Form N-CSRS for iShares Trust

N-CSRS 1 dncsrs.htm FORM N-CSRS FOR ISHARES TRUST Form N-CSRS for iShares Trust

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-09729

iShares Trust

(Exact name of registrant as specified in charter)

c/o: State Street Bank and Trust Company

200 Clarendon Street, Boston, MA 02116

(Address of principal executive offices) (Zip code)

CT Corporation System

1209 Orange Street, Wilmington, DE 19801

(Name and address of agent for service)

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

Date of fiscal year end: March 31, 2009

Date of reporting period: September 30, 2008

Item 1.

Reports to Stockholders.

LOGO

Dear iShares Shareholder:

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

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

Table of Contents


Fund Performance Overviews		1
Shareholder Expenses		11
Schedules of Investments		13
iShares S&P 100 Index Fund		13
iShares S&P MidCap 400 Index Fund (Summary)		16
iShares S&P MidCap 400 Growth Index Fund (Summary)		20
iShares S&P MidCap 400 Value Index Fund (Summary)		24
iShares S&P SmallCap 600 Index Fund (Summary)		28
iShares S&P SmallCap 600 Growth Index Fund (Summary)		32
iShares S&P SmallCap 600 Value Index Fund (Summary)		36
iShares S&P 1500 Index Fund (Summary)		40
iShares S&P U.S. Preferred Stock Index Fund		44
iShares Nasdaq Biotechnology Index Fund (Summary)		46
Financial Statements		48
Financial Highlights		59
Notes to Financial Statements		69
Board Review and Approval of Investment Advisory Contract		77
iShares Family of Funds		81

Fund Performance Overview

iSHARES^® S&P 100 INDEX FUND

Performance as of September 30, 2008

The iShares S&P 100 Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 100^® (the “Index”). The Index measures the performance of the large-capitalization sector of the U.S. equity market. The Index is a subset of the S&P 500^® and consists of blue chip stocks from diverse industries in the S&P 500. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (10.17)%, while the total return for the Index was (10.10)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(21.95)%	(23.04)%	(21.86)%	3.82%	3.50%	4.01%	(1.99)%	(2.16)%	(1.81)%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(21.95)%	(23.04)%	(21.86)%	20.62%	18.78%	21.72%	(14.74)%	(15.93)%	(13.51)%

Total returns for the period since inception are calculated from the inception date of the Fund (10/23/00). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or ”NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (10/27/00), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table(s) above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	23.95	%

Financial	14.95

Energy	14.91

Technology	14.03

Communications	12.00

Industrial	10.89

Consumer Cyclical	5.55

Utilities	1.77

Basic Materials	1.75

Short-Term and Other Net Assets	0.20


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	6.50	%

General Electric Co.	4.08

Procter & Gamble Co. (The)	3.41

Microsoft Corp.	3.37

Johnson & Johnson	3.12

JPMorgan Chase & Co.	2.77

Chevron Corp.	2.73

AT&T Inc.	2.65

Bank of America Corp.	2.57

International Business Machines Corp.	2.55


TOTAL	33.75	%


FUND PERFORMANCE OVERVIEWS		1

Fund Performance Overview

iSHARES^® S&P MIDCAP 400 INDEX FUNDS

Performance as of September 30, 2008


	Average Annual Total Returns
	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P MidCap 400	(16.67)%	(16.75)%	(16.68)%	8.51%	8.44%	8.65%	6.63%	6.61%	6.79%
S&P MidCap 400 Growth*	(16.40)%	(16.45)%	(16.37)%	7.39%	7.33%	7.56%	1.74%	1.72%	1.97%
S&P MidCap 400 Value*	(17.10)%	(17.00)%	(17.02)%	9.40%	9.35%	9.59%	9.78%	9.78%	9.99%

	Cumulative Total Returns

	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P MidCap 400	(16.67)%	(16.75)%	(16.68)%	50.44%	49.93%	51.42%	71.01%	70.79%	73.15%
S&P MidCap 400 Growth*	(16.40)%	(16.45)%	(16.37)%	42.81%	42.46%	43.97%	15.19%	14.98%	17.29%
S&P MidCap 400 Value*	(17.10)%	(17.00)%	(17.02)%	56.73%	56.35%	58.07%	114.71%	114.67%	118.09%

Total returns for the periods since inception are calculated from the inception date of each Fund (5/22/00, 7/24/00 and 7/24/00, respectively). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

*	Index performance reflects the S&P/BARRA methodology through December 16, 2005 and the S&P/Citigroup methodology thereafter.

Each Fund’s per share net asset value or” NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund and the market return is based on the market price per share of each Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Funds are listed for trading, as of the time that each Fund’s NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of each Fund (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV of each Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike each Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by each Fund. These expenses negatively impact the performance of each Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The returns shown in the table(s) above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of each Fund will vary with changes in market conditions. Shares of each Fund may be worth more or less than their original cost when they are redeemed or sold in the market. Each Fund’s past performance is no guarantee of future results.

The iShares S&P MidCap 400 Index Fund (the “MidCap 400 Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P MidCap 400 Index™ (the “Index”). The Index measures the performance of the mid-capitalization sector of the U.S. equity market and consists of stocks that have a market capitalization between $1.5 billion and $5.5 billion (which may fluctuate depending on the overall level of the equity markets). The MidCap 400 Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the MidCap 400 Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the MidCap 400 Fund was (6.05)%, while the total return for the Index was (6.03)%.


2		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview (Continued)

iSHARES^® S&P MIDCAP 400 INDEX FUNDS

iShares S&P MidCap 400 Index Fund (Continued)


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	20.08	%

Financial	18.19

Industrial	17.32

Consumer Cyclical	12.08

Energy	8.45

Technology	7.63

Utilities	6.51

Basic Materials	5.51

Communications	4.11

Short-Term and Other Net Assets	0.12


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
FMC Technologies Inc.	0.64	%

New York Community Bancorp Inc.	0.62

Cleveland-Cliffs Inc.	0.61

DENTSPLY International Inc.	0.60

Covance Inc.	0.60

Health Care REIT Inc.	0.58

FLIR Systems Inc.	0.57

Everest Re Group Ltd.	0.57

MDU Resources Group Inc.	0.57

Cephalon Inc.	0.57


TOTAL	5.93	%

The iShares S&P MidCap 400 Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P MidCap 400/Citigroup Growth Index™ (the “Growth Index”). The Growth Index measures the performance of the mid-capitalization growth sector of the U.S. equity market. The Growth Index is a subset of the S&P MidCap 400 Index and consists of those stocks in the S&P MidCap 400 Index exhibiting the strongest growth characteristics. The Growth Fund invests in a representative sample of securities included in the Growth Index that collectively has an investment profile similar to the Growth Index. Due to the use of representative sampling, the Growth Fund may or may not hold all of the securities that are included in the Growth Index. For the six-month period ended September 30, 2008, the total return for the Growth Fund was (7.36)%, while the total return for the Growth Index was (7.28)%.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	27.67	%

Industrial	18.49

Consumer Cyclical	16.66

Energy	10.12

Technology	10.09

Financial	6.49

Basic Materials	4.95

Communications	4.81

Utilities	0.68

Short-Term and Other Net Assets	0.04


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
FMC Technologies Inc.	1.34	%

Cleveland-Cliffs Inc.	1.28

Covance Inc.	1.26

FLIR Systems Inc.	1.21

Dun & Bradstreet Corp. (The)	1.17

McAfee Inc.	1.16

Stericycle Inc.	1.14

Hologic Inc.	1.12

Pharmaceutical Product Development Inc.	1.12

Joy Global Inc.	1.10


TOTAL	11.90	%


FUND PERFORMANCE OVERVIEWS		3

Fund Performance Overview (Continued)

iSHARES^® S&P MIDCAP 400 INDEX FUNDS

The iShares S&P MidCap 400 Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P MidCap 400/Citigroup Value Index™ (the “Value Index”). The Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. The Value Index is a subset of the S&P MidCap 400 Index and consists of those stocks in the S&P MidCap 400 Index exhibiting the strongest value characteristics. The Value Fund invests in a representative sample of securities included in the Value Index that collectively has an investment profile similar to the Value Index. Due to the use of representative sampling, the Value Fund may or may not hold all of the securities that are included in the Value Index. For the six-month period ended September 30, 2008, the total return for the Value Fund was (4.83)%, while the total return for the Value Index was (4.79)%.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Financial	28.82	%

Industrial	16.31

Consumer Non-Cyclical	13.19

Utilities	11.78

Consumer Cyclical	7.92

Energy	6.95

Basic Materials	6.01

Technology	5.41

Communications	3.48

Short-Term and Other Net Assets	0.13


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
New York Community Bancorp Inc.	1.18	%

Health Care REIT Inc.	1.11

Everest Re Group Ltd.	1.09

MDU Resources Group Inc.	1.09

Wisconsin Energy Corp.	1.08

Pride International Inc.	1.05

Federal Realty Investment Trust	1.03

Macerich Co. (The)	0.97

Regency Centers Corp.	0.96

SCANA Corp.	0.93


TOTAL	10.49	%


4		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P SMALLCAP 600 INDEX FUNDS

Performance as of September 30, 2008


	Average Annual Total Returns

	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P SmallCap 600	(13.80)%	(13.00)%	(13.82)%	9.76%	9.93%	9.89%	8.40%	8.50%	8.54%
S&P SmallCap 600 Growth*	(14.86)%	(14.16)%	(14.89)%	9.53%	9.69%	9.72%	5.14%	5.23%	5.35%
S&P SmallCap 600 Value*	(13.06)%	(12.25)%	(13.08)%	9.78%	9.97%	9.98%	9.36%	9.47%	9.59%

	Cumulative Total Returns

	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P SmallCap 600	(13.80)%	(13.00)%	(13.82)%	59.28%	60.53%	60.27%	96.24%	97.82%	98.47%
S&P SmallCap 600 Growth*	(14.86)%	(14.16)%	(14.89)%	57.66%	58.82%	59.02%	50.78%	51.77%	53.28%
S&P SmallCap 600 Value*	(13.06)%	(12.25)%	(13.08)%	59.47%	60.84%	60.94%	108.13%	109.72%	111.66%

*	Index performance reflects the S&P/BARRA methodology through December 16, 2005 and the S&P/Citigroup methodology thereafter.

Each Fund’s per share net asset value or ”NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund and the market return is based on the market price per share of each Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Funds are listed for trading, as of the time that each Fund’s NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of each Fund (5/26/00, 7/28/00 and 7/28/00, respectively), the NAV of each Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

The iShares S&P SmallCap 600 Index Fund (the “SmallCap 600 Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P SmallCap 600 Index™ (the “Index”). The Index measures the performance of the small-capitalization sector of the U.S. equity market and consists of stocks that have a market capitalization between $300 million and $2 billion (which may fluctuate depending on the overall level of the equity markets). The SmallCap 600 Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the SmallCap 600 Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for both the SmallCap 600 Fund and the Index was (0.46)%.


FUND PERFORMANCE OVERVIEWS		5

Fund Performance Overview (Continued)

iSHARES^® S&P SMALLCAP 600 INDEX FUNDS

iShares S&P SmallCap 600 Index Fund (Continued)


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	19.44	%

Industrial	18.82

Financial	18.48

Consumer Cyclical	15.53

Technology	9.11

Energy	5.67

Utilities	5.57

Communications	4.13

Basic Materials	2.99

Short-Term and Other Net Assets	0.26


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Itron Inc.	0.68	%

UGI Corp.	0.62

Senior Housing Properties Trust	0.62

Waste Connections Inc.	0.60

Southern Union Co.	0.58

Pediatrix Medical Group Inc.	0.55

Atmos Energy Corp.	0.54

Unit Corp.	0.53

Flowers Foods Inc.	0.53

Piedmont Natural Gas Co.	0.53


TOTAL	5.78	%

The iShares S&P SmallCap 600 Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P SmallCap 600/Citigroup Growth Index™ (the “Growth Index”). The Growth Index measures the performance of the small-capitalization growth sector of the U.S. equity market. The Growth Index is a subset of the S&P SmallCap 600 Index and consists of those stocks in the S&P SmallCap 600 Index exhibiting the strongest growth characteristics. The Growth Fund invests in a representative sample of securities included in the Growth Index that collectively has an investment profile similar to the Growth Index. Due to the use of representative sampling, the Growth Fund may or may not hold all of the securities that are included in the Growth Index. For the six-month period ended September 30, 2008, the total return for the Growth Fund was (1.13)%, while the total return for the Growth Index was (1.09)%.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	26.18	%

Industrial	19.13

Consumer Cyclical	17.35

Technology	10.50

Financial	10.05

Energy	9.43

Communications	5.43

Basic Materials	1.75

Utilities	0.17

Short-Term and Other Net Assets	0.01


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Waste Connections Inc.	1.32	%

Pediatrix Medical Group Inc.	1.23

Unit Corp.	1.17

Landstar System Inc.	1.16

LKQ Corp.	1.15

Immucor Inc.	1.12

Penn Virginia Corp.	1.11

St. Mary Land & Exploration Co.	1.11

MICROS Systems Inc.	1.07

Curtiss-Wright Corp.	1.02


TOTAL	11.46	%


6		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview (Continued)

iSHARES^® S&P SMALLCAP 600 INDEX FUNDS

The iShares S&P SmallCap 600 Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P SmallCap 600/Citigroup Value Index™ (the “Value Index”). The Value Index measures the performance of the small-capitalization value sector of the U.S. equity market. The Value Index is a subset of the S&P SmallCap 600 Index and consists of those stocks in the S&P SmallCap 600 Index exhibiting the strongest value characteristics. The Value Fund invests in a representative sample of securities included in the Value Index that collectively has an investment profile similar to the Value Index. Due to the use of representative sampling, the Value Fund may or may not hold all of the securities that are included in the Value Index. For the six-month period ended September 30, 2008, the total return for the Value Fund was (0.19)%, while the total return for the Value Index was (0.15)%


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Financial	25.88	%

Industrial	18.55

Consumer Cyclical	14.00

Consumer Non-Cyclical	13.82

Utilities	10.02

Technology	7.94

Basic Materials	4.02

Communications	3.03

Energy	2.55

Short-Term and Other Net Assets	0.19


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
UGI Corp.	1.14	%

Senior Housing Properties Trust	1.12

Southern Union Co.	1.06

Atmos Energy Corp.	0.99

Piedmont Natural Gas Co.	0.96

Longs Drug Stores Corp.	0.94

Owens & Minor Inc.	0.82

BioMed Realty Trust Inc.	0.78

Home Properties Inc.	0.76

Entertainment Properties Trust	0.74


TOTAL	9.31	%


FUND PERFORMANCE OVERVIEWS		7

Fund Performance Overview

iSHARES^® S&P 1500 INDEX FUND

Performance as of September 30, 2008

The iShares S&P 1500 Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Composite 1500 Index™ (the “Index”). The Index is comprised of the S&P 500, MidCap 400 and SmallCap 600 Indexes. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (10.20)%, while the total return for the Index was (10.12)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(21.37)%

(21.26)%

(21.27)%

2.65%

2.68%

2.83%

13.09%

13.22%

14.02%

Total returns for the period since inception are calculated from the inception date of the Fund (1/20/04). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (1/23/04), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	23.15	%

Financial	16.00

Energy	12.70

Industrial	12.19

Technology	10.86

Communications	9.48

Consumer Cyclical	8.54

Utilities	3.80

Basic Materials	3.05

Diversified	0.07

Short-Term and Other Net Assets	0.16


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	3.49	%

General Electric Co.	2.19

Procter & Gamble Co. (The)	1.83

Microsoft Corp.	1.81

Johnson & Johnson	1.67

JPMorgan Chase & Co.	1.49

Chevron Corp.	1.46

AT&T Inc.	1.42

Bank of America Corp.	1.38

International Business Machines Corp.	1.37


TOTAL	18.11	%


8		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P U.S. PREFERRED STOCK INDEX FUND

Performance as of September 30, 2008

The iShares S&P U.S. Preferred Stock Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P U.S. Preferred Stock Index™ (the “Index”). The Index measures the performance of a select group of preferred stocks listed on the NYSE, AMEX or The NASDAQ Stock Market LLC, and includes preferred stocks with a market capitalization over $100 million that meet minimum price, liquidity, maturity and other requirements determined by S&P^®. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (32.37)%, while the total return for the Index was (35.00)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(36.98)%

(36.17)%

(40.48)%

(27.81)%

(27.13)%

(30.39)%

(39.01)%

(38.15)%

(42.35)%

Total returns for the period since inception are calculated from the inception date of the Fund (3/26/07). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (3/30/07), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets

Financial	80.79	%

Basic Materials	7.78

Consumer Non-Cyclical	5.63

Consumer Cyclical	2.50

Energy	0.91

Short-Term and Other Net Assets	2.39


TOTAL	100.00	%

TEN LARGEST FUND HOLDINGS

As of 9/30/08


Security	Percentage of Net Assets
Freeport-McMoRan Copper & Gold Inc., 6.75%	7.78	%

Wells Fargo Capital IV, 7.00%	5.67

Citigroup Capital VIII, 6.95%	5.59

BAC Capital Trust X, 6.25%	5.09

BAC Capital Trust II, 7.00%	4.80

JP Morgan Chase Capital XI, 5.88%	4.80

Schering-Plough Corp., 6.00%	4.61

USB Capital XI, 6.60%	4.11

MetLife Inc., 6.50%	3.60

Deutsche Bank Capital Funding Trust VIII, 6.38%	2.77


TOTAL	48.82	%


FUND PERFORMANCE OVERVIEWS		9

Fund Performance Overview

iSHARES^® NASDAQ BIOTECHNOLOGY INDEX FUND

Performance as of September 30, 2008

The iShares Nasdaq Biotechnology Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the NASDAQ Biotechnology Index^® (the “Index”). The Index consists of securities of NASDAQ^® listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals and which also meet other eligibility criteria determined by NASDAQ. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was 6.98%, while the total return for the Index was 7.07%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.31)%	(2.39)%	(2.14)%	2.54%	2.50%	3.02%	(2.62)%	(2.64)%	(2.26)%


Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(2.31)%	(2.39)%	(2.14)%	13.36%	13.17%	16.05%	(18.39)%	(18.53)%	(16.06)%

Total returns for the period since inception are calculated from the inception date of the Fund (2/5/01). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (2/9/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Biotechnology	49.50	%

Pharmaceuticals	46.86

Health Care - Products	3.09

Commercial Services	0.39

Distribution & Wholesale	0.15

Short-Term and Other Net Assets	0.01


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Amgen Inc.	11.51	%

Gilead Sciences Inc.	8.47

Celgene Corp.	7.20

Teva Pharmaceutical Industries Ltd. SP ADR	5.68

Genzyme Corp.	4.38

Biogen Idec Inc.	3.26

Vertex Pharmaceuticals Inc.	2.65

Illumina Inc.	2.62

Perrigo Co.	2.05

BioMarin Pharmaceutical Inc.	1.84


TOTAL	49.66	%


10		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Unaudited)

iSHARES^® TRUST

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2008 to September 30, 2008.

