UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
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 Incorporated
351 West Camden Street, Baltimore, MD 21201
(Name and address of agent for service)
Registrants telephone number, including area code: 1-800-474-2737
Date of fiscal year end: August 31, 2011
Date of reporting period: February 28, 2011
Item 1. Reports to Stockholders. |
2011 SEMI-ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
FEBRUARY 28, 2011
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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
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iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
24.93% | 25.25% | 24.88% | (2.61)% | (2.67)% | (3.73)% | 12.62% | 12.49% | 12.34% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
24.93% | 25.25% | 24.88% | (12.37)% | (12.65)% | (17.31)% | 228.16% | 224.41% | 220.24% |
Index performance reflects the performance of the MSCI Austria IndexSM through January 31, 2008 and the MSCI Austria Investable Market IndexSM thereafter.
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Austria Investable Market IndexSM (the Index). The Index consists of stocks traded primarily on the Vienna Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 32.00%, while the total return for the Index was 32.20%.
FUND PERFORMANCE OVERVIEWS | 5 |
Fund Performance Overview
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
12.14% | 11.79% | 12.00% | (4.80)% | (4.86)% | (5.74)% | 4.07% | 4.09% | 2.87% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
12.14% | 11.79% | 12.00% | (21.80)% | (22.06)% | (25.60)% | 49.04% | 49.31% | 32.70% |
Index performance reflects the performance of the MSCI Belgium IndexSM through November 30, 2007 and the MSCI Belgium Investable Market IndexSM thereafter.
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Belgium Investable Market IndexSM (the Index). The Index consists of stocks traded primarily on the Brussels Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 17.81%, while the total return for the Index was 16.38%.
6 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
31.68% | 31.54% | 31.03% | 26.11% | 26.08% | 25.68% | 38.90% | 38.85% | 38.23% |
Total returns for the period since inception are calculated from the inception date of the Fund (9/30/09). Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds 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 calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 IndexSM (the Index). The Index is a free float-adjusted market capitalization index designed to measure equity market 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 six-month period ended February 28, 2011, the total return for the Fund was 32.68%, while the total return for the Index was 32.52%.
FUND PERFORMANCE OVERVIEWS | 7 |
Fund Performance Overview
iSHARES® MSCI EMU INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
17.87% | 18.46% | 18.05% | 1.60% | 1.62% | 1.74% | 3.86% | 3.79% | 4.06% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
17.87% | 18.46% | 18.05% | 8.26% | 8.35% | 9.03% | 46.05% | 45.08% | 48.84% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI EMU IndexSM (the Index). The Index consists of stocks from Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. 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 six-month period ended February 28, 2011, the total return for the Fund was 26.31%, while the total return for the Index was 26.63%.
8 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI FRANCE INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
17.04% | 17.37% | 17.29% | 2.28% | 2.27% | 2.48% | 4.03% | 4.00% | 4.27% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
17.04% | 17.37% | 17.29% | 11.93% | 11.88% | 13.03% | 48.44% | 48.07% | 51.87% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI France IndexSM (the Index). The Index consists of stocks traded primarily on the Paris Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 28.56%, while the total return for the Index was 28.91%.
FUND PERFORMANCE OVERVIEWS | 9 |
Fund Performance Overview
iSHARES® MSCI GERMANY INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
30.90% | 31.53% | 31.09% | 5.85% | 5.82% | 5.99% | 5.22% | 5.25% | 5.32% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
30.90% | 31.53% | 31.09% | 32.86% | 32.71% | 33.75% | 66.32% | 66.84% | 67.95% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
10 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview (Continued)
iSHARES® MSCI GERMANY INDEX FUND
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 the MSCI Germany IndexSM (the Index). The Index consists of stocks traded primarily on the Frankfurt Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 33.47%, while the total return for the Index was 33.83%.
FUND PERFORMANCE OVERVIEWS | 11 |
Fund Performance Overview
iSHARES® MSCI ITALY INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.49% | 11.50% | 12.35% | (3.99)% | (4.06)% | (4.04)% | 1.90% | 1.88% | 1.83% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.49% | 11.50% | 12.35% | (18.41)% | (18.73)% | (18.63)% | 20.66% | 20.42% | 19.94% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Italy IndexSM (the Index). The Index consists of stocks traded primarily on the Milan Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 24.46%, while the total return for the Index was 24.58%.
12 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.90% | 19.99% | 20.32% | 3.70% | 3.72% | 4.21% | 2.90% | 2.90% | 3.63% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.90% | 19.99% | 20.32% | 19.90% | 20.04% | 22.93% | 33.05% | 33.12% | 42.85% |
Index performance reflects the performance of the MSCI Netherlands IndexSM through January 31, 2008 and the MSCI Netherlands Investable Market IndexSM thereafter.
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
FUND PERFORMANCE OVERVIEWS | 13 |
Fund Performance Overview (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKET INDEX FUND
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 the MSCI Netherlands Investable Market IndexSM (the Index). The Index consists of stocks traded primarily on the Amsterdam Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 25.77%, while the total return for the Index was 26.06%.
14 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI SPAIN INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
10.17% | 10.03% | 9.25% | 5.12% | 5.06% | 5.00% | 8.31% | 8.27% | 8.10% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
10.17% | 10.03% | 9.25% | 28.38% | 28.02% | 27.61% | 122.12% | 121.33% | 117.82% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Spain IndexSM (the Index). The Index consists of stocks traded primarily on the Madrid Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 17.26%, while the total return for the Index was 15.62%.
FUND PERFORMANCE OVERVIEWS | 15 |
Fund Performance Overview
iSHARES® MSCI SWEDEN INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
37.52% | 37.49% | 37.65% | 9.29% | 9.21% | 9.29% | 8.80% | 8.81% | 8.57% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
37.52% | 37.49% | 37.65% | 55.95% | 55.38% | 55.89% | 132.33% | 132.59% | 127.58% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month and one-year periods. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Sweden IndexSM (the Index). The Index consists of stocks traded primarily on the Stockholm Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 31.11%, while the total return for the Index was 31.45%.
16 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI SWITZERLAND INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.16% | 19.38% | 17.17% | 6.31% | 6.33% | 5.20% | 6.17% | 6.17% | 6.38% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.16% | 19.38% | 17.17% | 35.77% | 35.94% | 28.84% | 81.96% | 82.03% | 85.59% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Switzerland IndexSM (the Index). The Index consists of stocks traded primarily on the Zurich Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 18.44%, while the total return for the Index was 17.04%.
FUND PERFORMANCE OVERVIEWS | 17 |
Fund Performance Overview
iSHARES® MSCI UNITED KINGDOM INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.57% | 23.09% | 23.32% | 2.24% | 2.23% | 2.86% | 4.17% | 4.21% | 4.92% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.57% | 23.09% | 23.32% | 11.71% | 11.67% | 15.14% | 50.44% | 51.00% | 61.59% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI United Kingdom IndexSM (the Index). The Index consists of stocks traded primarily on the London Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 22.47%, while the total return for the Index was 22.91%.
18 | 2011 iSHARES SEMI-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 September 1, 2010 to February 28, 2011.
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 Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds 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 (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
Austria Investable Market |
||||||||||||||||
Actual |
$1,000.00 | $1,320.00 | 0.52 | % | $2.99 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.52 | 2.61 | ||||||||||||
Belgium Investable Market |
||||||||||||||||
Actual |
1,000.00 | 1,178.10 | 0.53 | 2.86 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Emerging Markets Eastern Europe |
||||||||||||||||
Actual |
1,000.00 | 1,326.80 | 0.67 | 3.87 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.50 | 0.67 | 3.36 | ||||||||||||
EMU |
||||||||||||||||
Actual |
1,000.00 | 1,263.10 | 0.53 | 2.97 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 |
SHAREHOLDER EXPENSES | 19 |
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
France |
||||||||||||||||
Actual |
$1,000.00 | $1,285.60 | 0.53 | % | $3.00 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Germany |
||||||||||||||||
Actual |
1,000.00 | 1,334.70 | 0.53 | 3.07 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Italy |
||||||||||||||||
Actual |
1,000.00 | 1,244.60 | 0.52 | 2.89 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.52 | 2.61 | ||||||||||||
Netherlands Investable Market |
||||||||||||||||
Actual |
1,000.00 | 1,257.70 | 0.53 | 2.97 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Spain |
||||||||||||||||
Actual |
1,000.00 | 1,172.60 | 0.53 | 2.86 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Sweden |
||||||||||||||||
Actual |
1,000.00 | 1,311.10 | 0.52 | 2.98 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.52 | 2.61 | ||||||||||||
Switzerland |
||||||||||||||||
Actual |
1,000.00 | 1,184.40 | 0.53 | 2.87 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
United Kingdom |
||||||||||||||||
Actual |
1,000.00 | 1,224.70 | 0.53 | 2.92 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 |
a | Expenses are calculated using each Funds 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 (181 days) and divided by the number of days in the year (365 days). |
20 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 21 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI AUSTRIA INVESTABLE MARKET INDEX FUND
February 28, 2011
22 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 23 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BELGIUM INVESTABLE MARKET INDEX FUND
February 28, 2011
24 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 25 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND
February 28, 2011
26 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
February 28, 2011
SCHEDULES OF INVESTMENTS | 27 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMU INDEX FUND
February 28, 2011
28 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMU INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 29 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMU INDEX FUND
February 28, 2011
30 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMU INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 31 |
Schedule of Investments (Unaudited)
iSHARES® MSCI FRANCE INDEX FUND
February 28, 2011
32 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI FRANCE INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 33 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI FRANCE INDEX FUND
February 28, 2011
34 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI GERMANY INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 35 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI GERMANY INDEX FUND
February 28, 2011
36 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI ITALY INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 37 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI ITALY INDEX FUND
February 28, 2011
38 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKETS INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 39 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI NETHERLANDS INVESTABLE MARKETS INDEX FUND
February 28, 2011
40 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI SPAIN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 41 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SPAIN INDEX FUND
February 28, 2011
42 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI SWEDEN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 43 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SWEDEN INDEX FUND
February 28, 2011
44 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI SWITZERLAND INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 45 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SWITZERLAND INDEX FUND
February 28, 2011
46 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 47 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
February 28, 2011
48 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI UNITED KINGDOM INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 49 |
Statements of Assets and Liabilities (Unaudited)
iSHARES®, INC.
February 28, 2011
iShares MSCI Austria |
iShares MSCI Belgium Index Fund |
iShares MSCI Emerging Markets Eastern Europe Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 243,968,096 | $ | 57,729,461 | $ | 27,320,875 | ||||||
Affiliated issuers (Note 2) |
1,822,430 | 313,604 | 8,366 | |||||||||
Total cost of investments |
$ | 245,790,526 | $ | 58,043,065 | $ | 27,329,241 | ||||||
Investments in securities, at fair value (including securities on loana) |
||||||||||||
Unaffiliated issuers |
$ | 205,882,852 | $ | 40,859,666 | $ | 32,253,714 | ||||||
Affiliated issuers (Note 2) |
1,822,430 | 313,604 | 8,366 | |||||||||
Total fair value of investments |
207,705,282 | 41,173,270 | 32,262,080 | |||||||||
Foreign currencies, at valueb |
240,456 | 21,708 | 15,532 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
2,458,652 | 278,198 | 332,427 | |||||||||
Dividends and interest |
636,845 | 729,978 | 827 | |||||||||
Total Assets |
211,041,235 | 42,203,154 | 32,610,866 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
2,480,663 | | 333,123 | |||||||||
Collateral for securities on loan (Note 5) |
1,819,750 | 310,243 | | |||||||||
Investment advisory fees (Note 2) |
84,645 | 16,560 | 16,306 | |||||||||
Total Liabilities |
4,385,058 | 326,803 | 349,429 | |||||||||
NET ASSETS |
$ | 206,656,177 | $ | 41,876,351 | $ | 32,261,437 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 295,714,091 | $ | 96,180,654 | $ | 27,569,517 | ||||||
Distributions in excess of net investment income or accumulated net investment loss |
(619,593 | ) | (210,499 | ) | (2,725 | ) | ||||||
Accumulated net realized loss |
(50,385,348 | ) | (37,141,446 | ) | (238,609 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies |
(38,052,973 | ) | (16,952,358 | ) | 4,933,254 | |||||||
NET ASSETS |
$ | 206,656,177 | $ | 41,876,351 | $ | 32,261,437 | ||||||
Shares outstandingc |
9,100,000 | 3,040,000 | 950,000 | |||||||||
Net asset value per share |
$ | 22.71 | $ | 13.78 | $ | 33.96 | ||||||
a | Securities on loan with values of $1,698,504, $244,955 and $, respectively. See Note 5. |
b | Cost of foreign currencies: $238,410, $21,239 and $15,220, respectively. |
c | $0.001 par value, number of shares authorized: 100 million, 136.2 million and 200 million, respectively. |
See notes to financial statements.
50 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI EMU |
iShares MSCI France |
iShares MSCI Germany |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 1,041,169,108 | $ | 378,669,681 | $ | 2,419,949,403 | ||||||
Affiliated issuers (Note 2) |
4,178,794 | 366,422 | 1,023,327 | |||||||||
Total cost of investments |
$ | 1,045,347,902 | $ | 379,036,103 | $ | 2,420,972,730 | ||||||
Investments in securities, at fair value (including securities on loana) |
||||||||||||
Unaffiliated issuers |
$ | 815,446,815 | $ | 316,406,971 | $ | 2,642,943,772 | ||||||
Affiliated issuers (Note 2) |
4,178,794 | 366,422 | 1,023,327 | |||||||||
Total fair value of investments |
819,625,609 | 316,773,393 | 2,643,967,099 | |||||||||
Foreign currencies, at valueb |
575,465 | 243,863 | 3,187,234 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
1,192,171 | 638,994 | 23,260,408 | |||||||||
Dividends and interest |
516,435 | 38,236 | 2,320,748 | |||||||||
Capital shares sold |
321,164 | | | |||||||||
Total Assets |
822,230,844 | 317,694,486 | 2,672,735,489 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
1,013,237 | 495,452 | 23,545,910 | |||||||||
Collateral for securities on loan (Note 5) |
3,994,629 | 328,532 | | |||||||||
Investment advisory fees (Note 2) |
300,603 | 120,910 | 966,858 | |||||||||
Total Liabilities |
5,308,469 | 944,894 | 24,512,768 | |||||||||
NET ASSETS |
$ | 816,922,375 | $ | 316,749,592 | $ | 2,648,222,721 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 1,187,279,675 | $ | 396,692,651 | $ | 2,545,920,544 | ||||||
Undistributed (distributions in excess of) net investment income |
(942,750 | ) | (335,514 | ) | 1,479,531 | |||||||
Accumulated net realized loss |
(143,681,437 | ) | (17,349,638 | ) | (122,331,323 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies |
(225,733,113 | ) | (62,257,907 | ) | 223,153,969 | |||||||
NET ASSETS |
$ | 816,922,375 | $ | 316,749,592 | $ | 2,648,222,721 | ||||||
Shares outstandingc |
21,200,000 | 11,800,000 | 102,000,000 | |||||||||
Net asset value per share |
$ | 38.53 | $ | 26.84 | $ | 25.96 | ||||||
a | Securities on loan with values of $3,805,595, $313,978 and $, respectively. See Note 5. |
b | Cost of foreign currencies: $565,567, $239,541 and $3,158,404, respectively. |
c | $0.001 par value, number of shares authorized: 1 billion, 340.2 million and 382.2 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 51 |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI Italy |
iShares MSCI Netherlands |
iShares MSCI Spain |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 185,081,445 | $ | 208,196,937 | $ | 374,665,904 | ||||||
Affiliated issuers (Note 2) |
5,108,687 | 766,825 | 10,957,109 | |||||||||
Total cost of investments |
$ | 190,190,132 | $ | 208,963,762 | $ | 385,623,013 | ||||||
Investments in securities, at fair value (including securities on loana) |
||||||||||||
Unaffiliated issuers |
$ | 147,363,738 | $ | 194,614,122 | $ | 299,986,558 | ||||||
Affiliated issuers (Note 2) |
5,108,687 | 766,825 | 10,957,109 | |||||||||
Total fair value of investments |
152,472,425 | 195,380,947 | 310,943,667 | |||||||||
Foreign currencies, at valueb |
92,859 | 1,430,918 | 109,674 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
| 802,904 | 4,070,929 | |||||||||
Due from custodian (Note 4) |
| 1,852,621 | | |||||||||
Dividends and interest |
29,395 | 291,278 | 45,461 | |||||||||
Capital shares sold |
| 20,242 | | |||||||||
Total Assets |
152,594,679 | 199,778,910 | 315,169,731 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
| 2,690,071 | 4,032,095 | |||||||||
Collateral for securities on loan (Note 5) |
4,988,500 | 685,893 | 10,697,852 | |||||||||
Investment advisory fees (Note 2) |
53,546 | 71,881 | 106,861 | |||||||||
Total Liabilities |
5,042,046 | 3,447,845 | 14,836,808 | |||||||||
NET ASSETS |
$ | 147,552,633 | $ | 196,331,065 | $ | 300,332,923 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 223,638,481 | $ | 244,832,110 | $ | 404,087,961 | ||||||
Undistributed (distributions in excess of) net investment income |
(93,110 | ) | 122,952 | 563,386 | ||||||||
Accumulated net realized loss |
(38,276,597 | ) | (35,044,966 | ) | (29,642,159 | ) | ||||||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies |
(37,716,141 | ) | (13,579,031 | ) | (74,676,265 | ) | ||||||
NET ASSETS |
$ | 147,552,633 | $ | 196,331,065 | $ | 300,332,923 | ||||||
Shares outstandingc |
7,950,000 | 8,750,000 | 7,125,000 | |||||||||
Net asset value per share |
$ | 18.56 | $ | 22.44 | $ | 42.15 | ||||||
a | Securities on loan with values of $4,744,592, $651,396 and $10,175,562, respectively. See Note 5. |
b | Cost of foreign currencies: $91,292, $1,429,238 and $106,953, respectively. |
c | $0.001 par value, number of shares authorized: 63.6 million, 255 million and 127.8 million, respectively. |
See notes to financial statements.
52 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI Sweden |
iShares MSCI Switzerland |
iShares MSCI United Kingdom Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 635,640,461 | $ | 449,937,303 | $ | 1,367,718,534 | ||||||
Affiliated issuers (Note 2) |
2,929,901 | 949,387 | 868,196 | |||||||||
Total cost of investments |
$ | 638,570,362 | $ | 450,886,690 | $ | 1,368,586,730 | ||||||
Investments in securities, at fair value (including securities on loana) |
||||||||||||
Unaffiliated issuers |
$ | 677,926,955 | $ | 498,862,776 | $ | 1,358,464,874 | ||||||
Affiliated issuers (Note 2) |
2,929,901 | 949,387 | 868,196 | |||||||||
Total fair value of investments |
680,856,856 | 499,812,163 | 1,359,333,070 | |||||||||
Foreign currencies, at valueb |
53,061 | 536,367 | 2,918,441 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
11,628,413 | 4,368,444 | 1,589,675 | |||||||||
Dividends and interest |
376 | 3,746,395 | 5,008,080 | |||||||||
Capital shares sold |
| 1,089,102 | 111,846 | |||||||||
Total Assets |
692,538,706 | 509,552,471 | 1,368,961,112 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
11,436,508 | 5,603,453 | 3,691,007 | |||||||||
Collateral for securities on loan (Note 5) |
2,510,923 | 840,000 | | |||||||||
Investment advisory fees (Note 2) |
239,728 | 188,495 | 508,020 | |||||||||
Total Liabilities |
14,187,159 | 6,631,948 | 4,199,027 | |||||||||
NET ASSETS |
$ | 678,351,547 | $ | 502,920,523 | $ | 1,364,762,085 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 674,152,894 | $ | 494,770,161 | $ | 1,499,271,667 | ||||||
Undistributed net investment income (accumulated net investment loss) |
(836,702 | ) | 894,994 | 5,416,464 | ||||||||
Accumulated net realized loss |
(37,251,670 | ) | (41,951,852 | ) | (130,718,624 | ) | ||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies |
42,287,025 | 49,207,220 | (9,207,422 | ) | ||||||||
NET ASSETS |
$ | 678,351,547 | $ | 502,920,523 | $ | 1,364,762,085 | ||||||
Shares outstandingc |
21,150,000 | 19,625,000 | 75,000,000 | |||||||||
Net asset value per share |
$ | 32.07 | $ | 25.63 | $ | 18.20 | ||||||
a | Securities on loan with values of $2,388,921, $798,687 and $, respectively. See Note 5. |
b | Cost of foreign currencies: $52,530, $514,109 and $2,892,843, respectively. |
c | $0.001 par value, number of shares authorized: 63.6 million, 318.625 million and 934.2 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Statements of Operations (Unaudited)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Austria Investable Market Index Fund |
iShares MSCI Belgium Investable Market Index Fund |
iShares MSCI Emerging Markets Eastern Europe Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 560 | $ | 206,059 | $ | 71,858 | ||||||
Interest from unaffiliated issuers |
15,319 | | | |||||||||
Interest from affiliated issuers (Note 2) |
42 | 19 | 24 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
10,557 | 6,273 | | |||||||||
Total investment income |
26,478 | 212,351 | 71,882 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
398,537 | 145,432 | 67,726 | |||||||||
Total expenses |
398,537 | 145,432 | 67,726 | |||||||||
Less investment advisory fees waived (Note 2) |
| | (462 | ) | ||||||||
Net expenses |
398,537 | 145,432 | 67,264 | |||||||||
Net investment income (loss) |
(372,059 | ) | 66,919 | 4,618 | ||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(3,819,445 | ) | (5,626,726 | ) | (27,635 | ) | ||||||
In-kind redemptions |
5,904,383 | 3,720,808 | | |||||||||
Foreign currency transactions |
(69,346 | ) | 9,560 | (2,128 | ) | |||||||
Net realized gain (loss) |
2,015,592 | (1,896,358 | ) | (29,763 | ) | |||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
35,926,464 | 11,351,862 | 5,192,845 | |||||||||
Translation of assets and liabilities in foreign currencies |
198,232 | 62,889 | 417 | |||||||||
Net change in unrealized appreciation/depreciation |
36,124,696 | 11,414,751 | 5,193,262 | |||||||||
Net realized and unrealized gain |
38,140,288 | 9,518,393 | 5,163,499 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 37,768,229 | $ | 9,585,312 | $ | 5,168,117 | ||||||
a | Net of foreign withholding tax of $49,997, $43,665 and $15,339, respectively. |
See notes to financial statements.
54 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI EMU |
iShares MSCI France |
iShares MSCI Germany |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 6,489,673 | $ | 2,181,136 | $ | 6,346,612 | ||||||
Interest from affiliated issuers (Note 2) |
275 | 75 | 248 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
77,891 | 5,871 | 37,872 | |||||||||
Total investment income |
6,567,839 | 2,187,082 | 6,384,732 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
2,113,389 | 750,466 | 4,905,201 | |||||||||
Total expenses |
2,113,389 | 750,466 | 4,905,201 | |||||||||
Net investment income |
4,454,450 | 1,436,616 | 1,479,531 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(17,720,858 | ) | (1,458,070 | ) | (58,960,769 | ) | ||||||
In-kind redemptions |
13,906,763 | 5,187,606 | 59,624,479 | |||||||||
Foreign currency transactions |
46,868 | 44,681 | 555,852 | |||||||||
Net realized gain (loss) |
(3,767,227 | ) | 3,774,217 | 1,219,562 | ||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
182,885,094 | 63,803,470 | 499,334,115 | |||||||||
Translation of assets and liabilities in foreign currencies |
66,562 | 4,215 | 139,629 | |||||||||
Net change in unrealized appreciation/depreciation |
182,951,656 | 63,807,685 | 499,473,744 | |||||||||
Net realized and unrealized gain |
179,184,429 | 67,581,902 | 500,693,306 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 183,638,879 | $ | 69,018,518 | $ | 502,172,837 | ||||||
a | Net of foreign withholding tax of $847,384, $262,055 and $1,049,763, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Italy Index Fund |
iShares MSCI Netherlands Investable Market Index Fund |
iShares MSCI Spain Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 746,162 | $ | 615,280 | $ | 3,671,099 | ||||||
Interest from affiliated issuers (Note 2) |
31 | 31 | 135 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
33,421 | 11,313 | 107,953 | |||||||||
779,614 | 626,624 | 3,779,187 | ||||||||||
Less: Other foreign taxes (Note 1) |
(914 | ) | | | ||||||||
Total investment income |
778,700 | 626,624 | 3,779,187 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
248,352 | 444,060 | 481,971 | |||||||||
Total expenses |
248,352 | 444,060 | 481,971 | |||||||||
Net investment income |
530,348 | 182,564 | 3,297,216 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(5,739,277 | ) | 275,595 | (7,068,528 | ) | |||||||
In-kind redemptions |
5,136,078 | 4,402,079 | 10,033,358 | |||||||||
Foreign currency transactions |
42,593 | 4,730 | (341 | ) | ||||||||
Net realized gain (loss) |
(560,606 | ) | 4,682,404 | 2,964,489 | ||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
21,624,689 | 32,818,093 | 25,885,174 | |||||||||
Translation of assets and liabilities in foreign currencies |
3,273 | 13,692 | 6,080 | |||||||||
Net change in unrealized appreciation/depreciation |
21,627,962 | 32,831,785 | 25,891,254 | |||||||||
Net realized and unrealized gain |
21,067,356 | 37,514,189 | 28,855,743 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 21,597,704 | $ | 37,696,753 | $ | 32,152,959 | ||||||
a | Net of foreign withholding tax of $126,892, $108,579 and $393,080, respectively. |
See notes to financial statements.
