Form 497K
2011 SUMMARY PROSPECTUS TO SHAREHOLDERS
iSHARES® MSCI BRIC INDEX FUND
January 1, 2011(as revised June 15, 2011)
Before you invest, you may want to review the Fund’s prospectus, which contains
more information about the Fund and its risks. You can find the Fund’s prospectus (including amendments and supplements) and other information about the Fund, including the Fund’s statement of additional information and
shareholder report, online at http://us.ishares.com/prospectus. You can also get this information at no cost by calling 1-800-iShares (1-800-474-2737) or by sending an e-mail request to iSharesETFs@blackrock.com, or from your financial
professional. The Fund’s prospectus and statement of additional information, both dated January 1, 2011, as amended and supplemented from time to time, are incorporated by reference into (legally made a part of) this Summary
Prospectus.
BKF | NYSE Arca
The Securities and Exchange Commission (“SEC”) has not approved or
disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
iSHARES® MSCI BRIC INDEX FUND
Ticker: BKF Stock Exchange: NYSE Arca
Investment Objective
The iShares MSCI
BRIC Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI BRIC Index (the Underlying Index).
Fees and Expenses
The following table
describes the fees and expenses that you will incur if you own shares of the Fund. The investment advisory agreement between iShares, Inc. (the Company) and BlackRock Fund Advisors (BFA) (the Investment Advisory
Agreement) provides that BFA will pay all operating expenses of the Fund, except interest expenses, taxes, brokerage expenses, future distribution fees or expenses, and extraordinary expenses.
You will also incur usual and customary brokerage commissions when buying or selling shares of the Fund, which are not reflected in the example that
follows:
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Annual Fund Operating Expenses (ongoing
expenses that you pay each year as a percentage of the value of your investments) |
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Management Fees |
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Distribution and Service
(12b-1) Fees |
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Other Expenses |
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Total Annual Fund Operating Expenses |
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0.69 |
% |
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None |
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None |
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0.69 |
% |
Example. This Example is intended
to help you compare the cost of owning shares of the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then sell all of your shares at the end of those periods.
The Example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
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1 Year |
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3 Years |
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5 Years |
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10 Years |
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$ |
70 |
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$ |
221 |
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$ |
384 |
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$ |
859 |
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Portfolio Turnover. The Fund
pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held
in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 9% of the average
value of its portfolio.
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Principal Investment Strategies
The Underlying 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
Underlying Index consists of stocks traded primarily on the BM&FBOVESPA (the Brazilian exchange), Russian Trading System Stock Exchange, Moscow Interbank Currency Exchange, National Stock Exchange of India, Shanghai Stock Exchange, Shenzen Stock
Exchange and the Stock Exchange of Hong Kong. As of September 30, 2010, the Underlying Indexs three largest sectors by component weighting were financials, energy and materials.
BFA uses a passive or indexing approach to try to achieve the Funds investment objective. Unlike many investment companies, the Fund does not try to beat the index it tracks
and does not seek temporary defensive positions when markets decline or appear overvalued.
Indexing may eliminate the chance that the Fund
will substantially outperform the Underlying Index but also may reduce some of the risks of active management, such as poor security selection. Indexing seeks to achieve lower costs and better after-tax performance by keeping portfolio turnover low
in comparison to actively managed investment companies.
BFA uses a representative sampling indexing strategy to manage the Fund.
Representative sampling is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to the Underlying Index. The securities selected are expected to
have, in the aggregate, investment characteristics (based on factors such as market capitalization and
industry weightings), fundamental characteristics (such as return variability and yield) and liquidity measures similar to those of the Underlying Index. The Fund may or may not hold all of the securities in the Underlying Index. Funds that employ a
representative sampling strategy may incur tracking error risk to a greater extent than a fund that seeks to replicate an index.
The Fund
will at all times invest at least 80% of its assets in the securities of the Underlying Index or in depositary receipts representing securities in its Underlying Index. The Fund will invest all of its assets that are invested in India in a
wholly-owned subsidiary located in the Republic of Mauritius (the Subsidiary). BFA will serve as investment adviser to both the Fund and the Subsidiary. Unless otherwise indicated, the term Fund as used in this Prospectus
(the Prospectus) means the Fund and/or the Subsidiary, as applicable. The Fund may invest the remainder of its assets in other securities, including securities not in the Underlying Index, but which BFA believes will help the Fund track
the Underlying Index, futures contracts, options on futures contracts, other types of options and swaps related to its Underlying Index, as well as cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates.
The Underlying Index is sponsored by an organization (the Index Provider) that is independent of the Fund and BFA. The Index
Provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index.
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The Funds Index Provider is MSCI Inc. (MSCI).
