<PAGE>
iShares Dow Jones Series
SEMIANNUAL REPORT
October 31, 2000
i|Shares The way you invest now.
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BARCLAYS GLOBAL INVESTORS Only better.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Shareholder Letter....................................................... 1
Market Overview.......................................................... 2
Managers' Discussion & Analysis.......................................... 3
Schedules of Investments................................................. 18
iShares Dow Jones U.S. Total Market Index Fund........................ 18
iShares Dow Jones U.S. Basic Materials Sector Index Fund.............. 38
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund............ 39
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index
Fund................................................................ 43
iShares Dow Jones U.S. Energy Sector Index Fund....................... 45
iShares Dow Jones U.S. Financial Sector Index Fund.................... 46
iShares Dow Jones U.S. Healthcare Sector Index Fund................... 50
iShares Dow Jones U.S. Industrial Sector Index Fund................... 53
iShares Dow Jones U.S. Technology Sector Index Fund................... 56
iShares Dow Jones U.S. Telecommunications Sector Index Fund........... 61
iShares Dow Jones U.S. Utilities Sector Index Fund.................... 62
iShares Dow Jones U.S. Chemicals Index Fund........................... 63
iShares Dow Jones U.S. Financial Services Index Fund.................. 64
iShares Dow Jones U.S. Internet Index Fund............................ 67
iShares Dow Jones U.S. Real Estate Index Fund......................... 68
Financial Statements..................................................... 70
Financial Highlights..................................................... 79
Notes to Financial Statements............................................ 82
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To Our Shareholders
The iShares Funds' semiannual period ended October 31, 2000 was one of continued
market volatility. Significant events during this period include:
. The Federal Reserve Board raised rates 0.50% at its May 16 meeting. This
increase was the sixth in 12 months and brought the Federal Funds rate to
6.5%. This is the rate's highest level since it was 6.75% in January of 1991.
. The price of crude oil rose to $37.20 a barrel, the highest level since
November of 1990.
. The euro sank to a 21-month low since its introduction in January 1999.
. More than 50 IPOs occurred in August, representing 25% of the IPOs launched
so far in 2000.
As you read through this report and review the performance of the Funds in your
portfolio, we encourage you to keep long-term goals in mind when making
investment decisions. While one fund's recent performance may be better than
another's, it is important to remember that past performance is no guarantee of
future results. Even as market conditions change, you should maintain your
investment strategy as long as it remains appropriate for your short- or
long-term objectives. One trait many successful investors share is the ability
to stay focused on their personal financial goals and fundamental long term
market opinions, while ignoring temporary market swings.
We trust that the Funds are fulfilling your expectations as a simple,
cost-effective way for you to invest in your future, and will continue to do so.
We also encourage you to consider the appropriateness of other iShares Funds as
part of your long-term investment program. iShares Funds offer investors a wide
range of indexed investment choices based on market capitalization, investment
style, and sector exposure.
We appreciate your confidence and look forward to helping you meet your
investment goals.
iShares Funds December 2000
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iShares Shareholder Letter page 1
<PAGE>
Market Overview
After a bumpy ride, U.S. equity markets overall delivered relatively flat
returns during the six-month period ended October 31, 2000. During the period,
concerns about the economy and the potential for future earnings growth sparked
extreme levels of volatility and eventually dragged markets to new lows for the
year.
Performance diverged widely among sectors. In general, "old economy" companies
fared well, while "new economy" companies and those with exposure to European
markets languished. Not surprisingly, the utilities sector posted the strongest
returns, rising 19.66% for the period. The financial and healthcare sectors also
logged healthy gains, returning 19.16% and 15.42%, respectively. At the other
extreme, Internet stocks were the performance laggards, losing 15.63%, while the
technology sector dropped 8.14%.
Interest rate concerns dominated investors' attention at the beginning of the
period. On May 16, the Federal Reserve instituted its sixth interest rate hike
in 12 months, amid continued signs of an overheated economy. However, by the end
of May, economic figures began to reveal signs of a slowing economy. Lower
durable goods orders and new home sales suggested that the economy might be
approaching the Federal Reserve Board's desired "soft landing," and the Fed
chose to leave rates unchanged at its June meeting.
In July, higher than expected Gross Domestic Product and Consumer Price Index
(CPI) figures were announced. Investors responded by selling off technology
stocks and other high-valuation shares, and buying more defensive stocks. August
brought more encouraging news for interest rates: U.S. factory orders (excluding
transportation equipment) had fallen 4.8% in July, compared with a 0.5% increase
in June.
The CPI rose 0.2% in July, which suggested that inflation was not accelerating.
Finally, a record drop in durable goods orders and an increase in jobless claims
in July suggested that the demand for workers and goods was slowing enough to
relieve inflationary pressures. These indications that inflation was not
accelerating contributed to another pause in Fed tightening, and U.S. equity
markets welcomed the news with a strong rally in August.
By September, as concerns about inflation receded, investors began to focus on
new areas of concern. The price of crude oil, which had been climbing during the
year, reached a 10-year high in September. At the same time, the euro dipped to
an all-time low since its introduction in January 1999. Some investors worried
about the impact these factors would have on corporate earnings. These concerns
were realized when Intel announced that it would fail to meet its third quarter
earnings expectations, citing the weakness of the euro. Investors began to shift
from growth stocks, particularly technology companies, and buy shares of more
value-oriented stocks.
The trend continued into October, as reports of weak earnings figures worried
investors and pushed stocks lower. Both the Nasdaq and the S&P 500 reached new
year-to-date lows for the year: on October 12, the NASDAQ fell to 3074.68,
plunging 39.10% from its March high, while the S&P Index also recorded its year
low of 1329.78 during the month.
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page 2 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Total Market Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Total Market
Index Fund 06/12/00 (0.07)%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
General Electric Co. 3.9%
Cisco Systems Inc. 2.7%
Exxon Mobil Corp. 2.2%
Microsoft Corp. 2.1%
Intel Corp. 2.1%
Pfizer Inc. 2.0%
Citigroup Inc. 1.7%
Merck & Co. Inc. 1.5%
American International Group Inc. 1.4%
SBC Communications Inc. 1.4%
The iShares Dow Jones U.S. Total Market Index Fund seeks to track the Dow Jones
U.S. Total Market Index. For the period since its inception on June 12 through
October 31, 2000, the Fund declined 0.07%. During the same period, the Index
declined 0.03%.
Three primary factors drove markets during the period: escalating oil prices,
decreased corporate earnings estimates, and the continued fear of higher
interest rates. As oil prices reached their highest levels since November 1990,
the Clinton administration intervened and authorized the use of strategic oil
reserves in an effort to prevent further price increases. Similarly, a decline
in the euro prompted intervention. When the euro sank to $0.85 against the U.S.
dollar -- its lowest level since its introduction in January 1999, central banks
bought euros in an effort to prop up the currency.
After a series of interest rate increases by the Federal Reserve in an effort to
slow the economy, investors began to worry about the prospects for future
corporate growth in a higher interest rate environment. The uncertainty
surrounding oil prices and the euro contributed to investor apprehension about
corporate earnings potential. Technology companies and those companies with
exposure to European markets fell out of favor as investors turned to more
defensive "old economy" stocks.
After a revenue warning in September, Intel (the Fund's number five holding as
of October 31) lost more than 28% for the period. Cisco Systems, the Fund's
second largest holding as of October 31, fell 13%. While technology and "new
economy" issues were hit hard, some "old economy" stocks delivered strong
positive returns. Financial companies Citigroup and AIG, both top ten Fund
holdings as of October 31, returned 10% and 28%, respectively. Similarly,
pharmaceutical company Merck benefited from the retreat to "old economy" stocks,
gaining 29%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 3
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Basic Materials Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Basic Materials
Sector Index Fund 06/12/00 (3.86)%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Du Pont (E.I.) de Nemours 21.1%
Alcoa Inc. 11.1%
Dow Chemical Co. 9.3%
International Paper Co. 7.9%
Weyerhaeuser Co. 4.5%
Air Products & Chemicals Co. 3.8%
Praxair Inc. 2.6%
Union Carbide Corp. 2.6%
Avery Dennison Corp. 2.5%
Georgia-Pacific Corp. 2.1%
The iShares Dow Jones U.S. Basic Materials Sector Index Fund seeks to track the
Dow Jones U.S. Basic Materials Sector Index. For the period since its inception
on June 12 through October 31, 2000, the Fund returned (3.86)%. During the same
period, the Index returned (3.70)%.
Basic materials shares as a whole struggled during the period. Three primary
factors: slowing economic conditions, rising oil prices, and decreased corporate
earnings estimates weighed on global markets during the period as investors grew
apprehensive about the potential for future growth. Those companies that are the
most sensitive to the state of the economy, including basic materials companies,
suffered. Within the sector, companies that depend on oil and natural gas were
hit particularly hard, as the prices for these resources continued to rise.
Within the Fund, performance was mixed. Chemical company Union Carbide, a top
ten Fund holding as of October 31, saw its shares plummet 22% during the period.
The company indicated profits were hurt by higher energy and raw materials
costs, as well as lower European demand caused by the weakening euro. Dow
Chemical Company, which is in the process of acquiring Union Carbide, also
languished. The Fund's third largest holding as of October 31, Dow lost 12%
during the period. However, natural gas and chemicals producer Air Products and
Chemicals, another top ten holding as of October 31, rose 11%. Paper companies
International Paper and Weyerhaeuser, which saw their share price plummet during
the first half of the year, rebounded slightly. International Paper returned 8%.
Weyerhaeuser also edged up 1% for the period.
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page 4 iShares
<PAGE>
Managers' Discussion & Analysis
ishares Dow Jones U.S. Consumer Cyclical Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Consumer Cyclical
Sector Index Fund 06/12/00 (2.87)%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Wal-Mart Stores Inc. 8.6%
Home Depot Inc. 6.8%
Time Warner Inc. 5.7%
Walt Disney Co. (The) 5.1%
Viacom Inc. "B" 5.0%
Ford Motor Company 3.4%
Walgreen Co. 3.2%
AT&T - Liberty Media Group "A" 2.9%
McDonald's Corp. 2.8%
Comcast Corp. "A" 2.4%
The iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund seeks to track
the Dow Jones U.S. Consumer Cyclical Sector Index. The Fund posted a negative
return of 2.87% for the period since its inception, June 12 through October 31,
2000. The Index returned a negative 2.72% during the same period.
Consumer companies suffered this period as retail spending fell off sharply. A
0.50% interest rate hike in May, the sixth increase in 12 months, combined with
a late Easter and unusual weather swings produced a disappointing summer for
many retailers. In September, the euro sank to a 21-month low, and crude oil
prices soared to $37.20 a barrel, the highest level since November 1990. The
volatility of the stock market and October's economic slowdown led some
consumers to shift their spending away from retail and leisure towards gas and
electricity.
The downward pull of broad economic factors was felt throughout the sector.
Wal-Mart, the Fund's largest holding at 8.6% of assets as of October 31, fell
14%. Home Depot, the Fund's second largest position at 6.8%, dropped 7%. Time
Warner, Walt Disney and Viacom, the Fund's numbers three, four and five largest
positions, posted losses of 3%, 12% and 14%, respectively. McDonald's fell 5%,
citing the weakness in the euro. Ford saw its stock price fall 48% largely due
to the negative reaction of the recall of Firestone Tires. As of October 31,
Ford was the sixth largest holding in the Index at 3.4% of assets.
One bright spot was Walgreen Co., the Index's seventh largest holding as of
October 31, which showed a 61% gain. Although the effects of a tough retail
market caused some price fluctuation this period, the company's consistently
strong earnings growth and solid business model contributed to its positive
performance.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 5
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Consumer
Non-Cyclical Sector Index Fund 06/12/00 4.51%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Coca-Cola Co. 13.1%
America Online Inc. 11.9%
Procter & Gamble Co. 9.0%
Philip Morris Companies Inc. 8.4%
PepsiCo Inc. 7.1%
Anheuser-Busch Companies Inc. 4.2%
Kimberly-Clark Corp. 3.6%
Gillette Corp. 3.4%
Colgate-Palmolive Co. 3.2%
Safeway Inc. 2.8%
The iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund posted a
return of 4.51% for the period since its inception, June 12 through October 31,
2000. The Fund seeks to track the Dow Jones U.S. Consumer Non-Cyclical Sector
Index, which returned 4.79% during the same period.
"Old economy" consumer staple companies fell in and out of favor this period, as
investor concerns over "new economy" growth stocks waxed and waned. Despite this
month-to-month volatility, a strong overall economy and solid industry
fundamentals lifted consumer staple stocks overall for the period. In September,
the euro sank to a 21-month low at $.85 to a U.S. $1.00, hurting consumer
companies with heavy European exposure. October's slowing economy and resulting
shift away from technology companies benefited large cap value stocks.
The Dow Jones U.S. Consumer Non-Cyclical Sector reflected these trends in the
market, with more than half of the Fund's top ten securities as of October 31
showing double-digit gains for the period. Coca-Cola, the Index's largest
holding at 13.1% as of October 31, and PepsiCo, the fifth largest holding at
7.1%, each returned 15%. Philip Morris, in the fourth position, showed a 32%
gain. The strength of some of its brands helped its performance despite concerns
over tobacco litigation.
Procter and Gamble, the number three security in the Index as of October 31,
plummeted earlier in the year after announcing a major restructuring, including
a new CEO. However, the company rebounded and returned 26% by the end of the
period. Gillette, the eighth largest holding, issued profit warnings in
September resulting form the decline in the euro, but still managed a 7% gain.
As with many other Internet companies, America Online, the Index's number two
security at 11.9%, suffered from price volatility, falling 4% for the period.
--------------------------------------------------------------------------------
page 6 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Energy Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Energy Sector
Index Fund 06/12/00 1.03%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
In addition, legal requirements applicable to all investment companies may limit
the Fund's ability to invest fully in its underlying Index and may contribute to
the difference between the performance of the Fund and the performance of the
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Exxon Mobil Corp. 24.2%
Chevron Corp. 10.3%
Schlumberger Ltd. 6.4%
Texaco Inc. 6.3%
Phillips Petroleum Co. 3.0%
Halliburton Co. 2.7%
Williams Companies Inc. 2.7%
Anadarko Petroleum Corp. 2.4%
Conoco Inc. 2.3%
Murphy Oil Corp. 2.2%
The iShares Dow Jones U.S. Energy Sector Index Fund seeks to track the Dow Jones
U.S. Energy Sector Index. For the period since its inception on June 12 through
October 31, 2000, the Fund returned 1.03%. During the same period, the Index
returned 3.34%.
The inception of the Fund coincided with some of the highest crude oil prices in
history. With prices above $30 per barrel in late June, OPEC announced that it
would increase production in an effort to bring prices down to a more
sustainable level. Although prices dropped initially, the increase in supply
ultimately was too little to compensate for demand, and prices climbed to a ten-
year high of $37.20 per barrel by the middle of September. In an effort to
prevent prices from rising further, the Clinton administration authorized the
release of strategic oil reserves. The intervention appeared to be effective,
and prices settled at around $30 per barrel.
Not surprisingly, those companies that benefit from high oil prices demonstrated
strong performance during the period. Oil exploration company Anadarko
Petroleum, one of the Fund's top ten holdings, gained 24%. Similarly, Exxon
Mobil Corp. (the Fund's top holding, representing 24.2% of assets as of October
31, 2000) rose 10% due to higher oil and natural gas prices. However, for some
companies the high oil prices were a detriment. Because the prices were widely
considered to be at peak levels, most oil companies scaled back on new projects.
For example, oilfield services company Halliburton (the Fund's sixth largest
holding as of October 31) suffered, declining 23%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 7
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Financial Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Financial Sector
Index Fund 05/22/00 18.90%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Citigroup Inc. 10.6%
American International Group
Inc. 8.8%
Morgan Stanley Dean Witter & Co. 4.1%
Wells Fargo & Company 3.6%
Bank of America Corp. 3.6%
Fannie Mae 3.5%
American Express Co. 3.2%
Chase Manhatten Corp. 2.7%
Merrill Lynch & Co. Inc. 2.3%
Bank of New York Co. Inc. 1.9%
The iShares Dow Jones U.S. Financial Sector Index Fund seeks to track the Dow
Jones U.S. Financial Sector Index. For the period since its inception on May 22
through October 31, 2000, the Fund returned 18.90%. During the same period, the
Index returned 19.17%.
The Fund was launched on the heels of a 0.50% interest rate increase by the
Federal Reserve Board. This rate hike, the sixth in a year, appeared to have the
desired effect of bringing the U.S. economy to a soft landing and quelling fears
of an overheated economy. However, with inflation fears behind them, investor
concern shifted to the effects higher interest rates and a slower economy would
have on future corporate earnings growth. Compounding these fears, oil climbed
to ten-year highs as the euro sank to new lows, creating anxiety about global
economic conditions and their impact on the U.S. economy.
In response to the changing economic landscape, many investors sought shelter in
more defensive investments. Although the shift in sentiment meant declines for
most "new economy" stocks, it resulted in gains for most "old economy" stocks,
including financial companies.
Accordingly, many of the Fund's largest holdings logged strong returns for the
period. Financial services companies Citigroup and American International Group,
the Fund's largest and second largest holdings as of October 31, returned 14%
and 23%, respectively. As a group, the large financial services companies
performed well: Morgan Stanley Dean Witter, the Fund's third largest holding as
of October 31, gained 19%, and Merrill Lynch, the number nine position as of
October 31, soared 38%. Not surprisingly, Fannie Mae also benefited from the
flight to quality, gaining 28%. The weakest performing group was the banks,
which were disadvantaged somewhat by higher borrowing rates. Bank of America
lost 4%, while Chase Manhattan declined 5%.
--------------------------------------------------------------------------------
page 8 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Healthcare Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Healthcare Sector
Index Fund 06/12/00 14.80%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Pfizer Inc. 15.8%
Merck & Co. Inc. 12.0%
Johnson & Johnson 7.0%
Bristol-Myers Squibb Co. 7.0%
Lilly (Eli) & Co. 5.0%
American Home Products Corp. 4.8%
Abbott Laboratories 4.4%
Schering-Plough Corp. 4.4%
Pharmacia & Upjohn Inc. 4.1%
Medtronic Inc. 3.8%
The iShares Dow Jones U.S. Healthcare Sector Index Fund seeks to track the Dow
Jones U.S. Healthcare Sector Index. For the period since its inception on
June 12 through October 31, 2000, the Fund returned 14.80%. During the same
period, the Index returned 15.42%.
The Fund was launched during a period of global economic uncertainty. The
effects of three principal factors: rising interest rates, soaring oil prices,
and decreased corporate earnings estimates led to investor concern about the
sustainability of economic growth in the U.S. In response, many abandoned "new
economy" technology companies and retreated to more defensive "old economy"
issues.
For the healthcare sector, this shift in sentiment translated into strong
returns. Although those healthcare companies with significant exposure to
European markets were dragged down by the weak euro, most companies in the
sector posted healthy gains during the period.
Many of the Fund's largest holdings as of October 31 enjoyed strong performance.
Pharmaceutical company Merck, which was the Fund's second largest holding as of
October 31 and represented 12.0% of Fund assets, returned an impressive 29%. The
fourth largest holding, Bristol-Myers Squibb, also positively contributed to
Fund performance, gaining 17%. Diversified healthcare companies were positive
performers as well: The sixth largest holding American Home Products and number
seven holding Abbott Labs logged gains of 20% and 31%, respectively. The only
top ten holding to detract from performance was pharmaceutical giant Pfizer,
which lost 4% during the period. Pfizer derives a substantial amount of revenues
from European markets and was hurt by reduced European demand due to the weak
euro.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 9
<PAGE>
Managers' Discussion & Analysis
ishares Dow Jones U.S. Industrial Sector Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Industrial Sector
Index Fund 06/12/00 3.64%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
In addition, legal requirements applicable to all investment companies may limit
the Fund's ability to invest fully in its underlying Index and may contribute to
the difference between the performance of the Fund and the performance of the
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
General Electric Co. 22.6%
Tyco International Ltd. 5.0%
JDS Uniphase Corp. 4.6%
Corning Inc. 4.6%
Minnesota Mining & Manufacturing Co. 2.6%
Boeing Co. 2.4%
Automatic Data Processing Inc. 2.3%
Emerson Electric Co. 2.0%
Agilent Technologies Inc. 1.9%
Honeywell International Inc. 1.8%
The iShares Dow Jones U.S. Industrial Sector Index Fund seeks to track the Dow
Jones U.S. Industrial Sector Index. For the period since its inception on
June 12 through October 31, 2000, the Fund returned 3.64%. During the same
period, the Index returned 3.03%.
The relatively flat performance of the industrials sector for the period masks
widely diverging performance between the "new economy" technology and
communications companies, and "old economy" brick and mortar companies. During
the period, economic conditions contributed to investor concern for the future
prospects of continued earnings growth. The effects of higher interest rates,
combined with ever-increasing oil prices and a weakening European currency,
created concern about U.S. stocks. In particular, technology companies and those
companies with exposure to European markets came under fire. However, more
traditional companies, such as basic industrial and manufacturing companies,
fared better.
Similarly, the performance of the Fund's holdings was divided into two groups:
"old economy" stocks delivered robust gains, while "new economy" holdings
languished. Diversified manufacturing companies Tyco International, the Fund's
number two holding as of October 31, and Minnesota Mining & Manufacturing, the
number five holding, returned 24% and 18%, respectively. Aerospace company
Boeing soared 78%, citing strong earnings despite a drop in revenues. Many fiber
optic companies fell after Nortel's disappointing earnings release in late
October. JDS Uniphase, the Fund's third largest holding as of October 31, lost
30%. Agilent also was caught up in the technology rout, sinking 30% for the
period.
--------------------------------------------------------------------------------
page 10 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Technology Sector Index Fund
Performance as of 10/31/00
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------------------
<S> <C> <C>
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Technology Sector Index Fund 05/15/00 (8.48)%
--------------------------------------------------------------------------------------------
</TABLE>
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Cisco Systems Inc. 10.8%
Microsoft Corp. 8.3%
Intel Corp. 8.2%
EMC Corp. 5.6%
Sun Microsystems Inc. 5.0%
International Business Machines Corp. 5.0%
Oracle Corp. 4.1%
Texas Instruments Inc. 2.4%
Lucent Technologies Inc. 2.2%
Hewlett-Packard Co. 2.2%
The iShares Dow Jones U.S. Technology Sector Index Fund seeks to track the Dow
Jones U.S. Technology Sector Index. For the period since its inception May 15
through October 31, 2000, the Fund returned (8.48)%. During the same period, the
Index returned (8.14)%.
The period from May to October was marked by high volatility in the market, as
growth and technology stocks went in and out of favor with value and "old
economy" stocks. Investors were sensitive to economic data released, which
alternated from positive to negative.
In May, the technology sector continued its slide from its March high. June
economic reports indicated a slowing economy and the hope of a "soft landing,"
and the market reacted positively. Inflation concerns were renewed by strong
economic data in July, and there was another sell-off of technology issues.
August data for jobless claims and durable good orders relieved inflationary
worries, and there was a broad rally in the equity markets. In September,
investor worries turned to the high price of crude oil, decreased corporate
earnings estimates, and the prospect of rising interest rates. Technology
companies were among the hardest hit, as investors abandoned them in favor of
more defensive stocks.
In September, Intel Corp., the Fund's third largest position as of October 31,
announced it would not meet third quarter revenues, citing the weakness of the
euro. Its stock dropped 22% for the day and 44.5% for the month. Other
technology stocks fell in response to general technology concerns, and the
sell-off spread to the broader market due to concerns that profit expectations
were too high.
IBM, the sixth largest Fund holding as of October 31, also announced lower than
expected sales and fell 15.5% in a day. EMC and Sun Microsystems, the Fund's
fourth and fifth largest holdings as of October 31, posted gains of 35% and 32%,
respectively. Most of the Fund's top holdings, however, declined over the
period. Cisco Systems, Intel, Oracle, Texas Instruments, Lucent and Hewlett-
Packard experienced losses ranging from 10% to 64%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 11
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Telecommunications Sector Index Fund
Performance as of 10/31/00
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Total Return
----------------------------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
<S> <C> <C>
iShares Dow Jones U.S. Telecommunications Sector Index Fund 05/22/00 (8.32)%
----------------------------------------------------------------------------------------------------
</TABLE>
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
In addition, legal requirements applicable to all investment companies may limit
the Fund's ability to invest fully in its underlying Index and may contribute to
the difference between the performance of the Fund and the performance of the
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
SBC Communications Inc. 19.9%
Verizon Communications 15.2%
AT&T Corp. 8.9%
BellSouth Corp. 8.6%
WorldCom Inc. 7.5%
Qwest Communications International Inc. 6.6%
Alltel Corp. 3.3%
CenturyTel Inc. 2.4%
Telephone & Data Systems Inc. 2.4%
United States Cellular Corp. 2.3%
The iShares Dow Jones U.S. Telecommunications Sector Index Fund seeks to track
the Dow Jones U.S. Telecommunications Sector Index. For the period from its
inception May 22 through October 31, 2000, the Fund returned (8.32)%. During the
same period, the Index returned (5.02)%.
During the reporting period, investor enthusiasm for this sector weakened. The
telecoms began their slide in April, as investors retreated from high valuation
companies to defensive stocks and the "old economy." Initiating the flight from
this sector were announcements from AT&T and Worldcom that profits from their
long distance operations were down. Increasing investor concern over the state
of inflation was the Federal Reserve Board's 0.5% increase to the Federal Fund
rate on June 16. This move brought the rate to 6.5%, the highest level since
January 1991.
Competition in the wireless market has contributed to rate reductions and
encouraged corporate alliances. Verizon, which was created through the merger of
Bell Atlantic and GTE, is in a joint venture with Vodafone AirTouch, forming
Verizon Wireless. BellSouth and SBC intend to form a partnership which would
result in the second largest wireless service provider.
Despite the fact that many of the Fund's top ten holdings as of October 31 had
positive returns, the Fund's performance results was weighed down by the two
large long distance carriers. The share price of AT&T and Worldcom dropped 36%
and 38%, respectively. The Fund's largest holding as of October 31, SBC
Communications, was up 36%. The eighth largest position as of the end of the
period, CenturyTel Inc., returned 42% for the period.
--------------------------------------------------------------------------------
page 12 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Utilities Sector Index Fund
Performance as of 10/31/00
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Total Return
----------------------------------------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
<S> <C> <C>
iShares Dow Jones U.S. Utilities Sector Index Fund 06/12/00 19.32%
----------------------------------------------------------------------------------------------------------------
</TABLE>
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Enron Corp. 14.0%
Duke Energy Corp. 7.3%
AES Corp. 4.9%
Exelon Corp. 4.5%
Southern Co. 4.4%
Dominion Resources Inc. 3.3%
American Electric Power Inc. 3.1%
Calpine Corp. 2.5%
FPL Group Inc. 2.4%
PG&E Corp. 2.4%
The iShares Dow Jones U.S. Utilities Sector Index Fund seeks to track the Dow
Jones U.S. Utilities Sector Index. For the period since its inception on
June 12 through October 31, 2000, the Fund returned 19.32%. During the same
period, the Index returned 19.66%.
Utilities stocks represented the top performing sector for the period. During
the summer, the combined effects of rising oil prices, decreased corporate
earnings estimates, and a series of interest rate hikes by the Federal Reserve
caused increased investor apprehension about the prospects for economic growth.
In response, many investors retreated from growth-oriented companies. More
defensive companies such as utilities, however, benefited from this shift to
value companies.
Compounding the strength of the utilities sector, the global demand for energy
continued to rise as it has throughout the year, elevating prices for natural
gas. Demand for electric power in the U.S. also continued to face limited
supply, driving up prices for electric utility shares.
Performance of Fund holdings reflected the effects of these factors. The Fund's
top two holdings as of October 31, natural gas supplier Enron and energy
producer Duke Energy, returned 12% and 45%, respectively. Both companies
benefited from the high global demand for natural gas. Electric utility top ten
holdings as of October 31 also posted strong gains. Southern Company rose 17%,
Dominion Resources climbed 33%, and Calpine shot up an impressive 58%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 13
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Chemicals Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Chemicals Index Fund 06/12/00 (3.86)%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
In addition, legal requirements applicable to all investment companies may limit
the Fund's ability to invest fully in its underlying Index and may contribute to
the difference between the performance of the Fund and the performance of the
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Du Pont (E.I.) de Nemours 22.7%
Dow Chemical Co. 14.7%
Air Products & Chemicals Inc. 6.7%
Avery Dennison Corp. 4.6%
Praxair Inc. 4.5%
Union Carbide Corp. 4.3%
Ecoloab Inc. 3.9%
Rohm & Haas Co. "A" 3.6%
Eastman Chemical Co. 3.2%
Engelhard Corp. 2.9%
The iShares Dow Jones U.S. Chemicals Index Fund seeks to track the Dow Jones
U.S. Chemicals Index. For the period since its inception on June 12 through
October 31, 2000, the Fund declined 3.86%. During the same period, the Index
declined 5.51%.
The Fund's launch came at a time of historically high energy prices. In
particular, September saw the price of crude oil reached its highest level since
November 1990, and natural gas experienced unprecedented global demand, driving
up prices. Because crude oil and natural gas are the main raw ingredients used
in the products of most chemical companies, many companies in the sector were
hit hard during the period.
In addition, many chemical companies depend on European markets for a
significant portion of their revenues. These companies' losses were exacerbated
by the weak euro, which fell to a new low against the U.S. dollar during the
period and led to decreased demand in European markets.
The poor economic conditions for the chemicals sector was reflected in the
performance of some of its major holdings. Top ten Fund holdings as of October
31 with substantial European exposure include number four holding Avery
Dennison, which fell 20%; the largest holding Du Pont, which lost 8%; and number
two holding Dow Chemical which declined 12%. Dow Chemical recently indicated its
interest in acquiring Union Carbide, the Fund's number six holding, which
declined 22%. Natural gas and chemicals producer Air Products and Chemicals,
which was the Fund's third largest holding as of October 31, rose 11%.
--------------------------------------------------------------------------------
page 14 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Financial Services Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Financial
Services Index Fund 06/12/00 12.15%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TOP 10 INDEX HOLDINGS
---------------------
Citigroup Inc. 13.9%
Morgan Stanley Dean Witter & Co. 5.3%
Wells Fargo & Company 4.7%
Bank of America Corp. 4.6%
Fannie Mae 4.6%
American Express Co. 4.2%
Chase Manhatten Corp. 3.5%
Merrill Lynch & Co. Inc. 3.0%
Bank of New York Co. Inc. 2.5%
Banc One Corp. 2.5%
The iShares Dow Jones U.S. Financial Services Index Fund seeks to track the Dow
Jones U.S. Financial Services Index. For the period since its inception on
June 12 through October 31, 2000, the Fund returned 12.15%. During the same
period, the Index returned 12.42%.
At the time the Fund was launched, the U.S. economy appeared to be reaching the
Federal Reserve's desired "soft landing." However, with fears of an overheated
economy receding, investors found new worries. The prospect of high interest
rates and a slowing economy threatened future corporate earnings growth.
Exacerbating these fears, soaring oil prices and a sinking euro created concern
about global economic conditions and their impact on the U.S. economy.
The changing economic environment led some investors to seek shelter in more
defensive investments. Although the shift in sentiment meant declines for most
"new economy" stocks, it resulted in gains for most "old economy" stocks,
including financial services companies.
The Fund's largest holdings as of October 31 reflected the strong returns for
the financial services group. Financial services company Citigroup, the Fund's
largest holding, returned 10%. Merrill Lynch, the eighth largest position,
soared 29%. Not surprisingly, number five holding Fannie Mae also benefited from
the flight to quality, gaining 28%. The weakest performing group was the banks,
which were disadvantaged somewhat by higher borrowing rates. Number four holding
Bank of America lost 15%, while Chase Manhattan, the Fund's sixth largest
holding, declined 6%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 15
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Internet Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Internet Index
Fund 05/15/00 (16.01)%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
America Online Inc. 12.1%
BEA Systems Inc. 9.8%
Ariba Inc. 9.2%
VeriSign Inc. 8.6%
Yahoo! Inc. 7.1%
Check Point Software Technologies Ltd. 6.8%
i2 Technologies Inc. 6.2%
Exodus Communications Inc. 5.1%
Commerce One Inc. 4.3%
Amazon.com Inc. 3.2%
The iShares Dow Jones U.S. Internet Index Fund seeks to track the Dow Jones
U.S. Internet Index. For the period since its inception May 15 through
October 31, 2000, the Fund returned (16.01)%. During the same period, the Index
returned (15.63)%.
During the period from May to October, the U.S. equity markets saw a return to
value and "old economy stocks." Although growth and technology stocks returned
to favor during the summer, when economic data indicated that the economy might
have achieved a "soft landing," these rallies were short-lived. By September,
investor concerns turned to the price of crude oil, its highest in 10 years,
decreased corporate earnings estimates, and the continuing prospect of inflation
and higher interest rates. The stock market reflected a fear that the corporate
earnings of highly valued stocks could not grow as expected in this environment.
America Online (AOL), the Fund's largest holding as of October 31, has announced
the planned acquisition of Time Warner for $165 billion. This merger would
combine a traditional media giant with the largest Internet access provider and
potentially allow AOL to provide Internet access over television cable. Despite
the acquisition activity, AOL was down 14% during the reporting period. Yahoo!,
representing 7.1% of the Fund's assets as of October 31, saw its share price
drop 55% in the period despite the announcement of record profits. Amazon.com
Inc., the tenth largest holding in the Fund, also fell 35%.
The Fund's performance was enhanced by its business to business e-commerce
positions. Bea Systems Inc, the second largest position in the Fund as of
October 31, was up 63%. Ariba, the third largest position returned 89%. Check
Point Software Technologies LTD, i2 Technologies Inc, and Commerce One Inc.
returned 83%, 49%, and 38%, respectively.
--------------------------------------------------------------------------------
page 16 iShares
<PAGE>
Managers' Discussion & Analysis
iShares Dow Jones U.S. Real Estate Index Fund
Performance as of 10/31/00
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
Inception to
Fund Inception Date October 31, 2000
---- -------------- ----------------
iShares Dow Jones U.S. Real Estate Index
Fund 06/12/00 5.16%
--------------------------------------------------------------------------------
Total return represents the Fund's increase in value during the time period
noted above. These figures assume that dividends and capital gains distributions
have been reinvested in the Fund at net asset value. The Fund's past performance
is no guarantee of future results. 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.