56 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Sweden |
iShares MSCI Switzerland |
iShares MSCI United Kingdom Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 193,195 | $ | 2,071,600 | $ | 14,186,640 | ||||||
Interest from affiliated issuers (Note 2) |
60 | 79 | 429 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
4,866 | 1,716 | 5,047 | |||||||||
Total investment income |
198,121 | 2,073,395 | 14,192,116 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
1,031,995 | 1,178,401 | 2,841,961 | |||||||||
Total expenses |
1,031,995 | 1,178,401 | 2,841,961 | |||||||||
Net investment income (loss) |
(833,874 | ) | 894,994 | 11,350,155 | ||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(3,798,147 | ) | (1,877,720 | ) | (8,608,321 | ) | ||||||
In-kind redemptions |
1,549,504 | 3,481,975 | 13,729,893 | |||||||||
Foreign currency transactions |
77,163 | 280,561 | 121,710 | |||||||||
Net realized gain (loss) |
(2,171,480 | ) | 1,884,816 | 5,243,282 | ||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
93,764,775 | 72,470,295 | 194,020,897 | |||||||||
Translation of assets and liabilities in foreign currencies |
(3,806 | ) | 61,345 | 206,589 | ||||||||
Net change in unrealized appreciation/depreciation |
93,760,969 | 72,531,640 | 194,227,486 | |||||||||
Net realized and unrealized gain |
91,589,489 | 74,416,456 | 199,470,768 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 90,755,615 | $ | 75,311,450 | $ | 210,820,923 | ||||||
a | Net of foreign withholding tax of $, $522,112 and $243,855, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Austria Investable Market Index Fund |
iShares MSCI Belgium Investable Market Index Fund |
|||||||||||||||
Six months ended |
Year ended August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income (loss) |
$ | (372,059 | ) | $ | 3,373,743 | $ | 66,919 | $ | 1,126,180 | |||||||
Net realized gain (loss) |
2,015,592 | (8,201,889 | ) | (1,896,358 | ) | (10,076,096 | ) | |||||||||
Net change in unrealized appreciation/depreciation |
36,124,696 | (14,419,288 | ) | 11,414,751 | 14,374,647 | |||||||||||
Net increase (decrease) in net assets resulting |
37,768,229 | (19,247,434 | ) | 9,585,312 | 5,424,731 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(444,755 | ) | (5,965,890 | ) | (353,203 | ) | (1,145,981 | ) | ||||||||
Total distributions to shareholders |
(444,755 | ) | (5,965,890 | ) | (353,203 | ) | (1,145,981 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
123,107,555 | 154,605,120 | 13,428,990 | 122,747,250 | ||||||||||||
Cost of shares redeemed |
(64,294,513 | ) | (178,538,062 | ) | (39,680,925 | ) | (121,172,070 | ) | ||||||||
Net increase (decrease) in net assets from capital |
58,813,042 | (23,932,942 | ) | (26,251,935 | ) | 1,575,180 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS |
96,136,516 | (49,146,266 | ) | (17,019,826 | ) | 5,853,930 | ||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
110,519,661 | 159,665,927 | 58,896,177 | 53,042,247 | ||||||||||||
End of period |
$ | 206,656,177 | $ | 110,519,661 | $ | 41,876,351 | $ | 58,896,177 | ||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period |
$ | (619,593 | ) | $ | 197,221 | $ | (210,499 | ) | $ | 75,785 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
5,700,000 | 7,600,000 | 1,000,000 | 10,160,000 | ||||||||||||
Shares redeemed |
(3,000,000 | ) | (9,100,000 | ) | (2,960,000 | ) | (9,560,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
2,700,000 | (1,500,000 | ) | (1,960,000 | ) | 600,000 | ||||||||||
See notes to financial statements.
58 | 2011 iShares SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Emerging Markets Eastern Europe Index Fund |
iShares MSCI EMU Index Fund |
|||||||||||||||
Six months ended |
Period from August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 4,618 | $ | 103,151 | $ | 4,454,450 | $ | 19,143,111 | ||||||||
Net realized loss |
(29,763 | ) | (203,443 | ) | (3,767,227 | ) | (15,434,929 | ) | ||||||||
Net change in unrealized appreciation/depreciation |
5,193,262 | (260,008 | ) | 182,951,656 | (93,999,959 | ) | ||||||||||
Net increase (decrease) in net assets resulting |
5,168,117 | (360,300 | ) | 183,638,879 | (90,291,777 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(46,705 | ) | (64,350 | ) | (5,993,392 | ) | (21,378,328 | ) | ||||||||
From net realized gain |
| (4,842 | ) | | | |||||||||||
Total distributions to shareholders |
(46,705 | ) | (69,192 | ) | (5,993,392 | ) | (21,378,328 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
14,308,425 | 13,261,092 | 61,290,656 | 616,111,927 | ||||||||||||
Cost of shares redeemed |
| | (245,985,805 | ) | (421,739,675 | ) | ||||||||||
Net increase (decrease) in net assets from capital |
14,308,425 | 13,261,092 | (184,695,149 | ) | 194,372,252 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS |
19,429,837 | 12,831,600 | (7,049,662 | ) | 82,702,147 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
12,831,600 | | 823,972,037 | 741,269,890 | ||||||||||||
End of period |
$ | 32,261,437 | $ | 12,831,600 | $ | 816,922,375 | $ | 823,972,037 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (2,725 | ) | $ | 39,362 | $ | (942,750 | ) | $ | 596,192 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
450,000 | 500,000 | 1,600,000 | 18,100,000 | ||||||||||||
Shares redeemed |
| | (7,200,000 | ) | (12,100,000 | ) | ||||||||||
Net increase (decrease) in shares outstanding |
450,000 | 500,000 | (5,600,000 | ) | 6,000,000 | |||||||||||
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI France Index Fund |
iShares MSCI Germany Index Fund |
|||||||||||||||
Six months ended |
Year ended August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 1,436,616 | $ | 7,946,760 | $ | 1,479,531 | $ | 18,436,764 | ||||||||
Net realized gain (loss) |
3,774,217 | (8,608,895 | ) | 1,219,562 | 2,496,753 | |||||||||||
Net change in unrealized appreciation/depreciation |
63,807,685 | (40,527,838 | ) | 499,473,744 | (95,695,088 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations |
69,018,518 | (41,189,973 | ) | 502,172,837 | (74,761,571 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(2,118,525 | ) | (8,068,942 | ) | | (20,484,235 | ) | |||||||||
Total distributions to shareholders |
(2,118,525 | ) | (8,068,942 | ) | | (20,484,235 | ) | |||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
55,559,334 | 358,661,968 | 961,655,313 | 1,389,774,707 | ||||||||||||
Cost of shares redeemed |
(45,416,169 | ) | (254,208,011 | ) | (303,486,431 | ) | (426,285,646 | ) | ||||||||
Net increase in net assets from capital share transactions |
10,143,165 | 104,453,957 | 658,168,882 | 963,489,061 | ||||||||||||
INCREASE IN NET ASSETS |
77,043,158 | 55,195,042 | 1,160,341,719 | 868,243,255 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
239,706,434 | 184,511,392 | 1,487,881,002 | 619,637,747 | ||||||||||||
End of period |
$ | 316,749,592 | $ | 239,706,434 | $ | 2,648,222,721 | $ | 1,487,881,002 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (335,514 | ) | $ | 346,395 | $ | 1,479,531 | $ | | |||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
2,200,000 | 15,000,000 | 38,700,000 | 67,200,000 | ||||||||||||
Shares redeemed |
(1,800,000 | ) | (11,200,000 | ) | (13,200,000 | ) | (20,400,000 | ) | ||||||||
Net increase in shares outstanding |
400,000 | 3,800,000 | 25,500,000 | 46,800,000 | ||||||||||||
See notes to financial statements.
60 | 2011 iShares SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Italy Index Fund |
iShares MSCI Netherlands Investable Market Index Fund |
|||||||||||||||
Six months ended |
Year ended August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 530,348 | $ | 2,526,028 | $ | 182,564 | $ | 2,594,922 | ||||||||
Net realized gain (loss) |
(560,606 | ) | (7,791,468 | ) | 4,682,404 | (4,073,218 | ) | |||||||||
Net change in unrealized appreciation/depreciation |
21,627,962 | (14,934,273 | ) | 32,831,785 | (4,949,050 | ) | ||||||||||
Net increase (decrease) in net assets resulting |
21,597,704 | (20,199,713 | ) | 37,696,753 | (6,427,346 | ) | ||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(623,006 | ) | (3,028,440 | ) | (455,768 | ) | (2,418,715 | ) | ||||||||
Return of capital |
| (96,798 | ) | | | |||||||||||
Total distributions to shareholders |
(623,006 | ) | (3,125,238 | ) | (455,768 | ) | (2,418,715 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
130,713,951 | 87,900,548 | 39,995,889 | 94,430,557 | ||||||||||||
Cost of shares redeemed |
(80,636,068 | ) | (113,791,470 | ) | (28,516,316 | ) | (21,325,132 | ) | ||||||||
Net increase (decrease) in net assets from capital |
50,077,883 | (25,890,922 | ) | 11,479,573 | 73,105,425 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS |
71,052,581 | (49,215,873 | ) | 48,720,558 | 64,259,364 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
76,500,052 | 125,715,925 | 147,610,507 | 83,351,143 | ||||||||||||
End of period |
$ | 147,552,633 | $ | 76,500,052 | $ | 196,331,065 | $ | 147,610,507 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (93,110 | ) | $ | (452 | ) | $ | 122,952 | $ | 396,156 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
7,650,000 | 5,250,000 | 1,850,000 | 4,850,000 | ||||||||||||
Shares redeemed |
(4,800,000 | ) | (6,750,000 | ) | (1,350,000 | ) | (1,100,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
2,850,000 | (1,500,000 | ) | 500,000 | 3,750,000 | |||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Spain Index Fund |
iShares MSCI Sweden Index Fund |
|||||||||||||||
Six months ended |
Year ended August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income (loss) |
$ | 3,297,216 | $ | 9,022,079 | $ | (833,874 | ) | $ | 4,069,874 | |||||||
Net realized gain (loss) |
2,964,489 | (34,736,468 | ) | (2,171,480 | ) | (2,661,078 | ) | |||||||||
Net change in unrealized appreciation/depreciation |
25,891,254 | (22,172,420 | ) | 93,760,969 | 9,087,749 | |||||||||||
Net increase (decrease) in net assets resulting |
32,152,959 | (47,886,809 | ) | 90,755,615 | 10,496,545 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(3,998,596 | ) | (11,300,415 | ) | | (4,773,557 | ) | |||||||||
Total distributions to shareholders |
(3,998,596 | ) | (11,300,415 | ) | | (4,773,557 | ) | |||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
288,878,311 | 185,418,132 | 344,762,664 | 136,592,737 | ||||||||||||
Cost of shares redeemed |
(211,061,273 | ) | (210,603,819 | ) | (6,657,920 | ) | (83,157,268 | ) | ||||||||
Net increase (decrease) in net assets from capital |
77,817,038 | (25,185,687 | ) | 338,104,744 | 53,435,469 | |||||||||||
INCREASE (DECREASE) IN NET ASSETS |
105,971,401 | (84,372,911 | ) | 428,860,359 | 59,158,457 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
194,361,522 | 278,734,433 | 249,491,188 | 190,332,731 | ||||||||||||
End of period |
$ | 300,332,923 | $ | 194,361,522 | $ | 678,351,547 | $ | 249,491,188 | ||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period |
$ | 563,386 | $ | 1,264,766 | $ | (836,702 | ) | $ | (2,828 | ) | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
7,050,000 | 4,800,000 | 11,175,000 | 5,400,000 | ||||||||||||
Shares redeemed |
(5,175,000 | ) | (5,400,000 | ) | (225,000 | ) | (3,525,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
1,875,000 | (600,000 | ) | 10,950,000 | 1,875,000 | |||||||||||
See notes to financial statements.
62 | 2011 iShares SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Switzerland Index Fund |
iShares MSCI United Kingdom Index Fund |
|||||||||||||||
Six months ended |
Year ended August 31, 2010 |
Six months ended |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 894,994 | $ | 6,014,037 | $ | 11,350,155 | $ | 27,740,950 | ||||||||
Net realized gain (loss) |
1,884,816 | (3,149,216 | ) | 5,243,282 | 3,681,580 | |||||||||||
Net change in unrealized appreciation/depreciation |
72,531,640 | 13,666,076 | 194,227,486 | (20,637,671 | ) | |||||||||||
Net increase in net assets resulting from operations |
75,311,450 | 16,530,897 | 210,820,923 | 10,784,859 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
| (6,459,032 | ) | (11,118,254 | ) | (27,007,036 | ) | |||||||||
Total distributions to shareholders |
| (6,459,032 | ) | (11,118,254 | ) | (27,007,036 | ) | |||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
36,692,540 | 150,874,722 | 292,537,039 | 352,106,687 | ||||||||||||
Cost of shares redeemed |
(14,838,077 | ) | (27,046,917 | ) | (57,889,272 | ) | (144,597,222 | ) | ||||||||
Net increase in net assets from capital share transactions |
21,854,463 | 123,827,805 | 234,647,767 | 207,509,465 | ||||||||||||
INCREASE IN NET ASSETS |
97,165,913 | 133,899,670 | 434,350,436 | 191,287,288 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
405,754,610 | 271,854,940 | 930,411,649 | 739,124,361 | ||||||||||||
End of period |
$ | 502,920,523 | $ | 405,754,610 | $ | 1,364,762,085 | $ | 930,411,649 | ||||||||
Undistributed net investment income included in net assets at end of period |
$ | 894,994 | $ | | $ | 5,416,464 | $ | 5,184,563 | ||||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
1,500,000 | 6,875,000 | 16,600,000 | 22,200,000 | ||||||||||||
Shares redeemed |
(625,000 | ) | (1,250,000 | ) | (3,600,000 | ) | (9,400,000 | ) | ||||||||
Net increase in shares outstanding |
875,000 | 5,625,000 | 13,000,000 | 12,800,000 | ||||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Austria Investable Market Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 17.27 | $ | 20.21 | $ | 29.78 | $ | 37.28 | $ | 31.08 | $ | 26.62 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment income (loss)a |
(0.05 | ) | 0.43 | 0.51 | 0.56 | 0.51 | 0.44 | |||||||||||||||||
Net realized and unrealized gain (loss)b |
5.57 | (2.62 | ) | (9.36 | ) | (6.98 | ) | 6.42 | 4.31 | |||||||||||||||
Total from investment operations |
5.52 | (2.19 | ) | (8.85 | ) | (6.42 | ) | 6.93 | 4.75 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.08 | ) | (0.75 | ) | (0.72 | ) | (1.08 | ) | (0.73 | ) | (0.29 | ) | ||||||||||||
Total distributions |
(0.08 | ) | (0.75 | ) | (0.72 | ) | (1.08 | ) | (0.73 | ) | (0.29 | ) | ||||||||||||
Net asset value, end of period |
$ | 22.71 | $ | 17.27 | $ | 20.21 | $ | 29.78 | $ | 37.28 | $ | 31.08 | ||||||||||||
Total return |
32.00 | %c | (11.07 | )% | (28.52 | )% | (17.64 | )% | 22.35 | % | 18.00 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 206,656 | $ | 110,520 | $ | 159,666 | $ | 193,602 | $ | 473,514 | $ | 391,637 | ||||||||||||
Ratio of expenses to average net assetsd |
0.52 | % | 0.54 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income (loss) to average net assetsd |
(0.49 | )% | 2.20 | % | 3.25 | % | 1.57 | % | 1.36 | % | 1.48 | % | ||||||||||||
Portfolio turnover ratee |
3 | % | 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 Funds underlying securities. |
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.
64 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Belgium Investable Market Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 11.78 | $ | 12.06 | $ | 17.64 | $ | 25.89 | $ | 22.83 | $ | 18.94 | ||||||||||||
Income from investment operations: |
|
|||||||||||||||||||||||
Net investment incomea |
0.02 | 0.19 | 0.22 | 0.78 | 0.76 | 0.75 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
2.07 | (0.27 | ) | (5.46 | ) | (7.27 | ) | 2.74 | 3.95 | |||||||||||||||
Total from investment operations |
2.09 | (0.08 | ) | (5.24 | ) | (6.49 | ) | 3.50 | 4.70 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.09 | ) | (0.20 | ) | (0.34 | ) | (1.76 | ) | (0.44 | ) | (0.81 | ) | ||||||||||||
Total distributions |
(0.09 | ) | (0.20 | ) | (0.34 | ) | (1.76 | ) | (0.44 | ) | (0.81 | ) | ||||||||||||
Net asset value, end of period |
$ | 13.78 | $ | 11.78 | $ | 12.06 | $ | 17.64 | $ | 25.89 | $ | 22.83 | ||||||||||||
Total return |
17.81 | %c | (0.60 | )% | (29.15 | )% | (26.21 | )% | 15.36 | % | 25.66 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 41,876 | $ | 58,896 | $ | 53,042 | $ | 119,955 | $ | 303,483 | $ | 152,484 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
0.24 | % | 1.55 | % | 2.23 | % | 3.32 | % | 2.90 | % | 3.60 | % | ||||||||||||
Portfolio turnover ratee |
1 | % | 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 Funds underlying securities. |
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 | 65 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Emerging Markets Eastern Europe Index Fund | ||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
Period from Sep 30, 2009a to Aug. 31, 2010 |
|||||||
Net asset value, beginning of period |
$ | 25.66 | $ | 24.65 | ||||
Income from investment operations: |
||||||||
Net investment incomeb |
0.01 | 0.26 | ||||||
Net realized and unrealized gainc |
8.37 | 0.89 | ||||||
Total from investment operations |
8.38 | 1.15 | ||||||
Less distributions from: |
||||||||
Net investment income |
(0.08 | ) | (0.13 | ) | ||||
Net realized gain |
| (0.01 | ) | |||||
Total distributions |
(0.08 | ) | (0.14 | ) | ||||
Net asset value, end of period |
$ | 33.96 | $ | 25.66 | ||||
Total return |
32.68 | %d | 4.68 | %d | ||||
Ratios/Supplemental data: |
||||||||
Net assets, end of period (000s) |
$ | 32,261 | $ | 12,832 | ||||
Ratio of expenses to average net assets prior to waived feese |
0.67 | % | 0.69 | % | ||||
Ratio of expenses to average net assets after waived feese |
0.67 | % | n/a | |||||
Ratio of net investment income to average net assetse |
0.05 | % | 1.05 | % | ||||
Portfolio turnover ratef |
7 | % | 13 | % |
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 Funds 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.
66 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI EMU Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 30.75 | $ | 35.64 | $ | 45.97 | $ | 57.15 | $ | 46.14 | $ | 37.49 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomeb |
0.20 | 0.80 | 0.93 | 1.71 | 1.40 | 1.37 | ||||||||||||||||||
Net realized and unrealized gain (loss)c |
7.86 | (4.76 | ) | (9.97 | ) | (9.59 | ) | 10.54 | 7.94 | |||||||||||||||
Total from investment operations |
8.06 | (3.96 | ) | (9.04 | ) | (7.88 | ) | 11.94 | 9.31 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.28 | ) | (0.93 | ) | (1.29 | ) | (3.30 | ) | (0.93 | ) | (0.66 | ) | ||||||||||||
Total distributions |
(0.28 | ) | (0.93 | ) | (1.29 | ) | (3.30 | ) | (0.93 | ) | (0.66 | ) | ||||||||||||
Net asset value, end of period |
$ | 38.53 | $ | 30.75 | $ | 35.64 | $ | 45.97 | $ | 57.15 | $ | 46.14 | ||||||||||||
Total return |
26.31 | %d | (11.19 | )% | (19.05 | )% | (14.52 | )% | 26.10 | % | 25.18 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 816,922 | $ | 823,972 | $ | 741,270 | $ | 1,291,808 | $ | 2,971,565 | $ | 1,794,921 | ||||||||||||
Ratio of expenses to average net assetse,f |
0.53 | % | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetse |
1.11 | % | 2.29 | % | 3.07 | % | 3.06 | % | 2.60 | % | 3.23 | % | ||||||||||||
Portfolio turnover rateg |
2 | % | 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 Funds underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
g | 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 | 67 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI France Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 21.03 | $ | 24.28 | $ | 30.70 | $ | 36.53 | $ | 31.16 | $ | 25.41 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.12 | 0.65 | 0.66 | 0.93 | 0.77 | 0.55 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
5.87 | (3.30 | ) | (6.13 | ) | (5.17 | ) | 5.06 | 5.52 | |||||||||||||||
Total from investment operations |
5.99 | (2.65 | ) | (5.47 | ) | (4.24 | ) | 5.83 | 6.07 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.18 | ) | (0.60 | ) | (0.95 | ) | (1.59 | ) | (0.46 | ) | (0.32 | ) | ||||||||||||
Total distributions |
(0.18 | ) | (0.60 | ) | (0.95 | ) | (1.59 | ) | (0.46 | ) | (0.32 | ) | ||||||||||||
Net asset value, end of period |
$ | 26.84 | $ | 21.03 | $ | 24.28 | $ | 30.70 | $ | 36.53 | $ | 31.16 | ||||||||||||
Total return |
28.56 | %c | (10.98 | )% | (17.11 | )% | (11.96 | )% | 18.83 | % | 24.13 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 316,750 | $ | 239,706 | $ | 184,511 | $ | 227,203 | $ | 445,696 | $ | 211,886 | ||||||||||||
Ratio of expenses to average net assetsd,e |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
1.01 | % | 2.71 | % | 3.18 | % | 2.60 | % | 2.17 | % | 1.95 | % | ||||||||||||
Portfolio turnover ratef |
2 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
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.
68 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Germany Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 19.45 | $ | 20.86 | $ | 27.55 | $ | 32.18 | $ | 23.68 | $ | 19.08 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.02 | 0.38 | 0.58 | 0.88 | 0.68 | 0.57 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
6.49 | (1.49 | ) | (6.65 | ) | (3.84 | ) | 8.33 | 4.15 | |||||||||||||||
Total from investment operations |
6.51 | (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 period |
$ | 25.96 | $ | 19.45 | $ | 20.86 | $ | 27.55 | $ | 32.18 | $ | 23.68 | ||||||||||||
Total return |
33.47 | %c | (5.35 | )% | (21.62 | )% | (9.81 | )% | 38.47 | % | 24.82 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 2,648,223 | $ | 1,487,881 | $ | 619,638 | $ | 669,452 | $ | 1,641,245 | $ | 802,795 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
0.16 | % | 1.80 | % | 3.18 | % | 2.72 | % | 2.32 | % | 2.62 | % | ||||||||||||
Portfolio turnover ratee |
6 | % | 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 Funds underlying securities. |
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 | 69 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Italy Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 15.00 | $ | 19.05 | $ | 25.04 | $ | 33.82 | $ | 30.48 | $ | 25.77 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.10 | 0.39 | 0.47 | 1.53 | 1.35 | 1.07 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
3.56 | (3.99 | ) | (5.82 | ) | (7.71 | ) | 2.66 | 4.15 | |||||||||||||||
Total from investment operations |
3.66 | (3.60 | ) | (5.35 | ) | (6.18 | ) | 4.01 | 5.22 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.10 | ) | (0.44 | ) | (0.64 | ) | (2.60 | ) | (0.67 | ) | (0.51 | ) | ||||||||||||
Return of capital |
| (0.01 | ) | | | | | |||||||||||||||||
Total distributions |
(0.10 | ) | (0.45 | ) | (0.64 | ) | (2.60 | ) | (0.67 | ) | (0.51 | ) | ||||||||||||
Net asset value, end of period |
$ | 18.56 | $ | 15.00 | $ | 19.05 | $ | 25.04 | $ | 33.82 | $ | 30.48 | ||||||||||||
Total return |
24.46 | %c | (19.11 | )% | (20.78 | )% | (19.43 | )% | 13.20 | % | 20.61 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 147,553 | $ | 76,500 | $ | 125,716 | $ | 244,154 | $ | 172,495 | $ | 146,324 | ||||||||||||
Ratio of expenses to average net assetsd,e |
0.52 | % | 0.54 | % | 0.55 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
1.12 | % | 2.17 | % | 2.85 | % | 5.06 | % | 4.02 | % | 3.87 | % | ||||||||||||
Portfolio turnover ratef |
6 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
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.