Industry Concentration Policy. The Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in a particular
industry or group of industries to approximately the same extent that the Underlying Index is concentrated. For purposes of this limitation, securities of the U.S. government (including its agencies and instrumentalities) and repurchase agreements
collateralized by U.S. government securities are not considered to be issued by members of any industry.
Summary of Principal Risks
As with any investment, you could lose all or part of your investment in the Fund, and the Funds performance could trail that of
other investments. The Fund is subject to the principal risks noted below, any of which may adversely affect the Funds net asset value (NAV), trading price, yield, total return and ability to meet its investment objective.
Asset Class Risk. Securities in the Underlying Index or in the Funds portfolio may underperform in comparison to the
general securities markets or other asset classes.
Commodity Exposure Risk. The Fund invests in economies that are susceptible
to fluctuations in certain commodity markets. Any negative changes in commodity markets could have an adverse impact on those economies.
Concentration Risk. To the extent that the Funds investments are concentrated in a particular country, market, industry or asset
class, the Fund may be susceptible to loss due to adverse occurrences affecting that country, market, industry or asset class.
Currency Risk. Because the Funds NAV is determined in U.S. dollars, the Funds NAV
could decline if the currency of the non-U.S. market in which the Fund invests depreciates against the U.S. dollar.
Custody Risk.
Less developed markets are more likely to experience problems with the clearing and settling of trades.
Emerging Markets Risk.
The Funds investments in emerging markets may be subject to a greater risk of loss than investments in developed markets.
Energy Sector Risk. The value of securities issued by companies in the energy sector may decline for many reasons, including changes in
commodity prices, government regulations, energy conservation efforts and possible civil liabilities.
Equity Securities Risk.
Equity securities are subject to changes in value and their values may be more volatile than other asset classes.
Financials
Sector Risk. Performance of companies in the financials sector may be adversely impacted by many factors, including government regulations, economic conditions, changes in interest rates, and decreased liquidity in credit markets. This
sector has recently experienced significant losses, and the impact of recent legislation on the financials sector cannot be predicted.
Geographic Risk. A natural disaster could occur in a geographic region in which the Fund invests.
Issuer Risk. Fund performance depends on the performance of individual securities in which the Fund invests. Changes to the financial condition or credit rating of an issuer of those
securities may cause the value of the securities to decline.
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Management Risk. As the Fund does not fully replicate the Underlying Index, it is subject to
the risk that BFAs investment management strategy may not produce the intended results.
Market Risk. The
Fund could lose money over short periods due to short-term market movements and over longer periods during market downturns.
Market
Trading Risks. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption in the creation/redemption process of the Fund. ANY OF
THESE FACTORS MAY LEAD TO THE FUNDS SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.
Materials Sector Risk. Companies in
the materials sector may be adversely impacted by the volatility of commodity prices, exchange rates, depletion of resources, over-production, litigation and government regulations, among other factors.
Non-Diversification Risk. The Fund may invest a large percentage of its assets in securities issued by or representing a small number of
issuers. As a result, the Funds performance may depend on the performance of a small number of issuers.
Non-U.S. Securities
Risks. Investments in the securities of non-U.S. issuers are subject to the risks associated with investing in those non-U.S. markets, such as heightened risks of inflation or nationalization. The Fund may lose money due to political,
economic and geographic events affecting a non-U.S. issuer or market.
Passive Investment Risk. The Fund is not actively managed
and BFA does not attempt to take defensive positions in declining markets.
Privatization Risk. Some countries in which the Fund invests have begun a process of
privatizing certain entities and industries. Privatized entities may lose money or be re-nationalized.
Reliance on
Trading Partners Risk. The Fund invests in economies that are heavily dependent upon trading with key partners. Any reduction in this trading may cause an adverse impact on the economies in which the Fund invests. Through its
trading partners, the Fund is specifically exposed to Asian Economic Risk, Central and South American Economic Risk, European Economic Risk and U.S. Economic Risk.
Risk of Investing in India. Investment in Indian issuers involves risks that are specific to India, including legal, regulatory, political and economic risks. The securities markets in India
are relatively underdeveloped and may subject the Fund to higher transaction costs or greater uncertainty than more developed securities markets. As a result, such risks may adversely affect the value of the Funds investments.
Russian Securities Risk. Investing in Russian securities involves significant risks, including risks associated with settlement of
portfolio transactions and the risk of loss of the Funds ownership rights in its portfolio securities, as a result of the system of share registration and custody in Russia.
Securities Lending Risk. The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower fails to return the securities in a
timely manner or at all. The Fund could also lose money in the event of a decline in the value of the collateral provided for loaned securities or of investments made with cash collateral. These events could also trigger adverse tax consequences for
the Fund.
