559
Quality Houses PCL NVDR		24,532,200		1,865,686

Security	Shares		Value
Rojana Industrial Park
PCL NVDR		2,362,500	$	951,190
Sansiri PCL NVDR		3,534,300		643,729
Supalai PCL NVDR		6,596,100		2,487,106
Ticon Industrial Connection PCL NVDR		2,249,183		898,380
				21,286,929
RETAIL – 6.72%
CP All PCL NVDR		13,965,000		17,737,937
Home Product Center
PCL NVDR		11,132,100		3,770,579
PTT Aromatics & Refining PCL NVDR		9,166,500		6,854,006
Robinson Department Store PCL NVDR		3,534,300		2,529,743
Siam Makro PCL NVDR		963,900		4,096,459
				34,988,724
TELECOMMUNICATIONS – 5.03%
Advanced Information Service PCL NVDR		7,049,700		20,780,790
Samart Corp. PCL NVDR		869,400		212,523
Thaicom PCL NVDRa		2,570,400		661,183
True Corp. PCL NVDRa		21,300,300		4,492,155
				26,146,651
TRANSPORTATION – 0.85%
Bangkok Metro PCL NVDRa		20,166,300		534,847
Precious Shipping PCL NVDR		2,948,400		1,705,258
Regional Container Lines PCL NVDRa		1,039,500		508,207
Thoresen Thai Agencies
PCL NVDR		2,192,430		1,695,376
				4,443,688
WATER – 0.35%
Thai Tap Water Supply
PCL NVDR		10,829,700		1,816,774
				1,816,774
TOTAL COMMON STOCKS
(Cost: $454,698,564)				517,460,320

58 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI THAILAND INVESTABLE MARKET INDEX FUND

August 31, 2010

Security	Shares		Value
RIGHTS – 0.00%
IRON & STEEL – 0.00%
G J Steel PCL Series
W2 Warrantsa,b		12,827,908	$	41
				41
TOTAL RIGHTS
(Cost: $0)				41
WARRANTS – 0.02%
FOOD – 0.01%
Khon Kaen Sugar Industry PCL
Series W1 (Expires 3/15/13)a		222,000		26,105
				26,105
LODGING – 0.01%
Minor International PCL
Series W4 (Expires 5/18/13)a		625,140		49,939
				49,939
REAL ESTATE – 0.00%
Bangkok Land PCL Series W2
(Expires 5/2/13)a		1,083,411		7,616
Ticon Industrial Connection PCL
Series W3 (Expires 1/31/14)a		79,167		1,822
				9,438
TOTAL WARRANTS
(Cost: $0)				85,482
SHORT-TERM INVESTMENTS – 0.08%
MONEY MARKET FUNDS – 0.08%
BlackRock Cash Funds: Treasury,
SL Agency Shares
0.13%c,d		414,009		414,009
				414,009
TOTAL SHORT-TERM INVESTMENTS
(Cost: $414,009)				414,009
TOTAL INVESTMENTS IN SECURITIES – 99.55%
(Cost: $455,112,573)				517,959,852
Other Assets, Less Liabilities – 0.45%				2,343,953
NET ASSETS – 100.00%			$	520,303,805

NVDR – Non-Voting Depositary Receipts

^a Non-income earning security.

^b Security valued using Level 3 inputs in accordance with management’s fair valuation policy. 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 59

Statements of Assets and Liabilities

iSHARES^®, INC.

August 31, 2010

	iShares MSCI Australia Index Fund			iShares MSCI Hong Kong Index Fund			iShares MSCI Japan Small Cap Index Fund			iShares MSCI Malaysia Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	2,375,791,874		$	2,214,702,721		$	39,920,860		$	439,490,666
Affiliated issuers (Note 2)		10,365,856			67,821,574			514,850			437,397
Total cost of investments	$	2,386,157,730		$	2,282,524,295		$	40,435,710		$	439,928,063
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	2,174,908,579		$	1,967,455,809		$	36,551,728		$	792,290,563
Affiliated issuers (Note 2)		10,365,856			67,821,574			514,850			437,397
Total fair value of investments		2,185,274,435			2,035,277,383			37,066,578			792,727,960
Foreign currencies, at valueb		3,015,548			980,416			31,097			2,402,208
Receivables:
Investment securities sold		28,126,780			5,549,098			218,730			3,772,004
Dividends and interest		18,901,598			5,782,708			67,031			303,780
Capital shares sold		–			80,256			–			14,479,297
Total Assets		2,235,318,361			2,047,669,861			37,383,436			813,685,249
LIABILITIES
Payables:
Investment securities purchased		27,548,457			3,826,661			195,312			19,212,258
Collateral for securities on loan (Note 5)		9,933,962			66,678,345			507,011			–
Investment advisory fees (Note 2)		1,018,798			848,031			16,800			330,801
Total Liabilities		38,501,217			71,353,037			719,123			19,543,059
NET ASSETS	$	2,196,817,144		$	1,976,316,824		$	36,664,313		$	794,142,190
Net assets consist of:
Paid-in capital	$	2,535,929,467		$	2,438,819,813		$	40,989,726		$	524,806,205
Undistributed (distributions in excess of) net investment income		14,570,669			2,742,569			(75,394	)		2,529,953
Accumulated net realized loss		(152,688,211	)		(217,996,694	)		(884,612	)		(86,000,350	)
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies		(200,994,781	)		(247,248,864	)		(3,365,407	)		352,806,382
NET ASSETS	$	2,196,817,144		$	1,976,316,824		$	36,664,313		$	794,142,190
Shares outstandingc		105,000,000			123,375,000			900,000			61,200,000
Net asset value per share	$	20.92		$	16.02		$	40.74		$	12.98

^a Securities on loan with values of $9,432,798, $63,426,723, $482,708 and $ –, respectively. See Note 5.

^b Cost of foreign currencies: $3,063,129, $980,810, $30,166 and $2,395,091, respectively.

^c $0.001 par value, number of shares authorized: 627.8 million, 250 million, 500 million and 300 million, respectively.

See notes to financial statements.

60 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Pacific ex-Japan Index Fund			iShares MSCI Singapore Index Fund			iShares MSCI South Korea Index Fund			iShares MSCI Taiwan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	3,068,279,054		$	1,596,447,705		$	2,049,718,646		$	2,017,848,733
Affiliated issuers (Note 2)		52,471,856			86,276,463			376,423,632			15,647,864
Total cost of investments	$	3,120,750,910		$	1,682,724,168		$	2,426,142,278		$	2,033,496,597
Investments in securities, at fair value
(including securities on loana) (Note 1):
Unaffiliated issuers	$	3,409,241,007		$	1,715,847,705		$	3,247,449,623		$	2,688,145,124
Affiliated issuers (Note 2)		52,471,856			86,276,463			376,423,632			15,647,864
Total fair value of investments		3,461,712,863			1,802,124,168			3,623,873,255			2,703,792,988
Foreign currencies, at valueb		7,208,247			7,355,773			–			2,982,674
Receivables:
Investment securities sold		38,437,250			29,459,289			–			37,974,832
Dividends and interest		23,158,771			5,804,401			3,805,832			22,802,867
Capital shares sold		–			33,533			–			–
Total Assets		3,530,517,131			1,844,777,164			3,627,679,087			2,767,553,361
LIABILITIES
Payables:
Investment securities purchased		38,466,224			28,087,282			–			2,545,150
Collateral for securities on loan (Note 5)		52,174,516			85,913,042			370,776,902			–
Capital shares redeemed		225,619			–			–			39,434,980
Foreign taxes (Note 1)		–			–			–			2,620,907
Investment advisory fees (Note 2)		1,502,102			776,057			1,734,566			1,513,791
Total Liabilities		92,368,461			114,776,381			372,511,468			46,114,828
NET ASSETS	$	3,438,148,670		$	1,730,000,783		$	3,255,167,619		$	2,721,438,533
Net assets consist of:
Paid-in capital	$	3,459,742,720		$	1,831,386,456		$	3,163,770,052		$	3,060,566,156
Undistributed (distributions in excess of) net investment income		10,259,102			8,927,555			(5,138,651	)		59,235,519
Accumulated net realized loss		(372,668,749	)		(229,728,152	)		(1,101,247,876	)		(1,068,563,232	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		340,815,597			119,414,924			1,197,784,094			670,200,090
NET ASSETS	$	3,438,148,670		$	1,730,000,783		$	3,255,167,619		$	2,721,438,533
Shares outstandingc		87,600,000			142,100,000			68,150,000			223,200,000
Net asset value per share	$	39.25		$	12.17		$	47.76		$	12.19

^a Securities on loan with values of $49,548,691, $80,869,229, $351,136,593 and $ –, respectively. See Note 5.

^b Cost of foreign currencies: $7,290,982, $7,357,367, $ – and $2,985,330, respectively.

^c $0.001 par value, number of shares authorized: 1 billion, 300 million, 200 million and 900 million, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 61

Statements of Assets and Liabilities (Continued)

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Thailand Investable Market Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	454,698,564
Affiliated issuers (Note 2)		414,009
Total cost of investments	$	455,112,573
Investments in securities, at fair value (Note 1):
Unaffiliated issuers	$	517,545,843
Affiliated issuers (Note 2)		414,009
Total fair value of investments		517,959,852
Foreign currency, at valuea		127,662
Cash		254,466
Receivables:
Investment securities sold		2,543,591
Dividends and interest		1,991,680
Capital shares sold		2,863,961
Total Assets		525,741,212
LIABILITIES
Payables:
Investment securities purchased		4,943,035
Capital shares redeemed		272,734
Investment advisory fees (Note 2)		221,638
Total Liabilities		5,437,407
NET ASSETS	$	520,303,805
Net assets consist of:
Paid-in capital	$	461,532,422
Undistributed net investment income		1,923,968
Accumulated net realized loss		(6,019,210	)
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies		62,866,625
NET ASSETS	$	520,303,805
Shares outstandingb		9,450,000
Net asset value per share	$	55.06

^a Cost of foreign currency: $127,703.

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

See notes to financial statements.

62 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Australia Index Fund			iShares MSCI Hong Kong Index Fund			iShares MSCI Japan Small Cap Index Fund			iShares MSCI Malaysia Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	87,043,035		$	58,593,633		$	642,270		$	15,837,082
Interest from affiliated issuers (Note 2)		1,339			1,064			17			227
Securities lending income from affiliated issuers (Note 2)		68,287			186,018			20,226			–
Total investment income		87,112,661			58,780,715			662,513			15,837,309
EXPENSES
Investment advisory fees (Note 2)		12,339,948			9,797,546			177,474			3,134,564
Total expenses		12,339,948			9,797,546			177,474			3,134,564
Net investment income		74,772,713			48,983,169			485,039			12,702,745
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(63,947,206	)		(45,127,224	)		(246,150	)		8,951,299
In-kind redemptions		208,901,342			100,048,033			954,731			–
Foreign currency transactions		1,615,830			(42,616	)		22,585			222,437
Net realized gain		146,569,966			54,878,193			731,166			9,173,736
Net change in unrealized appreciation (depreciation) on:
Investments		(209,593,141	)		112,825,990			(3,560,884	)		157,412,064
Translation of assets and liabilities in foreign currencies		(281,599	)		(2,158	)		1,658			1,292
Net change in unrealized appreciation (depreciation)		(209,874,740	)		112,823,832			(3,559,226	)		157,413,356
Net realized and unrealized gain (loss)		(63,304,774	)		167,702,025			(2,828,060	)		166,587,092
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	11,467,939		$	216,685,194		$	(2,343,021	)	$	179,289,837

^a Net of foreign withholding tax of $1,081,457, $ –, $48,018 and $ –, respectively.

See notes to financial statements.

FINANCIAL STATEMENTS 63

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Pacific ex-Japan Index Fund			iShares MSCI Singapore Index Fund			iShares MSCI South Korea Index Fund			iShares MSCI Taiwan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	134,606,028		$	47,106,309		$	36,571,470		$	84,129,567
Interest from unaffiliated issuers		–			–			4,633			114
Interest from affiliated issuers (Note 2)		1,699			851			4,244			4,873
Securities lending income from affiliated issuers (Note 2)		862,954			2,234,202			3,036,862			–
Total investment income		135,470,681			49,341,362			39,617,209			84,134,554
EXPENSES
Investment advisory fees (Note 2)		18,876,847			7,922,869			18,891,270			19,597,924
Foreign taxes (Note 1)		–			–			1,185			3,345,796
Total expenses		18,876,847			7,922,869			18,892,455			22,943,720
Net investment income		116,593,834			41,418,493			20,724,754			61,190,834
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(70,765,402	)		(34,503,372	)		(74,994,575	)		(21,494,061	)
In-kind redemptions		226,260,088			44,292,299			–			–
Foreign currency transactions		2,478,913			266,559			1,086,012			211,728
Net realized gain (loss)		157,973,599			10,055,486			(73,908,563	)		(21,282,333	)
Net change in unrealized appreciation (depreciation) on:
Investments		45,302,895			241,956,116			389,194,420			349,155,063
Translation of assets and liabilities in foreign currencies		(429,971	)		(18,831	)		53,253			(42,413	)
Net change in unrealized appreciation (depreciation)		44,872,924			241,937,285			389,247,673			349,112,650
Net realized and unrealized gain		202,846,523			251,992,771			315,339,110			327,830,317
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	319,440,357		$	293,411,264		$	336,063,864		$	389,021,151

^a Net of foreign withholding tax of $1,441,692, $287,570, $6,746,541 and $20,945,383, respectively.

See notes to financial statements.

64 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Continued)

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Thailand Investable Market Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	9,619,494
Interest from affiliated issuers (Note 2)		382
Total investment income		9,619,876
EXPENSES
Investment advisory fees (Note 2)		1,524,281
Foreign taxes (Note 1)		25,260
Total expenses		1,549,541
Net investment income		8,070,335
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(4,827,344	)
In-kind redemptions		28,566,667
Foreign currency transactions		(3,710	)
Net realized gain		23,735,613
Net change in unrealized appreciation (depreciation) on:
Investments		63,087,900
Translation of assets and liabilities in foreign currencies		18,958
Net change in unrealized appreciation (depreciation)		63,106,858
Net realized and unrealized gain		86,842,471
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	94,912,806

^a Net of foreign withholding tax of $1,040,405.

See notes to financial statements.

FINANCIAL STATEMENTS 65

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Australia Index Fund						iShares MSCI Hong Kong Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	74,772,713		$	38,798,339		$	48,983,169		$	60,124,298
Net realized gain (loss)		146,569,966			(202,818,285	)		54,878,193			(134,562,987	)
Net change in unrealized appreciation (depreciation)		(209,874,740	)		205,661,326			112,823,832			(10,347,626	)
Net increase (decrease) in net assets resulting from operations		11,467,939			41,641,380			216,685,194			(84,786,315	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(86,675,542	)		(36,574,071	)		(51,090,437	)		(63,227,759	)
Total distributions to shareholders		(86,675,542	)		(36,574,071	)		(51,090,437	)		(63,227,759	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,343,260,266			845,682,054			906,802,573			788,711,422
Cost of shares redeemed		(664,911,916	)		(316,165,212	)		(1,047,857,371	)		(364,104,881	)
Net increase (decrease) in net assets from capital share transactions		678,348,350			529,516,842			(141,054,798	)		424,606,541
INCREASE IN NET ASSETS		603,140,747			534,584,151			24,539,959			276,592,467
NET ASSETS
Beginning of year		1,593,676,397			1,059,092,246			1,951,776,865			1,675,184,398
End of year	$	2,196,817,144		$	1,593,676,397		$	1,976,316,824		$	1,951,776,865
Undistributed net investment income included in net assets at end of year	$	14,570,669		$	12,740,394		$	2,742,569		$	4,275,742
SHARES ISSUED AND REDEEMED
Shares sold		58,000,000			53,800,000			56,325,000			61,575,000
Shares redeemed		(31,400,000	)		(19,600,000	)		(68,625,000	)		(31,425,000	)
Net increase (decrease) in shares outstanding		26,600,000			34,200,000			(12,300,000	)		30,150,000

See notes to financial statements.

66 2010 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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	485,039		$	433,446		$	12,702,745		$	12,513,392
Net realized gain (loss)		731,166			(1,735,854	)		9,173,736			(15,953,708	)
Net change in unrealized appreciation (depreciation)		(3,559,226	)		2,190,301			157,413,356			36,885,986
Net increase (decrease) in net assets resulting from operations		(2,343,021	)		887,893			179,289,837			33,445,670
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(721,861	)		(458,327	)		(12,611,955	)		(12,659,798	)
Total distributions to shareholders		(721,861	)		(458,327	)		(12,611,955	)		(12,659,798	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		8,487,461			14,997,836			215,972,540			162,777,082
Cost of shares redeemed		(4,314,452	)		(14,465,148	)		(101,507,881	)		(143,654,071	)
Net increase in net assets from capital share transactions		4,173,009			532,688			114,464,659			19,123,011
INCREASE IN NET ASSETS		1,108,127			962,254			281,142,541			39,908,883
NET ASSETS
Beginning of year		35,556,186			34,593,932			512,999,649			473,090,766
End of year	$	36,664,313		$	35,556,186		$	794,142,190		$	512,999,649
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(75,394	)	$	73,258		$	2,529,953		$	1,906,004
SHARES ISSUED AND REDEEMED
Shares sold		200,000			400,000			18,150,000			19,725,000
Shares redeemed		(100,000	)		(400,000	)		(9,375,000	)		(17,700,000	)
Net increase in shares outstanding		100,000			–			8,775,000			2,025,000

See notes to financial statements.

FINANCIAL STATEMENTS 67

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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	116,593,834		$	110,427,766		$	41,418,493		$	36,445,821
Net realized gain (loss)		157,973,599			(219,258,973	)		10,055,486			(278,459,331	)
Net change in unrealized appreciation (depreciation)		44,872,924			(61,255,012	)		241,937,285			61,395,602
Net increase (decrease) in net assets resulting from operations		319,440,357			(170,086,219	)		293,411,264			(180,617,908	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(128,810,457	)		(89,338,841	)		(48,264,119	)		(40,706,510	)
Total distributions to shareholders		(128,810,457	)		(89,338,841	)		(48,264,119	)		(40,706,510	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		357,007,662			606,264,055			360,350,218			368,595,441
Cost of shares redeemed		(492,042,511	)		(228,256,529	)		(169,535,152	)		(330,200,942	)
Net increase (decrease) in net assets from capital share transactions		(135,034,849	)		378,007,526			190,815,066			38,394,499
INCREASE (DECREASE) IN NET ASSETS		55,595,051			118,582,466			435,962,211			(182,929,919	)
NET ASSETS
Beginning of year		3,382,553,619			3,263,971,153			1,294,038,572			1,476,968,491
End of year	$	3,438,148,670		$	3,382,553,619		$	1,730,000,783		$	1,294,038,572
Undistributed net investment income included in net assets at end of year	$	10,259,102		$	12,221,049		$	8,927,555		$	14,645,717
SHARES ISSUED AND REDEEMED
Shares sold		8,700,000			20,400,000			30,800,000			41,900,000
Shares redeemed		(12,900,000	)		(7,500,000	)		(15,000,000	)		(44,700,000	)
Net increase (decrease) in shares outstanding		(4,200,000	)		12,900,000			15,800,000			(2,800,000	)

See notes to financial statements.

68 2010 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, 2010			Year ended August 31, 2009			Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	20,724,754		$	14,014,065		$	61,190,834		$	62,277,852
Net realized loss		(73,908,563	)		(687,272,279	)		(21,282,333	)		(681,314,758	)
Net change in unrealized appreciation (depreciation)		389,247,673			558,333,098			349,112,650			179,235,336
Net increase (decrease) in net assets resulting from operations		336,063,864			(114,925,116	)		389,021,151			(439,801,570	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(25,921,316	)		(19,134,761	)		(57,723,897	)		(105,890,576	)
Total distributions to shareholders		(25,921,316	)		(19,134,761	)		(57,723,897	)		(105,890,576	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		828,063,901			1,407,195,537			147,898,696			1,421,796,026
Cost of shares redeemed		(281,588,841	)		(860,348,791	)		(793,088,733	)		(758,780,360	)
Net increase (decrease) in net assets from capital share transactions		546,475,060			546,846,746			(645,190,037	)		663,015,666
INCREASE (DECREASE) IN NET ASSETS		856,617,608			412,786,869			(313,892,783	)		117,323,520
NET ASSETS
Beginning of year		2,398,550,011			1,985,763,142			3,035,331,316			2,918,007,796
End of year	$	3,255,167,619		$	2,398,550,011		$	2,721,438,533		$	3,035,331,316
Undistributed (distributions in excess of) net investment income included in net assets at end of year	$	(5,138,651	)	$	(1,028,101	)	$	59,235,519		$	55,542,497
SHARES ISSUED AND REDEEMED
Shares sold		17,150,000			43,400,000			12,000,000			140,800,000
Shares redeemed		(6,100,000	)		(31,900,000	)		(66,200,000	)		(85,600,000	)
Net increase (decrease) in shares outstanding		11,050,000			11,500,000			(54,200,000	)		55,200,000

See notes to financial statements.

FINANCIAL STATEMENTS 69

Statements of Changes in Net Assets (Continued)

iSHARES^® , INC.

	iShares MSCI Thailand Investable Market Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	8,070,335		$	1,585,596
Net realized gain (loss)		23,735,613			(18,721,813	)
Net change in unrealized appreciation (depreciation)		63,106,858			20,815,615
Net increase in net assets resulting from operations		94,912,806			3,679,398
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(6,685,017	)		(1,466,522	)
Total distributions to shareholders		(6,685,017	)		(1,466,522	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		553,374,038			57,023,862
Cost of shares redeemed		(215,318,898	)		(23,464,139	)
Net increase in net assets from capital share transactions		338,055,140			33,559,723
INCREASE IN NET ASSETS		426,282,929			35,772,599
NET ASSETS
Beginning of year		94,020,876			58,248,277
End of year	$	520,303,805		$	94,020,876
Undistributed net investment income included in net assets at end of year	$	1,923,968		$	542,360
SHARES ISSUED AND REDEEMED
Shares sold		11,950,000			1,900,000
Shares redeemed		(5,050,000	)		(850,000	)
Net increase in shares outstanding		6,900,000			1,050,000

See notes to financial statements.