ACTUAL EXPENSES

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

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

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

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


iShares Index Fund	Beginning Account Value (4/1/08)	Ending Account Value (9/30/08)	Annualized Expense Ratio		Expenses Paid During Period^a (4/1/08 to 9/30/08)
S&P 100
Actual	$1,000.00	$ 898.30	0.20	%	$0.95
Hypothetical (5% return before expenses)	1,000.00	1,024.10	0.20		1.01
S&P MidCap 400
Actual	1,000.00	939.50	0.20		0.97
Hypothetical (5% return before expenses)	1,000.00	1,024.10	0.20		1.01
S&P MidCap 400 Growth
Actual	1,000.00	926.40	0.25		1.21
Hypothetical (5% return before expenses)	1,000.00	1,023.80	0.25		1.27
S&P MidCap 400 Value
Actual	1,000.00	951.70	0.25		1.22
Hypothetical (5% return before expenses)	1,000.00	1,023.80	0.25		1.27


SHAREHOLDER EXPENSES		11

Shareholder Expenses (Unaudited) (Continued)

iSHARES^® TRUST


iShares Index Fund	Beginning Account Value (4/1/08)	Ending Account Value (9/30/08)	Annualized Expense Ratio		Expenses Paid During Period^a (4/1/08 to 9/30/08)
S&P SmallCap 600
Actual	$1,000.00	$ 995.40	0.20	%	$1.00
Hypothetical (5% return before expenses)	1,000.00	1,024.10	0.20		1.01
S&P SmallCap 600 Growth
Actual	1,000.00	988.70	0.25		1.25
Hypothetical (5% return before expenses)	1,000.00	1,023.80	0.25		1.27
S&P SmallCap 600 Value
Actual	1,000.00	998.10	0.25		1.25
Hypothetical (5% return before expenses)	1,000.00	1,023.80	0.25		1.27
S&P 1500
Actual	1,000.00	898.00	0.20		0.95
Hypothetical (5% return before expenses)	1,000.00	1,024.10	0.20		1.01
S&P U.S. Preferred Stock
Actual	1,000.00	676.30	0.48		2.02
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
Nasdaq Biotechnology
Actual	1,000.00	1,069.80	0.48		2.49
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43

a	Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (183 days) and divided by the number of days in the year (365 days).


12		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P 100 INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.80%

AEROSPACE & DEFENSE – 2.45%
Boeing Co. (The)	340,875	$	19,549,181
General Dynamics Corp.	182,753		13,454,276
Raytheon Co.	191,581		10,251,499
United Technologies Corp.	444,376		26,689,223

			69,944,179

AGRICULTURE – 2.25%
Altria Group Inc.	948,468		18,817,605
Philip Morris International Inc.	949,249		45,658,877

			64,476,482

AUTO MANUFACTURERS – 0.19%
Ford Motor Co.^a,b	1,041,371		5,415,129

			5,415,129

BANKS – 6.41%
Bank of America Corp.	2,100,035		73,501,225
Bank of New York Mellon Corp. (The)	527,693		17,192,238
Regions Financial Corp.	318,458		3,057,197
U.S. Bancorp	802,772		28,915,847
Wachovia Corp.	993,032		3,475,612
Wells Fargo & Co.	1,523,873		57,190,954

			183,333,073

BEVERAGES – 4.24%
Anheuser-Busch Companies Inc.	331,162		21,485,791
Coca-Cola Co. (The)	915,485		48,410,847
PepsiCo Inc.	720,969		51,383,461

			121,280,099

BIOTECHNOLOGY – 1.01%
Amgen Inc.^a	487,586		28,899,222

			28,899,222

CHEMICALS – 1.06%
Dow Chemical Co. (The)	425,605		13,525,727
E.I. du Pont de Nemours and Co.	415,328		16,737,718

			30,263,445

COMPUTERS – 6.86%
Apple Inc.^a	407,969		46,369,757
Dell Inc.^a	803,399		13,240,016
EMC Corp.^a	952,078		11,386,853
Hewlett-Packard Co.	1,127,884		52,153,356


Security	Shares	Value
International Business Machines Corp.	623,934	$	72,975,321

			196,125,303

COSMETICS & PERSONAL CARE – 4.31%
Avon Products Inc.	196,533		8,169,877
Colgate-Palmolive Co.	232,823		17,543,213
Procter & Gamble Co. (The)	1,397,356		97,381,740

			123,094,830

DIVERSIFIED FINANCIAL SERVICES – 7.64%
American Express Co.	533,928		18,917,069
Capital One Financial Corp.	173,469		8,846,919
Citigroup Inc.	2,507,772		51,434,404
Goldman Sachs Group Inc. (The)	200,089		25,611,392
JPMorgan Chase & Co.	1,696,044		79,205,255
Merrill Lynch & Co. Inc.	705,111		17,839,308
Morgan Stanley	510,154		11,733,542
NYSE Euronext Inc.	121,965		4,778,589

			218,366,478

ELECTRIC – 1.77%
AES Corp. (The)^a	308,451		3,605,792
American Electric Power Co. Inc.	185,352		6,863,585
Entergy Corp.	88,446		7,872,578
Exelon Corp.	302,735		18,957,266
Southern Co. (The)	354,279		13,352,776

			50,651,997

FOOD – 1.33%
Campbell Soup Co.	97,646		3,769,136
H.J. Heinz Co.	143,629		7,177,141
Kraft Foods Inc.	699,183		22,898,243
Sara Lee Corp.	324,575		4,099,382

			37,943,902

FOREST PRODUCTS & PAPER – 0.39%
International Paper Co.	196,964		5,156,518
Weyerhaeuser Co.	97,381		5,899,341

			11,055,859

HEALTH CARE - PRODUCTS – 5.13%
Baxter International Inc.	289,012		18,967,858
Covidien Ltd.	230,758		12,405,550
Johnson & Johnson	1,286,920		89,157,818
Medtronic Inc.	519,930		26,048,493

			146,579,719


SCHEDULES OF INVESTMENTS		13

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P 100 INDEX FUND

September 30, 2008


Security	Shares	Value
HEALTH CARE - SERVICES – 0.50%
UnitedHealth Group Inc.	560,191	$	14,223,249

			14,223,249
INSURANCE – 0.90%
Allstate Corp. (The)	248,905		11,479,499
American International Group Inc.	1,241,371		4,133,765
CIGNA Corp.	126,615		4,302,378
Hartford Financial Services Group Inc. (The)	139,096		5,701,545

			25,617,187

INTERNET – 1.54%
Google Inc. Class A^a	110,057		44,080,030

			44,080,030

MACHINERY – 0.58%
Caterpillar Inc.	280,218		16,700,993

			16,700,993

MANUFACTURING – 5.62%
General Electric Co.	4,581,224		116,821,212
Honeywell International Inc.	342,528		14,232,038
3M Co.	321,931		21,991,107
Tyco International Ltd.	219,210		7,676,734

			160,721,091

MEDIA – 2.77%
CBS Corp. Class B	313,266		4,567,418
Comcast Corp. Class A	1,343,978		26,382,288
Time Warner Inc.	1,650,110		21,632,942
Walt Disney Co. (The)	864,738		26,538,809

			79,121,457

MINING – 0.30%
Alcoa Inc.	375,518		8,479,196

			8,479,196

OFFICE & BUSINESS EQUIPMENT – 0.16%
Xerox Corp.	402,037		4,635,487

			4,635,487

OIL & GAS – 11.95%
Chevron Corp.	946,125		78,036,390
ConocoPhillips	699,914		51,268,700
Exxon Mobil Corp.	2,391,900		185,754,954
Occidental Petroleum Corp.	376,566		26,529,075

			341,589,119


Security	Shares	Value
OIL & GAS SERVICES – 2.60%
Baker Hughes Inc.	142,300	$	8,614,842
Halliburton Co.	403,383		13,065,575
National Oilwell Varco Inc.^a	191,802		9,634,214
Schlumberger Ltd.	552,449		43,140,742

			74,455,373

PHARMACEUTICALS – 5.18%
Abbott Laboratories	709,937		40,878,172
Bristol-Myers Squibb Co.	911,509		19,004,963
Merck & Co. Inc.	985,935		31,116,109
Pfizer Inc.	3,104,412		57,245,357

			148,244,601

PIPELINES – 0.36%
El Paso Corp.	322,928		4,120,561
Williams Companies Inc. (The)	266,045		6,291,964

			10,412,525

RETAIL – 5.36%
CVS Caremark Corp.	660,995		22,249,092
Home Depot Inc.	782,188		20,250,847
McDonald’s Corp.	517,614		31,936,784
Target Corp.	347,408		17,040,362
Wal-Mart Stores Inc.	1,032,669		61,846,546

			153,323,631

SEMICONDUCTORS – 2.15%
Intel Corp.	2,589,110		48,494,030
Texas Instruments Inc.	602,987		12,964,221

			61,458,251
SOFTWARE – 4.86%
MasterCard Inc. Class A	33,256		5,897,286
Microsoft Corp.	3,616,015		96,511,440
Oracle Corp.^a	1,804,022		36,639,687

			139,048,413

TELECOMMUNICATIONS – 7.69%
AT&T Inc.	2,713,848		75,770,636
Cisco Systems Inc.^a	2,720,388		61,371,953
QUALCOMM Inc.	755,409		32,459,925
Sprint Nextel Corp.	1,317,702		8,037,982
Verizon Communications Inc.	1,311,482		42,085,457

			219,725,953


14		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P 100 INDEX FUND

September 30, 2008


Security	Shares	Value
TRANSPORTATION – 2.24%
Burlington Northern Santa Fe Corp.	129,870	$	12,003,884
FedEx Corp.	143,058		11,307,304
Norfolk Southern Corp.	172,485		11,420,232
United Parcel Service Inc. Class B	464,658		29,222,342

			63,953,762


TOTAL COMMON STOCKS
(Cost: $3,765,227,364)			2,853,220,035

SHORT-TERM INVESTMENTS – 0.24%

MONEY MARKET FUNDS – 0.24%
Barclays Global Investors Funds
Treasury Money Market Fund,
Institutional Shares
0.47%^c,d	1,801,148		1,801,148
BGI Cash Premier Fund LLC
2.67%^c,d,e	5,092,660		5,092,660

			6,893,808


TOTAL SHORT-TERM INVESTMENTS
(Cost: $6,893,808)			6,893,808


TOTAL INVESTMENTS IN SECURITIES – 100.04%
(Cost: $3,772,121,172)			2,860,113,843
Other Assets, Less Liabilities – (0.04)%			(1,218,472	)


NET ASSETS – 100.00%		$	2,858,895,371

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		15

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P MIDCAP 400 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	13,849,066	0.29	%

			13,849,066	0.29

AEROSPACE & DEFENSE
Other securities^a			39,687,448	0.84

			39,687,448	0.84

AGRICULTURE
Other securities^a			6,312,189	0.13

			6,312,189	0.13

AIRLINES
Other securities^a			9,729,555	0.21

			9,729,555	0.21

APPAREL
Other securities^a			45,483,532	0.97

			45,483,532	0.97

AUTO MANUFACTURERS
Other securities^a			4,954,714	0.10

			4,954,714	0.10

AUTO PARTS & EQUIPMENT
Other securities^a			30,605,508	0.65

			30,605,508	0.65

BANKS
Other securities^a			165,471,336	3.52

			165,471,336	3.52

BEVERAGES
Other securities^a			17,304,727	0.37

			17,304,727	0.37

BIOTECHNOLOGY
Vertex Pharmaceuticals Inc.^b	753,879		25,058,938	0.53
Other securities^a			45,076,678	0.96

			70,135,616	1.49

BUILDING MATERIALS
Martin Marietta Materials Inc.^c	209,284		23,435,622	0.50

			23,435,622	0.50


Security	Shares	Value		% of Net Assets
CHEMICALS
Airgas Inc.	417,134	$	20,710,703	0.44	%
Other securities^a			135,795,287	2.89

			156,505,990	3.33

COAL
Arch Coal Inc.	730,312		24,019,962	0.51
Other securities^a			9,318,746	0.20

			33,338,708	0.71

COMMERCIAL SERVICES
Alliance Data Systems Corp.^b	340,336		21,570,496	0.46
Pharmaceutical Product Development Inc.	602,532		24,914,698	0.53
Quanta Services Inc.^b,c	887,395		23,968,539	0.51
Other securities^a			192,118,783	4.08

			262,572,516	5.58

COMPUTERS
Western Digital Corp.^b,c	1,120,435		23,887,674	0.51
Other securities^a			101,866,334	2.16

			125,754,008	2.67

COSMETICS & PERSONAL CARE
Other securities^a			11,666,238	0.25

			11,666,238	0.25

DISTRIBUTION & WHOLESALE
Other securities^a			21,100,088	0.45

			21,100,088	0.45

DIVERSIFIED FINANCIAL SERVICES
Eaton Vance Corp.	587,031		20,681,102	0.44
Other securities^a			63,428,787	1.35

			84,109,889	1.79

ELECTRIC
MDU Resources Group Inc.	926,845		26,878,505	0.57
Northeast Utilities	786,965		20,185,652	0.43
SCANA Corp.	591,763		23,037,334	0.49
Wisconsin Energy Corp.	591,447		26,555,970	0.56


16		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
Other securities^a		$	149,261,375	3.18	%

			245,918,836	5.23

ELECTRICAL COMPONENTS & EQUIPMENT
AMETEK Inc.	539,864		22,010,255	0.47
Energizer Holdings Inc.^b	294,180		23,696,199	0.51
Other securities^a			10,065,783	0.21

			55,772,237	1.19

ELECTRONICS
FLIR Systems Inc.^b	704,182		27,054,672	0.57
Other securities^a			93,329,672	1.99

			120,384,344	2.56

ENGINEERING & CONSTRUCTION
Other securities^a			50,309,986	1.07

			50,309,986	1.07

ENTERTAINMENT
Other securities^a			32,420,943	0.69

			32,420,943	0.69

ENVIRONMENTAL CONTROL
Republic Services Inc.	782,546		23,460,729	0.50
Stericycle Inc.^b	432,028		25,450,769	0.54
Other securities^a			5,729,627	0.12

			54,641,125	1.16

FOOD
Other securities^a			77,863,629	1.66

			77,863,629	1.66

FOREST PRODUCTS & PAPER
Other securities^a			40,610,994	0.86

			40,610,994	0.86

GAS
Other securities^a			48,202,227	1.02

			48,202,227	1.02

HAND & MACHINE TOOLS
Other securities^a			24,449,297	0.52

			24,449,297	0.52

HEALTH CARE - PRODUCTS
Beckman Coulter Inc.	314,705		22,340,908	0.48
DENTSPLY International Inc.	752,015		28,230,643	0.60
Henry Schein Inc.^b	452,122		24,342,248	0.52


Security	Shares	Value		% of Net Assets
Hologic Inc.^b	1,296,306	$	25,057,595	0.53	%
Other securities^a			111,669,278	2.37

			211,640,672	4.50

HEALTH CARE - SERVICES
Covance Inc.^b	318,829		28,187,672	0.60
Other securities^a			92,954,028	1.98

			121,141,700	2.58

HOME BUILDERS
Other securities^a			51,323,443	1.09

			51,323,443	1.09

HOME FURNISHINGS
Other securities^a			2,215,670	0.05

			2,215,670	0.05

HOUSEHOLD PRODUCTS & WARES
Church & Dwight Co. Inc.	337,073		20,928,863	0.45
Other securities^a			19,026,146	0.40