70 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Netherlands Investable Markets Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 17.89 | $ | 18.52 | $ | 24.38 | $ | 29.75 | $ | 24.17 | $ | 19.10 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.02 | 0.45 | 0.35 | 1.10 | 0.98 | 0.60 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
4.58 | (0.70 | ) | (5.55 | ) | (4.68 | ) | 5.05 | 4.95 | |||||||||||||||
Total from investment operations |
4.60 | (0.25 | ) | (5.20 | ) | (3.58 | ) | 6.03 | 5.55 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.05 | ) | (0.38 | ) | (0.66 | ) | (1.79 | ) | (0.45 | ) | (0.48 | ) | ||||||||||||
Total distributions |
(0.05 | ) | (0.38 | ) | (0.66 | ) | (1.79 | ) | (0.45 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period |
$ | 22.44 | $ | 17.89 | $ | 18.52 | $ | 24.38 | $ | 29.75 | $ | 24.17 | ||||||||||||
Total return |
25.77 | %c | (1.44 | )% | (20.59 | )% | (12.67 | )% | 25.22 | % | 29.53 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 196,331 | $ | 147,611 | $ | 83,351 | $ | 209,653 | $ | 251,354 | $ | 109,991 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
0.22 | % | 2.31 | % | 2.24 | % | 3.86 | % | 3.50 | % | 2.78 | % | ||||||||||||
Portfolio turnover ratee |
1 | % | 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 Funds underlying securities. |
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 | 71 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Spain Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 37.02 | $ | 47.65 | $ | 50.41 | $ | 58.06 | $ | 44.81 | $ | 35.70 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.71 | 1.64 | 1.75 | 1.98 | 1.30 | 1.07 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
5.53 | (10.01 | ) | (2.14 | ) | (7.33 | ) | 12.33 | 8.78 | |||||||||||||||
Total from investment operations |
6.24 | (8.37 | ) | (0.39 | ) | (5.35 | ) | 13.63 | 9.85 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(1.11 | ) | (2.26 | ) | (2.37 | ) | (2.30 | ) | (0.38 | ) | (0.74 | ) | ||||||||||||
Total distributions |
(1.11 | ) | (2.26 | ) | (2.37 | ) | (2.30 | ) | (0.38 | ) | (0.74 | ) | ||||||||||||
Net asset value, end of period |
$ | 42.15 | $ | 37.02 | $ | 47.65 | $ | 50.41 | $ | 58.06 | $ | 44.81 | ||||||||||||
Total return |
17.26 | %c | (17.91 | )% | 0.64 | % | (9.76 | )% | 30.47 | % | 28.09 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 300,333 | $ | 194,362 | $ | 278,734 | $ | 321,349 | $ | 522,556 | $ | 178,130 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.54 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
3.59 | % | 3.72 | % | 4.70 | % | 3.28 | % | 2.36 | % | 2.67 | % | ||||||||||||
Portfolio turnover ratee |
7 | % | 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 Funds underlying securities. |
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.
72 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Sweden Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 24.46 | $ | 22.86 | $ | 24.48 | $ | 34.57 | $ | 25.88 | $ | 21.58 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment income (loss)a |
(0.06 | ) | 0.48 | 0.40 | 0.91 | 1.15 | 0.76 | |||||||||||||||||
Net realized and unrealized gain (loss)b |
7.67 | 1.73 | (1.56 | ) | (8.63 | ) | 7.88 | 3.96 | ||||||||||||||||
Total from investment operations |
7.61 | 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 period |
$ | 32.07 | $ | 24.46 | $ | 22.86 | $ | 24.48 | $ | 34.57 | $ | 25.88 | ||||||||||||
Total return |
31.11 | %c | 9.70 | % | (4.04 | )% | (23.16 | )% | 35.01 | % | 22.16 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 678,352 | $ | 249,491 | $ | 190,333 | $ | 227,654 | $ | 573,026 | $ | 151,427 | ||||||||||||
Ratio of expenses to average net assetsd |
0.52 | % | 0.53 | % | 0.55 | % | 0.51 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income (loss) to average net assetsd |
(0.42 | )% | 1.97 | % | 2.34 | % | 2.91 | % | 3.42 | % | 3.13 | % | ||||||||||||
Portfolio turnover ratee |
5 | % | 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 Funds underlying securities. |
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 | 73 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Switzerland Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 21.64 | $ | 20.71 | $ | 23.09 | $ | 25.78 | $ | 22.49 | $ | 17.63 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.05 | 0.39 | 0.25 | 0.49 | 0.36 | 0.27 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
3.94 | 0.90 | (2.30 | ) | (2.51 | ) | 3.12 | 4.71 | ||||||||||||||||
Total from investment operations |
3.99 | 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 period |
$ | 25.63 | $ | 21.64 | $ | 20.71 | $ | 23.09 | $ | 25.78 | $ | 22.49 | ||||||||||||
Total return |
18.44 | %c | 6.35 | % | (8.63 | )% | (7.97 | )% | 15.53 | % | 28.36 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 502,921 | $ | 405,755 | $ | 271,855 | $ | 366,525 | $ | 318,998 | $ | 188,319 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
0.40 | % | 1.80 | % | 1.42 | % | 1.93 | % | 1.42 | % | 1.34 | % | ||||||||||||
Portfolio turnover ratee |
3 | % | 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 Funds underlying securities. |
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.
74 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI United Kingdom Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 15.01 | $ | 15.02 | $ | 19.35 | $ | 24.73 | $ | 21.92 | $ | 18.74 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.18 | 0.46 | 0.50 | 0.83 | 0.84 | 0.97 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
3.18 | (0.03 | ) | (4.26 | ) | (4.89 | ) | 2.78 | 2.79 | |||||||||||||||
Total from investment operations |
3.36 | 0.43 | (3.76 | ) | (4.06 | ) | 3.62 | 3.76 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.17 | ) | (0.44 | ) | (0.57 | ) | (1.32 | ) | (0.81 | ) | (0.58 | ) | ||||||||||||
Total distributions |
(0.17 | ) | (0.44 | ) | (0.57 | ) | (1.32 | ) | (0.81 | ) | (0.58 | ) | ||||||||||||
Net asset value, end of period |
$ | 18.20 | $ | 15.01 | $ | 15.02 | $ | 19.35 | $ | 24.73 | $ | 21.92 | ||||||||||||
Total return |
22.47 | %c | 2.87 | % | (18.68 | )% | (17.16 | )% | 16.77 | % | 20.61 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 1,364,762 | $ | 930,412 | $ | 739,124 | $ | 882,502 | $ | 1,127,738 | $ | 872,409 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
2.10 | % | 2.98 | % | 3.90 | % | 3.64 | % | 3.51 | % | 4.81 | % | ||||||||||||
Portfolio turnover ratee |
2 | % | 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 Funds underlying securities. |
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 | 75 |
Notes to Financial Statements (Unaudited)
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 its underlying index. The investment adviser uses a passive or index approach to achieve each Funds 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 Companys 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
76 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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); |
| 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); and |
| Level 3 Inputs that are unobservable for the asset or liability (a Level 3 Price). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in
NOTES TO FINANCIAL STATEMENTS | 77 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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 securitys 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 Funds net asset value and the prices used by the Funds underlying index, which in turn could result in a difference between the Funds performance and the performance of the Funds underlying index.
The following table summarizes the value of each of the Funds investments according to the fair value hierarchy as of February 28, 2011. The breakdown of each Funds 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 | ||||||||||||
Austria Investable Market |
||||||||||||||||
Common Stocks |
$ | 205,882,125 | $ | | $ | 262 | $ | 205,882,387 | ||||||||
Rights |
| 465 | 465 | |||||||||||||
Short-Term Investments |
1,822,430 | | | 1,822,430 | ||||||||||||
$ | 207,704,555 | $ | | $ | 727 | $ | 207,705,282 | |||||||||
Belgium Investable Market |
||||||||||||||||
Common Stocks |
$ | 40,766,168 | $ | | $ | | $ | 40,766,168 | ||||||||
Rights |
93,498 | 93,498 | ||||||||||||||
Short-Term Investments |
313,604 | | | 313,604 | ||||||||||||
$ | 41,173,270 | $ | | $ | | $ | 41,173,270 | |||||||||
Emerging Markets Eastern Europe |
||||||||||||||||
Common Stocks |
$ | 31,664,063 | $ | | $ | | $ | 31,664,063 | ||||||||
Preferred Stocks |
589,651 | 589,651 | ||||||||||||||
Short-Term Investments |
8,366 | | | 8,366 | ||||||||||||
$ | 32,262,080 | $ | | $ | | $ | 32,262,080 | |||||||||
EMU |
||||||||||||||||
Common Stocks |
$ | 800,431,255 | $ | | $ | 86 | $ | 800,431,341 | ||||||||
Preferred Stocks |
15,015,445 | | | 15,015,445 | ||||||||||||
Rights |
| | 29 | 29 | ||||||||||||
Short-Term Investments |
4,178,794 | | | 4,178,794 | ||||||||||||
$ | 819,625,494 | $ | | $ | 115 | $ | 819,625,609 | |||||||||
France |
||||||||||||||||
Common Stocks |
$ | 316,406,971 | $ | | $ | | $ | 316,406,971 | ||||||||
Short-Term Investments |
366,422 | | | 366,422 | ||||||||||||
$ | 316,773,393 | $ | | $ | | $ | 316,773,393 | |||||||||
78 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Investments in Securities | ||||||||||||||||
iShares MSCI Index Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Germany |
||||||||||||||||
Common Stocks |
$ | 2,492,100,701 | $ | | $ | | $ | 2,492,100,701 | ||||||||
Preferred Stocks |
150,843,071 | 150,843,071 | ||||||||||||||
Short-Term Investments |
1,023,327 | | | 1,023,327 | ||||||||||||
$ | 2,643,967,099 | $ | | $ | | $ | 2,643,967,099 | |||||||||
Italy |
||||||||||||||||
Common Stocks |
$ | 144,687,593 | $ | | $ | | $ | 144,687,593 | ||||||||
Preferred Stocks |
2,676,145 | | | 2,676,145 | ||||||||||||
Short-Term Investments |
5,108,687 | | | 5,108,687 | ||||||||||||
$ | 152,472,425 | $ | | $ | | $ | 152,472,425 | |||||||||
Netherlands Investable Market |
||||||||||||||||
Common Stocks |
$ | 194,614,122 | $ | | $ | | $ | 194,614,122 | ||||||||
Short-Term Investments |
766,825 | | | 766,825 | ||||||||||||
$ | 195,380,947 | $ | | $ | | $ | 195,380,947 | |||||||||
Spain |
||||||||||||||||
Common Stocks |
$ | 299,986,558 | $ | | $ | | $ | 299,986,558 | ||||||||
Short-Term Investments |
10,957,109 | | | 10,957,109 | ||||||||||||
$ | 310,943,667 | $ | | $ | | $ | 310,943,667 | |||||||||
Sweden |
||||||||||||||||
Common Stocks |
$ | 677,723,676 | $ | | $ | | $ | 677,723,676 | ||||||||
Rights |
| | 203,279 | 203,279 | ||||||||||||
Short-Term Investments |
2,929,901 | | | 2,929,901 | ||||||||||||
$ | 680,653,577 | $ | | $ | 203,279 | $ | 680,856,856 | |||||||||
Switzerland |
||||||||||||||||
Common Stocks |
$ | 498,862,776 | $ | | $ | | $ | 498,862,776 | ||||||||
Short-Term Investments |
949,387 | | | 949,387 | ||||||||||||
$ | 499,812,163 | $ | | $ | | $ | 499,812,163 | |||||||||
United Kingdom |
||||||||||||||||
Common Stocks |
$ | 1,358,464,874 | $ | | $ | | $ | 1,358,464,874 | ||||||||
Short-Term Investments |
868,196 | | | 868,196 | ||||||||||||
$ | 1,359,333,070 | $ | | $ | | $ | 1,359,333,070 | |||||||||
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
NOTES TO FINANCIAL STATEMENTS | 79 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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 February 28, 2011, if any, are reflected in the Funds Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income, if any, generally are declared and paid semi-annually by each of the Funds. 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
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 six months ended February 28, 2011.
80 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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 between paid-in capital, accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss) as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, and realized gains (losses) from foreign currency transactions and in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
As of February 28, 2011, 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) |
||||||||||||
Austria Investable Market |
$ | 250,394,246 | $ | 3,011,096 | $ | (45,700,060 | ) | $ | (42,688,964 | ) | ||||||
Belgium Investable Market |
59,392,792 | 2,267,755 | (20,487,277 | ) | (18,219,522 | ) | ||||||||||
Emerging Markets Eastern Europe |
27,360,802 | 5,084,414 | (183,136 | ) | 4,901,278 | |||||||||||
EMU |
1,060,741,563 | 32,368,002 | (273,483,956 | ) | (241,115,954 | ) | ||||||||||
France |
385,200,877 | 8,531,820 | (76,959,304 | ) | (68,427,484 | ) | ||||||||||
Germany |
2,481,044,076 | 221,116,770 | (58,193,747 | ) | 162,923,023 | |||||||||||
Italy |
198,837,324 | 1,202,993 | (47,567,892 | ) | (46,364,899 | ) | ||||||||||
Netherlands Investable Market |
212,380,396 | 7,698,821 | (24,698,270 | ) | (16,999,449 | ) | ||||||||||
Spain |
391,149,356 | 1,457,301 | (81,662,990 | ) | (80,205,689 | ) | ||||||||||
Sweden |
645,366,850 | 44,106,483 | (8,616,477 | ) | 35,490,006 | |||||||||||
Switzerland |
459,011,763 | 51,719,479 | (10,919,079 | ) | 40,800,400 | |||||||||||
United Kingdom |
1,427,711,840 | 112,555,151 | (180,933,921 | ) | (68,378,770 | ) |
NOTES TO FINANCIAL STATEMENTS | 81 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Management has reviewed the tax positions as of February 28, 2011, 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
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (BFA) manages the investment of each Funds assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (BlackRock). Under the Investment Advisory Agreement, BFA is responsible for all 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, litigation expenses and any extraordinary expenses.
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 Funds 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 |
Effective January 1, 2011, 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 Funds 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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
Prior to January 1, 2011, for its investment advisory services to the iShares MSCI Emerging Markets Eastern Europe Index Fund, BFA was entitled to an annual investment advisory fee based on the Funds 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 |
82 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
BFA has voluntarily waived a portion of its investment advisory fees for the iShares MSCI Emerging Markets Eastern Europe Index Fund in the amount of $462.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (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 combined income earned from the investment of cash collateral received for the loan of securities and any fees paid by borrowers. For the six months ended February 28, 2011, BTC earned securities lending agent fees from the Funds as follows:
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.
The PNC Financial Services Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays PLC (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.
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 six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Austria Investable Market |
$ | 5,309,929 | $ | 5,144,579 | ||||
Belgium Investable Market |
497,997 | 2,126,945 | ||||||
Emerging Markets Eastern Europe |
1,571,188 | 1,454,439 | ||||||
EMU |
19,838,532 | 23,302,376 | ||||||
France |
7,030,942 | 5,903,364 | ||||||
Germany |
104,108,954 | 103,767,789 | ||||||
Italy |
5,993,124 | 5,563,832 | ||||||
Netherlands Investable Market |
2,063,083 | 3,379,152 | ||||||
Spain |
13,337,829 | 13,343,756 | ||||||
Sweden |
20,038,170 | 21,405,117 | ||||||
Switzerland |
18,197,850 | 15,333,967 | ||||||
United Kingdom |
23,008,320 | 20,885,165 |
NOTES TO FINANCIAL STATEMENTS | 83 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
In-kind transactions (see Note 4) for the six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | In-kind Purchases |
In-kind Sales |
||||||
Austria Investable Market |
$ | 122,437,111 | $ | 63,976,279 | ||||
Belgium Investable Market |
13,178,844 | 38,391,446 | ||||||
Emerging Markets Eastern Europe |
14,258,371 | | ||||||
EMU |
60,804,349 | 242,954,210 | ||||||
France |
53,735,208 | 45,219,534 | ||||||
Germany |
958,491,549 | 299,979,146 | ||||||
Italy |
129,001,568 | 79,469,216 | ||||||
Netherlands Investable Market |
39,876,036 | 28,492,712 | ||||||
Spain |
287,313,016 | 210,284,966 | ||||||
Sweden |
343,361,253 | 4,653,278 | ||||||
Switzerland |
35,278,621 | 14,676,861 | ||||||
United Kingdom |
290,466,161 | 57,510,376 |
4. CAPITAL SHARE TRANSACTIONS
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) 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 securities, which constitutes an optimized representation of that Funds 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 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 February 28, 2011, 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 February 28, 2011 and the value of the related collateral are
84 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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.
NOTES TO FINANCIAL STATEMENTS | 85 |
Notes:
86 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, its 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 firms 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). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor 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 SECs website or may be reviewed and copied at the SECs 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.
©2011 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-SAR-82-0211
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2011 SEMI-ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
FEBRUARY 28, 2011
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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
5 | ||||
15 | ||||
17 | ||||
17 | ||||
20 | ||||
25 | ||||
28 | ||||
30 | ||||
33 | ||||
35 | ||||
37 | ||||
40 | ||||
49 | ||||
60 | ||||
69 | ||||
79 |
iSHARES® MSCI BRAZIL INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.92% | 12.77% | 12.92% | 15.70% | 16.27% | 16.54% | 19.53% | 19.60% | 21.60% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
11.92% | 12.77% | 12.92% | 107.32% | 112.46% | 114.93% | 495.53% | 498.77% | 606.96% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Brazil IndexSM (the Index). The Index consists of stocks traded primarily on the BM&FBOVESPA (the Brazilian exchange). 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 six-month period ended February 28, 2011, the total return for the Fund was 12.32%, while the total return for the Index was 12.87%.
FUND PERFORMANCE OVERVIEWS | 5 |
Fund Performance Overview
iSHARES® MSCI BRIC INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
13.35% | 14.40% | 13.67% | (3.60)% | (3.35)% | (3.89)% | (11.40)% | (10.62)% | (12.27)% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 IndexSM (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 six-month period ended February 28, 2011, the total return for the Fund was 12.20%, while the total return for the Index was 11.83%.
6 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI CANADA INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
32.10% | 32.13% | 32.50% | 9.28% | 9.33% | 9.55% | 12.21% | 12.39% | 12.56% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
32.10% | 32.13% | 32.50% | 55.88% | 56.18% | 57.81% | 216.53% | 221.51% | 226.33% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Canada IndexSM (the Index). The Index consists of stocks traded primarily on the Toronto Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 29.90%, while the total return for the Index was 30.16%.
FUND PERFORMANCE OVERVIEWS | 7 |
Fund Performance Overview
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
24.65% | 24.29% | 26.32% | 12.60% | 12.63% | 13.02% | 47.93% | 48.04% | 49.76% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 six-month period ended February 28, 2011, the total return for the Fund was 3.29%, while the total return for the Index was 3.61%.
8 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
6.75% | 5.31% | 7.56% | 6.85% | 6.96% | 7.80% | 21.43% | 21.79% | 24.63% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 IndexSM (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 six-month period ended February 28, 2011, the total return for the Fund was 16.52%, while the total return for the Index was 16.82%.
FUND PERFORMANCE OVERVIEWS | 9 |
Fund Performance Overview
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
26.14% | 26.84% | 26.95% | 11.39% | 11.48% | 10.56% | 17.56% | 17.63% | 17.37% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
26.14% | 26.84% | 26.95% | 71.47% | 72.20% | 65.18% | 404.29% | 407.09% | 396.04% |
Index performance reflects the performance of the MSCI Mexico IndexSM through November 30, 2007 and the MSCI Mexico Investable Market IndexSM thereafter.
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
10 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUNDS
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 the MSCI Mexico Investable Market IndexSM (the Index). The Index consists of stocks traded primarily on the Mexican Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 27.14%, while the total return for the Index was 26.44%.
FUND PERFORMANCE OVERVIEWS | 11 |
Fund Performance Overview
iSHARES® MSCI SOUTH AFRICA INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
31.97% | 32.78% | 32.83% | 8.79% | 8.74% | 9.82% | 20.41% | 20.38% | 21.72% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
31.97% | 32.78% | 32.83% | 52.36% | 52.03% | 59.76% | 347.88% | 346.77% | 388.82% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/7/03), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 the MSCI South Africa IndexSM (the Index). The Index consists of stocks traded primarily on the Johannesburg Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 20.75%, while the total return for the Index was 21.18%.
12 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
20.27% | 20.74% | 20.59% | 7.44% | 7.54% | 7.78% | 23.40% | 23.76% | 24.55% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 six-month period ended February 28, 2011, the total return for the Fund was (3.22)%, while the total return for the Index was (2.90)%.
FUND PERFORMANCE OVERVIEWS | 13 |
Fund Performance Overview
iSHARES® MSCI USA INDEX FUND
Performance as of February 28, 2011
Cumulative Total Returns | ||||
Inception to 2/28/11 | ||||
NAV | MARKET | INDEX | ||
15.94% | 15.98% | 16.17% |
Cumulative Total Returns represent the total change in value of an investment over the period indicated and are calculated from an inception date of 5/5/10.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds 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 calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 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 six-month period ended February 28, 2011, the total return for the Fund was 27.92%, while the total return for the Index was 28.17%.
14 | 2011 iSHARES SEMI-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 September 1, 2010 to February 28, 2011.
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 Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds 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 (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
Brazil |
||||||||||||||||
Actual |
$1,000.00 | $1,123.20 | 0.59 | % | $3.11 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
BRIC |
||||||||||||||||
Actual |
1,000.00 | 1,122.00 | 0.66 | 3.47 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.50 | 0.66 | 3.31 | ||||||||||||
Canada |
||||||||||||||||
Actual |
1,000.00 | 1,299.00 | 0.53 | 3.02 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Chile Investable Market |
||||||||||||||||
Actual |
1,000.00 | 1,032.90 | 0.59 | 2.97 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 |
SHAREHOLDER EXPENSES | 15 |
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
Israel Capped Investable Market |
||||||||||||||||
Actual |
$1,000.00 | $1,165.20 | 0.59 | % | $3.17 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
Mexico Investable Market |
||||||||||||||||
Actual |
1,000.00 | 1,271.40 | 0.53 | 2.98 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
South Africa |
||||||||||||||||
Actual |
1,000.00 | 1,207.50 | 0.59 | 3.23 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
Turkey Investable Market |
||||||||||||||||
Actual |
1,000.00 | 967.80 | 0.59 | 2.88 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
USA |
||||||||||||||||
Actual |
1,000.00 | 1,279.20 | 0.15 | 0.85 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,024.10 | 0.15 | 0.75 |
a | Expenses are calculated using each Funds 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 (181 days) and divided by the number of days in the year (365 days). |
16 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI BRAZIL INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 17 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
February 28, 2011
18 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRAZIL INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 19 |
Schedule of Investments (Unaudited)
iSHARES® MSCI BRIC INDEX FUND
February 28, 2011
20 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRIC INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 21 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRIC INDEX FUND
February 28, 2011
22 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRIC INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 23 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI BRIC INDEX FUND
February 28, 2011
24 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI CANADA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 25 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI CANADA INDEX FUND
February 28, 2011
26 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI CANADA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 27 |
Schedule of Investments (Unaudited)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
February 28, 2011
28 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI CHILE INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 29 |
Schedule of Investments (Unaudited)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
February 28, 2011
30 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 31 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI ISRAEL CAPPED INVESTABLE MARKET INDEX FUND
February 28, 2011
32 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 33 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI MEXICO INVESTABLE MARKET INDEX FUND
February 28, 2011
34 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 35 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SOUTH AFRICA INDEX FUND
February 28, 2011
36 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 37 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
February 28, 2011
38 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI TURKEY INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 39 |
Schedule of Investments (Unaudited)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
40 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 41 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
42 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 43 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
44 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 45 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
46 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 47 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA INDEX FUND
February 28, 2011
48 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited)
iSHARES®, INC.
February 28, 2011
iShares MSCI Index Fund |
iShares MSCI Index Fund |
iShares MSCI Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 7,816,538,966 | $ | 997,805,429 | $ | 4,937,503,862 | ||||||
Affiliated issuers (Note 2) |
8,169,947 | 26,870,916 | 13,445,072 | |||||||||
Total cost of investments |
$ | 7,824,708,913 | $ | 1,024,676,345 | $ | 4,950,948,934 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 12,616,781,669 | $ | 1,159,618,046 | $ | 5,775,875,111 | ||||||
Affiliated issuers (Note 2) |
8,169,947 | 26,870,916 | 13,445,072 | |||||||||
Total fair value of investments |
12,624,951,616 | 1,186,488,962 | 5,789,320,183 | |||||||||
Foreign currencies, at valueb |
36,066,829 | 2,038,309 | 5,265,061 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
135,129,246 | 13,127,123 | 64,197,221 | |||||||||
Dividends and interest |
38,634,387 | 1,229,397 | 4,780,703 | |||||||||
Capital shares sold |
| | 285,185 | |||||||||
Total Assets |
12,834,782,078 | 1,202,883,791 | 5,863,848,353 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
142,156,433 | 13,279,885 | 64,907,492 | |||||||||
Collateral for securities on loan (Note 5) |
| 26,766,391 | 10,018,055 | |||||||||
Investment advisory fees (Note 2) |
5,589,014 | 600,779 | 2,122,598 | |||||||||
Total Liabilities |
147,745,447 | 40,647,055 | 77,048,145 | |||||||||
NET ASSETS |
$ | 12,687,036,631 | $ | 1,162,236,736 | $ | 5,786,800,208 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 8,895,783,509 | $ | 1,048,275,022 | $ | 5,163,111,511 | ||||||
Undistributed (distributions in excess of) net investment income |
(337,681,853 | ) | (6,107,749 | ) | 3,756,701 | |||||||
Accumulated net realized loss |
(673,766,715 | ) | (41,830,577 | ) | (218,539,828 | ) | ||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies |
4,802,701,690 | 161,900,040 | 838,471,824 | |||||||||
NET ASSETS |
$ | 12,687,036,631 | $ | 1,162,236,736 | $ | 5,786,800,208 | ||||||
Shares outstandingc |
171,750,000 | 24,350,000 | 172,500,000 | |||||||||
Net asset value per share |
$ | 73.87 | $ | 47.73 | $ | 33.55 | ||||||
a | Securities on loan with values of $ , $25,136,695 and $9,529,731, respectively. See Note 5. |
b | Cost of foreign currencies: $35,889,187, $2,027,241 and $5,197,593, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 340.2 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 49 |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI Chile Investable Market Index Fund |
iShares MSCI Israel Capped Investable Market Index Fund |
iShares MSCI Mexico Investable Market Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 677,378,704 | $ | 131,137,628 | $ | 1,385,623,088 | ||||||
Affiliated issuers (Note 2) |
1,254,477 | 1,368,976 | 63,372,183 | |||||||||
Total cost of investments |
$ | 678,633,181 | $ | 132,506,604 | $ | 1,448,995,271 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 873,659,945 | $ | 121,583,668 | $ | 1,480,372,614 | ||||||
Affiliated issuers (Note 2) |
1,254,477 | 1,368,976 | 63,372,183 | |||||||||
Total fair value of investments |
874,914,422 | 122,952,644 | 1,543,744,797 | |||||||||
Foreign currencies, at valueb |
| 272,407 | 1,360,689 | |||||||||
Cash |
813,205 | | | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
3,153,447 | 3,616,742 | 6,500,337 | |||||||||
Due from custodian (Note 4) |
| 316,960 | | |||||||||
Dividends and interest |
16,562 | 7,621 | 62,307 | |||||||||
Total Assets |
878,897,636 | 127,166,374 | 1,551,668,130 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
5,560,549 | 3,871,065 | 7,024,895 | |||||||||
Collateral for securities on loan (Note 5) |
| 1,351,311 | 62,803,892 | |||||||||
Capital shares redeemed |
| 83,854 | | |||||||||
Investment advisory fees (Note 2) |
399,174 | 61,278 | 605,027 | |||||||||
Total Liabilities |
5,959,723 | 5,367,508 | 70,433,814 | |||||||||
NET ASSETS |
$ | 872,937,913 | $ | 121,798,866 | $ | 1,481,234,316 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 702,872,122 | $ | 147,756,018 | $ | 1,378,471,760 | ||||||
Undistributed (distributions in excess of) net investment income |
1,785,804 | (330,690 | ) | (2,105,707 | ) | |||||||
Undistributed net realized gain (accumulated net realized loss) |
(28,006,146 | ) | (16,073,821 | ) | 10,123,302 | |||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies |
196,286,133 | (9,552,641 | ) | 94,744,961 | ||||||||
NET ASSETS |
$ | 872,937,913 | $ | 121,798,866 | $ | 1,481,234,316 | ||||||
Shares outstandingc |
12,550,000 | 2,150,000 | 24,300,000 | |||||||||
Net asset value per share |
$ | 69.56 | $ | 56.65 | $ | 60.96 | ||||||
a | Securities on loan with values of $ , $1,277,307 and $59,570,946, respectively. See Note 5. |
b | Cost of foreign currencies: $ , $271,000 and $1,365,666, respectively. |
c | $0.001 par value, number of shares authorized: 200 million, 500 million and 255 million, respectively. |
See notes to financial statements.