70 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	20.33		$	23.96		$	27.62		$	21.59		$	18.28
Income from investment operations:
Net investment incomea		0.72			0.78			0.96			0.89			0.75
Net realized and unrealized gain (loss)b		0.69			(3.47	)		(3.34	)		6.24			3.23
Total from investment operations		1.41			(2.69	)		(2.38	)		7.13			3.98
Less distributions from:
Net investment income		(0.82	)		(0.94	)		(1.28	)		(1.10	)		(0.67	)
Total distributions		(0.82	)		(0.94	)		(1.28	)		(1.10	)		(0.67	)
Net asset value, end of year	$	20.92		$	20.33		$	23.96		$	27.62		$	21.59
Total return		6.86	%		(8.91	)%		(9.25	)%		33.97	%		22.35	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	2,196,817		$	1,593,676		$	1,059,092		$	1,464,112		$	686,407
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		3.24	%		4.92	%		3.38	%		3.46	%		3.75	%
Portfolio turnover ratec		8	%		14	%		10	%		10	%		7	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 71

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Hong Kong Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	14.39		$	15.87		$	18.30		$	14.20		$	13.01
Income from investment operations:
Net investment incomea		0.42			0.52			0.45			0.47			0.38
Net realized and unrealized gain (loss)b		1.69			(1.46	)		(2.25	)		3.94			1.17
Total from investment operations		2.11			(0.94	)		(1.80	)		4.41			1.55
Less distributions from:
Net investment income		(0.48	)		(0.54	)		(0.63	)		(0.31	)		(0.36	)
Total distributions		(0.48	)		(0.54	)		(0.63	)		(0.31	)		(0.36	)
Net asset value, end of year	$	16.02		$	14.39		$	15.87		$	18.30		$	14.20
Total return		14.85	%		(4.77	)%		(10.54	)%		31.44	%		12.20	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,976,317		$	1,951,777		$	1,675,184		$	1,445,309		$	882,712
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.52	%		0.54	%
Ratio of net investment income to average net assets		2.67	%		4.29	%		2.34	%		2.92	%		2.87	%
Portfolio turnover ratec		5	%		9	%		17	%		9	%		10	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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.

72 2010 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, 2010			Year ended Aug. 31, 2009			Period from Dec. 20, 2007a to Aug. 31, 2008
Net asset value, beginning of period	$	44.45		$	43.24		$	48.85
Income from investment operations:
Net investment incomeb		0.61			0.60			0.29
Net realized and unrealized gain (loss)c		(3.39	)		1.29			(5.74	)
Total from investment operations		(2.78	)		1.89			(5.45	)
Less distributions from:
Net investment income		(0.93	)		(0.68	)		(0.16	)
Total distributions		(0.93	)		(0.68	)		(0.16	)
Net asset value, end of period	$	40.74		$	44.45		$	43.24
Total return		(6.25	)%		4.62	%		(11.19	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	36,664		$	35,556		$	34,594
Ratio of expenses to average net assetse		0.53	%		0.56	%		0.53	%
Ratio of net investment income to average net assetse		1.46	%		1.59	%		0.93	%
Portfolio turnover ratef		7	%		7	%		7	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 73

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Malaysia Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	9.79		$	9.39		$	10.97		$	7.75		$	7.19
Income from investment operations:
Net investment incomea		0.24			0.28			0.34			0.34			0.26
Net realized and unrealized gain (loss)b		3.20			0.40			(1.31	)		3.08			0.59
Total from investment operations		3.44			0.68			(0.97	)		3.42			0.85
Less distributions from:
Net investment income		(0.25	)		(0.28	)		(0.61	)		(0.20	)		(0.29	)
Total distributions		(0.25	)		(0.28	)		(0.61	)		(0.20	)		(0.29	)
Net asset value, end of year	$	12.98		$	9.79		$	9.39		$	10.97		$	7.75
Total return		35.76	%		8.00	%		(9.86	)%		44.64	%		12.35	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	794,142		$	513,000		$	473,091		$	741,440		$	374,334
Ratio of expenses to average net assets		0.53	%		0.56	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		2.17	%		3.45	%		2.84	%		3.21	%		3.46	%
Portfolio turnover ratec		29	%		52	%		92	%		87	%		60	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 10%, 12%, 16%, 3% and 9%, respectively. See Note 4.

See notes to financial statements.

74 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a
Net asset value, beginning of year	$	36.85		$	41.37		$	48.31		$	37.34		$	32.52
Income from investment operations:
Net investment incomeb		1.25			1.38			1.64			1.52			1.28
Net realized and unrealized gain (loss)c		2.52			(4.79	)		(6.01	)		11.18			4.77
Total from investment operations		3.77			(3.41	)		(4.37	)		12.70			6.05
Less distributions from:
Net investment income		(1.37	)		(1.11	)		(2.51	)		(1.73	)		(1.23	)
Net realized gain		–			–			(0.06	)		–			–
Total distributions		(1.37	)		(1.11	)		(2.57	)		(1.73	)		(1.23	)
Net asset value, end of year	$	39.25		$	36.85		$	41.37		$	48.31		$	37.34
Total return		10.27	%		(7.23	)%		(9.87	)%		34.86	%		19.17	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,438,149		$	3,382,554		$	3,263,971		$	3,536,295		$	2,094,931
Ratio of expenses to average net assets		0.50	%		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of net investment income to average net assets		3.09	%		4.83	%		3.35	%		3.43	%		3.67	%
Portfolio turnover rated		7	%		10	%		14	%		11	%		8	%

^a Per share amounts were adjusted to reflect a three-for-one stock split effective July 24, 2008.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 75

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Singapore Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	10.25		$	11.44		$	13.28		$	9.11		$	7.77
Income from investment operations:
Net investment incomea		0.32			0.32			0.47			0.47			0.40
Net realized and unrealized gain (loss)b		1.97			(1.16	)		(1.67	)		4.01			1.23
Total from investment operations		2.29			(0.84	)		(1.20	)		4.48			1.63
Less distributions from:
Net investment income		(0.37	)		(0.35	)		(0.64	)		(0.31	)		(0.29	)
Total distributions		(0.37	)		(0.35	)		(0.64	)		(0.31	)		(0.29	)
Net asset value, end of year	$	12.17		$	10.25		$	11.44		$	13.28		$	9.11
Total return		22.68	%		(5.87	)%		(9.55	)%		49.92	%		21.61	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	1,730,001		$	1,294,039		$	1,476,968		$	1,669,210		$	574,620
Ratio of expenses to average net assets		0.53	%		0.55	%		0.52	%		0.51	%		0.54	%
Ratio of net investment income to average net assets		2.80	%		3.97	%		3.56	%		3.80	%		4.74	%
Portfolio turnover ratec		9	%		15	%		16	%		8	%		6	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	42.01		$	43.55		$	63.60		$	46.00		$	34.75
Income from investment operations:
Net investment incomea		0.32			0.30			0.80			0.51			0.31
Net realized and unrealized gain (loss)b		5.82			(1.45	)		(19.87	)		17.42			11.20
Total from investment operations		6.14			(1.15	)		(19.07	)		17.93			11.51
Less distributions from:
Net investment income		(0.39	)		(0.39	)		(0.98	)		(0.33	)		(0.26	)
Total distributions		(0.39	)		(0.39	)		(0.98	)		(0.33	)		(0.26	)
Net asset value, end of year	$	47.76		$	42.01		$	43.55		$	63.60		$	46.00
Total return		14.65	%		(2.31	)%		(30.35	)%		39.18	%		33.16	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,255,168		$	2,398,550		$	1,985,763		$	2,429,453		$	1,621,334
Ratio of expenses to average net assets		0.61	%		0.65	%		0.63	%		0.68	%		0.70	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.61	%		0.65	%		0.63	%		0.68	%		0.70	%
Ratio of net investment income to average net assets		0.67	%		0.91	%		1.35	%		0.96	%		0.71	%
Portfolio turnover ratec		14	%		62	%		42	%		20	%		47	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 6%, 8%, 15%, 6% and 14%, respectively. See Note 4.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 77

Financial Highlights (Continued)

iSHARES^®, INC.

(For a share outstanding throughout each period)

	iShares MSCI Taiwan Index Fund
	Year ended Aug. 31, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	10.94		$	13.13		$	15.99		$	12.57		$	11.57
Income from investment operations:
Net investment incomea		0.23			0.30			0.54			0.38			0.34
Net realized and unrealized gain (loss)b		1.23			(1.89	)		(3.01	)		3.34			0.80
Total from investment operations		1.46			(1.59	)		(2.47	)		3.72			1.14
Less distributions from:
Net investment income		(0.21	)		(0.60	)		(0.39	)		(0.30	)		(0.14	)
Total distributions		(0.21	)		(0.60	)		(0.39	)		(0.30	)		(0.14	)
Net asset value, end of year	$	12.19		$	10.94		$	13.13		$	15.99		$	12.57
Total return		13.30	%		(9.67	)%		(15.69	)%		29.91	%		9.84	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	2,721,439		$	3,035,331		$	2,918,008		$	2,769,764		$	1,893,751
Ratio of expenses to average net assets		0.71	%		0.82	%		0.73	%		0.77	%		0.85	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.61	%		0.65	%		0.63	%		0.68	%		0.70	%
Ratio of net investment income to average net assets		1.90	%		3.18	%		3.54	%		2.61	%		2.74	%
Portfolio turnover ratec		9	%		52	%		33	%		35	%		29	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 4%, 14%, 11%, 12% and 10%, respectively. See Note 4.

See notes to financial statements.

78 2010 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, 2010			Year ended Aug. 31, 2009			Period from Mar. 26, 2008a to Aug. 31, 2008
Net asset value, beginning of period	$	36.87		$	38.83		$	50.03
Income from investment operations:
Net investment incomeb		1.44			1.17			0.32
Net realized and unrealized gain (loss)c		17.95			(1.88	)		(11.52	)
Total from investment operations		19.39			(0.71	)		(11.20	)
Less distributions from:
Net investment income		(1.20	)		(1.25	)		–
Total distributions		(1.20	)		(1.25	)		–
Net asset value, end of period	$	55.06		$	36.87		$	38.83
Total return		53.19	%		(0.33	)%		(22.39	)%d
Ratios/Supplemental data:
Net assets, end of period (000s)	$	520,304		$	94,021		$	58,248
Ratio of expenses to average net assetse		0.62	%		0.65	%		0.63	%
Ratio of expenses to average net assets exclusive of foreign taxes		0.61	%		n/a			n/a
Ratio of net investment income to average net assetse		3.22	%		4.00	%		1.68	%
Portfolio turnover ratef		14	%		15	%		19	%

^a Commencement of operations.

^b Based on average shares outstanding throughout each period.

^c The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 79

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 a particular market, as measured by that market’s equity securities index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

Each Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This 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”) using 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

80 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy 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 81

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, 2010, the value of each of the Funds’ investments was classified as a Level 1 Price. 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. 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, 2010, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are generally declared and paid at least semi-annually by each Fund. Distributions of net realized capital gains, if any, generally are declared and paid once a year. Distributions are determined on a tax basis

82 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010, 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	$	25,319,510	$	(299,826,190	)	$	(64,605,643	)	$	(339,112,323	)
Hong Kong		4,146,433		(281,514,576	)		(185,134,846	)		(462,502,989	)
Japan Small Cap		168,081		(3,656,318	)		(837,176	)		(4,325,413	)
Malaysia		3,495,301		322,587,656			(56,746,972	)		269,335,985
Pacific ex-Japan		37,494,655		146,436,531			(205,525,236	)		(21,594,050	)
Singapore		25,421,800		43,793,835			(170,601,308	)		(101,385,673	)
South Korea		5,810,988		611,226,778			(525,640,199	)		91,397,567
Taiwan		60,772,523		465,069,349			(864,969,495	)		(339,127,623	)
Thailand Investable Market		1,923,968		60,940,362			(4,092,947	)		58,771,383

For the years ended August 31, 2010 and August 31, 2009, the tax characterization of distributions paid for each 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 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 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, 2010.

From November 1, 2009 to August 31, 2010, certain Funds incurred net realized capital losses. As permitted by tax regulations, these Funds have elected to defer those losses and treat them as arising in the year ending August 31, 2011, as follows:

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Australia	$	15,083,594
Hong Kong		28,882,559
Japan Small Cap		164,136
Pacific ex-Japan		34,517,905

iShares MSCI Index Fund	Deferred Net Realized Capital Losses
Singapore	$	10,449,774
South Korea		63,431,643
Taiwan		32,529,931
Thailand Investable Market		1,216,075

NOTES TO FINANCIAL STATEMENTS 83

Notes to Financial Statements (Continued)

iSHARES^® , INC.

The Funds had tax basis net capital loss carryforwards as of August 31, 2010, the tax year-end of the Funds, as follows:

iShares MSCI Index Fund	Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Expiring 2017		Expiring 2018		Total
Australia	$	650,082	$	596,240	$	384,424	$	–	$	7,066	$	529,868	$	24,006,125	$	23,348,244	$	49,522,049
Hong Kong		2,870,602		2,330,414		468,716		425,440		2,899,247		3,185,408		29,235,556		114,836,904		156,252,287
Japan Small Cap		–		–		–		–		–		–		131,718		541,322		673,040
Malaysia		2,898,105		775,477		6,820,474		1,543,708		3,357,786		1,127,892		40,223,530		–		56,746,972
Pacific ex-Japan		–		–		–		–		–		–		66,207,828		104,799,503		171,007,331
Singapore		4,428,316		4,256,421		2,558,348		–		–		807,115		15,680,510		132,420,824		160,151,534
South Korea		504,041		3,363,449		11,590,303		3,172,573		38,097,223		–		178,889,302		226,591,665		462,208,556
Taiwan		8,689,663		9,129,874		12,022,719		14,435,986		64,999,586		16,734,578		343,375,145		363,052,013		832,439,564
Thailand Investable Market		–		–		–		–		–		–		555,444		2,321,428		2,876,872

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

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

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

As of August 31, 2010, 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	$	2,484,989,139	$	36,666,279	$	(336,380,983	)	$	(299,714,704	)
Hong Kong		2,316,790,007		54,258,216		(335,770,840	)		(281,512,624	)
Japan Small Cap		40,726,621		2,195,849		(5,855,892	)		(3,660,043	)
Malaysia		470,146,789		354,321,402		(31,740,231	)		322,581,171
Pacific ex-Japan		3,315,129,976		591,848,473		(445,265,586	)		146,582,887
Singapore		1,758,345,257		142,870,284		(99,091,373	)		43,778,911
South Korea		3,012,699,594		1,215,604,269		(604,430,608	)		611,173,661
Taiwan		2,238,627,338		741,309,597		(276,143,947	)		465,165,650
Thailand Investable Market		457,038,836		65,077,882		(4,156,866	)		60,921,016

84 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.

Under the 1940 Act, upon completion of the Transaction on December 1, 2009, each Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Funds approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Funds remained the same after the Transaction.

Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA 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, BFA 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

For its investment advisory services to the iShares MSCI South Korea, iShares MSCI Taiwan and iShares MSCI Thailand Investable Market Index Funds, BFA 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

NOTES TO FINANCIAL STATEMENTS 85

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA, the Funds’ investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Funds as follows:

iShares MSCI Index Fund	Securities Lending Agent Fees
Australia	$	43,688
Hong Kong		108,597
Japan Small Cap		12,063

iShares MSCI Index Fund	Securities Lending Agent Fees
Pacific ex-Japan	$	530,874
Singapore		1,410,237
South Korea		1,862,692

Cross trades for the year ended August 31, 2010, 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 BFA (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 its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statements of Operations.

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	Purchases		Sales
Australia	$	170,237,500	$	181,146,267
Hong Kong		88,224,792		93,434,783
Japan Small Cap		2,433,082		2,666,541
Malaysia		281,232,807		166,935,647
Pacific ex-Japan		267,886,775		276,909,578
Singapore		136,738,275		145,835,053
South Korea		973,719,636		437,197,907
Taiwan		275,661,643		923,630,016
Thailand Investable Market		36,806,492		34,186,027

86 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

In-kind transactions (see Note 4) for the year ended August 31, 2010 were as follows:

iShares MSCI Index Fund	In-kind Purchases		In-kind Sales
Australia	$	1,332,300,366	$	661,124,387
Hong Kong		895,051,030		1,035,180,363
Japan Small Cap		8,460,175		4,304,845
Pacific ex-Japan		353,206,584		488,060,372
Singapore		355,981,428		166,761,419
Thailand Investable Market		548,545,263		213,925,965

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 Bank and Trust Company, 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 certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) 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 current 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 value of the securities on loan. The risks 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 BFA or its affiliates; such reinvestments are subject to investment risk.

As of August 31, 2010, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 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, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.

NOTES TO FINANCIAL STATEMENTS 87

Notes to Financial Statements (Continued)

iSHARES^® , INC.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

88 2010 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, 2010, 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 22, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 89

Tax Information (Unaudited)

iSHARES^® , INC.

For the fiscal year ended August 31, 2010, 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	$	88,124,492	$	1,078,977
Japan Small Cap		690,288		47,704
Pacific ex-Japan		136,047,720		1,437,287
Singapore		47,393,879		286,983
South Korea		43,318,011		6,725,608
Taiwan		105,074,950		23,876,952
Thailand Investable Market		10,659,899		1,029,787

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, 2010:

iShares MSCI Index Fund	Qualified Dividend Income
Australia	$	85,760,016
Japan Small Cap		635,363
Malaysia		427,297
Pacific ex-Japan		97,199,199
South Korea		25,921,316
Thailand Investable Market		6,685,017

In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

90 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® , INC.

Premium/Discount Information

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 fair 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.

SUPPLEMENTAL INFORMATION 91

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Australia Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		7		0.51
Greater than 3.0% and Less than 3.5%		12		0.87
Greater than 2.5% and Less than 3.0%		18		1.30
Greater than 2.0% and Less than 2.5%		23		1.66
Greater than 1.5% and Less than 2.0%		57		4.12
Greater than 1.0% and Less than 1.5%		114		8.25
Greater than 0.5% and Less than 1.0%		264		19.10
Between 0.5% and -0.5%		546		39.53
Less than -0.5% and Greater than -1.0%		120		8.68
Less than -1.0% and Greater than -1.5%		85		6.15
Less than -1.5% and Greater than -2.0%		39		2.82
Less than -2.0% and Greater than -2.5%		30		2.17
Less than -2.5% and Greater than -3.0%		23		1.66
Less than -3.0% and Greater than -3.5%		9		0.65
Less than -3.5% and Greater than -4.0%		7		0.51
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%		5		0.36
Less than -5.5% and Greater than -6.0%		2		0.14
Less than -6.0%		5		0.36
		1,382		100.00	%

92 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Hong Kong Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		48		3.47
Greater than 1.0% and Less than 1.5%		99		7.16
Greater than 0.5% and Less than 1.0%		205		14.83
Between 0.5% and –0.5%		592		42.85
Less than –0.5% and Greater than –1.0%		138		9.99
Less than –1.0% and Greater than –1.5%		83		6.01
Less than –1.5% and Greater than –2.0%		57		4.12
Less than –2.0% and Greater than –2.5%		33		2.39
Less than –2.5% and Greater than –3.0%		19		1.37
Less than –3.0% and Greater than –3.5%		12		0.87
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	%

SUPPLEMENTAL INFORMATION 93

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Japan Small Cap Index Fund

Period Covered: January 1, 2008 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		9		1.43	%
Greater than 4.5% and Less than 5.0%		3		0.48
Greater than 4.0% and Less than 4.5%		3		0.48
Greater than 3.5% and Less than 4.0%		5		0.80
Greater than 3.0% and Less than 3.5%		10		1.59
Greater than 2.5% and Less than 3.0%		11		1.75
Greater than 2.0% and Less than 2.5%		18		2.87
Greater than 1.5% and Less than 2.0%		46		7.32
Greater than 1.0% and Less than 1.5%		65		10.35
Greater than 0.5% and Less than 1.0%		84		13.38
Between 0.5% and –0.5%		201		31.99
Less than –0.5% and Greater than –1.0%		52		8.28
Less than –1.0% and Greater than –1.5%		33		5.25
Less than –1.5% and Greater than –2.0%		29		4.62
Less than –2.0% and Greater than –2.5%		18		2.87
Less than –2.5% and Greater than –3.0%		11		1.75
Less than –3.0% and Greater than –3.5%		12		1.91
Less than –3.5% and Greater than –4.0%		5		0.80
Less than –4.0% and Greater than –4.5%		2		0.32
Less than –4.5% and Greater than –5.0%		2		0.32
Less than –5.0% and Greater than –5.5%		3		0.48
Less than –5.5% and Greater than –6.0%		3		0.48
Less than –6.0%		3		0.48
		628		100.00	%

94 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Malaysia Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		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%		6		0.43
Greater than 2.5% and Less than 3.0%		4		0.29
Greater than 2.0% and Less than 2.5%		19		1.37
Greater than 1.5% and Less than 2.0%		43		3.11
Greater than 1.0% and Less than 1.5%		112		8.10
Greater than 0.5% and Less than 1.0%		220		15.92
Between 0.5% and –0.5%		549		39.76
Less than –0.5% and Greater than –1.0%		216		15.63
Less than –1.0% and Greater than –1.5%		94		6.80
Less than –1.5% and Greater than –2.0%		42		3.04
Less than –2.0% and Greater than –2.5%		33		2.39
Less than –2.5% and Greater than –3.0%		14		1.01
Less than –3.0% and Greater than –3.5%		7		0.51
Less than –3.5% and Greater than –4.0%		3		0.22
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%		2		0.14
		1,382		100.00	%