			39,955,009	0.85

INSURANCE
Everest Re Group Ltd.	312,074		27,003,763	0.57
Other securities^a			184,217,042	3.92

			211,220,805	4.49

INTERNET
McAfee Inc.^b	765,303		25,989,690	0.55
Other securities^a			44,946,237	0.96

			70,935,927	1.51

INVESTMENT COMPANIES
Other securities^a			12,264,798	0.26

			12,264,798	0.26

IRON & STEEL
Cleveland-Cliffs Inc.	539,831		28,578,653	0.61
Other securities^a			33,418,261	0.71

			61,996,914	1.32

LEISURE TIME
Other securities^a			10,144,589	0.22

			10,144,589	0.22

LODGING
Other securities^a			2,699,789	0.06

			2,699,789	0.06


SCHEDULES OF INVESTMENTS		17

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
MACHINERY
Flowserve Corp.	280,646	$	24,912,945	0.53	%
Joy Global Inc.	545,218		24,611,141	0.52
Other securities^a			73,771,096	1.57

			123,295,182	2.62

MANUFACTURING
Roper Industries Inc.	453,330		25,821,677	0.55
SPX Corp.	274,074		21,103,698	0.45
Other securities^a			131,229,042	2.79

			178,154,417	3.79

MEDIA
Other securities^a			17,072,245	0.36

			17,072,245	0.36

METAL FABRICATE & HARDWARE
Other securities^a			26,484,941	0.56

			26,484,941	0.56

OFFICE FURNISHINGS
Other securities^a			12,561,702	0.27

			12,561,702	0.27

OIL & GAS
Cimarex Energy Co.	420,270		20,555,406	0.44
Denbury Resources Inc.^b	1,249,023		23,781,398	0.50
Forest Oil Corp.^b,c	454,134		22,525,046	0.48
Helmerich & Payne Inc.	532,215		22,986,366	0.49
Newfield Exploration Co.^b	668,755		21,393,472	0.45
Pride International Inc.^b	875,440		25,921,778	0.55
Other securities^a			73,205,013	1.56

			210,368,479	4.47

OIL & GAS SERVICES
FMC Technologies Inc.^b	644,539		30,003,290	0.64
Other securities^a			63,919,936	1.36

			93,923,226	2.00

PACKAGING & CONTAINERS
Other securities^a			38,401,592	0.82

			38,401,592	0.82


Security	Shares	Value		% of Net Assets
PHARMACEUTICALS
Cephalon Inc.^b,c	343,885	$	26,647,649	0.57	%
Other securities^a			98,710,327	2.10

			125,357,976	2.67

PIPELINES
Equitable Resources Inc.	661,925		24,279,409	0.51
Other securities^a			35,560,077	0.76

			59,839,486	1.27

REAL ESTATE
Other securities^a			8,886,182	0.19

			8,886,182	0.19

REAL ESTATE INVESTMENT TRUSTS
AMB Property Corp.^c	495,819		22,460,601	0.48
Federal Realty Investment Trust^c	298,026		25,511,026	0.54
Health Care REIT Inc.	515,495		27,439,799	0.58
Macerich Co. (The)^c	377,581		24,033,031	0.51
Regency Centers Corp.	353,960		23,605,592	0.50
Other securities^a			195,501,395	4.16

			318,551,444	6.77

RETAIL
Ross Stores Inc.	665,372		24,492,343	0.52
Other securities^a			291,986,719	6.21

			316,479,062	6.73

SAVINGS & LOANS
New York Community Bancorp Inc.^c	1,738,586		29,190,859	0.62
Other securities^a			25,974,363	0.55

			55,165,222	1.17

SEMICONDUCTORS
Lam Research Corp.^b,c	634,515		19,980,877	0.43
Other securities^a			59,282,886	1.26

			79,263,763	1.69

SOFTWARE
Dun & Bradstreet Corp. (The)	276,041		26,047,229	0.55
Other securities^a			127,888,754	2.72

			153,935,983	3.27


18		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
TELECOMMUNICATIONS
Other securities^a		$	91,478,964	1.95	%

			91,478,964	1.95

TEXTILES
Other securities^a			19,125,417	0.41

			19,125,417	0.41

TOYS, GAMES & HOBBIES
Other securities^a			8,472,831	0.18

			8,472,831	0.18

TRANSPORTATION
Kansas City Southern Industries Inc.^b	459,907		20,401,475	0.43
Other securities^a			49,331,270	1.05

			69,732,745	1.48

TRUCKING & LEASING
Other securities^a			9,738,454	0.21

			9,738,454	0.21

WATER
Other securities^a			12,131,916	0.26

			12,131,916	0.26


TOTAL COMMON STOCKS
(Cost: $5,404,712,826)			4,696,550,913	99.88

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	4,207,628		4,207,628	0.09
BGI Cash Premier Fund LLC 2.67%^d,e,f	632,734,975		632,734,975	13.46

			636,942,603	13.55


TOTAL SHORT-TERM INVESTMENTS
(Cost: $636,942,603)			636,942,603	13.55


	Value			% of Net Assets
TOTAL INVESTMENTS IN SECURITIES
(Cost: $6,041,655,429)	$	5,333,493,516		113.43	%

Other Assets, Less Liabilities		(631,579,283	)	(13.43	)


NET ASSETS	$	4,701,914,233		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		19

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P MIDCAP 400 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	5,067,766	0.27	%

			5,067,766	0.27

AEROSPACE & DEFENSE
Alliant Techsystems Inc.^b,c	140,322		13,181,849	0.70
Other securities^a			7,286,657	0.39

			20,468,506	1.09

AIRLINES
Other securities^a			523,767	0.03

			523,767	0.03

APPAREL
Other securities^a			28,963,896	1.54

			28,963,896	1.54

AUTO MANUFACTURERS
Other securities^a			2,790,038	0.15

			2,790,038	0.15

AUTO PARTS & EQUIPMENT
Other securities^a			9,407,218	0.50

			9,407,218	0.50

BANKS
Other securities^a			13,852,134	0.74

			13,852,134	0.74

BEVERAGES
Other securities^a			11,784,043	0.63

			11,784,043	0.63

BIOTECHNOLOGY
Charles River Laboratories International Inc.^b,c	288,866		16,040,729	0.85
Invitrogen Corp.^b,c	393,068		14,857,970	0.79
Other securities^a			13,046,930	0.70

			43,945,629	2.34

BUILDING MATERIALS
Other securities^a			9,864,430	0.53

			9,864,430	0.53

CHEMICALS
Other securities^a			42,476,737	2.26

			42,476,737	2.26


Security	Shares	Value		% of Net Assets
COAL
Other securities^a		$	14,085,419	0.75	%

			14,085,419	0.75

COMMERCIAL SERVICES
Alliance Data Systems Corp.^b	286,482		18,157,229	0.97
Pharmaceutical Product Development Inc.	507,163		20,971,190	1.12
Strayer Education Inc.	60,776		12,171,002	0.65
Other securities^a			81,432,252	4.32

			132,731,673	7.06

COMPUTERS
Western Digital Corp.^b,c	943,105		20,106,999	1.07
Other securities^a			42,150,692	2.24

			62,257,691	3.31

COSMETICS & PERSONAL CARE
Other securities^a			4,026,235	0.21

			4,026,235	0.21

DIVERSIFIED FINANCIAL SERVICES
Affiliated Managers Group Inc.^b	173,901		14,407,698	0.77
Eaton Vance Corp.	494,097		17,407,037	0.92
Other securities^a			15,047,106	0.80

			46,861,841	2.49

ELECTRICAL COMPONENTS & EQUIPMENT
Energizer Holdings Inc.^b	247,613		19,945,227	1.06
Other securities^a			14,960,377	0.80

			34,905,604	1.86

ELECTRONICS
FLIR Systems Inc.^b,c	592,738		22,772,994	1.21
Trimble Navigation Ltd.^b	514,836		13,313,659	0.71
Other securities^a			24,214,548	1.29

			60,301,201	3.21

ENGINEERING & CONSTRUCTION
Other securities^a			12,284,534	0.65

			12,284,534	0.65

ENTERTAINMENT
Other securities^a			25,651,700	1.37

			25,651,700	1.37


20		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
ENVIRONMENTAL CONTROL
Stericycle Inc.^b	363,662	$	21,423,328	1.14	%
Other securities^a			15,485,822	0.82

			36,909,150	1.96

FOOD
Other securities^a			17,056,181	0.91

			17,056,181	0.91

FOREST PRODUCTS & PAPER
Other securities^a			4,214,485	0.22

			4,214,485	0.22

GAS
Other securities^a			8,709,563	0.46

			8,709,563	0.46

HAND & MACHINE TOOLS
Other securities^a			10,051,505	0.53

			10,051,505	0.53

HEALTH CARE - PRODUCTS
DENTSPLY International Inc.	405,129		15,208,543	0.81
Gen-Probe Inc.^b	230,852		12,246,699	0.65
Henry Schein Inc.^b	380,556		20,489,135	1.09
Hologic Inc.^b	1,091,171		21,092,335	1.12
IDEXX Laboratories Inc.^b,c	253,093		13,869,496	0.74
ResMed Inc.^b,c	321,763		13,835,809	0.74
TECHNE Corp.^b	164,622		11,872,539	0.63
Other securities^a			35,748,313	1.90

			144,362,869	7.68

HEALTH CARE - SERVICES
Community Health Systems Inc.^b	408,299		11,967,244	0.64
Covance Inc.^b	268,372		23,726,769	1.26
Other securities^a			43,431,872	2.31

			79,125,885	4.21

HOME BUILDERS
NVR Inc.^b,c	23,111		13,219,492	0.70
Toll Brothers Inc.^b	554,761		13,996,620	0.74
Other securities^a			6,264,653	0.34

			33,480,765	1.78

HOUSEHOLD PRODUCTS & WARES
Church & Dwight Co. Inc.	283,716		17,615,926	0.94


Security	Shares	Value		% of Net Assets
Other securities^a		$	1,805,458	0.09	%

			19,421,384	1.03

INSURANCE
Philadelphia Consolidated Holding Corp.^b	246,658		14,446,759	0.77
W.R. Berkley Corp.	596,424		14,045,785	0.75
Other securities^a			25,327,925	1.34

			53,820,469	2.86

INTERNET
McAfee Inc.^b	644,193		21,876,794	1.16
Other securities^a			32,794,553	1.75

			54,671,347	2.91

IRON & STEEL
Cleveland-Cliffs Inc.	454,415		24,056,730	1.28
Steel Dynamics Inc.	759,813		12,985,204	0.69
Other securities^a			9,435,624	0.50

			46,477,558	2.47

LEISURE TIME
Other securities^a			2,875,495	0.15

			2,875,495	0.15

MACHINERY
Joy Global Inc.	458,946		20,716,822	1.10
Other securities^a			45,857,321	2.44

			66,574,143	3.54

MANUFACTURING
Donaldson Co. Inc.	334,733		14,028,660	0.75
Roper Industries Inc.	251,837		14,344,636	0.76
Other securities^a			34,881,017	1.86

			63,254,313	3.37

MEDIA
Other securities^a			7,439,847	0.40

			7,439,847	0.40

METAL FABRICATE & HARDWARE
Other securities^a			8,236,594	0.44

			8,236,594	0.44

OFFICE FURNISHINGS
Other securities^a			6,213,373	0.33

			6,213,373	0.33

OIL & GAS
Cimarex Energy Co.	353,750		17,301,912	0.92
Denbury Resources Inc.^b	1,051,358		20,017,856	1.07


SCHEDULES OF INVESTMENTS		21

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
Newfield Exploration Co.^b	562,894	$	18,006,979	0.96	%
Other securities^a			52,087,073	2.77

			107,413,820	5.72

OIL & GAS SERVICES
FMC Technologies Inc.^b	542,548		25,255,609	1.34
Oceaneering International Inc.^b	236,409		12,605,328	0.67
Other securities^a			19,807,647	1.06

			57,668,584	3.07

PACKAGING & CONTAINERS
Other securities^a			4,569,777	0.24

			4,569,777	0.24

PHARMACEUTICALS
Cephalon Inc.^b	170,791		13,234,595	0.71
Other securities^a			54,419,717	2.89

			67,654,312	3.60

PIPELINES
Other securities^a			10,832,338	0.58

			10,832,338	0.58

REAL ESTATE
Other securities^a			7,477,212	0.40

			7,477,212	0.40

RETAIL
Advance Auto Parts Inc.	407,334		16,154,866	0.86
American Eagle Outfitters Inc.	876,719		13,369,965	0.71
Dollar Tree Inc.^b	385,046		14,000,273	0.75
O’Reilly Automotive Inc.^b	570,471		15,271,509	0.81
Ross Stores Inc.	560,071		20,616,214	1.10
Urban Outfitters Inc.^b,c	484,423		15,438,561	0.82
Other securities^a			93,107,188	4.95

			187,958,576	10.00

SEMICONDUCTORS
Other securities^a			24,870,818	1.32

			24,870,818	1.32

SOFTWARE
ANSYS Inc.^b	378,600		14,337,582	0.76
Cerner Corp.^b,c	288,994		12,900,692	0.69
Dun & Bradstreet Corp. (The)	232,344		21,923,980	1.17


Security	Shares	Value		% of Net Assets
Global Payments Inc.	339,752	$	15,241,275	0.81	%
SEI Investments Co.	570,950		12,675,090	0.67
Other securities^a			25,519,328	1.36

			102,597,947	5.46

TELECOMMUNICATIONS
Other securities^a			23,065,444	1.23

			23,065,444	1.23

TEXTILES
Other securities^a			8,049,196	0.43

			8,049,196	0.43

TOYS, GAMES & HOBBIES
Other securities^a			7,130,515	0.38

			7,130,515	0.38

TRANSPORTATION
Other securities^a			20,146,517	1.07

			20,146,517	1.07

WATER
Other securities^a			4,084,795	0.22

			4,084,795	0.22


TOTAL COMMON STOCKS
(Cost: $2,200,017,785)			1,878,664,839	99.96

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	1,405,809		1,405,809	0.08
BGI Cash Premier Fund LLC 2.67%^d,e,f	252,607,859		252,607,859	13.44

			254,013,668	13.52


TOTAL SHORT-TERM INVESTMENTS
(Cost: $254,013,668)			254,013,668	13.52


22		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 GROWTH INDEX FUND

September 30, 2008


	Value			% of Net Assets

TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,454,031,453)	$	2,132,678,507		113.48	%

Other Assets, Less Liabilities		(253,348,465	)	(13.48	)


NET ASSETS	$	1,879,330,042		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		23

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P MIDCAP 400 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	5,875,229	0.32	%

			5,875,229	0.32

AEROSPACE & DEFENSE
Other securities^a			11,590,734	0.62

			11,590,734	0.62

AGRICULTURE
Other securities^a			4,746,512	0.25

			4,746,512	0.25

AIRLINES
Other securities^a			6,883,793	0.37

			6,883,793	0.37

APPAREL
Other securities^a			8,335,082	0.45

			8,335,082	0.45

AUTO MANUFACTURERS
Other securities^a			1,247,713	0.07

			1,247,713	0.07

AUTO PARTS & EQUIPMENT
Other securities^a			14,630,896	0.79

			14,630,896	0.79

BANKS
Cullen/Frost Bankers Inc.	225,316		13,518,960	0.73
Synovus Financial Corp.^b	1,070,054		11,075,059	0.59
Other securities^a			87,790,112	4.72

			112,384,131	6.04

BEVERAGES
Other securities^a			2,501,816	0.13

			2,501,816	0.13

BIOTECHNOLOGY
Vertex Pharmaceuticals Inc.^c	358,007		11,900,153	0.64
Other securities^a			1,609,280	0.09

			13,509,433	0.73

BUILDING MATERIALS
Other securities^a			8,840,149	0.47

			8,840,149	0.47


Security	Shares	Value		% of Net Assets
CHEMICALS
Lubrizol Corp.	258,160	$	11,137,022	0.60	%
Other securities^a			68,808,966	3.69

			79,945,988	4.29

COAL
Other securities^a			12,511,119	0.67

			12,511,119	0.67

COMMERCIAL SERVICES
Manpower Inc.	302,749		13,066,647	0.70
Quanta Services Inc.^b,c	488,292		13,188,767	0.71
SAIC Inc.^c	733,888		14,846,554	0.80
Other securities^a			37,848,832	2.03

			78,950,800	4.24

COMPUTERS
Other securities^a			39,061,658	2.10

			39,061,658	2.10

COSMETICS & PERSONAL CARE
Other securities^a			5,178,242	0.28

			5,178,242	0.28

DISTRIBUTION & WHOLESALE
Ingram Micro Inc. Class A^c	632,656		10,166,782	0.54
Other securities^a			5,736,603	0.31