Because indexes are statistical composites that do not actually hold a portfolio
of securities, they do not incur expenses. The Fund, like other investment
companies, pays management fees. These expenses negatively impact the
performance of the Fund, and account for some of the difference between the
performance of the Fund and the performance of the Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Top 10 Index Holdings
---------------------
Equity Office Properties Trust 8.8%
Equity Residential Properties Trust 6.0%
Spieker Properties Inc. 3.7%
Prologis Trust 3.6%
AvalonBay Communities Inc. 3.2%
Vornado Realty Trust 3.1%
Simon Property Group Inc. 3.0%
Apartment Investment & Management Co. "A" 3.0%
Archstone Communities Trust 3.0%
Duke-Weeks Realty Corp. 2.9%
The iShares Dow Jones U.S. Real Estate Index Fund, launched on June 12, 2000,
seeks to track the Dow Jones U.S. Real Estate Index. During the period from June
12 through October 31, 2000, the Fund returned 5.16%. The Index returned 4.71%
during the same period.
The Real Estate sector turned in a strong performance this period, driven by a
strong economy, high occupancy rates and solid rental growth. The industry's
steady stream of income from leases attracted investors seeking an alternative
to the volatility of the overall markets. In September, crude oil prices hit
their highest level since November 1990 at $37.20 a barrel, driving stock prices
down in Real Estate and the broader market. Continued $30-plus oil prices and a
slowing economy in October further dampened earlier industry gains.
Office and apartment Real Estate Investment Trusts were among the top
performers, benefiting from strong demand in major markets. Equity Office
Properties Trust, the Fund's largest holding at 8.8% as of October 31, gained
9%. Spieker Properties, the Fund's third largest holding as of October 31,
continued to expand in the West Coast with acquisitions in the lucrative
Portland, Oregon and San Francisco markets in October. The stock returned 10%
for the period. AvalonBay Communities, the Fund's fifth largest position as of
October 31, increased 11%, also making several West Coast acquisitions.
Concerns over oil prices dampened residential and retail REIT gains. Equity
Residential Properties, the Fund's second largest holding, gained only 1%, and
Simon Property Group, the seventh largest holding, lost 8%.
--------------------------------------------------------------------------------
iShares Managers' Discussion & Analysis page 17
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 99.95%
---------------------------------------------------------------
General Electric Co. 21,404 $ 1,173,207
Cisco Systems Inc.+ 15,193 818,523
Exxon Mobil Corp. 7,525 671,136
Microsoft Corp.+ 9,058 623,870
Intel Corp. 13,708 616,860
Pfizer Inc. 13,617 588,084
Citigroup Inc. 9,729 511,989
Merck & Co. Inc. 4,980 447,889
SBC Communications Inc. 7,357 424,407
American International Group Inc. 4,314 422,772
EMC Corp.+ 4,707 419,217
Sun Microsystems Inc.+ 3,430 380,301
International Business Machines Corp. 3,805 374,792
Verizon Communications 5,877 339,764
Oracle Corp.+ 9,394 310,002
Coca-Cola Co. 4,589 277,061
Wal-Mart Stores Inc. 5,958 270,344
Johnson & Johnson 2,844 262,003
Bristol-Myers Squibb Co. 4,248 258,862
America Online Inc.+ 4,984 251,343
Home Depot Inc. 4,995 214,785
Tyco International Ltd. 3,778 214,165
Morgan Stanley Dean Witter & Co. 2,450 196,766
BellSouth Corp. 4,032 194,796
Procter & Gamble Co. 2,674 191,024
AT&T Corp. 8,107 187,981
Lilly (Eli) and Company 2,069 184,917
Texas Instruments Inc. 3,715 182,267
Time Warner Inc. 2,378 180,514
American Home Products Corp. 2,818 178,943
Philip Morris Companies Inc. 4,859 177,961
Wells Fargo & Company 3,691 170,939
Bank of America Corp. 3,538 170,045
Fannie Mae 2,194 168,938
Lucent Technologies Inc. 7,198 167,803
Hewlett-Packard Co. 3,596 166,989
Abbott Laboratories 3,123 164,933
Schering-Plough Corp. 3,160 163,333
Walt Disney Co. (The) 4,501 161,192
Viacom Inc. "B"+ 2,755 156,691
American Express Co. 2,556 153,360
Pharmacia & Upjohn Inc. 2,745 150,975
PepsiCo Inc. 3,115 150,883
WorldCom Inc.+ 6,182 146,823
Corning Inc. 1,914 146,421
Dell Computer Corp.+ 4,921 145,169
Qwest Communications International Inc.+ 2,977 $ 144,757
Medtronic Inc. 2,593 140,832
Boeing Co. 1,933 131,082
JDS Uniphase Corp.+ 1,610 131,014
Enron Corp. 1,594 130,808
Chase Manhattan Corp. 2,817 128,173
Amgen Inc.+ 2,212 128,158
Veritas Software Corp.+ 870 122,684
Motorola Inc. 4,707 117,381
Chevron Corp. 1,412 115,961
Compaq Computer Corp. 3,655 111,149
Merrill Lynch & Co. Inc. 1,557 108,990
Ford Motor Company 4,075 106,459
QUALCOMM Inc.+ 1,610 104,826
Du Pont (E.I.) de Nemours 2,240 101,640
Juniper Networks Inc.+ 509 99,255
Walgreen Co. 2,170 99,006
Schlumberger Ltd. 1,233 93,862
Applied Materials Inc.+ 1,744 92,650
Honeywell International Inc. 1,719 92,504
AT&T - Liberty Media Group "A"+ 5,119 92,142
Bank of New York Co. Inc. 1,592 91,639
Bank One Corp. 2,503 91,359
Anheuser-Busch Companies Inc. 1,978 90,493
Freddie Mac 1,503 90,180
Automatic Data Processing Inc. 1,358 88,694
McDonald's Corp. 2,853 88,443
Minnesota Mining & Manufacturing Co. 864 83,484
Schwab (Charles) Corp. 2,305 80,963
Siebel Systems Inc.+ 766 80,382
Marsh & McLennan Companies Inc. 591 77,273
Network Appliance Inc.+ 649 77,231
Kimberly-Clark Corp. 1,168 77,088
Comcast Corp. "A"+ 1,880 76,610
FleetBoston Financial Corp. 1,943 73,834
Gillette Co. 2,060 71,843
United Technologies Corp. 1,018 71,069
Texaco Inc. 1,196 70,639
Clear Channel Communications Inc.+ 1,168 70,153
Duke Energy Corp. 808 69,842
Emerson Electric Co. 934 68,591
General Motors Corp. "A" 1,099 68,275
Colgate-Palmolive Co. 1,152 67,692
Palm Inc.+ 1,224 65,561
First Union Corp. 2,116 64,141
Ciena Corp.+ 610 64,126
Allstate Corp. 1,584 63,756
Broadcom Corp.+ 279 62,043
--------------------------------------------------------------------------------
page 18 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
MBNA Corp. 1,611 $ 60,513
Sprint Corp. (PCS Group)+ 1,567 59,742
Safeway Inc.+ 1,079 59,008
BEA Systems Inc.+ 819 58,763
Associates First Capital Corp. 1,574 58,435
PMC - Sierra Inc.+ 340 57,630
Solectron Corp.+ 1,303 57,332
Morgan (J.P.) & Co. Inc. 341 56,436
Cardinal Health Inc. 586 55,523
Ariba Inc.+ 430 54,341
Target Corporation 1,960 54,145
Alcoa Inc. 1,863 53,445
Nextel Communications Inc. "A"+ 1,386 53,274
Brocade Communications System Inc.+ 233 52,978
PE Corp. (Biosystems Group) 448 52,416
Household International Inc. 1,027 51,671
Washington Mutual Inc. 1,169 51,436
Mellon Financial Corp. 1,062 51,242
Baxter International Inc. 621 51,038
AXA Financial Inc. 943 50,981
Xilinx Inc.+ 700 50,706
VeriSign Inc.+ 379 50,028
Analog Devices Inc.+ 756 49,140
Fifth Third Bancorp 952 48,909
Applied Micro Circuits Corp.+ 624 47,658
AES Corp.+ 818 46,217
MetLife Inc.+ 1,672 46,189
CVS Corp. 854 45,209
First Data Corp. 899 45,062
Dow Chemical Co. 1,466 44,896
HCA - The Healthcare Company 1,087 43,412
American General Corp. 539 43,389
Linear Technology Corp. 664 42,869
State Street Corp. 342 42,661
Yahoo! Inc.+ 727 42,620
Electronic Data Systems Corp. 890 41,774
Agilent Technologies Inc.+ 900 41,681
Exelon Corp. 690 41,486
PNC Bank Corp. 619 41,396
AFLAC Inc. 566 41,353
Southern Co. 1,403 41,213
Paychex Inc. 727 41,212
Alltel Corp. 637 41,047
CIGNA Corp. 334 40,731
Firstar Corp. 2,061 40,576
Tellabs Inc.+ 811 40,499
Sara Lee Corp. 1,872 $ 40,365
Williams Companies Inc. 963 40,265
Kroger Co.+ 1,781 40,184
Check Point Software Technologies Ltd.+ 252 39,910
SDL Inc.+ 153 39,665
Adobe Systems Inc. 518 39,400
Sprint Corp. (FON Group) 1,530 39,015
US Bancorp Inc. 1,610 38,942
International Paper Co. 1,052 38,530
Sysco Corp. 730 38,097
Maxim Integrated Products Inc.+ 574 38,063
Voicestream Wireless Corp.+ 289 38,004
Comverse Technology Inc.+ 340 37,995
Northern Trust Corp. 442 37,736
UnitedHealth Group Inc. 342 37,406
i2 Technologies Inc.+ 215 36,550
Sanmina Corp.+ 315 36,008
Halliburton Co. 971 35,988
Costco Wholesale Corp.+ 972 35,600
Illinois Tool Works Inc. 640 35,560
Lowe's Companies Inc. 774 35,362
Omnicom Group Inc. 378 34,871
Guidant Corp.+ 655 34,674
Hartford Financial Services Group Inc. 458 34,092
Seagate Technology Inc.+ 484 33,820
Lehman Brothers Holdings Inc. 520 33,540
Altera Corp.+ 817 33,446
Anadarko Petroleum Corp. 514 32,922
Computer Associates International Inc. 1,024 32,640
Gannett Co. Inc. 559 32,422
Heinz (H.J.) Co. 763 31,998
Providian Financial Corp. 305 31,720
Kohls Corp.+ 584 31,646
Redback Networks Inc.+ 296 31,506
Gap Inc. 1,214 31,336
Chubb Corp. 370 31,242
Micron Technology Inc.+ 899 31,240
Level 3 Communications Inc.+ 655 31,235
Harley-Davidson Inc. 647 31,177
Goldman Sachs Group Inc. (The) 307 30,642
Exodus Communications Inc.+ 909 30,508
Dominion Resources Inc. 505 30,079
ADC Telecommunications Inc.+ 1,405 30,032
Eastman Kodak Co. 656 29,438
American Electric Power Inc. 709 29,423
El Paso Energy Corp. 467 29,275
Coastal Corp. 385 29,043
Lockheed Martin Corp. 802 28,752
--------------------------------------------------------------------------------
iShares Schedules of Investments page 19
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Interpublic Group of Companies Inc. 665 $ 28,553
Gemstar-TV Guide International Inc.+ 414 28,385
Phillips Petroleum Co. 459 28,343
FedEx Corp.+ 604 28,303
BB&T Corp. 873 27,827
Southwest Airlines Co. 972 27,702
MedImmune Inc.+ 421 27,523
Tenet Healthcare Corp. 693 27,244
Vitesse Semiconductor Corp.+ 385 26,926
Waste Management Inc. 1,342 26,840
Caterpillar Inc. 764 26,788
SunTrust Banks Inc. 548 26,749
McGraw-Hill Companies Inc. 414 26,574
General Mills Inc. 630 26,302
Capital One Financial Corp. 415 26,197
Conoco Inc. 953 25,910
Baker Hughes Inc. 727 24,991
Millennium Pharmaceuticals Inc.+ 344 24,962
Commerce One Inc.+ 388 24,905
Forest Laboratories Inc. "A"+ 187 24,777
ConAgra Inc. 1,153 24,645
Avon Products Inc. 504 24,444
National City Corp. 1,141 24,389
Intuit Inc.+ 394 24,206
Carnival Corp. "A" 973 24,143
Transocean Sedco Forex Inc. 449 23,797
Rational Software Corp.+ 397 23,696
St. Paul Companies Inc. 460 23,575
RadioShack Corp. 395 23,552
Union Pacific Corp. 502 23,531
Burlington Northern Santa Fe Corp. 882 23,428
Scientific-Atlanta Inc. 341 23,337
Wachovia Corp. 432 23,328
Calpine Corp.+ 295 23,287
Allergan Inc. 277 23,285
KeyCorp 937 23,132
Sears, Roebuck and Co. 773 22,981
Quaker Oats Co. 280 22,838
PG&E Corp. 844 22,735
Gateway Inc.+ 440 22,708
FPL Group Inc. 342 22,572
LSI Logic Corp.+ 683 22,454
General Dynamics Corp. 313 22,399
PeopleSoft Inc.+ 511 22,300
Best Buy Co. Inc.+ 441 22,133
Reliant Energy Inc. 532 21,978
Hancock (John) Financial Services Inc.+ 693 $ 21,916
XO Communications Inc. "A"+ 647 21,826
Computer Sciences Corp.+ 341 21,483
Weyerhaeuser Co. 457 21,450
Stilwell Financial Inc. 477 21,376
ONI Systems Inc.+ 262 21,238
TXU Corporation 565 20,940
Albertson's Inc. 862 20,419
Comerica Inc. 332 20,024
Limited Inc. 791 19,973
ALZA Corp.+ 244 19,749
AON Corp. 476 19,724
AT&T Wireless Group+ 790 19,701
Immunex Corp.+ 460 19,579
Biogen Inc.+ 323 19,441
Handspring Inc.+ 268 19,380
Amazon.com Inc.+ 529 19,375
IDEC Pharmaceuticals Corp.+ 98 19,220
Delphi Automotive Systems Corp. 1,214 19,045
Public Service Enterprise Group Inc. 457 18,966
Xcel Energy Inc. 739 18,891
Mercury Interactive Corp.+ 170 18,870
Cendant Corp.+ 1,566 18,792
Nabisco Group Holdings Corp. "A" 649 18,740
Equity Office Properties Trust 622 18,738
Becton Dickinson & Co. 559 18,726
United Parcel Service Inc. 307 18,650
Lincoln National Corp. 385 18,624
USX-Marathon Group Inc. 684 18,596
Concord EFS Inc.+ 450 18,591
Entergy Corp. 485 18,582
USA Education Inc. 332 18,551
Cox Communications Inc. "A"+ 421 18,550
Masco Corp. 991 18,519
May Department Stores Co. 700 18,375
Waters Corp.+ 253 18,358
Deere & Co. 496 18,259
QLogic Corp.+ 188 18,189
Air Products & Chemicals Inc. 487 18,171
Raytheon Co. "B" 531 18,154
Marriott International Inc. 441 17,861
TJX Companies Inc. 649 17,685
Starbucks Corp.+ 395 17,652
Unocal Corp. 514 17,540
Jabil Circuit Inc.+ 306 17,461
Human Genome Sciences Inc.+ 196 17,325
Dover Corp. 406 17,230
Aetna Inc. 298 17,228
--------------------------------------------------------------------------------
page 20 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
-------------------------------------------------------------
COMMON STOCKS (continued)
-------------------------------------------------------------
Edison International 718 $ 17,142
Extreme Networks Inc.+ 206 17,085
eBay Inc.+ 322 16,583
Franklin Resources Inc. 386 16,536
Burlington Resources Inc. 459 16,524
PPG Industries Inc. 369 16,467
Sycamore Networks Inc.+ 260 16,445
Clorox Co. 367 16,377
Ralston Purina Co. 675 16,369
Pitney Bowes Inc. 541 16,061
Occidental Petroleum Corp. 808 16,059
Bed Bath & Beyond Inc.+ 622 16,055
Paine Webber Group Inc. 224 15,960
Nabors Industries Inc.+ 313 15,932
Consolidated Edison Inc. 450 15,834
Rockwell International Corp. 395 15,528
IMS Health Inc. 656 15,498
Textron Inc. 305 15,383
McKesson HBOC Inc. 548 15,378
MBIA Inc. 208 15,119
Jefferson-Pilot Corp. 217 14,919
Phone.com Inc.+ 161 14,903
King Pharmaceuticals Inc.+ 332 14,878
Wellpoint Health Networks Inc.+ 127 14,851
Advanced Micro Devices Inc.+ 656 14,842
Loews Corp. 162 14,732
Vignette Corp.+ 494 14,727
Inktomi Corp.+ 232 14,717
Nike Inc. "B" 361 14,417
Apache Corp. 260 14,381
Federated Department Stores Inc.+ 441 14,360
SunGard Data Systems Inc.+ 279 14,264
Fort James Corp. 433 14,262
Progressive Corporation 145 14,246
Staples Inc.+ 997 14,207
NTL Inc.+ 323 14,192
Summit Bancorp 376 14,100
Golden West Financial Corp. 251 14,072
Cadence Design Systems Inc.+ 547 14,051
Stryker Corp. 297 13,996
Archer-Daniels-Midland Co. 1,267 13,937
Campbell Soup Co. 475 13,894
UNUMProvident Corp. 487 13,758
CP&L Energy Inc. 341 13,747
Fiserv Inc.+ 262 13,739
Bear Stearns Companies Inc. 226 13,701
American Tower Corp.+ 334 13,673
McLeodUSA Inc. "A"+ 709 13,648
Danaher Corp. 216 13,635
3Com Corp.+ 765 13,579
MGIC Investment Corp. 199 13,557
Apple Computer Inc.+ 692 13,537
Metromedia Fiber Network Inc.+ 712 13,528
Watson Pharmaceutical Inc.+ 216 13,514
Atmel Corp.+ 898 13,414
KLA-Tencor Corp.+ 395 13,356
Convergys Corp.+ 304 13,243
Constellation Energy Group Inc. 316 13,173
SCI Systems Inc.+ 306 13,158
Tiffany & Co. 307 13,105
Devon Energy Corp. 259 13,054
Electronic Arts Inc.+ 260 13,000
Kerr-McGee Corp. 199 12,997
Broadwing Inc.+ 459 12,967
IVAX Corporation+ 298 12,963
BroadVision Inc.+ 433 12,882
Dynegy Inc. 278 12,875
Kellogg Co. 503 12,764
Conexant Systems Inc.+ 485 12,762
Biomet Inc. 351 12,702
PP&L Resources Inc. 306 12,603
FirstEnergy Corp. 486 12,575
Wrigley (William Jr.) Co. 158 12,512
Praxair Inc. 334 12,442
Micromuse Inc.+ 73 12,387
Telephone & Data Systems Inc. 117 12,344
Union Carbide Corp. 287 12,341
Delta Air Lines Inc. 261 12,332
CSX Corp. 486 12,302
Equity Residential Properties Trust 261 12,283
Symbol Technologies Inc. 270 12,268
Starwood Hotels & Resorts Worldwide Inc. 413 12,235
Columbia Energy Group 170 12,229
Ingersoll-Rand Co. 322 12,155
Xerox Corp. 1,440 12,150
Genzyme General+ 171 12,141
Price (T. Rowe) Associates 259 12,124
CDW Computer Centers Inc.+ 188 12,114
Ambac Financial Group Inc. 151 12,052
Cintas Corp. 259 12,011
Abgenix Inc.+ 152 11,989
Univision Communications Inc.+ 313 11,972
Mattel Inc. 925 11,967
AmSouth Bancorp 856 11,930
-------------------------------------------------------------
iShares Schedules of Investments page 21
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
StorageNetworks Inc.+ 188 $ 11,926
New York Times Co. "A" 324 11,907
Noble Drilling Corp.+ 286 11,887
Avery Dennison Corp. 235 11,867
PerkinElmer Inc. 99 11,831
Norfolk Southern Corp. 837 11,823
Software.com Inc.+ 79 11,771
Hershey Foods Corp. 216 11,731
Ameren Corp. 295 11,726
Integrated Device Technology Inc.+ 208 11,713
SouthTrust Corp. 359 11,623
Cablevision Systems Corp.+ 154 11,473
Crown Castle International Corp.+ 378 11,458
Regions Financial Corp. 486 11,451
CenturyTel Inc. 297 11,434
Novellus Systems Inc.+ 279 11,422
Newell Rubbermaid Inc. 592 11,359
Lexmark International Group Inc. "A"+ 277 11,357
Cincinnati Financial Corp. 307 11,282
BMC Software Inc.+ 548 11,131
Amdocs Ltd.+ 171 11,083
Protein Design Labs Inc.+ 82 11,076
Florida Progress Corp. 208 11,063
Healthsouth Corp.+ 919 11,028
DTE Energy Co. 304 10,982
Teradyne Inc.+ 349 10,906
Vertex Pharmaceuticals Inc.+ 116 10,801
Johnson Controls Inc. 181 10,792
Zions Bancorp 187 10,741
DST Systems Inc.+ 174 10,723
Health Management Associates Inc. "A"+ 539 10,679
Thermo Electron Corp.+ 368 10,672
Equifax Inc. 305 10,522
Ecolab Inc. 268 10,502
Sepracor Inc.+ 154 10,491
Eaton Corp. 154 10,482
Parker Hannifin Corp. 253 10,468
Robert Half International Inc.+ 342 10,431
Cinergy Corp. 340 10,412
AMR Corp.+ 316 10,349
Charter One Financial Inc. 448 10,276
Rohm & Haas Co. "A" 340 10,221
Conoco Inc. "B" 395 10,196
Power-One Inc.+ 142 10,073
Fortune Brands Inc. 342 10,068
KeySpan Corp. 286 10,064
Transwitch Corp.+ 172 9,933
St. Jude Medical Inc.+ 180 9,900
TMP Worldwide Inc.+ 142 9,885
Synovus Financial Corp. 457 9,854
National Semiconductor Corp.+ 378 9,828
Finisar Corp.+ 341 9,825
Global Marine Inc.+ 370 9,805
InfoSpace.com Inc.+ 487 9,801
Dollar General Corp. 629 9,749
National Commerce Bancorp 457 9,711
Union Planters Corp. 287 9,704
Georgia-Pacific Corp. 361 9,702
Cypress Semiconductor Corp.+ 259 9,696
Medarex Inc.+ 158 9,658
Charter Communications Inc.+ 494 9,633
Foundry Networks Inc.+ 145 9,633
Allegheny Energy Inc. 234 9,579
Sabre Holdings Corp. 286 9,563
EOG Resources Inc. 242 9,529
Cabletron Systems Inc.+ 351 9,521
UST Inc. 376 9,494
R&B Falcon Corporation+ 379 9,475
Sempra Energy 458 9,475
Quest Diagnostics Inc.+ 98 9,433
Emulex Corp.+ 64 9,400
Tricon Global Restaurants Inc.+ 313 9,390
Marshall & Ilsley Corp. 207 9,380
Tribune Co. 252 9,340
BJ Services Co.+ 178 9,334
Torchmark Corp. 280 9,328
Chiron Corp.+ 215 9,312
Polycom Inc.+ 143 9,295
ENSCO International Inc. 279 9,277
Echostar Communications Corp.+ 205 9,276
Rambus Inc.+ 206 9,257
NCR Corp.+ 214 9,229
Interwoven Inc.+ 91 9,168
Willamette Industries Inc. 251 9,114
Coca-Cola Enterprises Inc. 494 9,077
Northrop Grumman Corp. 108 9,072
USA Networks Inc.+ 448 9,072
Countrywide Credit Industries Inc. 242 9,060
Edwards (A.G.) Inc. 178 9,033
TRW Inc. 214 8,988
Toys R Us Inc.+ 520 8,938
Amerada Hess Corp. 143 8,866
Unisys Corp.+ 691 8,810
Tosco Corp. 307 8,788
---------------------------------------------------------------
page 22 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
-----------------------------------------------------------
COMMON STOCKS (continued)
-----------------------------------------------------------
Citrix Systems Inc.+ 395 $ 8,739
Acxiom Corp.+ 215 8,654
GPU Inc. 261 8,629
R.J. Reynolds Tobacco Holdings Inc. 241 8,616
Sealed Air Corp.+ 179 8,614
Knight Ridder Inc. 171 8,593
Portal Software Inc.+ 243 8,551
M&T Bank Corp. 170 8,534
Gilead Sciences Inc.+ 99 8,514
PE Corp. (Celera Genomics Group)+ 126 8,505
Citizen Communications Co.+ 585 8,482
Macromedia Inc.+ 109 8,400
Moody's Corp. 316 8,315
Genuine Parts Co. 385 8,205
North Fork Bancorp 406 8,196
Dana Corp. 369 8,187
Goodrich (B.F.) Co. 200 8,187
Celgene Corp.+ 127 8,176
Pepsi Bottling Group Inc. 235 8,137
Micrel Inc.+ 179 8,100
Molex Inc. "A" 206 8,098
Mylan Laboratories Inc. 288 8,064
Avaya Inc.+ 599 8,049
TECO Energy Inc. 288 8,028
Old Kent Financial Corp. 290 8,024
Microchip Technology Inc.+ 253 8,001
Newport Corp. 70 7,994
Agile Software Corp.+ 106 7,990
Harrah's Entertainment Inc.+ 278 7,958
Readers Digest Association Inc. (The) "A" 216 7,925
Weatherford International Inc.+ 217 7,921
Spieker Properties Inc. 143 7,919
Phelps Dodge Corp. 169 7,901
NVIDIA Corp.+ 127 7,892
Cooper Industries Inc. 206 7,879
TIBCO Software Inc.+ 125 7,875
Whirlpool Corp. 181 7,874
Internet Security Systems Inc.+ 89 7,854
Family Dollar Stores Inc. 404 7,853
Vishay Intertechnology Inc.+ 261 7,830
Pinnacle West Capital Corp. 180 7,819
Knight Trading Group Inc.+ 261 7,814
Raytheon Co. "A" 244 7,808
Sherwin-Williams Co. 360 7,808
Smurfit-Stone Container Corp.+ 577 7,790
SPX Corp.+ 63 7,788
Leggett & Platt Inc. 475 7,778
Andrx Group+ 108 7,776
DPL Inc. 273 7,746
CIT Group Inc. (The) 444 7,742
CMGI Inc.+ 457 7,712
H & R Block, Inc. 216 7,709
TCF Financial Corp. 190 7,683
Ceridian Corp.+ 307 7,675
Parametric Technology Corp.+ 620 7,634
Eastman Chemical Co. 178 7,632
Tektronix Inc. 107 7,624
Smith International Inc.+ 108 7,614
Huntington Bancshares Inc. 529 7,604
Western Wireless Corp. "A"+ 160 7,600
Old Republic International Corp. 287 7,462
Black & Decker Corp. 198 7,450
Hilton Hotels Corp. 783 7,438
Art Technology Group Inc.+ 118 7,404
PMI Group Inc. (The) 100 7,388
Allmerica Financial Corp. 117 7,378
WebMD Corp.+ 648 7,371
United States Cellular Corp.+ 115 7,360
SEI Investment Co. 81 7,351
Prologis Trust 350 7,350
Boston Scientific Corp.+ 460 7,331
Keebler Foods Co. 181 7,330
Everest Re Group Ltd. 125 7,328
LG&E Energy Corp. 296 7,270
Powerwave Technologies Inc.+ 151 7,267
Scripps (E.W.) Company 124 7,246
Cree Inc.+ 73 7,245
Archstone Communities Trust 306 7,210
SanDisk Corp.+ 134 7,200
Laboratory Corp. of America Holdings+ 53 7,148
Akamai Technologies Inc.+ 140 7,140
AutoZone Inc.+ 266 7,132
NiSource Inc. 286 7,132
Peregrine Systems Inc.+ 296 7,104
Donaldson, Lufkin & Jenrette Inc. 79 7,095
Minimed Inc.+ 97 7,075
Estee Lauder Companies Inc. "A" 152 7,058
Dime Bancorp Inc. 288 7,038
First Tennessee National Corp. 306 7,038
Affiliated Computer Services Inc.+ 126 7,017
Brinker International Inc.+ 178 6,986
AvalonBay Communities Inc. 152 6,983
SAFECO Corp. 288 6,966
Apartment Investment & Management Co. "A" 152 6,945
-----------------------------------------------------------
iShares Schedules of Investments page 23
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Westvaco Corp. 243 $ 6,926
New Focus Inc.+ 109 6,922
Enzon Inc.+ 97 6,911
Nucor Corp. 199 6,903
Critical Path Inc.+ 142 6,896
Imclone Systems Inc.+ 126 6,891
Bowater Inc. 127 6,874
Kinder Morgan Inc. 178 6,864
Vornado Realty Trust 197 6,858
Sybron International Corp.+ 277 6,856
Arrow Electronics Inc.+ 214 6,848
CMS Energy Corp. 253 6,831
Allegiance Telecom Inc.+ 217 6,822
RF Micro Devices Inc.+ 342 6,819
E*trade Group Inc.+ 468 6,815
Novell Inc.+ 756 6,804
Sunoco Inc. 226 6,766
Office Depot Inc.+ 809 6,725
Lattice Semiconductor Corp.+ 230 6,713
CacheFlow Inc.+ 62 6,696
ITT Industries Inc. 205 6,675
COR Therapeutics Inc.+ 118 6,667
Winn-Dixie Stores Inc. 346 6,661
Apollo Group Inc.+ 170 6,651
Kmart Corp.+ 1,116 6,626
Servicemaster Co. 721 6,579
Montana Power Co. 232 6,554
TriQuint Semiconductor Inc.+ 171 6,551
Harcourt General Inc. 116 6,502
Cytyc Corp.+ 109 6,472
Vulcan Materials Co. 154 6,468
Temple-Inland Inc. 144 6,444
Pall Corp. 298 6,426
Northeast Utilities 315 6,418
Internet Capital Group LLC+ 484 6,413
Mercantile Bankshares Corp. 170 6,396
Goodyear Tire & Rubber Co. 343 6,345
Sapient Corp.+ 178 6,330
Wind River Systems Inc.+ 154 6,324
Darden Restaurants Inc. 281 6,322
CheckFree Corp.+ 127 6,318
GlobeSpan Inc.+ 82 6,309
Trigon Healthcare Inc.+ 88 6,309
Radian Group Inc. 89 6,308
Manpower Inc. 181 6,301
Compuware Corp.+ 800 6,300
Gallagher (Arthur J.) & Co. 99 6,249
Dow Jones & Co. Inc. 106 6,241
Niagara Mohawk Holdings Inc.+ 390 6,240
Park Place Entertainment Corp.+ 487 6,209
Potomac Electric Power Co. 271 6,199
Manugistics Group Inc.+ 54 6,153
RSA Security Inc.+ 106 6,148
Murphy Oil Corp. 106 6,141
Legg Mason Inc. 117 6,077
Informatica Corp.+ 64 6,048
Network Associates Inc.+ 314 6,045
Medicis Pharmaceutical Corp. "A"+ 82 6,037
Simon Property Group Inc. 270 6,024
Dallas Semiconductor Corp. 152 6,023
UnitedGlobalCom Inc. "A"+ 189 6,013
Sawtek Inc.+ 118 6,003
Donnelley (R.R.) & Sons Co. 279 5,998
CNET Networks Inc.+ 190 5,985
Utilicorp United Inc. 225 5,977
Cooper Cameron Corp.+ 109 5,940
Synopsys Inc.+ 170 5,929
Ultramar Diamond Shamrock Corp. 225 5,906
Mead Corp. 204 5,903
BJ's Wholesale Club Inc.+ 178 5,863
ICN Pharmaceuticals Inc. 154 5,862
Duke-Weeks Realty Corp. 247 5,851
Ashland Inc. 178 5,829
Circuit City Stores Inc. 439 5,817
Energy East Corp. 288 5,814
Engelhard Corp. 277 5,782
SCANA Corp. 218 5,777
Expeditors International Washington Inc. 111 5,758
Macrovision Corp.+ 79 5,757
Visteon Corp. 325 5,748
At Home Corp. "A"+ 557 5,744
Ocean Energy Inc.+ 414 5,744
KEMET Corp.+ 206 5,742
Amphenol Corp. "A"+ 89 5,718
American Water Works Inc. 234 5,704
Avnet Inc. 212 5,697
Continental Airlines Inc. "B"+ 108 5,670
Tekelec+ 154 5,669
Crescent Real Estate Equities Co. 280 5,635
Millipore Corp. 107 5,618
Plexus Corp.+ 89 5,613
Bard (C.R.) Inc. 134 5,611
Wisconsin Energy Corp. 298 5,606
ICOS Corp.+ 109 5,600
-----------------------------------------------------------
page 24 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Dollar Tree Stores Inc.+ 143 $ 5,595
E.piphany Inc.+ 62 5,588
Advanced Fibre Communications Inc.+ 171 5,568
Invitrogen Corp.+ 73 5,553
Lincare Holdings Inc.+ 132 5,552
Homestore.com Inc.+ 163 5,542
MCN Energy Group Inc. 225 5,541
Federated Investors Inc. "B" 190 5,534
International Rectifier Corp.+ 124 5,533
Nuance Communications Inc.+ 64 5,520
Quantum DLT & Storage Group+ 368 5,520
Express Scripts Inc. "A"+ 82 5,509
Sigma-Aldrich Corp. 154 5,506
Newmont Mining Corp. 405 5,493
Bisys Group Inc.+ 116 5,466
Fluor Corp. 156 5,460
Commerce Bancorp Inc. 90 5,451
Sonoco Products Co. 280 5,408
Rowan Companies Inc.+ 214 5,390
IDACorp Inc. 109 5,375
Lam Research Corp.+ 277 5,367
Astoria Financial Corp. 143 5,362
Hibernia Corp. "A" 448 5,348
Puget Sound Energy Inc. 217 5,330
Navistar International Corp.+ 161 5,323
AMB Property Corp. 226 5,311
Conseco Inc. 764 5,300
Vitria Technology Inc.+ 197 5,294
Molex Inc. 98 5,292
Caremark Rx Inc.+ 423 5,287
Tech Data Corp.+ 127 5,286
Myriad Genetics Inc.+ 44 5,280
Equitable Resources Inc. 91 5,278
Catalina Marketing Corp.+ 134 5,259
Jones Apparel Group Inc.+ 189 5,257
Compass Bancshares Inc. 289 5,256
Cephalon Inc.+ 98 5,255
First Virginia Banks Inc. 127 5,255
IPALCO Enterprises Inc. 234 5,250
Southdown Inc. 74 5,245
PACCAR Inc. 124 5,216
US Airways Group Inc.+ 138 5,210
Viacom Inc. "A"+ 91 5,210
Fox Entertainment Group Inc.+ 242 5,203
Grant Prideco Inc.+ 280 5,198
Energizer Holdings Inc.+ 262 5,174
Viad Corp. 241 5,151
Martin Marietta Materials Inc. 134 5,146
Kimco Realty Corp. 127 5,112
Eastern Enterprises 79 5,086
Hispanic Broadcasting Corp.+ 162 5,062
Greenpoint Financial Corp. 170 5,057
True North Communications Inc. 134 5,050
Abercrombie & Fitch Co.+ 214 5,042
Cirrus Logic Inc.+ 116 5,003
Technitrol Inc. 45 4,989
Alliant Energy Corp. 164 4,971
Hercules Inc. 271 4,963
American Standard Companies Inc.+ 108 4,954
Amerisource Health Corp. "A"+ 114 4,952