SUPPLEMENTAL INFORMATION 95

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Pacific ex-Japan Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		26		1.88
Greater than 1.5% and Less than 2.0%		48		3.47
Greater than 1.0% and Less than 1.5%		129		9.33
Greater than 0.5% and Less than 1.0%		253		18.31
Between 0.5% and –0.5%		575		41.60
Less than –0.5% and Greater than –1.0%		109		7.89
Less than –1.0% and Greater than –1.5%		81		5.86
Less than –1.5% and Greater than –2.0%		46		3.33
Less than –2.0% and Greater than –2.5%		22		1.59
Less than –2.5% and Greater than –3.0%		21		1.52
Less than –3.0% and Greater than –3.5%		11		0.80
Less than –3.5% and Greater than –4.0%		6		0.43
Less than –4.0% and Greater than –4.5%		4		0.29
Less than –4.5% and Greater than –5.0%		3		0.22
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	%

96 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Singapore Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		4		0.29
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%		35		2.53
Greater than 1.5% and Less than 2.0%		47		3.40
Greater than 1.0% and Less than 1.5%		133		9.62
Greater than 0.5% and Less than 1.0%		265		19.18
Between 0.5% and –0.5%		554		40.11
Less than –0.5% and Greater than –1.0%		129		9.33
Less than –1.0% and Greater than –1.5%		81		5.86
Less than –1.5% and Greater than –2.0%		42		3.04
Less than –2.0% and Greater than –2.5%		31		2.24
Less than –2.5% and Greater than –3.0%		12		0.87
Less than –3.0% and Greater than –3.5%		8		0.58
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	%

SUPPLEMENTAL INFORMATION 97

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI South Korea Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		8		0.58
Greater than 3.0% and Less than 3.5%		12		0.87
Greater than 2.5% and Less than 3.0%		21		1.52
Greater than 2.0% and Less than 2.5%		40		2.89
Greater than 1.5% and Less than 2.0%		69		4.99
Greater than 1.0% and Less than 1.5%		122		8.83
Greater than 0.5% and Less than 1.0%		219		15.85
Between 0.5% and –0.5%		451		32.63
Less than –0.5% and Greater than –1.0%		149		10.78
Less than –1.0% and Greater than –1.5%		99		7.16
Less than –1.5% and Greater than –2.0%		54		3.91
Less than –2.0% and Greater than –2.5%		34		2.46
Less than –2.5% and Greater than –3.0%		30		2.17
Less than –3.0% and Greater than –3.5%		16		1.16
Less than –3.5% and Greater than –4.0%		11		0.80
Less than –4.0% and Greater than –4.5%		6		0.43
Less than –4.5% and Greater than –5.0%		4		0.29
Less than –5.0% and Greater than –5.5%		3		0.22
Less than –5.5% and Greater than –6.0%		5		0.36
Less than –6.0%		11		0.80
		1,382		100.00	%

98 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Taiwan Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		14		1.01
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%		63		4.56
Greater than 1.0% and Less than 1.5%		108		7.81
Greater than 0.5% and Less than 1.0%		213		15.41
Between 0.5% and –0.5%		463		33.51
Less than –0.5% and Greater than –1.0%		194		14.04
Less than –1.0% and Greater than –1.5%		100		7.24
Less than –1.5% and Greater than –2.0%		54		3.91
Less than –2.0% and Greater than –2.5%		32		2.32
Less than –2.5% and Greater than –3.0%		17		1.23
Less than –3.0% and Greater than –3.5%		22		1.59
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%		3		0.22
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	%

SUPPLEMENTAL INFORMATION 99

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Thailand Investable Market Index Fund

Period Covered: April 1, 2008 through June 30, 2010

Premium/Discount Range	Number of Days		Percentage of Total Days
Greater than 5.0%		1		0.18	%
Greater than 4.5% and Less than 5.0%		2		0.35
Greater than 4.0% and Less than 4.5%		3		0.53
Greater than 3.5% and Less than 4.0%		3		0.53
Greater than 3.0% and Less than 3.5%		5		0.88
Greater than 2.5% and Less than 3.0%		14		2.47
Greater than 2.0% and Less than 2.5%		17		3.00
Greater than 1.5% and Less than 2.0%		36		6.35
Greater than 1.0% and Less than 1.5%		73		12.87
Greater than 0.5% and Less than 1.0%		99		17.46
Between 0.5% and –0.5%		152		26.79
Less than –0.5% and Greater than –1.0%		50		8.82
Less than –1.0% and Greater than –1.5%		37		6.53
Less than –1.5% and Greater than –2.0%		27		4.76
Less than –2.0% and Greater than –2.5%		15		2.65
Less than –2.5% and Greater than –3.0%		9		1.59
Less than –3.0% and Greater than –3.5%		9		1.59
Less than –3.5% and Greater than –4.0%		2		0.35
Less than –4.0% and Greater than –4.5%		2		0.35
Less than –4.5% and Greater than –5.0%		3		0.53
Less than –5.0% and Greater than –5.5%		3		0.53
Less than –5.5% and Greater than –6.0%		1		0.18
Less than –6.0%		4		0.71
		567		100.00	%

100 2010 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 BFA 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, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. 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 the Past 5 Years	Other Directorships Held
Robert S. Kapitoa (53)	Director (since 2009).	President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007).
Michael Lathamb (45)	Director (since 2010); President (since 2007).	Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007).	Trustee of iShares Trust (since 2010).

^a Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc.

^b Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates.

DIRECTOR AND OFFICER INFORMATION 101

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Independent Directors

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held
George G.C. Parker (71)	Director (since 2000); Independent Chairman (since 2010).	Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994).	Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007).
Darrell Duffie (56)	Director (since 2008).	Professor, Stanford University: Graduate School of Business (since 1984).	Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008).
Cecilia H. Herbert (61)	Director (since 2005).	Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005).	Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009).
Charles A. Hurty (67)	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002).
John E. Kerrigan (55)	Director (since 2005).	Chief Investment Officer, Santa Clara University (since 2002).	Trustee of iShares Trust (since 2005).
John E. Martinez (49)	Director (since 2003).	Director of Real Estate Equity Exchange (since 2005).	Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007).

102 2010 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 the Past 5 Years	Other Directorships Held
Robert H. Silver (55)	Director (since 2007).	President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009).	Trustee of iShares Trust (since 2007).

DIRECTOR AND OFFICER INFORMATION 103

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Officers

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years
Geoffrey D. Flynn (53)	Executive Vice President and Chief Operating Officer (since 2008).	Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002- 2007).
Eilleen M. Clavere (58)	Secretary (since 2007).	Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005).
Jack Gee (51)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009).
Patrick O’Connor (43)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006).
Amy Schioldager (48)	Executive Vice President (since 2007).	Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).
Ira P. Shapiro (47)	Vice President and Chief Legal Officer (since 2007).	Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009).
Lee Sterne (45)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007).
Matt Tucker (38)	Vice President (since 2007).	Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005).

104 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 105

Notes:

106 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 107

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 Fund
iShares Dow Jones U.S.	IYY
iShares MSCI Domestic Index Fund
iShares MSCI USA	EUSA
iShares MSCI Socially Responsible Index Funds
iShares MSCI KLD 400 Social	DSI
iShares MSCI USA ESG 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

108 2010 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 Brazil Small Cap	EWZS
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI China Small Cap	ECNS
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares S&P India Nifty 50	INDY
iShares MSCI Indonesia Investable Market	EIDO
iShares MSCI Ireland Capped Investable Market	EIRL
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 New Zealand Investable Market	ENZL
iShares MSCI All Peru Capped	EPU
iShares MSCI Philippines Investable Market	EPHE
iShares MSCI Poland Investable Market	EPOL
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 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 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 International/Global Sector Index Funds
iShares MSCI ACWI ex US Consumer Discretionary Sector	AXDI
iShares MSCI ACWI ex US Consumer Staples Sector	AXSL
iShares MSCI ACWI ex US Energy Sector	AXEN
iShares MSCI ACWI ex US Financials Sector	AXFN
iShares MSCI ACWI ex US Health Care Sector	AXHE
iShares MSCI ACWI ex US Industrials Sector	AXID
iShares MSCI ACWI ex US Information Technology Sector	AXIT
iShares MSCI ACWI ex US Materials Sector	AXMT
iShares MSCI ACWI ex US Telecommunication Services Sector	AXTE
iShares MSCI ACWI ex US Utilities Sector	AXUT
iShares MSCI Emerging Markets Financials Sector	EMFN
iShares MSCI Emerging Markets Materials Sector	EMMT
iShares MSCI Europe Financials Sector	EUFN
iShares MSCI Far East Financials Sector	FEFN
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 International/Global Theme Based and Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV
iShares S&P Emerging Markets Infrastructure	EMIF
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 10+ Year Government/Credit	GLJ
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

THE iSHARES FAMILY OF FUNDS 109

The iShares^® Family of Funds (Continued)

iShares U.S. Credit Bond Funds	Trading Symbol
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares 10+ Year Credit	CLY
iShares iBoxx $ High Yield Corporate	HYG

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 2012 S&P AMT-Free Municipal Series	MUAA
iShares 2013 S&P AMT-Free Municipal Series	MUAB
iShares 2014 S&P AMT-Free Municipal Series	MUAC
iShares 2015 S&P AMT-Free Municipal Series	MUAD
iShares 2016 S&P AMT-Free Municipal Series	MUAE
iShares 2017 S&P AMT-Free Municipal Series	MUAF
iShares U.S. Securitized Bond Fund
iShares Barclays MBS	MBB
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

The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iSHARES^® is a registered trademark of BlackRock Institutional Trust Company, N.A. The 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^®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed 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.

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 2010 Annual Report.

iS-3594-1010

110 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Dear iShares Shareholder:

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

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

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

1.   Go to www.icsdelivery.com.

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

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

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

Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

For more information:

WWW.iSHARES.COM

1-800-iShares (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.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by SEI Investments Distribution Co. (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 BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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 ending 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.

©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.

iS-AR-83-0810

2010 ANNUAL REPORT TO SHAREHOLDERS

iSHARES^® MSCI SERIES

AUGUST 31, 2010

»  Would you prefer to receive materials like this electronically?

See inside back cover for details.

iShares MSCI Japan Index Fund  |  EWJ  |  NYSE Arca

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	22
Tax Information (Unaudited)	23
Supplemental Information (Unaudited)	24
Director and Officer Information (Unaudited)	26
The iShares Family of Funds	32

Management’s Discussion of Fund Performance

iSHARES^® MSCI JAPAN INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(6.41)%	(6.45)%	(5.92)%	(1.92)%	(2.30)%	(1.44)%	(3.17)%	(3.27)%	(2.72)%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Ten Years Ended 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(6.41)%	(6.45)%	(5.92)%	(9.23)%	(11.00)%	(7.02)%	(27.51)%	(28.29)%	(24.12)%

“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 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 DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector	Percentage of Net Assets
Consumer Cyclical		25.38	%
Industrial		21.78
Financial		17.01
Consumer Non-Cyclical		10.76
Basic Materials		6.53
Utilities		6.52
Communications		5.57
Technology		4.96
Energy		1.42
Short-Term and Other Net Assets		0.07
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Toyota Motor Corp.		4.46	%
Mitsubishi UFJ Financial Group Inc.		2.90
Honda Motor Co. Ltd.		2.57
Canon Inc.		2.24
Sumitomo Mitsui Financial Group Inc.		1.89
Tokyo Electric Power Co. Inc. (The)		1.70
Takeda Pharmaceutical Co. Ltd.		1.62
Nintendo Co. Ltd.		1.48
Mizuho Financial Group Inc.		1.47
Mitsubishi Corp.		1.36
TOTAL		21.69	%

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 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, 2010 (the “reporting period”), the total return for the Fund was (6.41)%, while the total return for the Index was (5.92)%.

The Japanese broad equity market performed poorly in comparison to other Asian markets for the reporting period. Japan’s economy slowed sharply as the reporting period came to a close. GDP rose just 0.4% in the most recent quarter against the year-ago period, down from growth of 4.4% in the quarter ended March 31. In many ways, 2010 echoed back to 2009: weak consumer spending, concerns of deflation, soaring federal debt and weak demand for Japanese exports. Consumer spending, which accounts for 60% of Japan’s economy, was flat during the first half of 2010. Persistent deflation created a drag on economic growth, as consumers waited for prices to drop before buying goods and services. Inflation was a negative 1.9% in the most recent quarter, a slight improvement over the prior quarter, when prices fell 2.8%. Japan’s federal debt is nearly 200% of annual GDP, and the International Monetary Fund recently warned that Japan was reaching a point at which markets become concerned about the threat of default.

Despite these concerns, Japan’s currency continued to strengthen, reaching a 15-year high against the U.S. dollar, dampening demand for Japanese exports. In response, as the reporting period came to a close, the Japanese government was considering options to weaken the yen by intervening in the market. Still, the strong yen has had its advantages, elevating Japan’s buying power in other countries. Through August 2010, Japanese corporations have already spent more money acquiring foreign companies than in all of 2009 with major acquisitions having taken place in telecommunications, convenience stores and e-commerce.

However, the Japanese government, which last intervened in 2004, faced resistance from the U.S. and Europe, because a weaker Japanese currency translates into a stronger dollar and euro, which in turn could dampen U.S. and European exports. Political resistance was also felt from within Japan. The Democratic Party of Japan (DPJ), which took power from the long-ruling Liberal Democratic Party, announced plans to cut Japan’s top corporate tax rate, the highest in the industrialized world, from 40% to 25%. However, political concerns make such a move difficult to accomplish. Already, Prime Minister Naoto Kan has had to fend off a challenge to his power from within his own party.

2 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

In this environment, six of the Fund’s top ten holdings as of August 31, 2010 recorded gains, led by Takeda Pharmaceutical Co. Ltd. and The Tokyo Electric Power Co. Inc., both of which posted double-digit gains for the reporting period. Financial companies Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. posted double-digit losses, as did Toyota Motor Corp.

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, 2010 to August 31, 2010.

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 (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During  Perioda (3/1/10 to 8/31/10)
Actual		$1,000.00		$953.60		0.53	%		$2.61
Hypothetical (5% return before expenses)		1,000.00		1,022.50		0.53			2.70

^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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 99.93%
ADVERTISING – 0.22%
Dentsu Inc.		278,800	$	6,358,247
Hakuhodo DY Holdings Inc.		48,790		2,280,585
				8,638,832
AGRICULTURE – 0.66%
Japan Tobacco Inc.		8,364		25,967,545
				25,967,545
AIRLINES – 0.13%
All Nippon Airways Co. Ltd.a		1,396,000		5,053,995
				5,053,995
APPAREL – 0.17%
ASICS Corp.		697,000		6,549,160
				6,549,160
AUTO MANUFACTURERS – 9.09%
Fuji Heavy Industries Ltd.a		1,394,000		7,835,751
Hino Motors Ltd.		697,000		3,071,216
Honda Motor Co. Ltd.		3,066,800		101,496,215
Isuzu Motors Ltd.		2,091,000		6,947,588
Mazda Motor Corp.		2,788,000		6,242,039
Mitsubishi Motors Corp.a		6,970,000		8,881,624
Nissan Motor Co. Ltd.a		4,669,900		35,704,130
Suzuki Motor Corp.		627,300		12,445,895
Toyota Motor Corp.		5,157,800		175,673,550
				358,298,008
AUTO PARTS & EQUIPMENT – 2.23%
Aisin Seiki Co. Ltd.		348,700		9,027,912
Bridgestone Corp.		1,184,900		20,573,826
Denso Corp.		906,100		24,581,348
JTEKT Corp.		348,500		2,859,551
NGK Spark Plug Co. Ltd.		428,000		5,010,408
NHK Spring Co. Ltd.		697,000		5,785,507
NOK Corp.		209,100		3,155,052
Sumitomo Rubber Industries Inc.		348,500		3,162,522
Toyoda Gosei Co. Ltd.		139,400		2,852,081
Toyota Boshoku Corp.		139,400		2,028,663
Toyota Industries Corp.		348,500		8,761,266
				87,798,136

Security	Shares		Value
BANKS – 9.45%
77 Bank Ltd. (The)		697,000	$	3,469,644
Aozora Bank Ltd.		1,394,000		1,875,932
Bank of Kyoto Ltd. (The)		697,000		5,553,090
Bank of Yokohama Ltd. (The)		2,091,000		9,089,139
Chiba Bank Ltd. (The)		1,394,000		7,852,352
Chuo Mitsui Trust Holdings Inc.		2,091,000		7,420,722
Fukuoka Financial Group Inc.		1,400,000		5,602,001
Gunma Bank Ltd. (The)		697,000		3,602,453
Hachijuni Bank Ltd. (The)		697,000		3,785,066
Hiroshima Bank Ltd. (The)		697,000		2,788,996
Hokuhoku Financial Group Inc.		2,793,000		4,889,496
Iyo Bank Ltd. (The)		697,000		5,910,015
Joyo Bank Ltd. (The)		1,394,000		5,677,599
Mitsubishi UFJ Financial Group Inc.		23,907,180		114,169,098
Mizuho Financial Group Inc.		37,707,700		57,928,943
Mizuho Trust & Banking Co. Ltd.a		2,788,000		2,257,759
Nishi-Nippon City Bank Ltd. (The)		1,394,000		3,917,876
Resona Holdings Inc.		1,115,200		11,049,737
Sapporo Hokuyo Holdings Inc.		627,300		2,958,328
Senshu Ikeda Holdings Inc.b		1,184,900		1,679,208
Seven Bank Ltd.		1,394		2,652,866
Shinsei Bank Ltd.a,b		1,394,000		1,062,475
Shizuoka Bank Ltd. (The)		1,394,000		11,670,621
Sumitomo Mitsui Financial Group Inc.		2,509,200		74,735,134
Sumitomo Trust and Banking Co. Ltd. (The)		2,788,000		14,841,444
Suruga Bank Ltd.		697,000		6,092,628
				372,532,622
BEVERAGES – 1.02%
Asahi Breweries Ltd.		697,000		13,156,425
Coca-Cola West Co. Ltd.		139,400		2,364,006
ITO EN Ltd.		139,400		2,284,320
Kirin Holdings Co. Ltd.		1,394,000		19,290,556
Sapporo Holdings Ltd.		697,000		3,262,129
				40,357,436

SCHEDULE OF INVESTMENTS 5

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
BUILDING MATERIALS – 1.57%
Asahi Glass Co. Ltd.		2,091,000	$	20,419,436
Daikin Industries Ltd.		418,200		14,253,762
JS Group Corp.		487,900		9,331,516
Nippon Sheet Glass Co. Ltd.b		1,394,000		3,054,615
Panasonic Electric Works Co. Ltd.		697,000		9,155,543
Rinnai Corp.		69,700		4,166,893
Taiheiyo Cement Corp.a		1,394,000		1,560,510
				61,942,275
CHEMICALS – 3.17%
Asahi Kasei Corp.		2,091,000		10,334,227
Daicel Chemical Industries Ltd.		697,000		4,274,801
Denki Kagaku Kogyo K.K.		697,000		2,805,597
Hitachi Chemical Co. Ltd.		209,100		3,628,185
JSR Corp.		348,500		5,138,061
Kaneka Corp.		697,000		4,166,893
Mitsubishi Chemical Holdings Corp.		2,439,500		11,562,713
Mitsubishi Gas Chemical Co. Inc.		697,000		3,768,465
Mitsui Chemicals Inc.		1,394,000		3,569,251
Nitto Denko Corp.		278,800		8,944,709
Shin-Etsu Chemical Co. Ltd.		766,700		35,518,197
Showa Denko K.K.		2,788,000		4,947,148
Sumitomo Chemical Co. Ltd.		2,788,000		11,454,805
Taiyo Nippon Sanso Corp.		697,000		5,519,889
Tokuyama Corp.		697,000		3,378,338
Tosoh Corp.		697,000		1,743,123
Ube Industries Ltd.		2,091,000		4,432,511
				125,186,913
COMMERCIAL SERVICES – 1.01%
Benesse Holdings Inc.		139,400		6,283,541
Dai Nippon Printing Co. Ltd.		1,394,000		16,219,340
Kamigumi Co. Ltd.		697,000		5,055,055
Nissha Printing Co. Ltd.b		69,700		1,538,098
Toppan Printing Co. Ltd.		1,396,000		10,639,991
				39,736,025
COMPUTERS – 0.98%
Fujitsu Ltd.		3,485,000		24,154,698
Itochu Techno- Solutions Corp.		69,700		2,272,700