			15,903,385	0.85

DIVERSIFIED FINANCIAL SERVICES
Other securities^a			21,446,585	1.15

			21,446,585	1.15

ELECTRIC
Alliant Energy Corp.	421,145		13,565,080	0.73
DPL Inc.^b	433,276		10,745,245	0.58
MDU Resources Group Inc.	698,582		20,258,878	1.09
Northeast Utilities	593,145		15,214,169	0.82
NSTAR	407,260		13,643,210	0.73
OGE Energy Corp.	351,992		10,869,513	0.58
Puget Energy Inc.	494,467		13,202,269	0.71
SCANA Corp.	446,037		17,364,220	0.93
Wisconsin Energy Corp.	445,802		20,016,510	1.08
Other securities^a			50,482,554	2.71

			185,361,648	9.96


24		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
ELECTRICAL COMPONENTS & EQUIPMENT
Other securities^a		$	10,741,570	0.58	%

			10,741,570	0.58

ELECTRONICS
Arrow Electronics Inc.^c	456,189		11,961,276	0.64
Other securities^a			24,777,330	1.33

			36,738,606	1.97

ENGINEERING & CONSTRUCTION
URS Corp.^c	321,966		11,806,493	0.64
Other securities^a			15,118,113	0.81

			26,924,606	1.45

ENTERTAINMENT
Other securities^a			1,474,767	0.08

			1,474,767	0.08

ENVIRONMENTAL CONTROL
Other securities^a			8,142,418	0.44

			8,142,418	0.44

FOOD
J.M. Smucker Co. (The)	209,070		10,597,758	0.57
Other securities^a			32,829,657	1.76

			43,427,415	2.33

FOREST PRODUCTS & PAPER
Rayonier Inc.	299,797		14,195,388	0.76
Other securities^a			12,612,124	0.68

			26,807,512	1.44

GAS
Other securities^a			28,544,127	1.53

			28,544,127	1.53

HAND & MACHINE TOOLS
Other securities^a			9,409,840	0.51

			9,409,840	0.51

HEALTH CARE - PRODUCTS
Other securities^a			30,279,468	1.63

			30,279,468	1.63

HEALTH CARE - SERVICES
Other securities^a			20,460,992	1.10

			20,460,992	1.10

HOME BUILDERS
Other securities^a			8,703,468	0.47

			8,703,468	0.47


Security	Shares	Value		% of Net Assets
HOME FURNISHINGS
Other securities^a		$	1,670,671	0.09	%

			1,670,671	0.09

HOUSEHOLD PRODUCTS & WARES
Other securities^a			12,723,416	0.68

			12,723,416	0.68

INSURANCE
Everest Re Group Ltd.	235,208		20,352,548	1.09
Fidelity National Financial Inc.	806,306		11,852,698	0.64
First American Corp.	353,232		10,420,344	0.56
Old Republic International Corp.	879,967		11,219,579	0.60
Other securities^a			57,200,185	3.08

			111,045,354	5.97

INTERNET
Other securities^a			4,485,670	0.24

			4,485,670	0.24

INVESTMENT COMPANIES
Other securities^a			9,251,688	0.50

			9,251,688	0.50

IRON & STEEL
Other securities^a			5,137,191	0.28

			5,137,191	0.28

LEISURE TIME
Other securities^a			5,056,892	0.27

			5,056,892	0.27

LODGING
Other securities^a			2,026,637	0.11

			2,026,637	0.11

MACHINERY
Flowserve Corp.	120,363		10,684,624	0.57
Other securities^a			23,349,559	1.26

			34,034,183	1.83

MANUFACTURING
Pentair Inc.	377,178		13,039,043	0.70
SPX Corp.	134,304		10,341,408	0.56
Other securities^a			54,260,122	2.91

			77,640,573	4.17


SCHEDULES OF INVESTMENTS		25

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
MEDIA
Other securities^a		$	6,200,590	0.33	%

			6,200,590	0.33

METAL FABRICATE & HARDWARE
Other securities^a			12,590,711	0.68

			12,590,711	0.68

OFFICE FURNISHINGS
Other securities^a			3,910,484	0.21

			3,910,484	0.21

OIL & GAS
Forest Oil Corp.^b,c	342,301		16,978,130	0.91
Helmerich & Payne Inc.	252,750		10,916,272	0.59
Pride International Inc.^c	659,855		19,538,307	1.05
Other securities^a			14,932,182	0.80

			62,364,891	3.35

OIL & GAS SERVICES
Tidewater Inc.	196,535		10,880,178	0.58
Other securities^a			8,377,016	0.45

			19,257,194	1.03

PACKAGING & CONTAINERS
Sonoco Products Co.	379,549		11,265,014	0.61
Other securities^a			13,605,019	0.73

			24,870,033	1.34

PHARMACEUTICALS
Omnicare Inc.	396,547		11,408,657	0.61
Other securities^a			22,540,651	1.21

			33,949,308	1.82

PIPELINES
National Fuel Gas Co.	310,670		13,104,061	0.70
ONEOK Inc.	398,201		13,698,114	0.74
Other securities^a			8,607,072	0.46

			35,409,247	1.90

REAL ESTATE INVESTMENT TRUSTS
Alexandria Real Estate Equities Inc.	122,453		13,775,963	0.74
AMB Property Corp.^b	373,720		16,929,516	0.91
Duke Realty Corp.	560,078		13,766,717	0.74
Essex Property Trust Inc.	97,491		11,536,110	0.62
Federal Realty Investment Trust^b	224,629		19,228,242	1.03


Security	Shares	Value		% of Net Assets
Health Care REIT Inc.	388,567	$	20,683,421	1.11	%
Liberty Property Trust	355,844		13,397,527	0.72
Macerich Co. (The)	284,603		18,114,981	0.97
Nationwide Health Properties Inc.	369,033		13,277,807	0.71
Regency Centers Corp.^b	266,789		17,792,158	0.96
UDR Inc.	488,187		12,766,090	0.69
Weingarten Realty Investors^b	285,121		10,170,266	0.55
Other securities^a			59,155,209	3.17

			240,594,007	12.92

RETAIL
Other securities^a			70,186,437	3.77

			70,186,437	3.77

SAVINGS & LOANS
New York Community Bancorp Inc.	1,310,467		22,002,740	1.18
Other securities^a			19,609,632	1.06

			41,612,372	2.24

SEMICONDUCTORS
Other securities^a			37,501,821	2.01

			37,501,821	2.01

SOFTWARE
Other securities^a			24,134,165	1.30

			24,134,165	1.30

TELECOMMUNICATIONS
Telephone and Data Systems Inc.	405,888		14,510,496	0.78
Other securities^a			33,747,207	1.81

			48,257,703	2.59

TEXTILES
Other securities^a			7,217,402	0.39

			7,217,402	0.39

TRANSPORTATION
Other securities^a			34,514,219	1.85

			34,514,219	1.85

TRUCKING & LEASING
Other securities^a			7,359,031	0.40

			7,359,031	0.40


26		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P MIDCAP 400 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value			% of Net Assets

WATER
Other securities^a		$	5,475,831		0.29	%

			5,475,831		0.29


TOTAL COMMON STOCKS
(Cost: $2,164,459,058)			1,859,037,423		99.87

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	2,200,419		2,200,419		0.12
BGI Cash Premier Fund LLC 2.67%^d,e,f	205,707,481		205,707,481		11.05

			207,907,900		11.17


TOTAL SHORT-TERM INVESTMENTS
(Cost: $207,907,900)			207,907,900		11.17


TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,372,366,958)			2,066,945,323		111.04

Other Assets, Less Liabilities			(205,522,427	)	(11.04	)


NET ASSETS		$	1,861,422,896		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

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

^c	Non-income earning security.

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		27

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P SMALLCAP 600 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	6,266,209	0.13	%

			6,266,209	0.13

AEROSPACE & DEFENSE
Curtiss-Wright Corp.	479,484		21,792,548	0.46
Moog Inc. Class A^b,c	455,791		19,544,318	0.41
Teledyne Technologies Inc.^b,c	381,106		21,784,019	0.46
Other securities^a			53,624,043	1.14

			116,744,928	2.47

AGRICULTURE
Other securities^a			10,408,062	0.22

			10,408,062	0.22

AIRLINES
Other securities^a			9,733,178	0.21

			9,733,178	0.21

APPAREL
Other securities^a			85,852,267	1.81

			85,852,267	1.81

AUTO MANUFACTURERS
Other securities^a			3,093,032	0.07

			3,093,032	0.07

AUTO PARTS & EQUIPMENT
Other securities^a			11,990,108	0.25

			11,990,108	0.25

BANKS
Susquehanna
Bancshares Inc.	918,879		17,936,518	0.38
Whitney Holding Corp.	683,216		16,567,988	0.35
Other securities^a			296,447,280	6.26

			330,951,786	6.99

BEVERAGES
Other securities^a			15,948,952	0.34

			15,948,952	0.34

BIOTECHNOLOGY
Other securities^a			53,022,144	1.12

			53,022,144	1.12


Security	Shares	Value		% of Net Assets
BUILDING MATERIALS
Lennox International Inc.	500,601	$	16,654,995	0.35	%
Other securities^a			50,109,101	1.06

			66,764,096	1.41

CHEMICALS
Other securities^a			66,948,829	1.41

			66,948,829	1.41

COMMERCIAL SERVICES
PAREXEL International Corp.^b	589,295		16,889,195	0.36
Watson Wyatt Worldwide Inc.	461,918		22,971,182	0.49
Other securities^a			224,501,541	4.74

			264,361,918	5.59

COMPUTERS
MICROS Systems Inc.^b	861,707		22,973,109	0.49
Other securities^a			78,168,292	1.65

			101,141,401	2.14

COSMETICS & PERSONAL CARE
Other securities^a			15,670,790	0.33

			15,670,790	0.33

DISTRIBUTION & WHOLESALE
LKQ Corp.^b	1,447,901		24,570,880	0.52
Owens & Minor Inc.	441,506		21,413,041	0.45
Other securities^a			51,153,766	1.08

			97,137,687	2.05

DIVERSIFIED FINANCIAL SERVICES
Other securities^a			84,441,256	1.78

			84,441,256	1.78

ELECTRIC
Other securities^a			81,261,310	1.72

			81,261,310	1.72

ELECTRICAL COMPONENTS & EQUIPMENT
Other securities^a			37,029,678	0.78

			37,029,678	0.78

ELECTRONICS
Brady Corp. Class A	575,069		20,288,434	0.43
Itron Inc.^b,c	366,335		32,431,638	0.68


28		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
Woodward
Governor Co.	582,451	$	20,543,047	0.43	%
Other securities^a			141,645,345	3.00

			214,908,464	4.54

ENERGY - ALTERNATE SOURCES
Other securities^a			5,989,130	0.13

			5,989,130	0.13

ENGINEERING & CONSTRUCTION
EMCOR Group Inc.^b	697,854		18,367,517	0.39
Other securities^a			4,466,532	0.09

			22,834,049	0.48

ENTERTAINMENT
Other securities^a			7,871,535	0.17

			7,871,535	0.17

ENVIRONMENTAL CONTROL
Waste
Connections Inc.^b,c	828,001		28,400,434	0.60
Other securities^a			24,986,985	0.53

			53,387,419	1.13

FOOD
Flowers Foods Inc.	854,792		25,096,693	0.53
Other securities^a			68,102,461	1.44

			93,199,154	1.97

FOREST PRODUCTS & PAPER
Other securities^a			38,489,064	0.81

			38,489,064	0.81

GAS
Atmos Energy Corp.	967,770		25,762,037	0.54
Piedmont Natural
Gas Co.	782,514		25,009,147	0.53
Southern Union Co.	1,324,394		27,348,736	0.58
UGI Corp.	1,149,502		29,634,162	0.62
Other securities^a			67,574,846	1.43

			175,328,928	3.70

HAND & MACHINE TOOLS
Other securities^a			28,846,189	0.61

			28,846,189	0.61


Security	Shares	Value		% of Net Assets
HEALTH CARE - PRODUCTS
Cooper Companies Inc. (The)	480,506	$	16,702,389	0.35	%
Haemonetics Corp.^b	271,202		16,738,587	0.35
Immucor Inc.^b,c	749,598		23,957,152	0.51
West Pharmaceutical Services Inc.	347,237		16,952,110	0.36
Other securities^a			141,036,626	2.98

			215,386,864	4.55

HEALTH CARE - SERVICES
Magellan Health Services Inc.^b	433,897		17,815,811	0.38
Pediatrix Medical Group Inc.^b	486,939		26,255,751	0.55
Other securities^a			95,259,027	2.01

			139,330,589	2.94

HOME BUILDERS
Other securities^a			29,576,433	0.62

			29,576,433	0.62

HOME FURNISHINGS
Other securities^a			20,382,617	0.43

			20,382,617	0.43

HOUSEHOLD PRODUCTS & WARES
Other securities^a			27,833,077	0.59

			27,833,077	0.59

HOUSEWARES
Other securities^a			20,829,088	0.44

			20,829,088	0.44

INSURANCE
Hilb Rogal & Hobbs Co.	383,719		17,935,026	0.38
ProAssurance Corp.^b,c	357,665		20,029,240	0.42
Other securities^a			98,539,615	2.08

			136,503,881	2.88

INTERNET
Other securities^a			83,673,455	1.77

			83,673,455	1.77

IRON & STEEL
Other securities^a			8,949,651	0.19

			8,949,651	0.19


SCHEDULES OF INVESTMENTS		29

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
LEISURE TIME
Other securities^a		$	51,825,686	1.09	%

			51,825,686	1.09

LODGING
Other securities^a			5,028,285	0.11

			5,028,285	0.11

MACHINERY
Gardner Denver Inc.^b	568,363		19,733,563	0.42
Other securities^a			72,002,394	1.52

			91,735,957	1.94

MANUFACTURING
Acuity Brands Inc.	434,193		18,131,900	0.38
CLARCOR Inc.	541,933		20,566,357	0.43
Other securities^a			55,430,380	1.18

			94,128,637	1.99

MEDIA
Other securities^a			4,732,597	0.10

			4,732,597	0.10

METAL FABRICATE & HARDWARE
Other securities^a			42,318,338	0.89

			42,318,338	0.89

MINING
Other securities^a			27,249,947	0.58

			27,249,947	0.58

MISCELLANEOUS - MANUFACTURING
Other securities^a			3,733,928	0.08

			3,733,928	0.08

OFFICE FURNISHINGS
Other securities^a			6,851,710	0.14

			6,851,710	0.14

OIL & GAS
Atwood Oceanics Inc.^b	594,873		21,653,377	0.46
Penn Virginia Corp.	446,746		23,874,106	0.50
St. Mary Land & Exploration Co.	663,985		23,671,065	0.50
Unit Corp.^b	504,463		25,132,347	0.53
Other securities^a			49,593,192	1.05

			143,924,087	3.04


Security	Shares	Value		% of Net Assets
OIL & GAS SERVICES
SEACOR Holdings Inc.^b,c	222,650	$	17,578,218	0.37	%
Other securities^a			100,564,367	2.13

			118,142,585	2.50

PHARMACEUTICALS
Other securities^a			84,634,434	1.79

			84,634,434	1.79

REAL ESTATE
Other securities^a			5,626,402	0.12

			5,626,402	0.12

REAL ESTATE INVESTMENT TRUSTS
BioMed Realty Trust Inc.^c	765,893		20,257,870	0.43
Entertainment Properties Trust	350,935		19,203,163	0.41
Home Properties Inc.	340,874		19,753,648	0.42
Kilroy Realty Corp.	348,702		16,664,469	0.35
National Retail Properties Inc.	789,998		18,920,452	0.40
Senior Housing Properties Trust^c	1,222,554		29,133,462	0.62
Other securities^a			174,962,512	3.68

			298,895,576	6.31

RETAIL
Longs Drug Stores Corp.	322,994		24,431,266	0.52
Other securities^a			329,422,635	6.96

			353,853,901	7.48

SAVINGS & LOANS
Other securities^a			18,896,803	0.40

			18,896,803	0.40

SEMICONDUCTORS
Microsemi Corp.^b,c	846,745		21,575,063	0.46
Varian Semiconductor Equipment Associates Inc.^b	775,542		19,481,615	0.41
Other securities^a			116,057,001	2.45

			157,113,679	3.32

SOFTWARE
Concur Technologies Inc.^b,c	458,791		17,553,344	0.37
Other securities^a			157,073,332	3.32

			174,626,676	3.69


30		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
STORAGE & WAREHOUSING
Other securities^a		$	7,195,496	0.15	%

			7,195,496	0.15

TELECOMMUNICATIONS
Anixter International Inc.^b,c	318,926		18,979,286	0.40
Other securities^a			79,873,724	1.69

			98,853,010	2.09

TEXTILES
Other securities^a			13,255,773	0.28

			13,255,773	0.28

TOYS, GAMES & HOBBIES
Other securities^a			10,980,644	0.23

			10,980,644	0.23

TRANSPORTATION
Kirby Corp.^b	577,039		21,892,860	0.46
Landstar System Inc.	565,455		24,913,947	0.53
Other securities^a			71,321,194	1.51

			118,128,001	2.50

WATER
Other securities^a			7,096,243	0.15

			7,096,243	0.15


TOTAL COMMON STOCKS
(Cost: $5,947,629,035)			4,720,915,613	99.74

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global
Investors Funds
Treasury Money
Market Fund,
Institutional Shares
0.47%^d,e	2,479,607		2,479,607	0.05
BGI Cash Premier Fund LLC
2.67%^d,e,f	648,537,815		648,537,815	13.70