Incyte Pharmaceuticals Inc.+ 135 4,944
Liberty Property Trust 187 4,944
VF Corp. 181 4,944
Penney (J.C.) Company Inc. 422 4,932
Diamond Offshore Drilling Inc. 142 4,908
Silicon Valley Bancshares+ 106 4,903
Silicon Storage Technology Inc.+ 215 4,891
Boise Cascade Corp. 170 4,877
Super Value Inc. 317 4,874
Gentex Corp.+ 196 4,851
RealNetworks Inc.+ 235 4,843
Netegrity Inc.+ 62 4,836
NICOR Inc. 136 4,803
Maytag Corp. 167 4,780
Centura Banks Inc. 124 4,766
Old National Bancorp 161 4,750
Questar Corp. 175 4,736
Wilmington Trust Corp. 90 4,736
Georgia-Pacific (Timber Group) 167 4,728
Coors (Adolf) Company "B" 74 4,713
Metris Companies Inc. 145 4,694
L-3 Communications Holdings Inc.+ 71 4,682
National-Oilwell Inc.+ 160 4,680
Litton Industries Inc.+ 90 4,674
MGM Grand Inc. 135 4,666
MRV Communications Inc.+ 118 4,661
Kana Communications Inc.+ 198 4,653
Symantec Corp.+ 119 4,648
Spectrasite Holdings Inc.+ 235 4,641
ALLETE 215 4,636
Alpha Industries Inc.+ 116 4,626
Beckman Coulter Inc. 66 4,624
American Power Conversion Corp.+ 357 4,619
Public Storage Inc. 205 4,613
---------------------------------------------------------------
iShares Schedules of Investments page 25
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
OGE Energy Corp. 224 $ 4,606
Semtech Corp.+ 142 4,580
Grainger (W.W.) Inc. 143 4,567
Conectiv Inc. 252 4,520
SkyWest Inc. 89 4,495
Hillenbrand Industries Inc. 97 4,486
Affymetrix Inc.+ 81 4,485
CH Robinson Worldwide Inc. 82 4,484
Tidewater Inc. 97 4,480
Whitman Corp. 342 4,446
Hudson City Bancorp Inc. 243 4,420
Edwards (J.D.) & Co.+ 170 4,399
National Fuel Gas Co. 82 4,397
Hanover Compressor Co.+ 134 4,372
Bank United Corp. "A" 77 4,365
AutoNation Inc.+ 646 4,360
Viasystems Group Inc.+ 306 4,341
Arden Realty Inc. 180 4,320
Andrew Corp.+ 164 4,315
Oxford Health Plans Inc.+ 127 4,286
Cummins Engine Company Inc. 126 4,284
Herman Miller Inc. 164 4,284
Kansas City Power & Light Co. 178 4,283
Lear Corp.+ 157 4,278
Helmerich & Payne Inc. 136 4,275
Washington Post Company (The) "B" 8 4,273
USX-U.S. Steel Group Inc. 268 4,271
Delhaize America Inc. "A" 250 4,250
International Game Technology Inc.+ 116 4,249
DoubleClick Inc.+ 261 4,241
CarrAmerica Realty Corp. 143 4,227
FirstMerit Corp. 185 4,220
UAL Corp. 111 4,211
Tyson Foods Inc. "A" 376 4,207
Quintiles Transnational Corp.+ 301 4,195
AmeriCredit Corp.+ 156 4,193
Primedia Inc.+ 369 4,174
Snap-On Inc. 163 4,167
Red Hat Inc.+ 332 4,150
Loral Space & Communications Ltd.+ 728 4,141
Sovereign Bancorp Inc. 498 4,140
Flowers Industries Inc. 269 4,136
Adaptec Inc.+ 261 4,127
Insight Enterprises Inc.+ 127 4,127
Sirius Satellite Radio Inc.+ 82 4,121
Elantec Semiconductor Inc.+ 37 4,116
Protective Life Corp. 178 $ 4,116
Alkermes Inc.+ 111 4,114
Aeroflex Inc.+ 69 4,105
Hormel Foods Corp. 244 4,102
CuraGen Corp.+ 63 4,071
Highwoods Properties Inc. 188 4,066
Pentair Inc. 136 4,055
DQE Inc. 116 4,053
Boston Properties Inc. 100 4,050
Consolidated Stores Corp.+ 341 4,049
Internap Network Services Corp.+ 253 4,048
Post Properties Inc. 115 4,018
Amkor Technology Inc.+ 181 4,016
Waddell & Reed Financial Inc. "A" 126 4,016
Powertel Inc.+ 46 4,014
Noble Affiliates Inc. 109 3,999
Host Marriott Corp. 376 3,995
DeVry Inc.+ 108 3,989
Chris-Craft Industries Inc.+ 54 3,969
Getty Images Inc.+ 125 3,969
Republic Services Inc. "A"+ 295 3,964
OSI Pharmaceuticals Inc.+ 55 3,960
Ameritrade Holding Corp. "A"+ 270 3,949
Webster Financial Corp. 162 3,949
Techne Corp.+ 35 3,946
Wendy's International Inc. 181 3,937
Valero Energy Corp. 119 3,934
Bemis Co. 152 3,933
Deluxe Corp. 174 3,926
Iron Mountain Inc.+ 116 3,922
Retek Inc.+ 99 3,904
Aurora Biosciences Corp.+ 64 3,900
Cousins Properties Inc. 150 3,900
ON Semiconductor Corp.+ 387 3,894
Lamar Advertising Co.+ 81 3,888
Pegasus Communications Corp.+ 109 3,876
Shaw Industries Inc. 208 3,861
Safeguard Scientifics Inc.+ 251 3,859
Universal Health Services Inc. "B"+ 46 3,858
Diebold Inc. 148 3,848
Marine Drilling Co. Inc.+ 161 3,844
Golden State Bancorp Inc. 147 3,840
VISX Inc.+ 179 3,837
Rouse Co. 155 3,827
Omnicare Inc. 218 3,815
OM Group Inc. 82 3,793
Liz Claiborne Inc. 89 3,783
Brown-Forman Corp. "B" 62 3,774
--------------------------------------------------------------------------------
page 26 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
CSG Systems International Inc.+ 81 $ 3,761
REMEC Inc.+ 126 3,756
Exar Corp.+ 84 3,754
Sybase Inc.+ 177 3,706
Time Warner Telecom Inc. "A"+ 62 3,697
Inhale Therapeutic Systems Inc.+ 74 3,681
Infonet Services Corp. "B"+ 566 3,679
Mastec Inc.+ 127 3,675
C&D Technologies Inc. 62 3,666
Advent Software Inc.+ 61 3,648
Winstar Communications Inc.+ 187 3,647
Royal Caribbean Cruises Ltd. 162 3,645
Northwest Airlines Corp. "A"+ 127 3,620
Dura Pharmaceuticals Inc.+ 105 3,616
Cell Therapeutics Inc.+ 54 3,612
Stanley Works (The) 135 3,594
Informix Corp.+ 844 3,587
Health Care Property Investors Inc. 122 3,584
Intermedia Communications Inc.+ 161 3,562
Fastenal Co. 62 3,561
St. Joe Company (The) 175 3,533
Western Resources Inc. 165 3,527
FMC Corp.+ 46 3,496
Infocus Corp.+ 79 3,491
Commerce Bancshares Inc. 97 3,486
CTS Corp. 81 3,478
Belo (A.H.) Corp. 181 3,473
Newfield Exploration Co.+ 92 3,473
Pride International Inc.+ 137 3,468
Aether Systems Inc.+ 43 3,467
Dycom Industries Inc.+ 92 3,462
Hasbro Inc. 322 3,461
Alpharma Inc. 89 3,454
Reckson Associates Realty Corp. 152 3,439
Bausch & Lomb Inc. 89 3,432
Iomega Corp.+ 699 3,432
Harris Corp. 108 3,422
McCormick & Co. Inc. 108 3,422
Nordstrom Inc. 208 3,419
Dun & Bradstreet Corp.+ 158 3,417
Fairchild Semiconductor Corp. "A"+ 162 3,412
National Instruments Corp.+ 73 3,408
Humana Inc.+ 279 3,383
Patterson Dental Co.+ 108 3,382
Jack Henry & Associates Inc. 61 3,355
Vicor Corp.+ 62 3,348
Cerner Corp.+ 54 $ 3,345
IBP Inc. 162 3,331
Plantronics Inc.+ 73 3,331
Santa Fe International Corp. 91 3,322
Outback Steakhouse Inc.+ 116 3,306
Natural Microsystems Corp.+ 73 3,299
Venator Group Inc.+ 233 3,291
Allied Capital Corp. 157 3,238
Manor Care Inc.+ 187 3,121
Lennar Corp. 97 3,116
SBA Communications Corp.+ 62 3,108
Clarent Corp.+ 100 3,106
Investors Financial Services Corp. 43 3,083
Cabot Corp. 140 3,080
Quanta Services Inc.+ 99 3,075
Cox Radio Inc. "A"+ 135 3,071
GATX Corporation 73 3,071
Ditech Communications Corp.+ 89 3,065
Efficient Networks Inc.+ 73 3,063
Precision Castparts Corp. 81 3,058
American Superconductor Corp.+ 64 3,056
Cobalt Networks Inc.+ 55 3,032
Callaway Golf Co. 189 3,024
Shaw Group Inc.+ 37 3,016
VerticalNet Inc.+ 108 3,012
Terayon Communications Systems Inc.+ 134 2,998
Adelphia Communications Corp. "A"+ 90 2,987
Mandalay Resort Group Inc.+ 143 2,976
Quantum Hard Disk Drive Group+ 260 2,974
Great Lakes Chemical Corp. 89 2,970
Mercury General Corp. 81 2,967
AudioCodes Ltd.+ 74 2,928
Allegheny Technologies Inc. 143 2,896
Comdisco Inc. 235 2,893
Inet Technologies Inc.+ 70 2,870
TeleCorp PCS Inc.+ 153 2,869
APW Ltd.+ 62 2,864
First Health Group Corp.+ 73 2,847
Galileo International Inc. 143 2,824
Dentsply International Inc. 81 2,810
Silicon Laboratories Inc.+ 100 2,806
Aspect Communications Corp.+ 170 2,802
Alexion Pharmaceuticals Inc.+ 27 2,791
Actuate Software Corp.+ 99 2,790
Brunswick Corp. 143 2,780
Barr Laboratories Inc.+ 44 2,778
Universal Access Inc.+ 189 2,764
CV Therapeutics Inc.+ 35 2,756
--------------------------------------------------------------------------------
iShares Schedules of Investments page 27
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Entercom Communications Corp.+ 70 $ 2,743
Leap Wireless International Inc.+ 55 2,736
Reinsurance Group of America Inc. 73 2,728
Focal Communications Corp.+ 188 2,726
FreeMarkets Inc.+ 55 2,719
International Flavors & Fragrances Inc. 162 2,713
Quest Software Inc.+ 62 2,709
Anaren Microwave Inc.+ 26 2,704
Cullen/Frost Bankers Inc. 81 2,698
Centillium Communications Inc.+ 71 2,697
SERENA Software Inc.+ 53 2,696
Teletech Holdings Inc.+ 97 2,692
Eaton Vance Corp. 54 2,690
Tollgrade Communications Inc.+ 28 2,681
FuelCell Energy Inc.+ 35 2,680
Newport News Shipbuilding Inc. 54 2,656
Matrixone Inc.+ 89 2,642
EarthLink Inc.+ 404 2,639
Crane Co. 100 2,619
Owens-Illinois Inc.+ 439 2,607
Proxim Inc.+ 43 2,607
Michaels Stores Inc.+ 107 2,601
Transatlantic Holdings Inc. 28 2,601
WatchGuard Technologies Inc.+ 52 2,600
Associated Bancorp 108 2,599
Harman International Industries Inc. 54 2,592
IndyMac Mortgage Holdings Inc.+ 124 2,588
Rite Aid Corp.+ 1,006 2,578
Liberate Technologies Inc.+ 135 2,573
Meredith Corp. 81 2,572
Krispy Kreme Doughnuts Inc.+ 26 2,563
IMC Global Inc. 198 2,562
Cable Design Technologies Corp.+ 111 2,560
Kopin Corp.+ 181 2,557
Smithfield Foods Inc.+ 89 2,553
AVX Corp. 89 2,548
iStar Financial Inc. 127 2,540
RenaissanceRe Holdings Ltd. 35 2,540
Pacific Century Financial Corp. 200 2,538
Nationwide Financial Services Inc. 52 2,529
Proxicom Inc.+ 187 2,525
Roslyn Bancorp Inc. 116 2,516
American Eagle Outfitters Inc.+ 73 2,514
City National Corp. 73 2,509
Cross Timbers Oil Co. 133 2,502
DMC Stratex Networks Inc.+ 108 2,497
Maxygen Inc.+ 62 $ 2,496
Harmonic Inc.+ 172 2,494
Entrust Technologies Inc.+ 81 2,486
Saks Inc.+ 244 2,486
PurchasePro.com Inc.+ 92 2,484
UnionBanCal Corporation 118 2,478
Trimeris Inc.+ 35 2,476
Cymer Inc.+ 99 2,475
Valassis Communications Inc.+ 89 2,470
Varco International Inc.+ 143 2,467
Software Technologies Corp.+ 145 2,465
Fidelity National Financial Inc. 100 2,456
Storage Technology Corp.+ 251 2,447
Orthodontic Centers of America+ 73 2,436
Caliper Technologies Corp.+ 43 2,424
Cytec Industries Inc.+ 70 2,424
Solutia Inc. 190 2,423
Sotheby's Holdings Inc. 89 2,420
Mack-Cali Realty Corp. 89 2,414
Pixar Inc.+ 73 2,409
General Growth Properties Inc. 81 2,389
Harte-Hanks Inc. 108 2,389
Hollinger International Inc. 154 2,377
BancWest Corporation 116 2,371
Raymond James Financial Corp. 70 2,367
Credence Systems Corp.+ 126 2,362
ADTRAN Inc.+ 62 2,356
United Therapeutics Inc.+ 44 2,354
Verity Inc.+ 100 2,350
Mentor Graphics Corp.+ 100 2,344
Pulte Corp. 70 2,332
Markel Corp.+ 16 2,318
Veeco Instruments Inc.+ 35 2,317
NPS Pharmaceuticals Inc.+ 54 2,315
Documentum Inc.+ 27 2,295
Immunomedics Inc.+ 99 2,289
Oak Technology Inc.+ 81 2,273
Oakley Inc.+ 108 2,268
Pier 1 Imports Inc. 171 2,266
Tularik Inc.+ 71 2,254
Key Energy Group Inc.+ 250 2,250
Triton Energy Ltd.+ 73 2,245
Concurrent Computer Corp.+ 127 2,238
Sensormatic Electronics Corp.+ 124 2,232
Westamerica Bancorp 62 2,228
BRE Properties Inc. 70 2,214
Leucadia National Corp. 89 2,214
Talbots Inc. (The) 28 2,214
--------------------------------------------------------------------------------
page 28 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
StanCorp Financial Group Inc. 54 $ 2,201
Wireless Facilities Inc.+ 44 2,200
Artesyn Technologies Inc.+ 54 2,194
FelCor Lodging Trust Inc. 100 2,194
Lafarge Corp. 116 2,190
Digital Lightware Inc.+ 43 2,180
Kaufman & Broad Home Corp. 73 2,172
Scholastic Corp.+ 27 2,160
Ticketmaster Online-CitySearch Inc. "B"+ 135 2,160
Tetra Tech Inc.+ 62 2,155
Adaptive Broadband Corp.+ 134 2,152
Autodesk Inc. 97 2,140
Sierra Pacific Resources Corp. 124 2,131
Suiza Foods Corp.+ 46 2,130
Provident Financial Group Inc. 70 2,118
Mohawk Industries Inc.+ 97 2,116
PLX Technology Inc.+ 88 2,112
Unitrin Inc. 68 2,112
Affiliated Managers Group Inc.+ 35 2,104
First American Financial Corp. 100 2,094
Dial Corp. 187 2,092
Cognex Corp.+ 62 2,077
Reynolds & Reynolds Co. "A" 116 2,074
Virata Corp.+ 107 2,073
National Data Corp. 54 2,059
RCN Corp.+ 116 2,059
Crown Cork & Seal Co. Inc. 225 2,053
Downey Financial Corp. 43 2,053
Trustmark Corp. 108 2,052
Commscope Inc.+ 81 2,050
Emcore Corp.+ 50 2,050
SICOR Inc.+ 160 2,050
Vintage Petroleum Inc. 97 2,049
Maxim Pharmaceuticals Inc.+ 46 2,041
Barnes & Noble Inc.+ 108 2,038
Cheesecake Factory (The)+ 46 2,038
Methode Electronics Inc. "A" 54 2,032
Power Integrations Inc.+ 151 2,029
Lexicon Genetics Inc.+ 100 2,025
People's Bank 100 2,025
DuPont Photomasks Inc.+ 36 2,020
Zebra Technologies Corp. "A"+ 46 2,015
Transkaryotic Therapies Inc.+ 54 2,012
Microstrategy Inc.+ 84 2,011
Millennium Chemicals Inc. 124 2,000
Borders Group Inc.+ 144 1,998
Siliconix Inc.+ 46 $ 1,990
Whole Foods Market Inc.+ 43 1,989
Louis Dreyfus Natural Gas Corp.+ 62 1,988
Legato Systems Inc.+ 223 1,986
Wiley (John) & Sons Inc. "A" 97 1,982
Ryder System Inc. 100 1,975
Varian Inc.+ 64 1,972
New Plan Excel Realty Trust 160 1,970
Wave Systems Corp. "A"+ 170 1,966
Dillards Inc. "A" 187 1,963
Atlas Air Inc.+ 54 1,957
Independence Community Bank Corp. 133 1,953
Osicom Technologies Inc.+ 61 1,952
Covad Communications Group Inc.+ 369 1,949
CNF Transportation Inc. 73 1,948
Scient Corp.+ 108 1,944
Delhaize America Inc. "B" 116 1,943
Hubbell Inc. "B" 81 1,939
Six Flags Inc.+ 124 1,938
IDT Corp.+ 54 1,930
Selectica Inc.+ 73 1,925
Hospitality Properties Trust 89 1,919
Reebok International Ltd.+ 89 1,919
Carlisle Companies Inc. 46 1,915
First Industrial Realty Trust 62 1,914
Valspar Corp. 70 1,912
American Financial Group Inc. 89 1,908
Linens 'N Things Inc.+ 62 1,906
Blyth Industries Inc. 73 1,898
CNA Financial Corp.+ 52 1,898
Visible Genetics Inc.+ 62 1,876
Steris Corp.+ 125 1,875
Photon Dynamics Inc.+ 52 1,872
Chesapeake Energy Corp.+ 331 1,862
Peoples Energy Corp. 54 1,856
Williams-Sonoma Inc.+ 89 1,852
D.R. Horton Inc. 100 1,850
Molecular Devices Corp.+ 27 1,846
Zale Corp.+ 54 1,829
ArvinMeritor Inc. 109 1,826
Hain Celestial Group Inc.+ 46 1,826
ONEOK Inc. 46 1,823
HSB Group Inc. 46 1,820
NOVA Corporation+ 116 1,820
American Greetings Corp. "A" 100 1,819
AGL Resources Inc. 89 1,813
Ethan Allen Interiors Inc. 62 1,813
Alberto-Culver Co. "B" 54 1,812
--------------------------------------------------------------------------------
iShares Schedules of Investments page 29
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Hudson United Bancorp 81 $ 1,812
Washington Federal Inc. 81 1,807
PSINET Inc.+ 271 1,804
Stillwater Mining Co.+ 62 1,798
Global Telesystems Group Inc. 664 1,785
Ross Stores Inc. 135 1,780
Black Box Corp.+ 27 1,779
Jacobs Engineering Group Inc.+ 43 1,779
Quorum Health Group Inc.+ 133 1,779
Silicon Valley Group Inc.+ 54 1,779
Aspen Technology Inc.+ 43 1,776
Camden Property Trust 62 1,775
Coventry Health Care Inc.+ 97 1,770
Greater Bay Bancorp 54 1,758
AK Steel Holding Corp. 190 1,757
Lubrizol Corp. 81 1,757
Toll Brothers Inc.+ 54 1,755
Alexander & Baldwin Inc. 70 1,746
Colonial BancGroup Inc. 198 1,745
Citizens Banking Corp. 73 1,738
Dean Foods Co. 54 1,728
Comcast Corp.+ 43 1,725
NetIQ Corp.+ 20 1,723
SonicWALL Inc.+ 115 1,718
Echelon Corp.+ 54 1,714
Global Industries Ltd.+ 163 1,711
Advance Paradigm Inc.+ 35 1,710
Public Service Company of New Mexico 62 1,709
Homestake Mining Company+ 414 1,708
Imperial Bancorp+ 70 1,702
Security Capital Group "B"+ 89 1,697
Houghton Mifflin Co. 46 1,693
OpenTV Corp.+ 63 1,693
Pennzoil-Quaker State Co. 144 1,692
York International Corp. 62 1,686
Barrett Resources Corp.+ 46 1,673
RPM Inc. 187 1,671
Cleco Corp. 35 1,665
GoAmerica Inc.+ 159 1,660
Emmis Communications Corp.+ 62 1,658
Enzo Biochem Inc.+ 43 1,655
Donaldson Co. Inc. 73 1,652
Crompton Corp. 206 1,648
Williams Communications Group Inc.+ 90 1,648
Renal Care Group Inc.+ 70 1,645
Avista Corp. 73 1,638
International Speedway Corp. "A" 51 $ 1,638
Next Level Communications Inc.+ 35 1,638
Intranet Solutions Inc.+ 35 1,627
HNC Software Inc.+ 80 1,625
Borg-Warner Automotive Inc. 43 1,623
United Stationers Inc.+ 54 1,623
Apria Healthcare Group Inc.+ 81 1,620
Perot Systems Corp. "A"+ 163 1,620
Ball Corp. 46 1,616
Louisiana-Pacific Corp. 190 1,615
Anchor Gaming+ 19 1,614
Station Casinos Inc.+ 100 1,613
Roper Industries Inc. 46 1,610
Varian Semiconductor Equipment
Associates Inc.+ 70 1,610
VA Linux Systems Inc.+ 55 1,609
RGS Energy Group Inc. 54 1,593
Netro Corp.+ 73 1,592
CBRL Group Inc. 89 1,591
Kenneth Cole Productions "A"+ 35 1,590
Learning Tree International Inc.+ 35 1,584
Prentiss Properties Trust 62 1,573
Southwest Bancorp of Texas Inc.+ 43 1,570
Diamond Technology Partners Inc.+ 35 1,562
Noven Pharmaceuticals Inc.+ 35 1,560
Corn Products International Inc. 62 1,558
Commercial Federal Corp. 89 1,557
First Midwest Bancorp Inc. 62 1,554
Nordson Corp. 54 1,549
Maxtor Corp.+ 198 1,547
Titan Corp. (The)+ 115 1,538
Scotts Co. (The) "A"+ 43 1,537
Pre-Paid Legal Services Inc.+ 35 1,536
MedQuist Inc.+ 136 1,530
Tut Systems Inc.+ 46 1,530
Tupperware Corp. 89 1,524
Forrester Research Inc.+ 37 1,519
Jack in the Box Inc.+ 62 1,519
Delta & Pine Land Co. 62 1,515
Hawaiian Electric Industries Inc. 46 1,515
Rayonier Inc. 43 1,513
Interstate Bakeries Corp. 108 1,512
Henry Schein Inc.+ 62 1,511
Intertrust Technologies Corp.+ 151 1,510
Electro Scientific Industries Inc.+ 43 1,502
Coherent Inc.+ 43 1,497
Polaris Industries Partners LP "A" 43 1,494
Trinity Industries Inc. 62 1,492
--------------------------------------------------------------------------------
page 30 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Benchmark Electronics Inc.+ 37 $ 1,489
Johns Manville Corp. 162 1,488
Mercury Computer Systems Inc.+ 48 1,488
Cooper Tire & Rubber Co. 136 1,487
S3 Inc.+ 163 1,472
Claire's Stores Inc. 73 1,469
Berkley (W.R.) Corp. 43 1,465
Lancaster Colony Corp. 62 1,465
Superior Industries International Inc. 43 1,465
Ligand Pharmaceuticals Inc. "B"+ 98 1,458
O'Reilly Automotive Inc.+ 81 1,458
Priority Healthcare Corp. "B"+ 27 1,451
HRPT Properties Trust 225 1,448
NorthPoint Communications Group Inc.+ 214 1,445
Extended Systems Inc.+ 37 1,443
Alliant Techsystems Inc.+ 16 1,439
Swift Transportation Co. Inc.+ 100 1,425
Freeport-McMoRan Copper & Gold Inc.+ 179 1,421
U.S. Industries Inc. 160 1,420
Earthgrains Company (The) 70 1,417
Lone Star Technologies Inc.+ 35 1,405
Keane Inc.+ 108 1,404
Piedmont Natural Gas Co. 46 1,403
Alliance Semiconductor Corp.+ 70 1,400
Western Digital Corp.+ 233 1,398
Meristar Hospitality Corp. 73 1,396
Stein Mart Inc.+ 90 1,395
Allscripts Inc.+ 116 1,392
HCC Insurance Holdings Inc. 73 1,392
Spherion Corporation+ 117 1,389
Stone Energy Corp.+ 27 1,382
WebTrends Corp.+ 43 1,382
AnnTaylor Stores Corp.+ 46 1,380
PC-Tel Inc.+ 80 1,380
Three-Five Systems, Inc.+ 40 1,380
Electronics For Imaging Inc.+ 89 1,379
Silicon Graphics Inc.+ 306 1,377
IDX Systems Corp.+ 43 1,376
Avis Rent A Car Inc.+ 46 1,374
Digex Inc.+ 35 1,374
Werner Enterprises Inc. 98 1,372
CEC Entertainment Inc.+ 43 1,371
Timken Co. 97 1,364
Wisconsin Central Transportation Corp.+ 106 1,358
Longs Drug Stores Inc. 62 1,356
Micron Electronics Inc.+ 171 1,352
Kennametal Inc. 46 $ 1,351
Dendrite International Inc.+ 62 1,348
Pharmaceutical Product Development Inc.+ 43 1,346
Thomas & Betts Corp. 89 1,346
M-Systems Flash Disk Pioneers Ltd.+ 54 1,343
American Management Systems Inc.+ 62 1,341
AGCO Corp. 117 1,331
Xoma Ltd.+ 109 1,328
Casey's General Store Inc. 106 1,325
National Discounts Brokers Group Inc.+ 27 1,315
Invacare Corp. 46 1,311
El Paso Electric Co.+ 109 1,307
Applebee's International Inc. 43 1,299
IDEXX Laboratories Inc.+ 54 1,296
Patterson Energy Inc.+ 46 1,294
ADVO Inc.+ 35 1,288
Priceline.com Inc.+ 224 1,288
Universal Corporation 46 1,288
Azurix Corp.+ 206 1,287
Pittston Brink's Group 81 1,286
Actel Corp.+ 35 1,282
Mutual Risk Management Ltd. 70 1,269
Plug Power Inc.+ 53 1,269
National Service Industries Inc. 62 1,267
Mueller Industries Inc.+ 54 1,259
Footstar Inc.+ 35 1,256
Valuevision International Inc. "A"+ 62 1,256
Rent-A-Center Inc.+ 43 1,255
Sylvan Learning Systems Inc.+ 81 1,250
Briggs & Stratton Corp. 35 1,249
Flowserve Corp. 62 1,248
USG Corp. 73 1,246
Olin Corp. 70 1,243
Mid Atlantic Medical Services Inc.+ 73 1,241
Cabot Microelectronics Corp.+ 28 1,237
Healthcare Realty Trust 62 1,236
CompuCredit Corp.+ 40 1,235
Tom Brown Inc.+ 54 1,235
Furniture Brands International Inc.+ 73 1,232
Digital Island Inc.+ 97 1,225
Donnelley (R.H.) Co.+ 54 1,222
Robert Mondavi Corp. (The) "A"+ 27 1,222
Copart Inc.+ 81 1,220
DSP Group Inc.+ 43 1,220
FileNET Corp.+ 46 1,219
Modine Manufacturing Co. 46 1,213
C-Cube Microsystems Inc.+ 62 1,209
Storage USA Inc. 43 1,201
--------------------------------------------------------------------------------
iShares Schedules of Investments page 31
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Newpark Resources Inc.+ 133 $ 1,197
Staten Island Bancorp Inc. 62 1,197
Catalytica Inc.+ 89 1,196
Federal Realty Investment Trust 62 1,193
Motient Corp.+ 98 1,188
Brandywine Realty Trust 62 1,186
Wellman Inc. 79 1,185
Tredegar Corporation 62 1,182
Lands' End Inc.+ 46 1,180
Copper Mountain Networks Inc.+ 103 1,178
Excalibur Technologies Corp.+ 20 1,177
Scios Inc.+ 82 1,174
Seacor Smit Inc.+ 28 1,173
Broadbase Software Inc.+ 109 1,172
Manitowoc Co. Inc. 43 1,169
MascoTech Inc. 70 1,168
Bob Evans Farms Inc. 62 1,166
Developers Diversified Realty Corp. 97 1,158
Papa John's International Inc.+ 46 1,156
AXT Inc.+ 30 1,155
Sl Green Realty Corp. 43 1,153
Pinnacle Holdings Inc.+ 73 1,150
Regeneron Pharmaceuticals Inc.+ 43 1,150
AnswerThink Consulting Group Inc.+ 70 1,146
Packeteer Inc.+ 46 1,144
ProBusiness Services Inc.+ 35 1,144
Chittenden Corp. 43 1,142
Fairfield Communities Inc.+ 90 1,142
EGL Inc.+ 40 1,140
PanAmSat Corp.+ 34 1,139
Dionex Corp.+ 35 1,135
AmerUs Group Co. 43 1,134
Community First Bankshares Inc. 73 1,131
Kilroy Realty Corp. 43 1,121
Forest Oil Corp.+ 81 1,119
AptarGroup Inc. 54 1,117
Alaska Air Group Inc.+ 43 1,115
Children's Place Retail Stores Inc.+ 43 1,115
Bio-Technology General Corp.+ 106 1,113
Washington Group International Inc.+ 106 1,113
Doral Financial Corp. 62 1,108
Ferro Corp. 54 1,107
US Freightways Corp. 43 1,107
Syncor International Corp.+ 43 1,105
Charming Shoppes Inc.+ 179 1,096
Phoenix Investment Partners Ltd. 70 1,094
Polymedica Industries Inc.+ 19 $ 1,093
Nationwide Health Properties Inc. 73 1,090
Carpenter Technology Corp. 35 1,085
F5 Networks Inc.+ 35 1,085
Aware Inc.+ 35 1,083
Concord Camera Corp.+ 35 1,083
Richmond County Financial Corp. 46 1,081
Core Laboratories NV+ 50 1,078
E-Town Corp. 16 1,078
Tower Automotive Inc.+ 98 1,078
Dole Food Co. 89 1,074
Insituform Technologies Inc. "A"+ 30 1,071
Computer Network Technology Corp.+ 35 1,064
Cell Genesys Inc.+ 46 1,061
Macerich Co. (The) 54 1,060
Respironics Inc.+ 54 1,060
Aztar Corp.+ 70 1,059
Dreyer's Grand Ice Cream Inc. 43 1,059
Hall Kinion & Associates Inc.+ 40 1,057
Park Electrochemical Corp. 16 1,057
Advanced Digital Information Corp.+ 81 1,053
Superior Energy Services Inc.+ 117 1,053
Lilly Industries Inc. "B" 35 1,050
Veritas DGC Inc.+ 35 1,050
Silicon Image Inc.+ 89 1,046
Shurgard Storage Centers Inc. 46 1,044
Maverick Tube Corp.+ 67 1,043
Avant! Corp.+ 62 1,042
Horace Mann Educators Corp. 62 1,042
Coulter Pharmaceutical Inc.+ 27 1,034
Stewart & Stevenson Services Inc. 43 1,032
Alliance Pharmaceutical Corp.+ 73 1,031
Kulicke & Soffa Industries Inc.+ 70 1,028
WMS Industries Inc.+ 46 1,024
Pharmacyclics Inc.+ 19 1,022
Service Corp. International+ 441 1,020
Wallace Computer Services Inc. 70 1,015
Haemonetics Corp.+ 43 1,010
Kaydon Corp. 46 1,009
Western Gas Resources Inc. 46 1,009
Northwest Natural Gas Co. 43 1,008
Overseas Shipholding Group Inc. 42 1,008
Key3Media Group Inc.+ 106 1,007
UTStarcom, Inc.+ 50 1,000
CBL & Associates Properties Inc. 43 994
GoTo.com Inc.+ 70 993
Banta Corp. 43 992
MacDermid Inc. 46 989
--------------------------------------------------------------------------------
page 32 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
HI/FN Inc.+ 16 $ 988
Pharmacopeia Inc.+ 54 986
Sonic Corp.+ 27 986
Ohio Casualty Corp. 117 984
Acuson Corp.+ 43 981
Granite Construction Inc. 43 981
Pinnacle Entertainment Inc.+ 43 981
Cost Plus Inc.+ 35 980
LTX Corp.+ 70 980
Queens County Bancorp Inc. 35 980
Helix Technology Corp. 35 976
Wolverine World Wide Inc. 90 973
Photronics Inc.+ 43 970
G&K Services Inc. "A" 35 967
Interface Inc. 106 967
Atlantic Coast Airlines Holdings Inc.+ 27 965
Glenayre Technologies Inc.+ 117 965
ANADIGICS Inc.+ 43 962
ESS Technology Inc.+ 62 961
Jeffries Group Inc. 35 954
LookSmart Ltd.+ 135 953
Zoran Corp.+ 19 952
Georgia Gulf Corp. 71 950
Unifi Inc.+ 109 947
ATMI, Inc.+ 50 944
Hutchinson Technology Inc.+ 43 943
Michael Foods Inc. 35 943
Pacific Sunwear of California Inc.+ 46 943
NCO Group Inc.+ 43 941
Zygo Corp.+ 19 941
Covance Inc.+ 109 940
Gene Logic Inc.+ 43 938
Regis Corp. 62 938
Fleetwood Enterprises Inc. 71 936
Prime Hospitality Corp.+ 98 931
Kansas City Southern Industries Inc. 107 930
LNR Property Corp. 43 930
Wausau-Mosinee Paper Corp. 106 928
Constellation Brands Inc.+ 19 926
Ciber Inc.+ 117 914
Metro-Goldwyn-Mayer Inc.+ 46 906
Sinclair Broadcast Group "A"+ 98 903
Trans World Entertainment Corp.+ 106 901
internet.com LLC+ 43 895
Waste Connections Inc.+ 35 895
Input/Output Inc.+ 106 894
S1 Corp.+ 73 $ 881
Fleming Companies Inc. 62 880
Bally Total Fitness Holding Corp.+ 35 873
Triarc Companies Inc.+ 35 873
Chelsea GCA Realty Inc. 27 871
Manufactured Home Communities Inc. 35 871
eLoyalty Corp.+ 90 866
Guilford Pharmaceuticals Inc.+ 35 864
JDN Realty Corp. 79 864
Parker Drilling Co.+ 144 864
Russell Corp. 54 864
Milacron Inc. 54 861
Colonial Properties Trust 35 860
Rural Cellular Corp. "A"+ 16 860
US Oncology Inc.+ 160 860
Republic Bancorp Inc. 90 855
Complete Business Solutions Inc.+ 82 851
AMCORE Financial Inc. 43 844
Cabot Oil & Gas Corp. "A" 43 844
Petsmart Inc.+ 190 843
Puma Technology Inc.+ 62 841
MAF Bancorp Inc. 35 840
New Era of Networks Inc.+ 54 840
Kellwood Co. 43 836
Network Plus Corp.+ 106 835
Trimble Navigation Ltd.+ 35 831
AXENT Technologies Inc.+ 43 825
Ultratech Stepper Inc.+ 35 823
Great Atlantic & Pacific Tea Co. 82 820
Sunrise Assisted Living Inc.+ 35 818
Metricom Inc.+ 46 817
Texas Industries Inc. 35 816
Biosite Diagnostics Inc.+ 37 814
Health Care Inc. 46 814
Provident Bankshares Corp. 43 814
NBTY Inc.+ 125 813
RFS Hotel Investors Inc. 63 811
NextCard Inc.+ 106 808
Allen Telecom Inc.+ 43 803
MSC Industrial Direct Co. Inc. "A"+ 54 803
eToys Inc.+ 214 802
Kent Electronics Corp.+ 43 801
InterDigital Communications Corp.+ 73 798
Kaman Corp. "A" 55 797
PRI Automation Inc.+ 35 792
Duane Reade Inc.+ 27 788
Remedy Corp.+ 46 788
ITC DeltaCom Inc.+ 97 785
--------------------------------------------------------------------------------
iShares Schedules of Investments page 33
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Littelfuse Inc.+ 27 $ 783
Ocwen Financial Corp.+ 133 781
Advanced Tissue Sciences Inc.+ 109 777
Schulman (A.) Inc. 71 777
Yellow Corporation+ 43 774
Harbor Florida Bancshares Inc. 63 772
Tumbleweed Communications Corp.+ 45 771
Performance Food Group Co.+ 19 770
Cytogen Corp.+ 133 765
Zomax Optical Media Inc.+ 126 764
First Sentinel Bancorp Inc. 82 761
Mentor Corp. 43 758
Steelcase Inc. 43 758
Cato Corp. "A" 63 756
Landstar System Inc.+ 16 756
Valence Technology Inc.+ 54 753
P-Com Inc.+ 133 748
Phillips-Van Heusen Corporation 63 748
Selective Insurance Group Inc. 43 742
Airborne Freight Corp. 73 739