Security	Shares		Value
OBIC Co. Ltd.		6,970	$	1,312,322
TDK Corp.		209,100		10,956,770
				38,696,490
COSMETICS & PERSONAL CARE – 1.19%
Kao Corp.		1,045,500		24,316,560
Shiseido Co. Ltd.		627,300		14,104,351
Unicharm Corp.		69,700		8,508,098
				46,929,009
DISTRIBUTION & WHOLESALE – 4.28%
Canon Marketing Japan Inc.		69,700		894,803
Hitachi High- Technologies Corp.		139,400		2,262,739
ITOCHU Corp.		2,788,000		22,776,801
Marubeni Corp.		2,788,000		14,376,611
Mitsubishi Corp.		2,509,200		53,787,781
Mitsui & Co. Ltd.		3,275,900		42,640,928
Sojitz Corp.		2,021,300		3,249,678
Sumitomo Corp.		2,091,000		23,980,386
Toyota Tsusho Corp.		348,500		4,988,651
				168,958,378
DIVERSIFIED FINANCIAL SERVICES – 2.02%
Acom Co. Ltd.		83,648		1,263,136
AEON Credit Service Co. Ltd.		139,470		1,473,263
Credit Saison Co. Ltd.		278,800		3,542,689
Daiwa Securities Group Inc.		2,788,000		11,321,996
Mitsubishi UFJ Lease & Finance Co. Ltd.		111,520		3,970,999
Mizuho Securities Co. Ltd.		697,000		1,560,510
Nomura Holdings Inc.		6,621,500		37,298,672
ORIX Corp.		195,160		14,688,713
SBI Holdings Inc.		36,244		4,501,905
				79,621,883
ELECTRIC – 5.52%
Chubu Electric Power Co. Inc.		1,254,600		33,064,544
Chugoku Electric Power Co. Inc. (The)		557,600		12,198,538
Electric Power Development Co. Ltd.		209,100		6,733,433
Hokkaido Electric Power Co. Inc.		348,500		7,848,202
Hokuriku Electric Power Co.		348,500		8,342,086
Kansai Electric Power Co. Inc. (The)		1,394,000		35,758,914

6 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
Kyushu Electric Power Co. Inc.		697,000	$	16,584,566
Shikoku Electric Power Co. Inc.		348,500		10,803,209
Tohoku Electric Power Co. Inc.		836,400		19,403,444
Tokyo Electric Power Co. Inc. (The)		2,300,100		67,000,650
				217,737,586
ELECTRICAL COMPONENTS & EQUIPMENT – 4.13%
Brother Industries Ltd.		418,200		4,492,276
Casio Computer Co. Ltd.		418,200		2,779,035
Furukawa Electric Co. Ltd.		1,394,000		5,063,356
GS Yuasa Corp.b		697,000		4,108,789
Hitachi Ltd.a		8,364,000		33,866,381
Mitsubishi Electric Corp.		3,485,000		27,806,955
SANYO Electric Co. Ltd.a,b		3,488,000		5,690,794
Sharp Corp.		2,091,000		20,021,007
Stanley Electric Co. Ltd.		280,000		4,321,543
Sumitomo Electric Industries Ltd.		1,394,000		14,990,854
Toshiba Corp.a		7,667,000		36,066,035
Ushio Inc.		209,100		3,536,049
				162,743,074
ELECTRONICS – 5.12%
Advantest Corp.		278,800		5,292,452
Fanuc Ltd.		348,500		37,435,632
Hirose Electric Co. Ltd.		69,700		6,740,074
Hoya Corp.		836,400		18,447,217
IBIDEN Co. Ltd.		209,100		5,040,114
Keyence Corp.		69,751		14,461,890
Kyocera Corp.		278,800		23,706,466
Mabuchi Motor Co. Ltd.		69,700		3,282,881
Minebea Co. Ltd.		697,000		3,212,326
Mitsumi Electric Co. Ltd.		139,400		1,955,617
Murata Manufacturing Co. Ltd.		348,500		16,559,664
NEC Corp.		5,831,000		14,860,474
NGK Insulators Ltd.		697,000		10,566,643
Nippon Electric Glass Co. Ltd.		697,500		7,816,452
Omron Corp.		348,500		7,416,571
Secom Co. Ltd.		418,200		18,203,180
Yaskawa Electric Corp.		697,000		4,830,940
Yokogawa Electric Corp.		348,500		2,170,603
				201,999,196

Security	Shares		Value
ENGINEERING & CONSTRUCTION – 0.72%
JGC Corp.		697,000	$	10,674,550
Kajima Corp.		1,394,000		3,270,430
Obayashi Corp.		1,394,000		5,312,374
Shimizu Corp.		1,394,000		4,947,148
Taisei Corp.		2,091,000		4,133,691
				28,338,193
ENTERTAINMENT – 0.24%
Oriental Land Co. Ltd.		69,700		6,183,935
Toho Co. Ltd.		209,100		3,396,599
				9,580,534
ENVIRONMENTAL CONTROL – 0.14%
Kurita Water Industries Ltd.		209,100		5,510,758
				5,510,758
FOOD – 1.25%
Ajinomoto Co. Inc.		1,394,000		13,679,362
Kikkoman Corp.		697,000		7,096,999
Meiji Holdings Co. Ltd.		139,428		6,500,662
Nippon Meat Packers Inc.		697,000		8,375,289
Nisshin Seifun Group Inc.		350,500		4,482,994
Nissin Foods Holdings Co. Ltd.		139,400		4,965,409
Yakult Honsha Co. Ltd.		139,400		4,166,893
				49,267,608
FOREST PRODUCTS & PAPER – 0.31%
Nippon Paper Group Inc.		210,000		5,456,949
Oji Paper Co. Ltd.		1,394,000		6,607,264
				12,064,213
GAS – 1.00%
Osaka Gas Co. Ltd.		3,485,000		13,156,425
Toho Gas Co. Ltd.		697,000		3,610,754
Tokyo Gas Co. Ltd.		4,879,000		22,776,801
				39,543,980
HAND & MACHINE TOOLS – 1.18%
Fuji Electric Holdings Co. Ltd.		697,000		1,726,521
Makita Corp.		209,100		5,949,028
Nidec Corp.		209,100		18,377,492
SMC Corp.		139,400		17,198,809
THK Co. Ltd.		209,700		3,456,291
				46,708,141

SCHEDULE OF INVESTMENTS 7

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
HEALTH CARE - PRODUCTS – 0.55%
Sysmex Corp.		69,700	$	4,407,610
Terumo Corp.		348,500		17,265,214
				21,672,824
HOME BUILDERS – 0.26%
Sekisui Chemical Co. Ltd.		697,000		4,092,188
Sekisui House Ltd.		697,000		6,042,825
				10,135,013
HOME FURNISHINGS – 2.61%
Panasonic Corp.		3,694,115		46,984,814
Sony Corp.		1,881,900		53,070,611
Yamaha Corp.		278,800		2,862,041
				102,917,466
HOUSEWARES – 0.11%
TOTO Ltd.		697,000		4,424,211
				4,424,211
INSURANCE – 2.71%
Dai-ichi Life Insurance Co. Ltd. (The)		14,742		17,433,376
MS&AD Insurance Group Holdings Inc.		976,740		21,891,446
NKSJ Holdings Inc.a		2,800,800		15,676,742
Sony Financial Holdings Inc.		1,394		4,565,321
T&D Holdings Inc.		522,750		9,948,249
Tokio Marine Holdings Inc.		1,394,000		37,419,031
				106,934,165
INTERNET – 1.91%
Dena Co. Ltd.		139,400		4,180,174
Matsui Securities Co. Ltd.		209,100		1,195,284
Rakuten Inc.		13,940		10,558,342
SoftBank Corp.		1,533,400		44,027,955
Trend Micro Inc.		209,100		5,675,109
Yahoo! Japan Corp.		27,183		9,792,613
				75,429,477
IRON & STEEL – 2.31%
Daido Steel Co. Ltd.		697,000		3,303,632
JFE Holdings Inc.		836,450		24,713,975
Kobe Steel Ltd.		4,879,000		10,110,111
Nippon Steel Corp.		9,758,000		32,189,663
Nisshin Steel Co. Ltd.		1,394,000		2,241,157
Sumitomo Metal Industries Ltd.		6,273,000		14,716,935

Security	Shares		Value
Tokyo Steel Manufacturing Co. Ltd.		209,100	$	2,285,981
Yamato Kogyo Co. Ltd.		69,700		1,576,281
				91,137,735
LEISURE TIME – 0.73%
Namco Bandai Holdings Inc.		348,598		3,312,864
Sankyo Co. Ltd.		139,400		7,055,496
Sega Sammy Holdings Inc.		348,500		5,175,414
Shimano Inc.		139,400		6,839,681
Yamaha Motor Co. Ltd.a		487,900		6,559,951
				28,943,406
MACHINERY – 0.23%
Hitachi Construction Machinery Co. Ltd.		139,400		2,770,735
Japan Steel Works Ltd. (The)		697,000		6,175,634
				8,946,369
MACHINERY - CONSTRUCTION & MINING – 0.90%
Komatsu Ltd.		1,742,500		35,381,237
				35,381,237
MACHINERY - DIVERSIFIED – 0.61%
Amada Co. Ltd.		697,000		4,141,991
Kubota Corp.		2,091,000		16,783,780
Sumitomo Heavy Industries Ltd.		697,000		3,228,927
				24,154,698
MANUFACTURING – 2.19%
FUJIFILM Holdings Corp.		836,400		25,399,786
IHI Corp.		2,091,000		3,710,361
Kawasaki Heavy Industries Ltd.		2,788,000		7,437,323
Konica Minolta Holdings Inc.		1,045,500		9,138,943
Mitsubishi Heavy Industries Ltd.		5,576,000		20,120,615
Nikon Corp.		627,300		10,436,323
Olympus Corp.		418,200		9,990,582
				86,233,933
MEDIA – 0.16%
Fuji Media Holdings Inc.		853		1,157,041
Jupiter Telecommunications Co. Ltd.		4,879		5,200,315
				6,357,356

8 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
METAL FABRICATE & HARDWARE – 0.21%
Maruichi Steel Tube Ltd.		69,700	$	1,328,093
NSK Ltd.		697,000		4,158,592
NTN Corp.		697,000		2,639,586
				8,126,271
MINING – 0.74%
Dowa Holdings Co. Ltd.		729,200		3,768,879
Mitsubishi Materials Corp.a		2,091,000		5,528,189
Mitsui Mining & Smelting Co. Ltd.		1,394,000		3,751,863
Sumitomo Metal Mining Co. Ltd.		1,271,000		16,271,585
				29,320,516
OFFICE & BUSINESS EQUIPMENT – 2.76%
Canon Inc.		2,160,750		88,133,485
Ricoh Co. Ltd.		1,394,000		17,829,653
Seiko Epson Corp.		209,100		2,681,919
				108,645,057
OIL & GAS – 1.42%
Cosmo Oil Co. Ltd.		1,394,000		3,336,835
Idemitsu Kosan Co. Ltd.		69,700		5,494,986
INPEX Corp.		3,485		15,771,109
Japan Petroleum Exploration Co. Ltd.		69,700		2,515,077
JX Holdings Inc.a		4,042,695		20,413,275
Showa Shell Sekiyu K.K.		278,800		2,018,702
TonenGeneral Sekiyu K.K.		697,000		6,300,143
				55,850,127
PACKAGING & CONTAINERS – 0.11%
Toyo Seikan Kaisha Ltd.		278,800		4,439,152
				4,439,152
PHARMACEUTICALS – 5.08%
Alfresa Holdings Corp.		69,700		3,108,569
Astellas Pharma Inc.		836,430		28,916,950
Chugai Pharmaceutical Co. Ltd.		418,200		7,141,822
Daiichi Sankyo Co. Ltd.		1,254,669		25,087,403
Dainippon Sumitomo Pharma Co. Ltd.		278,800		2,314,203
Eisai Co. Ltd.		487,900		17,605,538
Hisamitsu Pharmaceutical Co. Inc.		69,700		2,880,302
Kyowa Hakko Kirin Co. Ltd.		697,000		6,823,080

Security	Shares		Value
Medipal Holdings Corp.		278,800	$	3,472,964
Mitsubishi Tanabe Pharma Corp.		697,000		10,923,568
Ono Pharmaceutical Co. Ltd.		139,400		6,125,831
Santen Pharmaceutical Co. Ltd.		139,400		4,996,951
Shionogi & Co. Ltd.		557,600		9,734,924
Suzuken Co. Ltd.		139,400		4,839,240
Takeda Pharmaceutical Co. Ltd.		1,394,000		64,080,505
Tsumura & Co.		70,500		2,198,035
				200,249,885
REAL ESTATE – 2.50%
AEON Mall Co. Ltd.		209,100		4,796,077
Daito Trust Construction Co. Ltd.		139,400		8,001,763
Daiwa House Industry Co. Ltd.		697,000		6,540,860
Mitsubishi Estate Co. Ltd.		2,091,000		31,450,911
Mitsui Fudosan Co. Ltd.		1,500,000		24,347,982
Nomura Real Estate Holdings Inc.		209,100		2,769,075
NTT Urban Development Corp.		2,788		2,174,753
Sumitomo Realty & Development Co. Ltd.		697,000		13,305,835
Tokyo Tatemono Co. Ltd.		697,000		2,440,372
Tokyu Land Corp.		697,000		2,755,794
				98,583,422
REAL ESTATE INVESTMENT TRUSTS – 0.57%
Japan Prime Realty Investment Corp.		1,394		3,109,399
Japan Real Estate Investment Corp.		697		6,192,236
Japan Retail Fund Investment Corp.		2,788		3,738,583
Nippon Building Fund Inc.		697		5,910,016
Nomura Real Estate Office Fund Inc.		697		3,461,343
				22,411,577
RETAIL – 3.07%
ABC-Mart Inc.		69,700		2,093,407
AEON Co. Ltd.		1,115,200		11,912,998
Citizen Holdings Co. Ltd.		418,200		2,146,531
FamilyMart Co. Ltd.		139,400		5,046,755
Fast Retailing Co. Ltd.		69,700		9,612,076
Isetan Mitsukoshi Holdings Ltd.		697,060		7,346,649

SCHEDULE OF INVESTMENTS 9

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
J. Front Retailing Co. Ltd.		697,000	$	3,353,436
Lawson Inc.		139,400		6,358,247
Marui Group Co. Ltd.		418,200		2,808,917
McDonald’s Holdings Co. (Japan) Ltd.		139,400		3,328,534
Nitori Holdings Co. Ltd.		69,700		6,076,027
Seven & I Holdings Co. Ltd.		1,463,780		33,469,782
Shimamura Co. Ltd.		69,700		6,349,946
Takashimaya Co. Ltd.		697,000		5,279,171
UNY Co. Ltd.		348,500		2,560,730
USS Co. Ltd.		48,790		3,602,453
Yamada Denki Co. Ltd.		153,340		9,550,651
				120,896,310
SEMICONDUCTORS – 0.97%
Elpida Memory Inc.a		348,500		4,187,644
Rohm Co. Ltd.		209,500		12,649,339
Shinko Electric Industries Co. Ltd.		139,400		1,528,967
Sumco Corp.a		209,100		3,558,460
Tokyo Electron Ltd.		348,552		16,354,590
				38,279,000
SHIPBUILDING – 0.08%
Mitsui Engineering & Shipbuilding Co. Ltd.b		1,394,000		2,971,609
				2,971,609
SOFTWARE – 0.25%
Konami Corp.		139,400		2,244,478
Nomura Research Institute Ltd.		139,400		2,710,971
Oracle Corp. Japan		69,700		3,577,552
Square Enix Holdings Co. Ltd.		69,700		1,439,321
				9,972,322
STORAGE & WAREHOUSING – 0.09%
Mitsubishi Logistics Corp.		319,000		3,521,651
				3,521,651
TELECOMMUNICATIONS – 3.17%
KDDI Corp.		5,576		26,893,891
Nippon Telegraph and Telephone Corp.		975,800		42,125,462
NTT Data Corp.		2,091		6,544,180
NTT DoCoMo Inc.		29,274		49,574,405
				125,137,938

Security	Shares		Value
TEXTILES – 0.72%
Kuraray Co. Ltd.		627,300	$	7,104,469
Teijin Ltd.		2,091,000		6,424,652
Toray Industries Inc.		2,788,000		14,741,836
				28,270,957
TOYS, GAMES & HOBBIES – 1.48%
Nintendo Co. Ltd.		209,100		58,220,293
				58,220,293
TRANSPORTATION – 4.59%
Central Japan Railway Co.		2,788		22,511,183
East Japan Railway Co.		627,300		40,639,657
Hankyu Hanshin Holdings Inc.		2,096,800		9,638,738
Kawasaki Kisen Kaisha Ltd.a		1,394,000		5,196,165
Keihin Electric Express Railway Co. Ltd.		701,000		7,112,683
Keio Corp.		1,394,000		9,578,873
Kintetsu Corp.b		3,489,000		11,675,706
Mitsui O.S.K. Lines Ltd.		2,091,000		13,148,124
Nippon Express Co. Ltd.		1,394,000		4,880,743
Nippon Yusen K.K.		2,788,000		10,757,556
Odakyu Electric Railway Co. Ltd.		697,000		6,441,253
Tobu Railway Co. Ltd.		1,394,000		7,968,560
Tokyu Corp.		2,091,000		9,562,273
West Japan Railway Co.		3,485		12,948,910
Yamato Holdings Co. Ltd.		766,700		9,021,074
				181,081,498
VENTURE CAPITAL – 0.04%
JAFCO Co. Ltd.		69,700		1,549,719
				1,549,719
TOTAL COMMON STOCKS
(Cost: $5,498,884,784)				3,939,955,184
SHORT-TERM INVESTMENTS – 0.63%
MONEY MARKET FUNDS – 0.63%
BlackRock Cash Funds: Institutional, SL Agency Shares
0.31%c,d,e		20,623,233		20,623,233
BlackRock Cash Funds: Prime, SL Agency Shares
0.30%c,d,e		4,007,516		4,007,516

10 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI JAPAN INDEX FUND

August 31, 2010

Security	Shares		Value
BlackRock Cash Funds: Treasury, SL Agency Shares
0.13%c,d		284,986	$	284,986
				24,915,735
TOTAL SHORT-TERM INVESTMENTS
(Cost: $24,915,735)				24,915,735
TOTAL INVESTMENTS IN SECURITIES – 100.56%
(Cost: $5,523,800,519)				3,964,870,919
Other Assets, Less Liabilities – (0.56)%				(22,102,248)
NET ASSETS – 100.00%			$	3,942,768,671

^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, 2010

	iShares MSCI Japan Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	5,498,884,784
Affiliated issuers (Note 2)		24,915,735
Total cost of investments	$	5,523,800,519
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	3,939,955,184
Affiliated issuers (Note 2)		24,915,735
Total fair value of investments		3,964,870,919
Foreign currency, at valueb		2,935,551
Receivables:
Dividends and interest		3,032,317
Total Assets		3,970,838,787
LIABILITIES
Payables:
Collateral for securities on loan (Note 5)		24,630,749
Capital shares redeemed		1,479,571
Investment advisory fees (Note 2)		1,959,796
Total Liabilities		28,070,116
NET ASSETS	$	3,942,768,671
Net assets consist of:
Paid-in capital	$	6,129,100,268
Undistributed net investment income		3,270,048
Accumulated net realized loss		(630,836,522	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(1,558,765,123	)
NET ASSETS	$	3,942,768,671
Shares outstandingc		418,200,000
Net asset value per share	$	9.43

^a Securities on loan with a value of $23,514,317. See Note 5.

^b Cost of foreign currency: $2,900,257.

^c $0.001 par value, number of shares authorized: 2,124,600,000.

See notes to financial statements.

12 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statement of Operations

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Japan Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	87,827,993
Interest from affiliated issuers (Note 2)		1,740
Securities lending income from affiliated issuers (Note 2)		616,643
Total investment income		88,446,376
EXPENSES
Investment advisory fees (Note 2)		27,202,065
Total expenses		27,202,065
Net investment income		61,244,311
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(210,579,340	)
In-kind redemptions		159,125,973
Foreign currency transactions		3,027,167
Net realized loss		(48,426,200	)
Net change in unrealized appreciation (depreciation) on:
Investments		(368,909,528	)
Translation of assets and liabilities in foreign currencies		1,361
Net change in unrealized appreciation (depreciation)		(368,908,167	)
Net realized and unrealized loss		(417,334,367	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(356,090,056	)

^a Net of foreign withholding tax of $6,589,966.

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, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	61,244,311		$	78,031,066
Net realized loss		(48,426,200	)		(471,304,985	)
Net change in unrealized appreciation (depreciation)		(368,908,167	)		(579,533,927	)
Net decrease in net assets resulting from operations		(356,090,056	)		(972,807,846	)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(77,025,449	)		(73,264,843	)
Total distributions to shareholders		(77,025,449	)		(73,264,843	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		1,380,264,536			2,197,765,511
Cost of shares redeemed		(3,168,550,601	)		(2,487,058,899	)
Net decrease in net assets from capital share transactions		(1,788,286,065	)		(289,293,388	)
DECREASE IN NET ASSETS		(2,221,401,570	)		(1,335,366,077	)
NET ASSETS
Beginning of year		6,164,170,241			7,499,536,318
End of year	$	3,942,768,671		$	6,164,170,241
Undistributed net investment income included in net assets at end of year	$	3,270,048		$	11,285,164
SHARES ISSUED AND REDEEMED
Shares sold		137,400,000			239,400,000
Shares redeemed		(321,000,000	)		(283,200,000	)
Net decrease in shares outstanding		(183,600,000	)		(43,800,000	)

See notes to financial statements.

14 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008			Year ended Aug. 31, 2007			Year ended Aug. 31, 2006
Net asset value, beginning of year	$	10.24		$	11.62		$	14.07		$	13.80		$	10.99
Income from investment operations:
Net investment incomea		0.12			0.13			0.14			0.10			0.06
Net realized and unrealized gain (loss)b		(0.77	)		(1.39	)		(2.39	)		0.27			2.81
Total from investment operations		(0.65	)		(1.26	)		(2.25	)		0.37			2.87
Less distributions from:
Net investment income		(0.16	)		(0.12	)		(0.20	)		(0.10	)		(0.06	)
Total distributions		(0.16	)		(0.12	)		(0.20	)		(0.10	)		(0.06	)
Net asset value, end of year	$	9.43		$	10.24		$	11.62		$	14.07		$	13.80
Total return		(6.41	)%		(10.68	)%		(16.13	)%		2.68	%		26.10	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	3,942,769		$	6,164,170		$	7,499,536		$	11,780,006		$	13,724,590
Ratio of expenses to average net assets		0.54	%		0.56	%		0.52	%		0.52	%		0.54	%
Ratio of net investment income to average net assets		1.20	%		1.46	%		1.11	%		0.68	%		0.48	%
Portfolio turnover ratec		5	%		4	%		4	%		3	%		8	%

^a Based on average shares outstanding throughout each period.