			651,017,422	13.75


TOTAL SHORT-TERM INVESTMENTS
(Cost: $651,017,422)			651,017,422	13.75


	Value			% of Net Assets
TOTAL INVESTMENTS IN SECURITIES
(Cost: $6,598,646,457)	$	5,371,933,035		113.49	%

Other Assets, Less Liabilities		(638,411,928	)	(13.49	)


NET ASSETS	$	4,733,521,107		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		31

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P SMALLCAP 600 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	4,262,594	0.29	%

			4,262,594	0.29

AEROSPACE & DEFENSE
Curtiss-Wright Corp.	326,229		14,827,108	1.02
Orbital Sciences Corp.^b	426,047		10,212,347	0.70
Teledyne Technologies Inc.^b	259,294		14,821,245	1.02
Other securities^a			17,967,060	1.23

			57,827,760	3.97

AGRICULTURE
Other securities^a			2,085,411	0.14

			2,085,411	0.14

AIRLINES
Other securities^a			3,907,350	0.27

			3,907,350	0.27

APPAREL
Deckers Outdoor Corp.^b	94,842		9,871,155	0.68
Gymboree Corp.^b	210,728		7,480,844	0.51
Other securities^a			24,039,028	1.65

			41,391,027	2.84

AUTO PARTS & EQUIPMENT
Other securities^a			1,780,245	0.12

			1,780,245	0.12

BANKS
PrivateBancorp Inc.^c	198,624		8,274,676	0.57
Other securities^a			40,824,709	2.80

			49,099,385	3.37

BEVERAGES
Other securities^a			9,592,394	0.66

			9,592,394	0.66

BIOTECHNOLOGY
Martek Biosciences Corp.	240,648		7,561,160	0.52
Other securities^a			15,152,491	1.04

			22,713,651	1.56


Security	Shares	Value		% of Net Assets
BUILDING MATERIALS
Simpson Manufacturing Co. Inc.^c	271,914	$	7,366,150	0.51	%
Other securities^a			7,293,833	0.50

			14,659,983	1.01

CHEMICALS
Other securities^a			9,686,103	0.66

			9,686,103	0.66

COMMERCIAL SERVICES
Arbitron Inc.^c	192,775		8,615,115	0.59
Watson Wyatt Worldwide Inc.	204,291		10,159,391	0.70
Wright Express Corp.^b	282,001		8,417,730	0.58
Other securities^a			65,276,736	4.47

			92,468,972	6.34

COMPUTERS
CACI International Inc. Class A^b	219,907		11,017,341	0.76
MICROS Systems Inc.^b	586,287		15,630,411	1.07
Other securities^a			22,514,108	1.54

			49,161,860	3.37

COSMETICS & PERSONAL CARE
Chattem Inc.^b,c	136,373		10,661,641	0.73

			10,661,641	0.73

DISTRIBUTION & WHOLESALE
LKQ Corp.^b	985,124		16,717,554	1.15
Pool Corp.^c	347,947		8,117,604	0.56
Other securities^a			8,203,788	0.56

			33,038,946	2.27

DIVERSIFIED FINANCIAL SERVICES
Greenhill & Co. Inc.^c	127,138		9,376,427	0.64
Other securities^a			32,089,804	2.20

			41,466,231	2.84

ELECTRIC
Other securities^a			2,463,384	0.17

			2,463,384	0.17

ELECTRICAL COMPONENTS & EQUIPMENT
Other securities^a			5,092,115	0.35

			5,092,115	0.35


32		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
ELECTRONICS
Brady Corp. Class A	219,124	$	7,730,695	0.53	%
Dionex Corp.^b	131,531		8,358,795	0.57
Itron Inc.^b,c	149,557		13,240,281	0.91
Other securities^a			34,633,904	2.38

			63,963,675	4.39

ENERGY - ALTERNATE SOURCES
Other securities^a			4,074,100	0.28

			4,074,100	0.28

ENTERTAINMENT
Other securities^a			2,055,271	0.14

			2,055,271	0.14

ENVIRONMENTAL CONTROL
Waste Connections Inc.^b	563,359		19,323,213	1.32
Other securities^a			6,527,636	0.45

			25,850,849	1.77

FOOD
Flowers Foods Inc.	412,938		12,123,860	0.83
United Natural Foods Inc.^b	311,535		7,785,260	0.53
Other securities^a			8,250,501	0.57

			28,159,621	1.93

FOREST PRODUCTS & PAPER
Other securities^a			4,900,025	0.34

			4,900,025	0.34

HAND & MACHINE TOOLS
Other securities^a			3,289,756	0.23

			3,289,756	0.23

HEALTH CARE - PRODUCTS
American Medical Systems Holdings Inc.^b,c	530,903		9,428,837	0.65
Cooper Companies Inc. (The)	326,917		11,363,635	0.78
Haemonetics Corp.^b	184,515		11,388,266	0.78
Immucor Inc.^b	510,009		16,299,888	1.12
Other securities^a			54,733,520	3.75

			103,214,146	7.08


Security	Shares	Value		% of Net Assets
HEALTH CARE - SERVICES
Amedisys Inc.^b,c	194,727	$	9,477,363	0.65	%
Pediatrix Medical Group Inc.^b	331,305		17,863,966	1.23
Other securities^a			36,325,806	2.49

			63,667,135	4.37

HOME BUILDERS
Other securities^a			11,445,331	0.78

			11,445,331	0.78

HOME FURNISHINGS
Other securities^a			1,415,816	0.10

			1,415,816	0.10

HOUSEHOLD PRODUCTS & WARES
Fossil Inc.^b,c	329,420		9,299,527	0.64
Other securities^a			2,104,312	0.14

			11,403,839	0.78

HOUSEWARES
Toro Co. (The)	258,046		10,657,300	0.73

			10,657,300	0.73

INSURANCE
Hilb Rogal & Hobbs Co.	170,096		7,950,287	0.54
ProAssurance Corp.^b	160,615		8,994,440	0.62
Zenith National Insurance Corp.	270,645		9,916,433	0.68
Other securities^a			19,291,116	1.32

			46,152,276	3.16

INTERNET
j2 Global Communications Inc.^b	318,321		7,432,795	0.51
Other securities^a			38,361,214	2.63

			45,794,009	3.14

IRON & STEEL
Other securities^a			1,063,645	0.07

			1,063,645	0.07

LEISURE TIME
Polaris Industries Inc.^c	235,943		10,733,047	0.74
WMS Industries Inc.^b	364,374		11,138,913	0.76
Other securities^a			1,000,900	0.07

			22,872,860	1.57


SCHEDULES OF INVESTMENTS		33

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
LODGING
Other securities^a		$	948,514	0.06	%

			948,514	0.06

MACHINERY
Gardner Denver Inc.^b	235,901		8,190,483	0.56
Other securities^a			12,921,895	0.89

			21,112,378	1.45

MANUFACTURING
CLARCOR Inc.	199,123		7,556,718	0.52
Other securities^a			11,524,346	0.79

			19,081,064	1.31

MEDIA
Other securities^a			759,742	0.05

			759,742	0.05

METAL FABRICATE & HARDWARE
Other securities^a			9,456,102	0.65

			9,456,102	0.65

MINING
Other securities^a			9,985,642	0.68

			9,985,642	0.68

MISCELLANEOUS - MANUFACTURING
Other securities^a			1,015,205	0.07

			1,015,205	0.07

OFFICE FURNISHINGS
Other securities^a			1,445,889	0.10

			1,445,889	0.10

OIL & GAS
Penn Virginia Corp.	303,958		16,243,516	1.11
St. Mary Land & Exploration Co.	451,761		16,105,280	1.11
Unit Corp.^b	343,228		17,099,619	1.17
Other securities^a			28,202,172	1.94

			77,650,587	5.33

OIL & GAS SERVICES
CARBO Ceramics Inc.	148,320		7,654,795	0.53
Dril-Quip Inc.^b,c	221,859		9,626,462	0.66
Other securities^a			38,361,317	2.63

			55,642,574	3.82


Security	Shares	Value		% of Net Assets
PHARMACEUTICALS
Other securities^a		$	37,795,598	2.59	%

			37,795,598	2.59

REAL ESTATE
Other securities^a			1,874,710	0.13

			1,874,710	0.13

REAL ESTATE INVESTMENT TRUSTS
Other securities^a			8,027,042	0.55

			8,027,042	0.55

RETAIL
Panera Bread Co. Class A^b,c	221,279		11,263,101	0.77
Tractor Supply Co.^b	232,932		9,794,791	0.67
Other securities^a			94,293,600	6.47

			115,351,492	7.91

SEMICONDUCTORS
Other securities^a			31,137,640	2.14

			31,137,640	2.14

SOFTWARE
Concur Technologies Inc.^b,c	312,145		11,942,668	0.82
Other securities^a			60,834,779	4.17

			72,777,447	4.99

STORAGE & WAREHOUSING
Other securities^a			2,692,843	0.18

			2,692,843	0.18

TELECOMMUNICATIONS
Comtech Telecommunications Corp.^b,c	176,217		8,676,925	0.60
Other securities^a			19,752,917	1.35

			28,429,842	1.95

TOYS, GAMES & HOBBIES
Other securities^a			4,083,237	0.28

			4,083,237	0.28


34		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 GROWTH INDEX FUND

September 30, 2008


Security	Shares	Value			% of Net Assets
TRANSPORTATION
Kirby Corp.^b	235,576	$	8,937,753		0.62	%
Landstar System Inc.	384,722		16,950,851		1.16
Other securities^a			31,395,474		2.15

			57,284,078		3.93


TOTAL COMMON STOCKS
(Cost: $1,655,297,147)			1,457,890,332		99.99

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares




0.47%^d,e	756,396		756,396		0.05
BGI Cash Premier Fund LLC
2.67%^d,e,f	205,292,689		205,292,689		14.08

			206,049,085		14.13


TOTAL SHORT-TERM INVESTMENTS
(Cost: $206,049,085)			206,049,085		14.13


TOTAL INVESTMENTS IN SECURITIES
(Cost: $1,861,346,232)			1,663,939,417		114.12

Other Assets, Less Liabilities			(205,848,921	)	(14.12	)


NET ASSETS		$	1,458,090,496		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		35

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P SMALLCAP 600 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

AEROSPACE & DEFENSE
Other securities^a		$	18,728,110	1.22	%

			18,728,110	1.22

AGRICULTURE
Other securities^a			4,341,088	0.28

			4,341,088	0.28

AIRLINES
Other securities^a			2,356,203	0.15

			2,356,203	0.15

APPAREL
Other securities^a			14,746,207	0.96

			14,746,207	0.96

AUTO MANUFACTURERS
Other securities^a			1,831,372	0.12

			1,831,372	0.12

AUTO PARTS & EQUIPMENT
Other securities^a			5,525,958	0.36

			5,525,958	0.36

BANKS
First Midwest Bancorp Inc.^b	305,801		7,412,616	0.48
National Penn Bancshares Inc.	501,368		7,319,973	0.48
Old National Bancorp^b	416,618		8,340,692	0.55
Susquehanna Bancshares Inc.	541,546		10,570,978	0.69
UMB Financial Corp.	133,563		7,014,729	0.46
United Bancshares Inc.	237,003		8,295,105	0.54
Whitney Holding Corp.	402,658		9,764,457	0.64
Other securities^a			93,803,683	6.13

			152,522,233	9.97

BEVERAGES
Other securities^a			1,093,236	0.07

			1,093,236	0.07

BIOTECHNOLOGY
Other securities^a			11,563,712	0.76

			11,563,712	0.76


Security	Shares	Value		% of Net Assets
BUILDING MATERIALS
Lennox International Inc.	295,032	$	9,815,715	0.64	%
Other securities^a			16,828,885	1.10

			26,644,600	1.74

CHEMICALS
Other securities^a			31,043,472	2.03

			31,043,472	2.03

COMMERCIAL SERVICES
Live Nation Inc.^b,c	476,936		7,759,749	0.51
Other securities^a			67,935,389	4.44

			75,695,138	4.95

COMPUTERS
Other securities^a			17,017,861	1.11

			17,017,861	1.11

DISTRIBUTION & WHOLESALE
Owens & Minor Inc.	260,199		12,619,651	0.82
United Stationers Inc.^c	147,267		7,043,781	0.46
Watsco Inc.	178,301		8,964,974	0.59

			28,628,406	1.87

DIVERSIFIED FINANCIAL SERVICES
Other securities^a			20,682,019	1.35

			20,682,019	1.35

ELECTRIC
ALLETE Inc.	163,789		7,288,611	0.48
Avista Corp.	336,748		7,310,799	0.48
Cleco Corp.	377,630		9,535,158	0.62
UniSource Energy Corp.	223,420		6,521,630	0.42
Other securities^a			15,111,091	0.99

			45,767,289	2.99

ELECTRICAL COMPONENTS & EQUIPMENT
Belden Inc.	271,358		8,626,471	0.56
Other securities^a			8,788,401	0.58

			17,414,872	1.14

ELECTRONICS
Itron Inc.^b,c	86,378		7,647,044	0.50
Woodward Governor Co.	185,403		6,539,164	0.43
Other securities^a			57,070,948	3.73

			71,257,156	4.66


36		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
ENGINEERING & CONSTRUCTION
EMCOR Group Inc.^b,c	411,280	$	10,824,890	0.71	%
Other securities^a			2,634,516	0.17

			13,459,406	0.88

ENTERTAINMENT
Other securities^a			2,853,960	0.19

			2,853,960	0.19

ENVIRONMENTAL CONTROL
Other securities^a			9,075,776	0.59

			9,075,776	0.59

FOOD
Other securities^a			30,526,816	2.00

			30,526,816	2.00

FOREST PRODUCTS & PAPER
Rock-Tenn Co. Class A	240,242		9,604,875	0.63
Other securities^a			8,833,583	0.58

			18,438,458	1.21

GAS
Atmos Energy Corp.	570,339		15,182,424	0.99
Laclede Group Inc. (The)	138,314		6,706,846	0.44
New Jersey Resources Corp.	264,562		9,495,130	0.62
Northwest Natural Gas Co.	166,390		8,652,280	0.57
Piedmont Natural Gas Co.^b	461,164		14,738,801	0.96
South Jersey Industries Inc.	187,143		6,681,005	0.44
Southern Union Co.	780,504		16,117,408	1.06
Southwest Gas Corp.	274,011		8,291,573	0.54
UGI Corp.	677,433		17,464,223	1.14

			103,329,690	6.76

HAND & MACHINE TOOLS
Regal Beloit Corp.	202,764		8,621,525	0.57
Other securities^a			5,531,549	0.36

			14,153,074	0.93

HEALTH CARE - PRODUCTS
Other securities^a			37,517,579	2.45

			37,517,579	2.45


Security	Shares	Value		% of Net Assets
HEALTH CARE - SERVICES
Other securities^a		$	26,972,659	1.76	%

			26,972,659	1.76

HOME BUILDERS
Other securities^a			7,501,239	0.49

			7,501,239	0.49

HOME FURNISHINGS
Other securities^a			10,779,398	0.71

			10,779,398	0.71

HOUSEHOLD PRODUCTS & WARES
Other securities^a			6,516,142	0.43

			6,516,142	0.43

HOUSEWARES
Other securities^a			3,038,203	0.20

			3,038,203	0.20

INSURANCE
Selective Insurance Group Inc.	331,590		7,600,043	0.50
Other securities^a			32,965,721	2.15

			40,565,764	2.65

INTERNET
Other securities^a			9,535,702	0.62

			9,535,702	0.62

IRON & STEEL
Other securities^a			4,358,384	0.29

			4,358,384	0.29

LEISURE TIME
Brunswick Corp.	551,432		7,052,815	0.46
Other securities^a			3,681,772	0.24

			10,734,587	0.70

LODGING
Other securities^a			2,139,283	0.14

			2,139,283	0.14

MACHINERY
Other securities^a			35,784,315	2.34

			35,784,315	2.34

MANUFACTURING
Acuity Brands Inc.	255,895		10,686,175	0.70
Other securities^a			28,288,496	1.85

			38,974,671	2.55


SCHEDULES OF INVESTMENTS		37

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
MEDIA
Other securities^a		$	2,126,291	0.14	%

			2,126,291	0.14

METAL FABRICATE & HARDWARE
Other securities^a			16,751,029	1.10

			16,751,029	1.10

MINING
Other securities^a			7,413,247	0.49

			7,413,247	0.49

MISCELLANEOUS - MANUFACTURING
Other securities^a			1,320,514	0.09

			1,320,514	0.09

OFFICE FURNISHINGS
Other securities^a			2,789,880	0.18

			2,789,880	0.18

OIL & GAS
Atwood Oceanics Inc.^c	178,842		6,509,849	0.43
Other securities^a			11,061,328	0.72

			17,571,177	1.15

OIL & GAS SERVICES
Other securities^a			21,432,321	1.40

			21,432,321	1.40

PHARMACEUTICALS
Alpharma Inc. Class A^b,c	262,864		9,697,053	0.63
Other securities^a			7,399,405	0.49