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Securities Market Risk. Certain securities markets may trade a small number of securities and
may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of holdings difficult or impossible at times.
Security Risk. Some geographic areas in which the Fund invests have experienced security concerns. Incidents involving a countrys security may cause uncertainty in these markets and
may adversely affect their economies.
Structural Risks. The economies in which the Fund invests may be subject to considerable
degrees of economic, political and social instability.
Tracking Error Risk. The performance of the Fund may diverge from that
of the Underlying Index. Because the Fund employs a representative sampling strategy, the Fund may experience tracking error to a greater extent than a fund that seeks to replicate an index. BFA EXPECTS THAT THE FUND MAY EXPERIENCE HIGHER TRACKING
ERROR THAN IS TYPICAL FOR EQUITY INDEX EXCHANGE-TRADED FUNDS.
Treaty/Tax Risk. The Fund and the Subsidiary rely on the Double Tax Avoidance Agreement
between India and Mauritius (DTAA) for relief from certain Indian taxes. Treaty renegotiation or legislative changes may result in higher taxes and lower return to the Fund.
Valuation Risk. The value of the securities in the Funds portfolio may change on days when shareholders will not be able to purchase
or sell the Funds shares.
Performance Information
The bar chart and table that follow show how the Fund has performed on a calendar year basis and provide an indication of the risks of investing in the Fund. Both assume that all dividends and
distributions have been reinvested in the Fund. Past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future. Supplemental information about the Funds performance is shown under the heading
Total Return Information in the Supplemental Information section of the Funds Prospectus.
Year by Year Returns1 (Years Ended December 31)
1 |
The Funds total return for the nine months ended September 30, 2010 was 4.63%. |
The best calendar quarter return during the periods shown above was 41.58% in the 2nd quarter of 2009; the worst was -33.01% in the 3rd quarter of 2008.
Updated performance information is available at www.iShares.com or by calling 1-800-iShares (1-800-474-2737) (toll free).
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Average Annual Total Returns
(for the periods ended December 31, 2009)
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One Year |
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Since Fund Inception |
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(Inception Date: 11/12/2007) |
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Return Before Taxes |
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89.85 |
% |
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-8.32 |
% |
Return After Taxes on Distributions1 |
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89.46 |
% |
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-8.58 |
% |
Return After Taxes on Distributions and Sale of Fund Shares1 |
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58.61 |
% |
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-7.13 |
% |
MSCI BRIC Index (Index returns do not reflect deductionsfor fees, expenses or taxes) |
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93.12 |
% |
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-8.90 |
% |
1 |
After-tax returns in the table above are calculated using the historical highest individual U.S. federal marginal income tax rates and do not reflect
the impact of state or local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown, and after-tax returns shown are not relevant to tax-exempt investors or investors who hold shares through
tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). Fund returns after taxes on distributions and sale of Fund shares are calculated assuming that an investor has sufficient capital gains of the same
character from other investments to offset any capital losses from the sale of Fund shares. As a result, Fund returns after taxes on distributions and sale of Fund shares may exceed Fund returns before taxes and/or returns after taxes on
distributions. |
Management
Investment Adviser. BlackRock Fund Advisors.
Portfolio Managers. Rene Casis, Diane
Hsiung and Greg Savage (the Portfolio Managers) are primarily responsible for the day-to-day management of the Fund. Each Portfolio Manager supervises a portfolio management team. Mr. Casis, Ms. Hsiung and Mr. Savage have
been Portfolio Managers of the Fund since 2011, 2008 and 2008, respectively.
Purchase and Sale of Fund Shares
The Fund is an exchange-traded fund (commonly referred to as an ETF). Individual Fund shares may only be purchased and sold on a national
securities exchange through a broker-dealer. The price of Fund shares is based on market price, and because ETF shares trade at market prices rather than NAV, shares may trade at a price
greater than NAV (a premium) or less than NAV (a discount). The Fund will only issue or redeem shares that
have been aggregated into blocks of 50,000 shares or multiples thereof (Creation Units) to authorized participants who have entered into agreements with the Funds distributor. The Fund will issue or redeem Creation Units in return
for a basket of assets that the Fund specifies each day.
Tax Information
The Fund intends to make distributions that may be taxable to you as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement such as a 401(k) plan or an IRA.
Payments to Broker-dealers and other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank),
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BFA or other related companies may pay the intermediary for marketing activities and presentations,
educational training programs, conferences, the development of technology platforms and reporting systems or other services related to the sale or promotion of the Fund. These
payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediarys website for more information.
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For more information:
WWW.iSHARES.COM
1-800-iShares (1-800-474-2737)
Investment Company Act File No.: 811-09102
IS-SP-BKF-0611