Glenborough Realty Trust Inc. 46 739
IHOP Corp.+ 35 739
Sterling Bancshares Inc. 43 739
Tesoro Petroleum Corp.+ 71 737
Home Properties of NY Inc. 27 734
PacifiCare Health Systems Inc. "A"+ 70 731
Read-Rite Corp.+ 98 729
Del Webb Corp.+ 27 726
Presstek Inc.+ 46 725
SCM Microsystems Inc.+ 19 722
Enhance Financial Services Group Inc. 62 721
C-COR Electronics Inc.+ 46 719
Republic Security Financial Corp. 106 719
RadiSys Corp.+ 27 716
Brooks Automation Inc.+ 27 715
Trico Marine Services Inc.+ 43 715
BE Aerospace Inc.+ 43 709
Sunrise Technologies International Inc.+ 98 707
Brightpoint Inc.+ 106 706
Hunt (J.B.) Transport Services Inc. 54 705
Modis Professional Services Inc.+ 171 705
Watts Industries Inc. "A" 63 705
Polaroid Corp. 70 704
Viatel Inc.+ 73 703
Sunglass Hut International Inc.+ 90 698
Owens & Minor Inc. 46 696
Inprise Corp.+ 109 $ 695
InterVoice Inc.+ 71 694
Sanchez Computer Associates Inc.+ 43 691
Asyst Technologies Inc.+ 46 690
ACTV Inc.+ 70 689
Mpower Communications Corp.+ 106 689
FirstFed Financial Corp.+ 27 688
UniSource Energy Corp. 46 687
Koger Equity Inc. 43 685
Nautica Enterprises Inc.+ 54 682
Meridian Gold Inc.+ 136 680
Meridian Resource Corp. (The)+ 98 680
Dress Barn Inc.+ 27 677
IMRglobal Corp.+ 82 676
Adelphia Business Solutions Inc.+ 108 675
NBC Internet Inc. "A"+ 109 674
IGEN International Inc.+ 27 672
Meditrust Corp.+ 244 671
Presidential Life Corp. 46 670
Biomatrix Inc.+ 35 669
Quiksilver Inc.+ 35 669
StarMedia Network Inc.+ 109 668
Lone Star Steakhouse & Saloon Inc. 79 667
Anchor Bancorp Wisconsin Inc. 43 664
Systems & Computer Technology Corp.+ 46 664
East West Bancorp Inc. 35 663
Bowne & Co. Inc. 79 662
Ryan's Family Steak Houses Inc.+ 79 662
Xcelera.com Inc.+ 55 660
Metasolv Software Inc.+ 53 659
ANTEC Corp.+ 54 658
Datascope Corp. 19 658
Hughes Supply Inc. 35 656
Citadel Communications Corp.+ 54 655
SLI Inc. 79 652
Orbital Sciences Corp.+ 82 651
WebLink Wireless Inc.+ 82 651
Xircom Inc.+ 46 650
About.com Inc.+ 27 648
Standard Microsystems Corp.+ 27 648
Bethlehem Steel Corp.+ 225 647
Ralcorp Holdings Inc.+ 46 647
Seitel Inc.+ 43 645
Hyperion Solutions Corp.+ 46 644
Genzyme Transgenics Corp.+ 30 643
Fuller (H.B.) Co. 19 642
South Financial Group Inc. (The) 63 642
Atwood Oceanics Inc.+ 19 638
--------------------------------------------------------------------------------
page 34 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Auspex Systems Inc.+ 63 $ 638
Springs Industries Inc. "A" 27 636
Caraustar Industries Inc. 63 634
Geron Corp.+ 27 634
MetaCreations Corp.+ 63 630
Cyberonics Inc.+ 27 628
Cell Pathways Inc.+ 82 625
OfficeMax Inc.+ 217 624
Genesco Inc.+ 35 621
Scott Technologies Inc.+ 27 621
Transaction Systems Architects Inc. "A"+ 46 621
Internet Pictures Corp.+ 288 616
Stericycle Inc.+ 19 615
Arthocare Corp.+ 27 613
Intergraph Corp.+ 98 612
SilverStream Software Inc.+ 27 608
GBC Bancorp 19 606
Offshore Logistics Inc.+ 35 604
Esterline Corp.+ 27 602
Fossil Inc.+ 46 601
Mills Corp. 35 597
Pioneer-Standard Electronics Inc. 43 597
American Capital Strategies Ltd. 27 596
Activision Inc.+ 43 594
NUI Corp. 19 593
EntreMed Inc.+ 19 591
WD-40 Company 27 591
Regal-Beloit Corp. 35 586
Cheap Tickets Inc.+ 55 584
UCBH Holdings Inc. 16 582
Westpoint Stevens Inc. 81 582
UCAR International Inc.+ 70 578
Bay View Capital Corp. 71 577
Organogenesis Inc.+ 46 577
Razorfish Inc.+ 127 572
World Access Inc.+ 117 570
Texas Regional Bancshares "A" 19 568
Ionics Inc.+ 27 565
Checkpoint Systems Inc.+ 71 564
Cygnus Inc.+ 63 563
Arkansas Best Corp.+ 35 560
Ask Jeeves Inc.+ 43 559
Structural Dynamics Research Corp.+ 54 557
Multex.com Inc.+ 43 556
Airtran Holdings Inc.+ 125 555
Roadway Express Inc. 27 555
Supergen Inc.+ 43 $ 554
THQ Inc.+ 27 554
Cohu Inc. 35 553
Hyseq Inc.+ 19 552
Parexel International Corp.+ 63 551
NaviSite Inc.+ 54 550
Globix Corp.+ 54 547
Prodigy Communications Corp. "A"+ 125 547
Accrue Software Inc.+ 118 546
American Italian Pasta Co.+ 27 542
Southwest Securities Group Inc. 19 537
Basin Exploration Inc.+ 27 535
Kos Pharmaceuticals Inc.+ 27 535
Take-Two Interactive Software Inc.+ 43 535
Viant Corp.+ 90 534
Micros Systems Inc.+ 27 533
Inter-Tel Inc. 46 532
Chesapeake Corp. 27 530
I-Stat Corp.+ 27 530
Trenwick Group Ltd. 27 530
Terex Corp.+ 43 529
APAC Customer Services Inc.+ 98 527
JDA Software Group Inc.+ 35 527
Profit Recovery Group International Inc.
(The)+ 98 527
Chemed Corp. 16 526
Network Equipment Technologies Inc.+ 55 523
Evergreen Resources Inc.+ 19 522
Picturetel Corp.+ 82 521
Battle Mountain Gold Co.+ 376 517
AAR Corp. 43 513
RTI International Metals Inc.+ 35 508
Equity Inns Inc. 82 507
Grace (W.R.) & Company+ 133 507
Albany International Corp.+ 46 494
Electroglas Inc.+ 35 492
Oceaneering International Inc.+ 35 492
Avid Technology Inc.+ 35 486
Mail-Well Inc.+ 98 484
Stride Rite Corp. 90 484
Sykes Enterprises Inc.+ 90 484
BackWeb Technologies Ltd.+ 54 483
NABI Inc.+ 79 483
Calgon Carbon Corp. 82 482
Fremont General Corp. 133 482
Emisphere Technologies Inc.+ 19 481
Data Broadcasting Corp.+ 109 480
Finish Line Inc. (The)+ 63 480
--------------------------------------------------------------------------------
iShares Schedules of Investments page 35
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (Continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
Novoste Corp.+ 19 $ 480
Audiovox Corp. "A"+ 35 479
Casella Waste Systems Inc. "A"+ 55 478
Pep Boys-Manny Moe & Jack Inc. 106 477
General Cable Corp. 79 474
Ryerson Tull Inc. 63 473
Friede Goldman Halter Inc.+ 82 471
Teligent Inc. "A"+ 62 471
Young Broadcasting Corp. "A"+ 19 471
MP3.com Inc.+ 133 470
Hearst-Argyle Television Inc.+ 26 466
Guitar Center Inc.+ 35 464
ZixIt Corp.+ 19 464
Intraware Inc.+ 63 461
Monaco Coach Corp.+ 27 461
Haven Bancorp Inc. 16 458
StarBase Corp.+ 90 458
International Multifoods Corp. 27 457
Project Software & Development Inc.+ 35 455
Cambridge Technology Partners Inc.+ 117 453
Shopko Stores Inc.+ 71 453
Capital Automotive 35 451
ePresence Inc.+ 63 445
Viropharma Inc.+ 19 444
Wabash National Corp. 55 440
Uniroyal Technology Corp.+ 43 438
Carrier Access Corp.+ 35 437
SpeedFam-IPEC Inc.+ 46 437
Columbia Laboratories Inc.+ 71 435
Pediatrix Medical Group Inc.+ 27 430
Dime Community Bancshares 19 422
Elcor Corp. 27 420
Rare Medium Group Inc.+ 90 416
EMCOR Group Inc.+ 16 415
Magic Software Enterprises Ltd.+ 71 413
Miravant Medical Technologies+ 27 408
Genome Therapeutics Corp.+ 27 403
Winnebago Industries Inc. 35 403
FSI International Inc.+ 43 400
Net.B@nk Inc.+ 46 400
Primus Telecommunications Group Inc.+ 79 400
PSS World Medical Inc.+ 133 399
kForce.com Inc.+ 98 398
OceanFirst Financial Corp. 19 398
USinternetworking Inc.+ 171 395
CACI International Inc. "A"+ 19 392
Cleveland-Cliffs Inc. 19 392
Talk.com Inc.+ 125 387
Burnham Pacific Properties Inc. 71 386
Stamps.com Inc.+ 98 386
Immune Response Corp.+ 63 382
Champion Enterprises Inc.+ 98 380
Ha-Lo Industries Inc.+ 98 380
Stewart Enterprises Inc. "A" 179 380
US LEC Corp. "A"+ 63 378
American Classic Voyages Co.+ 27 373
Dura Automotive Systems Inc.+ 44 371
Imatron Inc.+ 171 369
Jupiter Media Metrix Inc.+ 27 368
InfoCure Corp.+ 71 362
Pacific Northwest Bancorp 27 361
Digital River Inc.+ 55 359
E.W. Blanch Holdings Inc. 19 359
National Information Consortium Inc.+ 106 358
Symmetricom Inc.+ 28 357
Computer Horizons Corp.+ 71 355
PFF Bancorp Inc. 19 352
Wild Oats Markets Inc.+ 55 347
Navigant Consulting Co.+ 90 343
iXL Enterprises Inc.+ 133 341
Tenneco Automotive Inc. 79 341
NetSpeak Corp.+ 44 336
Vertel Corp.+ 63 335
Theragenics Corp.+ 71 333
General Magic Inc.+ 82 331
NEON Communications Inc.+ 27 326
CPI Corp. 16 323
Modem Media Inc.+ 55 323
Arch Wireless Inc.+ 106 318
Rhythms Netconnections Inc.+ 144 315
Allaire Corp.+ 43 314
High Speed Access Corp.+ 106 311
CyberSource Corp.+ 55 302
Finova Group Inc. 117 300
SportsLine USA Inc.+ 35 300
Open Market Inc.+ 90 298
Actuant Corp. "A" 82 297
Westell Technologies Inc.+ 54 297
Pope & Talbot Inc. 19 296
Student Advantage Inc.+ 79 296
Neotopia Inc.+ 27 294
Medallion Financial Corp. 19 292
e.spire Communications Inc.+ 106 291
Warnaco Group Inc. "A" 109 286
--------------------------------------------------------------------------------
page 36 iShares
<PAGE>
iShares Dow Jones U.S. Total Market Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
24/7 Media Inc.+ 55 $ 285
Ames Department Stores Inc.+ 71 280
Applica Inc.+ 55 278
Astec Industries Inc.+ 27 278
Hollywood Entertainment Corp.+ 90 276
CellStar Corp.+ 117 271
Labor Ready Inc.+ 90 270
Sangstat Medical Corp.+ 27 270
3Dfx Interactive Inc.+ 63 268
Wolverine Tube Inc.+ 19 259
Laser Vision Centers Inc.+ 63 256
Geoworks Corp.+ 52 255
EMS Technologies Inc.+ 16 254
Advanced Radio Telecom Corp.+ 63 248
Vans Inc.+ 19 246
Be Inc.+ 79 242
Osteotech Inc.+ 44 242
Jakks Pacific Inc.+ 27 238
ePlus Inc.+ 16 234
BSB Bancorp Inc. 16 232
CAIS Internet Inc.+ 55 232
Gliatech Inc.+ 36 232
Brooktrout Technology Inc.+ 16 231
Ventro Corporation+ 46 221
Elcom International Inc.+ 63 220
Juno Online Services Inc.+ 82 218
LTV Corp. 179 213
Mercator Software Inc.+ 46 210
Northfield Laboratories Inc.+ 19 210
Concord Communications Inc.+ 27 209
Marimba Inc.+ 35 208
SYNAVANT Inc.+ 45 205
Per-Se Technologies Inc.+ 46 203
PTEK Holdings Inc.+ 98 199
Superconductor Technologies Inc.+ 19 192
Clarus Corp.+ 19 190
Trans World Airlines Inc.+ 117 183
Armstrong Holdings Inc. 62 178
Epicor Software Corp.+ 82 161
QRS Corp.+ 19 160
Net Perceptions Inc.+ 43 142
Exchange Applications Inc.+ 43 138
Robotic Vision Systems Inc.+ 25 137
InterWorld Corp.+ 43 94
Federal-Mogul Corp. 25 81
Allied Riser Communications Corp.+ 25 80
Shares or
Security Principal Value
---------------------------------------------------------------
ICG Communications Inc.+ 98 $ 43
Xceed Inc.+ 52 41
---------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $30,627,662) 30,123,353
---------------------------------------------------------------
REPURCHASE AGREEMENT - 0.07%
---------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $20,374 and an
effective yield of 5.65%. $ 20,370 20,370
---------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $20,370) 20,370
---------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.02%
(Cost: $30,648,032) 30,143,723
---------------------------------------------------------------
Other Assets, Less Liabilities -- (0.02%) (6,375)
---------------------------------------------------------------
NET ASSETS -- 100.00% $30,137,348
===============================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 37
<PAGE>
iShares Dow Jones U.S. Basic Materials Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
-------------------------------------------------------------
COMMON STOCKS - 100.01%
-------------------------------------------------------------
Du Pont (E.I.) de Nemours 40,097 $1,819,401
Alcoa Inc. 33,264 954,261
Dow Chemical Co. 26,093 799,098
International Paper Co. 18,603 681,335
Weyerhaeuser Co. 8,205 385,122
Air Products & Chemicals Inc. 8,802 328,425
Praxair Inc. 6,068 226,033
Union Carbide Corp. 5,176 222,568
Avery Dennison Corp. 4,279 216,089
Georgia-Pacific Corp. 6,540 175,763
Rohm & Haas Co. "A" 5,816 174,844
Ecolab Inc. 4,249 166,508
Phelps Dodge Corp. 3,017 141,045
Willamette Industries Inc. 3,693 134,102
Eastman Chemical Co. 2,963 127,039
Westvaco Corp. 3,893 110,951
Mead Corp. 3,720 107,648
Bowater Inc. 1,880 101,755
Engelhard Corp. 4,874 101,745
Nucor Corp. 2,882 99,969
Georgia-Pacific (Timber Group) 3,061 86,665
Sigma-Aldrich Corp. 2,423 86,622
Newmont Mining Corp. 5,814 78,852
Hercules Inc. 4,079 74,697
Boise Cascade Corp. 2,228 63,916
Cabot Corp. 2,568 56,496
Great Lakes Chemical Corp. 1,662 55,469
USX-U.S. Steel Group Inc. 3,421 54,522
Solutia Inc. 4,123 52,568
IMC Global Inc. 3,979 51,478
Cytec Industries Inc.+ 1,408 48,752
Lubrizol Corp. 2,072 44,937
Allegheny Technologies Inc. 2,144 43,416
Stillwater Mining Co.+ 1,483 43,007
OM Group Inc. 920 42,550
Millennium Chemicals Inc. 2,467 39,780
Cabot Microelectronics Corp.+ 889 39,283
AK Steel Holding Corp. 4,016 37,147
Rayonier Inc. 1,047 36,841
RPM Inc. 3,945 35,258
Crompton Corp. 4,403 35,224
Louisiana-Pacific Corp. 4,035 34,297
Homestake Mining Company+ 7,909 32,625
Olin Corp. 1,742 $ 30,921
Ferro Corp. 1,337 27,408
Lilly Industries Inc. "B" 877 26,310
Carpenter Technology Corp. 757 23,467
MacDermid Inc. 1,059 22,768
Wellman Inc. 1,227 18,405
Fuller (H. B.) Co. 541 18,293
Freeport-McMoRan Copper & Gold Inc.+ 2,283 18,121
Tredegar Corporation 927 17,671
Georgia Gulf Corp. 1,117 14,940
Meridian Gold Inc.+ 2,868 14,340
Bethlehem Steel Corp.+ 4,840 13,915
WD-40 Company 592 12,950
Wausau-Mosinee Paper Corp. 1,469 12,854
Schulman (A.) Inc. 1,162 12,709
Caraustar Industries Inc. 992 9,982
Grace (W.R.) & Company+ 2,605 9,932
Battle Mountain Gold Co.+ 6,380 8,772
Pope & Talbot Inc. 541 8,419
Cleveland-Cliffs Inc. 406 8,374
RTI International Metals Inc.+ 551 7,990
Calgon Carbon Corp. 1,333 7,831
Ryerson Tull Inc. 954 7,155
LTV Corp. 3,876 4,603
-------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $8,953,438) 8,606,233
-------------------------------------------------------------
REPURCHASE AGREEMENT - 0.04%
-------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $3,270 and an
effective yield of 5.65%. $ 3,269 3,269
-------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $3,269) 3,269
-------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.05%
(Cost: $8,956,707) 8,609,502
-------------------------------------------------------------
Other Assets, Less Liabilities -- (0.05%) (4,180)
-------------------------------------------------------------
NET ASSETS -- 100.00% $8,605,322
=============================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
page 38 iShares
<PAGE>
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------
COMMON STOCKS - 99.98%
--------------------------------------------------------------
Wal-Mart Stores Inc. 27,439 $ 1,245,045
Home Depot Inc. 22,954 987,022
Time Warner Inc. 10,885 826,280
Walt Disney Co. (The) 20,657 739,779
Viacom Inc. "B"+ 12,635 718,616
Ford Motor Company 18,762 490,157
Walgreen Co. 10,018 457,071
AT&T - Liberty Media Group "A"+ 23,514 423,252
McDonald's Corp. 13,090 405,790
Comcast Corp. "A"+ 8,667 353,180
Clear Channel Communications Inc.+ 5,328 320,013
General Motors Corp. "A" 5,028 312,365
Cardinal Health Inc. 2,716 257,341
Target Corporation 9,042 249,785
CVS Corp. 3,868 204,762
Omnicom Group Inc. 1,772 163,467
Costco Wholesale Corp.+ 4,448 162,908
Lowe's Companies Inc. 3,498 159,815
Gannett Co. Inc. 2,622 152,076
Kohls Corp.+ 2,700 146,306
Harley-Davidson Inc. 3,008 144,948
Gap Inc. 5,584 144,137
Eastman Kodak Co. 3,051 136,914
Interpublic Group of Companies Inc. 2,990 128,383
Southwest Airlines Co. 4,416 125,856
McGraw-Hill Companies Inc. 1,939 124,460
RadioShack Corp. 1,852 110,426
Carnival Corp. "A" 4,398 109,125
Sears, Roebuck and Co. 3,487 103,669
Best Buy Co. Inc.+ 2,037 102,232
Limited Inc. 3,580 90,395
Delphi Automotive Systems Corp. 5,539 86,893
Amazon.com Inc.+ 2,362 86,508
Cox Communications Inc. "A"+ 1,941 85,525
May Department Stores Co. 3,148 82,635
Starbucks Corp.+ 1,830 81,778
TJX Companies Inc. 2,932 79,897
Marriott International Inc. 1,861 75,370
Bed Bath & Beyond Inc.+ 2,803 72,352
McKesson HBOC Inc. 2,448 68,697
Nike Inc. "B" 1,682 67,175
Federated Department Stores Inc.+ 2,048 66,688
NTL Inc.+ 1,497 65,774
Staples Inc.+ 4,525 64,481
Tiffany & Co. 1,457 $ 62,196
Electronic Arts Inc.+ 1,198 59,900
Delta Air Lines Inc. 1,205 56,936
Starwood Hotels & Resorts Worldwide Inc. 1,910 56,584
CDW Computer Centers Inc.+ 861 55,481
Cablevision Systems Corp.+ 728 54,236
Mattel Inc. 4,191 54,221
New York Times Co. "A" 1,437 52,810
Univision Communications Inc.+ 1,348 51,561
Johnson Controls Inc. 846 50,443
AMR Corp.+ 1,482 48,535
TMP Worldwide Inc.+ 685 47,682
Tribune Co. 1,169 43,326
Dollar General Corp. 2,787 43,198
TRW Inc. 1,024 43,008
Tricon Global Restaurants Inc.+ 1,433 42,990
Charter Communications Inc.+ 2,203 42,958
Echostar Communications Corp.+ 943 42,671
Knight Ridder Inc. 747 37,537
Toys R Us Inc.+ 2,147 36,902
USA Networks Inc.+ 1,771 35,863
Genuine Parts Co. 1,631 34,761
Scripps (E.W.) Company 592 34,595
Harrah's Entertainment Inc.+ 1,202 34,407
AutoZone Inc.+ 1,254 33,623
Family Dollar Stores Inc. 1,689 32,830
Dana Corp. 1,475 32,727
Hilton Hotels Corp. 3,419 32,480
Leggett & Platt Inc. 1,954 31,997
Readers Digest Association Inc. (The) "A" 857 31,441
Whirlpool Corp. 705 30,668
Park Place Entertainment Corp.+ 2,371 30,230
Harcourt General Inc. 527 29,538
Dow Jones & Co. Inc. 498 29,320
Goodyear Tire & Rubber Co. 1,545 28,582
Kmart Corp.+ 4,757 28,245
Darden Restaurants Inc. 1,217 27,382
Continental Airlines Inc. "B"+ 513 26,932
Circuit City Stores Inc. 2,022 26,791
Caremark Rx Inc.+ 2,103 26,287
Brinker International Inc.+ 646 25,355
Office Depot Inc.+ 3,029 25,179
US Airways Group Inc.+ 663 25,028
VF Corp. 902 24,636
Viacom Inc. "A"+ 428 24,503
Jones Apparel Group Inc.+ 875 24,336
--------------------------------------------------------------------------------
iShares Schedules of Investments page 39
<PAGE>
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------
COMMON STOCKS (continued)
--------------------------------------------------------------
Fox Entertainment Group Inc.+ 1,122 $ 24,123
UnitedGlobalCom Inc. "A"+ 757 24,082
BJ's Wholesale Club Inc.+ 723 23,814
International Game Technology Inc.+ 642 23,513
Abercrombie & Fitch Co.+ 992 23,374
Penney (J.C.) Company Inc. 1,958 22,884
Dollar Tree Stores Inc.+ 583 22,810
Visteon Corp. 1,287 22,764
Maytag Corp. 774 22,156
Amerisource Health Corp. "A"+ 508 22,066
MGM Grand Inc. 629 21,740
AutoNation Inc.+ 3,203 21,620
Liz Claiborne Inc. 482 20,485
Hispanic Broadcasting Corp.+ 654 20,437
Herman Miller Inc. 777 20,299
Wendy's International Inc. 912 19,836
DoubleClick Inc.+ 1,207 19,614
Northwest Airlines Corp. "A"+ 685 19,522
UAL Corp. 510 19,348
Washington Post Company (The) "B" 36 19,229
Outback Steakhouse Inc.+ 672 19,152
Lamar Advertising Co.+ 374 17,952
Lear Corp.+ 652 17,767
Fastenal Co. 307 17,633
Belo (A.H.) Corp. 916 17,576
Primedia Inc.+ 1,546 17,489
Shaw Industries Inc. 924 17,152
Gentex Corp.+ 692 17,127
Royal Caribbean Cruises Ltd. 753 16,943
Sirius Satellite Radio Inc.+ 331 16,633
Hasbro Inc. 1,547 16,630
True North Communications Inc. 441 16,620
Venator Group Inc.+ 1,167 16,484
Brunswick Corp. 796 15,472
Lennar Corp. 479 15,388
Harman International Industries Inc. 315 15,120
Valassis Communications Inc.+ 538 14,930
Nordstrom Inc. 887 14,580
Mandalay Resort Group Inc.+ 694 14,444
Pixar Inc.+ 431 14,223
Pegasus Communications Corp.+ 395 14,047
Adelphia Communications Corp. "A"+ 414 13,740
SkyWest Inc. 267 13,484
Saks Inc.+ 1,308 13,325
Consolidated Stores Corp.+ 1,097 $ 13,027
Pier 1 Imports Inc. 969 12,839
Entercom Communications Corp.+ 322 12,618
Insight Enterprises Inc.+ 388 12,610
Chris-Craft Industries Inc.+ 167 12,274
Callaway Golf Co. 759 12,144
Six Flags Inc.+ 777 12,141
Linens 'N Things Inc.+ 388 11,931
ArvinMeritor Inc. 701 11,742
Zale Corp.+ 325 11,009
Scholastic Corp.+ 137 10,960
Ross Stores Inc. 819 10,801
Cheesecake Factory (The)+ 243 10,768
American Greetings Corp. "A" 592 10,767
Houghton Mifflin Co. 292 10,749
Mohawk Industries Inc.+ 492 10,732
Borders Group Inc.+ 772 10,712
Reebok International Ltd.+ 493 10,630
Pulte Corp. 307 10,227
CBRL Group Inc. 565 10,099
Hollinger International Inc. 648 10,004
D.R. Horton Inc. 538 9,953
Wiley (John) & Sons Inc. "A" 487 9,953
Comcast Corp.+ 243 9,750
Barnes & Noble Inc.+ 505 9,532
Meredith Corp. 300 9,525
Harte-Hanks Inc. 430 9,514
Anchor Gaming+ 112 9,513
Ethan Allen Interiors Inc. 324 9,477
Dillards Inc. "A" 900 9,450
Williams-Sonoma Inc.+ 445 9,262
Talbots Inc. (The) 117 9,250
American Eagle Outfitters Inc.+ 268 9,229
Jack in the Box Inc.+ 374 9,163
Borg-Warner Automotive Inc. 241 9,098
Cox Radio Inc. "A"+ 395 8,986
Claire's Stores Inc. 440 8,855
Emmis Communications Corp.+ 327 8,747
AnnTaylor Stores Corp.+ 281 8,430
Rite Aid Corp.+ 3,272 8,385
CEC Entertainment Inc.+ 262 8,351
Furniture Brands International Inc.+ 493 8,319
Polaris Industries Partners LP "A" 233 8,097
Priority Healthcare Corp. "B"+ 148 7,955
Michaels Stores Inc.+ 324 7,877
O'Reilly Automotive Inc.+ 437 7,866
--------------------------------------------------------------------------------
page 40 iShares
<PAGE>
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------
COMMON STOCKS (continued)
--------------------------------------------------------------
Valuevision International Inc. "A"+ 377 $ 7,634
Toll Brothers Inc.+ 227 7,378
Applebee's International Inc. 242 7,309
ADVO Inc.+ 198 7,289
Cooper Tire & Rubber Co. 653 7,142
Footstar Inc.+ 190 6,816
Alaska Air Group Inc.+ 258 6,692
Donnelley (R.H.) Co.+ 294 6,652
Kaufman & Broad Home Corp. 222 6,604
Bob Evans Farms Inc. 345 6,490
Superior Industries International Inc. 189 6,438
Pacific Sunwear of California Inc.+ 309 6,334
Sonic Corp.+ 171 6,242
Charming Shoppes Inc.+ 1,012 6,199
Atlantic Coast Airlines Holdings Inc.+ 170 6,077
Aztar Corp.+ 397 6,005
Bally Total Fitness Holding Corp.+ 237 5,910
Cost Plus Inc.+ 202 5,656
Tower Automotive Inc.+ 488 5,368
MascoTech Inc. 318 5,307
Rent-A-Center Inc.+ 181 5,283
Concord Camera Corp.+ 168 5,197
Pinnacle Entertainment Inc.+ 227 5,178
Unifi Inc.+ 581 5,047
Duane Reade Inc.+ 172 5,020
Stein Mart Inc.+ 318 4,929
Del Webb Corp.+ 179 4,811
Oakley Inc.+ 225 4,725
Longs Drug Stores Inc. 212 4,637
Kellwood Co. 236 4,587
Kenneth Cole Productions "A"+ 100 4,544
Petsmart Inc.+ 1,007 4,469
Modine Manufacturing Co. 167 4,405
International Speedway Corp. "A" 137 4,401
Papa John's International Inc.+ 175 4,397
Metro-Goldwyn-Mayer Inc.+ 222 4,371
Citadel Communications Corp.+ 360 4,365
Polaroid Corp. 421 4,236
Quiksilver Inc.+ 220 4,208
Fleetwood Enterprises Inc. 319 4,207
Sinclair Broadcast Group "A"+ 450 4,148
ACTV Inc.+ 407 4,006
IHOP Corp.+ 187 3,950
eToys Inc.+ 1,044 3,915
Nautica Enterprises Inc.+ 305 3,851
THQ Inc.+ 187 3,834
Wolverine World Wide Inc. 349 3,774
Genesco Inc.+ 210 3,727
Interface Inc. 407 3,714
Prime Hospitality Corp.+ 382 3,629
Station Casinos Inc.+ 225 3,628
Take-Two Interactive Software Inc.+ 282 3,507
Dress Barn Inc.+ 137 3,434
WMS Industries Inc.+ 154 3,427
Lands' End Inc.+ 132 3,386
Steelcase Inc. 192 3,384
Trans World Entertainment Corp.+ 387 3,290
Young Broadcasting Corp. "A"+ 132 3,275
Activision Inc.+ 237 3,274
Airtran Holdings Inc.+ 698 3,097
Sunglass Hut International Inc.+ 357 2,767
Stride Rite Corp. 512 2,752
American Classic Voyages Co.+ 194 2,680
OfficeMax Inc.+ 927 2,665
Children's Place Retail Stores Inc.+ 100 2,594
Pep Boys-Manny Moe & Jack Inc. 569 2,561
Ha-Lo Industries Inc.+ 632 2,449
Wink Communications Inc.+ 236 2,419
Phillips-Van Heusen Corporation 202 2,399
Ryan's Family Steak Houses Inc.+ 282 2,362
Cato Corp. "A" 189 2,268
Fossil Inc.+ 169 2,208
Champion Enterprises Inc.+ 566 2,193
Hearst-Argyle Television Inc.+ 119 2,135
Lone Star Steakhouse & Saloon Inc. 246 2,076
Guitar Center Inc.+ 156 2,067
Russell Corp. 127 2,032
Federal-Mogul Corp. 602 1,956
Vans Inc.+ 147 1,902
Tenneco Automotive Inc. 431 1,859
Shopko Stores Inc.+ 290 1,849
Winnebago Industries Inc. 156 1,794
Zomax Optical Media Inc.+ 292 1,770
24/7 Media Inc.+ 327 1,696
Jakks Pacific Inc.+ 190 1,674
Dura Automotive Systems Inc.+ 197 1,662
Finish Line Inc. (The)+ 202 1,540
Trans World Airlines Inc.+ 879 1,371
Warnaco Group Inc. "A" 430 1,129
Hollywood Entertainment Corp.+ 360 1,103
--------------------------------------------------------------
iShares Schedules of Investments page 41
<PAGE>
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Shares or
Security Principal Value
----------------------------------------------------------------
COMMON STOCKS (continued)
----------------------------------------------------------------
Modem Media Inc.+ 179 $ 1,052
Student Advantage Inc.+ 277 1,039
MP3.com Inc.+ 287 1,013
Ames Department Stores Inc.+ 241 949
Applica Inc.+ 177 896
----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $15,209,365) 14,472,897
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.07%
----------------------------------------------------------------
Investors Bank & Trust Tri Party
Repurchase Agreement, dated 10/31/00,
due 11/01/00, with a maturity value
of $10,240 and an effective yield
of 5.65%. $10,239 10,239
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $10,239) 10,239
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.05%
(Cost: $15,219,604) 14,483,136
----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.05%) (7,834)
----------------------------------------------------------------
NET ASSETS -- 100.00% $14,475,302
================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
page 42 iShares
<PAGE>
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
------------------------------------------------------------------------------
COMMON STOCKS - 99.95%
------------------------------------------------------------------------------
Coca-Cola Co. 32,303 $ 1,950,295
America Online Inc.+ 35,088 1,769,488
Procter & Gamble Co. 18,777 1,341,382
Philip Morris Companies Inc. 34,227 1,253,564
PepsiCo Inc. 21,936 1,062,525
Anheuser-Busch Companies Inc. 13,766 629,794
Kimberly-Clark Corp. 8,183 540,078
Gillette Co. 14,553 507,536
Colgate-Palmolive Co. 8,075 474,487
Safeway Inc.+ 7,553 413,055
Yahoo! Inc.+ 5,105 299,281
Sara Lee Corp. 13,246 285,617
Kroger Co.+ 12,547 283,092
Sysco Corp. 5,078 265,008
Heinz (H.J.) Co. 5,302 222,353
General Mills Inc. 4,330 180,777
Avon Products Inc. 3,599 174,551
ConAgra Inc. 8,095 173,031
Quaker Oats Co. 2,007 163,696
Albertson's Inc. 5,987 141,817
Cendant Corp.+ 11,021 132,252
Nabisco Group Holdings Corp. "A" 4,472 129,129
eBay Inc.+ 2,286 117,729
Clorox Co. 2,637 117,676
Ralston Purina Co. 4,655 112,884
Fort James Corp. 3,101 102,139
Campbell Soup Co. 3,367 98,485
Archer-Daniels-Midland Co. 8,789 96,679
Kellogg Co. 3,424 86,884
Wrigley (William Jr.) Co. 1,094 86,631
Hershey Foods Corp. 1,431 77,721
Newell Rubbermaid Inc. 4,045 77,613
Fortune Brands Inc. 2,382 70,120
UST Inc. 2,462 62,166
Coca-Cola Enterprises Inc. 3,364 61,813
InfoSpace.com Inc.+ 3,031 60,999
T.J. Reynolds Tobacco Holdings Inc. 1,570 56,128
Keebler Foods Co. 1,283 51,962
Estee Lauder Companies Inc. "A" 1,080 50,153
Pepsi Bottling Group Inc. 1,410 48,821
H & R Block, Inc. 1,293 46,144
Apollo Group Inc.+ 1,131 44,250
At Home Corp. "A"+ 4,070 41,972
Winn-Dixie Stores Inc. 2,157 41,522
Coors (Adolf) Company "B" 551 35,092
DeVry Inc.+ 919 33,946
Super Value Inc. 2,023 31,104
IBP Inc. 1,437 29,548
Energizer Holdings Inc.+ 1,466 28,953
Brown-Forman Corp. "B" 474 28,855
Delhaize America Inc. "A" 1,622 27,574
Hormel Foods Corp. 1,622 27,270
McCormick & Co. Inc. 828 26,237
Whitman Corp. 2,012 26,156
Flowers Industries Inc. 1,551 23,847