			17,096,458	1.12

REAL ESTATE
Other securities^a			1,692,799	0.11

			1,692,799	0.11

REAL ESTATE INVESTMENT TRUSTS
BioMed Realty Trust Inc.^b	451,375		11,938,869	0.78
EastGroup Properties Inc.	157,700		7,654,758	0.50
Entertainment Properties Trust	206,825		11,317,464	0.74
Home Properties Inc.	200,894		11,641,807	0.76
Kilroy Realty Corp.	205,511		9,821,371	0.64
Lexington Realty Trust	406,647		7,002,461	0.46


Security	Shares	Value		% of Net Assets
Mid-America Apartment Communities Inc.	173,079	$	8,505,102	0.56	%
National Retail Properties Inc.^b	465,587		11,150,809	0.73
Senior Housing Properties Trust^b	720,487		17,169,205	1.12
Tanger Factory Outlet Centers Inc.	199,031		8,715,567	0.57
Other securities^a			64,295,134	4.21

			169,212,547	11.07

RETAIL
Longs Drug Stores Corp.	190,352		14,398,225	0.94
Other securities^a			94,183,375	6.16

			108,581,600	7.10

SAVINGS & LOANS
Other securities^a			11,124,553	0.73

			11,124,553	0.73

SEMICONDUCTORS
Microsemi Corp.^b,c	264,546		6,740,632	0.44
Varian Semiconductor Equipment Associates Inc.^c	265,147		6,660,493	0.44
Other securities^a			52,228,143	3.41

			65,629,268	4.29

SOFTWARE
Other securities^a			39,900,559	2.61

			39,900,559	2.61

STORAGE & WAREHOUSING
Other securities^a			1,912,472	0.13

			1,912,472	0.13

TELECOMMUNICATIONS
Anixter International Inc.^b,c	110,920		6,600,849	0.43
Other securities^a			27,029,887	1.77

			33,630,736	2.20

TEXTILES
Other securities^a			7,813,728	0.51

			7,813,728	0.51

TOYS, GAMES & HOBBIES
Other securities^a			2,935,245	0.19

			2,935,245	0.19


38		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P SMALLCAP 600 VALUE INDEX FUND

September 30, 2008


Security	Shares	Value			% of Net Assets
TRANSPORTATION
Other securities^a		$	20,005,757		1.31	%

			20,005,757		1.31

WATER
Other securities^a			4,182,987		0.27

			4,182,987		0.27


TOTAL COMMON STOCKS
(Cost: $1,736,864,567)			1,526,237,206		99.81

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	1,169,325		1,169,325		0.08
BGI Cash Premier Fund LLC 2.67%^d,e,f	140,334,769		140,334,769		9.18

			141,504,094		9.26


TOTAL SHORT-TERM INVESTMENTS
(Cost: $141,504,094)			141,504,094		9.26


TOTAL INVESTMENTS IN SECURITIES
(Cost: $1,878,368,661)			1,667,741,300		109.07

Other Assets, Less Liabilities			(138,651,128	)	(9.07	)


NET ASSETS		$	1,529,090,172		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

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

^c	Non-income earning security.

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		39

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P 1500 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	385,565	0.17	%

			385,565	0.17

AEROSPACE & DEFENSE
Boeing Co. (The)	14,900		854,515	0.37
United Technologies Corp.	19,379		1,163,903	0.50
Other securities^a			3,066,456	1.31

			5,084,874	2.18

AGRICULTURE
Monsanto Co.	11,048		1,093,531	0.47
Philip Morris International Inc.	41,502		1,996,246	0.86
Other securities^a			1,761,770	0.75

			4,851,547	2.08

AIRLINES
Other securities^a			268,139	0.11

			268,139	0.11

APPAREL
Other securities^a			1,323,817	0.57

			1,323,817	0.57

AUTO MANUFACTURERS
Other securities^a			650,633	0.28

			650,633	0.28

AUTO PARTS & EQUIPMENT
Other securities^a			584,894	0.25

			584,894	0.25

BANKS
Bank of America Corp.	91,679		3,208,765	1.38
U.S. Bancorp	35,012		1,261,132	0.54
Wells Fargo & Co.	66,635		2,500,812	1.07
Other securities^a			5,365,644	2.31

			12,336,353	5.30

BEVERAGES
Anheuser-Busch Companies Inc.	14,504		941,020	0.40
Coca-Cola Co. (The)	40,032		2,116,892	0.91
PepsiCo Inc.	31,522		2,246,573	0.96
Other securities^a			617,997	0.27

			5,922,482	2.54


Security	Shares	Value		% of Net Assets
BIOTECHNOLOGY
Amgen Inc.^b	21,301	$	1,262,510	0.54	%
Other securities^a			1,755,800	0.76

			3,018,310	1.30

BUILDING MATERIALS
Other securities^a			346,367	0.15

			346,367	0.15

CHEMICALS
Other securities^a			3,923,915	1.69

			3,923,915	1.69

COAL
Other securities^a			603,592	0.26

			603,592	0.26

COMMERCIAL SERVICES
Other securities^a			2,972,563	1.28

			2,972,563	1.28

COMPUTERS
Apple Inc.^b	17,834		2,027,012	0.87
Hewlett-Packard Co.	49,316		2,280,372	0.98
International Business Machines Corp.	27,244		3,186,458	1.37
Other securities^a			2,586,232	1.11

			10,080,074	4.33

COSMETICS & PERSONAL CARE
Procter & Gamble Co. (The)	61,032		4,253,320	1.83
Other securities^a			1,311,599	0.56

			5,564,919	2.39

DISTRIBUTION & WHOLESALE
Other securities^a			636,455	0.27

			636,455	0.27

DIVERSIFIED FINANCIAL SERVICES
Citigroup Inc.	109,651		2,248,942	0.97
Goldman Sachs Group Inc. (The)	8,742		1,118,976	0.48
JPMorgan Chase & Co.	74,116		3,461,217	1.49
Other securities^a			5,636,494	2.41

			12,465,629	5.35

ELECTRIC
Other securities^a			7,895,288	3.39

			7,895,288	3.39


40		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P 1500 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
ELECTRICAL COMPONENTS & EQUIPMENT
Other securities^a		$	996,802	0.43	%

			996,802	0.43

ELECTRONICS
Other securities^a			2,303,420	0.99

			2,303,420	0.99

ENERGY - ALTERNATE SOURCES
Other securities^a			10,787	0.00

			10,787	0.00

ENGINEERING & CONSTRUCTION
Other securities^a			571,554	0.25

			571,554	0.25

ENTERTAINMENT
Other securities^a			248,403	0.11

			248,403	0.11

ENVIRONMENTAL CONTROL
Other securities^a			701,014	0.30

			701,014	0.30

FOOD
Kraft Foods Inc.	30,509		999,170	0.43
Other securities^a			3,870,718	1.66

			4,869,888	2.09

FOREST PRODUCTS & PAPER
Other securities^a			962,275	0.41

			962,275	0.41

GAS
Other securities^a			894,621	0.38

			894,621	0.38

HAND & MACHINE TOOLS
Other securities^a			350,590	0.15

			350,590	0.15

HEALTH CARE - PRODUCTS
Johnson & Johnson	56,195		3,893,190	1.67
Medtronic Inc.	22,673		1,135,917	0.49
Other securities^a			4,868,743	2.09

			9,897,850	4.25

HEALTH CARE - SERVICES
Other securities^a			2,933,975	1.26

			2,933,975	1.26


Security	Shares	Value		% of Net Assets
HOLDING COMPANIES - DIVERSIFIED
Other securities^a		$	164,356	0.07	%

			164,356	0.07

HOME BUILDERS
Other securities^a			502,920	0.22

			502,920	0.22

HOME FURNISHINGS
Other securities^a			209,034	0.09

			209,034	0.09

HOUSEHOLD PRODUCTS & WARES
Other securities^a			1,197,020	0.51

			1,197,020	0.51

HOUSEWARES
Other securities^a			135,509	0.06

			135,509	0.06

INSURANCE
Other securities^a			7,384,429	3.17

			7,384,429	3.17

INTERNET
Google Inc. Class A^b	4,812		1,927,302	0.83
Other securities^a			2,437,240	1.04

			4,364,542	1.87

INVESTMENT COMPANIES
Other securities^a			153,660	0.07

			153,660	0.07

IRON & STEEL
Other securities^a			809,792	0.35

			809,792	0.35

LEISURE TIME
Other securities^a			633,360	0.27

			633,360	0.27

LODGING
Other securities^a			339,926	0.15

			339,926	0.15

MACHINERY
Other securities^a			2,210,677	0.95

			2,210,677	0.95


SCHEDULES OF INVESTMENTS		41

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P 1500 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
MANUFACTURING
General Electric Co.	200,126	$	5,103,213	2.19	%
3M Co.	14,094		962,761	0.41
Other securities^a			4,009,420	1.73

			10,075,394	4.33

MEDIA
Comcast Corp. Class A	58,758		1,153,420	0.49
Time Warner Inc.	72,015		944,117	0.41
Walt Disney Co. (The)	37,789		1,159,744	0.50
Other securities^a			1,918,120	0.82

			5,175,401	2.22

METAL FABRICATE & HARDWARE
Other securities^a			404,542	0.17

			404,542	0.17

MINING
Other securities^a			1,400,203	0.60

			1,400,203	0.60

MISCELLANEOUS - MANUFACTURING
Other securities^a			6,988	0.00

			6,988	0.00

OFFICE & BUSINESS EQUIPMENT
Other securities^a			340,002	0.15

			340,002	0.15

OFFICE FURNISHINGS
Other securities^a			59,971	0.03

			59,971	0.03

OIL & GAS
Chevron Corp.	41,313		3,407,496	1.46
ConocoPhillips	30,606		2,241,890	0.96
Exxon Mobil Corp.	104,506		8,115,936	3.49
Occidental Petroleum Corp.	16,447		1,158,691	0.50
Other securities^a			8,194,859	3.52

			23,118,872	9.93

OIL & GAS SERVICES
Schlumberger Ltd.	24,152		1,886,030	0.81
Other securities^a			2,840,789	1.22

			4,726,819	2.03


Security	Shares	Value		% of Net Assets
PACKAGING & CONTAINERS
Other securities^a		$	423,756	0.18	%

			423,756	0.18

PHARMACEUTICALS
Abbott Laboratories	31,044		1,787,514	0.77
Eli Lilly and Co.	20,182		888,613	0.38
Gilead Sciences Inc.^b	18,459		841,361	0.36
Merck & Co. Inc.	43,144		1,361,625	0.58
Pfizer Inc.	135,739		2,503,027	1.08
Wyeth	26,826		990,952	0.43
Other securities^a			4,328,533	1.85

			12,701,625	5.45

PIPELINES
Other securities^a			1,121,611	0.48

			1,121,611	0.48

REAL ESTATE
Other securities^a			93,931	0.04

			93,931	0.04

REAL ESTATE INVESTMENT TRUSTS
Other securities^a			4,338,908	1.86

			4,338,908	1.86

RETAIL
CVS Caremark Corp.	28,802		969,475	0.42
Home Depot Inc.	34,145		884,014	0.38
McDonald’s Corp.	22,611		1,395,099	0.60
Wal-Mart Stores Inc.	45,150		2,704,034	1.16
Other securities^a			7,842,901	3.36

			13,795,523	5.92

SAVINGS & LOANS
Other securities^a			485,735	0.21

			485,735	0.21

SEMICONDUCTORS
Intel Corp.	113,208		2,120,386	0.91
Other securities^a			3,141,288	1.35

			5,261,674	2.26

SOFTWARE
Microsoft Corp.	157,927		4,215,072	1.81
Oracle Corp.^b	78,908		1,602,621	0.69
Other securities^a			3,773,270	1.62

			9,590,963	4.12


42		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P 1500 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
STORAGE & WAREHOUSING
Other securities^a		$	12,738	0.01	%

			12,738	0.01

TELECOMMUNICATIONS
AT&T Inc.	118,492		3,308,297	1.42
Cisco Systems Inc.^b	118,956		2,683,647	1.15
QUALCOMM Inc.	33,007		1,418,311	0.61
Verizon Communications Inc.	57,340		1,840,041	0.79
Other securities^a			2,901,957	1.25

			12,152,253	5.22

TEXTILES
Other securities^a			179,559	0.08

			179,559	0.08

TOYS, GAMES & HOBBIES
Other securities^a			270,138	0.12

			270,138	0.12

TRANSPORTATION
United Parcel Service Inc. Class B	20,300		1,276,667	0.55
Other securities^a			3,596,485	1.54

			4,873,152	2.09

TRUCKING & LEASING
Other securities^a			36,563	0.02

			36,563	0.02

WATER
Other securities^a			60,325	0.03

			60,325	0.03


TOTAL COMMON STOCKS
(Cost: $279,071,816)			232,468,466	99.84


Security	Shares	Value			% of Net Assets
SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	55,816	$	55,816		0.03	%
BGI Cash Premier Fund LLC 2.67%^c,d,e	1,819,844		1,819,844		0.78

			1,875,660		0.81


TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,875,660)			1,875,660		0.81


TOTAL INVESTMENTS IN SECURITIES
(Cost: $280,947,476)			234,344,126		100.65

Other Assets, Less Liabilities			(1,512,910	)	(0.65	)


NET ASSETS		$	232,831,216		100.00	%

^a	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited)

iSHARES^® S&P U.S. PREFERRED STOCK INDEX FUND

September 30, 2008


Security	Shares	Value
PREFERRED STOCKS – 97.61%

AUTO MANUFACTURERS – 2.50%
Ford Motor Co. Capital Trust II, 6.50%	496,496	$	7,646,038

			7,646,038

BANKS – 37.08%
BAC Capital Trust II, 7.00%	744,991		14,676,323
BAC Capital Trust X, 6.25%	746,317		15,560,709
Banco Santander SA, 6.41%	282,858		4,808,586
Bank of America Corp., 5.91%	291,720		3,704,844
Bank One Capital Trust VI, 7.20%	75,000		1,518,750
Barclays Bank PLC, 6.63%^a	397,800		5,927,220
Barclays Bank PLC, 7.10%^a	75,000		1,086,750
Fifth Third Capital Trust VI, 7.25%	131,096		1,199,528
Fleet Capital Trust VIII, 7.20%	155,038		2,775,180
KeyCorp Capital IX, 6.75%	79,560		660,348
M&T Capital Trust IV, 8.50%	113,338		2,425,433
National City Capital Trust II, 6.63%	665,210		3,924,739
Royal Bank of Scotland Group PLC ADR, 6.40%	298,551		2,764,582
Royal Bank of Scotland Group PLC Series L, 5.75%	265,200		2,254,200
Royal Bank of Scotland Group PLC Series N, 6.35%	589,403		5,687,739
Santander Finance Preferred SA Unipersonal, 6.50%	56,096		927,267
UBS Preferred Funding Trust IV Series D, 5.79%	173,047		2,128,478
USB Capital VIII, 6.35%	53,040		994,500
USB Capital XI, 6.60%	634,933		12,571,673
USB Capital XII, 6.30%	79,560		1,494,137
Wachovia Capital Trust IV, 6.38%	171,074		1,965,640
Wachovia Corp., 7.25%	320,199		2,974,649
Wells Fargo Capital IV, 7.00%	787,202		17,318,444
Wells Fargo Capital IX, 5.63%	184,103		3,488,752
Zions Capital Trust B, 8.00%	25,000		493,750

			113,332,221

DIVERSIFIED FINANCIAL SERVICES – 32.62%
ABN AMRO Capital Funding Trust V, 5.90%	685,100		6,138,496
ABN AMRO Capital Funding Trust VII, 6.08%	884,000		7,204,600


Security	Shares	Value
Capital One Capital II, 7.50%	50,000	$	587,500
CIT Group Inc., 6.35%	53,040		411,060
CIT Group Inc., 7.75%	225,000		1,968,750
Citigroup Capital VIII, 6.95%	1,020,136		17,077,077
Citigroup Capital IX, 6.00%	505,648		7,018,394
Citigroup Capital XVI, 6.45%	238,680		3,537,238
Countrywide Capital V, 7.00%	75,272		598,412
Deutsche Bank Capital Funding Trust VIII, 6.38%	575,705		8,462,863
Goldman Sachs Group Inc. (The) Series D, 4.00%	431,869		5,398,362
HSBC Finance Corp., 6.36%	112,192		1,744,586
JPMorgan Chase Capital X, 7.00%	159,120		3,659,760
JPMorgan Chase Capital XI, 5.88%	811,070		14,664,146
Merrill Lynch & Co. Inc., 6.00%	301,460		2,969,381
Merrill Lynch & Co. Inc., 6.16%	807,755		7,229,407
Merrill Lynch Capital Trust I, 6.45%	190,040		2,641,556
Morgan Stanley Capital Trust III, 6.25%	427,193		4,904,176
Morgan Stanley Capital Trust IV, 6.25%	97,240		1,097,840
Morgan Stanley Capital Trust VI, 6.60%	203,484		2,401,111

			99,714,715

HOUSEHOLD PRODUCTS & WARES – 1.02%
Avery Dennison Corp., 7.88%	72,000		3,105,360

			3,105,360

INSURANCE – 4.72%
MetLife Inc., 5.99%	168,430		2,021,160
MetLife Inc., 6.50%	708,152		10,990,519
RenaissanceRe Holdings Ltd. Series D, 6.60%	97,390		1,414,103

			14,425,782

MINING – 7.78%
Freeport-McMoRan Copper & Gold Inc., 6.75%	280,168		23,789,065

			23,789,065

OIL & GAS – 0.91%
Chesapeake Energy Corp., 4.50%	28,000		2,786,000

			2,786,000


44		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P U.S. PREFERRED STOCK INDEX FUND

September 30, 2008


Security	Shares	Value
PHARMACEUTICALS – 4.61%
Schering-Plough Corp., 6.00%	81,500	$	14,101,130

			14,101,130

REAL ESTATE INVESTMENTTRUSTS – 6.37%
Capstead Mortgage Corp., 11.07%	143,456		1,790,331
Duke Realty Corp. Series O, 8.38%	98,328		1,818,085
Hospitality Properties Trust, 7.00%	117,600		1,405,320
Maguire Properties Inc. Series A, 7.63%	73,282		703,507
Public Storage Series I, 7.25%	413,302		8,009,793
Public Storage Series K, 7.25%	233,155		4,348,341
Public Storage Series M, 6.63%	79,560		1,392,300

			19,467,677


TOTAL PREFERRED STOCKS
(Cost: $417,512,733)			298,367,988

SHORT-TERM INVESTMENTS – 1.91%

MONEY MARKET FUNDS – 1.91%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^a,b	5,843,506		5,843,506

			5,843,506


TOTAL SHORT-TERM INVESTMENTS
(Cost: $5,843,506)			5,843,506


TOTAL INVESTMENTS IN SECURITIES – 99.52%
(Cost: $423,356,239)			304,211,494

Other Assets, Less Liabilities – 0.48%			1,464,401


NET ASSETS – 100.00%		$	305,675,895

ADR – American Depositary Receipts

^a	Affiliated issuer. See Note 2.