^b The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 Japanese equity market, as measured by the MSCI Japan Index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

The Fund invests in the securities of non-U.S. issuers of a single country. This 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”) using 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 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 2010 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 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 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

NOTES TO FINANCIAL STATEMENTS 17

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010, 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. 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, generally are declared and paid at least semi-annually by the Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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, 2010, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $3,436,133, unrealized depreciation of $1,610,956,895, and capital and other losses of $578,810,835, for net accumulated losses of $2,186,331,597.

For the years ended August 31, 2010 and August 31, 2009, 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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

FEDERAL INCOME TAXES

The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its 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, 2010.

From November 1, 2009 to August 31, 2010, the Fund incurred net realized capital losses of $130,604,505. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2011.

As of August 31, 2010, the tax year-end of the Fund, the Fund had tax basis net capital loss carryforwards of $3,621,148, $5,594,562, $8,733,802, $68,122,871, $27,817,841, $44,443,527, $116,295,478 and $173,577,101 expiring in 2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2018, 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, 2010, the cost of investments for federal income tax purposes was $5,575,992,291. Net unrealized depreciation was $1,611,121,372, of which $63,042,191 represented gross unrealized appreciation on securities and $1,674,163,563 represented gross unrealized depreciation on securities.

Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.

Under the 1940 Act, upon completion of the Transaction on December 1, 2009, the Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Fund approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Fund remained the same after the Transaction.

NOTES TO FINANCIAL STATEMENTS 19

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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

For its investment advisory services to the Fund, BFA 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

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA, the Fund’s investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Fund of $404,958.

The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the Statement of Operations.

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 aggregated $272,995,182 and $304,640,625, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2010 aggregated $1,365,072,841 and $3,129,948,959, 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 Bank and Trust Company, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.

20 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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 current 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 value of the securities on loan. The risks 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 BFA or its affiliates; such reinvestments are subject to investment risk.

As of August 31, 2010, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 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, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

NOTES TO FINANCIAL STATEMENTS 21

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, 2010, 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 22, 2010

22 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Tax Information (Unaudited)

iSHARES^® , INC.

For the fiscal year ended August 31, 2010, the Fund earned foreign source income of $94,417,959 and paid foreign taxes of $6,486,978 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 $77,025,449 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, 2010.

In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

TAX INFORMATION 23

Supplemental Information (Unaudited)

iSHARES^® , INC.

Premium/Discount Information

The table that follows presents information about the differences between the daily market price on secondary markets for shares of the Fund and the Fund’s 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 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 fair 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.

24 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited) (Continued)

iSHARES^® , INC.

iShares MSCI Japan Index Fund

Period Covered: January 1, 2005 through June 30, 2010

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%		14		1.01
Greater than 2.0% and Less than 2.5%		19		1.37
Greater than 1.5% and Less than 2.0%		45		3.26
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%		591		42.79
Less than –0.5% and Greater than –1.0%		146		10.56
Less than –1.0% and Greater than –1.5%		87		6.30
Less than –1.5% and Greater than –2.0%		54		3.91
Less than –2.0% and Greater than –2.5%		26		1.88
Less than –2.5% and Greater than –3.0%		17		1.23
Less than –3.0% and Greater than –3.5%		11		0.80
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	%

SUPPLEMENTAL INFORMATION 25

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 BFA 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, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. 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 the Past 5 Years	Other Directorships Held
Robert S. Kapitoa (53)	Director (since 2009).	President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007).
Michael Lathamb (45)	Director (since 2010); President (since 2007).	Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007).	Trustee of iShares Trust (since 2010).

^a Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc.

^b Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates.

26 2010 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 the Past 5 Years	Other Directorships Held
George G.C. Parker (71)	Director (since 2000); Independent Chairman (since 2010).	Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994).	Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007).
Darrell Duffie (56)	Director (since 2008).	Professor, Stanford University: Graduate School of Business (since 1984).	Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008).
Cecilia H. Herbert (61)	Director (since 2005).	Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005).	Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009).
Charles A. Hurty (67)	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002).
John E. Kerrigan (55)	Director (since 2005).	Chief Investment Officer, Santa Clara University (since 2002).	Trustee of iShares Trust (since 2005).
John E. Martinez (49)	Director (since 2003).	Director of Real Estate Equity Exchange (since 2005).	Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007).

DIRECTOR AND OFFICER INFORMATION 27

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Independent Directors (Continued)

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held
Robert H. Silver (55)	Director (since 2007).	President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009).	Trustee of iShares Trust (since 2007).

28 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Officers

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years
Geoffrey D. Flynn (53)	Executive Vice President and Chief Operating Officer (since 2008).	Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002-2007).
Eilleen M. Clavere (58)	Secretary (since 2007).	Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005).
Jack Gee (51)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009).
Patrick O’Connor (43)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006).
Amy Schioldager (48)	Executive Vice President (since 2007).	Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).
Ira P. Shapiro (47)	Vice President and Chief Legal Officer (since 2007).	Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009).
Lee Sterne (45)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007).
Matt Tucker (38)	Vice President (since 2007).	Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005).

DIRECTOR AND OFFICER INFORMATION 29

Notes:

30 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 31

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 Fund
iShares Dow Jones U.S.	IYY
iShares MSCI Domestic Index Fund
iShares MSCI USA	EUSA
iShares MSCI Socially Responsible Index Funds
iShares MSCI KLD 400 Social	DSI
iShares MSCI USA ESG 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

32 2010 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 Brazil Small Cap	EWZS
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI China Small Cap	ECNS
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares S&P India Nifty 50	INDY
iShares MSCI Indonesia Investable Market	EIDO
iShares MSCI Ireland Capped Investable Market	EIRL
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 New Zealand Investable Market	ENZL
iShares MSCI All Peru Capped	EPU
iShares MSCI Philippines Investable Market	EPHE
iShares MSCI Poland Investable Market	EPOL
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 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 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 International/Global Sector Index Funds
iShares MSCI ACWI ex US Consumer Discretionary Sector	AXDI
iShares MSCI ACWI ex US Consumer Staples Sector	AXSL
iShares MSCI ACWI ex US Energy Sector	AXEN
iShares MSCI ACWI ex US Financials Sector	AXFN
iShares MSCI ACWI ex US Health Care Sector	AXHE
iShares MSCI ACWI ex US Industrials Sector	AXID
iShares MSCI ACWI ex US Information Technology Sector	AXIT
iShares MSCI ACWI ex US Materials Sector	AXMT
iShares MSCI ACWI ex US Telecommunication Services Sector	AXTE
iShares MSCI ACWI ex US Utilities Sector	AXUT
iShares MSCI Emerging Markets Financials Sector	EMFN
iShares MSCI Emerging Markets Materials Sector	EMMT
iShares MSCI Europe Financials Sector	EUFN
iShares MSCI Far East Financials Sector	FEFN
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 International/Global Theme Based and Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV
iShares S&P Emerging Markets Infrastructure	EMIF
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 10+ Year Government/Credit	GLJ
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

THE iSHARES FAMILY OF FUNDS 33

The iShares^® Family of Funds (Continued)

iShares U.S. Credit Bond Funds	Trading Symbol
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares 10+ Year Credit	CLY
iShares iBoxx $ High Yield Corporate	HYG

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 2012 S&P AMT-Free Municipal Series	MUAA
iShares 2013 S&P AMT-Free Municipal Series	MUAB
iShares 2014 S&P AMT-Free Municipal Series	MUAC
iShares 2015 S&P AMT-Free Municipal Series	MUAD
iShares 2016 S&P AMT-Free Municipal Series	MUAE
iShares 2017 S&P AMT-Free Municipal Series	MUAF
iShares U.S. Securitized Bond Fund
iShares Barclays MBS	MBB
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

The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. The 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^®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed 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.

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 2010 Annual Report.

iS-3594-1010

34 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Dear iShares Shareholder:

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

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

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

1.   Go to www.icsdelivery.com.

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

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

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

Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

For more information:

WWW.iSHARES.COM

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

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

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by SEI Investments Distribution Co. (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 BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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

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

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.

©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.

iS-AR-81-0810

2010 ANNUAL REPORT TO SHAREHOLDERS

iSHARES^® MSCI SERIES

AUGUST 31, 2010

»  Would you prefer to receive materials like this electronically?

See inside back cover for details.

iShares MSCI Emerging Markets Index Fund  |  EEM  |  NYSE Arca

Table of Contents

Management’s Discussion of Fund Performance	1
Shareholder Expenses (Unaudited)	4
Schedule of Investments	5
Financial Statements	20
Financial Highlights	23
Notes to Financial Statements	24
Report of Independent Registered Public Accounting Firm	31
Tax Information (Unaudited)	32
Supplemental Information (Unaudited)	33
Director and Officer Information (Unaudited)	34
The iShares Family of Funds	40

Management’s Discussion of Fund Performance

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

Performance as of August 31, 2010

Average Annual Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.97%	15.05%	18.02%	11.02%	10.87%	12.38%	20.44%	20.37%	20.76%
Cumulative Total Returns
Year Ended 8/31/10			Five Years Ended 8/31/10			Inception to 8/31/10
NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
14.97%	15.05%	18.02%	68.66%	67.51%	79.22%	296.14%	294.59%	303.73%

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 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 calculated 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 DISCUSSION OF FUND PERFORMANCE 1

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

PORTFOLIO ALLOCATION As of 8/31/10
Sector/Investment Type	Percentage of Net Assets
Financial		24.70	%
Energy		13.39
Basic Materials		12.67
Communications		10.67
Technology		8.99
Industrial		8.25
Consumer Cyclical		7.40
Consumer Non-Cyclical		6.72
Utilities		3.51
Diversified		2.77
Exchange-Traded Funds		0.44
Short-Term and Other Net Assets		0.49
TOTAL		100.00	%

TEN LARGEST FUND HOLDINGS As of 8/31/10
Security	Percentage of Net Assets
Samsung Electronics Co. Ltd. SP GDR (South Korea)		2.39	%
China Mobile Ltd. (China)		1.87
OAO Gazprom SP ADR (Russia)		1.65
Petroleo Brasileiro SA Preferred SP ADR (Brazil)		1.59
Itau Unibanco Holding SA SP ADR (Brazil)		1.51
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR (Taiwan)		1.50
Vale SA Class A Preferred SP ADR (Brazil)		1.50
HDFC Bank Ltd. SP ADR (India)		1.43
Banco Bradesco SA Preferred SP ADR (Brazil)		1.39
Infosys Technologies Ltd. SP ADR (India)		1.33
TOTAL		16.16	%

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, 2010 (the “reporting period”), the total return for the Fund was 14.97%, while the total return for the Index was 18.02%.

Stock markets around the world delivered mixed results during the reporting period. Underlying the uneven stock market performance was an environment of generally improving economic conditions and rising investor confidence, followed by investor uncertainty and market declines. As the reporting period began, the global financial crisis abated, while expansive monetary and fiscal measures employed by governments around the world appeared to help the global economic recovery gain momentum. However, as the reporting period progressed, stock markets reversed course. Emerging market economies performed well in comparison to their developed market counterparts. While many emerging market economies posted GDP growth approaching – and sometimes exceeding – 10%, developed economies such as the U.S., Europe and Japan struggled to reach 3%.

Taiwan posted 13.7% and 12.5% GDP growth in the first and second quarters of 2010, respectively, versus the year ago periods. China also reached double-digit GDP growth, while South Korea’s economy saw GDP advance between 7% and 8% during the first half of 2010, as government officials declared that the country’s economy had recovered to pre-recession levels. Reflecting this economic buoyancy, Asia currencies generally strengthened against the U.S. dollar. For example, the yuan, controlled by the People’s Bank of China, has continued to increase in value since the central bank ended fixed exchange rates in June. Meanwhile, China has strengthened its commercial ties to South Africa, signing trade agreements in mining, finance and nuclear energy during the reporting period. China’s booming demand for natural resources has elevated South Africa’s economy.

In contrast, India, among the earliest countries to emerge from the global economic downturn, posted 8.8% economic growth in the second quarter of 2010, its best performance in more than two years. However, the Reserve Bank of India raised interest rates four times

2 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Management’s Discussion of Fund Performance (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

in an attempt to control inflation, which hovered around 10% during the period. Another country that has struggled with inflation is Russia, particularly due to a summer heat wave that sparked wildfires which destroyed crops and led to food shortages. Russia’s central bank left interest rates at 7.75% for the third month in a row, after being reduced 14 times to aid Russia’s economy. Brazil, Latin America’s largest economy, posted an 8.8% growth in GDP during the second quarter of 2010 versus the year ago period. However, the central bank kept short-term interest rates at 10.75% to fight rising prices.

In this environment, nine of the Fund’s top ten holdings as of August 31, 2010 recorded gains for the reporting period, led by Brazilian mining company Vale SA, technology service firm Infosys Technologies Ltd. and HDFC Bank Ltd., both of which are based in India. Only one top ten holding, global energy firm Petroleo Brasileiro SA from Brazil, posted a loss.

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, 2010 to August 31, 2010.

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 (3/1/10)		Ending Account Value (8/31/10)		Annualized Expense Ratio			Expenses Paid During Perioda (3/1/10 to 8/31/10)
Actual	$	1,000.00	$	1,037.80		0.70	%	$	3.60
Hypothetical (5% return before expenses)		1,000.00		1,021.70		0.70			3.57

^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 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
COMMON STOCKS – 91.38%
BRAZIL – 8.28%
ALL – America Latina Logistica SA		4,428,500	$	40,877,685
B2W Companhia Global do Varejo		482,500		7,702,614
Banco do Brasil SA		7,076,474		114,905,202
Banco Santander (Brasil) SA		732,900		9,318,207
Banco Santander (Brasil) SA SP ADR		6,098,131		76,714,488
BM&F Bovespa SA		23,647,100		172,572,126
BR Malls Participacoes SA		956,300		14,993,728
BRF – Brasil Foods SA		2,681,700		36,006,748
BRF – Brasil Foods SA SP ADRa		3,030,386		40,879,907
Brookfield Incorporacoes SA		1,636,200		8,451,764
Centrais Eletricas Brasileiras SA		680,600		8,292,381
Centrais Eletricas Brasileiras SA SP ADR		1,246,589		15,407,840
Cielo SA		4,554,300		38,948,944
Companhia de Concessoes Rodoviarias		1,495,200		34,354,776
Companhia de Saneamento Basico do Estado de Sao Paulo SP ADRa		756,045		28,729,710
Companhia Siderurgica Nacional SA SP ADR		10,515,986		162,471,984
Cosan SA Industria e Comercio		693,200		9,046,636
CPFL Energia SA		63,600		1,470,384
CPFL Energia SA SP ADRa		383,955		27,368,312
Cyrela Brazil Realty SA		3,311,300		41,213,078
Duratex SA		1,182,600		12,001,642
EDP Energias do Brasil SA		297,800		6,365,359
Empresa Brasileira de Aeronautica SA SP ADR		4,400,122		109,079,024
Fibria Celulose SA SP ADRa,b		4,481,265		68,384,104

Security	Shares		Value
Gafisa SA SP ADRa		2,433,046	$	33,503,043
Hypermarcas SAb		2,012,000		26,533,003
Itau Unibanco Holding SA SP ADR		27,855,122		600,834,982
JBS SA		6,351,965		26,980,324
LLX Logistica SAb		1,599,300		8,115,266
Localiza Rent A Car SA		408,100		5,700,533
Lojas Renner SA		1,242,000		40,150,175
Marfrig Alimentos SA		838,800		8,129,992
MMX Mineracao e Metalicos SAb		1,983,500		14,192,494
MRV Engenharia e Participacoes SA		2,150,200		17,959,708
Multiplan Empreendimentos Imobiliarios SA		196,900		3,738,288
Natura Cosmeticos SA		1,117,100		26,941,093
OGX Petroleo e Gas Participacoes SAb		16,095,100		191,605,056
PDG Realty SA Empreendimentos e Participacoes		5,650,300		58,115,346
Petroleo Brasileiro SA SP ADR		15,569,961		519,258,199
Porto Seguro SA		268,600		3,277,197
Redecard SA		2,558,400		35,007,611
Rossi Residencial SA		1,489,300		12,872,538
Souza Cruz SA		315,800		14,575,108
SulAmerica SA		264,200		2,583,329
TAM SA SP ADRa		1,222,513		24,107,956
Tele Norte Leste Participacoes SA		266,300		4,623,185
TIM Participacoes SA SP ADR		285,106		8,151,181
Tractebel Energia SA		455,100		6,027,522
Usinas Siderurgicas de Minas Gerais SA		578,100		15,207,693
Vale SA SP ADR		17,706,203		473,640,930
Vivo Participacoes SA SP ADR		985,106		23,642,544
				3,291,030,939

SCHEDULE OF INVESTMENTS 5

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
CHILE – 1.94%
AES Gener SA		1,091,034	$	603,417
Banco Santander (Chile) SA SP ADR		2,874,974		248,167,756
CAP SA		35,280		1,396,741
Cencosud SA		561,267		3,366,597
Colbun SA		2,720,480		757,177
Compania Cervecerias Unidas SA		49,588		577,121
Empresa Nacional de Electricidad SA		1,099,521		1,892,143
Empresa Nacional de Electricidad SA SP ADR		52,463		2,692,926
Empresa Nacional de Telecomunicaciones SA		49,473		795,269
Empresas CMPC SA		13,635		624,120
Empresas Copec SA		101,504		1,766,955
Enersis SA SP ADR		8,795,957		193,511,054
LAN Airlines SA SP ADRa		4,624,407		123,656,643
S.A.C.I. Falabella SA		264,600		2,202,841
Sociedad Quimica y Minera de Chile SA Series B SP ADR		4,456,610		190,074,416
Vina Concha y Toro SA		134,064		312,083
				772,397,259
CHINA – 18.45%
Agile Property Holdings Ltd.a		44,160,000		51,605,631
Agricultural Bank of China Ltd. Class Hb		164,494,000		74,438,373
Air China Ltd. Class Hb		49,862,000		53,204,936
Alibaba.com Ltd.a		13,843,000		27,015,072
Aluminum Corp. of China Ltd. Class Ha,b		45,974,000		36,526,235
Angang New Steel Co. Ltd. Class Ha		28,389,320		40,146,882
Anhui Conch Cement Co. Ltd. Class H		8,424,000		29,944,540
Anta Sports Products Ltd.a		11,196,402		22,944,096
Bank of China Ltd. Class H		683,665,000		343,656,252

Security	Shares		Value
Bank of Communications Co. Ltd. Class Ha		94,858,000	$	100,607,894
BBMG Corp. Class H		10,153,000		13,052,645
Beijing Capital International Airport Co. Ltd. Class H		30,646,000		14,813,777
Beijing Enterprises Holdings Ltd.		8,010,000		56,533,907
Belle International Holdings Ltd.		41,147,000		71,835,992
BYD Co. Ltd. Class Ha		4,988,500		28,731,092
Chaoda Modern Agriculture (Holdings) Ltd.a		14,643,942		10,919,183
China Agri-Industries Holdings Ltd.a		28,390,000		34,527,145
China BlueChemical Ltd. Class H		4,722,000		3,071,713
China CITIC Bank Class H		27,501,000		17,854,348
China Coal Energy Co. Class H		44,176,000		62,244,515
China Communications Construction Co. Ltd. Class H		53,788,000		47,574,910
China Communications Services Corp. Ltd. Class H		828,000		413,015
China Construction Bank Corp. Class H		539,907,000		445,613,284
China COSCO Holdings Co. Ltd. Class Ha,b		44,140,000		45,907,643
China Dongxiang (Group) Co. Ltd.		36,411,000		19,192,016
China Everbright Ltd.		39,206,000		86,491,606
China High Speed Transmission Equipment Group Co. Ltd.		12,159,000		27,105,105
China Life Insurance Co. Ltd.		8,494,726		6,894,639
China Life Insurance Co. Ltd. Class H		95,526,000		364,738,986

6 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
China Longyuan Power Group Corp. Ltd. Class Ha,b		10,012,000	$	10,104,030
China Mengniu Dairy Co. Ltd.		16,095,000		44,487,047
China Merchants Bank Co. Ltd. Class Ha		45,324,542		116,829,346
China Merchants Holdings (International) Co. Ltd.		15,482,000		52,246,899
China Minsheng Banking Corp. Ltd. Class H		23,994,200		21,808,703
China Mobile Ltd.		73,119,500		744,026,281
China National Building Material Co. Ltd. Class Ha		24,320,000		44,459,780
China Oilfield Services Ltd. Class H		6,898,000		8,823,693
China Overseas Land & Investment Ltd.		55,718,960		118,909,139
China Pacific Insurance (Group) Co. Ltd. Class H		2,474,200		8,890,389
China Petroleum & Chemical Corp. Class H		238,098,000		188,556,106
China Railway Construction Corp. Ltd. Class H		22,443,500		28,622,423
China Railway Group Ltd. Class H		39,349,000		28,632,171
China Resources Enterprise Ltd.a		26,864,000		111,897,358
China Resources Land Ltd.a		52,820,000		101,042,823
China Resources Power Holdings Co. Ltd.		21,954,999		48,434,503
China Shenhua Energy Co. Ltd. Class H		40,611,500		148,015,173
China Shineway Pharmaceutical Group Ltd.		2,425,000		6,359,838
China Shipping Container Lines Co. Ltd. Class Ha,b		98,184,000		33,828,260