50 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI South Africa Index Fund |
iShares MSCI Turkey Investable Market Index Fund |
iShares MSCI Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 582,870,102 | $ | 557,268,543 | $ | 1,233,498 | ||||||
Affiliated issuers (Note 2) |
1,898,852 | 45,824,469 | 10,655 | |||||||||
Total cost of investments |
$ | 584,768,954 | $ | 603,093,012 | $ | 1,244,153 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 610,548,428 | $ | 506,416,467 | $ | 1,409,360 | ||||||
Affiliated issuers (Note 2) |
1,898,852 | 45,824,469 | 10,641 | |||||||||
Total fair value of investments |
612,447,280 | 552,240,936 | 1,420,001 | |||||||||
Foreign currencies, at valueb |
662,640 | 353,604 | | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
2,014,135 | 4,911,557 | | |||||||||
Dividends and interest |
7,340 | 49,527 | 2,843 | |||||||||
Capital shares sold |
| 202,617 | | |||||||||
Total Assets |
615,131,395 | 557,758,241 | 1,422,844 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
2,097,184 | 6,457,164 | 2,659 | |||||||||
Collateral for securities on loan (Note 5) |
1,768,348 | 44,504,287 | 2,905 | |||||||||
Capital shares redeemed |
3,750 | | | |||||||||
Investment advisory fees (Note 2) |
279,756 | 262,423 | 162 | |||||||||
Total Liabilities |
4,149,038 | 51,223,874 | 5,726 | |||||||||
NET ASSETS |
$ | 610,982,357 | $ | 506,534,367 | $ | 1,417,118 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 607,443,314 | $ | 500,077,019 | $ | 1,220,478 | ||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) |
(6,639,512 | ) | (6,108,359 | ) | 4,228 | |||||||
Undistributed net realized gain (accumulated net realized loss) |
(17,505,910 | ) | 63,418,291 | 16,564 | ||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies |
27,684,465 | (50,852,584 | ) | 175,848 | ||||||||
NET ASSETS |
$ | 610,982,357 | $ | 506,534,367 | $ | 1,417,118 | ||||||
Shares outstandingc |
8,800,000 | 8,650,000 | 50,000 | |||||||||
Net asset value per share |
$ | 69.43 | $ | 58.56 | $ | 28.34 | ||||||
a | Securities on loan with values of $1,682,718, $42,009,584 and $2,844, respectively. See Note 5. |
b | Cost of foreign currencies: $648,422, $354,268 and $ , respectively. |
c | $0.001 par value, number of shares authorized: 400 million, 200 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 51 |
Statements of Operations (Unaudited)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Index Fund |
iShares MSCI Index Fund |
iShares MSCI Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 131,213,835 | $ | 7,551,150 | $ | 50,852,347 | ||||||
Interest from affiliated issuers (Note 2) |
10,271 | 614 | 1,970 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
1,392 | 299,759 | 68,000 | |||||||||
Total investment income |
131,225,498 | 7,851,523 | 50,922,317 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
33,799,907 | 3,730,035 | 11,302,817 | |||||||||
Total expenses |
33,799,907 | 3,730,035 | 11,302,817 | |||||||||
Less investment advisory fees waived (Note 2) |
| (31,041 | ) | | ||||||||
Net expenses |
| 3,698,994 | | |||||||||
Net investment income |
97,425,591 | 4,152,529 | 39,619,500 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
10,855,355 | (10,265,698 | ) | (50,638,624 | ) | |||||||
In-kind redemptions |
| | 25,133,226 | |||||||||
Foreign currency transactions |
3,811,433 | (155,805 | ) | 379,522 | ||||||||
Net realized gain (loss) |
14,666,788 | (10,421,503 | ) | (25,125,876 | ) | |||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
971,766,931 | 120,515,141 | 1,123,051,528 | |||||||||
Translation of assets and liabilities in foreign currencies |
1,204,803 | 124,579 | 296,137 | |||||||||
Net change in unrealized appreciation/depreciation |
972,971,734 | 120,639,720 | 1,123,347,665 | |||||||||
Net realized and unrealized gain |
987,638,522 | 110,218,217 | 1,098,221,789 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 1,085,064,113 | $ | 114,370,746 | $ | 1,137,841,289 | ||||||
a | Net of foreign withholding tax of $16,153,788, $785,343 and $7,754,602, respectively. |
See notes to financial statements.
52 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Chile Investable Market Index Fund |
iShares MSCI Israel Capped Investable Market Index Fund |
iShares MSCI Mexico Investable Market Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 4,865,665 | $ | 1,978,171 | $ | 8,215,512 | ||||||
Interest from affiliated issuers (Note 2) |
678 | 57 | 317 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
| 31,933 | 305,787 | |||||||||
Total investment income |
4,866,343 | 2,010,161 | 8,521,616 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
2,665,552 | 404,822 | 4,179,996 | |||||||||
Total expenses |
2,665,552 | 404,822 | 4,179,996 | |||||||||
Net investment income |
2,200,791 | 1,605,339 | 4,341,620 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(1,499,905 | ) | (808,000 | ) | (13,959,574 | ) | ||||||
In-kind redemptions |
| 4,492,387 | 84,395,945 | |||||||||
Foreign currency transactions |
(23,177 | ) | 23,299 | 106,048 | ||||||||
Net realized gain (loss) |
(1,523,082 | ) | 3,707,686 | 70,542,419 | ||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
12,542,279 | 14,359,849 | 304,465,829 | |||||||||
Translation of assets and liabilities in foreign currencies |
5,369 | 1,475 | 61,920 | |||||||||
Net change in unrealized appreciation/depreciation |
12,547,648 | 14,361,324 | 304,527,749 | |||||||||
Net realized and unrealized gain |
11,024,566 | 18,069,010 | 375,070,168 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 13,225,357 | $ | 19,674,349 | $ | 379,411,788 | ||||||
a | Net of foreign withholding tax of $2,348,188, $411,753 and $ , respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI South Africa Index Fund |
iShares MSCI Turkey Investable Market Index Fund |
iShares MSCI Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 8,225,230 | $ | 247,868 | $ | 18,624 | ||||||
Dividends from affiliated issuers (Note 2) |
| | 28 | |||||||||
Interest from affiliated issuers (Note 2) |
196 | 313 | | |||||||||
Securities lending income from affiliated issuers (Note 2) |
49,649 | 333,114 | 30 | |||||||||
Total investment income |
8,275,075 | 581,295 | 18,682 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
1,905,266 | 2,323,147 | 1,371 | |||||||||
Total expenses |
1,905,266 | 2,323,147 | 1,371 | |||||||||
Net investment income (loss) |
6,369,809 | (1,741,852 | ) | 17,311 | ||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(3,181,749 | ) | (3,010,882 | ) | (1,613 | ) | ||||||
Investments in affiliated issuers (Note 2) |
| | (662 | ) | ||||||||
In-kind redemptions |
34,998,876 | 81,076,863 | 21,273 | |||||||||
Foreign currency transactions |
49,772 | 40,595 | | |||||||||
Net realized gain |
31,866,899 | 78,106,576 | 18,998 | |||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
63,834,398 | (103,417,727 | ) | 422,452 | ||||||||
Translation of assets and liabilities in foreign currencies |
5,470 | (7,165 | ) | | ||||||||
Net change in unrealized appreciation/depreciation |
63,839,868 | (103,424,892 | ) | 422,452 | ||||||||
Net realized and unrealized gain (loss) |
95,706,767 | (25,318,316 | ) | 441,450 | ||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 102,076,576 | $ | (27,060,168 | ) | $ | 458,761 | |||||
a | Net of foreign withholding tax of $ , $43,741 and $ , respectively. |
See notes to financial statements.
54 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Brazil Index Fund |
iShares MSCI BRIC Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 97,425,591 | $ | 228,419,252 | $ | 4,152,529 | $ | 12,434,508 | ||||||||
Net realized gain (loss) |
14,666,788 | 372,816,382 | (10,421,503 | ) | (12,482,457 | ) | ||||||||||
Net change in unrealized appreciation/depreciation |
972,971,734 | 1,246,032,535 | 120,639,720 | 63,820,880 | ||||||||||||
Net increase in net assets resulting from operations |
1,085,064,113 | 1,847,268,169 | 114,370,746 | 63,772,931 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(391,280,802 | ) | (384,786,885 | ) | (10,878,230 | ) | (12,829,123 | ) | ||||||||
Total distributions to shareholders |
(391,280,802 | ) | (384,786,885 | ) | (10,878,230 | ) | (12,829,123 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
2,752,800,804 | 6,659,059 | 111,929,766 | 398,031,773 | ||||||||||||
Cost of shares redeemed |
| (1,006,054,310 | ) | | | |||||||||||
Net increase (decrease) in net assets from capital share |
2,752,800,804 | (999,395,251 | ) | 111,929,766 | 398,031,773 | |||||||||||
INCREASE IN NET ASSETS |
3,446,584,115 | 463,086,033 | 215,422,282 | 448,975,581 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
9,240,452,516 | 8,777,366,483 | 946,814,454 | 497,838,873 | ||||||||||||
End of period |
$ | 12,687,036,631 | $ | 9,240,452,516 | $ | 1,162,236,736 | $ | 946,814,454 | ||||||||
Undistributed (distributions in excess of) net investment |
$ | (337,681,853 | ) | $ | (43,826,642 | ) | $ | (6,107,749 | ) | $ | 617,952 | |||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
36,000,000 | 100,000 | 2,300,000 | 8,800,000 | ||||||||||||
Shares redeemed |
| (15,000,000 | ) | | | |||||||||||
Net increase (decrease) in shares outstanding |
36,000,000 | (14,900,000 | ) | 2,300,000 | 8,800,000 | |||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Canada Index Fund |
iShares MSCI Chile Investable Market Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 39,619,500 | $ | 51,900,908 | $ | 2,200,791 | $ | 3,713,462 | ||||||||
Net realized gain (loss) |
(25,125,876 | ) | 109,004,495 | (1,523,082 | ) | (2,840,935 | ) | |||||||||
Net change in unrealized appreciation/depreciation |
1,123,347,665 | 93,342,915 | 12,547,648 | 149,610,800 | ||||||||||||
Net increase in net assets resulting from operations |
1,137,841,289 | 254,248,318 | 13,225,357 | 150,483,327 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(47,100,095 | ) | (50,623,009 | ) | (414,987 | ) | (4,266,725 | ) | ||||||||
Return of capital |
| | | (214,415 | ) | |||||||||||
Total distributions to shareholders |
(47,100,095 | ) | (50,623,009 | ) | (414,987 | ) | (4,481,140 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
1,359,661,556 | 1,858,101,617 | 251,058,874 | 378,631,231 | ||||||||||||
Cost of shares redeemed |
(110,845,039 | ) | (1,008,121,985 | ) | (61,281,737 | ) | (117,487,891 | ) | ||||||||
Net increase in net assets from capital share transactions |
1,248,816,517 | 849,979,632 | 189,777,137 | 261,143,340 | ||||||||||||
INCREASE IN NET ASSETS |
2,339,557,711 | 1,053,604,941 | 202,587,507 | 407,145,527 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,447,242,497 | 2,393,637,556 | 670,350,406 | 263,204,879 | ||||||||||||
End of period |
$ | 5,786,800,208 | $ | 3,447,242,497 | $ | 872,937,913 | $ | 670,350,406 | ||||||||
Undistributed net investment income included in net assets at end of period |
$ | 3,756,701 | $ | 11,237,296 | $ | 1,785,804 | $ | | ||||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
44,200,000 | 69,800,000 | 3,450,000 | 6,350,000 | ||||||||||||
Shares redeemed |
(3,800,000 | ) | (38,700,000 | ) | (850,000 | ) | (2,300,000 | ) | ||||||||
Net increase in shares outstanding |
40,400,000 | 31,100,000 | 2,600,000 | 4,050,000 | ||||||||||||
See notes to financial statements.
56 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Israel Capped Investable Market Index Fund |
iShares MSCI Mexico Investable Market Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 1,605,339 | $ | 4,797,060 | $ | 4,341,620 | $ | 17,453,662 | ||||||||
Net realized gain |
3,707,686 | 70,349 | 70,542,419 | 29,433,811 | ||||||||||||
Net change in unrealized appreciation/depreciation |
14,361,324 | (1,531,719 | ) | 304,527,749 | (1,696,792 | ) | ||||||||||
Net increase in net assets resulting from operations |
19,674,349 | 3,335,690 | 379,411,788 | 45,190,681 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(2,172,730 | ) | (5,130,542 | ) | (8,422,387 | ) | (18,506,573 | ) | ||||||||
Total distributions to shareholders |
(2,172,730 | ) | (5,130,542 | ) | (8,422,387 | ) | (18,506,573 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
26,222,053 | 136,885,872 | 145,174,024 | 1,412,598,195 | ||||||||||||
Cost of shares redeemed |
(50,397,510 | ) | (114,410,341 | ) | (484,967,680 | ) | (683,521,351 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions |
(24,175,457 | ) | 22,475,531 | (339,793,656 | ) | 729,076,844 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS |
(6,673,838 | ) | 20,680,679 | 31,195,745 | 755,760,952 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
128,472,704 | 107,792,025 | 1,450,038,571 | 694,277,619 | ||||||||||||
End of period |
$ | 121,798,866 | $ | 128,472,704 | $ | 1,481,234,316 | $ | 1,450,038,571 | ||||||||
Undistributed (distributions in excess of) net investment |
$ | (330,690 | ) | $ | 236,701 | $ | (2,105,707 | ) | $ | 1,975,060 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
450,000 | 2,550,000 | 2,600,000 | 28,100,000 | ||||||||||||
Shares redeemed |
(900,000 | ) | (2,250,000 | ) | (8,400,000 | ) | (14,300,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
(450,000 | ) | 300,000 | (5,800,000 | ) | 13,800,000 | ||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI South Africa Index Fund |
iShares MSCI Turkey Investable Market Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income (loss) |
$ | 6,369,809 | $ | 10,783,825 | $ | (1,741,852 | ) | $ | 7,418,467 | |||||||
Net realized gain |
31,866,899 | 30,902,311 | 78,106,576 | 25,274,469 | ||||||||||||
Net change in unrealized appreciation/depreciation |
63,839,868 | 23,527,386 | (103,424,892 | ) | 46,433,957 | |||||||||||
Net increase (decrease) in net assets resulting from operations |
102,076,576 | 65,213,522 | (27,060,168 | ) | 79,126,893 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(14,254,057 | ) | (12,009,132 | ) | (3,808,549 | ) | (8,702,771 | ) | ||||||||
Total distributions to shareholders |
(14,254,057 | ) | (12,009,132 | ) | (3,808,549 | ) | (8,702,771 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
174,104,575 | 215,358,696 | 290,112,506 | 471,556,198 | ||||||||||||
Cost of shares redeemed |
(156,135,475 | ) | (252,100,617 | ) | (354,697,561 | ) | (182,426,990 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions |
17,969,100 | (36,741,921 | ) | (64,585,055 | ) | 289,129,208 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS |
105,791,619 | 16,462,469 | (95,453,772 | ) | 359,553,330 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
505,190,738 | 488,728,269 | 601,988,139 | 242,434,809 | ||||||||||||
End of period |
$ | 610,982,357 | $ | 505,190,738 | $ | 506,534,367 | $ | 601,988,139 | ||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period |
$ | (6,639,512 | ) | $ | 1,244,736 | $ | (6,108,359 | ) | $ | (557,958 | ) | |||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
2,500,000 | 3,800,000 | 4,200,000 | 8,350,000 | ||||||||||||
Shares redeemed |
(2,300,000 | ) | (4,600,000 | ) | (5,450,000 | ) | (3,500,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
200,000 | (800,000 | ) | (1,250,000 | ) | 4,850,000 | ||||||||||
See notes to financial statements.
58 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI USA Index Fund |
||||||||
Six months ended February 28, 2011 (Unaudited) |
Period from May 5, 2010a to August 31, 2010 |
|||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||
OPERATIONS: |
||||||||
Net investment income |
$ | 17,311 | $ | 16,601 | ||||
Net realized gain (loss) |
18,998 | (2,434 | ) | |||||
Net change in unrealized appreciation/depreciation |
422,452 | (246,604 | ) | |||||
Net increase (decrease) in net assets resulting from operations |
458,761 | (232,437 | ) | |||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||
From net investment income |
(23,058 | ) | (6,626 | ) | ||||
Total distributions to shareholders |
(23,058 | ) | (6,626 | ) | ||||
CAPITAL SHARE TRANSACTIONS: |
||||||||
Proceeds from shares sold |
| 2,482,623 | ||||||
Cost of shares redeemed |
(1,262,145 | ) | | |||||
Net increase (decrease) in net assets from capital share transactions |
(1,262,145 | ) | 2,482,623 | |||||
INCREASE (DECREASE) IN NET ASSETS |
(826,442 | ) | 2,243,560 | |||||
NET ASSETS |
||||||||
Beginning of period |
2,243,560 | | ||||||
End of period |
$ | 1,417,118 | $ | 2,243,560 | ||||
Undistributed net investment income included in net assets at end of period |
$ | 4,228 | $ | 9,975 | ||||
SHARES ISSUED AND REDEEMED |
||||||||
Shares sold |
| 100,000 | ||||||
Shares redeemed |
(50,000 | ) | | |||||
Net increase (decrease) in shares outstanding |
(50,000 | ) | 100,000 | |||||
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Brazil Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 68.07 | $ | 58.26 | $ | 73.27 | $ | 61.59 | $ | 39.09 | $ | 28.18 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.63 | 1.56 | 1.56 | 1.93 | 1.09 | 1.00 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
7.70 | 10.83 | (14.63 | ) | 11.59 | 22.35 | 10.49 | |||||||||||||||||
Total from investment operations |
8.33 | 12.39 | (13.07 | ) | 13.52 | 23.44 | 11.49 | |||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(2.53 | ) | (2.58 | ) | (1.94 | ) | (1.41 | ) | (0.94 | ) | (0.58 | ) | ||||||||||||
Net realized gain |
| | | (0.43 | ) | | | |||||||||||||||||
Total distributions |
(2.53 | ) | (2.58 | ) | (1.94 | ) | (1.84 | ) | (0.94 | ) | (0.58 | ) | ||||||||||||
Net asset value, end of period |
$ | 73.87 | $ | 68.07 | $ | 58.26 | $ | 73.27 | $ | 61.59 | $ | 39.09 | ||||||||||||
Total return |
12.32 | %c | 21.12 | % | (16.05 | )% | 21.58 | % | 60.82 | % | 41.13 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 12,687,037 | $ | 9,240,453 | $ | 8,777,366 | $ | 7,242,260 | $ | 4,434,334 | $ | 2,468,295 | ||||||||||||
Ratio of expenses to average net assetsd,e |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||||
Ratio of net investment income to averagenet assetsd |
1.70 | % | 2.24 | % | 3.38 | % | 2.37 | % | 2.17 | % | 2.65 | % | ||||||||||||
Portfolio turnover ratef |
11 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
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 six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 0%, 13%, 14%, 19%, 6% and 13%, respectively. See Note 4. |
See notes to financial statements.
60 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI BRIC Index Fund | ||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
Year ended Aug. 31, 2010 |
Year ended Aug. 31, 2009 |
Period from Aug. 31, 2008 |
|||||||||||||
Net asset value, beginning of period |
$ | 42.94 | $ | 37.57 | $ | 44.13 | $ | 56.50 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment incomeb |
0.18 | 0.66 | 0.58 | 0.72 | ||||||||||||
Net realized and unrealized gain (loss)c |
5.06 | 5.35 | (6.60 | ) | (12.93 | ) | ||||||||||
Total from investment operations |
5.24 | 6.01 | (6.02 | ) | (12.21 | ) | ||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.45 | ) | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||||
Total distributions |
(0.45 | ) | (0.64 | ) | (0.54 | ) | (0.16 | ) | ||||||||
Net asset value, end of period |
$ | 47.73 | $ | 42.94 | $ | 37.57 | $ | 44.13 | ||||||||
Total return |
12.20 | %d | 15.95 | % | (13.08 | )% | (21.65 | )%d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 1,162,237 | $ | 946,814 | $ | 497,839 | $ | 161,092 | ||||||||
Ratio of expenses to average net assets prior to waived feese |
0.67 | % | n/a | n/a | n/a | |||||||||||
Ratio of expenses to average net assets after waived feese |
0.66 | % | 0.69 | % | 0.72 | % | 0.72 | % | ||||||||
Ratio of net investment income to average net assetse |
0.75 | % | 1.52 | % | 1.87 | % | 1.74 | % | ||||||||
Portfolio turnover ratef |
7 | % | 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 Funds 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 partially for cash in U.S. dollars. Excluding such transactions, the portfolio turnover rate for the six months ended February 28, 2011, the years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 0%, 8%, 6% and 2%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 61 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Canada Index Fund | ||||||||||||||||||||||||
Six months ended (Unaudited) |
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 period |
$ | 26.10 | $ | 23.70 | $ | 30.55 | $ | 29.87 | $ | 24.69 | $ | 20.30 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.27 | 0.43 | 0.41 | 0.47 | 0.35 | 0.25 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
7.50 | 2.39 | (6.84 | ) | 0.72 | 5.11 | 4.29 | |||||||||||||||||
Total from investment operations |
7.77 | 2.82 | (6.43 | ) | 1.19 | 5.46 | 4.54 | |||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.32 | ) | (0.42 | ) | (0.42 | ) | (0.51 | ) | (0.28 | ) | (0.15 | ) | ||||||||||||
Total distributions |
(0.32 | ) | (0.42 | ) | (0.42 | ) | (0.51 | ) | (0.28 | ) | (0.15 | ) | ||||||||||||
Net asset value, end of period |
$ | 33.55 | $ | 26.10 | $ | 23.70 | $ | 30.55 | $ | 29.87 | $ | 24.69 | ||||||||||||
Total return |
29.90 | %c | 11.91 | % | (20.51 | )% | 3.88 | % | 22.33 | % | 22.46 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 5,786,800 | $ | 3,447,242 | $ | 2,393,638 | $ | 2,071,061 | $ | 1,323,122 | $ | 1,101,161 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to averagenet assetsd |
1.84 | % | 1.63 | % | 2.00 | % | 1.46 | % | 1.32 | % | 1.09 | % | ||||||||||||
Portfolio turnover ratee |
5 | % | 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 Funds underlying securities. |
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.