Smithfield Foods Inc.+ 730 20,942
Tyson Foods Inc. "A" 1,849 20,686
International Flavors & Fragrances Inc. 1,192 19,966
Suiza Foods Corp.+ 416 19,266
Whole Foods Market Inc.+ 399 18,454
Sotheby's Holdings Inc. 630 17,128
Hain Celestial Group Inc.+ 418 16,589
Alberto-Culver Co. "B" 491 16,479
Dean Foods Co. 501 16,032
Pre-Paid Legal Services Inc.+ 359 15,751
Tupperware Corp. 913 15,635
Dial Corp. 1,327 14,846
Scotts Co. (The) "A"+ 411 14,693
Lancaster Colony Corp. 582 13,750
Krispy Kreme Doughnuts Inc.+ 139 13,700
Corn Products International Inc. 523 13,140
Interstate Bakeries Corp. 935 13,090
Blyth Industries Inc. 500 13,000
EarthLink Inc.+ 1,955 12,769
Earthgrains Company (The) 627 12,697
Universal Corporation 422 11,816
Avis Rent A Car Inc.+ 388 11,591
Constellation Brands Inc.+ 230 11,212
GoTo.com Inc.+ 726 10,300
Learning Tree International Inc.+ 210 9,503
Service Corp. International+ 4,065 9,400
Sylvan Learning Systems Inc.+ 589 9,093
Casey's General Store Inc. 685 8,562
Delhaize America Inc. "B" 501 8,392
Fleming Companies Inc. 588 8,342
Performance Food Group Co.+ 200 8,100
Ticketmaster Online-CitySearch Inc. "B"+ 505 8,080
Regis Corp. 531 8,031
Valence Technology Inc.+ 476 6,634
Dole Food Co. 523 6,309
------------------------------------------------------------------------------
iShares Schedules of Investments page 43
<PAGE>
iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Shares or
Security Principal Value
----------------------------------------------------------------
COMMON STOCKS (continued)
----------------------------------------------------------------
Ralcorp Holdings Inc.+ 446 $ 6,272
About.com Inc.+ 258 6,192
Michael Foods Inc. 228 6,142
Priceline.com Inc.+ 1,064 6,118
LookSmart Ltd.+ 839 5,925
StarMedia Network Inc.+ 933 5,715
Robert Mondavi Corp. (The) "A"+ 120 5,430
American Italian Pasta Co.+ 264 5,297
NBTY Inc.+ 814 5,291
Ask Jeeves Inc.+ 357 4,641
International Multifoods Corp. 272 4,607
Triarc Companies Inc.+ 173 4,314
Dreyer's Grand Ice Cream Inc. 167 4,112
Cheap Tickets Inc.+ 376 3,995
Springs Industries Inc. "A" 157 3,699
Stewart Enterprises Inc. "A" 1,596 3,392
Westpoint Stevens Inc. 469 3,371
NBC Internet Inc. "A"+ 412 2,549
Great Atlantic & Pacific Tea Co. 253 2,530
Stamps.com Inc.+ 610 2,402
SportsLine USA Inc.+ 274 2,346
Wild Oats Markets Inc.+ 337 2,127
CPI Corp. 102 2,059
High Speed Access Corp.+ 416 1,222
Juno Online Services Inc.+ 309 821
----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $14,146,779) 14,876,428
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
----------------------------------------------------------------
Investors Bank & Trust Tri Party
Repurchase Agreement, dated 10/31/00,
due 11/01/00, with a maturity value of
$5,187 and an effective yield of
5.65%. $ 5,186 5,186
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $5,186) 5,186
----------------------------------------------------------------
Security Value
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 99.98%
(Cost: $14,151,965) $14,881,614
----------------------------------------------------------------
Other Assets, Less Liabilities -- 0.02% 2,743
----------------------------------------------------------------
NET ASSETS -- 100.00% $14,884,357
================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
Page 44 iShares
<PAGE>
iShares Dow Jones U.S. Energy Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 100.02%
---------------------------------------------------------------
Exxon Mobil Corp. 103,698 $ 9,248,565
Chevron Corp. 47,967 3,939,290
Texaco Inc. 41,298 2,439,163
Schlumberger Ltd. 31,878 2,426,713
Phillips Petroleum Co. 18,642 1,151,143
Williams Companies Inc. 25,262 1,056,267
Halliburton Co. 27,206 1,008,322
Anadarko Petroleum Corp. 14,624 936,667
Conoco Inc. 34,038 925,408
Murphy Oil Corp. 14,634 847,857
El Paso Energy Corp. 12,544 786,352
Burlington Resources Inc. 19,560 704,160
Coastal Corp. 9,242 697,193
USX-Marathon Group Inc. 22,726 617,863
Baker Hughes Inc. 17,234 592,419
Unocal Corp. 17,126 584,425
Transocean Sedco Forex Inc. 11,006 583,318
Occidental Petroleum Corp. 28,689 570,194
Kerr-McGee Corp. 7,654 499,902
Nabors Industries Inc.+ 9,604 488,844
Apache Corp. 8,194 453,231
Tidewater Inc. 9,282 428,712
Helmerich & Payne Inc. 12,658 397,936
Devon Energy Corp. 7,616 383,846
Amerada Hess Corp. 5,674 351,788
Conoco Inc. "B" 12,776 329,781
EOG Resources Inc. 8,052 317,048
Tosco Corp. 10,834 310,123
Ashland Inc. 9,108 298,287
Noble Drilling Corp.+ 6,822 283,539
Sunoco Inc. 8,942 267,701
Grant Prideco Inc.+ 14,207 263,717
Diamond Offshore Drilling Inc. 7,482 258,597
Santa Fe International Corp. 6,642 242,433
ENSCO International Inc. 7,196 239,267
Cooper Cameron Corp.+ 4,380 238,710
Evergreen Resources Inc.+ 7,992 219,780
Noble Affiliates Inc. 5,764 211,467
Stone Energy Corp.+ 3,724 190,669
Newfield Exploration Co.+ 4,548 171,687
Smith International Inc.+ 2,326 163,983
BJ Services Co.+ 3,016 158,152
Kinder Morgan Inc. 3,886 149,854
Lone Star Technologies Inc.+ 3,424 137,474
Weatherford International Inc.+ 3,722 135,853
Tom Brown Inc.+ 5,928 135,603
National-Oilwell Inc.+ 4,500 131,625
Shares or
Security Principal Value
----------------------------------------------------------------
Global Marine Inc.+ 4,602 $ 121,953
Hanover Compressor Co.+ 3,582 116,863
Ultramar Diamond Shamrock Corp. 4,154 109,042
Ocean Energy Inc.+ 7,509 104,187
Louis Dreyfus Natural Gas Corp.+ 3,224 103,370
Barrett Resources Corp.+ 2,764 100,540
Veritas DGC Inc.+ 3,000 90,000
Basin Exploration Inc.+ 4,408 87,333
Cabot Oil & Gas Corp. "A" 3,422 67,157
Valero Energy Corp. 1,962 64,869
Varco International Inc.+ 3,372 58,167
Seacor Smit Inc.+ 1,154 48,324
Vintage Petroleum Inc. 2,208 46,644
Maverick Tube Corp.+ 2,862 44,540
Patterson Energy Inc.+ 1,384 38,925
Atwood Oceanics Inc.+ 1,066 35,778
Forest Oil Corp.+ 2,529 34,932
Global Industries Ltd.+ 2,663 27,961
Rowan Companies Inc.+ 986 24,835
Western Gas Resources Inc. 1,112 24,395
Marine Drilling Co. Inc.+ 1,020 24,352
Oceaneering International Inc.+ 1,359 19,111
R&B Falcon Corporation+ 692 17,300
Core Laboratories NV+ 692 14,921
Pennzoil-Quaker State Co. 667 7,837
Input/Output Inc.+ 893 7,535
----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $39,608,862) 38,415,799
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
----------------------------------------------------------------
Investors Bank & Trust Tri Party
Repurchase Agreement, dated 10/31/00,
due 11/01/00, with a maturity value
of $12,597 and an effective yield of
5.65%. $ 12,595 12,595
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $12,595) 12,595
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.05%
(Cost: $39,621,457) 38,428,394
----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.05%) (18,986)
----------------------------------------------------------------
NET ASSETS -- 100.00% $38,409,408
================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 45
<PAGE>
iShares Dow Jones U.S. Financial Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
----------------------------------------------------------------
COMMON STOCKS - 99.91%
----------------------------------------------------------------
Citigroup Inc. 257,066 $ 13,528,098
American International Group Inc. 114,169 11,188,562
Morgan Stanley Dean Witter & Co. 64,683 5,194,853
Wells Fargo & Company 97,790 4,528,899
Bank of America Corp. 93,891 4,512,636
Fannie Mae 58,262 4,486,174
American Express Co. 67,447 4,046,820
Chase Manhattan Corp. 74,456 3,387,748
Merrill Lynch & Co. Inc. 41,219 2,885,330
Bank of New York Co. Inc. 42,152 2,426,375
Bank One Corp. 66,044 2,410,606
Freddie Mac 39,819 2,389,140
Schwab (Charles) Corp. 61,329 2,154,181
Marsh & McLennan Companies Inc. 15,507 2,027,540
FleetBoston Financial Corp. 51,572 1,959,736
First Union Corp. 56,292 1,706,351
Allstate Corp. 41,963 1,689,011
MBNA Corp. 42,704 1,604,069
Associates First Capital Corp. 41,632 1,545,588
Morgan (J.P.) & Co. Inc. 9,084 1,503,402
Household International Inc. 27,036 1,360,249
Washington Mutual Inc. 30,798 1,355,112
Mellon Financial Corp. 27,902 1,346,271
AXA Financial Inc. 24,698 1,335,236
Fifth Third Bancorp 24,947 1,281,652
MetLife Inc.+ 44,289 1,223,484
American General Corp. 14,433 1,161,856
State Street Corp. 9,208 1,148,606
AFLAC Inc. 15,169 1,108,285
PNC Bank Corp. 16,562 1,107,584
Firstar Corp. 54,766 1,078,206
US Bancorp Inc. 42,628 1,031,065
Northern Trust Corp. 11,890 1,015,109
Hartford Financial Services Group Inc. 12,282 914,241
Lehman Brothers Holdings Inc. 13,868 894,486
Providian Financial Corp. 8,158 848,432
Chubb Corp. 9,981 842,771
Goldman Sachs Group Inc. (The) 8,301 828,544
BB&T Corp. 22,849 728,312
SunTrust Banks Inc. 14,688 716,958
Capital One Financial Corp. 11,184 705,990
National City Corp. 30,008 641,421
St. Paul Companies Inc. 12,358 633,348
Wachovia Corp. 11,618 627,372
KeyCorp 24,599 $ 607,288
Stilwell Financial Inc. 12,835 575,168
Hancock (John) Financial Services Inc.+ 18,009 569,535
Comerica Inc. 8,933 538,772
AON Corp. 12,778 529,488
Lincoln National Corp. 10,325 499,472
USA Education Inc. 8,865 495,332
Equity Office Properties Trust 16,168 487,061
Franklin Resources Inc. 10,353 443,523
Paine Webber Group Inc. 5,870 418,237
MBIA Inc. 5,628 409,085
Jefferson-Pilot Corp. 5,896 405,350
Golden West Financial Corp. 6,790 380,664
Summit Bancorp 10,048 376,800
Bear Stearns Companies Inc. 6,148 372,723
MGIC Investment Corp. 5,387 366,989
Loews Corp. 3,886 353,383
UNUMProvident Corp. 12,068 340,921
Progressive Corporation 3,403 334,345
Equity Residential Properties Trust 7,049 331,744
Price (T. Rowe) Associates 6,898 322,913
Ambac Financial Group Inc. 3,999 319,170
AmSouth Bancorp 22,452 312,923
SouthTrust Corp. 9,602 310,865
Regions Financial Corp. 12,538 295,427
Charter One Financial Inc. 12,033 276,007
Cincinnati Financial Corp. 7,498 275,551
Zions Bancorp 4,722 271,220
Synovus Financial Corp. 12,341 266,103
Union Planters Corp. 7,696 260,221
National Commerce Bancorp 11,582 246,118
Torchmark Corp. 7,287 242,748
Countrywide Credit Industries Inc. 6,481 242,632
Edwards (A.G.) Inc. 4,710 239,032
M&T Bank Corp. 4,682 235,036
Marshall & Ilsley Corp. 4,969 225,158
Old Kent Financial Corp. 7,821 216,544
Knight Trading Group Inc.+ 7,010 209,862
Spieker Properties Inc. 3,747 207,490
North Fork Bancorp 9,965 201,168
Prologis Trust 9,386 197,106
CIT Group Inc. (The) 10,986 191,568
Allmerica Financial Corp. 3,032 191,205
Huntington Bancshares Inc. 13,108 188,428
PMI Group Inc. (The) 2,524 186,461
TCF Financial Corp. 4,595 185,810
--------------------------------------------------------------------------------
page 46 iShares
<PAGE>
iShares Dow Jones U.S. Financial Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
----------------------------------------------------------------
COMMON STOCKS (continued)
----------------------------------------------------------------
E*trade Group Inc.+ 12,627 $ 183,881
Donaldson, Lufkin & Jenrette Inc. 2,044 183,577
SAFECO Corp. 7,298 176,520
SEI Investment Co. 1,941 176,146
AvalonBay Communities Inc. 3,815 175,252
Old Republic International Corp. 6,708 174,408
Vornado Realty Trust 4,960 172,670
First Tennessee National Corp. 7,409 170,407
Dime Bancorp Inc. 6,937 169,523
Simon Property Group Inc. 7,471 166,697
Apartment Investment & Management
Co. "A" 3,611 164,978
Legg Mason Inc. 3,168 164,538
Archstone Communities Trust 6,979 164,443
Duke-Weeks Realty Corp. 6,843 162,094
Everest Re Group Ltd. 2,616 153,363
Radian Group Inc. 2,153 152,594
Mercantile Bankshares Corp. 4,026 151,478
Homestore.com Inc.+ 4,438 150,892
Federated Investors Inc. "B" 5,157 150,198
Greenpoint Financial Corp. 5,022 149,404
Bisys Group Inc.+ 3,170 149,386
Kimco Realty Corp. 3,507 141,157
Gallagher (Arthur J.) & Co. 2,178 137,486
Conseco Inc. 18,625 129,211
Silicon Valley Bancshares+ 2,749 127,141
Crescent Real Estate Equities Co. 6,300 126,788
Compass Bancshares Inc. 6,934 126,112
Boston Properties Inc. 2,966 120,123
Hudson City Bancorp Inc. 6,529 118,746
AmeriCredit Corp.+ 4,337 116,557
FirstMerit Corp. 5,056 115,340
CarrAmerica Realty Corp. 3,826 113,106
Metris Companies Inc. 3,479 112,633
Public Storage Inc. 4,952 111,420
Astoria Financial Corp. 2,933 109,987
First Virginia Banks Inc. 2,636 109,065
Hibernia Corp. "A" 9,109 108,739
Sovereign Bancorp Inc. 12,942 107,580
AMB Property Corp. 4,555 107,042
Commerce Bancorp Inc. 1,748 105,863
Commerce Bancshares Inc. 2,932 105,369
Bank United Corp. "A" 1,852 104,985
Liberty Property Trust 3,852 101,837
Investors Financial Services Corp. 1,388 99,502
St. Joe Company (The) 4,863 $ 98,172
Wilmington Trust Corp. 1,846 97,146
Host Marriott Corp. 8,882 94,371
Rouse Co. 3,790 93,566
Cullen/Frost Bankers Inc. 2,752 91,676
Old National Bancorp 3,053 90,063
Allied Capital Corp. 4,337 89,451
Ameritrade Holding Corp. "A"+ 6,050 88,481
Centura Banks Inc. 2,277 87,522
Golden State Bancorp Inc. 3,338 87,205
Arden Realty Inc. 3,626 87,024
Associated Bancorp 3,563 85,735
Health Care Property Investors Inc. 2,918 85,716
Protective Life Corp. 3,696 85,470
Eaton Vance Corp. 1,685 83,934
General Growth Properties Inc. 2,796 82,482
Raymond James Financial Corp. 2,409 81,454
City National Corp. 2,320 79,750
IndyMac Mortgage Holdings Inc.+ 3,697 77,175
Roslyn Bancorp Inc. 3,515 76,232
Waddell & Reed Financial Inc. "A" 2,391 76,213
BRE Properties Inc. 2,402 75,963
Westamerica Bancorp 2,097 75,361
Fidelity National Financial Inc. 3,054 75,014
StanCorp Financial Group Inc. 1,826 74,410
Post Properties Inc. 2,125 74,242
Webster Financial Corp. 3,033 73,929
Highwoods Properties Inc. 3,411 73,763
Transatlantic Holdings Inc. 792 73,557
Mack-Cali Realty Corp. 2,703 73,319
Cousins Properties Inc. 2,788 72,488
Hospitality Properties Trust 3,234 69,733
First Industrial Realty Trust 2,212 68,296
UnionBanCal Corporation 3,235 67,935
RenaissanceRe Holdings Ltd. 935 67,846
Affiliated Managers Group Inc.+ 1,113 66,919
Nationwide Financial Services Inc. 1,369 66,568
Washington Federal Inc. 2,983 66,558
Greater Bay Bancorp 2,038 66,362
HSB Group Inc. 1,657 65,555
Camden Property Trust 2,183 62,488
New Plan Excel Realty Trust 5,036 62,006
Hudson United Bancorp 2,766 61,889
Downey Financial Corp. 1,282 61,215
Markel Corp.+ 420 60,848
Trustmark Corp. 3,106 59,014
--------------------------------------------------------------------------------
iShares Schedules of Investments page 47
<PAGE>
iShares Dow Jones U.S. Financial Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
----------------------------------------------------------------
COMMON STOCKS (continued)
----------------------------------------------------------------
First American Financial Corp. 2,799 $ 58,604
Citizens Banking Corp. 2,453 58,412
Reckson Associates Realty Corp. 2,576 58,282
Imperial Bancorp+ 2,387 58,034
Pacific Century Financial Corp. 4,564 57,906
Commercial Federal Corp. 3,234 56,595
Colonial BancGroup Inc. 6,347 55,933
Mercury General Corp. 1,491 54,608
Southwest Bancorp of Texas Inc.+ 1,488 54,312
Provident Financial Group Inc. 1,790 54,148
Prentiss Properties Trust 2,076 52,679
First Midwest Bancorp Inc. 2,053 51,453
FelCor Lodging Trust Inc. 2,310 50,676
Leucadia National Corp. 2,036 50,646
Independence Community Bank Corp. 3,431 50,393
Meristar Hospitality Corp. 2,626 50,222
Berkley (W.R.) Corp. 1,464 49,867
CNA Financial Corp.+ 1,362 49,713
HRPT Properties Trust 7,564 48,693
Unitrin Inc. 1,516 47,091
HCC Insurance Holdings Inc. 2,422 46,169
Healthcare Realty Trust 2,290 45,657
Community First Bankshares Inc. 2,889 44,779
Storage USA Inc. 1,580 44,141
Reinsurance Group of America Inc. 1,181 44,140
Doral Financial Corp. 2,439 43,597
Federal Realty Investment Trust 2,246 43,235
Mutual Risk Management Ltd. 2,348 42,558
Security Capital Group "B"+ 2,153 41,042
Phoenix Investment Partners Ltd. 2,548 39,813
Nationwide Health Properties Inc. 2,660 39,734
Chittenden Corp. 1,492 39,631
Horace Mann Educators Corp. 2,356 39,610
Kilroy Realty Corp. 1,510 39,354
Macerich Co. (The) 1,950 38,269
Sl Green Realty Corp. 1,392 37,323
Staten Island Bancorp Inc. 1,906 36,810
American Financial Group Inc. 1,712 36,701
iStar Financial Inc. 1,810 36,200
Shurgard Storage Centers Inc. 1,590 36,073
Trenwick Group Ltd. 1,816 35,639
Jeffries Group Inc. 1,302 35,479
Developers Diversified Realty Corp. 2,931 34,989
Richmond County Financial Corp. 1,481 34,804
BancWest Corporation 1,644 $ 33,599
National Discounts Brokers Group Inc.+ 659 32,085
American Capital Strategies Ltd. 1,409 31,086
MAF Bancorp Inc. 1,276 30,624
CBL & Associates Properties Inc. 1,291 29,854
Brandywine Realty Trust 1,550 29,644
People's Bank 1,463 29,626
Provident Bankshares Corp. 1,553 29,410
LNR Property Corp. 1,357 29,345
Chelsea GCA Realty Inc. 909 29,315
Health Care Inc. 1,631 28,848
Home Properties of NY Inc. 1,057 28,737
Queens County Bancorp Inc. 1,022 28,616
CompuCredit Corp.+ 917 28,312
Manufactured Home Communities Inc. 1,123 27,935
AMCORE Financial Inc. 1,419 27,848
Fairfield Communities Inc.+ 2,056 26,086
Sterling Bancshares Inc. 1,516 26,056
Selective Insurance Group Inc. 1,510 26,048
Southwest Securities Group Inc. 906 25,595
South Financial Group Inc. (The) 2,492 25,387
Presidential Life Corp. 1,735 25,266
Ohio Casualty Corp. 3,000 25,219
FirstFed Financial Corp.+ 956 24,378
Enhance Financial Services Group Inc. 2,019 23,471
Glenborough Realty Trust Inc. 1,459 23,435
Mills Corp. 1,370 23,376
Meditrust Corp.+ 8,231 22,635
Texas Regional Bancshares "A" 753 22,496
East West Bancorp Inc. 1,099 20,812
NextCard Inc.+ 2,696 20,557
Anchor Bancorp Wisconsin Inc. 1,303 20,115
Republic Bancorp Inc. 2,078 19,741
Republic Security Financial Corp. 2,904 19,693
UCBH Holdings Inc. 533 19,388
GBC Bancorp 599 19,093
AmerUs Group Co. 720 18,990
RFS Hotel Investors Inc. 1,418 18,257
First Sentinel Bancorp Inc. 1,888 17,523
Koger Equity Inc. 1,075 17,133
JDN Realty Corp. 1,549 16,942
Harbor Florida Bancshares Inc. 1,330 16,292
Capital Automotive 1,233 15,894
Colonial Properties Trust 575 14,123
E.W. Blanch Holdings Inc. 745 14,062
Bay View Capital Corp. 1,714 13,926
--------------------------------------------------------------------------------
page 48 iShares
<PAGE>
iShares Dow Jones U.S. Financial Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Shares or
Security Principal Value
-----------------------------------------------------------------
COMMON STOCKS (continued)
-----------------------------------------------------------------
Fremont General Corp. 3,710 $ 13,449
Net.B@nk Inc.+ 1,546 13,431
Equity Inns Inc. 2,155 13,334
Haven Bancorp Inc. 460 13,167
PFF Bancorp Inc. 695 12,858
OceanFirst Financial Corp. 606 12,688
Pacific Northwest Bancorp 939 12,559
Ocwen Financial Corp.+ 2,126 12,490
Medallion Financial Corp. 802 12,331
Dime Community Bancshares 529 11,737
Burnham Pacific Properties Inc. 1,916 10,418
BSB Bancorp Inc. 594 8,613
Finova Group Inc. 3,154 8,082
-----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $109,803,496) 127,190,753
-----------------------------------------------------------------
SHORT TERM INSTRUMENTS - 0.71%
-----------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $136,122 136,122
Goldman Sachs Financial Square Prime
Obligation Fund++ 151,878 151,878
Providian Temp Cash Money Market Fund++ 167,200 167,200
Short Term Investment Company Liquid
Assets Portfolio++ 455,999 455,999
-----------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $911,199) 911,199
-----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.05%
-----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $58,471 and an
effective yield of
5.65%. 58,462 58,462
-----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $58,462) 58,462
-----------------------------------------------------------------
Security Value
-----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.67%
(Cost: $110,773,157) $128,160,414
-----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.67%) (851,895)
-----------------------------------------------------------------
NET ASSETS -- 100.00% $127,308,519
=================================================================
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 49
<PAGE>
iShares Dow Jones U.S. Healthcare Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 99.99%
---------------------------------------------------------------
Pfizer Inc. 124,845 $ 5,391,742
Merck & Co. Inc. 45,630 4,103,848
Johnson & Johnson 26,092 2,403,726
Bristol-Myers Squibb Co. 38,996 2,376,319
Lilly (Eli) and Company 19,059 1,703,398
American Home Products Corp. 25,865 1,642,427
Abbott Laboratories 28,709 1,516,194
Schering-Plough Corp. 29,064 1,502,246
Pharmacia & Upjohn Inc. 25,194 1,385,670
Medtronic Inc. 23,786 1,291,877
Amgen Inc.+ 20,381 1,180,824
PE Corp. (Biosystems Group) 4,139 484,263
Baxter International Inc. 5,803 476,934
HCA - The Healthcare Company 9,916 396,020
CIGNA Corp. 3,121 380,606
UnitedHealth Group Inc. 3,183 348,141
Guidant Corp.+ 6,099 322,866
MedImmune Inc.+ 3,922 256,401
Tenet Healthcare Corp. 6,273 246,607
Millennium Pharmaceuticals Inc.+ 3,240 235,103
Forest Laboratories Inc. "A"+ 1,728 228,960
Allergan Inc. 2,570 216,041
ALZA Corp.+ 2,304 186,480
Immunex Corp.+ 4,299 182,976
Biogen Inc.+ 2,986 179,720
IDEC Pharmaceuticals Corp.+ 878 172,198
Becton Dickinson & Co. 5,014 167,969
Human Genome Sciences Inc.+ 1,898 167,765
Aetna Inc. 2,798 161,759
King Pharmaceuticals Inc.+ 3,092 138,560
Wellpoint Health Networks Inc.+ 1,157 135,297
Watson Pharmaceutical Inc.+ 2,034 127,252
Stryker Corp. 2,620 123,468
Biomet Inc. 3,274 118,478
IVAX Corporation+ 2,674 116,319
Genzyme General+ 1,588 112,748
Abgenix Inc.+ 1,414 111,529
Protein Design Labs Inc.+ 772 104,280
Vertex Pharmaceuticals Inc.+ 1,067 99,348
Sepracor Inc.+ 1,451 98,849
Health Management Associates Inc. "A"+ 4,828 95,655
Healthsouth Corp.+ 7,629 91,548
Medarex Inc.+ 1,440 88,020
Quest Diagnostics Inc.+ 899 86,529
St. Jude Medical Inc.+ 1,573 86,515
Chiron Corp.+ 1,990 $ 86,192
Gilead Sciences Inc.+ 929 79,894
Celgene Corp.+ 1,211 77,958
Mylan Laboratories Inc. 2,464 68,992
Minimed Inc.+ 934 68,124
Andrx Group+ 942 67,824
Boston Scientific Corp.+ 4,101 65,360
Imclone Systems Inc.+ 1,184 64,750
ICN Pharmaceuticals Inc. 1,574 59,910
Enzon Inc.+ 799 56,929
COR Therapeutics Inc.+ 993 56,104
Invitrogen Corp.+ 727 55,297
Trigon Healthcare Inc.+ 741 53,120
Sybron International Corp.+ 2,080 51,480
Express Scripts Inc. "A"+ 759 50,995
Myriad Genetics Inc.+ 407 48,840
Incyte Pharmaceuticals Inc.+ 1,269 46,477
Lincare Holdings Inc.+ 1,059 44,544
Oxford Health Plans Inc.+ 1,299 43,841
Cytyc Corp.+ 722 42,869
Bard (C.R.) Inc. 1,009 42,252
ICOS Corp.+ 821 42,179
Affymetrix Inc.+ 760 42,085
Medicis Pharmaceutical Corp. "A"+ 569 41,893
Universal Health Services Inc. "B"+ 490 41,099
Beckman Coulter Inc. 582 40,776
Techne Corp.+ 360 40,590
Alkermes Inc.+ 1,072 39,731
Cephalon Inc.+ 739 39,629
Patterson Dental Co.+ 1,264 39,579
Inhale Therapeutic Systems Inc.+ 777 38,656
Hillenbrand Industries Inc. 826 38,202
Bausch & Lomb Inc. 983 37,907
CuraGen Corp.+ 584 37,741
OSI Pharmaceuticals Inc.+ 520 37,440
Humana Inc.+ 2,768 33,562
Cell Therapeutics Inc.+ 491 32,843
Omnicare Inc. 1,843 32,252
Dentsply International Inc. 894 31,011
Dura Pharmaceuticals Inc.+ 887 30,546
Quintiles Transnational Corp.+ 2,181 30,398
Orthodontic Centers of America+ 826 27,568
Manor Care Inc.+ 1,607 26,817
VISX Inc.+ 1,201 25,746
Alexion Pharmaceuticals Inc.+ 244 25,223
Barr Laboratories Inc.+ 387 24,429
Advance Paradigm Inc.+ 494 24,144
--------------------------------------------------------------------------------
page 50 iShares
<PAGE>
iShares Dow Jones U.S. Healthcare Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (continued)
---------------------------------------------------------------
CV Therapeutics Inc.+ 303 $ 23,861
Alpharma Inc. 599 23,249
Aurora Biosciences Corp.+ 374 22,791
Maxygen Inc.+ 559 22,500
Trimeris Inc.+ 310 21,933
Coventry Health Care Inc.+ 1,173 21,407
United Therapeutics Inc.+ 397 21,240
Renal Care Group Inc.+ 898 21,103
Tularik Inc.+ 661 20,987
Maxim Pharmaceuticals Inc.+ 447 19,836
Lexicon Genetics Inc.+ 948 19,197
Henry Schein Inc.+ 784 19,110
NPS Pharmaceuticals Inc.+ 433 18,565
Coherent Inc.+ 532 18,520
Steris Corp.+ 1,218 18,270
Noven Pharmaceuticals Inc.+ 406 18,092
Pharmacyclics Inc.+ 314 16,897
Mid Atlantic Medical Services Inc.+ 969 16,473
IDEXX Laboratories Inc.+ 682 16,368
SICOR Inc.+ 1,238 15,862
Xoma Ltd.+ 1,293 15,758
Immunomedics Inc.+ 669 15,471
Invacare Corp. 539 15,361
Polymedica Industries Inc.+ 260 14,950
Enzo Biochem Inc.+ 384 14,784
Apria Healthcare Group Inc.+ 733 14,660
Cell Genesys Inc.+ 630 14,529
Quorum Health Group Inc.+ 1,083 14,485
Alliance Pharmaceutical Corp.+ 1,001 14,139
Ligand Pharmaceuticals Inc. "B"+ 919 13,670
Molecular Devices Corp.+ 199 13,607
Transkaryotic Therapies Inc.+ 361 13,447
Coulter Pharmaceutical Inc.+ 337 12,911
Delta & Pine Land Co. 524 12,805
Respironics Inc.+ 652 12,796
Syncor International Corp.+ 473 12,150
Regeneron Pharmaceuticals Inc.+ 446 11,931
Acuson Corp.+ 507 11,566
Guilford Pharmaceuticals Inc.+ 460 11,356
Bio-Technology General Corp.+ 1,079 11,329
Scios Inc.+ 776 11,107
Haemonetics Corp.+ 450 10,575
Gene Logic Inc.+ 476 10,383
Geron Corp.+ 424 9,964
Owens & Minor Inc. 656 $ 9,922
Visible Genetics Inc.+ 326 9,862
US Oncology Inc.+ 1,834 9,858
Arthocare Corp.+ 429 9,733
EntreMed Inc.+ 310 9,649
Catalytica Inc.+ 680 9,138
Datascope Corp. 261 9,037
Genzyme Transgenics Corp.+ 417 8,939
Mentor Corp. 501 8,830
Emisphere Technologies Inc.+ 343 8,682
Cytogen Corp.+ 1,436 8,257
Organogenesis Inc.+ 630 7,900
Novoste Corp.+ 297 7,499
Pharmacopeia Inc.+ 403 7,355
Sunrise Assisted Living Inc.+ 314 7,340
Cyberonics Inc.+ 314 7,300
Supergen Inc.+ 557 7,171
Advanced Tissue Sciences Inc.+ 1,004 7,154
Viropharma Inc.+ 300 7,013
PacifiCare Health Systems Inc. "A"+ 662 6,910
Sunrise Technologies International Inc.+ 954 6,887
Hyseq Inc.+ 224 6,510
Kos Pharmaceuticals Inc.+ 324 6,419
Genome Therapeutics Corp.+ 404 6,035
Biosite Diagnostics Inc.+ 273 6,006
IGEN International Inc.+ 203 5,050
I-Stat Corp.+ 243 4,769
Miravant Medical Technologies+ 314 4,749
Cygnus Inc.+ 526 4,701
Pediatrix Medical Group Inc.+ 290 4,622
NABI Inc.+ 724 4,423
Cell Pathways Inc.+ 523 3,988
Biomatrix Inc.+ 200 3,825
Imatron Inc.+ 1,734 3,739
Sangstat Medical Corp.+ 341 3,410
Columbia Laboratories Inc.+ 518 3,173
Immune Response Corp.+ 464 2,813
Northfield Laboratories Inc.+ 247 2,732
Theragenics Corp.+ 527 2,470
Laser Vision Centers Inc.+ 446 1,812
Osteotech Inc.+ 247 1,359
Gliatech Inc.+ 176 1,133
---------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $32,279,872) 34,145,442
---------------------------------------------------------------
--------------------------------------------------------------------------------
iShares Schedules of Investments page 51
<PAGE>