Security	Shares		Value
China Shipping Development Co. Ltd. Class Ha		34,504,000	$	45,688,912
China Taiping Insurance Holdings Co. Ltd.b		3,619,200		11,236,573
China Telecom Corp. Ltd. Class H		106,182,000		51,326,647
China Travel International Investment Hong Kong Ltd.a,b		172,716,951		37,525,442
China Unicom (Hong Kong) Ltd.		55,108,000		75,947,517
China Yurun Food Group Ltd.		13,846,000		50,285,981
China Zhongwang Holdings Ltd.a		676,800		400,242
CITIC Pacific Ltd.		26,853,000		54,890,108
CNOOC Ltd.		220,839,000		381,574,361
CNPC (Hong Kong) Ltd.		22,790,000		28,214,656
COSCO Pacific Ltd.		11,854,000		15,605,189
Country Garden Holdings Co. Ltd.a		13,690,000		4,100,752
CSR Corp. Ltd.		12,381,000		10,425,603
Datang International Power Generation Co. Ltd. Class Ha		30,658,000		12,139,441
Dongfang Electric Corp. Ltd. Class H		15,588,000		56,812,985
Dongfeng Motor Group Co. Ltd. Class H		40,464,000		62,840,537
Fosun International Ltd.		12,937,500		9,879,636
Franshion Properties (China) Ltd.		14,444,000		4,159,486
Fushan International Energy Group Ltd.a		8,522,000		4,459,027
Geely Automobile Holdings Ltd.a		51,960,000		17,033,875
Golden Eagle Retail Group Ltd.		8,187,000		21,576,589
GOME Electrical Appliances Holdings Ltd.b		102,913,200		31,223,906

SCHEDULE OF INVESTMENTS 7

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Greentown China Holdings Ltd.		9,331,000	$	10,004,569
Guangdong Investment Ltd.a		29,852,110		14,545,156
Guangzhou Automobile Group Co. Ltd. Class Ha,b		36,212,742		42,458,084
Guangzhou R&F Properties Co. Ltd. Class Ha		19,960,800		28,946,175
Hengan International Group Co. Ltd.		9,008,000		79,848,506
Hidili Industry International Development Ltd.		1,470,000		1,203,818
Hopson Development Holdings Ltd.a		838,000		978,214
Huabao International Holdings Ltd.		13,703,000		20,012,352
Huaneng Power International Inc. Class H		42,334,000		25,416,183
Industrial and Commercial Bank of China Ltd. Class H		626,104,000		454,777,603
Jiangsu Expressway Co. Ltd. Class H		11,644,000		11,361,826
Jiangxi Copper Co. Ltd. Class Ha		41,922,000		90,974,270
Kingboard Chemical Holdings Co. Ltd.		3,468,000		16,384,779
Lee & Man Paper Manufacturing Ltd.		4,276,000		2,968,490
Lenovo Group Ltd.a		96,044,000		55,069,260
Li Ning Co. Ltd.a		8,510,000		27,405,734
Longfor Properties Co. Ltd.		14,637,500		16,371,569
Maanshan Iron & Steel Co. Ltd. Class Ha		60,178,000		30,713,719
Metallurgical Corp. of China Ltd. Class Hb		3,765,000		1,636,010
Nine Dragons Paper (Holdings) Ltd.a		20,310,000		27,885,942

Security	Shares		Value
Parkson Retail Group Ltd.a		9,331,000	$	15,498,685
PetroChina Co. Ltd. Class H		252,992,000		274,506,971
PICC Property and Casualty Co. Ltd. Class Ha,b		26,706,000		30,556,457
Ping An Insurance (Group) Co. of China Ltd. Class Hc		20,547,000		169,981,288
Poly (Hong Kong) Investments Ltd.a		22,556,458		24,068,728
Renhe Commercial Holdings Co. Ltd.		126,758,000		25,095,754
Semiconductor Manufacturing International Corp.b		10,815,000		688,234
Shandong Weigao Group Medical Polymer Co. Ltd. Class H		2,176,000		10,854,124
Shanghai Electric Group Co. Ltd. Class Hb		1,330,000		589,895
Shanghai Industrial Holdings Ltd.		8,193,000		39,919,612
Shimao Property Holdings Ltd.a		30,142,000		48,903,007
Shui On Land Ltd.a		62,803,450		27,613,010
Sinofert Holdings Ltd.a,b		63,064,000		32,835,277
Sino-Ocean Land Holdings Ltd.a		62,165,000		43,555,859
Sinopec Shanghai Petrochemical Co. Ltd. Class Ha		46,042,000		17,875,791
Sinopharm Group Co. Ltd. Class H		11,396,400		43,440,671
Sinotruk (Hong Kong) Ltd.a		3,519,500		3,325,619
Skyworth Digital Holdings Ltd.a		4,894,000		2,541,847
Soho China Ltd.a		20,221,500		12,946,335
Tencent Holdings Ltd.		11,310,400		206,912,634
Tingyi (Cayman Islands) Holding Corp.		20,890,000		52,799,049

8 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Tsingtao Brewery Co. Ltd. Class H		3,782,000	$	19,886,071
Want Want China Holdings Ltd.		62,712,000		50,711,382
Weichai Power Co. Ltd. Class H		444,000		3,693,103
Wumart Stores Inc. Class H		1,259,000		2,628,548
XinAo Gas Holdings Ltd.		8,882,000		23,807,894
Yanzhou Coal Mining Co. Ltd. Class H		42,174,800		86,534,654
Zhejiang Expressway Co. Ltd. Class H		42,174,000		37,465,108
Zijin Mining Group Co. Ltd. Class H		90,208,000		62,392,369
ZTE Corp. Class Ha		4,277,200		15,891,378
				7,337,408,472
COLOMBIA – 0.55%
Bancolombia SA SP ADR		3,388,156		217,621,260
				217,621,260
CZECH REPUBLIC – 0.81%
Central European Media Enterprises Ltd. Class Ab		23,000		489,892
CEZ AS		5,312,039		223,289,995
Komercni Banka AS		508,200		98,333,188
Telefonica O2 Czech Republic AS		76,499		1,723,239
				323,836,314
EGYPT – 0.45%
Orascom Construction Industries Co. SP GDRa		2,830,732		123,702,988
Orascom Telecom Holding SAE SP GDRa,b,d		11,907,609		55,132,230
				178,835,218
HUNGARY – 0.84%
Magyar Telekom Telecommunications PLC		4,679,031		14,240,891
MOL Hungarian Oil and Gas Nyrtb		1,021,061		94,855,776
OTP Bank Nyrta,b		4,223,452		89,494,403

Security	Shares		Value
Richter Gedeon Nyrt		657,282	$	136,369,542
				334,960,612
INDIA – 6.93%
Axis Bank Ltd. SP GDRd		1,424,039		40,869,919
Dr. Reddy’s Laboratories Ltd. SP ADRa		2,754,086		79,345,218
HDFC Bank Ltd. SP ADRa		3,560,024		568,891,835
ICICI Bank Ltd. SP ADR		9,548,928		394,466,216
Infosys Technologies Ltd. SP ADRa		9,263,755		530,720,524
Larsen & Toubro Ltd. SP GDRd		2,530,292		97,416,242
Mahanagar Telephone Nigam Ltd. SP ADRa		1,649,115		4,337,172
Reliance Industries Ltd. SP GDRa,e		11,579,754		452,652,584
Satyam Computer Services Ltd. SP ADRa,b		4,486,828		20,280,463
Sterlite Industries (India) Ltd. SP ADR		8,650,023		111,412,296
Tata Communications Ltd. SP ADRa,b		6,596,019		93,003,868
Tata Motors Ltd. SP ADRa		5,785,644		123,870,638
Wipro Ltd. SP ADRa		18,619,863		238,892,842
				2,756,159,817
INDONESIA – 2.58%
PT Adaro Energy Tbk		116,035,000		24,401,383
PT Aneka Tambang Tbk		237,124,000		54,458,472
PT Astra Agro Lestari Tbk		4,884,500		10,623,179
PT Astra International Tbk		30,303,500		159,650,979
PT Bank Central Asia Tbk		171,729,500		110,241,406
PT Bank Danamon Indonesia Tbk		39,409,487		23,336,000
PT Bank Mandiri Tbk		102,972,500		67,242,695
PT Bank Negara Indonesia (Persero) Tbk		47,379,000		18,222,692
PT Bank Rakyat Indonesia Tbk		87,324,061		89,885,309
PT Bumi Resources Tbk		331,970,500		60,992,920
PT Gudang Garam Tbk		7,101,500		30,968,356
PT Indo Tambangraya Megah Tbk		4,178,500		18,129,186

SCHEDULE OF INVESTMENTS 9

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
PT Indocement Tunggal Prakarsa Tbk		2,650,000	$	5,176,812
PT Indofood Sukses Makmur Tbk		54,478,000		27,434,964
PT Indosat Tbk		2,655,560		1,293,245
PT International Nickel Indonesia Tbk		17,405,500		8,235,585
PT Perusahaan Gas Negara Tbk		179,926,500		79,657,553
PT Semen Gresik (Persero) Tbk		21,199,500		20,413,465
PT Tambang Batubara Bukit Asam Tbk		4,842,500		9,379,496
PT Telekomunikasi Indonesia Tbk		121,970,000		116,772,607
PT Unilever Indonesia Tbk		3,256,000		5,802,059
PT United Tractors Tbk		40,584,150		82,650,621
				1,024,968,984
MALAYSIA – 2.87%
AirAsia Bhdb		24,609,700		13,174,735
Alliance Financial Group Bhd		6,443,600		6,303,667
AMMB Holdings Bhd		30,144,875		54,369,610
Axiata Group Bhdb		29,119,500		41,477,993
Berjaya Corp. Bhd		10,881,600		3,294,145
Berjaya Sports Toto Bhd		15,075,100		19,887,805
British American Tobacco (Malaysia) Bhd		1,449,600		20,832,962
Bursa Malaysia Bhd		6,694,600		15,295,726
CIMB Group Holdings Bhd		34,488,700		85,723,072
DiGi.Com Bhd		1,927,800		15,198,054
Gamuda Bhd		38,679,500		42,646,486
Genting Bhd		29,956,800		90,209,761
Genting Malaysia Bhd		54,256,600		52,213,862
Genting Plantations Bhd		3,981,900		9,250,052
Hong Leong Bank Bhd		1,096,400		3,088,500
Hong Leong Financial Group Bhd		578,900		1,603,059
IJM Corp. Bhd		21,525,020		34,227,124
IOI Corp. Bhd		43,686,720		73,086,143
Kuala Lumpur Kepong Bhd		5,279,300		28,531,755

Security	Shares		Value
Lafarge Malayan Cement Bhd		3,130,100	$	7,460,812
Malayan Banking Bhd		24,853,300		66,446,533
Malaysian Airline System Bhdb		9,862,500		6,756,967
Maxis Communications Bhd		15,895,800		27,251,535
MISC Bhd		6,638,100		18,593,407
MMC Corp. Bhd		12,016,600		9,687,873
Parkson Holdings Bhd		7,486,159		13,120,429
Petronas Dagangan Bhd		1,104,000		3,785,364
Petronas Gas Bhd		2,321,000		7,765,881
PLUS Expressways Bhd		29,601,320		39,617,464
PPB Group Bhd		5,129,100		27,916,138
Public Bank Bhd Foreign		3,616,400		14,036,216
RHB Capital Bhd		3,054,900		6,473,586
Sime Darby Bhd		35,807,673		95,277,176
SP Setia Bhd		11,931,100		16,462,458
Tanjong PLC		2,660,500		18,074,936
Telekom Malaysia Bhd		15,241,100		17,144,204
Tenaga Nasional Bhd		27,990,300		79,025,559
UMW Holdings Bhd		8,219,500		17,286,841
YTL Corp. Bhd		6,996,508		16,409,126
YTL Power International Bhd		30,248,460		21,687,630
				1,140,694,646
MEXICO – 4.26%
Alfa SAB de CV Series A		7,592,000		52,312,474
America Movil SAB de CV Series L		216,119,300		506,076,124
Cemex SAB de CV CPOa,b		96,783,169		75,593,180
Coca-Cola FEMSA SAB de CV Class L		24,400		184,405
Desarrolladora Homex SAB de CVb		1,850,000		8,544,635
Fomento Economico Mexicano SAB de CV BD Units		33,936,800		166,671,713
Grupo Aeroportuario del Pacifico SAB de CV Series B		100,300		279,220

10 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Grupo Bimbo SAB de CV Series A		635,900	$	4,375,371
Grupo Carso SAB de CV Series A1		1,849,441		8,209,027
Grupo Elektra SA de CV		41,890		1,344,418
Grupo Financiero Banorte SAB de CV Series Oa		19,932,156		71,919,409
Grupo Financiero Inbursa SAB de CV Series O		294,000		1,089,629
Grupo Mexico SAB de CV Series B		55,969,063		143,902,405
Grupo Modelo SAB de CV Series C		18,601,898		99,103,462
Grupo Televisa SA CPO		36,448,600		135,585,087
Industrias Penoles SAB de CV		1,879,188		39,772,112
Kimberly-Clark de Mexico SAB de CV Series A		13,204,300		76,647,572
Mexichem SAB de CV		337,900		872,371
Telefonos de Mexico SAB de CV Series L		81,253,400		56,734,433
Urbi Desarrollos Urbanos SAB de CVa,b		6,511,300		12,278,891
Wal-Mart de Mexico SAB de CV Series V		103,398,100		231,830,958
				1,693,326,896
PERU – 0.83%
Compania de Minas Buenaventura SA SP ADR		4,999,413		206,675,733
Credicorp Ltd.		403,544		42,473,006
Southern Copper Corp.		2,705,152		81,803,796
				330,952,535
PHILIPPINE ISLANDS – 1.17%
Ayala Corp.		7,413,503		56,385,770
Ayala Land Inc.		63,244,800		22,866,286
Banco de Oro Unibank Inc.		257,000		294,338
Bank of the Philippine Islands		51,804,414		54,819,486
Energy Development Corp.		3,670,000		377,033

Security	Shares		Value
Globe Telecom Inc.		842,360	$	14,856,437
Jollibee Foods Corp.f		61,761,000		106,202,778
Manila Electric Co.		15,715,362		62,016,089
Metropolitan Bank & Trust Co.		920,140		1,302,315
Philippine Long Distance Telephone Co.		965,920		52,001,249
SM Investments Corp.		3,513,031		36,632,797
SM Prime Holdings Inc.		236,372,820		56,904,568
				464,659,146
POLAND – 1.35%
Asseco Poland SA		602,752		10,562,500
Bank Handlowy w Warszawie SA		326,040		8,070,323
Bank Millennium SAb		4,178,407		5,868,344
Bank Pekao SA		1,399,057		68,326,918
Bank Zachodni WBK SA		221,405		13,218,944
BRE Bank SAb		143,512		11,582,558
Cyfrowy Polsat SA		2,743,170		12,351,086
Getin Holding SAa,b		3,206,263		9,780,317
Globe Trade Centre SAb		1,205,424		8,709,894
Grupa Lotos SAb		658,222		6,234,720
ING Bank Slaski SAb		31,971		8,203,162
Kernel Holding SAb		442,314		8,671,583
KGHM Polska Miedz SA		1,658,862		56,346,964
PBG SA		114,220		8,238,546
Polska Grupa Energetyczna SAb		2,654,234		19,271,165
Polski Koncern Naftowy Orlen SAb		3,764,150		46,514,400
Polskie Gornictwo Naftowe i Gazownictwo SA		18,559,182		20,757,930
Powszechna Kasa Oszczednosci Bank Polski SA		7,481,110		90,567,749
Powszechny Zaklad Ubezpieczen SA		453,397		54,399,284
Tauron Polska Energia SAb		11,029,736		18,820,102
Telekomunikacja Polska SA		8,012,481		43,637,553

SCHEDULE OF INVESTMENTS 11

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
TVN SA		1,356,770	$	7,406,482
				537,540,524
RUSSIA – 5.95%
JSC MMC Norilsk Nickel SP ADR		8,186,099		138,754,378
JSC Polymetal SP GDRb,d		463,885		5,506,315
LUKOIL SP ADR		5,581,441		297,490,805
Magnit OJSC SP GDRd		3,395,510		72,324,363
Mechel OAO SP ADR		3,564,266		81,087,051
Mobile TeleSystems SP ADR		5,673,958		118,358,764
Novolipetsk Steel SP GDRd		2,089,519		60,805,003
OAO Gazprom SP ADR		31,663,765		655,439,936
OAO NovaTek SP GDRd		1,284,061		94,250,077
OAO Tatneft SP ADR		4,310,506		128,797,919
OAO TMK SP GDRb,d		792,793		12,351,715
OJSC Comstar United Telesystems SP GDRb		2,046,893		13,243,398
OJSC Rosneft Oil Co. SP GDRb,d		16,585,700		105,153,338
Polyus Gold SP ADR		1,061,599		26,062,255
Rushydro SP ADRb		13,350,238		69,421,238
Sberbank GDRd		765,409		218,879,228
Sistema JSFC SP GDRd		1,140,371		29,364,553
Surgutneftegaz SP ADR		6,600,773		62,047,266
Uralkali SP GDRd		2,568,602		59,463,136
VTB Bank OJSC SP GDRd		16,123,013		83,194,747
Wimm-Bill-Dann Foods OJSC SP ADRa		1,944,712		35,646,571
				2,367,642,056
SOUTH AFRICA – 7.75%
Absa Group Ltd.		1,007,410		16,833,987
African Bank Investments Ltd.		18,749,717		82,363,262
African Rainbow Minerals Ltd.		523,729		10,954,941
Anglo Platinum Ltd.b		635,821		52,627,695
AngloGold Ashanti Ltd.		3,417,648		146,607,982
ArcelorMittal South Africa Ltd.		5,114,258		57,135,188

Security	Shares		Value
Aspen Pharmacare Holdings Ltd.b		149,937	$	1,709,616
Aveng Ltd.		2,879,216		14,833,774
Bidvest Group Ltd.		4,238,890		78,274,998
Discovery Holdings Ltd.		101,419		481,674
Exxaro Resources Ltd.		2,717,139		42,158,341
FirstRand Ltd.		47,892,077		125,513,181
Foschini Ltd.		8,787,678		84,591,416
Gold Fields Ltd.		7,431,781		106,805,245
Growthpoint Properties Ltd.		704,627		1,609,730
Harmony Gold Mining Co. Ltd.		4,465,629		46,292,512
Impala Platinum Holdings Ltd.		6,029,732		142,246,330
Imperial Holdings Ltd.		5,079,361		70,311,868
Investec Ltd.		6,383,676		47,974,397
Kumba Iron Ore Ltd.		714,021		32,456,336
Liberty Holdings Ltd.		1,373,646		13,036,670
Massmart Holdings Ltd.		811,899		13,480,006
MTN Group Ltd.		18,050,491		294,896,677
Murray & Roberts Holdings Ltd.		3,623,749		20,389,192
Naspers Ltd. Class N		5,877,802		237,303,580
Nedbank Group Ltd.		5,163,897		98,268,594
Netcare Ltd.b		29,734,694		53,335,593
Northam Platinum Ltd.a		491,573		2,682,549
Pick’n Pay Stores Ltd.		8,514,314		51,230,757
Pretoria Portland Cement Co. Ltd.		6,465,255		26,322,965
Redefine Properties Ltd.		718,936		778,809
Remgro Ltd.		1,808,926		24,402,690
Reunert Ltd.		2,655,518		20,698,333
RMB Holdings Ltd.		509,836		2,303,879
Sanlam Ltd.		30,300,995		95,638,703
Sappi Ltd.b		1,743,697		8,262,510
Sasol Ltd.		7,569,443		288,225,342
Shoprite Holdings Ltd.		15,061,973		184,605,275
Standard Bank Group Ltd.		14,479,342		205,202,944
Steinhoff International Holdings Ltd.b		3,355,619		8,553,115
Telkom South Africa Ltd.		179,376		817,142
Tiger Brands Ltd.		3,215,181		78,791,169

12 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Truworths International Ltd.		14,984,875	$	118,952,572
Vodacom Group (Proprietary) Ltd.		285,432		2,387,323
Woolworths Holdings Ltd.		20,597,674		68,698,475
				3,081,047,337
SOUTH KOREA – 12.80%
AmorePacific Corp.a		36,050		33,076,153
Busan Bank		174,940		1,860,443
Celltrion Inc.a,b		997,646		17,183,577
Cheil Industries Inc.		417,368		36,379,144
CJ CheilJedang Corp.		77,100		14,308,741
Daegu Bank		143,400		1,668,555
Daelim Industrial Co. Ltd.		172,914		10,874,732
Daewoo Engineering & Construction Co. Ltd.		115,000		947,702
Daewoo International Corp.a		156,096		4,342,148
Daewoo Securities Co. Ltd.		636,610		11,708,441
Daewoo Shipbuilding & Marine Engineering Co. Ltd.		971,470		18,880,016
Dongbu Insurance Co. Ltd.		53,730		1,512,543
Dongkuk Steel Mill Co. Ltd.		346,920		6,944,766
Doosan Corp.a		304,560		30,483,944
Doosan Heavy Industries & Construction Co. Ltd.		389,966		22,378,564
Doosan Infracore Co. Ltd.a,b		873,480		14,061,360
GLOVIS Co. Ltd.		66,500		9,096,672
GS Engineering & Construction Corp.		304,501		21,741,001
GS Holdings Corp.		235,940		9,682,416
Hana Financial Group Inc.		1,541,690		39,670,645
Hanjin Heavy Industries & Construction Co. Ltd.a		856,070		20,528,829
Hankook Tire Co. Ltd.		1,018,760		22,135,873
Hanwha Chemical Corp.a		425,090		9,520,116
Hanwha Corp.		334,230		12,419,673