62 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Chile Investable Market Index Fund | ||||||||||||||||
Six months ended (Unaudited) |
Year ended Aug. 31, 2010 |
Year ended Aug. 31, 2009 |
Period from Aug. 31, 2008 |
|||||||||||||
Net asset value, beginning of period |
$ | 67.37 | $ | 44.61 | $ | 44.80 | $ | 48.84 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment incomeb |
0.18 | 0.59 | 0.76 | 0.92 | ||||||||||||
Net realized and unrealized gain (loss)c |
2.04 | 22.86 | (0.42 | ) | (4.38 | ) | ||||||||||
Total from investment operations |
2.22 | 23.45 | 0.34 | (3.46 | ) | |||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.03 | ) | (0.66 | ) | (0.53 | ) | (0.58 | ) | ||||||||
Return of capital |
| (0.03 | ) | | | |||||||||||
Total distributions |
(0.03 | ) | (0.69 | ) | (0.53 | ) | (0.58 | ) | ||||||||
Net asset value, end of period |
$ | 69.56 | $ | 67.37 | $ | 44.61 | $ | 44.80 | ||||||||
Total return |
3.29 | %d | 52.88 | % | 0.89 | % | (7.15 | )%d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 872,938 | $ | 670,350 | $ | 263,205 | $ | 76,158 | ||||||||
Ratio of expenses to average net assetse |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||
Ratio of net investment income to average net assetse |
0.49 | % | 1.05 | % | 1.98 | % | 2.38 | % | ||||||||
Portfolio turnover ratef |
10 | % | 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 Funds 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 six months ended February 28, 2011, the years ended August 31, 2010, August 31, 2009 and the period ended August 31, 2008 would have been 7%, 9%, 14% and 16%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 63 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Israel Capped Investable Market Index Fund | ||||||||||||||||
Six months ended (Unaudited) |
Year ended Aug. 31, 2010 |
Year ended Aug. 31, 2009 |
Period from Aug. 31, 2008 |
|||||||||||||
Net asset value, beginning of period |
$ | 49.41 | $ | 46.87 | $ | 48.62 | $ | 50.33 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment incomeb |
0.66 | 1.40 | 0.98 | 0.21 | ||||||||||||
Net realized and unrealized gain (loss)c |
7.52 | 2.63 | (1.75 | ) | (1.92 | ) | ||||||||||
Total from investment operations |
8.18 | 4.03 | (0.77 | ) | (1.71 | ) | ||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.94 | ) | (1.49 | ) | (0.98 | ) | | |||||||||
Total distributions |
(0.94 | ) | (1.49 | ) | (0.98 | ) | | |||||||||
Net asset value, end of period |
$ | 56.65 | $ | 49.41 | $ | 46.87 | $ | 48.62 | ||||||||
Total return |
16.52 | %d | 8.57 | % | (0.63 | )% | (3.40 | )%d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 121,799 | $ | 128,473 | $ | 107,792 | $ | 204,201 | ||||||||
Ratio of expenses to average net assetse |
0.59 | % | 0.61 | % | 0.66 | % | 0.63 | % | ||||||||
Ratio of net investment income to average net assetse |
2.34 | % | 2.64 | % | 2.66 | % | 0.93 | % | ||||||||
Portfolio turnover ratef |
9 | % | 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 Funds 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.
64 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Mexico Investable Market Index Fund | ||||||||||||||||||||||||
Six months ended (Unaudited) |
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 period |
$ | 48.17 | $ | 42.59 | $ | 51.94 | $ | 58.35 | $ | 41.30 | $ | 29.04 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.16 | 0.72 | 0.43 | 1.40 | 0.64 | 0.76 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
12.93 | 5.61 | (9.17 | ) | (6.21 | ) | 16.87 | 11.98 | ||||||||||||||||
Total from investment operations |
13.09 | 6.33 | (8.74 | ) | (4.81 | ) | 17.51 | 12.74 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.30 | ) | (0.75 | ) | (0.61 | ) | (1.60 | ) | (0.46 | ) | (0.48 | ) | ||||||||||||
Total distributions |
(0.30 | ) | (0.75 | ) | (0.61 | ) | (1.60 | ) | (0.46 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period |
$ | 60.96 | $ | 48.17 | $ | 42.59 | $ | 51.94 | $ | 58.35 | $ | 41.30 | ||||||||||||
Total return |
27.14 | %c | 14.83 | % | (16.50 | )% | (8.44 | )% | 42.58 | % | 44.11 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 1,481,234 | $ | 1,450,039 | $ | 694,278 | $ | 955,684 | $ | 1,382,810 | $ | 764,107 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to averagenet assetsd |
0.55 | % | 1.46 | % | 1.25 | % | 2.42 | % | 1.19 | % | 2.06 | % | ||||||||||||
Portfolio turnover ratee |
2 | % | 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 Funds underlying securities. |
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 | 65 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Africa Index Fund | ||||||||||||||||||||||||
Six months ended (Unaudited) |
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 period |
$ | 58.74 | $ | 51.99 | $ | 55.80 | $ | 62.26 | $ | 48.84 | $ | 41.50 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomeb |
0.67 | 1.18 | 1.94 | 2.28 | 1.50 | 1.44 | ||||||||||||||||||
Net realized and unrealized gain (loss)c |
11.57 | 6.92 | (3.84 | ) | (6.02 | ) | 13.18 | 6.89 | ||||||||||||||||
Total from investment operations |
12.24 | 8.10 | (1.90 | ) | (3.74 | ) | 14.68 | 8.33 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(1.55 | ) | (1.35 | ) | (1.91 | ) | (2.72 | ) | (1.26 | ) | (0.99 | ) | ||||||||||||
Total distributions |
(1.55 | ) | (1.35 | ) | (1.91 | ) | (2.72 | ) | (1.26 | ) | (0.99 | ) | ||||||||||||
Net asset value, end of period |
$ | 69.43 | $ | 58.74 | $ | 51.99 | $ | 55.80 | $ | 62.26 | $ | 48.84 | ||||||||||||
Total return |
20.75 | %d | 15.80 | % | (2.23 | )% | (6.18 | )% | 30.34 | % | 20.06 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 610,982 | $ | 505,191 | $ | 488,728 | $ | 429,655 | $ | 466,940 | $ | 297,898 | ||||||||||||
Ratio of expenses to average net assetse |
0.59 | % | 0.61 | % | 0.66 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||||
Ratio of net investment income to averagenet assetse |
1.97 | % | 2.09 | % | 4.81 | % | 3.61 | % | 2.58 | % | 2.79 | % | ||||||||||||
Portfolio turnover ratef |
3 | % | 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 Funds 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.
66 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Turkey Investable Market Index Fund | ||||||||||||||||
Six months ended (Unaudited) |
Year ended Aug. 31, 2010 |
Year ended Aug. 31, 2009 |
Period from Aug. 31, 2008 |
|||||||||||||
Net asset value, beginning of period |
$ | 60.81 | $ | 48.01 | $ | 52.42 | $ | 50.30 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment income (loss)b |
(0.15 | ) | 1.00 | 0.78 | 0.83 | |||||||||||
Net realized and unrealized gain (loss)c |
(1.78 | ) | 13.02 | (4.22 | ) | 1.29 | ||||||||||
Total from investment operations |
(1.93 | ) | 14.02 | (3.44 | ) | 2.12 | ||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.32 | ) | (1.22 | ) | (0.97 | ) | | |||||||||
Total distributions |
(0.32 | ) | (1.22 | ) | (0.97 | ) | | |||||||||
Net asset value, end of period |
$ | 58.56 | $ | 60.81 | $ | 48.01 | $ | 52.42 | ||||||||
Total return |
(3.22 | )%d | 29.55 | % | (5.56 | )% | 4.22 | %d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 506,534 | $ | 601,988 | $ | 242,435 | $ | 152,021 | ||||||||
Ratio of expenses to average net assetse |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||
Ratio of net investment income (loss) to average net assetse |
(0.44 | )% | 1.81 | % | 2.39 | % | 3.78 | % | ||||||||
Portfolio turnover ratef |
3 | % | 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 Funds 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 | 67 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI USA Index Fund | ||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
Period from Aug. 31, 2010 |
|||||||
Net asset value, beginning of period |
$ | 22.44 | $ | 24.83 | ||||
Income from investment operations: |
||||||||
Net investment incomeb |
0.24 | 0.17 | ||||||
Net realized and unrealized gain (loss)c |
5.99 | (2.49 | ) | |||||
Total from investment operations |
6.23 | (2.32 | ) | |||||
Less distributions from: |
||||||||
Net investment income |
(0.33 | ) | (0.07 | ) | ||||
Total distributions |
(0.33 | ) | (0.07 | ) | ||||
Net asset value, end of period |
$ | 28.34 | $ | 22.44 | ||||
Total return |
27.92 | %d | (9.37 | )%d | ||||
Ratios/Supplemental data: |
||||||||
Net assets, end of period (000s) |
$ | 1,417 | $ | 2,244 | ||||
Ratio of expenses to average net assetse |
0.15 | % | 0.15 | % | ||||
Ratio of net investment income to average net assetse |
1.89 | % | 2.21 | % | ||||
Portfolio turnover ratef |
1 | % | 1 | % |
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 Funds 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.
68 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited)
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 investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a passive or index approach to achieve each Funds 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 Companys 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 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); |
NOTES TO FINANCIAL STATEMENTS | 69 |
Notes to Financial Statements (Unaudited) (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); and |
| Level 3 Inputs that are unobservable for the asset or liability (a Level 3 Price). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and 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 securitys 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.
70 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Fair value pricing could result in a difference between the prices used to calculate a Funds net asset value and the prices used by the Funds underlying index, which in turn could result in a difference between the Funds performance and the performance of the Funds underlying index.
The following table summarizes the value of each of the Funds investments according to the fair value hierarchy as of February 28, 2011. The breakdown of each Funds 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 |
||||||||||||||||
Common Stocks |
$ | 5,833,081,831 | $ | | $ | | $ | 5,833,081,831 | ||||||||
Preferred Stocks |
6,783,542,808 | | | 6,783,542,808 | ||||||||||||
Rights |
157,030 | | 0 | a | 157,030 | |||||||||||
Short-Term Investments |
8,169,947 | | | 8,169,947 | ||||||||||||
$ | 12,624,951,616 | $ | | $ | 0 | a | $ | 12,624,951,616 | ||||||||
BRIC |
||||||||||||||||
Common Stocks |
$ | 934,944,852 | $ | | $ | | $ | 934,944,852 | ||||||||
Preferred Stocks |
224,666,588 | | | 224,666,588 | ||||||||||||
Rights |
6,606 | | 0 | a | 6,606 | |||||||||||
Short-Term Investments |
26,870,916 | | | 26,870,916 | ||||||||||||
$ | 1,186,488,962 | $ | | $ | 0 | a | $ | 1,186,488,962 | ||||||||
Canada |
||||||||||||||||
Common Stocks |
$ | 5,775,875,111 | $ | | $ | | $ | 5,775,875,111 | ||||||||
Short-Term Investments |
13,445,072 | | | 13,445,072 | ||||||||||||
$ | 5,789,320,183 | $ | | $ | | $ | 5,789,320,183 | |||||||||
Chile Investable Market |
||||||||||||||||
Common Stocks |
$ | 873,659,945 | $ | | $ | | $ | 873,659,945 | ||||||||
Short-Term Investments |
1,254,477 | | | 1,254,477 | ||||||||||||
$ | 874,914,422 | $ | | $ | | $ | 874,914,422 | |||||||||
Israel Capped Investable Market |
||||||||||||||||
Common Stocks |
$ | 121,118,978 | $ | | $ | 464,690 | $ | 121,583,668 | ||||||||
Short-Term Investments |
1,368,976 | | | 1,368,976 | ||||||||||||
$ | 122,487,954 | $ | | $ | 464,690 | $ | 122,952,644 | |||||||||
Mexico Investable Market |
||||||||||||||||
Common Stocks |
$ | 1,480,372,614 | $ | | $ | | $ | 1,480,372,614 | ||||||||
Short-Term Investments |
63,372,183 | | | 63,372,183 | ||||||||||||
$ | 1,543,744,797 | $ | | $ | | $ | 1,543,744,797 | |||||||||
a | Rounds to less than $1. |
NOTES TO FINANCIAL STATEMENTS | 71 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Investments in Securities | ||||||||||||||||
iShares MSCI Index Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
South Africa |
||||||||||||||||
Common Stocks |
$ | 610,548,428 | $ | | $ | | $ | 610,548,428 | ||||||||
Short-Term Investments |
1,898,852 | | | 1,898,852 | ||||||||||||
$ | 612,447,280 | $ | | $ | | $ | 612,447,280 | |||||||||
Turkey Investable Market |
||||||||||||||||
Common Stocks |
$ | 506,416,467 | $ | | $ | | $ | 506,416,467 | ||||||||
Short-Term Investments |
45,824,469 | | | 45,824,469 | ||||||||||||
$ | 552,240,936 | $ | | $ | | $ | 552,240,936 | |||||||||
USA |
||||||||||||||||
Common Stocks |
$ | 1,415,040 | $ | | $ | | $ | 1,415,040 | ||||||||
Short-Term Investments |
4,961 | | | 4,961 | ||||||||||||
$ | 1,420,001 | $ | | $ | | $ | 1,420,001 | |||||||||
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 (except for the iShares MSCI USA Index 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 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 February 28, 2011, if any, are reflected in the Funds Statements of Assets and Liabilities.
72 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income, if any, are generally declared and paid quarterly by the iShares MSCI USA Index Fund and semi-annually by each of the other Funds. 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
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 six months ended February 28, 2011.
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 between paid-in capital, accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss) as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, and realized gains (losses) from foreign currency transactions and in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
NOTES TO FINANCIAL STATEMENTS | 73 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
As of February 28, 2011, 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 |
$ | 8,626,266,009 | $ | 4,072,990,356 | $ | (74,304,749 | ) | $ | 3,998,685,607 | |||||||
BRIC |
1,048,938,092 | 179,427,879 | (41,877,009 | ) | 137,550,870 | |||||||||||
Canada |
5,065,137,582 | 808,326,431 | (84,143,830 | ) | 724,182,601 | |||||||||||
Chile Investable Market |
695,000,757 | 183,293,960 | (3,380,295 | ) | 179,913,665 | |||||||||||
Israel Capped Investable Market |
134,050,892 | 3,786,790 | (14,885,038 | ) | (11,098,248 | ) | ||||||||||
Mexico Investable Market |
1,470,028,301 | 156,914,961 | (83,198,465 | ) | 73,716,496 | |||||||||||
South Africa |
599,816,910 | 50,677,714 | (38,047,344 | ) | 12,630,370 | |||||||||||
Turkey Investable Market |
613,025,405 | 12,914,384 | (73,698,853 | ) | (60,784,469 | ) | ||||||||||
USA |
1,244,222 | 204,405 | (28,626 | ) | 175,779 |
Management has reviewed the tax positions as of February 28, 2011, 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
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (BFA) manages the investment of each Funds assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (BlackRock). Under the Investment Advisory Agreement, BFA is responsible for all 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, litigation expenses and any extraordinary expenses.
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 Funds 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 |
Effective January 1, 2011, 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
74 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
annual investment advisory fee based on each Funds 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, up to and including $32 billion | |
0.45 | Over $32 billion |
Prior to January 1, 2011, 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 Funds 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 |
Effective January 1, 2011, for its investment advisory services to the iShares MSCI BRIC Index Fund, BFA is entitled to an annual investment advisory fee based on the Funds 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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
NOTES TO FINANCIAL STATEMENTS | 75 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Prior to January 1, 2011, for its investment advisory services to the iShares MSCI BRIC Index Fund, BFA is entitled to an annual investment advisory fee based on the Funds 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 voluntarily waived a portion of its investment advisory fee for the iShares MSCI BRIC Index Fund in the amount of $31,041.
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 BlackRock Institutional Trust Company, N.A. (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 combined income earned from the investment of cash collateral received for the loan of securities and any fees paid by borrowers. For the six months ended February 28, 2011, BTC earned securities lending agent fees from certain Funds as follows:
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.
The PNC Financial Services Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays PLC (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.
76 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Investments in issuers considered to be affiliates of the Funds (excluding short-term investments) during the six months ended February 28, 2011, for 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 (Loss) |
|||||||||||||||||||||
MSCI USA |
||||||||||||||||||||||||||||
Blackrock Inc. |
8 | 12 | (10 | ) | 10 | $ | 2,040 | $ | 10 | $ | 45 | |||||||||||||||||
PNC Financial Services Group (The) |
118 | | (59 | ) | 59 | 3,640 | 18 | (707 | ) | |||||||||||||||||||
$ | 5,680 | $ | 28 | $ | (662 | ) | ||||||||||||||||||||||
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 six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Brazil |
$ | 3,718,810,152 | $ | 1,229,263,638 | ||||
BRIC |
109,099,005 | 75,515,210 | ||||||
Canada |
258,711,504 | 237,319,572 | ||||||
Chile Investable Market |
280,607,322 | 88,505,003 | ||||||
Israel Capped Investable Market |
11,475,951 | 12,283,604 | ||||||
Mexico Investable Market |
34,436,040 | 39,666,946 | ||||||
South Africa |
20,152,755 | 25,831,583 | ||||||
Turkey Investable Market |
26,645,550 | 22,754,172 | ||||||
USA |
22,643 | 31,987 |
In-kind transactions (see Note 4) for the six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | In-kind Purchases |
In-kind Sales |
||||||
BRIC |
$ | 73,505,568 | $ | | ||||
Canada |
1,320,678,210 | 109,056,647 | ||||||
Israel Capped Investable Market |
26,063,086 | 50,039,140 | ||||||
Mexico Investable Market |
144,943,643 | 482,897,593 | ||||||
South Africa |
172,453,674 | 155,951,807 | ||||||
Turkey Investable Market |
278,607,484 | 352,270,192 | ||||||
USA |
| 1,252,897 |
NOTES TO FINANCIAL STATEMENTS | 77 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
4. CAPITAL SHARE TRANSACTIONS
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) 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 securities of that Funds underlying 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.
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 February 28, 2011, 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 February 28, 2011 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.
78 | 2011 iSHARES SEMI-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 Funds 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-to-Date |
% Breakdown of the Total
Cumulative Distributions for the Fiscal Year-to-Date |
|||||||||||||||||||||||||||||||
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 |
|||||||||||||||||||||||||
iShares MSCI USA Index Fund |
$ | 0.33182 | $ | | $ | 0.00078 | $ | 0.33260 | 100 | % | | % | 0 | %a | 100 | % | ||||||||||||||||
a | Rounds to less than 1%. |
SUPPLEMENTAL INFORMATION | 79 |
Notes:
80 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes:
NOTES | 81 |
Notes:
82 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, its 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 firms 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). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor 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 SECs website or may be reviewed and copied at the SECs 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.
©2011 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-SAR-84-0211
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2011 SEMI-ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
FEBRUARY 28, 2011
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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
5 | ||||
14 | ||||
16 | ||||
16 | ||||
19 | ||||
21 | ||||
31 | ||||
33 | ||||
36 | ||||
38 | ||||
41 | ||||
44 | ||||
47 | ||||
58 | ||||
67 |
iSHARES® MSCI AUSTRALIA INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.07% | 22.01% | 21.73% | 10.33% | 10.48% | 10.16% | 15.06% | 15.04% | 14.72% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.07% | 22.01% | 21.73% | 63.51% | 64.57% | 62.22% | 306.56% | 305.95% | 294.77% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
Certain sectors and markets performed exceptionally well based on market conditions during the six-month period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Australia IndexSM (the Index). The Index consists of stocks traded primarily on the Australian Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 27.17%, while the total return for the Index was 27.58%.
FUND PERFORMANCE OVERVIEWS | 5 |
Fund Performance Overview
iSHARES® MSCI HONG KONG INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
24.04% | 24.14% | 24.85% | 9.94% | 10.05% | 10.53% | 7.15% | 7.27% | 7.93% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
24.04% | 24.14% | 24.85% | 60.58% | 61.41% | 64.99% | 99.41% | 101.69% | 114.48% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Hong Kong IndexSM (the Index). The Index consists of stocks traded primarily on the Stock Exchange of Hong Kong Limited. 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 six-month period ended February 28, 2011, the total return for the Fund was 17.22%, while the total return for the Index was 17.49%.
6 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
20.97% | 22.36% | 21.28% | 1.88% | 2.20% | 2.15% | 6.13% | 7.21% | 7.02% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/21/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
The iShares MSCI Japan Small Cap Index Fund (the Fund) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Japan Small Cap IndexSM (the Index). The Index targets 40% of the eligible small-cap universe within each industry group in the MSCI Japan Index, which consists of stocks traded primarily on the Tokyo Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 21.82%, while the total return for the Index was 21.96%.
FUND PERFORMANCE OVERVIEWS | 7 |
Fund Performance Overview
iSHARES® MSCI MALAYSIA INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
34.95% | 35.30% | 35.65% | 17.33% | 17.28% | 17.90% | 13.12% | 13.46% | 14.02% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
34.95% | 35.30% | 35.65% | 122.36% | 121.91% | 127.80% | 243.19% | 253.69% | 271.42% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
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 Funds 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 Funds 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 spreads as of the opening 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Malaysia IndexSM (the Index). The Index consists of stocks traded primarily on the Kuala Lumpur Stock Exchange. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities included in the Index. For the six-month period ended February 28, 2011, the total return for the Fund was 10.02%, while the total return for the Index was 10.40%.
8 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.55% | 22.25% | 22.14% | 10.40% | 10.56% | 10.42% | 15.43% | 15.46% | 15.41% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
21.55% | 22.25% | 22.14% | 63.97% | 65.21% | 64.17% | 282.30% | 283.25% | 281.89% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/26/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 the MSCI Pacific ex-Japan IndexSM (the Index). The Index consists of stocks from Australia, Hong Kong, New Zealand and Singapore. 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 six-month period ended February 28, 2011, the total return for the Fund was 22.47%, while the total return for the Index was 22.83%.
FUND PERFORMANCE OVERVIEWS | 9 |
Fund Performance Overview
iSHARES® MSCI SINGAPORE INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.33% | 22.80% | 22.20% | 12.77% | 12.91% | 12.97% | 10.48% | 10.67% | 10.31% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
22.33% | 22.80% | 22.20% | 82.34% | 83.52% | 83.99% | 170.91% | 175.65% | 166.85% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Singapore IndexSM (the Index). The Index consists of stocks traded primarily on the Singapore Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 9.55%, while the total return for the Index was 9.41%.
10 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI SOUTH KOREA INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
27.70% | 28.55% | 28.35% | 5.26% | 5.09% | 5.60% | 15.97% | 16.34% | 17.15% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
27.70% | 28.55% | 28.35% | 29.22% | 28.15% | 31.31% | 339.83% | 354.24% | 386.91% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 spreads as of the opening 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Korea IndexSM (the Index). The Index consists of stocks traded primarily on the Stock Market Division of the Korean Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 20.99%, while the total return for the Index was 21.28%.
FUND PERFORMANCE OVERVIEWS | 11 |
Fund Performance Overview
iSHARES® MSCI TAIWAN INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
26.65% | 27.83% | 27.32% | 6.22% | 6.40% | 6.90% | 3.70% | 3.94% | 4.67% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
26.65% | 27.83% | 27.32% | 35.24% | 36.38% | 39.63% | 43.82% | 47.16% | 57.85% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 spreads as of the opening 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Taiwan IndexSM (the Index). The Index consists of stocks traded primarily on the Taiwan Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 22.19%, while the total return for the Index was 22.38%.
12 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Fund Performance Overview
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 2/28/11 | Inception to 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
50.57% | 51.26% | 52.00% | 10.28% | 10.51% | 10.67% | 33.21% | 34.03% | 34.58% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods 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 Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/28/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
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 IndexSM (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 six-month period ended February 28, 2011, the total return for the Fund was 12.41%, while the total return for the Index was 12.53%.
FUND PERFORMANCE OVERVIEWS | 13 |
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 September 1, 2010 to February 28, 2011.
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 Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds 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 (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
Australia |
||||||||||||||||
Actual |
$1,000.00 | $1,271.70 | 0.53 | % | $2.99 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Hong Kong |
||||||||||||||||
Actual |
1,000.00 | 1,172.20 | 0.53 | 2.85 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Japan Small Cap |
||||||||||||||||
Actual |
1,000.00 | 1,218.20 | 0.53 | 2.91 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
Malaysia |
||||||||||||||||
Actual |
1,000.00 | 1,100.20 | 0.53 | 2.76 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 |
14 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares MSCI Index Fund | Beginning Account Value (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
||||||||||||
Pacific ex-Japan |
||||||||||||||||
Actual |
$1,000.00 | $1,224.70 | 0.50 | % | $2.76 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.30 | 0.50 | 2.51 | ||||||||||||
Singapore |
||||||||||||||||
Actual |
1,000.00 | 1,095.50 | 0.53 | 2.75 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 | ||||||||||||
South Korea |
||||||||||||||||
Actual |
1,000.00 | 1,209.90 | 0.59 | 3.23 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
Taiwan |
||||||||||||||||
Actual |
1,000.00 | 1,221.90 | 0.59 | 3.25 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 | ||||||||||||
Thailand Investable Market |
||||||||||||||||
Actual |
1,000.00 | 1,124.10 | 0.59 | 3.11 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.90 | 0.59 | 2.96 |
a | Expenses are calculated using each Funds 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 (181 days) and divided by the number of days in the year (365 days). |
SHAREHOLDER EXPENSES | 15 |
Schedule of Investments (Unaudited)
iSHARES® MSCI AUSTRALIA INDEX FUND
February 28, 2011
16 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 17 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI AUSTRALIA INDEX FUND
February 28, 2011
18 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI HONG KONG INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 19 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI HONG KONG INDEX FUND
February 28, 2011
20 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 21 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
22 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 23 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
24 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 25 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
26 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 27 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
28 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 29 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN SMALL CAP INDEX FUND
February 28, 2011
30 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI MALAYSIA INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 31 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI MALAYSIA INDEX FUND
February 28, 2011
32 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 33 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
February 28, 2011
34 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI PACIFIC EX-JAPAN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 35 |
Schedule of Investments (Unaudited)
iSHARES® MSCI SINGAPORE INDEX FUND
February 28, 2011
36 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SINGAPORE INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 37 |
Schedule of Investments (Unaudited)
iSHARES® MSCI SOUTH KOREA INDEX FUND
February 28, 2011
38 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 39 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI SOUTH KOREA INDEX FUND
February 28, 2011
40 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI TAIWAN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 41 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
February 28, 2011
42 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI TAIWAN INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 43 |
Schedule of Investments (Unaudited)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
February 28, 2011
44 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
February 28, 2011
SCHEDULES OF INVESTMENTS | 45 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI THAILAND INVESTABLE MARKET INDEX FUND
February 28, 2011
46 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited)
iSHARES®, INC.