iShares Dow Jones U.S. Healthcare Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Principal Value
-------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
-------------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $10,300 and an
effective yield of 5.65%. $ 10,299 $ 10,299
-------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $10,299) 10,299
-------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.02%
(Cost $32,290,171) 34,155,741
-------------------------------------------------------------------
Other Assets, Less Liabilities -- (0.02%) (8,488)
-------------------------------------------------------------------
NET ASSETS -- 100.00% $34,147,253
===================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
page 52 iShares
<PAGE>
iShares Dow Jones U.S. Industrial Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 100.00%
---------------------------------------------------------------
General Electric Co. 106,870 $ 5,857,812
Tyco International Ltd. 27,823 1,577,216
Corning Inc. 13,986 1,069,929
Boeing Co. 15,547 1,054,281
Minnesota Mining & Manufacturing Co. 10,081 974,077
JDS Uniphase Corp.+ 11,701 952,169
Automatic Data Processing Inc. 12,273 801,580
Honeywell International Inc. 13,023 700,800
Emerson Electric Co. 9,422 691,928
United Technologies Corp. 9,018 629,569
First Data Corp. 9,194 460,849
Solectron Corp.+ 9,503 418,132
Paychex Inc. 6,516 369,376
Electronic Data Systems Corp. 7,648 358,978
Illinois Tool Works Inc. 5,916 328,708
Agilent Technologies Inc.+ 6,540 302,884
SDL Inc.+ 1,112 288,286
Caterpillar Inc. 7,196 252,310
Union Pacific Corp. 5,060 237,188
FedEx Corp.+ 5,004 234,487
Gemstar-TV Guide International Inc.+ 3,283 225,091
Burlington Northern Santa Fe Corp. 8,451 224,480
Lockheed Martin Corp. 6,092 218,398
Concord EFS Inc.+ 5,270 217,717
Exodus Communications Inc.+ 6,449 216,445
Waste Management Inc. 10,759 215,180
General Dynamics Corp. 2,986 213,686
Computer Sciences Corp.+ 2,934 184,842
Waters Corp.+ 2,386 173,134
Masco Corp. 9,223 172,355
Deere & Co. 4,580 168,601
PPG Industries Inc. 3,686 164,488
Equifax Inc. 4,478 154,491
Dover Corp. 3,538 150,144
Textron Inc. 2,954 148,992
United Parcel Service Inc. 2,400 145,800
Rockwell International Corp. 3,325 130,714
DST Systems Inc.+ 2,064 127,194
Danaher Corp. 1,978 124,861
Fiserv Inc.+ 2,274 119,243
Cintas Corp. 2,554 118,442
Moody's Corp. 4,138 108,881
Convergys Corp.+ 2,458 107,077
IMS Health Inc. 4,473 105,675
Raytheon Co. "B" 3,062 104,682
Norfolk Southern Corp. 7,376 104,186
CSX Corp. 3,966 100,389
SCI Systems Inc.+ 2,278 $ 97,954
PerkinElmer Inc. 804 96,078
StorageNetworks Inc.+ 1,500 95,156
Robert Half International Inc.+ 3,090 94,245
Molex Inc. 1,722 92,988
Vulcan Materials Co. 2,202 92,484
Ingersoll-Rand Co. 2,430 91,732
Thermo Electron Corp.+ 2,978 86,362
Symbol Technologies Inc. 1,778 80,788
Northrop Grumman Corp. 936 78,624
PE Corp. (Celera Genomics Group)+ 1,108 74,790
PACCAR Inc. 1,726 72,600
Power-One Inc.+ 1,000 70,938
Eaton Corp. 1,008 68,607
Sealed Air Corp.+ 1,368 65,835
Temple-Inland Inc. 1,470 65,783
Parker Hannifin Corp. 1,578 65,290
Donnelley (R.R.) & Sons Co. 2,754 59,211
Newport Corp. 500 57,102
Goodrich (B.F.) Co. 1,394 57,067
Molex Inc. "A" 1,422 55,902
Ceridian Corp.+ 2,234 55,850
Sabre Holdings Corp. 1,650 55,172
CMGI Inc.+ 3,266 55,114
Laboratory Corp. of America Holdings+ 400 53,950
Sherwin-Williams Co. 2,478 53,742
SPX Corp.+ 432 53,406
Cooper Industries Inc. 1,394 53,320
Vishay Intertechnology Inc.+ 1,762 52,860
Southdown Inc. 708 50,180
WebMD Corp.+ 4,402 50,073
Fluor Corp. 1,394 48,790
Tektronix Inc. 680 48,450
Servicemaster Co. 5,192 47,377
Akamai Technologies Inc.+ 900 45,900
American Standard Companies Inc.+ 984 45,141
Dun & Bradstreet Corp.+ 2,069 44,742
Manpower Inc. 1,274 44,351
Macrovision Corp.+ 604 44,016
Deluxe Corp. 1,950 43,997
Pall Corp. 2,002 43,168
Acxiom Corp.+ 1,042 41,940
Internet Capital Group LLC+ 3,162 41,896
Grainger (W.W.) Inc. 1,298 41,455
Arrow Electronics Inc.+ 1,250 40,000
Plexus Corp.+ 612 38,594
Critical Path Inc.+ 793 38,510
CH Robinson Worldwide Inc. 700 38,281
Avnet Inc. 1,416 38,055
--------------------------------------------------------------------------------
iShares Schedules of Investments Page 53
<PAGE>
iShares Dow Jones U.S. Industrial Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS (Continued)
---------------------------------------------------------------
CheckFree Corp.+ 745 $ 37,064
GATX Corporation 880 37,015
Comdisco Inc. 2,985 36,753
ITT Industries Inc. 1,122 36,535
Expeditors International Washington Inc. 704 36,520
Stanley Works (The) 1,370 36,476
Affiliated Computer Services Inc.+ 652 36,308
American Power Conversion Corp.+ 2,730 35,319
Viad Corp. 1,626 34,756
Catalina Marketing Corp.+ 840 32,970
Millipore Corp. 624 32,760
Alexander & Baldwin Inc. 1,298 32,369
Sonoco Products Co. 1,674 32,329
CSG Systems International Inc.+ 680 31,577
Smurfit-Stone Container Corp.+ 2,306 31,131
Martin Marietta Materials Inc. 808 31,027
Black & Decker Corp. 800 30,100
First Health Group Corp.+ 728 28,392
Sawtek Inc.+ 552 28,083
Republic Services Inc. "A"+ 2,081 27,963
Tekelec+ 728 26,800
Dycom Industries Inc.+ 708 26,638
VerticalNet Inc.+ 936 26,106
National Instruments Corp.+ 556 25,958
Safeguard Scientifics Inc.+ 1,687 25,938
Vicor Corp.+ 480 25,920
Banta Corp. 1,094 25,230
Quanta Services Inc.+ 800 24,850
Atlas Air Inc.+ 680 24,650
CNET Networks Inc.+ 776 24,444
National Service Industries Inc. 1,194 24,402
Iron Mountain Inc.+ 700 23,669
C&D Technologies Inc. 400 23,650
APW Ltd.+ 504 23,278
Reynolds & Reynolds Co. "A" 1,298 23,202
FuelCell Energy Inc.+ 300 22,969
Technitrol Inc. 200 22,175
Bemis Co. 856 22,149
Tech Data Corp.+ 528 21,978
AVX Corp. 754 21,583
Navistar International Corp.+ 652 21,557
Veeco Instruments Inc.+ 324 21,450
FMC Corp.+ 280 21,280
Anaren Microwave Inc.+ 200 20,800
Getty Images Inc.+ 652 20,701
PurchasePro.com Inc.+ 752 20,304
Raytheon Co. "A" 632 20,224
Mastec Inc.+ 684 $ 19,793
L-3 Communications Holdings Inc.+ 300 19,781
FreeMarkets Inc.+ 400 19,775
NOVA Corporation+ 1,246 19,547
Tollgrade Communications Inc.+ 200 19,150
Crane Co. 728 19,064
Jacobs Engineering Group Inc.+ 456 18,867
Litton Industries Inc.+ 352 18,282
ePlus Inc.+ 1,228 17,940
Teletech Holdings Inc.+ 636 17,649
Chemed Corp. 528 17,358
Methode Electronics Inc. "A" 456 17,157
Crown Cork & Seal Co. Inc. 1,878 17,137
Ryder System Inc. 856 16,906
Tetra Tech Inc.+ 480 16,680
Diebold Inc. 632 16,432
Shaw Group Inc.+ 200 16,300
PSINET Inc.+ 2,421 16,115
Valspar Corp. 584 15,949
Snap-On Inc. 608 15,542
Varian Inc.+ 500 15,406
Hubbell Inc. "B" 632 15,129
Aeroflex Inc.+ 250 14,875
Carlisle Companies Inc. 352 14,652
Granite Construction Inc. 632 14,418
Cognex Corp.+ 428 14,338
United Stationers Inc.+ 456 13,709
Pentair Inc. 456 13,594
Diamond Technology Partners Inc.+ 304 13,566
Johns Manville Corp. 1,426 13,101
Scient Corp.+ 722 12,996
Lafarge Corp. 684 12,911
Digital Island Inc.+ 1,008 12,726
REMEC Inc.+ 420 12,521
Donaldson Co. Inc. 552 12,489
Artesyn Technologies Inc.+ 304 12,350
Digex Inc.+ 304 11,932
NCO Group Inc.+ 528 11,550
Copart Inc.+ 760 11,447
Sensormatic Electronics Corp.+ 628 11,304
Newport News Shipbuilding Inc. 228 11,215
Mueller Industries Inc.+ 480 11,190
Commscope Inc.+ 428 10,834
CTS Corp. 252 10,820
American Superconductor Corp.+ 224 10,696
Proxicom Inc.+ 760 10,260
Owens-Illinois Inc.+ 1,711 10,159
Plug Power Inc.+ 400 9,575
AptarGroup Inc. 456 9,434
--------------------------------------------------------------------------------
page 54 iShares
<PAGE>
iShares Dow Jones U.S. Industrial Sector Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
----------------------------------------------------------------
COMMON STOCKS (CONTINUED)
----------------------------------------------------------------
Galileo International Inc. 470 $ 9,282
ProBusiness Services Inc.+ 280 9,153
Ball Corp. 256 8,992
Nordson Corp. 304 8,721
Zygo Corp.+ 176 8,712
Dendrite International Inc.+ 400 8,700
Cymer Inc.+ 304 7,600
Timken Co. 518 7,284
Overseas Shipholding Group Inc. 300 7,200
Xcelera.com Inc.+ 598 7,176
Roper Industries Inc. 204 7,140
Insituform Technologies Inc. "A"+ 200 7,137
Helix Technology Corp. 256 7,136
Electro Scientific Industries Inc.+ 204 7,127
Three-Five Systems, Inc.+ 200 6,900
Titan Corp. (The)+ 500 6,688
AnswerThink Consulting Group Inc.+ 400 6,550
Littelfuse Inc.+ 224 6,496
Stericycle Inc.+ 200 6,475
Scott Technologies Inc.+ 260 5,980
National Data Corp. 152 5,795
MSC Industrial Direct Co. Inc. "A"+ 376 5,593
Audiovox Corp. "A"+ 400 5,475
Key3Media Group Inc.+ 575 5,462
American Management Systems Inc.+ 252 5,449
eLoyalty Corp.+ 555 5,342
EMCOR Group Inc.+ 204 5,291
Hall Kinion & Associates Inc.+ 200 5,287
Uniroyal Technology Corp.+ 507 5,165
Wolverine Tube Inc.+ 369 5,028
GoAmerica Inc.+ 475 4,958
Pharmaceutical Product Development Inc.+ 152 4,760
Swift Transportation Co. Inc.+ 332 4,731
Ionics Inc.+ 224 4,690
Globix Corp.+ 456 4,617
Kent Electronics Corp.+ 224 4,172
Forrester Research Inc.+ 100 4,106
Texas Industries Inc. 176 4,103
Washington Group International Inc.+ 380 3,990
APAC Customer Services Inc.+ 718 3,859
Precision Castparts Corp. 96 3,624
Thomas & Betts Corp. 239 3,615
Photon Dynamics Inc.+ 100 3,600
Wisconsin Central Transportation Corp.+ 280 3,588
Kansas City Southern Industries Inc. 383 3,327
internet.com LLC+ 156 3,247
Presstek Inc.+ 204 3,213
Spherion Corporation+ 265 $ 3,147
Elcor Corp. 200 3,113
Superconductor Technologies Inc.+ 299 3,027
USinternetworking Inc.+ 1,261 2,916
Ventro Corporation+ 583 2,806
NaviSite Inc.+ 275 2,802
MedQuist Inc.+ 239 2,689
Cummins Engine Company Inc. 72 2,448
Avid Technology Inc.+ 176 2,442
Keynote Systems Inc.+ 100 2,400
Multex.com Inc.+ 176 2,277
Flowserve Corp. 104 2,093
U.S. Industries Inc. 231 2,050
Rare Medium Group Inc.+ 438 2,026
Pittston Brink's Group 124 1,969
Internet Pictures Corp.+ 775 1,659
Covance Inc.+ 172 1,483
SYNAVANT Inc.+ 316 1,442
G&K Services Inc. "A" 52 1,436
CellStar Corp.+ 588 1,360
CAIS Internet Inc.+ 314 1,325
Data Broadcasting Corp.+ 295 1,300
Per-Se Technologies Inc.+ 275 1,212
UCAR International Inc.+ 103 850
Parexel International Corp.+ 78 682
Razorfish Inc.+ 146 657
CNF Transportation Inc. 24 640
National Information Consortium Inc.+ 116 391
----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $26,459,821) 27,070,764
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $7,542 and an
effective yield of 5.65%. $7,541 7,541
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $7,541) 7,541
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.03%
(Cost: $26,467,362) 27,078,305
----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.03%) (8,979)
----------------------------------------------------------------
NET ASSETS -- 100.00% $27,069,326
================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 55
<PAGE>
iShares Dow Jones U.S. Technology Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCKS - 100.01%
------------------------------------------------------------------
Cisco Systems Inc.+ 235,759 $ 12,701,516
Microsoft Corp.+ 140,662 9,688,095
Intel Corp. 212,875 9,579,375
EMC Corp.+ 73,185 6,518,039
Sun Microsystems Inc.+ 53,259 5,905,092
International Business Machines Corp. 59,109 5,822,236
Oracle Corp.+ 146,052 4,819,716
Texas Instruments Inc. 57,862 2,838,854
Lucent Technologies Inc. 112,118 2,613,751
Hewlett-Packard Co. 55,922 2,596,878
Dell Computer Corp.+ 76,519 2,257,310
Veritas Software Corp.+ 13,499 1,903,570
Motorola Inc. 73,213 1,825,749
Compaq Computer Corp. 57,002 1,733,431
QUALCOMM Inc.+ 25,009 1,628,320
Juniper Networks Inc.+ 7,955 1,551,225
Applied Materials Inc.+ 27,088 1,439,050
Siebel Systems Inc.+ 11,927 1,251,590
Network Appliance Inc.+ 10,073 1,198,687
Palm Inc.+ 18,939 1,014,420
Ciena Corp.+ 9,536 1,002,472
Broadcom Corp.+ 4,404 979,339
BEA Systems Inc.+ 12,584 902,902
PMC - Sierra Inc.+ 5,302 898,689
Ariba Inc.+ 6,734 851,009
Brocade Communications System Inc.+ 3,669 834,239
Xilinx Inc.+ 11,015 797,899
VeriSign Inc.+ 6,000 792,000
Analog Devices Inc.+ 11,908 774,020
Applied Micro Circuits Corp.+ 9,802 748,628
Linear Technology Corp. 10,443 674,226
Check Point Software Technologies Ltd.+ 3,970 628,749
Tellabs Inc.+ 12,464 622,421
Adobe Systems Inc. 8,044 611,847
Maxim Integrated Products Inc.+ 9,005 597,144
Comverse Technology Inc.+ 5,330 595,627
i2 Technologies Inc.+ 3,375 573,750
Sanmina Corp.+ 4,979 569,162
Seagate Technology Inc.+ 7,633 533,356
Altera Corp.+ 12,504 511,883
Computer Associates International Inc. 15,742 501,776
Redback Networks Inc.+ 4,644 494,296
Level 3 Communications Inc.+ 10,294 490,895
Micron Technology Inc.+ 13,824 480,384
ADC Telecommunications Inc.+ 21,869 467,449
Vitesse Semiconductor Corp.+ 6,028 421,583
Commerce One Inc.+ 6,139 394,047
Intuit Inc.+ 6,189 380,237
Rational Software Corp.+ 6,248 372,928
Scientific-Atlanta Inc. 5,346 365,867
Gateway Inc.+ 6,915 356,883
PeopleSoft Inc.+ 8,039 350,827
LSI Logic Corp.+ 10,443 343,314
ONI Systems Inc.+ 4,161 337,301
Handspring Inc.+ 4,207 304,219
Mercury Interactive Corp.+ 2,665 295,815
QLogic Corp.+ 2,962 286,574
Extreme Networks Inc.+ 3,261 270,459
Jabil Circuit Inc.+ 4,542 259,178
Sycamore Networks Inc.+ 4,061 256,858
Pitney Bowes Inc. 8,573 254,511
Phone.com Inc.+ 2,527 233,905
Vignette Corp.+ 7,781 231,971
Inktomi Corp.+ 3,620 229,644
SunGard Data Systems Inc.+ 4,431 226,535
Advanced Micro Devices Inc.+ 9,960 225,345
American Tower Corp.+ 5,305 217,173
Apple Computer Inc.+ 10,948 214,170
Cadence Design Systems Inc.+ 8,260 212,179
KLA-Tencor Corp.+ 6,251 211,362
3Com Corp.+ 11,752 208,598
Atmel Corp.+ 13,828 206,556
Conexant Systems Inc.+ 7,653 201,370
Micromuse Inc.+ 1,152 195,480
BroadVision Inc.+ 6,534 194,386
Xerox Corp. 22,453 189,447
Integrated Device Technology Inc.+ 3,315 186,676
Crown Castle International Corp.+ 5,970 180,966
Novellus Systems Inc.+ 4,401 180,166
Lexmark International Group Inc. "A"+ 4,340 177,940
Amdocs Ltd.+ 2,730 176,938
Software.com Inc.+ 1,148 171,052
Teradyne Inc.+ 5,460 170,625
BMC Software Inc.+ 8,329 169,183
Emulex Corp.+ 1,083 159,066
Transwitch Corp.+ 2,740 158,235
National Semiconductor Corp.+ 5,990 155,740
Finisar Corp.+ 5,366 154,608
Foundry Networks Inc.+ 2,321 154,201
Cypress Semiconductor Corp.+ 4,051 151,659
Cabletron Systems Inc.+ 5,401 146,502
Polycom Inc.+ 2,252 146,380
</TABLE>
--------------------------------------------------------------------------------
Page 56 iShares
<PAGE>
iShares Dow Jones U.S. Technology Sector Index Fund
Schedule Of Investments (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
------------------------------------------------------------------
Interwoven Inc.+ 1,441 $ 145,181
Rambus Inc.+ 3,217 144,564
Citrix Systems Inc.+ 6,222 137,662
Unisys Corp.+ 10,497 133,837
NCR Corp.+ 3,058 131,876
Macromedia Inc.+ 1,654 127,461
Micrel Inc.+ 2,806 126,971
Microchip Technology Inc.+ 3,993 126,279
Avaya Inc.+ 9,337 125,466
TIBCO Software Inc.+ 1,954 123,102
Portal Software Inc.+ 3,262 114,782
Peregrine Systems Inc.+ 4,685 112,440
Parametric Technology Corp.+ 9,122 112,315
SanDisk Corp.+ 2,079 111,714
Art Technology Group Inc.+ 1,776 111,444
New Focus Inc.+ 1,735 110,173
Cree Inc.+ 1,106 109,770
RF Micro Devices Inc.+ 5,409 107,842
NVIDIA Corp.+ 1,707 106,074
Lattice Semiconductor Corp.+ 3,580 104,491
Agile Software Corp.+ 1,371 103,339
CacheFlow Inc.+ 953 102,924
GlobeSpan Inc.+ 1,315 101,173
Internet Security Systems Inc.+ 1,127 99,458
Novell Inc.+ 11,047 99,423
TriQuint Semiconductor Inc.+ 2,582 98,923
Powerwave Technologies Inc.+ 2,046 98,464
Informatica Corp.+ 1,029 97,240
Compuware Corp.+ 12,235 96,351
Sapient Corp.+ 2,565 91,218
Network Associates Inc.+ 4,657 89,647
Amphenol Corp. "A"+ 1,394 89,564
Manugistics Group Inc.+ 784 89,327
Nuance Communications Inc.+ 1,021 88,061
Advanced Fibre Communications Inc.+ 2,698 87,854
E.piphany Inc.+ 969 87,331
International Rectifier Corp.+ 1,911 85,278
Synopsys Inc.+ 2,405 83,874
Vitria Technology Inc.+ 3,066 82,399
Wind River Systems Inc.+ 2,002 82,207
KEMET Corp.+ 2,939 81,925
Lam Research Corp.+ 4,178 80,949
Cirrus Logic Inc.+ 1,815 78,272
Netegrity Inc.+ 971 75,738
Quantum DLT & Storage Group+ 5,044 75,660
Dallas Semiconductor Corp. 1,908 75,605
RSA Security Inc.+ 1,269 73,602
Spectrasite Holdings Inc.+ 3,713 73,332
Symantec Corp.+ 1,861 72,695
RealNetworks Inc.+ 3,444 70,979
Kana Communications Inc.+ 2,974 69,889
Elantec Semiconductor Inc.+ 625 69,531
Harris Corp. 2,114 66,987
Andrew Corp.+ 2,545 66,965
Semtech Corp.+ 2,070 66,758
MRV Communications Inc.+ 1,685 66,557
Red Hat Inc.+ 5,300 66,250
Viasystems Group Inc.+ 4,543 64,454
Retek Inc.+ 1,597 62,982
Silicon Storage Technology Inc.+ 2,629 59,810
Internap Network Services Corp.+ 3,715 59,440
Amkor Technology Inc.+ 2,645 58,686
Sybase Inc.+ 2,792 58,458
Fairchild Semiconductor Corp. "A"+ 2,763 58,196
ON Semiconductor Corp.+ 5,752 57,880
Loral Space & Communications Ltd.+ 9,945 56,562
Exar Corp.+ 1,258 56,217
Cerner Corp.+ 899 55,682
Infonet Services Corp. "B"+ 8,542 55,523
Advent Software Inc.+ 928 55,506
Alpha Industries Inc.+ 1,336 53,273
Plantronics Inc.+ 1,167 53,244
DMC Stratex Networks Inc.+ 2,285 52,841
Adaptec Inc.+ 3,332 52,687
Infocus Corp.+ 1,185 52,362
Natural Microsystems Corp.+ 1,154 52,146
Proxim Inc.+ 843 51,107
Jack Henry & Associates Inc. 922 50,710
Documentum Inc.+ 595 50,575
SBA Communications Corp.+ 991 49,674
Cobalt Networks Inc.+ 888 48,951
Edwards (J.D.) & Co.+ 1,827 47,274
Terayon Communications Systems Inc.+ 2,091 46,786
AudioCodes Ltd.+ 1,174 46,446
Inet Technologies Inc.+ 1,129 46,289
Oak Technology Inc.+ 1,638 45,966
Iomega Corp.+ 9,078 44,573
Silicon Laboratories Inc.+ 1,583 44,423
Actuate Software Corp.+ 1,569 44,226
Entrust Technologies Inc.+ 1,427 43,791
Universal Access Inc.+ 2,976 43,524
Quest Software Inc.+ 972 42,464
</TABLE>
--------------------------------------------------------------------------------
iShares Schedules of Investments Page 57
<PAGE>
iShares Dow Jones U.S. Technology Sector Index Fund
Schedule Of Investments (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCKS (continued)
------------------------------------------------------------------
Centillium Communications Inc.+ 1,101 $ 41,821
Matrixone Inc.+ 1,403 41,652
Black Box Corp.+ 627 41,304
Informix Corp.+ 9,524 40,477
Efficient Networks Inc.+ 964 40,443
Software Technologies Corp.+ 2,316 39,372
Autodesk Inc. 1,743 38,455
Emcore Corp.+ 916 37,556
Mentor Graphics Corp.+ 1,601 37,523
Silicon Valley Group Inc.+ 1,138 37,483
Zebra Technologies Corp. "A"+ 814 35,663
NetIQ Corp.+ 402 34,622
Clarent Corp.+ 1,096 34,045
Cable Design Technologies Corp.+ 1,453 33,510
Aspen Technology Inc.+ 811 33,504
Storage Technology Corp.+ 3,392 33,072
Virata Corp.+ 1,667 32,298
Quantum Hard Disk Drive Group+ 2,817 32,219
Selectica Inc.+ 1,204 31,756
Siliconix Inc.+ 733 31,702
SERENA Software Inc.+ 621 31,593
Echelon Corp.+ 984 31,242
Ditech Communications Corp.+ 902 31,063
FileNET Corp.+ 1,149 30,448
Kopin Corp.+ 2,116 29,888
Concurrent Computer Corp.+ 1,689 29,769
Caliper Technologies Corp.+ 526 29,653
Liberate Technologies Inc.+ 1,546 29,471
Actel Corp.+ 801 29,337
C-Cube Microsystems Inc.+ 1,495 29,152
Western Digital Corp.+ 4,811 28,866
Aspect Communications Corp.+ 1,729 28,501
Intranet Solutions Inc.+ 609 28,318
Netro Corp.+ 1,291 28,160
Credence Systems Corp.+ 1,500 28,125
Harmonic Inc.+ 1,922 27,869
OpenTV Corp.+ 1,004 26,983
Silicon Graphics Inc.+ 5,927 26,672
VA Linux Systems Inc.+ 911 26,647
Electronics For Imaging Inc.+ 1,688 26,164
SonicWALL Inc.+ 1,738 25,961
Legato Systems Inc.+ 2,903 25,855
Verity Inc.+ 1,094 25,709
Pinnacle Holdings Inc.+ 1,619 25,499
Next Level Communications Inc.+ 539 25,232
Varian Semiconductor Equipment
Associates Inc.+ 1,073 24,679
Computer Network Technology Corp.+ 805 24,464
Benchmark Electronics Inc.+ 605 24,351
NorthPoint Communications Group Inc.+ 3,478 23,477
Intertrust Technologies Corp.+ 2,334 23,340
Zoran Corp.+ 462 23,158
S3 Inc.+ 2,507 22,641
WebTrends Corp.+ 699 22,466
Kulicke & Soffa Industries Inc.+ 1,527 22,428
ANADIGICS Inc.+ 1,000 22,375
Advanced Digital Information Corp.+ 1,718 22,334
ADTRAN Inc.+ 585 22,230
S1 Corp.+ 1,839 22,183
Keane Inc.+ 1,700 22,100
DSP Group Inc.+ 777 22,047
Avant! Corp.+ 1,305 21,940
AXT Inc.+ 569 21,906
LTX Corp.+ 1,519 21,266
Excalibur Technologies Corp.+ 359 21,136
Williams Communications Group Inc.+ 1,143 20,931
Aware Inc.+ 672 20,790
ESS Technology Inc.+ 1,328 20,584
WatchGuard Technologies Inc.+ 407 20,350
Photronics Inc.+ 897 20,239
F5 Networks Inc.+ 651 20,181
Adaptive Broadband Corp.+ 1,254 20,142
Microstrategy Inc.+ 823 19,701
UTStarcom, Inc.+ 985 19,700
Copper Mountain Networks Inc.+ 1,690 19,329
Maxtor Corp.+ 2,419 18,898
AXENT Technologies Inc.+ 969 18,593
HNC Software Inc.+ 915 18,586
Mercury Computer Systems Inc.+ 587 18,197
Digital Lightware Inc.+ 355 17,994
Puma Technology Inc.+ 1,321 17,916
Wave Systems Corp. "A"+ 1,548 17,899
HI/FN Inc.+ 287 17,722
PRI Automation Inc.+ 780 17,648
C-COR Electronics Inc.+ 1,123 17,547
Trimble Navigation Ltd.+ 729 17,314
PanAmSat Corp.+ 502 16,817
Silicon Image Inc.+ 1,412 16,591
Remedy Corp.+ 966 16,543
ATMI, Inc.+ 873 16,478
New Era of Networks Inc.+ 1,050 16,341
Asyst Technologies Inc.+ 1,080 16,200
</TABLE>
--------------------------------------------------------------------------------
Page 58 iShares
<PAGE>
iShares Dow Jones U.S. Technology Sector Index Fund
Schedule Of Investments (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCKS (continued)
------------------------------------------------------------------
Tut Systems Inc.+ 486 $ 16,160
DuPont Photomasks Inc.+ 287 16,108
Systems & Computer Technology Corp.+ 1,102 15,910
M-Systems Flash Disk Pioneers Ltd.+ 636 15,820
Ultratech Stepper Inc.+ 672 15,792
Alliance Semiconductor Corp.+ 789 15,780
Glenayre Technologies Inc.+ 1,912 15,774
Hutchinson Technology Inc.+ 717 15,729
Read-Rite Corp.+ 2,065 15,358
Packeteer Inc.+ 617 15,348
Hyperion Solutions Corp.+ 1,088 15,232
PLX Technology Inc.+ 619 14,856
Transaction Systems Architects Inc. "A"+ 1,099 14,837
Allen Telecom Inc.+ 777 14,520
RadiSys Corp.+ 534 14,151
Brooks Automation Inc.+ 500 13,250
International Fibercom Inc.+ 1,025 13,197
Inprise Corp.+ 2,047 13,050
P-Com Inc.+ 2,316 13,028
ANTEC Corp.+ 1,040 12,675
Broadbase Software Inc.+ 1,163 12,502
ZixIt Corp.+ 508 12,414
Tumbleweed Communications Corp.+ 723 12,381
Power Integrations Inc.+ 905 12,161
SilverStream Software Inc.+ 522 11,745
Osicom Technologies Inc.+ 365 11,680
Standard Microsystems Corp.+ 483 11,592
Integrated Silicon Solution Inc.+ 862 11,529
Xircom Inc.+ 797 11,258
Micros Systems Inc.+ 570 11,257
JDA Software Group Inc.+ 715 10,770
Sanchez Computer Associates Inc.+ 662 10,633
Structural Dynamics Research Corp.+ 1,023 10,550
InterVoice Inc.+ 1,046 10,231
Micron Electronics Inc.+ 1,275 10,080
Intergraph Corp.+ 1,607 10,044
Extended Systems Inc.+ 249 9,711
Allscripts Inc.+ 806 9,672
Symmetricom Inc.+ 758 9,665
Metasolv Software Inc.+ 777 9,664
PC-Tel Inc.+ 552 9,522
Project Software & Development Inc.+ 731 9,503
Auspex Systems Inc.+ 932 9,436
Cohu Inc. 593 9,377
Electroglas Inc.+ 657 9,239
IMRglobal Corp.+ 1,067 8,803
Inter-Tel Inc. 693 8,013
StarBase Corp.+ 1,549 7,890
Westell Technologies Inc.+ 1,385 7,618
Picturetel Corp.+ 1,184 7,530
General Magic Inc.+ 1,851 7,462
SpeedFam-IPEC Inc.+ 773 7,344
World Access Inc.+ 1,466 7,147
FSI International Inc.+ 757 7,050
MetaCreations Corp.+ 701 7,010
BackWeb Technologies Ltd.+ 771 6,891
Network Equipment Technologies Inc.+ 706 6,707
Allaire Corp.+ 912 6,669
Neotopia Inc.+ 577 6,275
Brooktrout Technology Inc.+ 410 5,919
InfoCure Corp.+ 1,135 5,781
ePresence Inc.+ 812 5,735
3Dfx Interactive Inc.+ 1,280 5,440
Open Market Inc.+ 1,615 5,350
Clarus Corp.+ 514 5,140
EMS Technologies Inc.+ 323 5,128
Vertel Corp.+ 913 4,850
Mercator Software Inc.+ 1,022 4,663
Rhythms Netconnections Inc.+ 2,050 4,484
Carrier Access Corp.+ 352 4,400
Concord Communications Inc.+ 548 4,247
Accrue Software Inc.+ 856 3,959
CyberSource Corp.+ 637 3,503
Geoworks Corp.+ 634 3,111
NetSpeak Corp.+ 403 3,073
Be Inc.+ 995 3,047
Magic Software Enterprises Ltd.+ 517 3,005
NEON Communications Inc.+ 241 2,907
Epicor Software Corp.+ 1,416 2,788
Elcom International Inc.+ 785 2,747
Net Perceptions Inc.+ 676 2,239
Marimba Inc.+ 361 2,143
InterWorld Corp.+ 841 1,840
Exchange Applications Inc.+ 571 1,829
------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $124,730,214) 117,368,980
------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
iShares Schedules Of Investments Page 59
<PAGE>
iShares Dow Jones U.S. Technology Sector Index Fund
Schedule Of Investments (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Security Principal Value
<S> <C> <C>
------------------------------------------------------------------
SHORT TERM INSTRUMENTS - 5.50%
------------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $ 964,065 $ 964,065
Goldman Sachs Financial Square Prime
Obligation Fund++ 1,624,397 1,624,397
Providian Temp Cash Money Market Fund++ 1,184,058 1,184,058
Short Term Investment Company Liquid
Assets Portfolio++ 2,680,313 2,680,313
------------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $6,452,833) 6,452,833
------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
------------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due
11/01/00, with a maturity value of
$38,363 and an effective yield of 5.65%. 38,357 38,357
------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $38,357) 38,357
------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 105.54%
(Cost: $131,221,404) 123,860,170
------------------------------------------------------------------
Other Assets, Less Liabilities -- (5.54%) (6,505,796)
------------------------------------------------------------------
NET ASSETS -- 100.00% $117,354,374
==================================================================
</TABLE>
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
Page 60 iShares
<PAGE>
iShares Dow Jones U.S. Telecommunications Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
-----------------------------------------------------------------
COMMON STOCKS - 100.02%
-----------------------------------------------------------------
SBC Communications Inc. 130,094 $ 7,504,798
Verizon Communications 104,114 6,019,091
AT&T Corp. 148,829 3,450,972
BellSouth Corp. 68,220 3,295,879
WorldCom Inc.+ 115,083 2,733,221
Qwest Communications International Inc.+ 50,523 2,456,681
Alltel Corp. 20,611 1,328,121
CenturyTel Inc. 25,892 996,842
United States Cellular Corp.+ 14,293 914,752
Telephone & Data Systems Inc. 8,610 908,355
Sprint Corp. (FON Group) 32,122 819,111
Sprint Corp. (PCS Group)+ 20,264 772,565
Nextel Communications Inc. "A"+ 19,522 750,377
Citizen Communications Co.+ 50,362 730,249
Broadwing Inc.+ 17,725 500,731