Security	Shares		Value
Hite Brewery Co. Ltd.a		49,868	$	5,407,323
Honam Petrochemical Corp.a		57,850		9,023,230
Hynix Semiconductor Inc.a,b		4,925,780		86,691,099
Hyosung Corp.		206,618		18,440,342
Hyundai Department Store Co. Ltd.		51,990		5,203,770
Hyundai Development Co.		268,550		6,159,917
Hyundai Engineering & Construction Co. Inc.		763,253		40,744,176
Hyundai Heavy Industries Co. Ltd.a		406,510		89,514,255
Hyundai Mipo Dockyard Co. Ltd.		132,220		17,700,651
Hyundai Mobis Co. Ltd.		843,320		152,640,287
Hyundai Motor Co. Ltd.		1,825,318		215,432,894
Hyundai Securities Co. Ltd.		184,970		2,213,962
Hyundai Steel Co.a		568,300		51,193,928
Industrial Bank of Korea		270,910		3,276,499
Kangwon Land Inc.		125,500		2,297,710
KB Financial Group Inc. SP ADR		6,529,111		265,995,982
KCC Corp.		6,970		1,732,471
Kia Motors Corp.		2,763,300		70,989,774
Korea Electric Power Corp. SP ADRb		20,870,470		256,915,486
Korea Exchange Bank		678,450		7,158,556
Korea Gas Corp.		88,280		3,180,996
Korea Investment Holdings Co. Ltd.		137,560		3,608,526
Korea Life Insurance Co. Ltd.		1,835,490		12,263,137
Korea Zinc Co. Ltd.a		60,610		13,472,821
Korean Air Lines Co. Ltd.b		387,460		23,559,791
KT Corp. SP ADRa		11,093,294		207,111,799
KT&G Corp.a		1,386,350		70,537,451
LG Chem Ltd.a		494,400		142,270,415
LG Corp.a		1,025,711		73,576,734
LG Display Co. Ltd. SP ADRa		10,834,706		152,552,660
LG Electronics Inc.a		1,002,700		80,624,139

SCHEDULE OF INVESTMENTS 13

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
LG Household & Health Care Ltd.a		92,080	$	30,875,102
LG Innotek Co. Ltd.a		117,150		12,898,323
LG Uplus Corp.		990,950		6,190,855
Lotte Confectionery Co. Ltd.		2,300		2,365,418
Lotte Shopping Co. Ltd.		54,530		17,670,285
LS Corp.		84,860		8,316,832
LS Industrial Systems Co. Ltd.a		127,280		10,255,441
Mirae Asset Securities Co. Ltd.		132,360		6,270,788
NCsoft Corp.a		301,635		57,866,419
NHN Corp.b		443,035		72,613,544
OCI Co. Ltd.a		128,730		39,942,914
POSCO SP ADRa		4,324,338		436,585,164
S1 Corp.		109,590		5,301,710
Samsung C&T Corp.a		1,386,440		65,222,467
Samsung Card Co. Ltd.		66,780		2,980,007
Samsung Electro- Mechanics Co. Ltd.a		779,671		74,136,704
Samsung Electronics Co. Ltd. SP GDRa,d		3,026,333		951,781,729
Samsung Engineering Co. Ltd.a		241,254		26,562,289
Samsung Fire & Marine Insurance Co. Ltd.		291,530		46,566,015
Samsung Heavy Industries Co. Ltd.		2,036,070		45,259,209
Samsung Life Insurance Co. Ltd.		559,030		50,825,148
Samsung SDI Co. Ltd.a		322,010		45,122,763
Samsung Securities Co. Ltd.		219,230		10,605,839
Samsung Techwin Co. Ltd.		565,987		52,165,788
Seoul Semiconductor Co. Ltd.a		90,003		2,740,103
Shinhan Financial Group Co. Ltd.		2,610,940		99,960,085
Shinhan Financial Group Co. Ltd. SP ADR		702,105		53,809,327
Shinsegae Co. Ltd.		125,440		60,371,074
SK Broadband Co. Ltd.b		230,670		1,019,727

Security	Shares		Value
SK C&C Co. Ltd.		53,700	$	4,093,903
SK Energy Co. Ltd.a		516,890		54,969,952
SK Holdings Co. Ltd.		154,450		11,852,031
SK Networks Co. Ltd.		304,280		2,504,999
SK Telecom Co. Ltd. SP ADR		11,141,005		178,478,900
S-Oil Corp.a		107,240		5,170,133
STX Pan Ocean Co. Ltd.a		2,279,800		21,773,050
Tong Yang Securities Inc.		669,960		5,459,596
Woongjin Coway Co. Ltd.a		613,750		20,502,700
Woori Finance Holdings Co. Ltd.		1,129,620		12,672,774
Woori Investment & Securities Co. Ltd.		286,320		4,191,272
Yuhan Corp.		70,601		10,482,090
				5,091,329,304
TAIWAN – 10.24%
Acer Inc.		25,974,053		60,893,157
Advanced Semiconductor Engineering Inc.		18,032,645		12,412,431
Advantech Co. Ltd.		1,410,000		3,195,542
Asia Cement Corp.		13,834,753		12,438,062
ASUSTeK Computer Inc.		4,379,400		29,187,797
AU Optronics Corp. SP ADRa		21,090,040		181,585,244
Capital Securities Corp.		21,678,914		9,474,458
Catcher Technology Co. Ltd.		3,873,210		8,560,382
Cathay Financial Holding Co. Ltd.		54,109,350		77,868,547
Chang Hwa Commercial Bank Ltd.		4,627,000		2,628,813
Cheng Shin Rubber Industry Co. Ltd.		21,180,893		43,044,145
Cheng Uei Precision Industry Co. Ltd.		3,111,260		5,031,007
Chicony Electronics Co. Ltd.		6,575,600		11,802,991
Chimei Innolux Corp.		36,402,487		37,613,858
China Airlines Ltd.b		19,775,000		11,790,675
China Development Financial Holding Corp.		999,900		273,744

14 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
China Steel Corp.		119,400,412	$	112,937,269
Chinatrust Financial Holding Co. Ltd.		61,557,720		34,493,385
Chinese Gamer International Corp.		913,000		7,239,246
Chunghwa Picture Tubes Ltd.b		1,999,199		308,923
Chunghwa Telecom Co. Ltd. SP ADR		18,093,769		372,188,828
Clevo Co.		7,792,000		16,175,564
CMC Magnetics Corp.b		24,861,000		6,084,480
Compal Communications Inc.		7,538,750		5,895,164
Compal Electronics Inc.		35,210,908		39,460,311
Coretronic Corp.		6,819,000		9,132,019
Delta Electronics Inc.		21,252,000		80,605,544
E.Sun Financial Holding Co. Ltd.		1,246,000		558,160
Epistar Corp.		4,388,345		11,315,393
Eternal Chemical Co. Ltd.		3,737,800		3,652,155
EVA Airways Corp.b		11,351,000		8,061,286
Evergreen International Storage & Transport Corp.		7,904,000		6,094,425
Evergreen Marine Corp. Ltd.b		15,981,000		10,601,119
Everlight Electronics Co. Ltd.		2,067,000		5,310,423
Far Eastern Department Stores Co. Ltd.		13,945,125		13,799,727
Far Eastern New Century Corp.		26,693,842		31,165,315
Far EasTone Telecommunications Co. Ltd.		11,376,000		14,737,591
Farglory Land Development Co. Ltd.		15,066,000		32,545,645
Feng Hsin Iron & Steel Co. Ltd.		5,762,000		8,849,672
First Financial Holding Co. Ltd.		12,306,350		7,107,057
Formosa Chemicals & Fibre Corp.		23,414,000		52,040,857

Security	Shares		Value
Formosa International Hotels Corp.		212,300	$	3,406,449
Formosa Petrochemical Corp.		6,564,000		14,732,834
Formosa Plastics Corp.		45,456,000		100,748,455
Formosa Taffeta Co. Ltd.		8,762,000		6,550,849
Foxconn Technology Co. Ltd.		1,778,710		5,097,258
Fubon Financial Holding Co. Ltd.		45,236,121		52,742,996
Giant Manufacturing Co. Ltd.		4,597,000		16,646,438
HannStar Display Corp.b		16,360,963		2,998,029
Hon Hai Precision Industry Co. Ltd.		96,624,373		340,842,672
HTC Corp.		10,088,389		184,232,614
Hua Nan Financial Holdings Co. Ltd.		1,204,489		706,886
Inventec Co. Ltd.		13,326,050		6,551,954
KGI Securities Co. Ltd.		51,309,000		21,382,754
Largan Precision Co. Ltd.		1,199,000		21,633,951
Lite-On Technology Corp.		14,480,114		16,679,659
Macronix International Co. Ltd.		42,943,275		22,856,429
MediaTek Inc.		9,877,176		134,587,854
Mega Financial Holding Co. Ltd.		21,957,000		13,263,031
Micro-Star International Co. Ltd.		3,464,000		1,697,721
MiTAC International Corp.		7,403,728		2,750,339
Motech Industries Inc.		3,952,123		15,359,909
Nan Ya Plastics Corp.		43,773,000		84,446,881
Nan Ya Printed Circuit Board Corp.		916,000		2,945,246
Novatek Microelectronics Corp. Ltd.		607,000		1,447,674
Pegatron Corp.b		7,562,414		9,466,592
Phison Electronics Corp.		1,419,535		5,694,270
Pixart Imaging Inc.		61,000		282,778
Polaris Securities Co. Ltd.		39,894,000		17,746,441
Pou Chen Corp.		28,594,220		23,074,252
Powertech Technology Inc.		483,000		1,432,384

SCHEDULE OF INVESTMENTS 15

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
President Chain Store Corp.		6,493,000	$	24,018,871
Prime View International Co. Ltd.b		8,656,000		12,821,602
Qisda Corp.b		12,286,000		6,941,893
Quanta Computer Inc.		19,167,000		29,078,985
Realtek Semiconductor Corp.		648,420		1,281,294
Richtek Technology Corp.		482,150		3,281,161
Ruentex Development Co. Ltd.		9,899,000		15,945,196
Ruentex Industries Ltd.		9,281,000		27,407,835
Shin Kong Financial Holding Co. Ltd.b		16,067,345		5,341,738
Siliconware Precision Industries Co. Ltd. SP ADR		25,847,866		115,539,961
Simplo Technology Co. Ltd.		2,872,200		14,031,944
SinoPac Financial Holdings Co. Ltd.		1,614,000		566,820
Synnex Technology International Corp.		14,230,985		29,231,404
Taishin Financial Holdings Co. Ltd.b		1,472,970		602,357
Taiwan Business Bank Ltd.b		16,416,000		4,765,836
Taiwan Cement Corp.		29,239,190		26,880,632
Taiwan Cooperative Bank Co. Ltd.		13,013,000		8,124,493
Taiwan Fertilizer Co. Ltd.		6,481,000		19,826,996
Taiwan Glass Industrial Corp.		3,505,060		3,391,923
Taiwan Mobile Co. Ltd.		21,376,000		42,039,333
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR		63,589,025		598,372,725
Tatung Co. Ltd.b		63,875,000		10,687,707
Teco Electric and Machinery Co. Ltd.		32,413,000		15,632,792
Transcend Information Inc.		101,000		260,114
Tripod Technology Corp.		2,373,000		8,148,530
TSRC Corp.		7,170,000		10,463,804

Security	Shares		Value
Tung Ho Steel Enterprise Corp.		10,688,000	$	9,241,980
U-Ming Marine Transport Corp.		5,007,000		9,675,136
Unimicron Technology Corp.		8,985,000		14,220,500
Uni-President Enterprises Co.		52,656,513		60,901,661
United Microelectronics Corp. SP ADRa		94,905,857		243,908,053
Walsin Lihwa Corp.b		19,204,000		9,052,269
Wan Hai Lines Ltd.b		2,387,000		1,527,549
Winbond Electronics Corp.b		1,584,000		399,041
Wintek Corp.b		14,572,000		18,104,689
Wistron Corp.		14,454,059		22,605,618
WPG Holdings Co. Ltd.		9,643,966		17,882,612
Yang Ming Marine Transport Corp.		30,031,978		17,812,561
Young Fast Optoelectronics Co. Ltd.		1,339,000		14,128,176
Yuanta Financial Holding Co. Ltd.		38,829,000		22,060,554
Yulon Motor Co. Ltd.		32,452,000		47,309,371
				4,073,681,726
THAILAND – 1.68%
Advanced Information Service PCL Foreign		1,137,900		3,354,251
Advanced Information Service PCL NVDR		1,665,200		4,908,602
Bangkok Bank PCL Foreign		9,493,400		46,412,852
Banpu PCL Foreign		2,711,200		53,019,793
BEC World PCL Foreign		322,200		326,884
BEC World PCL NVDR		1,139,600		1,156,169
Charoen Pokphand Foods PCL Foreign		8,690,400		7,081,170
Charoen Pokphand Foods PCL NVDR		33,339,900		27,166,239
CP All PCL Foreign		3,120,900		3,964,077
CP All PCL NVDR		11,538,600		14,655,995
Glow Energy PCL Foreign		137,400		193,181

16 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Glow Energy PCL NVDR		2,009,600	$	2,825,448
IRPC PCL Foreign		138,979,600		17,852,627
Kasikornbank PCL Foreign		17,516,200		63,807,215
Krung Thai Bank PCL Foreign		66,825,500		30,321,843
PTT Aromatics & Refining PCL Foreign		39,556,386		29,577,231
PTT Chemical PCL Foreign		12,166,468		41,209,318
PTT Exploration and Production PCL Foreign		29,268,500		134,207,693
PTT PCL Foreign		17,016,700		144,094,121
Siam Cement PCL Foreign		2,752,600		27,266,528
Siam Commercial Bank PCL NVDR		2,713,400		8,258,551
Thai Oil PCL NVDR		3,677,700		5,170,756
				666,830,544
TURKEY – 1.65%
Akbank TAS		11,607,160		61,736,159
Anadolu Efes Biracilik ve Malt Sanayii AS		1,193,525		16,066,231
Arcelik AS		174,218		829,392
Asya Katilim Bankasi AS		20,642,407		45,814,785
BIM Birlesik Magazalar ASa		833,830		22,859,283
Coca-Cola Icecek AS		77,113		810,170
Dogan Sirketler Grubu Holdings AS		19,387,008		12,730,322
Enka Insaat ve Sanayi AS		781,156		2,846,814
Eregli Demir ve Celik Fabrikalari TASa,b		10,327,555		29,974,254
Haci Omer Sabanci Holding AS		2,485,414		11,260,987
KOC Holding AS		4,561,801		17,823,045
Migros TAS		1		12
Turk Hava Yollari Anonim Ortakligib		6,070,983		19,135,018
Turk Telekomunikasyon AS		3,198,265		13,230,724
Turkcell Iletisim Hizmetleri AS		6,309,417		39,980,218
Turkiye Garanti Bankasi AS		27,426,901		133,271,435
Turkiye Halk Bankasi AS		1,872,140		15,243,638

Security	Shares		Value
Turkiye Is Bankasi AS		12,499,018	$	45,961,324
Turkiye Petrol Rafinerileri AS		1,468,027		33,015,907
Turkiye Vakiflar Bankasi TAO		28,218,621		76,712,254
Yapi ve Kredi Bankasi ASb		18,496,827		55,384,813
				654,686,785
TOTAL COMMON STOCKS
(Cost: $36,620,889,104)				36,339,610,374
PREFERRED STOCKS – 7.69%
BRAZIL – 7.60%
AES Tiete SA		401,200		4,876,755
Banco Bradesco SA SP ADRa		31,373,944		553,122,633
Banco do Estado do Rio Grande do Sul SA		475,600		4,197,547
Bradespar SA		1,516,500		31,645,087
Brasil Telecom SA SP ADRb		1,610,890		30,977,415
Braskem SA Class A		829,900		7,324,526
Centrais Eletricas Brasileiras SA Class B		579,200		8,374,533
Centrais Eletricas Brasileiras SA Class B SP ADR		310,574		4,549,909
Companhia Brasileira de Distribuicao Grupo Pao de Acucar		18,200		642,310
Companhia Brasileira de Distribuicao Grupo Pao de Acucar Class A SP ADRa		1,270,108		89,441,005
Companhia de Bebidas das Americas SP ADR		2,932,683		324,618,681
Companhia de Transmissao de Energia Eletrica Paulista		119,900		3,404,327
Companhia Energetica de Minas Gerais		704,700		11,249,808
Companhia Energetica de Minas Gerais SP ADRa		4,004,322		66,151,399

SCHEDULE OF INVESTMENTS 17

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

Security	Shares		Value
Companhia Energetica de Sao Paulo Class B		677,300	$	9,858,587
Companhia Paranaense de Energia Class B		395,800		8,676,707
Companhia Paranaense de Energia Class B SP ADR		591,078		13,145,575
Eletropaulo Metropolitana Electricidade de Sao Paulo SA Class B		530,600		9,983,067
Fertilizantes Fosfatados SAb		233,600		2,254,824
Gerdau SA SP ADR		9,781,077		131,262,053
Gol Linhas Aereas Inteligentes SA SP ADRa		1,906,578		25,014,303
Itausa – Investimentos Itau SA		28,108,972		197,120,987
Klabin SA		868,400		2,426,044
Lojas Americanas SA		2,271,300		19,152,500
Metalurgica Gerdau SA		1,533,800		24,634,195
Net Servicos de Comunicacao SA SP ADRa,b		3,079,827		39,206,198
Petroleo Brasileiro SA SP ADR		21,444,036		633,885,704
Suzano Bahia Sul Papel e Celulose SA		988,700		8,996,637
Tele Norte Leste Participacoes SA SP ADR		3,414,621		46,302,261
Telemar Norte Leste SA Class A		90,600		2,299,157
TIM Participacoes SA		2,017,500		5,705,294
Ultrapar Participacoes SA		365,900		20,131,332
Usinas Siderurgicas de Minas Gerais SA Class A		2,819,500		70,778,862
Vale SA Class A SP ADR		25,313,800		597,911,956
Vivo Participacoes SA		469,000		11,284,130
				3,020,606,308
SOUTH KOREA – 0.09%
Hyundai Motor Co. Ltd.		8,310		336,171

Security	Shares		Value
Hyundai Motor Co. Ltd. Series 2		168,080	$	7,079,856
LG Electronics Inc.		7,470		259,198
Samsung Electronics Co. Ltd.		68,200		30,319,957
				37,995,182
TOTAL PREFERRED STOCKS
(Cost: $2,937,856,766)				3,058,601,490
RIGHTS – 0.00%
BRAZIL – 0.00%
Marfrig Alimentos SAb		396		147
				147
TOTAL RIGHTS
(Cost: $0)				147
EXCHANGE-TRADED FUNDS – 0.44%
iShares MSCI Malaysia Index Funda,f		1,314,976		16,936,891
iShares MSCI South Korea Index Fundf		1,623,064		77,566,228
iShares MSCI Taiwan Index Fundf		6,577,720		79,919,298
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $176,008,202)				174,422,417
SHORT-TERM INVESTMENTS – 4.45%
MONEY MARKET FUNDS – 4.45%
BlackRock Cash Funds: Institutional,
SL Agency Shares 0.31%f,g,h		1,385,091,326		1,385,091,326
BlackRock Cash Funds: Prime,
SL Agency Shares 0.30%f,g,h		269,151,577		269,151,577
BlackRock Cash Funds: Treasury,
SL Agency Shares 0.13%f,g		113,419,152		113,419,152
				1,767,662,055
TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,767,662,055)				1,767,662,055

18 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Continued)

iSHARES^® MSCI EMERGING MARKETS INDEX FUND

August 31, 2010

	Value
TOTAL INVESTMENTS IN SECURITIES – 103.96%
(Cost: $41,502,416,127)	$	41,340,296,483
Other Assets, Less Liabilities – (3.96)%		(1,573,341,619)
NET ASSETS – 100.00%	$	39,766,954,864

CPO – Certificates of Participation (Ordinary)

GDR – Global Depositary Receipts

NVDR – Non-Voting Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

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

^b Non-income earning security.

^c Security valued using Level 3 inputs in accordance with management’s fair valuation policy. See Note 1.

^d This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

^e This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

^f Affiliated issuer. See Note 2.

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

^h 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 19

Statement of Assets and Liabilities

iSHARES^® , INC.

August 31, 2010

	iShares MSCI Emerging Markets Index Fund
ASSETS
Investments, at cost:
Unaffiliated issuers	$	39,490,061,141
Affiliated issuers (Note 2)		2,012,354,986
Total cost of investments	$	41,502,416,127
Investments in securities, at fair value (including securities on loana) (Note 1):
Unaffiliated issuers	$	39,292,009,233
Affiliated issuers (Note 2)		2,048,287,250
Total fair value of investments		41,340,296,483
Foreign currencies, at valueb		17,248,560
Receivables:
Investment securities sold		79,833,103
Due from custodian (Note 4)		1,048,890
Dividends and interest		90,859,331
Total Assets		41,529,286,367
LIABILITIES
Payables:
Investment securities purchased		82,786,239
Collateral for securities on loan (Note 5)		1,654,242,903
Foreign taxes (Note 1)		2,299,952
Investment advisory fees (Note 2)		23,002,409
Total Liabilities		1,762,331,503
NET ASSETS	$	39,766,954,864
Net assets consist of:
Paid-in capital	$	42,492,928,130
Undistributed net investment income		129,955,696
Accumulated net realized loss		(2,693,731,778	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(162,197,184	)
NET ASSETS	$	39,766,954,864
Shares outstandingc		989,550,000
Net asset value per share	$	40.19

^a Securities on loan with a value of $1,582,543,186. See Note 5.

^b Cost of foreign currencies: $17,306,224.

^c $0.001 par value, number of shares authorized: 2,000,000,000.

See notes to financial statements.