February 28, 2011
iShares MSCI Australia Index Fund |
iShares MSCI Hong Kong Index Fund |
iShares MSCI Japan Small Cap Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 2,749,236,007 | $ | 1,969,378,882 | $ | 41,911,130 | ||||||
Affiliated issuers (Note 2) |
31,358,656 | 41,707,746 | 261,271 | |||||||||
Total cost of investments |
$ | 2,780,594,663 | $ | 2,011,086,628 | $ | 42,172,401 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 3,108,179,466 | $ | 1,989,745,227 | $ | 43,958,834 | ||||||
Affiliated issuers (Note 2) |
31,358,656 | 41,707,746 | 261,271 | |||||||||
Total fair value of investments |
3,139,538,122 | 2,031,452,973 | 44,220,105 | |||||||||
Foreign currencies, at valueb |
5,635,327 | 5,011,057 | 19,473 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
| 26,626,768 | | |||||||||
Due from custodian (Note 4) |
| 853,808 | | |||||||||
Dividends and interest |
22,171,534 | 316,486 | 116,485 | |||||||||
Capital shares sold |
| | 22,585 | |||||||||
Total Assets |
3,167,344,983 | 2,064,261,092 | 44,378,648 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
| 25,271,539 | | |||||||||
Collateral for securities on loan (Note 5) |
31,241,783 | 40,762,750 | 237,931 | |||||||||
Investment advisory fees (Note 2) |
1,234,597 | 790,546 | 14,637 | |||||||||
Total Liabilities |
32,476,380 | 66,824,835 | 252,568 | |||||||||
NET ASSETS |
$ | 3,134,868,603 | $ | 1,997,436,257 | $ | 44,126,080 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 2,912,764,855 | $ | 2,146,405,640 | $ | 41,248,714 | ||||||
Distributions in excess of net investment income |
(4,348,522 | ) | (2,392,451 | ) | (290,726 | ) | ||||||
Undistributed net realized gain (accumulated net realized loss) |
(132,760,280 | ) | (166,946,119 | ) | 1,119,905 | |||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies |
359,212,550 | 20,369,187 | 2,048,187 | |||||||||
NET ASSETS |
$ | 3,134,868,603 | $ | 1,997,436,257 | $ | 44,126,080 | ||||||
Shares outstandingc |
120,800,000 | 107,325,000 | 900,000 | |||||||||
Net asset value per share |
$ | 25.95 | $ | 18.61 | $ | 49.03 | ||||||
a | Securities on loan with values of $29,678,276, $38,671,569 and $225,911, respectively. See Note 5. |
b | Cost of foreign currencies: $5,600,729, $5,008,381 and $19,302, respectively. |
c | $0.001 par value, number of shares authorized: 627.8 million, 250 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 47 |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI Malaysia Index Fund |
iShares MSCI Pacific ex-Japan Index Fund |
iShares MSCI Singapore Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 503,252,835 | $ | 3,081,596,054 | $ | 1,671,638,154 | ||||||
Affiliated issuers (Note 2) |
184,303 | 86,882,085 | 143,575,639 | |||||||||
Total cost of investments |
$ | 503,437,138 | $ | 3,168,478,139 | $ | 1,815,213,793 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 920,509,633 | $ | 3,961,161,202 | $ | 1,886,507,361 | ||||||
Affiliated issuers (Note 2) |
184,303 | 86,882,085 | 143,575,639 | |||||||||
Total fair value of investments |
920,693,936 | 4,048,043,287 | 2,030,083,000 | |||||||||
Foreign currencies, at valueb |
1,999,443 | 7,406,678 | 3,030,903 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
458,868 | 4,426,152 | 18,913,591 | |||||||||
Dividends and interest |
1,015,369 | 19,479,532 | 63,394 | |||||||||
Total Assets |
924,167,616 | 4,079,355,649 | 2,052,090,888 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
1,262,389 | 9,936,039 | 17,042,418 | |||||||||
Collateral for securities on loan (Note 5) |
| 86,626,556 | 143,054,199 | |||||||||
Capital shares redeemed |
| | 850,996 | |||||||||
Investment advisory fees (Note 2) |
386,645 | 1,568,534 | 815,000 | |||||||||
Total Liabilities |
1,649,034 | 98,131,129 | 161,762,613 | |||||||||
NET ASSETS |
$ | 922,518,582 | $ | 3,981,224,520 | $ | 1,890,328,275 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 581,582,384 | $ | 3,309,874,702 | $ | 1,869,670,287 | ||||||
Undistributed (distributions in excess of) net investment income |
775,079 | (19,885,050 | ) | (28,139,976 | ) | |||||||
Accumulated net realized loss |
(77,106,685 | ) | (188,564,106 | ) | (166,087,550 | ) | ||||||
Net unrealized appreciation on investments and translation of assets and |
417,267,804 | 879,798,974 | 214,885,514 | |||||||||
NET ASSETS |
$ | 922,518,582 | $ | 3,981,224,520 | $ | 1,890,328,275 | ||||||
Shares outstandingc |
65,700,000 | 84,600,000 | 145,100,000 | |||||||||
Net asset value per share |
$ | 14.04 | $ | 47.06 | $ | 13.03 | ||||||
a | Securities on loan with values of $, $81,853,621 and $135,200,233, respectively. See Note 5. |
b | Cost of foreign currencies: $1,989,984, $7,378,374 and $3,012,965, respectively. |
c | $0.001 par value, number of shares authorized: 300 million, 1 billion and 300 million, respectively. |
See notes to financial statements.
48 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES®, INC.
February 28, 2011
iShares MSCI South Korea Index Fund |
iShares MSCI Taiwan Index Fund |
iShares MSCI Thailand Investable Market Index Fund |
||||||||||
ASSETS |
||||||||||||
Investments, at cost: |
||||||||||||
Unaffiliated issuers |
$ | 2,353,178,259 | $ | 2,170,568,439 | $ | 485,519,796 | ||||||
Affiliated issuers (Note 2) |
230,350,714 | 2,044,565 | 507,235 | |||||||||
Total cost of investments |
$ | 2,583,528,973 | $ | 2,172,613,004 | $ | 486,027,031 | ||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||||||||||
Unaffiliated issuers |
$ | 4,204,926,478 | $ | 3,388,138,277 | $ | 567,817,893 | ||||||
Affiliated issuers (Note 2) |
230,350,714 | 2,044,565 | 507,235 | |||||||||
Total fair value of investments |
4,435,277,192 | 3,390,182,842 | 568,325,128 | |||||||||
Receivables: |
||||||||||||
Investment securities sold |
8,877,854 | 47,338,148 | 3,330,925 | |||||||||
Dividends and interest |
28,770,915 | 172 | 969,419 | |||||||||
Capital shares sold |
| | 3,045,211 | |||||||||
Total Assets |
4,472,925,961 | 3,437,521,162 | 575,670,683 | |||||||||
LIABILITIES |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
8,087,883 | 47,089,730 | 4,318,440 | |||||||||
Collateral for securities on loan (Note 5) |
224,560,542 | | | |||||||||
Capital shares redeemed |
| | 234,188 | |||||||||
Foreign taxes (Note 1) |
| 200,637 | | |||||||||
Investment advisory fees (Note 2) |
1,980,866 | 1,604,188 | 254,397 | |||||||||
Total Liabilities |
234,629,291 | 48,894,555 | 4,807,025 | |||||||||
NET ASSETS |
$ | 4,238,296,670 | $ | 3,388,626,607 | $ | 570,863,658 | ||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 3,487,258,753 | $ | 3,223,279,147 | $ | 450,141,384 | ||||||
Undistributed net investment income (accumulated net investment loss) |
1,895,065 | (8,268,524 | ) | 532,316 | ||||||||
Undistributed net realized gain (accumulated net realized loss) |
(1,103,050,285 | ) | (1,043,953,787 | ) | 37,882,364 | |||||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies |
1,852,193,137 | 1,217,569,771 | 82,307,594 | |||||||||
NET ASSETS |
$ | 4,238,296,670 | $ | 3,388,626,607 | $ | 570,863,658 | ||||||
Shares outstandingb |
73,550,000 | 232,000,000 | 9,300,000 | |||||||||
Net asset value per share |
$ | 57.62 | $ | 14.61 | $ | 61.38 | ||||||
a | Securities on loan with values of $214,507,625, $ and $, respectively. See Note 5. |
b | $0.001 par value, number of shares authorized: 200 million, 900 million and 200 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 49 |
Statements of Operations (Unaudited)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Australia Index Fund |
iShares MSCI Hong Kong Index Fund |
iShares MSCI Japan Small Cap Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 61,386,241 | $ | 19,060,409 | $ | 374,894 | ||||||
Interest from affiliated issuers (Note 2) |
749 | 836 | 12 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
80,102 | 100,558 | 7,382 | |||||||||
Total investment income |
61,467,092 | 19,161,803 | 382,288 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
7,374,965 | 5,432,592 | 100,062 | |||||||||
Total expenses |
7,374,965 | 5,432,592 | 100,062 | |||||||||
Net investment income |
54,092,127 | 13,729,211 | 282,226 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(29,798,962 | ) | (54,186,210 | ) | (65,540 | ) | ||||||
In-kind redemptions |
46,983,259 | 105,236,978 | 2,064,217 | |||||||||
Foreign currency transactions |
2,743,634 | (193 | ) | 5,840 | ||||||||
Net realized gain |
19,927,931 | 51,050,575 | 2,004,517 | |||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
559,826,754 | 267,613,257 | 5,416,836 | |||||||||
Translation of assets and liabilities in foreign currencies |
380,577 | 4,794 | (3,242 | ) | ||||||||
Net change in unrealized appreciation/depreciation |
560,207,331 | 267,618,051 | 5,413,594 | |||||||||
Net realized and unrealized gain |
580,135,262 | 318,668,626 | 7,418,111 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 634,227,389 | $ | 332,397,837 | $ | 7,700,337 | ||||||
a | Net of foreign withholding tax of $283,372, $ and $28,299, respectively. |
See notes to financial statements.
50 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI Malaysia Index Fund |
iShares MSCI Pacific ex-Japan Index Fund |
iShares MSCI Singapore Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 17,109,326 | $ | 70,534,917 | $ | 16,581,543 | ||||||
Interest from affiliated issuers (Note 2) |
472 | 2,183 | 1,424 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
| 371,677 | 912,330 | |||||||||
Total investment income |
17,109,798 | 70,908,777 | 17,495,297 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
2,586,310 | 10,232,658 | 5,508,338 | |||||||||
Total expenses |
2,586,310 | 10,232,658 | 5,508,338 | |||||||||
Net investment income |
14,523,488 | 60,676,119 | 11,986,959 | |||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
8,822,111 | (50,021,149 | ) | (10,680,553 | ) | |||||||
In-kind redemptions |
| 231,248,782 | 73,679,060 | |||||||||
Foreign currency transactions |
71,554 | 2,877,010 | 642,095 | |||||||||
Net realized gain |
8,893,665 | 184,104,643 | 63,640,602 | |||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
64,456,901 | 538,603,195 | 95,469,207 | |||||||||
Translation of assets and liabilities in foreign currencies |
4,521 | 380,182 | 1,383 | |||||||||
Net change in unrealized appreciation/depreciation |
64,461,422 | 538,983,377 | 95,470,590 | |||||||||
Net realized and unrealized gain |
73,355,087 | 723,088,020 | 159,111,192 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 87,878,575 | $ | 783,764,139 | $ | 171,098,151 | ||||||
a | Net of foreign withholding tax of $1,969,913, $287,571 and $188,171, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 51 |
Statements of Operations (Unaudited) (Continued)
iSHARES®, INC.
Six months ended February 28, 2011
iShares MSCI South Korea Index Fund |
iShares MSCI Taiwan Index Fund |
iShares MSCI Thailand Investable Market Index Fund |
||||||||||
NET INVESTMENT INCOME |
||||||||||||
Dividends from unaffiliated issuersa |
$ | 28,290,561 | $ | 3,021,442 | $ | 6,308,718 | ||||||
Interest from unaffiliated issuers |
189 | 160 | | |||||||||
Interest from affiliated issuers (Note 2) |
3,293 | 4,269 | 987 | |||||||||
Securities lending income from affiliated issuers (Note 2) |
2,109,949 | | | |||||||||
30,403,922 | 3,025,871 | 6,309,705 | ||||||||||
Less: Other foreign taxes (Note 1) |
| | (25,049 | ) | ||||||||
Total investment income |
30,403,992 | 3,025,871 | 6,284,656 | |||||||||
EXPENSES |
||||||||||||
Investment advisory fees (Note 2) |
11,727,879 | 9,293,530 | 1,931,117 | |||||||||
Total expenses |
11,727,879 | 9,293,530 | 1,931,117 | |||||||||
Net investment income (loss) |
18,676,113 | (6,267,659 | ) | 4,353,539 | ||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||
Net realized gain (loss) from: |
||||||||||||
Investments in unaffiliated issuers |
(1,818,968 | ) | 24,521,836 | (235,885 | ) | |||||||
In-kind redemptions |
| | 44,072,682 | |||||||||
Foreign currency transactions |
16,559 | 87,609 | 64,777 | |||||||||
Net realized gain (loss) |
(1,802,409 | ) | 24,609,445 | 43,901,574 | ||||||||
Net change in unrealized appreciation/depreciation on: |
||||||||||||
Investments |
654,017,242 | 547,273,447 | 19,450,818 | |||||||||
Translation of assets and liabilities in foreign currencies |
391,801 | 96,234 | (9,849 | ) | ||||||||
Net change in unrealized appreciation/depreciation |
654,409,043 | 547,369,681 | 19,440,969 | |||||||||
Net realized and unrealized gain |
652,606,634 | 571,979,126 | 63,342,543 | |||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 671,282,747 | $ | 565,711,467 | $ | 67,696,082 | ||||||
a | Net of foreign withholding tax of $5,475,185, $25,776 and $715,919, respectively. |
See notes to financial statements.
52 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets
iSHARES®, INC.
iShares MSCI Australia Index Fund |
iShares MSCI Hong Kong Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 54,092,127 | $ | 74,772,713 | $ | 13,729,211 | $ | 48,983,169 | ||||||||
Net realized gain |
19,927,931 | 146,569,966 | 51,050,575 | 54,878,193 | ||||||||||||
Net change in unrealized appreciation/depreciation |
560,207,331 | (209,874,740 | ) | 267,618,051 | 112,823,832 | |||||||||||
Net increase in net assets resulting from operations |
634,227,389 | 11,467,939 | 332,397,837 | 216,685,194 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
|
|||||||||||||||
From net investment income |
(73,011,318 | ) | (86,675,542 | ) | (18,864,231 | ) | (51,090,437 | ) | ||||||||
Total distributions to shareholders |
(73,011,318 | ) | (86,675,542 | ) | (18,864,231 | ) | (51,090,437 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
|
|||||||||||||||
Proceeds from shares sold |
520,260,598 | 1,343,260,266 | 304,280,458 | 906,802,573 | ||||||||||||
Cost of shares redeemed |
(143,425,210 | ) | (664,911,916 | ) | (596,694,631 | ) | (1,047,857,371 | ) | ||||||||
Net increase (decrease) in net assets from capital share |
376,835,388 | 678,348,350 | (292,414,173 | ) | (141,054,798 | ) | ||||||||||
INCREASE IN NET ASSETS |
938,051,459 | 603,140,747 | 21,119,433 | 24,539,959 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
2,196,817,144 | 1,593,676,397 | 1,976,316,824 | 1,951,776,865 | ||||||||||||
End of period |
$ | 3,134,868,603 | $ | 2,196,817,144 | $ | 1,997,436,257 | $ | 1,976,316,824 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (4,348,522 | ) | $ | 14,570,669 | $ | (2,392,451 | ) | $ | 2,742,569 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
21,600,000 | 58,000,000 | 15,900,000 | 56,325,000 | ||||||||||||
Shares redeemed |
(5,800,000 | ) | (31,400,000 | ) | (31,950,000 | ) | (68,625,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
15,800,000 | 26,600,000 | (16,050,000 | ) | (12,300,000 | ) | ||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Japan Small Cap Index Fund |
iShares MSCI Malaysia Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 282,226 | $ | 485,039 | $ | 14,523,488 | $ | 12,702,745 | ||||||||
Net realized gain |
2,004,517 | 731,166 | 8,893,665 | 9,173,736 | ||||||||||||
Net change in unrealized appreciation/depreciation |
5,413,594 | (3,559,226 | ) | 64,461,422 | 157,413,356 | |||||||||||
Net increase (decrease) in net assets resulting from operations |
7,700,337 | (2,343,021 | ) | 87,878,575 | 179,289,837 | |||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(497,558 | ) | (721,861 | ) | (16,278,362 | ) | (12,611,955 | ) | ||||||||
Total distributions to shareholders |
(497,558 | ) | (721,861 | ) | (16,278,362 | ) | (12,611,955 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
9,742,416 | 8,487,461 | 224,250,223 | 215,972,540 | ||||||||||||
Cost of shares redeemed |
(9,483,428 | ) | (4,314,452 | ) | (167,474,044 | ) | (101,507,881 | ) | ||||||||
Net increase in net assets from capital share transactions |
258,988 | 4,173,009 | 56,776,179 | 114,464,659 | ||||||||||||
INCREASE IN NET ASSETS |
7,461,767 | 1,108,127 | 128,376,392 | 281,142,541 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
36,664,313 | 35,556,186 | 794,142,190 | 512,999,649 | ||||||||||||
End of period |
$ | 44,126,080 | $ | 36,664,313 | $ | 922,518,582 | $ | 794,142,190 | ||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (290,726 | ) | $ | (75,394 | ) | $ | 775,079 | $ | 2,529,953 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
200,000 | 200,000 | 16,350,000 | 18,150,000 | ||||||||||||
Shares redeemed |
(200,000 | ) | (100,000 | ) | (11,850,000 | ) | (9,375,000 | ) | ||||||||
Net increase in shares outstanding |
| 100,000 | 4,500,000 | 8,775,000 | ||||||||||||
See notes to financial statements.
54 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Pacific ex-Japan Index Fund |
iShares MSCI Singapore Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 60,676,119 | $ | 116,593,834 | $ | 11,986,959 | $ | 41,418,493 | ||||||||
Net realized gain |
184,104,643 | 157,973,599 | 63,640,602 | 10,055,486 | ||||||||||||
Net change in unrealized appreciation/depreciation |
538,983,377 | 44,872,924 | 95,470,590 | 241,937,285 | ||||||||||||
Net increase in net assets resulting from operations |
783,764,139 | 319,440,357 | 171,098,151 | 293,411,264 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(90,820,271 | ) | (128,810,457 | ) | (49,054,490 | ) | (48,264,119 | ) | ||||||||
Total distributions to shareholders |
(90,820,271 | ) | (128,810,457 | ) | (49,054,490 | ) | (48,264,119 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
329,583,703 | 357,007,662 | 265,806,674 | 360,350,218 | ||||||||||||
Cost of shares redeemed |
(479,451,721 | ) | (492,042,511 | ) | (227,522,843 | ) | (169,535,152 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions |
(149,868,018 | ) | (135,034,849 | ) | 38,283,831 | 190,815,066 | ||||||||||
INCREASE IN NET ASSETS |
543,075,850 | 55,595,051 | 160,327,492 | 435,962,211 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,438,148,670 | 3,382,553,619 | 1,730,000,783 | 1,294,038,572 | ||||||||||||
End of period |
$ | 3,981,224,520 | $ | 3,438,148,670 | $ | 1,890,328,275 | $ | 1,730,000,783 | ||||||||
Undistributed (distributions in excess of) net investment |
$ | (19,885,050 | ) | $ | 10,259,102 | $ | (28,139,976 | ) | $ | 8,927,555 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
7,200,000 | 8,700,000 | 20,000,000 | 30,800,000 | ||||||||||||
Shares redeemed |
(10,200,000 | ) | (12,900,000 | ) | (17,000,000 | ) | (15,000,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
(3,000,000 | ) | (4,200,000 | ) | 3,000,000 | 15,800,000 | ||||||||||
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI South Korea Index Fund |
iShares MSCI Taiwan Index Fund |
|||||||||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS: |
||||||||||||||||
Net investment income (loss) |
$ | 18,676,113 | $ | 20,724,754 | $ | (6,267,659 | ) | $ | 61,190,834 | |||||||
Net realized gain (loss) |
(1,802,409 | ) | (73,908,563 | ) | 24,609,445 | (21,282,233 | ) | |||||||||
Net change in unrealized appreciation/depreciation |
654,409,043 | 389,247,673 | 547,369,681 | 349,112,650 | ||||||||||||
Net increase in net assets resulting from operations |
671,282,747 | 336,063,864 | 565,711,467 | 389,021,151 | ||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
From net investment income |
(11,642,397 | ) | (25,921,316 | ) | (61,236,384 | ) | (57,723,897 | ) | ||||||||
Total distributions to shareholders |
(11,642,397 | ) | (25,921,316 | ) | (61,236,384 | ) | (57,723,897 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Proceeds from shares sold |
418,091,748 | 828,063,901 | 411,981,447 | 147,898,696 | ||||||||||||
Cost of shares redeemed |
(94,603,047 | ) | (281,588,841 | ) | (249,268,456 | ) | (793,088,733 | ) | ||||||||
Net increase (decrease) in net assets from capital share transactions |
323,488,701 | 546,475,060 | 162,712,991 | (645,190,037 | ) | |||||||||||
INCREASE (DECREASE) IN NET ASSETS |
983,129,051 | 856,617,608 | 667,188,074 | (313,892,783 | ) | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,255,167,619 | 2,398,550,011 | 2,721,438,533 | 3,035,331,316 | ||||||||||||
End of period |
$ | 4,238,296,670 | $ | 3,255,167,619 | $ | 3,388,626,607 | $ | 2,721,438,533 | ||||||||
Undistributed (distributions in excess of) net investment income (accumulated net investment loss) included in net assets at end of period |
$ | 1,895,065 | $ | (5,138,651 | ) | $ | (8,268,524 | ) | $ | 59,235,519 | ||||||
SHARES ISSUED AND REDEEMED |
||||||||||||||||
Shares sold |
7,050,000 | 17,150,000 | 27,000,000 | 12,000,000 | ||||||||||||
Shares redeemed |
(1,650,000 | ) | (6,100,000 | ) | (18,200,000 | ) | (66,200,000 | ) | ||||||||
Net increase (decrease) in shares outstanding |
5,400,000 | 11,050,000 | 8,800,000 | (54,200,000 | ) | |||||||||||
See notes to financial statements.
56 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares MSCI Thailand Investable Market Index Fund |
||||||||
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||
OPERATIONS: |
||||||||
Net investment income |
$ | 4,353,539 | $ | 8,070,335 | ||||
Net realized gain |
43,901,574 | 23,735,613 | ||||||
Net change in unrealized appreciation/depreciation |
19,440,969 | 63,106,858 | ||||||
Net increase in net assets resulting from operations |
67,696,082 | 94,912,806 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||
From net investment income |
(5,745,191 | ) | (6,685,017 | ) | ||||
Total distributions to shareholders |
(5,745,191 | ) | (6,685,017 | ) | ||||
CAPITAL SHARE TRANSACTIONS: |
||||||||
Proceeds from shares sold |
135,807,707 | 553,374,038 | ||||||
Cost of shares redeemed |
(147,198,745 | ) | (215,318,898 | ) | ||||
Net increase (decrease) in net assets from capital share transactions |
(11,391,038 | ) | 338,055,140 | |||||
INCREASE IN NET ASSETS |
50,559,853 | 426,282,929 | ||||||
NET ASSETS |
||||||||
Beginning of period |
520,303,805 | 94,020,876 | ||||||
End of period |
$ | 570,863,658 | $ | 520,303,805 | ||||
Undistributed net investment income included in net assets at end of period |
$ | 532,316 | $ | 1,923,968 | ||||
SHARES ISSUED AND REDEEMED |
||||||||
Shares sold |
2,250,000 | 11,950,000 | ||||||
Shares redeemed |
(2,400,000 | ) | (5,050,000 | ) | ||||
Net increase (decrease) in shares outstanding |
(150,000 | ) | 6,900,000 | |||||
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Australia Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 20.92 | $ | 20.33 | $ | 23.96 | $ | 27.62 | $ | 21.59 | $ | 18.28 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.47 | 0.72 | 0.78 | 0.96 | 0.89 | 0.75 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
5.19 | 0.69 | (3.47 | ) | (3.34 | ) | 6.24 | 3.23 | ||||||||||||||||
Total from investment operations |
5.66 | 1.41 | (2.69 | ) | (2.38 | ) | 7.13 | 3.98 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.63 | ) | (0.82 | ) | (0.94 | ) | (1.28 | ) | (1.10 | ) | (0.67 | ) | ||||||||||||
Total distributions |
(0.63 | ) | (0.82 | ) | (0.94 | ) | (1.28 | ) | (1.10 | ) | (0.67 | ) | ||||||||||||
Net asset value, end of period |
$ | 25.95 | $ | 20.92 | $ | 20.33 | $ | 23.96 | $ | 27.62 | $ | 21.59 | ||||||||||||
Total return |
27.17 | %c | 6.86 | % | (8.91 | )% | (9.25 | )% | 33.97 | % | 22.35 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 3,134,869 | $ | 2,196,817 | $ | 1,593,676 | $ | 1,059,092 | $ | 1,464,112 | $ | 686,407 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
3.85 | % | 3.24 | % | 4.92 | % | 3.38 | % | 3.46 | % | 3.75 | % | ||||||||||||
Portfolio turnover ratee |
4 | % | 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 Funds underlying securities. |
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.