Voicestream Wireless Corp.+ 3,622 476,293
Western Wireless Corp. "A"+ 9,694 460,465
XO Communications Inc. "A"+ 12,053 406,600
Rural Cellular Corp. "A"+ 6,042 324,758
McLeodUSA Inc. "A"+ 15,776 303,688
Time Warner Telecom Inc. "A"+ 4,500 268,313
AT&T Wireless Group+ 10,300 256,856
Powertel Inc.+ 2,758 240,636
Metromedia Fiber Network Inc.+ 10,755 204,345
Wireless Facilities Inc.+ 3,500 175,000
Allegiance Telecom Inc.+ 5,205 163,632
IDT Corp.+ 4,140 148,005
Focal Communications Corp.+ 9,543 138,373
US LEC Corp. "A"+ 22,670 136,020
Aether Systems Inc.+ 1,500 120,937
AirGate PCS Inc.+ 2,800 108,850
WebLink Wireless Inc.+ 13,612 108,045
RCN Corp.+ 6,015 106,766
PTEK Holdings Inc.+ 52,230 106,092
Talk.com Inc.+ 33,667 104,157
Intermedia Communications Inc.+ 4,643 102,726
ITC DeltaCom Inc.+ 12,482 101,026
Motient Corp.+ 8,027 97,327
Winstar Communications Inc.+ 4,922 95,979
ITXC Corp.+ 8,675 91,630
Arch Wireless Inc.+ 28,066 84,198
Network Plus Corp.+ 10,174 80,120
TeleCorp PCS Inc.+ 4,264 79,950
InterDigital Communications Corp.+ 5,868 64,181
Allied Riser Communications Corp.+ 18,575 59,208
Shares or
Security Principal Value
-----------------------------------------------------------------
Advanced Radio Telecom Corp.+ 13,459 $ 52,995
Covad Communications Group Inc.+ 9,592 50,658
e.spire Communications Inc.+ 18,368 50,512
Teligent Inc. "A"+ 6,320 47,993
Global Telesystems Group Inc. 17,591 47,276
Metricom Inc.+ 2,617 46,452
Primus Telecommunications Group Inc.+ 9,083 45,983
Adelphia Business Solutions Inc.+ 6,929 43,306
Leap Wireless International Inc.+ 850 42,288
Viatel Inc.+ 4,228 40,695
Mpower Communications Corp.+ 5,493 35,705
ICG Communications Inc.+ 15,016 6,569
-----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $40,296,314) 38,906,353
-----------------------------------------------------------------
SHORT TERM INSTRUMENTS - 8.28%
-----------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $ 481,527 481,527
Goldman Sachs Financial Square Prime
Obligation Fund++ 1,350,345 1,350,345
Providian Temp Cash Money Market Fund++ 591,464 591,464
Short Term Investment Company Liquid
Assets Portfolio++ 800,000 800,000
-----------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $3,223,336) 3,223,336
-----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.04%
-----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $14,365 and an
effective yield of 5.65%. 14,362 14,362
-----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $14,362) 14,362
-----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 108.34%
(Cost: $43,534,012) 42,144,051
-----------------------------------------------------------------
Other Assets, Less Liabilities -- (8.34%) (3,244,351)
-----------------------------------------------------------------
NET ASSETS -- 100.00% $38,899,700
=================================================================
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 61
<PAGE>
iShares Dow Jones U.S. Utilities Sector Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------
COMMON STOCKS - 99.86%
--------------------------------------------------------------
Enron Corp. 77,271 $ 6,341,051
Duke Energy Corp. 38,490 3,326,979
AES Corp.+ 39,049 2,206,268
Exelon Corp. 33,840 2,034,630
Southern Co. 67,815 1,992,066
Dominion Resources Inc. 24,866 1,481,081
American Electric Power Inc. 33,648 1,396,392
Calpine Corp.+ 14,405 1,137,095
FPL Group Inc. 16,825 1,110,450
PG&E Corp. 40,335 1,086,524
Reliant Energy Inc. 26,251 1,084,494
TXU Corporation 27,580 1,022,184
Public Service Enterprise Group Inc. 22,418 930,347
Entergy Corp. 23,820 912,604
Xcel Energy Inc. 35,310 902,612
Edison International 34,075 813,541
Consolidated Edison Inc. 22,189 780,775
CP&L Energy Inc. 16,721 674,065
Constellation Energy Group Inc. 15,651 652,451
Dynegy Inc. 13,677 633,416
PP&L Resources Inc. 15,132 623,249
FirstEnergy Corp. 23,872 617,688
Columbia Energy Group 8,352 600,822
Ameren Corp. 14,375 571,406
Florida Progress Corp. 10,301 547,884
DTE Energy Co. 14,901 538,299
Cinergy Corp. 16,647 509,814
KeySpan Corp. 14,067 494,983
Allegheny Energy Inc. 11,533 472,132
Sempra Energy 21,399 442,692
GPU Inc. 12,833 424,291
Pinnacle West Capital Corp. 8,845 384,205
DPL Inc. 13,516 383,517
TECO Energy Inc. 13,108 365,386
LG&E Energy Corp. 13,589 333,780
NiSource Inc. 12,705 316,831
Northeast Utilities 15,519 316,200
Montana Power Co. 11,033 311,682
CMS Energy Corp. 11,462 309,474
SCANA Corp. 10,939 289,883
Potomac Electric Power Co. 11,844 270,932
Niagara Mohawk Holdings Inc.+ 16,752 268,032
Energy East Corp. 12,886 260,136
Utilicorp United Inc. 9,670 256,859
American Water Works Inc. 10,282 250,624
Alliant Energy Corp. 8,247 249,987
Wisconsin Energy Corp. 12,725 239,389
MCN Energy Group Inc. 9,416 231,869
National Fuel Gas Co. 4,105 220,131
Shares or
Security Principal Value
----------------------------------------------------------------
Puget Sound Energy Inc. 8,910 $ 218,852
DQE Inc. 6,182 215,984
Questar Corp. 7,764 210,113
IPALCO Enterprises Inc. 9,009 202,139
Equitable Resources Inc. 3,406 197,548
IDACorp Inc. 3,941 194,341
Eastern Enterprises 2,830 182,181
NICOR Inc. 4,805 169,677
OGE Energy Corp. 8,127 167,111
ALLETE 7,750 167,109
Conectiv Inc. 8,892 159,500
Western Resources Inc. 7,239 154,734
Kansas City Power & Light Co. 6,134 147,599
Sierra Pacific Resources Corp. 7,683 132,052
Peoples Energy Corp. 3,699 127,153
AGL Resources Inc. 5,667 115,465
Cleco Corp. 2,353 111,915
Hawaiian Electric Industries Inc. 3,374 111,131
Avista Corp. 4,934 110,707
RGS Energy Group Inc. 3,675 108,412
Public Service Company of New Mexico 3,930 108,321
Piedmont Natural Gas Co. 3,309 100,924
ONEOK Inc. 2,460 97,478
El Paso Electric Co.+ 5,713 68,499
E-Town Corp. 922 62,120
Northwest Natural Gas Co. 2,636 61,781
UniSource Energy Corp. 3,386 50,578
NUI Corp. 1,353 42,197
Azurix Corp.+ 3,871 24,194
----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $40,925,249) 45,441,017
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.05%
----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $19,710 and an
effective yield of 5.65%. $19,707 19,707
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $19,707) 19,707
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 99.91%
(Cost: $40,944,956) 45,460,724
----------------------------------------------------------------
Other Assets, Less Liabilities -- 0.09% 43,063
----------------------------------------------------------------
NET ASSETS -- 100.00% $45,503,787
================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
page 62 iShares
<PAGE>
iShares Dow Jones U.S. Chemicals Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------
COMMON STOCKS - 99.99%
--------------------------------------------------------------
Du Pont (E.I.) de Nemours 85,791 $ 3,892,767
Dow Chemical Co. 87,448 2,678,095
Air Products & Chemicals Inc. 29,505 1,100,906
Union Carbide Corp. 18,970 815,710
Avery Dennison Corp. 15,512 783,356
Praxair Inc. 20,956 780,611
Ecolab Inc. 16,408 642,988
Rohm & Haas Co. "A" 20,757 624,007
Eastman Chemical Co. 12,859 551,330
Engelhard Corp. 24,098 503,046
Sigma-Aldrich Corp. 12,765 456,349
Hercules Inc. 19,002 347,974
Lubrizol Corp. 15,842 343,573
Great Lakes Chemical Corp. 9,945 331,914
RPM Inc. 32,709 292,337
IMC Global Inc. 21,767 281,611
Cytec Industries Inc.+ 7,830 271,114
Solutia Inc. 21,185 270,109
OM Group Inc. 5,715 264,319
Millennium Chemicals Inc. 16,309 262,983
Cabot Corp. 11,178 245,916
Olin Corp. 11,175 198,356
Ferro Corp. 9,566 196,103
Crompton Corp. 23,311 186,488
MacDermid Inc. 6,359 136,718
Cabot Microelectronics Corp.+ 3,029 133,844
Fuller (H. B.) Co. 3,592 121,454
Lilly Industries Inc. "B" 3,761 112,830
Wellman Inc. 6,975 104,625
WD-40 Company 4,475 97,891
Schulman (A.) Inc. 8,528 93,275
Georgia Gulf Corp. 6,096 81,534
Grace (W.R.) & Company+ 12,285 46,836
Calgon Carbon Corp. 6,318 37,118
--------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $18,217,839) 17,288,087
--------------------------------------------------------------
Security Principal Value
------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.03%
------------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $6,002 and an
effective yield of 5.65%. $ 6,001 $ 6,001
-----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $6,001) 6,001
-----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.02%
(Cost: $18,223,840) 17,294,088
-----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.02%) (3,513)
-----------------------------------------------------------------
NET ASSETS -- 100.00% $17,290,575
=================================================================
+ Non-income earning securities.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 63
<PAGE>
iShares Dow Jones U.S. Financial Services Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 99.94%
---------------------------------------------------------------
Citigroup Inc. 176,420 $ 9,284,102
Morgan Stanley Dean Witter & Co. 44,389 3,564,992
Wells Fargo & Company 67,107 3,107,893
Bank of America Corp. 64,429 3,096,619
Fannie Mae 39,986 3,078,922
American Express Co. 46,288 2,777,280
Chase Manhattan Corp. 51,095 2,324,822
Merrill Lynch & Co. Inc. 28,285 1,979,950
Bank of New York Co. Inc. 28,925 1,664,995
Bank One Corp. 45,322 1,654,253
Freddie Mac 27,325 1,639,500
Schwab (Charles) Corp. 42,088 1,478,341
Marsh & McLennan Companies Inc. 10,636 1,390,657
FleetBoston Financial Corp. 35,393 1,344,934
First Union Corp. 38,627 1,170,881
MBNA Corp. 29,304 1,100,732
Associates First Capital Corp. 28,569 1,060,624
Morgan (J.P.) & Co. Inc. 6,239 1,032,555
Household International Inc. 18,553 933,448
Washington Mutual Inc. 21,134 929,896
Mellon Financial Corp. 19,140 923,505
AXA Financial Inc. 16,949 916,305
Fifth Third Bancorp 17,120 879,540
American General Corp. 9,901 797,030
State Street Corp. 6,325 788,981
PNC Bank Corp. 11,360 759,700
Firstar Corp. 37,578 739,817
US Bancorp Inc. 29,248 707,436
Northern Trust Corp. 8,163 696,916
Lehman Brothers Holdings Inc. 9,520 614,040
Providian Financial Corp. 5,595 581,880
Goldman Sachs Group Inc. (The) 5,692 568,133
BB&T Corp. 15,713 500,852
SunTrust Banks Inc. 10,073 491,688
Capital One Financial Corp. 7,679 484,737
National City Corp. 20,596 440,240
Wachovia Corp. 7,970 430,380
KeyCorp 16,882 416,774
Stilwell Financial Inc. 8,805 394,574
Hancock (John) Financial Services Inc.+ 12,352 390,632
Comerica Inc. 6,127 369,535
USA Education Inc. 6,079 339,664
Franklin Resources Inc. 7,109 304,550
Paine Webber Group Inc. 4,025 286,781
Golden West Financial Corp. 4,658 261,139
Summit Bancorp 6,920 259,500
Bear Stearns Companies Inc. 4,215 255,534
Price (T. Rowe) Associates 4,730 221,423
AmSouth Bancorp 15,437 215,153
SouthTrust Corp. 6,594 213,481
Regions Financial Corp. 8,560 201,695
Charter One Financial Inc. 8,264 189,556
Zions Bancorp 3,241 186,155
Synovus Financial Corp. 8,517 183,648
Union Planters Corp. 5,277 178,429
National Commerce Bancorp 7,936 168,640
Countrywide Credit Industries Inc. 4,454 166,747
Edwards (A.G.) Inc. 3,234 164,125
M&T Bank Corp. 3,205 160,891
Marshall & Ilsley Corp. 3,410 154,516
Old Kent Financial Corp. 5,373 148,765
Knight Trading Group Inc.+ 4,817 144,209
North Fork Bancorp 6,843 138,143
CIT Group Inc. (The) 7,546 131,583
Huntington Bancshares Inc. 9,002 129,404
TCF Financial Corp. 3,155 127,580
E*trade Group Inc.+ 8,719 126,970
Donaldson, Lufkin & Jenrette Inc. 1,402 125,917
SEI Investment Co. 1,331 120,788
First Tennessee National Corp. 5,108 117,484
Dime Bancorp Inc. 4,762 116,371
Legg Mason Inc. 2,170 112,704
Mercantile Bankshares Corp. 2,765 104,033
Federated Investors Inc. "B" 3,540 103,103
Greenpoint Financial Corp. 3,448 102,578
Bisys Group Inc.+ 2,174 102,450
Silicon Valley Bancshares+ 1,905 88,106
Compass Bancshares Inc. 4,764 86,645
Hudson City Bancorp Inc. 4,527 82,335
AmeriCredit Corp.+ 2,977 80,007
FirstMerit Corp. 3,470 79,159
Metris Companies Inc. 2,388 77,312
First Virginia Banks Inc. 1,808 74,806
Hibernia Corp. "A" 6,256 74,681
Astoria Financial Corp. 1,990 74,625
Sovereign Bancorp Inc. 8,887 73,873
Commerce Bancorp Inc. 1,199 72,614
Commerce Bancshares Inc. 2,009 72,198
Bank United Corp. "A" 1,270 71,993
Investors Financial Services Corp. 953 68,318
--------------------------------------------------------------------------------
page 64 iShares
<PAGE>
iShares Dow Jones U.S. Financial Services Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS (continued)
--------------------------------------------------------------------------------
Wilmington Trust Corp. 21,267 $ 66,676
Cullen/Frost Bankers Inc. 1,889 62,927
Old National Bancorp 2,094 61,773
Allied Capital Corp. 2,977 61,401
Ameritrade Holding Corp. "A"+ 4,152 60,723
Centura Banks Inc. 1,562 60,039
Golden State Bancorp Inc. 2,292 59,879
Associated Bancorp 2,446 58,857
Eaton Vance Corp. 1,156 57,583
Raymond James Financial Corp. 1,659 56,095
City National Corp. 1,591 54,691
Roslyn Bancorp Inc. 2,414 52,354
Waddell & Reed Financial Inc. "A" 1,640 52,275
Westamerica Bancorp 1,438 51,678
Webster Financial Corp. 2,091 50,968
UnionBanCal Corporation 2,221 46,641
Affiliated Managers Group Inc.+ 763 45,875
Washington Federal Inc. 2,049 45,718
Greater Bay Bancorp 1,398 45,522
Hudson United Bancorp 1,897 42,445
Downey Financial Corp. 879 41,972
Citizens Banking Corp. 1,725 41,077
Trustmark Corp. 2,132 40,508
Pacific Century Financial Corp. 3,138 39,813
Imperial Bancorp+ 1,607 39,070
Commercial Federal Corp. 2,220 38,850
Colonial BancGroup Inc. 4,361 38,431
Southwest Bancorp of Texas Inc.+ 1,034 37,741
Provident Financial Group Inc. 1,227 37,117
First Midwest Bancorp Inc. 1,408 35,288
Independence Community Bank Corp. 2,382 34,986
Community First Bankshares Inc. 1,984 30,752
Doral Financial Corp. 1,659 29,655
Phoenix Investment Partners Ltd. 1,762 27,531
Chittenden Corp. 1,019 27,067
Staten Island Bancorp Inc. 1,307 25,241
Richmond County Financial Corp. 1,045 24,558
Jeffries Group Inc. 896 24,416
BancWest Corporation 1,127 23,033
National Discounts Brokers Group Inc.+ 452 22,007
American Capital Strategies Ltd. 966 21,312
MAF Bancorp Inc. 862 20,688
People's Bank 1,003 20,311
Shares or
Security Principal Value
--------------------------------------------------------------------------------
AMCORE Financial Inc. 1,019 $ 19,998
Provident Bankshares Corp. 1,051 19,903
Queens County Bancorp Inc. 701 19,628
CompuCredit Corp.+ 629 19,420
Sterling Bancshares Inc. 1,025 17,617
Southwest Securities Group Inc. 622 17,572
South Financial Group Inc. (The) 1,716 17,482
FirstFed Financial Corp.+ 666 16,983
Texas Regional Bancshares "A" 523 15,625
East West Bancorp Inc. 753 14,260
NextCard Inc.+ 1,857 14,160
Anchor Bancorp Wisconsin Inc. 902 13,925
Republic Bancorp Inc. 1,432 13,604
UCBH Holdings Inc. 367 13,350
GBC Bancorp 418 13,324
Republic Security Financial Corp. 1,857 12,593
First Sentinel Bancorp Inc. 1,302 12,084
Harbor Florida Bancshares Inc. 986 12,079
Bay View Capital Corp. 1,204 9,782
Haven Bancorp Inc. 327 9,360
Net.B@nk Inc.+ 1,077 9,356
PFF Bancorp Inc. 483 8,936
OceanFirst Financial Corp. 415 8,689
Medallion Financial Corp. 564 8,672
Ocwen Financial Corp.+ 1,465 8,607
Dime Community Bancshares 362 8,032
Pacific Northwest Bancorp 594 7,945
BSB Bancorp Inc. 413 5,988
Finova Group Inc. 2,236 5,730
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $58,903,190) 66,838,720
--------------------------------------------------------------------------------
SHORT TERM INSTRUMENTS - 0.73%
--------------------------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $ 72,974 72,974
Goldman Sachs Financial Square Prime
Obligation Fund++ 81,422 81,422
Providian Temp Cash Money Market Fund++ 89,635 89,635
Short Term Investment Company Liquid
Assets Portfolio++ 244,459 244,459
--------------------------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $488,490) 488,490
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
iShares Schedules of Investments page 65
<PAGE>
iShares Dow Jones U.S. Financial Services Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Principal Value
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.05%
----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $33,951 and
an effective yield of 5.65%. $ 33,945 $ 33,945
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $33,945) 33,945
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.72%
(Cost: $59,425,625) 67,361,155
----------------------------------------------------------------
Other Assets, Less Liabilities -- (0.72%) (478,980)
----------------------------------------------------------------
NET ASSETS -- 100.00% $66,882,175
================================================================
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
page 66 iShares
<PAGE>
iShares Dow Jones U.S. Internet Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
-----------------------------------------------------------------
COMMON STOCKS - 100.02%
-----------------------------------------------------------------
America Online Inc.+ 123,009 $ 6,203,344
BEA Systems Inc.+ 69,858 5,012,312
Ariba Inc.+ 37,410 4,727,689
VeriSign Inc.+ 33,331 4,399,692
Yahoo! Inc.+ 62,591 3,669,397
Check Point Software Technologies Ltd.+ 22,035 3,489,793
i2 Technologies Inc.+ 18,723 3,182,910
Exodus Communications Inc.+ 77,694 2,607,605
Commerce One Inc.+ 34,102 2,188,922
Amazon.com Inc.+ 44,183 1,618,202
eBay Inc.+ 27,890 1,436,335
Vignette Corp.+ 43,195 1,287,751
Inktomi Corp.+ 20,094 1,274,713
BroadVision Inc.+ 36,249 1,078,408
InfoSpace.com Inc.+ 37,166 747,966
TIBCO Software Inc.+ 10,820 681,660
CMGI Inc.+ 39,911 673,498
Portal Software Inc.+ 18,087 636,436
WebMD Corp.+ 55,491 631,210
E*trade Group Inc.+ 41,322 601,752
Akamai Technologies Inc.+ 11,008 561,408
Internet Capital Group LLC+ 38,481 509,873
At Home Corp. "A"+ 49,263 508,025
CheckFree Corp.+ 9,117 453,571
CNET Networks Inc.+ 13,287 418,541
RealNetworks Inc.+ 19,118 394,010
DoubleClick Inc.+ 22,879 371,784
VerticalNet Inc.+ 10,923 304,649
Ameritrade Holding Corp. "A"+ 19,725 288,477
FreeMarkets Inc.+ 5,090 251,637
PSINET Inc.+ 29,422 195,840
Homestore.com Inc.+ 5,479 186,286
Digital Island Inc.+ 12,474 157,484
Covad Communications Group Inc.+ 28,869 152,464
EarthLink Inc.+ 22,792 148,860
Ticketmaster Online-CitySearch Inc. "B"+ 6,337 101,392
Priceline.com Inc.+ 13,397 77,033
Webvan Group Inc.+ 70,862 69,755
eToys Inc.+ 18,299 68,621
MP3.com Inc.+ 4,998 17,649
-----------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $61,008,471) 51,386,954
-----------------------------------------------------------------
SHORT TERM INSTRUMENTS - 10.68%
-----------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $2,000,000 $ 2,000,000
Goldman Sachs Financial Square Prime
Obligation Fund++ 2,079,991 2,079,991
Providian Temp Cash Money Market Fund++ 1,006,794 1,006,794
Short Term Investment Company Liquid
Assets Portfolio++ 400,000 400,000
-----------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $5,486,785) 5,486,785
-----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.05%
-----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $28,137 and an
effective yield of 5.65%. 28,133 28,133
-----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $28,133) 28,133
-----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 110.75%
(Cost: $66,523,389) 56,901,872
-----------------------------------------------------------------
Other Assets, Less Liabilities -- (10.75%) (5,523,318)
-----------------------------------------------------------------
NET ASSETS -- 100.00% $51,378,554
=================================================================
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 67
<PAGE>
iShares Dow Jones U.S. Real Estate Index Fund
Schedule of Investments
October 31, 2000 (Unaudited)
Security Shares Value
---------------------------------------------------------------
COMMON STOCKS - 99.04%
---------------------------------------------------------------
Equity Office Properties Trust 92,187 $ 2,777,133
Equity Residential Properties Trust 40,213 1,892,524
Spieker Properties Inc. 21,329 1,181,093
Prologis Trust 53,547 1,124,487
AvalonBay Communities Inc. 21,691 996,430
Vornado Realty Trust 28,248 983,384
Simon Property Group Inc. 42,620 950,959
Apartment Investment & Management Co.
"A" 20,558 939,244
Archstone Communities Trust 39,778 937,269
Duke-Weeks Realty Corp. 39,004 923,907
Homestore.com Inc.+ 25,277 859,418
Kimco Realty Corp. 19,936 802,424
Crescent Real Estate Equities Co. 35,731 719,086
Boston Properties Inc. 16,934 685,827
CarrAmerica Realty Corp. 21,794 644,285
Public Storage Inc. 28,227 635,108
AMB Property Corp. 25,962 610,107
Liberty Property Trust 21,943 580,118
St. Joe Company (The) 27,664 558,467
Host Marriott Corp. 50,568 537,285
Rouse Co. 21,558 532,213
Arden Realty Inc. 20,617 494,808
Health Care Property Investors Inc. 16,673 489,770
General Growth Properties Inc. 15,946 470,407
IndyMac Mortgage Holdings Inc.+ 21,026 438,918
BRE Properties Inc. 13,700 433,261
Post Properties Inc. 12,122 423,512
Highwoods Properties Inc. 19,430 420,174
Mack-Cali Realty Corp. 15,453 419,163
Cousins Properties Inc. 15,904 413,504
Hospitality Properties Trust 18,385 396,427
First Industrial Realty Trust 12,610 389,334
Camden Property Trust 12,447 356,295
New Plan Excel Realty Trust 28,529 351,263
Reckson Associates Realty Corp. 14,694 332,452
Prentiss Properties Trust 11,831 300,212
FelCor Lodging Trust Inc. 13,166 288,829
Meristar Hospitality Corp. 14,968 286,263
HRPT Properties Trust 42,947 276,471
Healthcare Realty Trust 13,058 260,344
Storage USA Inc. 9,008 251,661
Federal Realty Investment Trust 12,808 $ 246,554
Security Capital Group "B"+ 12,278 234,049
Nationwide Health Properties Inc. 15,048 224,780
Kilroy Realty Corp. 8,613 224,476
Macerich Co. (The) 11,123 218,289
Sl Green Realty Corp. 7,942 212,945
iStar Financial Inc. 10,385 207,700
Shurgard Storage Centers Inc. 9,063 205,617
Developers Diversified Realty Corp. 16,531 197,339
Brandywine Realty Trust 8,841 169,084
Chelsea GCA Realty Inc. 5,190 167,378
CBL & Associates Properties Inc. 7,135 164,997
Health Care Inc. 9,300 164,494
Home Properties of NY Inc. 6,034 164,049
LNR Property Corp. 7,570 163,701
Manufactured Home Communities Inc. 6,407 159,374
Fairfield Communities Inc.+ 11,533 146,325
Glenborough Realty Trust Inc. 8,312 133,512
Mills Corp. 7,813 133,309
Meditrust Corp.+ 46,691 128,400
RFS Hotel Investors Inc. 7,972 102,640
Koger Equity Inc. 6,189 98,637
JDN Realty Corp. 8,713 95,299
Capital Automotive 6,827 88,004
Colonial Properties Trust 3,312 81,351
Equity Inns Inc. 12,084 74,770
Burnham Pacific Properties Inc. 10,683 58,089
---------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $32,736,104) 31,628,998
----------------------------------------------------------------
SHORT TERM INSTRUMENTS - 5.39%
----------------------------------------------------------------
Freddie Mac Discount Note
6.40%, 11/21/00++ $257,257 257,257
Goldman Sachs Financial Square Prime
Obligation Fund++ 287,033 287,033
Providian Temp Cash Money Market Fund++ 315,991 315,991
Short Term Investment Company Liquid
Assets Portfolio++ 861,793 861,793
----------------------------------------------------------------
TOTAL SHORT TERM INSTRUMENTS
(Cost: $1,722,074) 1,722,074
----------------------------------------------------------------
--------------------------------------------------------------------------------
page 68 iShares
<PAGE>
iShares Dow Jones U.S. Real Estate Index Fund
Schedule of Investments (continued)
October 31, 2000 (Unaudited)
Security Principal Value
----------------------------------------------------------------
REPURCHASE AGREEMENT - 0.07%
----------------------------------------------------------------
Investors Bank & Trust Tri Party Repurchase
Agreement, dated 10/31/00, due 11/01/00,
with a maturity value of $20,171 and an
effective yield of 5.65%. $ 20,168 $ 20,168
----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost: $20,168) 20,168
----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 104.50%
(Cost $34,478,346) 33,371,240
----------------------------------------------------------------
Other Assets, Less Liabilities -- (4.50%) (1,435,817)
----------------------------------------------------------------
NET ASSETS -- 100.00% $31,935,423
================================================================
+ Non-income earning securities.
++ Represents investment of collateral received from securities lending
transactions. See Note 5.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Schedules of Investments page 69
<PAGE>
Statements of Assets and Liabilities
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------
Basic Consumer Consumer
Total Materials Cyclical Non-Cyclical Energy
Market Sector Sector Sector Sector
Index Fund Index Fund Index Fund Index Fund Index Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $30,648,032 $8,956,707 $15,219,604 $14,151,965 $39,621,457
---------------------------------------------------------------
Investments in securities, at market
value (Note 1) $30,143,723 $8,609,502 $14,483,136 $14,881,614 $38,428,394
Receivables:
Investment securities sold 9,707 - - 59,536 4,871
Dividends and interest 21,558 4,006 7,037 16,672 11,225
---------------------------------------------------------------
Total Assets 30,174,988 8,613,508 14,490,173 14,957,822 38,444,490
---------------------------------------------------------------
LIABILITIES
Payables:
Investment securities purchased 30,243 - - 59,841 -
Advisory fees (Note 2) 7,397 8,186 14,871 13,624 35,082
---------------------------------------------------------------
Total Liabilities 37,640 8,186 14,871 73,465 35,082
---------------------------------------------------------------
NET ASSETS $30,137,348 $8,605,322 $14,475,302 $14,884,357 $38,409,408
===============================================================
Net assets consist of:
Paid-in capital $30,629,112 $9,208,270 $15,129,024 $14,258,218 $38,739,621
Undistributed (distributions in
excess of) net investment income 5,646 (403) 3,070 9,299 (2,099)
Undistributed net realized gain
(loss) 6,899 (255,340) 79,676 (112,809) 864,949
Net unrealized appreciation
(depreciation) (504,309) (347,205) (736,468) 729,649 (1,193,063)
---------------------------------------------------------------
NET ASSETS $30,137,348 $8,605,322 $14,475,302 $14,884,357 $38,409,408
===============================================================
iShares outstanding 450,000 250,000 250,000 350,000 750,000
===============================================================
Net asset value per iShare $ 66.97 $ 34.42 $ 57.90 $ 42.53 $ 51.21
===============================================================
</TABLE>
--------------------------------------------------------------------------------
See notes to financial statements.