20 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Statement of Operations

iSHARES^®, INC.

Year ended August 31, 2010

	iShares MSCI Emerging Markets Index Fund
NET INVESTMENT INCOME
Dividends from unaffiliated issuersa	$	749,980,468
Dividends from affiliated issuers (Note 2)b		5,194,102
Interest from unaffiliated issuers		1,410
Interest from affiliated issuers (Note 2)		75,839
Securities lending income from affiliated issuers (Note 2)		13,414,244
Total investment income		768,666,063
EXPENSES
Investment advisory fees (Note 2)		246,844,312
Foreign taxes (Note 1)		2,747,338
Total expenses		249,591,650
Less investment advisory fees waived (Note 2)		(1,176,450	)
Net expenses		248,415,200
Net investment income		520,250,863
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(995,851,472	)
Investments in affiliated issuers (Note 2)		12,385,889
In-kind redemptions		2,320,507,709
Foreign currency transactions		(37,560,037	)
Net realized gain		1,299,482,089
Net change in unrealized appreciation (depreciation) on:
Investments		2,361,839,545
Translation of assets and liabilities in foreign currencies		(303,340	)
Net change in unrealized appreciation (depreciation)		2,361,536,205
Net realized and unrealized gain		3,661,018,294
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,181,269,157

^a Net of foreign withholding tax of $103,972,802.

^b Net of foreign withholding tax of $685,632.

See notes to financial statements.

FINANCIAL STATEMENTS 21

Statements of Changes in Net Assets

iSHARES^®, INC.

	iShares MSCI Emerging Markets Index Fund
	Year ended August 31, 2010			Year ended August 31, 2009
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income	$	520,250,863		$	516,988,234
Net realized gain (loss)		1,299,482,089			(496,335,831	)
Net change in unrealized appreciation (depreciation)		2,361,536,205			807,907,449
Net increase in net assets resulting from operations		4,181,269,157			828,559,852
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(551,986,882	)		(487,478,088	)
Total distributions to shareholders		(551,986,882	)		(487,478,088	)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		13,614,469,565			18,716,077,957
Cost of shares redeemed		(7,744,918,384	)		(9,091,794,756	)
Net increase in net assets from capital share transactions		5,869,551,181			9,624,283,201
INCREASE IN NET ASSETS		9,498,833,456			9,965,364,965
NET ASSETS
Beginning of year		30,268,121,408			20,302,756,443
End of year	$	39,766,954,864		$	30,268,121,408
Undistributed net investment income included in net assets at end of year	$	129,955,696		$	199,251,752
SHARES ISSUED AND REDEEMED
Shares sold		337,050,000			691,200,000
Shares redeemed		(200,700,000	)		(344,700,000	)
Net increase in shares outstanding		136,350,000			346,500,000

See notes to financial statements.

22 2010 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, 2010			Year ended Aug. 31, 2009			Year ended Aug. 31, 2008a			Year ended Aug. 31, 2007a			Year ended Aug. 31, 2006a
Net asset value, beginning of year	$	35.48		$	40.07		$	44.78		$	32.48		$	25.97
Income from investment operations:
Net investment incomeb		0.58			0.66			1.10			0.63			0.55
Net realized and unrealized gain (loss)c		4.73			(4.66	)		(4.64	)		12.19			6.29
Total from investment operations		5.31			(4.00	)		(3.54	)		12.82			6.84
Less distributions from:
Net investment income		(0.60	)		(0.59	)		(1.17	)		(0.52	)		(0.33	)
Total distributions		(0.60	)		(0.59	)		(1.17	)		(0.52	)		(0.33	)
Net asset value, end of year	$	40.19		$	35.48		$	40.07		$	44.78		$	32.48
Total return		14.97	%		(9.47	)%		(8.36	)%		39.86	%		26.44	%
Ratios/Supplemental data:
Net assets, end of year (000s)	$	39,766,955		$	30,268,121		$	20,302,756		$	18,198,371		$	11,969,380
Ratio of expenses to average net assets prior to waived fees		0.69	%		0.72	%		0.72	%		0.74	%		0.77	%
Ratio of expenses to average net assets after waived fees		0.69	%		0.72	%		0.72	%		0.74	%		0.77	%
Ratio of expenses to average net assets after waived fees and exclusive of foreign taxes		0.68	%		0.72	%		0.72	%		0.74	%		0.75	%
Ratio of net investment income to average net assets		1.45	%		2.32	%		2.32	%		1.63	%		1.77	%
Portfolio turnover rated		14	%		5	%		11	%		5	%		12	%

^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 for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

^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 23

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 global emerging markets, as measured by the MSCI Emerging Markets Index compiled by MSCI Inc. 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 issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.

The Fund invests in the securities of non-U.S. issuers that may trade in non-U.S. markets. This 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”) using 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 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”);

24 2010 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 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 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

NOTES TO FINANCIAL STATEMENTS 25

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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, 2010, 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. 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, 2010, 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, are generally declared and paid semi-annually by the Fund. Distributions of net realized capital gains, if any, generally are declared and paid 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.

26 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

As of August 31, 2010, the tax year-end of the Fund, the components of net accumulated losses on a tax basis consisted of undistributed ordinary income of $186,082,382, unrealized depreciation of $632,158,250, and capital and other losses of $2,279,897,398, for net accumulated losses of $2,725,973,266.

For the years ended August 31, 2010 and August 31, 2009, 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

The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the year ended August 31, 2010.

From November 1, 2009 to August 31, 2010, the Fund incurred net realized capital losses of $774,139,567. As permitted by tax regulations, the Fund has elected to defer those losses and treat them as arising in the year ending August 31, 2011.

As of August 31, 2010, 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, $228,196,854 and $1,201,366,175 expiring in 2012, 2013, 2014, 2015, 2016, 2017 and 2018, 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, 2010, the cost of investments for federal income tax purposes was $41,972,377,193. Net unrealized depreciation was $632,080,710, of which $3,883,149,246 represented gross unrealized appreciation on securities and $4,515,229,956 represented gross unrealized depreciation on securities.

Management has reviewed the tax positions as of August 31, 2010, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Fund’s financial statements.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

On December 1, 2009, Barclays PLC (“Barclays”) completed the sale of its interest in BlackRock Institutional Trust Company, N.A. (“BTC”), formerly known as Barclays Global Investors, N.A., and certain affiliated companies to BlackRock, Inc. (“BlackRock,” and such sale, the “Transaction”). BTC is a wholly-owned subsidiary of BlackRock.

NOTES TO FINANCIAL STATEMENTS 27

Notes to Financial Statements (Continued)

iSHARES^® , INC.

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays are the largest stockholders of BlackRock. Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC and Barclays are not.

Under the 1940 Act, upon completion of the Transaction on December 1, 2009, the Fund’s investment advisory agreement with BlackRock Fund Advisors (“BFA”), formerly known as Barclays Global Fund Advisors, was automatically terminated. The Board and shareholders of the Fund approved a new investment advisory agreement with BFA. The investment advisory fee rates and expense arrangements for the Fund remained the same after the Transaction.

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

For its investment advisory services to the Fund, BFA 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

BFA has contractually agreed to waive a portion of its investment advisory fees for the Fund through June 30, 2012 in an amount equal to the investment advisory fees payable on the amount of the Fund’s investment in other iShares Funds.

The U.S. Securities and Exchange Commission has issued an exemptive order which permits BTC to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA, the Fund’s investment adviser. As securities lending agent, BTC 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, 2010, BTC earned securities lending agent fees from the Fund of $8,171,633.

The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in interest from affiliated issuers in the 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, 2010, the Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.

28 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Continued)

iSHARES^® , INC.

Investments in issuers considered to be an affiliate of the Fund (excluding short-term investments) during the year ended August 31, 2010, for purposes of Section 2(a)(3) of the 1940 Act, were 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
iShares MSCI Malaysia Index Fund		1,159		439		(283	)		1,315	$	16,936,891	$	329,052		$	1,238,113
iShares MSCI South Korea Index Fund		1,318		648		(343	)		1,623		77,566,228		613,344			3,892,695
iShares MSCI Taiwan Index Fund		6,426		1,684		(1,532	)		6,578		79,919,298		1,509,178			2,555,820
Jollibee Foods Corp.		68,446		12,706		(19,391	)		61,761		106,202,778		2,742,528	a		4,699,261
										$	280,625,195	$	5,194,102		$	12,385,889

^a Net of foreign withholding tax of $685,632.

Certain directors and officers of the Company are also officers of BTC and/or BFA.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended August 31, 2010 aggregated $10,781,294,306 and $5,111,736,289, respectively.

In-kind purchases and sales (see Note 4) for the year ended August 31, 2010 aggregated $7,241,238,259 and $7,103,391,939, 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 Bank and Trust Company, 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 Statement of Assets and Liabilities.

NOTES TO FINANCIAL STATEMENTS 29

Notes to Financial Statements (Continued)

iSHARES^® , INC.

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 current 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 value of the securities on loan. The risks 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 BFA or its affiliates; such reinvestments are subject to investment risk.

As of August 31, 2010, the Fund had loaned securities which were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of August 31, 2010 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, plus any fees paid by borrowers and less the fees paid to BTC as securities lending agent which are subject to adjustments pursuant to the securities lending agreement.

6. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.

30 2010 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, 2010, 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, 2010 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

October 22, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 31

Tax Information (Unaudited)

iSHARES^® , INC.

For corporate shareholders, 0.78% of the income dividends paid by the Fund during the fiscal year ended August 31, 2010 qualified for the dividends-received deduction.

For the fiscal year ended August 31, 2010, the Fund earned foreign source income of $852,899,239 and paid foreign taxes of $107,681,891 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 $551,986,882 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, 2010.

In February 2011, shareholders will receive Form 1099-DIV which will include their share of qualified dividend income distributed during the calendar year 2010. Shareholders are advised to check with their tax advisers for information on the treatment of these amounts on their income tax returns.

32 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Supplemental Information (Unaudited)

iSHARES^® , INC.

Premium/Discount Information

The table that follows presents information about the differences between the daily market price on secondary markets for shares of the Fund and the Fund’s 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 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 fair 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, 2005 through June 30, 2010

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%		27		1.95
Greater than 1.0% and Less than 1.5%		63		4.56
Greater than 0.5% and Less than 1.0%		262		18.96
Between 0.5% and -0.5%		695		50.29
Less than -0.5% and Greater than -1.0%		164		11.87
Less than -1.0% and Greater than -1.5%		82		5.93
Less than -1.5% and Greater than -2.0%		36		2.60
Less than -2.0% and Greater than -2.5%		12		0.87
Less than -2.5% and Greater than -3.0%		3		0.22
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	%

SUPPLEMENTAL INFORMATION 33

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 BFA 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, BlackRock Funds III (formerly, Barclays Global Investors Funds) and Master Investment Portfolio, each an open-end management investment company registered under the 1940 Act, are considered 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, as a result, oversees a total of 214 funds within the fund complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52^nd Street, New York, NY 10055. The Board has designated George G.C. Parker as its Independent Chairman. 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 the Past 5 Years	Other Directorships Held
Robert S. Kapitoa (53)	Director (since 2009).	President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); Chairman, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983).	Trustee of iShares Trust (since 2009); Director of BlackRock, Inc. (since 2007).
Michael Lathamb (45)	Director (since 2010); President (since 2007).	Global Chief Executive Officer of iShares, BTC (since 2010); Managing Director, BTC (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange Traded Products Business of BGI (2003-2007).	Trustee of iShares Trust (since 2010).

^a Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc.

^b Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates.

34 2010 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 the Past 5 Years	Other Directorships Held
George G.C. Parker (71)	Director (since 2000); Independent Chairman (since 2010).	Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University: Graduate School of Business (since 1994).	Trustee of iShares Trust (since 2002); Independent Chairman of iShares Trust (since 2010); Director of Continental Airlines Inc. (since 1996); Director of Community First Financial Group (since 1995); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of NETGEAR, Inc. (since 2007).
Darrell Duffie (56)	Director (since 2008).	Professor, Stanford University: Graduate School of Business (since 1984).	Trustee of iShares Trust (since 2008); Director of Moody’s Corp. (since 2008).
Cecilia H. Herbert (61)	Director (since 2005).	Director (since 1998) and President (since 2007) of the Board of Directors, Catholic Charities CYO; Trustee of Pacific Select Funds (2004-2005); Trustee (since 2005) and Chair of the Finance and Investment Committees (since 2006) of the Thacher School; Chair of Investment Committee, Archdiocese of San Francisco (1994-2005).	Trustee of iShares Trust (since 2005); Director, Forward Funds (34 portfolios) (since 2009).
Charles A. Hurty (67)	Director (since 2005).	Retired; Partner, KPMG LLP (1968-2001).	Trustee of iShares Trust (since 2005); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of Citigroup Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002).
John E. Kerrigan (55)	Director (since 2005).	Chief Investment Officer, Santa Clara University (since 2002).	Trustee of iShares Trust (since 2005).
John E. Martinez (49)	Director (since 2003).	Director of Real Estate Equity Exchange (since 2005).	Trustee of iShares Trust (since 2003); Chairman, Independent Review Committee, Canadian iShares Funds (since 2007).

DIRECTOR AND OFFICER INFORMATION 35

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Independent Directors (Continued)

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years	Other Directorships Held
Robert H. Silver (55)	Director (since 2007).	President and Co-Founder of The Bravitas Group, Inc. (since 2006); Member, Non-Investor Advisory Board of Russia Partners II, LP (since 2006); President and Chief Operating Officer (2003-2005) and Director (1999-2005) of UBS Financial Services, Inc.; President and Chief Executive Officer of UBS Services USA, LLC (1999-2005); Managing Director, UBS America, Inc. (2000-2005); Director and Vice Chairman of the YMCA of Greater NYC (since 2001); Broadway Producer (since 2006); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009).	Trustee of iShares Trust (since 2007).

36 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information (Unaudited) (Continued)

iSHARES^® , INC.

Officers

Name (Age)	Position(s) (Length of Service)	Principal Occupation(s) During the Past 5 Years
Geoffrey D. Flynn (53)	Executive Vice President and Chief Operating Officer (since 2008).	Managing Director, BTC (since 2009); Chief Operating Officer, U.S. iShares, BGI (2007-2009); President, Van Kampen Investors Services (2003-2007); Managing Director, Morgan Stanley (2002-2007); President, Morgan Stanley Trust, FSB (2002-2007).
Eilleen M. Clavere (58)	Secretary (since 2007).	Director, BTC (since 2009); Director of Legal Administration of Intermediary Investor Business of BGI (2006-2009); Legal Counsel and Vice President of Atlas Funds, Atlas Advisers, Inc. and Atlas Securities, Inc. (2005-2006); Counsel of Kirkpatrick & Lockhart LLP (2001-2005).
Jack Gee (51)	Treasurer and Chief Financial Officer (since 2008).	Managing Director, BTC (since 2009); Senior Director of Fund Administration of Intermediary Investor Business of BGI (2009); Director of Fund Administration of Intermediary Investor Business of BGI (2004-2009).
Patrick O’Connor (43)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of iShares Portfolio Management, BGI (2006-2009); Senior Portfolio Manager, BGI (1999-2006).
Amy Schioldager (48)	Executive Vice President (since 2007).	Managing Director, BTC (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008); Head of Domestic Equity Portfolio Management, BGI (2001-2006).
Ira P. Shapiro (47)	Vice President and Chief Legal Officer (since 2007).	Managing Director, BTC (since 2009); Associate General Counsel, BGI (2004-2009).
Lee Sterne (45)	Vice President (since 2007).	Managing Director, BTC (since 2009); Head of U.S. Fixed Income Index and iShares, BGI (2007-2009); Senior Portfolio Manager, BGI (2004-2007).
Matt Tucker (38)	Vice President (since 2007).	Managing Director, BTC (since 2009); Director of Fixed Income Investment Strategy, BGI (2009); Head of U.S. Fixed Income Investment Solutions, BGI (2005-2008); Fixed Income Investment Strategist, BGI (2003-2005).

DIRECTOR AND OFFICER INFORMATION 37

Notes:

38 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Notes:

NOTES 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 Fund
iShares Dow Jones U.S.	IYY
iShares MSCI Domestic Index Fund
iShares MSCI USA	EUSA
iShares MSCI Socially Responsible Index Funds
iShares MSCI KLD 400 Social	DSI
iShares MSCI USA ESG 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 2010 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 Brazil Small Cap	EWZS
iShares MSCI Canada	EWC
iShares MSCI Chile Investable Market	ECH
iShares MSCI China Small Cap	ECNS
iShares MSCI France	EWQ
iShares MSCI Germany	EWG
iShares MSCI Hong Kong	EWH
iShares S&P India Nifty 50	INDY
iShares MSCI Indonesia Investable Market	EIDO
iShares MSCI Ireland Capped Investable Market	EIRL
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 New Zealand Investable Market	ENZL
iShares MSCI All Peru Capped	EPU
iShares MSCI Philippines Investable Market	EPHE
iShares MSCI Poland Investable Market	EPOL
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 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 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 International/Global Sector Index Funds
iShares MSCI ACWI ex US Consumer Discretionary Sector	AXDI
iShares MSCI ACWI ex US Consumer Staples Sector	AXSL
iShares MSCI ACWI ex US Energy Sector	AXEN
iShares MSCI ACWI ex US Financials Sector	AXFN
iShares MSCI ACWI ex US Health Care Sector	AXHE
iShares MSCI ACWI ex US Industrials Sector	AXID
iShares MSCI ACWI ex US Information Technology Sector	AXIT
iShares MSCI ACWI ex US Materials Sector	AXMT
iShares MSCI ACWI ex US Telecommunication Services Sector	AXTE
iShares MSCI ACWI ex US Utilities Sector	AXUT
iShares MSCI Emerging Markets Financials Sector	EMFN
iShares MSCI Emerging Markets Materials Sector	EMMT
iShares MSCI Europe Financials Sector	EUFN
iShares MSCI Far East Financials Sector	FEFN
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 International/Global Theme Based and Specialty Index Funds
iShares Dow Jones International Select Dividend	IDV
iShares S&P Emerging Markets Infrastructure	EMIF
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 10+ Year Government/Credit	GLJ
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

THE iSHARES FAMILY OF FUNDS 41

The iShares^® Family of Funds (Continued)

iShares U.S. Credit Bond Funds	Trading Symbol
iShares Barclays Credit	CFT
iShares Barclays 1-3 Year Credit	CSJ
iShares Barclays Intermediate Credit	CIU
iShares iBoxx $ Investment Grade Corporate	LQD
iShares 10+ Year Credit	CLY
iShares iBoxx $ High Yield Corporate	HYG

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 2012 S&P AMT-Free Municipal Series	MUAA
iShares 2013 S&P AMT-Free Municipal Series	MUAB
iShares 2014 S&P AMT-Free Municipal Series	MUAC
iShares 2015 S&P AMT-Free Municipal Series	MUAD
iShares 2016 S&P AMT-Free Municipal Series	MUAE
iShares 2017 S&P AMT-Free Municipal Series	MUAF
iShares U.S. Securitized Bond Fund
iShares Barclays MBS	MBB
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

The iShares Funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 as iShares, Inc. and iShares Trust (“Funds”) are distributed in the U.S. by SEI Investments Distribution Co. (“SEI”). iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. The 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^®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor’s, nor are they sponsored, endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. All rights in the FTSE/Xinhua Index vest in FXI. Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50/Residential/Retail/Mortgage or Industrial/Office Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed 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.

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 2010 Annual Report.

iS-3594-1010

42 2010 iSHARES ANNUAL REPORT TO SHAREHOLDERS

Dear iShares Shareholder:

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

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

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

1.   Go to www.icsdelivery.com.

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

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

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

Your information and e-mail address will be kept confidential and only used to deliver documents to you. If at any time you are not satisfied, you can cancel electronic delivery at www.icsdelivery.com and once again receive physical delivery of your materials. If you have any questions, please contact your brokerage firm or financial adviser.

For more information:

WWW.iSHARES.COM

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

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

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by SEI Investments Distribution Co. (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 BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

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

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

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.

©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares^® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.

iS-AR-85-0810

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, 2010, 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 $471,552 for the fiscal year ended August 31, 2009 and $483,283 for the fiscal year ended August 31, 2010.

(b) Audit-Related Fees – There were no fees billed for the fiscal years ended August 31, 2009 and August 31, 2010 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 $136,950 for the fiscal year ended August 31, 2009 and $146,080 for the fiscal year ended August 31, 2010.

(d) All Other Fees – There were no other fees billed for the fiscal years ended August 31, 2009 and August 31, 2010 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, 2010 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 $3,697,425 for the fiscal year ended August 31, 2009 and $4,199,105 for the fiscal year ended August 31, 2010.

(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 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 Latham
	Michael Latham, President (Principal Executive Officer)
	Date: October 21, 2010

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 Latham
	Michael Latham, President (Principal Executive Officer)
	Date: October 21, 2010
By:	/s/ Jack Gee
	Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer)
	Date: October 21, 2010

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 Latham, President (Principal Executive Officer)

2. Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer)

Current as of: October 21, 2010

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

EX-99.CERT

N-CSR Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS

I, Michael 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: October 21, 2010	/s/ Michael Latham	President (Principal Executive Officer)
	Michael Latham [Signature]	[Title]

EX-99.CERT

N-CSR Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS

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: October 21, 2010	/s/ Jack Gee	Treasurer and Chief Financial Officer (Principal Financial Officer)
	Jack Gee [Signature]	[Title]

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 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, 2010 (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: October 21, 2010	/s/ Michael Latham	President (Principal Executive Officer)
	Michael Latham [Signature]	[Title]
Date: October 21, 2010	/s/ Jack Gee	Treasurer and Chief Financial Officer (Principal Financial Officer)
	Jack Gee [Signature]	[Title]