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

See notes to financial statements.


SCHEDULES OF INVESTMENTS		45

Summary Schedule of Investments (Unaudited)

iSHARES^® NASDAQ BIOTECHNOLOGY INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

BIOTECHNOLOGY
Acorda Therapeutics Inc.^a,b	374,989	$	8,943,488	0.51	%
Alexion Pharmaceuticals Inc.^a,b	821,139		32,270,763	1.84
Amgen Inc.^a	3,407,442		201,959,087	11.51
Biogen Idec Inc.^a	1,137,472		57,203,467	3.26
Celgene Corp.^a	1,997,947		126,430,086	7.20
Exelixis Inc.^a,b	1,409,896		8,572,168	0.49
Genzyme Corp.^a	950,724		76,904,064	4.38
Illumina Inc.^a,b	1,132,238		45,889,606	2.62
InterMune Inc.^a,b	602,326		10,305,798	0.59
Invitrogen Corp.^a,b	403,040		15,234,912	0.87
Medivation Inc.^a,b	309,971		8,201,833	0.47
Myriad Genetics Inc.^a,b	430,102		27,905,018	1.59
PDL BioPharma Inc.	925,288		8,614,431	0.49
Qiagen NV^a,b	1,205,533		23,785,166	1.36
Regeneron Pharmaceuticals Inc.^a	1,155,572		25,226,137	1.44
Savient Pharmaceuticals Inc.^a	528,322		7,877,281	0.45
Seattle Genetics Inc.^a,b	772,870		8,269,709	0.47
Sequenom Inc.^a	600,292		15,979,773	0.91
Vertex Pharmaceuticals Inc.^a,b	1,400,053		46,537,762	2.65
Other securities^c			112,500,505	6.40

			868,611,054	49.50

COMMERCIAL SERVICES
Other securities^c			6,882,612	0.39

			6,882,612	0.39

DISTRIBUTION & WHOLESALE
Other securities^c			2,665,071	0.15

			2,665,071	0.15

HEALTH CARE - PRODUCTS
Gen-Probe Inc.^a	376,105		19,952,370	1.14
Luminex Corp.^a	432,113		10,807,146	0.62
TECHNE Corp.^a	260,218		18,766,922	1.07
Other securities^c			4,602,566	0.26

			54,129,004	3.09


Security	Shares	Value		% of Net Assets
PHARMACEUTICALS
Alkermes Inc.^a	847,489	$	11,271,604	0.64	%
Alnylam Pharmaceuticals Inc.^a,b	428,220		12,396,969	0.71
Amylin Pharmaceuticals Inc.^a,b	655,728		13,258,820	0.76
Auxilium Pharmaceuticals Inc.^a	414,861		13,441,496	0.77
BioMarin Pharmaceutical Inc.^a,b	1,220,331		32,326,568	1.84
Cephalon Inc.^a	317,734		24,621,208	1.40
Cubist Pharmaceuticals Inc.^a,b	673,375		14,969,126	0.85
CVTherapeutics Inc.^a	837,280		9,042,624	0.52
Endo Pharmaceuticals Holdings Inc.^a	590,935		11,818,700	0.67
Eurand NV^a,b	495,841		9,004,473	0.51
Gilead Sciences Inc.^a	3,259,545		148,570,061	8.47
ImClone Systems Inc.^a,b	404,270		25,242,619	1.44
Isis Pharmaceuticals Inc.^a,b	948,572		16,021,381	0.91
Medarex Inc.^a,b	1,802,497		11,662,156	0.66
Medicines Co. (The)^a	385,459		8,950,358	0.51
Onyx Pharmaceuticals Inc.^a	778,678		28,172,570	1.61
OSI Pharmaceuticals Inc.^a,b	526,969		25,974,302	1.48
Perrigo Co.	936,410		36,014,329	2.05
Pharmasset Inc.^a	503,351		10,041,852	0.57
Rigel Pharmaceuticals Inc.^a	410,977		9,596,313	0.55
Sciele Pharma Inc.^b	349,924		10,774,160	0.61
Sepracor Inc.^a	523,368		9,582,868	0.55
Shire PLC ADR	505,174		24,122,058	1.37
Teva Pharmaceutical Industries Ltd. SP ADR^b	2,177,204		99,694,171	5.68
United Therapeutics Corp.^a	265,382		27,910,225	1.59
ViroPharma Inc.^a,b	694,400		9,110,528	0.52
Warner Chilcott Ltd. Class A^a	1,587,241		23,999,084	1.37
XenoPort Inc.^a	265,261		12,862,506	0.73


46		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited) (Continued)

iSHARES^® NASDAQ BIOTECHNOLOGY INDEX FUND

September 30, 2008


Security	Shares	Value			% of Net Assets
Other securities^c		$	131,949,060		7.52	%

			822,402,189		46.86


TOTAL COMMON STOCKS
(Cost: $2,245,309,370)			1,754,689,930		99.99

RIGHTS

HOLDING COMPANIES - DIVERSIFIED
Other securities^c			25,550		0.00

			25,550		0.00


TOTAL RIGHTS
(Cost: $36,556)			25,550		0.00

SHORT-TERM INVESTMENTS

MONEY MARKET FUNDS
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	1,432,883		1,432,883		0.08
BGI Cash Premier Fund LLC 2.67%^d,e,f	243,836,741		243,836,741		13.89

			245,269,624		13.97


TOTAL SHORT-TERM INVESTMENTS
(Cost: $245,269,624)			245,269,624		13.97


TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,490,615,550)			1,999,985,104		113.96

Other Assets, Less Liabilities			(245,072,572	)	(13.96	)


NET ASSETS		$	1,754,912,532		100.00	%

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

^c	Other securities are those securities, which individually, are not one of the 50 largest unaffiliated issuers and which represent less than one percent of the net assets of the Fund as of September 30, 2008.

^d	Affiliated issuer. See Note 2.

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

f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		47

Statements of Assets and Liabilities (Unaudited)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	100 Index Fund			MidCap 400 Index Fund			MidCap 400 Growth Index Fund			MidCap 400 Value Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	3,765,227,364		$	5,404,712,826		$	2,200,017,785		$	2,164,459,058
Affiliated issuers (Note 2)		6,893,808			636,942,603			254,013,668			207,907,900

Total cost of investments	$	3,772,121,172		$	6,041,655,429		$	2,454,031,453		$	2,372,366,958

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	2,853,220,035		$	4,696,550,913		$	1,878,664,839		$	1,859,037,423
Affiliated issuers (Note 2)		6,893,808			636,942,603			254,013,668			207,907,900

Total fair value of investments		2,860,113,843			5,333,493,516			2,132,678,507			2,066,945,323
Receivables:
Investment securities sold		4,840,183			23,129,793			15,807,335			8,005,159
Dividends and interest		4,838,325			5,594,546			1,002,138			3,461,464
Capital shares sold		190,165			1,216,743			11,020			59,102
Capital shares redeemed		–			300,940			182,126			–

Total Assets		2,869,982,516			5,363,735,538			2,149,681,126			2,078,471,048


LIABILITIES
Payables:
Investment securities purchased		5,288,972			28,290,785			17,301,876			10,935,106
Collateral for securities on loan (Note 5)		5,092,660			632,734,975			252,607,859			205,707,481
Capital shares redeemed		187,040			–			–			–
Investment advisory fees (Note 2)		518,473			795,545			441,349			405,565

Total Liabilities		11,087,145			661,821,305			270,351,084			217,048,152


NET ASSETS	$	2,858,895,371		$	4,701,914,233		$	1,879,330,042		$	1,861,422,896


Net assets consist of:
Paid-in capital	$	3,915,343,204		$	5,329,615,938		$	2,266,758,082		$	2,287,960,947
Undistributed net investment income		475,783			4,307,269			1,293,010			2,037,410
Undistributed net realized gain (accumulated net realized loss)		(144,916,287	)		76,152,939			(67,368,104	)		(123,153,826	)
Net unrealized depreciation		(912,007,329	)		(708,161,913	)		(321,352,946	)		(305,421,635	)


NET ASSETS	$	2,858,895,371		$	4,701,914,233		$	1,879,330,042		$	1,861,422,896


Shares outstanding^b		52,450,000			64,850,000			24,950,000			27,200,000


Net asset value per share	$	54.51		$	72.50		$	75.32		$	68.43

^a	Securities on loan with market values of $4,247,278, $617,472,615, $246,430,320 and $200,666,777, respectively. See Note 5.

^b	No par value, unlimited number of shares authorized.

See notes to financial statements.


48		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	SmallCap 600 Index Fund			SmallCap 600 Growth Index Fund			SmallCap 600 Value Index Fund			1500 Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	5,947,629,035		$	1,655,297,147		$	1,736,864,567		$	279,071,816
Affiliated issuers (Note 2)		651,017,422			206,049,085			141,504,094			1,875,660

Total cost of investments	$	6,598,646,457		$	1,861,346,232		$	1,878,368,661		$	280,947,476

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	4,720,915,613		$	1,457,890,332		$	1,526,237,206		$	232,468,466
Affiliated issuers (Note 2)		651,017,422			206,049,085			141,504,094			1,875,660

Total fair value of investments		5,371,933,035			1,663,939,417			1,667,741,300			234,344,126
Receivables:
Due from custodian		7,630,841			–			–			–
Investment securities sold		35,737,349			21,032,371			4,492,936			247,562
Dividends and interest		5,948,640			894,686			2,965,608			311,703
Capital shares sold		336,854			–			–			61,022

Total Assets		5,421,586,719			1,685,866,474			1,675,199,844			234,964,413


LIABILITIES
Payables:
Investment securities purchased		38,735,527			22,164,302			5,358,456			276,060
Collateral for securities on loan (Note 5)		648,537,815			205,292,689			140,334,769			1,819,844
Due to custodian		–			–			85,356			–
Investment advisory fees (Note 2)		792,270			318,987			331,091			37,293

Total Liabilities		688,065,612			227,775,978			146,109,672			2,133,197


NET ASSETS	$	4,733,521,107		$	1,458,090,496		$	1,529,090,172		$	232,831,216


Net assets consist of:
Paid-in capital	$	5,972,006,484		$	1,678,331,964		$	1,833,406,976		$	279,417,477
Undistributed net investment income		2,784,911			793,800			1,206,124			65,650
Accumulated net realized loss		(14,556,866	)		(23,628,453	)		(94,895,567	)		(48,561	)
Net unrealized depreciation		(1,226,713,422	)		(197,406,815	)		(210,627,361	)		(46,603,350	)


NET ASSETS	$	4,733,521,107		$	1,458,090,496		$	1,529,090,172		$	232,831,216


Shares outstanding^b		79,550,000			24,000,000	^c		23,600,000			4,450,000	^c


Net asset value per share	$	59.50		$	60.75	^c	$	64.79		$	52.32	^c

^a	Securities on loan with market values of $631,706,032, $200,274,907, $136,614,266 and $1,770,307, respectively. See Note 5.

^b	No par value, unlimited number of shares authorized.

^c	Shares outstanding and net asset value per share reflect a two-for-one stock split effective July 24, 2008. See Note 4.

See notes to financial statements.


FINANCIAL STATEMENTS		49

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

September 30, 2008


	iShares S&P			iShares Nasdaq
	U.S. Preferred Stock Index Fund			Biotechnology Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	407,479,941		$	2,245,345,926
Affiliated issuers (Note 2)		15,876,298			245,269,624

Total cost of investments	$	423,356,239		$	2,490,615,550

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	291,354,018		$	1,754,715,480
Affiliated issuers (Note 2)		12,857,476			245,269,624

Total fair value of investments		304,211,494			1,999,985,104
Receivables:
Investment securities sold		29,914,257			275,008
Due from custodian (Note 4)		–			4,951,027
Dividends and interest		1,119,111			243,852
Capital shares sold		319,822			11,790

Total Assets		335,564,684			2,005,466,781


LIABILITIES
Payables:
Investment securities purchased		29,762,558			5,958,829
Collateral for securities on loan (Note 5)		–			243,836,741
Capital shares redeemed		–			79,689
Investment advisory fees (Note 2)		126,231			678,990

Total Liabilities		29,888,789			250,554,249


NET ASSETS	$	305,675,895		$	1,754,912,532


Net assets consist of:
Paid-in capital	$	457,757,472		$	2,345,909,079
Undistributed (distributions in excess of) net investment income		3,226,914			(1,721,566	)
Accumulated net realized loss		(36,163,746	)		(98,644,535	)
Net unrealized depreciation		(119,144,745	)		(490,630,446	)


NET ASSETS	$	305,675,895		$	1,754,912,532


Shares outstanding^b		11,050,000			21,650,000


Net asset value per share	$	27.66		$	81.06

^a	Securities on loan with market values of $– and $234,877,164, respectively. See Note 5.

^b	No par value, unlimited number of shares authorized.

See notes to financial statements.


50		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
	100 Index Fund			MidCap 400 Index Fund			MidCap 400 Growth Index Fund			MidCap 400 Value Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers	$	45,395,515		$	37,785,784		$	6,620,718		$	25,359,969
Interest from affiliated issuers (Note 2)		49,062			55,915			18,597			26,649
Securities lending income from affiliated issuers (Note 2)		55,321			3,265,202			1,435,267			1,146,683

Total investment income		45,499,898			41,106,901			8,074,582			26,533,301


EXPENSES
Investment advisory fees (Note 2)		3,573,657			4,985,116			2,776,683			2,629,582

Total expenses		3,573,657			4,985,116			2,776,683			2,629,582

Net investment income		41,926,241			36,121,785			5,297,899			23,903,719


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(75,467,993	)		(127,924,483	)		(84,967,087	)		(54,216,660	)
In-kind redemptions		(34,358,990	)		367,434,622			141,832,304			42,280,694
Short positions (Note 1)		–			(2,737	)		–			(3,639	)

Net realized gain (loss)		(109,826,983	)		239,507,402			56,865,217			(11,939,605	)

Net change in unrealized appreciation (depreciation) on:
Investments		(278,724,617	)		(618,118,150	)		(244,462,993	)		(109,889,910	)
Short positions (Note 1)		–			2,737			–			3,639

Net change in unrealized appreciation (depreciation)		(278,724,617	)		(618,115,413	)		(244,462,993	)		(109,886,271	)

Net realized and unrealized loss		(388,551,600	)		(378,608,011	)		(187,597,776	)		(121,825,876	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(346,625,359	)	$	(342,486,226	)	$	(182,299,877	)	$	(97,922,157	)

See notes to financial statements.


FINANCIAL STATEMENTS		51

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
	SmallCap 600 Index Fund			SmallCap 600 Growth Index Fund			SmallCap 600 Value Index Fund			1500 Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	26,995,137		$	3,618,640		$	13,461,737		$	2,342,611
Interest from affiliated issuers (Note 2)		48,286			15,714			17,110			2,885
Securities lending income from affiliated issuers (Note 2)		3,738,527			1,411,752			1,077,353			22,253

Total investment income		30,781,950			5,046,106			14,556,200			2,367,749


EXPENSES
Investment advisory fees (Note 2)		4,447,213			1,706,497			1,827,517			225,169

Total expenses		4,447,213			1,706,497			1,827,517			225,169

Net investment income		26,334,737			3,339,609			12,728,683			2,142,580


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(155,198,517	)		(19,710,858	)		(59,595,873	)		(4,813,341	)
In-kind redemptions		239,200,566			79,913,546			50,550,572			6,399,789

Net realized gain (loss)		84,002,049			60,202,688			(9,045,301	)		1,586,448

Net change in unrealized appreciation (depreciation)		(172,072,128	)		(95,606,587	)		(10,929,574	)		(28,365,899	)

Net realized and unrealized loss		(88,070,079	)		(35,403,899	)		(19,974,875	)		(26,779,451	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(61,735,342	)	$	(32,064,290	)	$	(7,246,192	)	$	(24,636,871	)

^a	Net of foreign withholding tax of $10,093, $–, $6,379 and $22, respectively.