--------------------------------------------------------------------------------
page 70 iShares
<PAGE>
Statements of Assets and Liabilities (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
-----------------------------------------------------------------
Telecom-
Financial Healthcare Industrial Technology munications
Sector Sector Sector Sector Sector
Index Fund Index Fund Index Fund Index Fund Index Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $110,773,157 $32,290,171 $26,467,362 $131,221,404 $43,534,012
-----------------------------------------------------------------
Investments in securities, at market
value (Note 1) $128,160,414 $34,155,741 $27,078,305 $123,860,170 $42,144,051
Receivables:
Investment securities sold 46,032 4,944 8,040 67,180 18,600
Dividends and interest 130,043 17,447 9,293 5,862 122,737
-----------------------------------------------------------------
Total Assets 128,336,489 34,178,132 27,095,638 123,933,212 42,285,388
-----------------------------------------------------------------
LIABILITIES
Payables:
Investment securities purchased - - - - 125,395
Collateral for securities on loan
(Note 5) 911,199 - - 6,452,833 3,223,336
Advisory fees (Note 2) 116,771 30,879 26,312 126,005 36,957
-----------------------------------------------------------------
Total Liabilities 1,027,970 30,879 26,312 6,578,838 3,385,688
-----------------------------------------------------------------
NET ASSETS $127,308,519 $34,147,253 $27,069,326 $117,354,374 $38,899,700
=================================================================
NET ASSETS CONSIST OF:
Paid-in capital $109,574,111 $31,144,460 $26,264,668 $123,942,764 $39,350,488
Undistributed (distributions in
excess of) net investment
income (loss) 39,192 (7,058) (2,107) (280,887) (6,532)
Undistributed net realized gain 307,959 1,144,281 195,822 1,053,731 945,705
Net unrealized appreciation
(depreciation) 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961)
-----------------------------------------------------------------
NET ASSETS $127,308,519 $34,147,253 $27,069,326 $117,354,374 $38,899,700
=================================================================
iShares outstanding 1,500,000 500,000 450,000 1,100,000 750,000
=================================================================
Net asset value per iShare $ 84.87 $ 68.29 $ 60.15 $ 106.69 $ 51.87
=================================================================
-----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Financial Statements page 71
<PAGE>
Statements of Assets and Liabilities (continued)
October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------
Utilities Financial Real
Sector Chemicals Services Internet Estate
Index Fund Index Fund Index Fund Index Fund Index Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $40,944,956 $18,223,840 $59,425,625 $66,523,389 $34,478,346
---------------------------------------------------------------
Investments in securities, at market
value (Note 1) $45,460,724 $17,294,088 $67,361,155 $56,901,872 $33,371,240
Receivables:
Investment securities sold - - - 726,579 262,464
Dividends and interest 85,546 12,707 76,170 2,565 76,185
---------------------------------------------------------------
Total Assets 45,546,270 17,306,795 67,437,325 57,631,016 33,709,889
---------------------------------------------------------------
LIABILITIES
Payables:
Investment securities purchased - - - 698,606 25,704
Collateral for securities on loan
(Note 5) - - 488,490 5,486,785 1,722,074
Advisory fees (Note 2) 42,483 16,220 66,660 67,071 26,688
---------------------------------------------------------------
Total Liabilities 42,483 16,220 555,150 6,252,462 1,774,466
---------------------------------------------------------------
NET ASSETS $45,503,787 $17,290,575 $66,882,175 $51,378,554 $31,935,423
===============================================================
NET ASSETS CONSIST OF:
Paid-in capital $40,693,693 $18,243,539 $57,758,237 $50,339,225 $32,372,724
Undistributed net investment income
(loss) 34,602 1,199 21,430 (195,556) 40,333
Undistributed net realized gain
(loss) 259,724 (24,411) 1,166,978 10,856,402 629,472
Net unrealized appreciation
(depreciation) 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106)
---------------------------------------------------------------
NET ASSETS $45,503,787 $17,290,575 $66,882,175 $51,378,554 $31,935,423
===============================================================
iShares outstanding 550,000 450,000 700,000 900,000 450,000
===============================================================
Net asset value per iShare $ 82.73 $ 38.42 $ 95.55 $ 57.09 $ 70.97
===============================================================
---------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
page 72 iShares
<PAGE>
Statements of Operations
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
--------------------------------------------------------------------------
Basic Consumer Consumer
Total Materials Cyclical Non-Cyclical Energy
Market Sector Sector Sector Sector
Index Fund* Index Fund* Index Fund* Index Fund* Index Fund*
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Dividends $ 60,566 $ 69,889 $ 40,934 $ 83,633 $ 148,327
Interest 233 363 308 275 937
--------------------------------------------------------------------------
Total investment income 60,799 70,252 41,242 83,908 149,264
--------------------------------------------------------------------------
EXPENSES (NOTE 2)
Advisory fees 11,915 19,436 34,250 29,168 71,542
--------------------------------------------------------------------------
Total expenses 11,915 19,436 34,250 29,168 71,542
--------------------------------------------------------------------------
Net investment income 48,884 50,816 6,992 54,740 77,722
--------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments 6,899 (255,340) 79,676 (112,809) 864,949
Net change in unrealized appreciation
(depreciation) on investments (504,309) (347,205) (736,468) 729,649 (1,193,063)
--------------------------------------------------------------------------
Net realized and unrealized gain (loss) (497,410) (602,545) (656,792) 616,840 (328,114)
--------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (448,526) $(551,729) $(649,800) $ 671,580 $ (250,392)
==========================================================================
</TABLE>
--------------------------------------------------------------------------------
* For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Financial Statements page 73
<PAGE>
Statements of Operations (continued)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
--------------------------------------------------------------------------------
Telecom-
Financial Healthcare Industrial Technology munications
Sector Sector Sector Sector Sector
Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund**
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Dividends $ 899,287 $ 74,353 $ 89,290 $ 48,453 $ 271,890
Interest+ 3,542 595 816 5,780 13,770
--------------------------------------------------------------------------------
Total investment income 902,829 74,948 90,106 54,233 285,660
--------------------------------------------------------------------------------
EXPENSES (NOTE 2)
Advisory fees 268,348 58,399 59,199 335,120 117,106
--------------------------------------------------------------------------------
Total expenses 268,348 58,399 59,199 335,120 117,106
--------------------------------------------------------------------------------
Net investment income (loss) 634,481 16,549 30,907 (280,887) 168,554
--------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 307,959 1,144,281 195,822 1,053,731 945,705
Net change in unrealized appreciation
(depreciation) on investments 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961)
--------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 17,695,216 3,009,851 806,765 (6,307,503) (444,256)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $18,329,697 $ 3,026,400 $ 837,672 $(6,588,390) $ (275,702)
================================================================================
--------------------------------------------------------------------------------------------------------------------------------
+ Includes securities lending income of: $ 1,975 $ - $ - $ 3,076 $ 10,153
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from May 22, 2000 (commencement of operations) to October
31, 2000.
*** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
page 74 iShares
<PAGE>
Statements of Operations (continued)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
IShares Dow Jones U.S.
----------------------------------------------------------------------------------------------
Utilities Financial Real
Sector Chemicals Services Internet Estate
Index Fund** Index Fund** Index Fund** Index Fund* Index Fund**
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Dividends $ 399,844 $ 154,933 $ 427,413 $ 170 $ 660,604
Interest+ 443 618 2,101 22,383 604
-----------------------------------------------------------------------------------------------
Total investment income 400,287 155,551 429,514 22,553 661,208
-----------------------------------------------------------------------------------------------
EXPENSES (NOTE 2)
Advisory fees 78,347 37,658 139,674 218,109 50,243
-----------------------------------------------------------------------------------------------
Total expenses 78,347 37,658 139,674 218,109 50,243
-----------------------------------------------------------------------------------------------
Net investment income (loss) 321,940 117,893 289,840 (195,556) 610,965
-----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from
investments 259,724 (24,411) 1,166,978 10,856,402 629,472
Net change in unrealized
appreciation (depreciation)
on investments 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106)
-----------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) 4,775,492 (954,163) 9,102,508 1,234,885 (477,634)
-----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 5,097,432 $(836,270) $9,392,348 $ 1,039,329 $ 133,331
===============================================================================================
---------------------------------------------------------------------------------------------------------------------------------
+Includes securities lending
income of: $ - $ - $ 1,289 $ 18,362 $ 4
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Financial Statements page 75
<PAGE>
Statements of Changes in Net Assets
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
--------------------------------------------------------------------------------
Basic Consumer Consumer
Total Materials Cyclical Non-Cyclical Energy
Market Sector Sector Sector Sector
Index Fund* Index Fund* Index Fund* Index Fund* Index Fund*
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 48,884 $ 50,816 $ 6,992 $ 54,740 $ 77,722
Net realized gain (loss) 6,899 (255,340) 79,676 (112,809) 864,949
Net change in unrealized appreciation
(depreciation) (504,309) (347,205) (736,468) 729,649 (1,193,063)
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (448,526) (551,729) (649,800) 671,580 (250,392)
-----------------------------------------------------------------------------------
Distributions to iShareholders:
From net investment income (43,238) (51,219) (3,922) (45,441) (79,821)
-----------------------------------------------------------------------------------
Total distributions to iShareholders (43,238) (51,219) (3,922) (45,441) (79,821)
-----------------------------------------------------------------------------------
iShares Transactions:
iShares sold 30,629,112 12,403,712 18,015,428 14,258,218 52,105,219
iShares redeemed - (3,195,442) (2,886,404) - (13,365,598)
-----------------------------------------------------------------------------------
Net increase in net assets from iShares
transactions 30,629,112 9,208,270 15,129,024 14,258,218 38,739,621
-----------------------------------------------------------------------------------
Increase in net assets 30,137,348 8,605,322 14,475,302 14,884,357 38,409,408
NET ASSETS:
Beginning of period - - - - -
-----------------------------------------------------------------------------------
End of period $ 30,137,348 $ 8,605,322 $14,475,302 $14,884,357 $38,409,408
===================================================================================
Undistributed (distributions in excess
of) net investment income included in
net assets at end of period $ 5,646 $ (403) $ 3,070 $ 9,299 $ (2,099)
===================================================================================
iSHARES ISSUED AND REDEEMED:
iShares sold 450,000 350,000 300,000 350,000 1,000,000
iShares redeemed - (100,000) (50,000) - (250,000)
-----------------------------------------------------------------------------------
Net increase in iShares outstanding 450,000 250,000 250,000 350,000 750,000
===================================================================================
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
page 76 iShares
<PAGE>
Statements of Changes in Net Assets (continued)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------------------------
Telecom-
Financial Healthcare Industrial Technology munications
Sector Sector Sector Sector Sector
Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund**
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 634,481 $ 16,549 $ 30,907 $ (280,887) $ 168,554
Net realized gain 307,959 1,144,281 195,822 1,053,731 945,705
Net change in unrealized appreciation
(depreciation) 17,387,257 1,865,570 610,943 (7,361,234) (1,389,961)
------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 18,329,697 3,026,400 837,672 (6,588,390) (275,702)
------------------------------------------------------------------------------
Distributions to iShareholders:
From net investment income (595,289) (23,607) (33,014) - (175,086)
------------------------------------------------------------------------------
Total distributions to iShareholders (595,289) (23,607) (33,014) - (175,086)
------------------------------------------------------------------------------
iShares Transactions:
iShares sold 113,763,345 41,012,434 29,391,488 123,942,764 72,412,050
iShares redeemed (4,189,234) (9,867,974) (3,126,820) - (33,061,562)
------------------------------------------------------------------------------
Net increase in net assets from iShares
transactions 109,574,111 31,144,460 26,264,668 123,942,764 39,350,488
------------------------------------------------------------------------------
Increase in net assets 127,308,519 34,147,253 27,069,326 117,354,374 38,899,700
NET ASSETS:
Beginning of period - - - - -
------------------------------------------------------------------------------
End of period $127,308,519 $34,147,253 $27,069,326 $117,354,374 $ 38,899,700
==============================================================================
Undistributed (distributions in excess
of) net investment income (loss)
included in net assets at end of
period $ 39,192 $ (7,058) $ (2,107) $ (280,887) $ (6,532)
==============================================================================
iSHARES ISSUED AND REDEEMED:
iShares sold 1,550,000 650,000 500,000 1,100,000 1,300,000
iShares redeemed (50,000) (150,000) (50,000) - (550,000)
------------------------------------------------------------------------------
Net increase in iShares outstanding 1,500,000 500,000 450,000 1,100,000 750,000
==============================================================================
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from May 22, 2000 (commencement of operations) to October
31, 2000.
*** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Financial Statements page 77
<PAGE>
Statements of Changes in Net Assets (continued)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------------------------------
Utilities Financial Real
Sector Chemicals Services Internet Estate
Index Fund** Index Fund** Index Fund** Index Fund* Index Fund**
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 321,940 $ 117,893 $ 289,840 $ (195,556) $ 610,965
Net realized gain (loss) 259,724 (24,411) 1,166,978 10,856,402 629,472
Net change in unrealized appreciation
(depreciation) 4,515,768 (929,752) 7,935,530 (9,621,517) (1,107,106)
---------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 5,097,432 (836,270) 9,392,348 1,039,329 133,331
---------------------------------------------------------------------------------------
Distributions To iShareholders:
From net investment income (287,338) (116,694) (268,410) - (570,632)
---------------------------------------------------------------------------------------
Total distributions to iShareholders (287,338) (116,694) (268,410) - (570,632)
---------------------------------------------------------------------------------------
iShares Transactions:
iShares sold 40,693,693 19,905,022 62,520,385 141,226,573 39,826,180
iShares redeemed - (1,661,483) (4,762,148) (90,887,348) (7,453,456)
---------------------------------------------------------------------------------------
Net increase in net assets from iShares
transactions 40,693,693 18,243,539 57,758,237 50,339,225 32,372,724
---------------------------------------------------------------------------------------
Increase in net assets 45,503,787 17,290,575 66,882,175 51,378,554 31,935,423
NET ASSETS:
Beginning of period - - - - -
---------------------------------------------------------------------------------------
End of period $45,503,787 $17,290,575 $66,882,175 $ 51,378,554 $31,935,423
=======================================================================================
Undistributed net investment income
(loss) included in net assets at end
of period $ 34,602 $ 1,199 $ 21,430 $ (195,556) $ 40,333
=======================================================================================
iSHARES ISSUED AND REDEEMED
iShares sold 550,000 500,000 750,000 2,200,000 550,000
iShares redeemed - (50,000) (50,000) (1,300,000) (100,000)
---------------------------------------------------------------------------------------
Net increase in iShares outstanding 550,000 450,000 700,000 900,000 450,000
=======================================================================================
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
See notes to financial statements.
--------------------------------------------------------------------------------
page 78 iShares
<PAGE>
Financial Highlights
(For a share outstanding throughout each period)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
----------------------------------------------------------------------------------
Basic Consumer Consumer
Total Materials Cyclical Non-cyclical Energy
Market Sector Sector Sector Sector
Index Fund* Index Fund* Index Fund* Index Fund* Index Fund*
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 67.15 $ 36.04 $ 59.63 $ 40.83 $ 50.79
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.14 0.20 0.03 0.16 0.11
Net realized and unrealized gain (loss) (0.19) (1.62) (1.74) 1.67 0.42
--------------------------------------------------------------------------------
Total from investment operations (0.05) (1.42) (1.71) 1.83 0.53
--------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.13) (0.20) (0.02) (0.13) (0.11)
--------------------------------------------------------------------------------
Total distributions (0.13) (0.20) (0.02) (0.13) (0.11)
--------------------------------------------------------------------------------
Net asset value, end of period $ 66.97 $ 34.42 $ 57.90 $ 42.53 $ 51.21
================================================================================
Total return (not annualized) (0.07)% (3.86)% (2.87)% 4.51% 1.03%
================================================================================
Ratios/Supplemental data:
Net assets, end of period (000s) $ 30,137 $ 8,605 $ 14,475 $ 14,884 $ 38,409
Ratio of expenses to average net assets+ 0.20% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income to
average net assets+ 0.81% 1.56% 0.12% 1.12% 0.65%
Portfolio turnover rate++ 1% 10% 2% 7% 6%
</TABLE>
-------------------------------------------------------------------------------
* For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
+ Annualized for periods of less than one year.
++ Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Units.
See notes to financial statements.
--------------------------------------------------------------------------------
iShares Financial Highlights page 79
<PAGE>
Financial Highlights (continued)
(For a share outstanding throughout each period)
For the period ended october 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------------------------
Telecom-
Financial Heathcare Industrial Technology munications
Sector Sector Sector Sector Sector
Index Fund** Index Fund*** Index Fund*** Index Fund* Index Fund**
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 71.80 $ 59.53 $ 58.11 $ 116.57 $ 56.81
---------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.47 0.04 0.07 (0.26) 0.21
Net realized and unrealized gain (loss) 13.04 8.77 2.04 (9.62) (4.93)
---------------------------------------------------------------------------------
Total from investment operations 13.51 8.81 2.11 (9.88) (4.72)
---------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.44) (0.05) (0.07) -- (0.22)
---------------------------------------------------------------------------------
Total distributions (0.44) (0.05) (0.07) -- (0.22)
---------------------------------------------------------------------------------
Net asset value, end of period $ 84.87 $ 68.29 $ 60.15 $ 106.69 $ 51.87
=================================================================================
Total return (not annualized) 18.90% 14.80% 3.64% $ 117,354 $ 38,900
=================================================================================
Ratios/Supplemental data:
Net assets, end of period (000s) $ 127,309 $ 34,147 $ 27,069 0.60% 0.60%
Ratio of expenses to average net assets+ 0.60% 0.60% 0.60%
Ratio of net investment income (loss)
to average net assets+ 1.41% 0.17% 0.31% (0.50)% 0.86%
Portfolio turnover rate++ 3% 4% 5% 5% 42%
</TABLE>
-------------------------------------------------------------------------------
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from May 22, 2000 (commencement of operations) to October
31, 2000.
*** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
+ Annualized for periods of less than one year.
++ Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Units.
See notes to financial statements.
--------------------------------------------------------------------------------
page 80 iShares
<PAGE>
Financial Highlights (continued)
(For a share outstanding throughout each period)
For the period ended October 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
iShares Dow Jones U.S.
---------------------------------------------------------------------------------------
Utilities Financial Real
Sector Chemicals Services Internet Estate
Index Fund** Index Fund** Index Fund** Index Fund* Index Fund**
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 69.81 $ 40.26 $ 85.58 $ 67.97 $ 68.97
----------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.61 0.26 0.41 (0.22) 1.64
Net realized and unrealized gain
(loss) 12.86 (1.84) 9.94 (10.66) 1.91
---------------------------------------------------------------------------------------
Total from investment operations 13.47 (1.58) 10.35 (10.88) 3.55
---------------------------------------------------------------------------------------
Less distributions from:
Net investment income (0.55) (0.26) (0.38) -- (1.55)
---------------------------------------------------------------------------------------
Total distributions (0.55) (0.26) (0.38) -- (1.55)
---------------------------------------------------------------------------------------
Net asset value, end of period $ 82.73 $ 38.42 $ 95.55 $ 57.09 $ 70.97
=======================================================================================
Total Return (Not Annualized) 19.32% (3.86)% 12.15% (16.01)% 5.16%
======================================================================================
Ratios/Supplemental data:
Net assets, end of period (000s) $ 45,504 $ 17,291 $ 66,882 $ 51,379 $ 31,935
Ratio of expenses to average net
assets+ 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss)
to average net assets+ 2.44% 1.86% 1.24% (0.54)% 7.22%
Portfolio turnover rate++ 1% 8% 2% 30% 8%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from May 15, 2000 (commencement of operations) to October
31, 2000.
** For the period from June 12, 2000 (commencement of operations) to October
31, 2000.
+ Annualized for periods of less than one year.
++ Excludes portfolio securities received or delivered as a result of
processing capital share transactions in Creation Units.
See Notes To Financial Statements.
--------------------------------------------------------------------------------
iShares Financial Highlights page 81
81
<PAGE>
iShares Trust
Notes to the Financial Statements (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
As of October 31, 2000, the iShares Trust (the "Trust") offers 37 investment
portfolios or funds. Each of these funds is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. The Trust was established as a Delaware business trust
pursuant to a Declaration of Trust dated December 16, 1999.
The Trust currently offers the following funds:
<TABLE>
<CAPTION>
iShares S&P Series iShares Dow Jones Series iShares Russell Series
------------------ ------------------------ ----------------------
<S> <C> <C>
- iShares S&P 500 Index Fund - iShares Dow Jones U.s. Total - iShares Russell 3000 Index
- iShares S&P 500/BARRA Growth Market Index Fund Fund
Index Fund - iShares Dow Jones U.s. Basic - iShares Russell 3000 Growth
- iShares S&P 500/BARRA Value Materials Sector Index Fund Index Fund
Index Fund - iShares Dow Jones U.s. - iShares Russell 3000 Value
- iShares S&P Midcap 400 Index Consumer Cyclical Sector Index Index Fund
Fund Fund - iShares Russell 2000 Index
- iShares S&P Midcap 400/BARRA - iShares Dow Jones U.s. Fund
Growth Index Fund Consumer Non-cyclical Sector - iShares Russell 2000 Growth
- iShares S&P Midcap 400/BARRA Index Fund Index Fund
Value Index Fund - iShares Dow Jones U.s. Energy - iShares Russell 2000 Value
- iShares S&P Smallcap 600 Index Sector Index Fund Index Fund
Fund - iShares Dow Jones U.s. - iShares Russell 1000 Index
- iShares S&P Smallcap 600/BARRA Financial Sector Index Fund Fund
Growth Index Fund - iShares Dow Jones U.s. - iShares Russell 1000 Growth
- iShares S&P Smallcap 600/BARRA Healthcare Sector Index Fund Index Fund
Value Index Fund - iShares Dow Jones U.s. - iShares Russell 1000 Value
- iShares S&P 100 Index Fund* Industrial Sector Index Fund Index Fund
- iShares S&P Global 100 Index - iShares Dow Jones U.s.
Fund** Technology Sector Index Fund
- iShares S&P Europe 350 Index - iShares Dow Jones U.s.
Fund Telecommunications Sector Index
- iShares S&P/TSE 60 Index Fund Fund
- iShares Dow Jones U.s.
Utilities Sector Index Fund
- iShares Dow Jones U.s.
Chemicals Index Fund
- iShares Dow Jones U.s.
Financial Services Index Fund
- iShares Dow Jones U.s.
Internet Index Fund
- iShares Dow Jones U.s. Real
Estate Index Fund
</TABLE>
* Public Offering Date On October 27, 2000.
** Public Offering Date On December 8, 2000.
These financial statements relate to the iShares Dow Jones Series of
investment portfolios (each a "Fund", collectively the "Funds"). Because certain
of the Funds concentrate their investments in a particular industry or group of
industries, their portfolios may be subject to special risks and considerations
not typically associated with investing in a broader range of domestic
securities.
--------------------------------------------------------------------------------
page 82 iShares
82
<PAGE>
iShares Trust
Notes To The Financial Statements (Unaudited) (continued)
The following significant accounting policies are consistently followed by
the Trust in the preparation of its financial statements in conformity with
generally accepted accounting principles for investment companies. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions. Actual results could differ from those estimates.
SECURITY VALUATION
Equity securities for which quotations are readily available are valued at
the last sale price, or if no sale price, at the closing bid price in the
principal market in which such securities are primarily traded. U.S. Government
obligations are valued at the last reported bid price. Debt securities maturing
in 60 days or less are valued at amortized cost, which approximates market
value. Any securities, including restricted securities or other assets for which
market quotations are not readily available, are valued at fair value as
determined in good faith in accordance with policies approved by the Board of
Trustees.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Dividend income is
recognized on the ex-dividend date, and interest income is recognized on a daily
accrual basis. Realized gains and losses on investment transactions are
determined using the specific identification method.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income are declared and
distributed quarterly by each Fund. Distributions of net realized capital gains,
if any, generally are declared and distributed once a year. Distributions are
determined on a tax basis and may differ from net investment income and realized
capital gains for financial reporting purposes.
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 distribute annually substantially all of its income and any 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 taxes was required at October 31, 2000.
FUTURES CONTRACTS
The Funds may purchase stock index futures contracts to simulate full
investment in the respective underlying index, to facilitate trading or to
reduce transaction costs. A futures contract is an agreement between two parties
to buy and sell a specified amount of a specific instrument or index at a
specified future time and at a specific price. Each Fund will only enter into
futures contracts that are traded on a U.S. or foreign exchange. Upon entering
into a futures contract, the Funds are required to pledge to the broker an
amount of cash or cash equivalents equal to the minimum "initial margin"
requirements of the exchange on which the contract is traded. Pursuant to the
contract, the Funds agree to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in the value of the index underlying the futures
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Funds as unrealized gains or losses. When the contract is
closed, the Funds record a gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it was
closed.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, the Funds are required to segregate cash, U.S. Government
securities or high quality, liquid debt instruments in connection with long
futures transactions in an
--------------------------------------------------------------------------------
iShares Notes To Financial Statements page 83
<PAGE>
iShares Trust
Notes To The Financial Statements (Unaudited) (continued)
amount generally equal to the entire futures contract amount. The primary risks
associated with the use of futures contracts are that the changes in the value
of the contracts may not correlate perfectly with changes in the market value of
stocks held in the Fund, and the possibility of an illiquid market.
As of October 31, 2000, there were no open long futures contracts
outstanding.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with banks and securities
dealers. These transactions involve the purchase of securities with a
simultaneous commitment to resell the securities to the bank or the dealer at an
agreed-upon date and price. A repurchase agreement is accounted for as a loan by
the Fund to the seller, collateralized by securities, which are delivered to the
Funds' custodian or to an agent bank under a tri-party agreement. The securities
are marked-to-market daily and additional securities are acquired as needed, to
ensure that their value equals or exceeds the repurchase price plus accrued
interest.
The repurchase agreements entered into on October 31, 2000 by the Funds were
fully collateralized by U.S. Government obligations with a rate of 6.88%, a
maturity date of 05/15/06 and an aggregate market value of $356,833.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to an Investment Advisory Agreement with the Trust, Barclays Global
Fund Advisors ("BGFA") manages the investment of each Fund's assets. BGFA is a
California corporation indirectly owned by Barclays Bank PLC. Under this
agreement, BGFA is responsible for all expenses ("Covered Expenses") of the
Trust, 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 executions of portfolio transactions,
distribution fees and extraordinary expenses.
For its investment management services to each Fund, BGFA is entitled to a
management fee based on the average daily net assets of each Fund as follows:
---------------------------------------------
Management
iShares Dow Jones U.S. Index Fund Fee
---------------------------------------------
Total Market 0.20%
Basic Materials Sector 0.60
Consumer Cyclical Sector 0.60
Consumer Non-Cyclical Sector 0.60
Energy Sector 0.60
Financial Sector 0.60
Healthcare Sector 0.60
Industrial Sector 0.60
Technology Sector 0.60
Telecommunications Sector 0.60
Utilities Sector 0.60
Chemicals 0.60
Financial Services 0.60
Internet 0.60
Real Estate 0.60
---------------------------------------------
--------------------------------------------------------------------------------
page 84 iShares
<PAGE>
iShares Trust
Notes To The Financial Statements (Unaudited) (continued)
Investors Bank & Trust Company ("IBT") serves as Administrator, Custodian,
Transfer Agent and Securities Lending Agent for the Funds. As compensation for
its services, IBT receives certain out-of-pocket costs, transaction fees, and
asset-based fees which are accrued daily and paid monthly. These fees are
Covered Expenses as defined above.
SEI Investments Distribution Company serves as the Distributor of the shares
of each Fund, pursuant to a Distribution Agreement with the Trust. The
Distributor will deliver the Prospectus and Statement of Additional Information,
if so requested, to persons purchasing Creation Unit Aggregations and will
maintain records of both orders placed with it and confirmations of acceptance
furnished by it.
Certain of the officers of the Trust are also employees of IBT, the
Administrator, Custodian, Transfer Agent and Securities Lending Agent for the
Funds.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments (excluding in-kind transactions and
short-term securities) for the period ended October 31, 2000, were as follows:
-----------------------------------------------------------
iShares Dow Jones U.S. Index Fund Purchases Sales
-----------------------------------------------------------
Total Market $ 416,050 $ 253,954
Basic Materials Sector 988,704 787,040
Consumer Cyclical Sector 526,356 320,939
Consumer Non-Cyclical Sector 1,172,874 962,077
Energy Sector 2,035,361 1,803,720
Financial Sector 3,008,449 2,812,634
Healthcare Sector 1,356,065 1,157,335
Industrial Sector 1,563,747 1,320,379
Technology Sector 6,181,684 6,078,437
Telecommunications Sector 19,616,772 19,184,712
Utilities Sector 743,395 498,651
Chemicals 1,590,363 1,332,047
Financial Services 1,174,806 960,848
Internet 24,025,535 23,899,206
Real Estate 1,697,642 1,747,075
-----------------------------------------------------------
--------------------------------------------------------------------------------
iShares Notes To Financial Statements page 85
<PAGE>
iShares Trust
Notes to the Financial Statements (Unaudited) (continued)
In-kind transactions for the period ended October 31, 2000, were as follows:
-------------------------------------------------------------
In-kind In-kind
iShares Dow Jones U.S. Index Fund Purchases Sales
-------------------------------------------------------------
Total Market $ 30,665,129 $ 206,462
Basic Materials Sector 12,353,743 3,346,629
Consumer Cyclical Sector 18,903,344 3,979,072
Consumer Non-Cyclical Sector 14,564,687 515,896
Energy Sector 54,365,067 15,852,795
Financial Sector 118,468,845 9,169,123
Healthcare Sector 41,358,335 10,421,474
Industrial Sector 29,708,963 3,688,332
Technology Sector 130,787,830 7,214,594
Telecommunications Sector 75,027,059 36,108,510
Utilities Sector 41,329,482 908,701
Chemicals 20,636,507 2,652,573
Financial Services 64,453,338 6,931,084
Internet 151,329,626 101,303,886
Real Estate 40,886,719 8,730,654
-------------------------------------------------------------
At October 31, 2000, the aggregate unrealized appreciation and depreciation
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Net Unrealized
Tax Unrealized Unrealized Appreciation
iShares Dow Jones U.S. index Fund Cost Appreciation Depreciation (Depreciation)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Market $ 30,648,032 $ 1,836,094 $ (2,340,403) $ (504,309)
Basic Materials Sector 8,956,707 253,225 (600,430) (347,205)
Consumer Cyclical Sector 15,219,604 760,168 (1,496,636) (736,468)
Consumer Non-Cyclical Sector 14,151,965 1,668,571 (938,922) 729,649
Energy Sector 39,621,457 868,070 (2,061,133) (1,193,063)
Financial Sector 110,773,157 19,426,644 (2,039,387) 17,387,257
Healthcare Sector 32,290,171 3,181,007 (1,315,437) 1,865,570
Industrial Sector 26,467,362 2,712,777 (2,101,834) 610,943
Technology Sector 131,221,404 12,771,896 (20,133,130) (7,361,234)
Telecommunications Sector 43,534,012 4,294,235 (5,684,196) (1,389,961)
Utilities Sector 40,944,956 4,864,640 (348,872) 4,515,768
Chemicals 18,223,840 593,645 (1,523,397) (929,752)
Financial Services 59,425,625 8,828,595 (893,065) 7,935,530
Internet 66,523,389 6,735,235 (16,356,752) (9,621,517)
Real Estate 34,478,346 285,693 (1,392,799) (1,107,106)
-------------------------------------------------------------------------------------------
</TABLE>
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page 86 iShares
<PAGE>
iShares Trust
Notes to the Financial Statements (Unaudited) (continued)
4. iSHARES TRANSACTIONS
At October 31, 2000, there were an unlimited number of no par value shares
of beneficial interest ("iShares") authorized. iShares are issued and redeemed
by each Fund only in large blocks of 50,000 iShares ("Creation Unit") or
multiples thereof. Except when aggregated in Creation Units, iShares are not
redeemable.
The consideration for purchase of Creation Units of a Fund generally
consists of the in-kind deposit of a designated portfolio of equity securities
constituting a substantial replication, or a portfolio sampling representation,
of the stocks involved in the relevant Fund's underlying index and an amount of
cash. A purchase transaction fee and a redemption transaction fee are charged to
offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of iShares.
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 collateral is maintained at a value equal to at least 100% of
the current market value of the loaned securities. The risks to the Funds of
securities lending are that the borrower may not provide additional collateral
when required or return the securities when due.
The market value of the securities on loan at October 31, 2000 and the value
of the related collateral were as follows:
---------------------------------------------------------
Value of Value of
iShares Dow Jones U.S. index Fund Securities Collateral
---------------------------------------------------------
Financial Sector $ 864,755 $ 911,199
Technology Sector 6,293,161 6,452,833
Telecommunications Sector 3,027,723 3,223,336
Financial Services 465,258 488,490
Internet 5,281,908 5,486,785
Real Estate 1,633,146 1,722,074
---------------------------------------------------------
--------------------------------------------------------------------------------
iShares Notes to Financial Statements page 87
<PAGE>
iShares 45 Fremont Street www.ishares.com 1-800-iSHARES
-------------------------
BARCLAYS GLOBAL INVESTORS San Francisco, CA 1-800-474-2737
94105
iShares are distributed by SEI Investments Distribution Co.
Barclays Global Fund Advisors serves as an adviser to
iShares and is a subsidiary of Barclays Global Investors,
N.A., neither of which is affiliated with SEI.
IBT serves as administrator, custodian, securities lending
agent and transfer agent for the iShares Dow Jones Series.
iShares are not sponsored, endorsed, sold of promoted by Dow
Jones & Company, Inc. Nor does this company make any
representation regarding the advisability of investing in
iShares.
(c)2000 Barclays Global Investors. All rights reserved.
iShares is a servicemark of Barclays Global Investors, N.A.
All other trademarks, servicemarks or registered trademarks
are the property of their respective owners.
BGI-F-008-01000
Not FDIC Insured
Have no bank guarantee
May lose value