58 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Hong Kong Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 16.02 | $ | 14.39 | $ | 15.87 | $ | 18.30 | $ | 14.20 | $ | 13.01 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.12 | 0.42 | 0.52 | 0.45 | 0.47 | 0.38 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
2.64 | 1.69 | (1.46 | ) | (2.25 | ) | 3.94 | 1.17 | ||||||||||||||||
Total from investment operations |
2.76 | 2.11 | (0.94 | ) | (1.80 | ) | 4.41 | 1.55 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.17 | ) | (0.48 | ) | (0.54 | ) | (0.63 | ) | (0.31 | ) | (0.36 | ) | ||||||||||||
Total distributions |
(0.17 | ) | (0.48 | ) | (0.54 | ) | (0.63 | ) | (0.31 | ) | (0.36 | ) | ||||||||||||
Net asset value, end of period |
$ | 18.61 | $ | 16.02 | $ | 14.39 | $ | 15.87 | $ | 18.30 | $ | 14.20 | ||||||||||||
Total return |
17.22 | %c | 14.85 | % | (4.77 | )% | (10.54 | )% | 31.44 | % | 12.20 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 1,997,436 | $ | 1,976,317 | $ | 1,951,777 | $ | 1,675,184 | $ | 1,445,309 | $ | 882,712 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
1.33 | % | 2.67 | % | 4.29 | % | 2.34 | % | 2.92 | % | 2.87 | % | ||||||||||||
Portfolio turnover ratee |
12 | % | 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 Funds underlying securities. |
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 | 59 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Japan Small Cap Index Fund | ||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 |
$ | 40.74 | $ | 44.45 | $ | 43.24 | $ | 48.85 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment incomeb |
0.33 | 0.61 | 0.60 | 0.29 | ||||||||||||
Net realized and unrealized gain (loss)c |
8.51 | (3.39 | ) | 1.29 | (5.74 | ) | ||||||||||
Total from investment operations |
8.84 | (2.78 | ) | 1.89 | (5.45 | ) | ||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.55 | ) | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||||
Total distributions |
(0.55 | ) | (0.93 | ) | (0.68 | ) | (0.16 | ) | ||||||||
Net asset value, end of period |
$ | 49.03 | $ | 40.74 | $ | 44.45 | $ | 43.24 | ||||||||
Total return |
21.82 | %d | (6.25 | )% | 4.62 | % | (11.19 | )%d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 44,126 | $ | 36,664 | $ | 35,556 | $ | 34,594 | ||||||||
Ratio of expenses to average net assetse |
0.53 | % | 0.53 | % | 0.56 | % | 0.53 | % | ||||||||
Ratio of net investment income to average net assetse |
1.48 | % | 1.46 | % | 1.59 | % | 0.93 | % | ||||||||
Portfolio turnover ratef |
2 | % | 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 Funds 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.
60 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Malaysia Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 12.98 | $ | 9.79 | $ | 9.39 | $ | 10.97 | $ | 7.75 | $ | 7.19 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.21 | 0.24 | 0.28 | 0.34 | 0.34 | 0.26 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
1.09 | 3.20 | 0.40 | (1.31 | ) | 3.08 | 0.59 | |||||||||||||||||
Total from investment operations |
1.30 | 3.44 | 0.68 | (0.97 | ) | 3.42 | 0.85 | |||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.24 | ) | (0.25 | ) | (0.28 | ) | (0.61 | ) | (0.20 | ) | (0.29 | ) | ||||||||||||
Total distributions |
(0.24 | ) | (0.25 | ) | (0.28 | ) | (0.61 | ) | (0.20 | ) | (0.29 | ) | ||||||||||||
Net asset value, end of period |
$ | 14.04 | $ | 12.98 | $ | 9.79 | $ | 9.39 | $ | 10.97 | $ | 7.75 | ||||||||||||
Total return |
10.02 | %c | 35.76 | % | 8.00 | % | (9.86 | )% | 44.64 | % | 12.35 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 922,519 | $ | 794,142 | $ | 513,000 | $ | 473,091 | $ | 741,440 | $ | 374,334 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.56 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average netassetsd |
2.95 | % | 2.17 | % | 3.45 | % | 2.84 | % | 3.21 | % | 3.46 | % | ||||||||||||
Portfolio turnover ratee |
28 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | 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 six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 20%, 10%, 12%, 16%, 3% and 9%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 61 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Pacific ex-Japan Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 39.25 | $ | 36.85 | $ | 41.37 | $ | 48.31 | $ | 37.34 | $ | 32.52 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomeb |
0.67 | 1.25 | 1.38 | 1.64 | 1.52 | 1.28 | ||||||||||||||||||
Net realized and unrealized gain (loss)c |
8.13 | 2.52 | (4.79 | ) | (6.01 | ) | 11.18 | 4.77 | ||||||||||||||||
Total from investment operations |
8.80 | 3.77 | (3.41 | ) | (4.37 | ) | 12.70 | 6.05 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.99 | ) | (1.37 | ) | (1.11 | ) | (2.51 | ) | (1.73 | ) | (1.23 | ) | ||||||||||||
Net realized gain |
| | | (0.06 | ) | | | |||||||||||||||||
Total distributions |
(0.99 | ) | (1.37 | ) | (1.11 | ) | (2.57 | ) | (1.73 | ) | (1.23 | ) | ||||||||||||
Net asset value, end of period |
$ | 47.06 | $ | 39.25 | $ | 36.85 | $ | 41.37 | $ | 48.31 | $ | 37.34 | ||||||||||||
Total return |
22.47 | %d | 10.27 | % | (7.23 | )% | (9.87 | )% | 34.86 | % | 19.17 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 3,981,225 | $ | 3,438,149 | $ | 3,382,554 | $ | 3,263,971 | $ | 3,536,295 | $ | 2,094,931 | ||||||||||||
Ratio of expenses to average net assetse |
0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
Ratio of net investment income to averagenet assetse |
2.96 | % | 3.09 | % | 4.83 | % | 3.35 | % | 3.43 | % | 3.67 | % | ||||||||||||
Portfolio turnover ratef |
5 | % | 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 Funds 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.
62 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Singapore Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 12.17 | $ | 10.25 | $ | 11.44 | $ | 13.28 | $ | 9.11 | $ | 7.77 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.08 | 0.32 | 0.32 | 0.47 | 0.47 | 0.40 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
1.09 | 1.97 | (1.16 | ) | (1.67 | ) | 4.01 | 1.23 | ||||||||||||||||
Total from investment operations |
1.17 | 2.29 | (0.84 | ) | (1.20 | ) | 4.48 | 1.63 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.31 | ) | (0.37 | ) | (0.35 | ) | (0.64 | ) | (0.31 | ) | (0.29 | ) | ||||||||||||
Total distributions |
(0.31 | ) | (0.37 | ) | (0.35 | ) | (0.64 | ) | (0.31 | ) | (0.29 | ) | ||||||||||||
Net asset value, end of period |
$ | 13.03 | $ | 12.17 | $ | 10.25 | $ | 11.44 | $ | 13.28 | $ | 9.11 | ||||||||||||
Total return |
9.55 | %c | 22.68 | % | (5.87 | )% | (9.55 | )% | 49.92 | % | 21.61 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 1,890,328 | $ | 1,730,001 | $ | 1,294,039 | $ | 1,476,968 | $ | 1,669,210 | $ | 574,620 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.53 | % | 0.55 | % | 0.52 | % | 0.51 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to averagenet assetsd |
1.14 | % | 2.80 | % | 3.97 | % | 3.56 | % | 3.80 | % | 4.74 | % | ||||||||||||
Portfolio turnover ratee |
4 | % | 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 Funds underlying securities. |
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 | 63 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI South Korea Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 47.76 | $ | 42.01 | $ | 43.55 | $ | 63.60 | $ | 46.00 | $ | 34.75 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.27 | 0.32 | 0.30 | 0.80 | 0.51 | 0.31 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
9.76 | 5.82 | (1.45 | ) | (19.87 | ) | 17.42 | 11.20 | ||||||||||||||||
Total from investment operations |
10.03 | 6.14 | (1.15 | ) | (19.07 | ) | 17.93 | 11.51 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.17 | ) | (0.39 | ) | (0.39 | ) | (0.98 | ) | (0.33 | ) | (0.26 | ) | ||||||||||||
Total distributions |
(0.17 | ) | (0.39 | ) | (0.39 | ) | (0.98 | ) | (0.33 | ) | (0.26 | ) | ||||||||||||
Net asset value, end of period |
$ | 57.62 | $ | 47.76 | $ | 42.01 | $ | 43.55 | $ | 63.60 | $ | 46.00 | ||||||||||||
Total return |
20.99 | %c | 14.65 | % | (2.31 | )% | (30.35 | )% | 39.18 | % | 33.16 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 4,238,297 | $ | 3,255,168 | $ | 2,398,550 | $ | 1,985,763 | $ | 2,429,453 | $ | 1,621,334 | ||||||||||||
Ratio of expenses to average net assetsd,e |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||||
Ratio of net investment income to averagenet assetsd |
0.94 | % | 0.67 | % | 0.91 | % | 1.35 | % | 0.96 | % | 0.71 | % | ||||||||||||
Portfolio turnover ratef |
4 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
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 six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 2%, 6%, 8%, 15%, 6% and 14%, respectively. See Note 4. |
See notes to financial statements.
64 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Taiwan Index Fund | ||||||||||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 12.19 | $ | 10.94 | $ | 13.13 | $ | 15.99 | $ | 12.57 | $ | 11.57 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment income (loss)a |
(0.03 | ) | 0.23 | 0.30 | 0.54 | 0.38 | 0.34 | |||||||||||||||||
Net realized and unrealized gain (loss)b |
2.74 | 1.23 | (1.89 | ) | (3.01 | ) | 3.34 | 0.80 | ||||||||||||||||
Total from investment operations |
2.71 | 1.46 | (1.59 | ) | (2.47 | ) | 3.72 | 1.14 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.29 | ) | (0.21 | ) | (0.60 | ) | (0.39 | ) | (0.30 | ) | (0.14 | ) | ||||||||||||
Total distributions |
(0.29 | ) | (0.21 | ) | (0.60 | ) | (0.39 | ) | (0.30 | ) | (0.14 | ) | ||||||||||||
Net asset value, end of period |
$ | 14.61 | $ | 12.19 | $ | 10.94 | $ | 13.13 | $ | 15.99 | $ | 12.57 | ||||||||||||
Total return |
22.19 | %c | 13.30 | % | (9.67 | )% | (15.69 | )% | 29.91 | % | 9.84 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 3,388,627 | $ | 2,721,439 | $ | 3,035,331 | $ | 2,918,008 | $ | 2,769,764 | $ | 1,893,751 | ||||||||||||
Ratio of expenses to average net assetsd,e |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | 0.68 | % | 0.70 | % | ||||||||||||
Ratio of net investment income (loss) toaverage net assetsd |
(0.40 | )% | 1.90 | % | 3.18 | % | 3.54 | % | 2.61 | % | 2.74 | % | ||||||||||||
Portfolio turnover ratef |
13 | % | 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 Funds underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
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 six months ended February 28, 2011 and the years ended August 31, 2010, August 31, 2009, August 31, 2008, August 31, 2007 and August 31, 2006 would have been 8%, 4%, 14%, 11%, 12% and 10%, respectively. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 65 |
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares MSCI Thailand Investable Market Index Fund | ||||||||||||||||
Six months ended Feb. 28, 2011 (Unaudited) |
Year ended Aug. 31, 2010 |
Year ended Aug. 31, 2009 |
Period from Aug. 31, 2008 |
|||||||||||||
Net asset value, beginning of period |
$ | 55.06 | $ | 36.87 | $ | 38.83 | $ | 50.03 | ||||||||
Income from investment operations: |
||||||||||||||||
Net investment incomeb |
0.41 | 1.44 | 1.17 | 0.32 | ||||||||||||
Net realized and unrealized gain (loss)c |
6.43 | 17.95 | (1.88 | ) | (11.52 | ) | ||||||||||
Total from investment operations |
6.84 | 19.39 | (0.71 | ) | (11.20 | ) | ||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.52 | ) | (1.20 | ) | (1.25 | ) | | |||||||||
Total distributions |
(0.52 | ) | (1.20 | ) | (1.25 | ) | | |||||||||
Net asset value, end of period |
$ | 61.38 | $ | 55.06 | $ | 36.87 | $ | 38.83 | ||||||||
Total return |
12.41 | %d | 53.19 | % | (0.33 | )% | (22.39 | )%d | ||||||||
Ratios/Supplemental data: |
||||||||||||||||
Net assets, end of period (000s) |
$ | 570,864 | $ | 520,304 | $ | 94,021 | $ | 58,248 | ||||||||
Ratio of expenses to average net assetse,f |
0.59 | % | 0.61 | % | 0.65 | % | 0.63 | % | ||||||||
Ratio of net investment income to average net assetse |
1.33 | % | 3.22 | % | 4.00 | % | 1.68 | % | ||||||||
Portfolio turnover rateg |
9 | % | 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 Funds underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
g | 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.
66 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited)
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 its underlying index. The investment adviser uses a passive or index approach to achieve each Funds 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 Companys 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 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); |
NOTES TO FINANCIAL STATEMENTS | 67 |
Notes to Financial Statements (Unaudited) (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); and |
| Level 3 Inputs that are unobservable for the asset or liability (a Level 3 Price). |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3 of the fair value hierarchy.
The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds perceived risk of that instrument.
Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 Prices, include active listed equities. The Funds do not adjust the quoted price for such instruments, even in situations where the Funds hold a large position and a sale could reasonably impact the quoted price.
Investments that trade in markets that are not considered to be active, but whose values are based on inputs such as quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified within Level 2. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments whose values are classified as Level 3 Prices have significant unobservable inputs, as they may trade infrequently or not at all. Investments whose values are classified as Level 3 Prices may include unlisted securities related to corporate actions, securities whose trading have been suspended or which have been de-listed from their primary trading exchange, less liquid corporate debt securities (including distressed debt instruments), collateralized debt obligations, and less liquid mortgage securities (backed by either commercial or residential real estate). When observable prices are not available for these securities, the Funds use one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available. Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
The inputs used by the Funds in estimating the value of Level 3 Prices may include the original transaction price, recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, and 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 securitys 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.
68 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Fair value pricing could result in a difference between the prices used to calculate a Funds net asset value and the prices used by the Funds underlying index, which in turn could result in a difference between the Funds performance and the performance of the Funds underlying index.
The following table summarizes the value of each of the Funds investments according to the fair value hierarchy as of February 28, 2011. The breakdown of each Funds 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 | ||||||||||||
Australia |
||||||||||||||||
Common Stocks |
$ | 3,108,176,857 | $ | | $ | 2,609 | $ | 3,108,179,466 | ||||||||
Short-Term Investments |
31,358,656 | | | 31,358,656 | ||||||||||||
$ | 3,139,535,513 | $ | | $ | 2,609 | $ | 3,139,538,122 | |||||||||
Hong Kong |
||||||||||||||||
Common Stocks |
$ | 1,988,146,887 | $ | | $ | | $ | 1,988,146,887 | ||||||||
Rights |
| | 1,598,340 | 1,598,340 | ||||||||||||
Short-Term Investments |
41,707,746 | | | 41,707,746 | ||||||||||||
$ | 2,029,854,633 | $ | | $ | 1,598,340 | $ | 2,031,452,973 | |||||||||
Japan Small Cap |
||||||||||||||||
Common Stocks |
$ | 43,958,834 | $ | | $ | | $ | 43,958,834 | ||||||||
Short-Term Investments |
261,271 | | | 261,271 | ||||||||||||
$ | 44,220,105 | $ | | $ | | $ | 44,220,105 | |||||||||
Malaysia |
||||||||||||||||
Common Stocks |
$ | 920,509,633 | $ | | $ | | $ | 920,509,633 | ||||||||
Short-Term Investments |
184,303 | | | 184,303 | ||||||||||||
$ | 920,693,936 | $ | | $ | | $ | 920,693,936 | |||||||||
Pacific ex-Japan |
||||||||||||||||
Common Stocks |
$ | 3,960,472,670 | $ | | $ | 3,730 | $ | 3,960,476,400 | ||||||||
Rights |
| | 684,802 | 684,802 | ||||||||||||
Short-Term Investments |
86,882,085 | | | 86,882,085 | ||||||||||||
$ | 4,047,354,755 | $ | | $ | 688,532 | $ | 4,048,043,287 | |||||||||
Singapore |
||||||||||||||||
Common Stocks |
$ | 1,886,507,361 | $ | | $ | | $ | 1,886,507,361 | ||||||||
Short-Term Investments |
143,575,639 | | | 143,575,639 | ||||||||||||
$ | 2,030,083,000 | $ | | $ | | $ | 2,030,083,000 | |||||||||
NOTES TO FINANCIAL STATEMENTS | 69 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Investments in Securities | ||||||||||||||||
iShares MSCI Index Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
South Korea |
||||||||||||||||
Common Stocks |
$ | 4,077,890,971 | $ | | $ | | $ | 4,077,890,971 | ||||||||
Preferred Stocks |
127,035,507 | | | 127,035,507 | ||||||||||||
Short-Term Investments |
230,350,714 | | | 230,350,714 | ||||||||||||
$ | 4,435,277,192 | $ | | $ | | $ | 4,435,277,192 | |||||||||
Taiwan |
||||||||||||||||
Common Stocks |
$ | 3,388,138,254 | $ | | $ | 23 | $ | 3,388,138,277 | ||||||||
Short-Term Investments |
2,044,565 | | | 2,044,565 | ||||||||||||
$ | 3,390,182,819 | $ | | $ | 23 | $ | 3,390,182,842 | |||||||||
Thailand Investable Market |
||||||||||||||||
Common Stocks |
$ | 567,785,505 | $ | | $ | | $ | 567,785,505 | ||||||||
Warrants |
32,388 | | | 32,388 | ||||||||||||
Short-Term Investments |
507,235 | | | 507,235 | ||||||||||||
$ | 568,325,128 | $ | | $ | | $ | 568,325,128 | |||||||||
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
70 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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 February 28, 2011, if any, are reflected in the Funds Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income, if any, generally are declared and paid semi-annually by each of the Funds. 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
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 six months ended February 28, 2011.
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 | |||||||||||||||||||||||||||
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 between paid-in capital, accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss) as a result of permanent book and tax differences primarily
NOTES TO FINANCIAL STATEMENTS | 71 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
attributed to net investment loss, return of capital, passive foreign investment companies, and realized gains (losses) from foreign currency transactions and in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
As of February 28, 2011, 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 |
$ | 2,900,747,666 | $ | 279,254,623 | $ | (40,464,167 | ) | $ | 238,790,456 | |||||||
Hong Kong |
2,046,380,045 | 107,690,510 | (122,617,582 | ) | (14,927,072 | ) | ||||||||||
Japan Small Cap |
42,580,239 | 4,373,566 | (2,733,700 | ) | 1,639,866 | |||||||||||
Malaysia |
533,633,646 | 387,754,146 | (693,856 | ) | 387,060,290 | |||||||||||
Pacific ex-Japan |
3,358,083,906 | 785,521,964 | (95,562,583 | ) | 689,959,381 | |||||||||||
Singapore |
1,890,883,066 | 167,214,084 | (28,014,150 | ) | 139,199,934 | |||||||||||
South Korea |
3,165,250,313 | 1,292,424,127 | (22,397,248 | ) | 1,270,026,879 | |||||||||||
Taiwan |
2,381,731,138 | 1,053,241,115 | (44,789,411 | ) | 1,008,451,704 | |||||||||||
Thailand Investable Market |
488,146,906 | 92,164,255 | (11,986,033 | ) | 80,178,222 |
Management has reviewed the tax positions as of February 28, 2011, 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
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (BFA) manages the investment of each Funds assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (BlackRock). Under the Investment Advisory Agreement, BFA is responsible for all 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, litigation expenses and any 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 Funds 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 |
72 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
Effective January 1, 2011, 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 Funds 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, up to and including $32 billion | |
0.45 | Over $32 billion |
Prior to January 1, 2011, 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 Funds allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | |
0.74% | First $2 billion | |
0.69 | Over $2 billion, up to and including $4 billion | |
0.64 | Over $4 billion, up to and including $8 billion | |
0.57 | Over $8 billion, up to and including $16 billion | |
0.51 | Over $16 billion |
For its investment advisory services to the iShares MSCI Pacific ex-Japan Index Fund, 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 BlackRock Institutional Trust Company, N.A. (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 combined income earned from the investment of cash collateral received for the loan of securities and any fees paid by borrowers. For the six months ended February 28, 2011, BTC earned securities lending agent fees from certain Funds as follows:
iShares MSCI Index Fund | Securities Lending Agent Fees |
|||
Australia |
$ | 43,046 | ||
Hong Kong |
53,342 | |||
Japan Small Cap |
3,831 | |||
Pacific ex-Japan |
190,884 | |||
Singapore |
443,568 | |||
South Korea |
1,119,806 |
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.
NOTES TO FINANCIAL STATEMENTS | 73 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
The PNC Financial Services Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays PLC (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.
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 six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | Purchases | Sales | ||||||
Australia |
$ | 97,958,097 | $ | 115,640,093 | ||||
Hong Kong |
245,842,213 | 276,125,645 | ||||||
Japan Small Cap |
931,443 | 1,195,775 | ||||||
Malaysia |
285,868,162 | 230,889,803 | ||||||
Pacific ex-Japan |
212,992,443 | 230,354,981 | ||||||
Singapore |
73,261,723 | 98,190,828 | ||||||
South Korea |
462,620,174 | 157,333,819 | ||||||
Taiwan |
536,355,864 | 408,157,994 | ||||||
Thailand Investable Market |
55,489,451 | 54,374,520 |
In-kind transactions (see Note 4) for the six months ended February 28, 2011 were as follows:
iShares MSCI Index Fund | In-kind Purchases |
In-kind Sales |
||||||
Australia |
$ | 516,556,218 | $ | 142,610,211 | ||||
Hong Kong |
299,040,631 | 565,131,806 | ||||||
Japan Small Cap |
9,699,722 | 9,443,797 | ||||||
Pacific ex-Japan |
327,341,094 | 477,886,051 | ||||||
Singapore |
262,078,520 | 224,957,473 | ||||||
Thailand Investable Market |
132,202,189 | 146,332,084 |
4. CAPITAL SHARE TRANSACTIONS
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) 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 securities of that Funds underlying 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
74 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES®, INC.
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.
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 February 28, 2011, 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 February 28, 2011 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.
NOTES TO FINANCIAL STATEMENTS | 75 |
Notes:
76 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes:
NOTES | 77 |
Notes:
78 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, its 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 firms 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). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor 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 SECs website or may be reviewed and copied at the SECs 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.
©2011 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-SAR-83-0211
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2011 SEMI-ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
FEBRUARY 28, 2011
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iShares MSCI Japan Index Fund | EWJ | NYSE Arca
5 | ||||
6 | ||||
7 | ||||
13 | ||||
16 | ||||
17 |
iSHARES® MSCI JAPAN INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
16.68% | 17.61% | 17.29% | (2.80)% | (2.37)% | (2.35)% | 1.57% | 1.60% | 2.05% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Ten Years Ended 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
16.68% | 17.61% | 17.29% | (13.25)% | (11.31)% | (11.20)% | 16.85% | 17.21% | 22.50% |
Average Annual Total Returns represent the average annual change in value of an investment over the periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds 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 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 Funds past performance is no guarantee of future results.
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 the MSCI Japan IndexSM (the Index). The Index consists of stocks traded primarily on the Tokyo Stock Exchange. 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 six-month period ended February 28, 2011, the total return for the Fund was 22.36%, while the total return for the Index was 22.76%.
FUND PERFORMANCE OVERVIEW | 5 |
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 September 1, 2010 to February 28, 2011.
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 Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds 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 (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
|||||||||||||
Actual |
$1,000.00 | $1,223.60 | 0.53 | % | $2.92 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.20 | 0.53 | 2.66 |
a | Expenses are calculated using the Funds 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 (181 days) and divided by the number of days in the year (365 days). |
6 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 7 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
8 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 9 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
10 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 11 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
12 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statement of Assets and Liabilities (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
February 28, 2011
ASSETS |
||||
Investments, at cost: |
||||
Unaffiliated issuers |
$ | 6,801,111,059 | ||
Affiliated issuers (Note 2) |
56,927,238 | |||
Total cost of investments |
$ | 6,858,038,297 | ||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||
Unaffiliated issuers |
$ | 6,168,897,920 | ||
Affiliated issuers (Note 2) |
56,927,238 | |||
Total fair value of investments |
6,225,825,158 | |||
Foreign currency, at valueb |
3,278,170 | |||
Receivables: |
||||
Due from custodian (Note 4) |
17,716 | |||
Dividends and interest |
5,708,320 | |||
Total Assets |
6,234,829,364 | |||
LIABILITIES |
||||
Payables: |
||||
Investment securities purchased |
17,716 | |||
Collateral for securities on loan (Note 5) |
51,309,810 | |||
Investment advisory fees (Note 2) |
2,242,730 | |||
Total Liabilities |
53,570,256 | |||
NET ASSETS |
$ | 6,181,259,108 | ||
Net assets consist of: |
||||
Paid-in capital |
$ | 7,498,667,876 | ||
Distributions in excess of net investment income |
(2,751,759 | ) | ||
Accumulated net realized loss |
(682,498,256 | ) | ||
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies |
(632,158,753 | ) | ||
NET ASSETS |
$ | 6,181,259,108 | ||
Shares outstandingc |
539,400,000 | |||
Net asset value per share |
$ | 11.46 | ||
a | Securities on loan with value of $47,483,129. See Note 5. |
b | Cost of foreign currency: $3,234,242. |
c | $0.001 par value, number of shares authorized: 2,124,600,000. |
See notes to financial statements.
FINANCIAL STATEMENTS | 13 |
Statement of Operations (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
Six months ended February 28, 2011
NET INVESTMENT INCOME |
||||
Dividends from unaffiliated issuersa |
$ | 37,404,230 | ||
Interest from affiliated issuers (Note 2) |
1,636 | |||
Securities lending income from affiliated issuers (Note 2) |
319,679 | |||
Total investment income |
37,725,545 | |||
EXPENSES |
||||
Investment advisory fees (Note 2) |
11,813,653 | |||
Total expenses |
11,813,653 | |||
Net investment income |
25,911,892 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||
Net realized gain (loss) from: |
||||
Investments in unaffiliated issuers |
(43,566,711 | ) | ||
In-kind redemptions |
(8,685,886 | ) | ||
Foreign currency transactions |
590,863 | |||
Net realized loss |
(51,661,734 | ) | ||
Net change in unrealized appreciation/depreciation on: |
||||
Investments |
926,716,461 | |||
Translation of assets and liabilities in foreign currencies |
(110,091 | ) | ||
Net change in unrealized appreciation/depreciation |
926,606,370 | |||
Net realized and unrealized gain |
874,944,636 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 900,856,528 | ||
a | Net of foreign withholding tax of $2,818,649. |
See notes to financial statements.
14 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets
iSHARES® MSCI JAPAN INDEX FUND
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||
OPERATIONS: |
||||||||
Net investment income |
$ | 25,911,892 | $ | 61,244,311 | ||||
Net realized loss |
(51,661,734 | ) | (48,426,200 | ) | ||||
Net change in unrealized appreciation/depreciation |
926,606,370 | (368,908,167 | ) | |||||
Net increase (decrease) in net assets resulting from operations |
900,856,528 | (356,090,056 | ) | |||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||
From net investment income |
(31,933,699 | ) | (77,025,449 | ) | ||||
Total distributions to shareholders |
(31,933,699 | ) | (77,025,449 | ) | ||||
CAPITAL SHARE TRANSACTIONS: |
||||||||
Proceeds from shares sold |
1,809,209,193 | 1,380,264,536 | ||||||
Cost of shares redeemed |
(439,641,585 | ) | (3,168,550,601 | ) | ||||
Net increase (decrease) in net assets from capital share transactions |
1,369,567,608 | (1,788,286,065 | ) | |||||
INCREASE (DECREASE) IN NET ASSETS |
2,238,490,437 | (2,221,401,570 | ) | |||||
NET ASSETS |
||||||||
Beginning of period |
3,942,768,671 | 6,164,170,241 | ||||||
End of period |
$ | 6,181,259,108 | $ | 3,942,768,671 | ||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (2,751,759 | ) | $ | 3,270,048 | |||
SHARES ISSUED AND REDEEMED |
||||||||
Shares sold |
164,400,000 | 137,400,000 | ||||||
Shares redeemed |
(43,200,000 | ) | (321,000,000 | ) | ||||
Net increase (decrease) in shares outstanding |
121,200,000 | (183,600,000 | ) | |||||
See notes to financial statements.
FINANCIAL STATEMENTS | 15 |
iSHARES® MSCI JAPAN INDEX FUND
(For a share outstanding throughout each period)
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 9.43 | $ | 10.24 | $ | 11.62 | $ | 14.07 | $ | 13.80 | $ | 10.99 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomea |
0.06 | 0.12 | 0.13 | 0.14 | 0.10 | 0.06 | ||||||||||||||||||
Net realized and unrealized gain (loss)b |
2.04 | (0.77 | ) | (1.39 | ) | (2.39 | ) | 0.27 | 2.81 | |||||||||||||||
Total from investment operations |
2.10 | (0.65 | ) | (1.26 | ) | (2.25 | ) | 0.37 | 2.87 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.07 | ) | (0.16 | ) | (0.12 | ) | (0.20 | ) | (0.10 | ) | (0.06 | ) | ||||||||||||
Total distributions |
(0.07 | ) | (0.16 | ) | (0.12 | ) | (0.20 | ) | (0.10 | ) | (0.06 | ) | ||||||||||||
Net asset value, end of period |
$ | 11.46 | $ | 9.43 | $ | 10.24 | $ | 11.62 | $ | 14.07 | $ | 13.80 | ||||||||||||
Total return |
22.36 | %c | (6.41 | )% | (10.68 | )% | (16.13 | )% | 2.68 | % | 26.10 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 6,181,259 | $ | 3,942,769 | $ | 6,164,170 | $ | 7,499,536 | $ | 11,780,006 | $ | 13,724,590 | ||||||||||||
Ratio of expenses to average net assetsd |
0.53 | % | 0.54 | % | 0.56 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||||
Ratio of net investment income to average net assetsd |
1.15 | % | 1.20 | % | 1.46 | % | 1.11 | % | 0.68 | % | 0.48 | % | ||||||||||||
Portfolio turnover ratee |
2 | % | 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 Funds underlying securities. |
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.
16 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited)
iSHARES® MSCI JAPAN INDEX FUND
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 Funds objective is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a passive or indexing approach to try to achieve the Funds 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 Companys organizational documents, the Funds officers and trustees 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 Funds 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); |
NOTES TO FINANCIAL STATEMENTS | 17 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
| 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); and |
| 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 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 not include transaction costs that may have been capitalized as part of the securitys cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds results of operations.
18 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
Fair value pricing could result in a difference between the prices used to calculate the Funds net asset value and the prices used by the Funds underlying index, which in turn could result in a difference between the Funds performance and the performance of the Funds underlying index.
As of February 28, 2011, the value of each of the Funds investments was classified as a Level 1 Price. The breakdown of the Funds investments into major categories is disclosed in its 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 February 28, 2011, if any, are reflected in the Funds Statement of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income, if any, generally are 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
FEDERAL INCOME TAXES
The Fund is treated as an entity separate from the Companys 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
NOTES TO FINANCIAL STATEMENTS | 19 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
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 six months ended February 28, 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 between paid-in capital, accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss) as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, and realized gains (losses) from foreign currency transactions and in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
As of February 28, 2011, the cost of investments for federal income tax purposes was $6,942,688,717. Net unrealized depreciation was $716,863,559, of which $312,167,415 represented gross unrealized appreciation on securities and $1,029,030,974 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of February 28, 2011, 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
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (BFA) manages the investment of the Funds assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (BlackRock). Under the Investment Advisory Agreement, BFA is responsible for all 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, litigation expenses and any extraordinary expenses.
For its investment advisory services to the Fund, BFA is entitled to an annual investment advisory fee based on the Funds 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 BlackRock Institutional Trust Company, N.A. (BTC) to serve as securities lending agent for the Fund, subject to applicable conditions. BTC is an affiliate of BFA, the Funds investment
20 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
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 and any fees paid by borrowers. For the six months ended February 28, 2011, BTC earned securities lending agent fees of $168,263.
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 PNC Financial Services Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays PLC (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.
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 six months ended February 28, 2011, aggregated $75,703,299 and $76,939,469, respectively.
In-kind transactions (see Note 4) for the six months ended February 28, 2011, aggregated $1,788,975,106 and $433,260,064, respectively.
4. CAPITAL SHARE TRANSACTIONS
Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) 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 securities, which constitutes an optimized representation of the securities of the Funds 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.
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.
NOTES TO FINANCIAL STATEMENTS | 21 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI JAPAN INDEX FUND
As of February 28, 2011, 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 February 28, 2011 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Funds 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.
22 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, its 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 firms 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). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor 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 Funds 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 Funds Form N-Q is available on the SECs website or may be reviewed and copied at the SECs 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 Funds website.
©2011 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-SAR-81-0211
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2011 SEMI-ANNUAL REPORT TO SHAREHOLDERS
iSHARES® MSCI SERIES
FEBRUARY 28, 2011
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iShares MSCI Emerging Markets Index Fund | EEM | NYSE Arca
5 | ||||
7 | ||||
8 | ||||
21 | ||||
24 | ||||
25 |
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Performance as of February 28, 2011
Average Annual Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.25% | 19.34% | 20.91% | 8.87% | 9.03% | 9.63% | 21.15% | 21.14% | 21.45% | ||||||||
Cumulative Total Returns | ||||||||||||||||
Year Ended 2/28/11 | Five Years Ended 2/28/11 | Inception to 2/28/11 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
19.25% | 19.34% | 20.91% | 52.96% | 54.06% | 58.36% | 355.17% | 354.98% | 364.07% |
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 periods indicated. Cumulative Total Returns represent the total change in value of an investment over the periods indicated.
The Funds 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 Funds NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Funds inception, for the period from inception to the first day of secondary market trading in shares of the Fund (4/11/03), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The performance shown 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 Funds past performance is no guarantee of future results.
FUND PERFORMANCE OVERVIEW | 5 |
Fund Performance Overview (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 IndexSM (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 six-month period ended February 28, 2011, the total return for the Fund was 14.90%, while the total return for the Index was 14.95%.
6 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
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 September 1, 2010 to February 28, 2011.
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 Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds 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 (9/1/10) |
Ending Account Value (2/28/11) |
Annualized Expense Ratio |
Expenses Paid During Perioda (9/1/10 to 2/28/11) |
|||||||||||||
Actual |
$1,000.00 | $1,149.00 | 0.66 | % | $3.52 | |||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.50 | 0.66 | 3.31 |
a | Expenses are calculated using the Funds 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 (181 days) and divided by the number of days in the year (365 days). |
SHAREHOLDER EXPENSES | 7 |
Schedule of Investments (Unaudited)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
8 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 9 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
10 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 11 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
12 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 13 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
14 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 15 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
16 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 17 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
18 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
SCHEDULE OF INVESTMENTS | 19 |
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
20 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statement of Assets and Liabilities (Unaudited)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
February 28, 2011
ASSETS |
||||
Investments, at cost: |
||||
Unaffiliated issuers |
$ | 33,704,831,525 | ||
Affiliated issuers (Note 2) |
1,107,249,899 | |||
Total cost of investments |
$ | 34,812,081,424 | ||
Investments in securities, at fair value (including securities on loana) (Note 1): |
||||
Unaffiliated issuers |
$ | 36,568,058,672 | ||
Affiliated issuers (Note 2) |
1,107,327,482 | |||
Total fair value of investments |
37,675,386,154 | |||
Foreign currencies, at valueb |
6,223,560 | |||
Cash |
5,179,224 | |||
Receivables: |
||||
Investment securities sold |
422,313,358 | |||
Dividends and interest |
57,763,768 | |||
Total Assets |
38,166,866,064 | |||
LIABILITIES |
||||
Payables: |
||||
Investment securities purchased |
256,671,754 | |||
Securities related to in-kind transactions (Note 4) |
93,680 | |||
Collateral for securities on loan (Note 5) |
1,040,903,835 | |||
Capital shares redeemed |
202,304,948 | |||
Investment advisory fees (Note 2) |
19,857,804 | |||
Total Liabilities |
1,519,832,021 | |||
NET ASSETS |
$ | 36,647,034,043 | ||
Net assets consist of: |
||||
Paid-in capital |
$ | 33,647,728,557 | ||
Distributions in excess of net investment income |
(94,686,647 | ) | ||
Undistributed net realized gain |
230,111,764 | |||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies |
2,863,880,369 | |||
NET ASSETS |
$ | 36,647,034,043 | ||
Shares outstandingc |
800,100,000 | |||
Net asset value per share |
$ | 45.80 | ||
a | Securities on loan with a value of $990,189,105. See Note 5. |
b | Cost of foreign currencies: $6,137,279. |
c | $0.001 par value, number of shares authorized: 2,000,000,000. |
See notes to financial statements.
FINANCIAL STATEMENTS | 21 |
Statement of Operations (Unaudited)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Six months ended February 28, 2011
NET INVESTMENT INCOME |
||||
Dividends from unaffiliated issuersa |
$ | 297,038,907 | ||
Dividends from affiliated issuers (Note 2)b |
2,913,276 | |||
Interest from unaffiliated issuers |
1,000 | |||
Interest from affiliated issuers (Note 2) |
53,437 | |||
Securities lending income from affiliated issuers (Note 2) |
11,025,465 | |||
Total investment income |
311,032,085 | |||
EXPENSES |
||||
Investment advisory fees (Note 2) |
149,543,010 | |||
Total expenses |
149,543,010 | |||
Less investment advisory fees waived (Note 2) |
(1,794,047 | ) | ||
Net expenses |
147,748,963 | |||
Net investment income |
163,283,122 | |||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
||||
Net realized gain (loss) from: |
||||
Investments in unaffiliated issuers |
(462,684,438 | ) | ||
Investments in affiliated issuers (Note 2) |
62,096,246 | |||
In-kind redemptions |
3,342,916,624 | |||
Foreign currency transactions |
(18,484,890 | ) | ||
Net realized gain |
2,923,843,542 | |||
Net change in unrealized appreciation/depreciation on: |
||||
Investments |
3,025,424,374 | |||
Translation of assets and liabilities in foreign currencies |
653,179 | |||
Net change in unrealized appreciation/depreciation |
3,026,077,553 | |||
Net realized and unrealized gain |
5,949,921,095 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 6,113,204,217 | ||
a | Net of foreign withholding tax of $28,907,591. |
b | Net of foreign withholding tax of $309,109. |
See notes to financial statements.
22 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Statements of Changes in Net Assets
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Six months ended February 28, 2011 (Unaudited) |
Year ended August 31, 2010 |
|||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||
OPERATIONS: |
||||||||
Net investment income |
$ | 163,283,122 | $ | 520,250,863 | ||||
Net realized gain |
2,923,843,542 | 1,299,482,089 | ||||||
Net change in unrealized appreciation/depreciation |
3,026,077,553 | 2,361,536,205 | ||||||
Net increase in net assets resulting from operations |
6,113,204,217 | 4,181,269,157 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||
From net investment income |
(387,925,465 | ) | (551,986,882 | ) | ||||
Total distributions to shareholders |
(387,925,465 | ) | (551,986,882 | ) | ||||
CAPITAL SHARE TRANSACTIONS: |
||||||||
Proceeds from shares sold |
2,933,545,307 | 13,614,469,565 | ||||||
Cost of shares redeemed |
(11,778,744,880 | ) | (7,744,918,384 | ) | ||||
Net increase (decrease) in net assets from capital share transactions |
(8,845,199,573 | ) | 5,869,551,181 | |||||
INCREASE (DECREASE) IN NET ASSETS |
(3,119,920,821 | ) | 9,498,833,456 | |||||
NET ASSETS |
||||||||
Beginning of period |
39,766,954,864 | 30,268,121,408 | ||||||
End of period |
$ | 36,647,034,043 | $ | 39,766,954,864 | ||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period |
$ | (94,686,647 | ) | $ | 129,955,696 | |||
SHARES ISSUED AND REDEEMED |
||||||||
Shares sold |
64,800,000 | 337,050,000 | ||||||
Shares redeemed |
(254,250,000 | ) | (200,700,000 | ) | ||||
Net increase (decrease) in shares outstanding |
(189,450,000 | ) | 136,350,000 | |||||
See notes to financial statements.
FINANCIAL STATEMENTS | 23 |
iSHARES® MSCI EMERGING MARKETS INDEX FUND
(For a share outstanding throughout each period)
Six months ended Feb. 28, 2011 (Unaudited) |
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 period |
$ | 40.19 | $ | 35.48 | $ | 40.07 | $ | 44.78 | $ | 32.48 | $ | 25.97 | ||||||||||||
Income from investment operations: |
||||||||||||||||||||||||
Net investment incomeb |
0.17 | 0.58 | 0.66 | 1.10 | 0.63 | 0.55 | ||||||||||||||||||
Net realized and unrealized gain (loss)c |
5.82 | 4.73 | (4.66 | ) | (4.64 | ) | 12.19 | 6.29 | ||||||||||||||||
Total from investment operations |
5.99 | 5.31 | (4.00 | ) | (3.54 | ) | 12.82 | 6.84 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.38 | ) | (0.60 | ) | (0.59 | ) | (1.17 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
Total distributions |
(0.38 | ) | (0.60 | ) | (0.59 | ) | (1.17 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
Net asset value, end of period |
$ | 45.80 | $ | 40.19 | $ | 35.48 | $ | 40.07 | $ | 44.78 | $ | 32.48 | ||||||||||||
Total return |
14.90 | %d | 14.97 | % | (9.47 | )% | (8.36 | )% | 39.86 | % | 26.44 | % | ||||||||||||
Ratios/Supplemental data: |
||||||||||||||||||||||||
Net assets, end of period (000s) |
$ | 36,647,034 | $ | 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 feese,f |
0.67 | % | 0.68 | % | 0.72 | % | 0.72 | % | 0.74 | % | 0.75 | % | ||||||||||||
Ratio of expenses to average net assets after waived feese,f |
0.66 | % | 0.68 | % | 0.72 | % | 0.72 | % | 0.74 | % | 0.75 | % | ||||||||||||
Ratio of net investment income to average net assetse |
0.73 | % | 1.45 | % | 2.32 | % | 2.32 | % | 1.63 | % | 1.77 | % | ||||||||||||
Portfolio turnover rateg |
9 | % | 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 Funds underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Amounts have been adjusted as necessary to be consistent with current period presentation of foreign taxes. |
g | 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.
24 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 Funds investment objective is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a passive or index approach to try to achieve the Funds 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 Companys organizational documents, the Funds 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 Funds 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); |
NOTES TO FINANCIAL STATEMENTS | 25 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
| 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); and |
| 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 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 not include transaction costs that may have been capitalized as part of the securitys cost basis. Assumptions used by the Fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Funds results of operations.
26 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Fair value pricing could result in a difference between the prices used to calculate the Funds net asset value and the prices used by the Funds underlying index, which in turn could result in a difference between the Funds performance and the performance of the Funds underlying index.
The following table summarizes the value of each of the Funds investments according to the fair value hierarchy as of February 28, 2011. The breakdown of the Funds investments into major categories is disclosed in its Schedule of Investments.
Investments in Securities |
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common Stocks |
$ | 30,358,764,906 | $ | 3,336,115,770 | $ | | $ | 33,694,880,676 | ||||||||
Exchange-Traded Funds |
5,099,291 | | | 5,099,291 | ||||||||||||
Preferred Stock |
2,873,168,048 | | | 2,873,168,048 | ||||||||||||
Rights |
9,948 | | 0 | a | 9,948 | |||||||||||
Short-Term Investments |
1,102,228,191 | | | 1,102,228,191 | ||||||||||||
$ | 34,339,270,384 | $ | 3,336,115,770 | $ | 0 | a | $ | 37,675,386,154 | ||||||||
a | Rounds to less than $1. |
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 February 28, 2011, if any, are reflected in the Funds Statement of Assets and Liabilities.
NOTES TO FINANCIAL STATEMENTS | 27 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income, if any, generally are 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
FEDERAL INCOME TAXES
The Fund is treated as an entity separate from the Companys 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 six months ended February 28, 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 between paid-in capital, accumulated net realized gain (loss) on investments and foreign currency transactions and accumulated net investment income (loss) as a result of permanent book and tax differences primarily attributed to net investment loss, return of capital, passive foreign investment companies, and realized gains (losses) from foreign currency transactions and in-kind redemptions. These reclassifications have no effect on net assets or net asset values per share.
As of February 28, 2011, the cost of investments for federal income tax purposes was $35,214,414,757. Net unrealized appreciation was $2,460,971,397, of which $4,908,692,655 represented gross unrealized appreciation on securities and $2,447,721,258 represented gross unrealized depreciation on securities.
Management has reviewed the tax positions as of February 28, 2011, 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
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (BFA) manages the investment of the Funds assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (BlackRock). Under the Investment Advisory Agreement, BFA is responsible for all 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, litigation expenses and any extraordinary expenses.
28 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Effective January 1, 2011, for its investment advisory services to the Fund, BFA is entitled to an annual investment advisory fee based on the Funds 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, up to and including $42 billion | |
0.56 | Over $42 billion, up to and including $56 billion | |
0.50 | Over $56 billion, up to and including $70 billion | |
0.45 | Over $70 billion, up to and including $84 billion | |
0.40 | Over $84 billion |
Prior to January 1, 2011, for its investment advisory services to the Fund, BFA was entitled to an annual investment advisory fee based on the Funds 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 voluntarily waived a portion of its investment advisory fees for the Fund in the amount of $1,311,265.
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 Funds investment in other iShares Funds. In association with this agreement, for the six months ended February 28, 2011, BFA waived its investment advisory fees for the Fund in the amount of $482,782.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (BTC) to serve as securities lending agent for the Fund, 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 combined income earned from investment of cash collateral received for the loan of securities and any fees paid by borrowers. For the six months ended February 28, 2011, BTC earned securities lending agent fees from the Fund of $5,855,396.
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 Funds underlying index. As of February 28, 2011, the Fund held shares of the iShares MSCI Malaysia, iShares MSCI South Korea and iShares MSCI Taiwan Index Funds.
The PNC Financial Services Group, Inc. (PNC), Bank of America Corporation (BAC) and Barclays PLC (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.
NOTES TO FINANCIAL STATEMENTS | 29 |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
Investments in issuers considered to be affiliates of the Fund (excluding short-term investments) during the six months ended February 28, 2011, 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 |
Gross Additions |
Gross Reductions |
Number of Shares Held End of Period |
Value at End of Period |
Dividend Income |
Net Realized |
|||||||||||||||||||||
iShares MSCI Malaysia Index Fund |
1,314,976 | 343,038 | 1,296,970 | 361,044 | $ | 5,079,889 | $ | 374,778 | $ | 6,642,208 | ||||||||||||||||||
iShares MSCI South Korea Index Fund |
1,623,064 | 48,236 | 1,670,977 | 323 | 18,753 | 269,616 | 18,148,528 | |||||||||||||||||||||
iShares MSCI Taiwan Index Fund |
6,577,720 | | 6,577,676 | 44 | 649 | 1,547,628 | 17,759,154 | |||||||||||||||||||||
Jollibee Foods Corp.a |
61,761,000 | 140,450 | 25,341,601 | 36,559,849 | 57,074,965 | 721,254 | b | 19,546,356 | ||||||||||||||||||||
$ | 62,174,256 | $ | 2,913,276 | $ | 62,096,246 | |||||||||||||||||||||||
a | Not an affiliate at the end of the period. |
b | Net of foreign withholding tax of $309,109. |
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 six months ended February 28, 2011 aggregated $4,229,985,751 and $3,698,901,837, respectively.
In-kind purchases and sales (see Note 4) for the six months ended February 28, 2011, aggregated $971,200,804 and $10,471,053,723, respectively.
4. CAPITAL SHARE TRANSACTIONS
Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) 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 securities, which constitutes an optimized representation of the securities of the Funds 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.
30 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® MSCI EMERGING MARKETS INDEX FUND
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 February 28, 2011, 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 February 28, 2011 and the value of the related collateral are disclosed in the Statement of Assets and Liabilities. Securities lending income, as disclosed in the Funds 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 | 31 |
Notes:
32 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Notes:
NOTES | 33 |
Notes:
34 | 2011 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS |
Dear iShares Shareholder:
Electronic delivery is the easiest, most convenient way to receive reporting on your iShares holdings. In addition, its 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 firms 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). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. Neither SEI, nor 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 Funds 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 Funds Form N-Q is available on the SECs website or may be reviewed and copied at the SECs 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 Funds website.
©2011 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-SAR-85-0211
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Item 2. | Code of Ethics. |
Not applicable to this semi-annual filing.
Item 3. | Audit Committee Financial Expert. |
Not applicable to this semi-annual filing.
Item 4. | Principal Accountant Fees and Services. |
Not applicable to this semi-annual filing.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable to this semi-annual filing.
Item 6. | 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 Registrants Board of Directors.
Item 11. | Controls and Procedures. |
(a) The President (the Registrants Principal Executive Officer) and Chief Financial Officer (the Registrants 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 Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrants internal control over financial reporting.
Item 12. | Exhibits. |
(a) (1) Not applicable to this semi-annual filing.
(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: April 20, 2011 |
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: April 20, 2011 | ||
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: April 20, 2011 |
N-CSRS Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS | EX-99.CERT |
I, Michael Latham, certify that:
1. | I have reviewed this report on Form N-CSRS 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 Registrants 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 Registrants 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 Registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. | The Registrants other certifying officer and I have disclosed to the Registrants auditors and the audit committee of the Registrants 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 Registrants 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 Registrants internal control over financial reporting. |
Date: April 20, 2011 | /s/ Michael Latham | President (Principal Executive Officer) | ||
Michael Latham | [Title] | |||
[Signature] |
N-CSRS Exhibit for Item 12(a)(2): SECTION 302 CERTIFICATIONS | EX-99.CERT |
I, Jack Gee, certify that:
1. | I have reviewed this report on Form N-CSRS 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 Registrants 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 Registrants 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 Registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. | The Registrants other certifying officer and I have disclosed to the Registrants auditors and the audit committee of the Registrants 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 Registrants 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 Registrants internal control over financial reporting. |
Date: April 20, 2011 | /s/ Jack Gee | Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Jack Gee | [Title] | |||
[Signature] |
EX.99.906 CERT
N-CSRS 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 Registrants periodic report on Form N-CSRS for the period ended February 28, 2011 (the Form N-CSRS) 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-CSRS fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: April 20, 2011 | /s/ Michael Latham | President (Principal Executive Officer) | ||
Michael Latham | [Title] | |||
[Signature] |
Date: April 20, 2011 | /s/ Jack Gee | Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Jack Gee | [Title] | |||
[Signature] |
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