See notes to financial statements.


52		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P			iShares Nasdaq
	U.S. Preferred Stock Index Fund			Biotechnology Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	11,911,915		$	2,727,296
Dividends from affiliated issuers (Note 2)		237,755			–
Interest from affiliated issuers (Note 2)		31,185			16,312
Securities lending income from affiliated issuers (Note 2)		–			1,224,011

Total investment income		12,180,855			3,967,619


EXPENSES
Investment advisory fees (Note 2)		685,347			3,778,859

Total expenses		685,347			3,778,859

Net investment income		11,495,508			188,760


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(36,135,781	)		(52,151,050	)
Investments in affiliated issuers (Note 2)		9,000			–
In-kind redemptions		958,638			102,510,382

Net realized gain (loss)		(35,168,143	)		50,359,332

Net change in unrealized appreciation (depreciation)		(105,047,005	)		50,086,275

Net realized and unrealized gain (loss)		(140,215,148	)		100,445,607


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(128,719,640	)	$	100,634,367

^a	Net of foreign withholding tax of $– and $77,897, respectively.

See notes to financial statements.


FINANCIAL STATEMENTS		53

Statements of Changes in Net Assets

iSHARES^® TRUST


	iShares S&P 100 Index Fund						iShares S&P MidCap 400 Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	41,926,241		$	87,102,967		$	36,121,785		$	50,274,380
Net realized gain (loss)		(109,826,983	)		354,402,644			239,507,402			422,553,727
Net change in unrealized appreciation (depreciation)		(278,724,617	)		(661,448,744	)		(618,115,413	)		(813,802,990	)

Net decrease in net assets resulting from operations		(346,625,359	)		(219,943,133	)		(342,486,226	)		(340,974,883	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(41,995,358	)		(87,061,148	)		(33,540,989	)		(48,808,103	)
Return of capital		–			–			–			(230,513	)

Total distributions to shareholders		(41,995,358	)		(87,061,148	)		(33,540,989	)		(49,038,616	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		758,380,308			5,482,095,202			2,018,989,667			1,611,208,119
Cost of shares redeemed		(1,405,498,381	)		(4,738,348,677	)		(1,310,380,163	)		(1,471,958,503	)

Net increase (decrease) in net assets from capital share transactions		(647,118,073	)		743,746,525			708,609,504			139,249,616

INCREASE (DECREASE) IN NET ASSETS		(1,035,738,790	)		436,742,244			332,582,289			(250,763,883	)

NET ASSETS
Beginning of period		3,894,634,161			3,457,891,917			4,369,331,944			4,620,095,827

End of period	$	2,858,895,371		$	3,894,634,161		$	4,701,914,233		$	4,369,331,944

Undistributed net investment income included in net assets at end of period	$	475,783		$	544,900		$	4,307,269		$	1,726,473


SHARES ISSUED AND REDEEMED
Shares sold		12,750,000			81,000,000			24,700,000			18,650,000
Shares redeemed		(23,650,000	)		(70,800,000	)		(16,100,000	)		(17,100,000	)

Net increase (decrease) in shares outstanding		(10,900,000	)		10,200,000			8,600,000			1,550,000

See notes to financial statements.


54		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P MidCap 400 Growth Index Fund						iShares S&P MidCap 400 Value Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	5,297,899		$	8,595,540		$	23,903,719		$	38,614,574
Net realized gain (loss)		56,865,217			146,895,355			(11,939,605	)		231,356,552
Net change in unrealized appreciation (depreciation)		(244,462,993	)		(222,181,245	)		(109,886,271	)		(544,194,103	)

Net decrease in net assets resulting from operations		(182,299,877	)		(66,690,350	)		(97,922,157	)		(274,222,977	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,884,393	)		(8,467,412	)		(22,661,768	)		(37,935,379	)

Total distributions to shareholders		(4,884,393	)		(8,467,412	)		(22,661,768	)		(37,935,379	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		757,631,000			980,881,253			244,173,563			649,521,363
Cost of shares redeemed		(617,866,868	)		(843,713,340	)		(283,290,326	)		(1,061,547,841	)

Net increase (decrease) in net assets from capital share transactions		139,764,132			137,167,913			(39,116,763	)		(412,026,478	)

INCREASE (DECREASE) IN NET ASSETS		(47,420,138	)		62,010,151			(159,700,688	)		(724,184,834	)

NET ASSETS
Beginning of period		1,926,750,180			1,864,740,029			2,021,123,584			2,745,308,418

End of period	$	1,879,330,042		$	1,926,750,180		$	1,861,422,896		$	2,021,123,584

Undistributed net investment income included in net assets at end of period	$	1,293,010		$	879,504		$	2,037,410		$	795,459


SHARES ISSUED AND REDEEMED
Shares sold		8,600,000			11,100,000			3,250,000			7,900,000
Shares redeemed		(7,300,000	)		(9,650,000	)		(3,850,000	)		(13,050,000	)

Net increase (decrease) in shares outstanding		1,300,000			1,450,000			(600,000	)		(5,150,000	)

See notes to financial statements.


FINANCIAL STATEMENTS		55

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P SmallCap 600 Index Fund						iShares S&P SmallCap 600 Growth Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008^a (Unaudited)			Year ended March 31, 2008^a

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	26,334,737		$	45,858,688		$	3,339,609		$	5,801,111
Net realized gain		84,002,049			512,084,814			60,202,688			167,364,381
Net change in unrealized appreciation (depreciation)		(172,072,128	)		(1,016,617,944	)		(95,606,587	)		(284,796,782	)

Net decrease in net assets resulting from operations		(61,735,342	)		(458,674,442	)		(32,064,290	)		(111,631,290	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(25,031,654	)		(44,932,734	)		(3,094,033	)		(5,740,703	)
Return of capital		–			(209,218	)		–			–

Total distributions to shareholders		(25,031,654	)		(45,141,952	)		(3,094,033	)		(5,740,703	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		2,432,192,713			4,509,966,944			554,737,496			763,894,926
Cost of shares redeemed		(1,630,082,627	)		(4,734,202,128	)		(280,749,670	)		(855,757,792	)

Net increase (decrease) in net assets from capital share transactions		802,110,086			(224,235,184	)		273,987,826			(91,862,866	)

INCREASE (DECREASE) IN NET ASSETS		715,343,090			(728,051,578	)		238,829,503			(209,234,859	)

NET ASSETS
Beginning of period		4,018,178,017			4,746,229,595			1,219,260,993			1,428,495,852

End of period	$	4,733,521,107		$	4,018,178,017		$	1,458,090,496		$	1,219,260,993

Undistributed net investment income included in net assets at end of period	$	2,784,911		$	1,481,828		$	793,800		$	548,224


SHARES ISSUED AND REDEEMED
Shares sold		38,900,000			67,100,000			8,500,000			11,100,000
Shares redeemed		(26,150,000	)		(70,150,000	)		(4,300,000	)		(12,700,000	)

Net increase (decrease) in shares outstanding		12,750,000			(3,050,000	)		4,200,000			(1,600,000	)

^a	Share transactions were adjusted to reflect a two-for-one stock split effective July 24, 2008. See Note 4.

See notes to financial statements.


56		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P SmallCap 600 Value Index Fund						iShares S&P 1500 Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008^a (Unaudited)			Year ended March 31, 2008^a

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	12,728,683		$	25,181,055		$	2,142,580		$	3,806,287
Net realized gain (loss)		(9,045,301	)		120,796,077			1,586,448			26,932,817
Net change in unrealized appreciation (depreciation)		(10,929,574	)		(375,623,037	)		(28,365,899	)		(43,715,357	)

Net decrease in net assets resulting from operations		(7,246,192	)		(229,645,905	)		(24,636,871	)		(12,976,253	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(12,092,440	)		(24,781,478	)		(2,121,216	)		(3,763,229	)
Return of capital		–			(486,869	)		–			–

Total distributions to shareholders		(12,092,440	)		(25,268,347	)		(2,121,216	)		(3,763,229	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		317,005,007			417,345,111			81,245,580			138,991,869
Cost of shares redeemed		(149,527,920	)		(789,170,519	)		(39,349,475	)		(107,289,403	)

Net increase (decrease) in net assets from capital share transactions		167,477,087			(371,825,408	)		41,896,105			31,702,466

INCREASE (DECREASE) IN NET ASSETS		148,138,455			(626,739,660	)		15,138,018			14,962,984

NET ASSETS
Beginning of period		1,380,951,717			2,007,691,377			217,693,198			202,730,214

End of period	$	1,529,090,172		$	1,380,951,717		$	232,831,216		$	217,693,198

Undistributed net investment income included in net assets at end of period	$	1,206,124		$	569,881		$	65,650		$	44,286


SHARES ISSUED AND REDEEMED
Shares sold		4,700,000			5,750,000			1,450,000			2,100,000
Shares redeemed		(2,200,000	)		(10,800,000	)		(700,000	)		(1,600,000	)

Net increase (decrease) in shares outstanding		2,500,000			(5,050,000	)		750,000			500,000

^a	Share transactions were adjusted to reflect a two-for-one stock split effective July 24, 2008. See Note 4.

See notes to financial statements.


FINANCIAL STATEMENTS		57

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P U.S. Preferred Stock Index Fund						iShares Nasdaq Biotechnology Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	11,495,508		$	5,026,441		$	188,760		$	(1,599,453	)
Net realized gain (loss)		(35,168,143	)		(565,050	)		50,359,332			90,481,241
Net change in unrealized appreciation (depreciation)		(105,047,005	)		(14,074,208	)		50,086,275			(138,323,564	)

Net increase (decrease) in net assets resulting from operations		(128,719,640	)		(9,612,817	)		100,634,367			(49,441,776)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(9,242,949	)		(4,142,242	)		(2,472,606	)		–
Return of capital		–			–			–			(1,256,561	)

Total distributions to shareholders		(9,242,949	)		(4,142,242	)		(2,472,606	)		(1,256,561	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		288,541,459			169,238,069			3,598,029,176			8,040,892,063
Cost of shares redeemed		(16,206,565	)		(9,210,024	)		(3,285,439,038	)		(8,010,456,906	)

Net increase in net assets from capital share transactions		272,334,894			160,028,045			312,590,138			30,435,157

INCREASE (DECREASE) IN NET ASSETS		134,372,305			146,272,986			410,751,899			(20,263,180	)

NET ASSETS
Beginning of period		171,303,590			25,030,604			1,344,160,633			1,364,423,813

End of period	$	305,675,895		$	171,303,590		$	1,754,912,532		$	1,344,160,633

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	3,226,914		$	974,355		$	(1,721,566	)	$	562,280


SHARES ISSUED AND REDEEMED
Shares sold		7,450,000			3,750,000			44,700,000			100,400,000
Shares redeemed		(450,000	)		(200,000	)		(40,750,000	)		(100,700,000	)

Net increase (decrease) in shares outstanding		7,000,000			3,550,000			3,950,000			(300,000)

See notes to financial statements.


58		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P 100 Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	61.48		$	65.06		$	58.69		$	56.02		$	55.24		$	43.05


Income from investment operations:
Net investment income		0.71	^a		1.41	^a		1.28	^a		1.12			1.20			0.89
Net realized and unrealized gain (loss)^b		(6.92	)		(3.60	)		6.20			2.57			0.89			12.21

Total from investment operations		(6.21	)		(2.19	)		7.48			3.69			2.09			13.10


Less distributions from:
Net investment income		(0.76	)		(1.39	)		(1.11	)		(1.02	)		(1.31	)		(0.91	)

Total distributions		(0.76	)		(1.39	)		(1.11	)		(1.02	)		(1.31	)		(0.91	)

Net asset value, end of period	$	54.51		$	61.48		$	65.06		$	58.69		$	56.02		$	55.24


Total return		(10.17	)%^c		(3.56	)%		12.82	%		6.65	%		3.81	%		30.55	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	2,858,895		$	3,894,634		$	3,457,892		$	880,326		$	795,417		$	392,221
Ratio of expenses to average net assets^d		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assets^d		2.35	%		2.08	%		2.03	%		1.96	%		2.41	%		1.68	%
Portfolio turnover rate^e		5	%		6	%		12	%		12	%		6	%		5	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		59

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P MidCap 400 Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	77.68		$	84.46		$	79.21		$	65.84		$	60.37		$	40.97


Income from investment operations:
Net investment income		0.60	^a		0.88	^a		1.13	^a		0.81			0.71			0.53
Net realized and unrealized gain (loss)^b		(5.25	)		(6.80	)		5.27			13.37			5.44			19.40

Total from investment operations		(4.65	)		(5.92	)		6.40			14.18			6.15			19.93


Less distributions from:
Net investment income		(0.53	)		(0.86	)		(1.07	)		(0.81	)		(0.68	)		(0.53	)
Return of capital		–			(0.00	)^c		(0.08	)		–			–			–

Total distributions		(0.53	)		(0.86	)		(1.15	)		(0.81	)		(0.68	)		(0.53	)

Net asset value, end of period	$	72.50		$	77.68		$	84.46		$	79.21		$	65.84		$	60.37


Total return		(6.05	)%^d		(7.10	)%		8.19	%		21.64	%		10.24	%		48.81	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,701,914		$	4,369,332		$	4,620,096		$	3,881,208		$	2,416,338		$	1,636,020
Ratio of expenses to average net assets^e		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assets^e		1.45	%		1.03	%		1.44	%		1.19	%		1.21	%		1.02	%
Portfolio turnover rate^f		9	%		15	%		12	%		9	%		10	%		11	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Rounds to less than $0.01.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


60		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P MidCap 400 Growth Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	81.47		$	84.00		$	80.40		$	67.01		$	62.02		$	44.22


Income from investment operations:
Net investment income		0.21	^a		0.36	^a		0.66	^a		0.44			0.33			0.24
Net realized and unrealized gain (loss)^b		(6.17	)		(2.54	)		3.61			13.32			5.03			17.80

Total from investment operations		(5.96	)		(2.18	)		4.27			13.76			5.36			18.04


Less distributions from:
Net investment income		(0.19	)		(0.35	)		(0.67	)		(0.37	)		(0.37	)		(0.24	)

Total distributions		(0.19	)		(0.35	)		(0.67	)		(0.37	)		(0.37	)		(0.24	)

Net asset value, end of period	$	75.32		$	81.47		$	84.00		$	80.40		$	67.01		$	62.02


Total return		(7.36	)%^c		(2.63	)%		5.34	%		20.58	%		8.67	%		40.86	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,879,330		$	1,926,750		$	1,864,740		$	1,990,019		$	1,112,261		$	669,822
Ratio of expenses to average net assets^d		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%
Ratio of net investment income to average net assets^d		0.48	%		0.41	%		0.85	%		0.60	%		0.56	%		0.45	%
Portfolio turnover rate^e		15	%		31	%		36	%		24	%		34	%		37	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		61

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P MidCap 400 Value Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	72.70		$	83.32		$	76.67		$	63.68		$	57.85		$	37.45


Income from investment operations:
Net investment income		0.86	^a		1.23	^a		1.41	^a		1.11			0.99			0.70
Net realized and unrealized gain (loss)^b		(4.31	)		(10.63	)		6.73			13.07			5.71			20.40

Total from investment operations		(3.45	)		(9.40	)		8.14			14.18			6.70			21.10


Less distributions from:
Net investment income		(0.82	)		(1.22	)		(1.32	)		(1.13	)		(0.87	)		(0.70	)
Return of capital		–			–			(0.17	)		(0.06	)		–			–

Total distributions		(0.82	)		(1.22	)		(1.49	)		(1.19	)		(0.87	)		(0.70	)

Net asset value, end of period	$	68.43		$	72.70		$	83.32		$	76.67		$	63.68		$	57.85


Total return		(4.83	)%^c		(11.44	)%		10.78	%		22.43	%		11.64	%		56.59	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,861,423		$	2,021,124		$	2,745,308		$	2,637,379		$	1,852,990		$	1,133,907
Ratio of expenses to average net assets^d		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%
Ratio of net investment income to average net assets^d		2.27	%		1.50	%		1.82	%		1.68	%		1.78	%		1.47	%
Portfolio turnover rate^e		7	%		29	%		20	%		21	%		10	%		11	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


62		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P SmallCap 600 Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	60.15		$	67.95		$	65.18		$	53.03		$	47.42		$	30.56


Income from investment operations:
Net investment income		0.37	^a		0.67	^a		0.49	^a		0.53			0.45			0.29
Net realized and unrealized gain (loss)^b		(0.68	)		(7.82	)		2.78			12.07			5.65			16.87

Total from investment operations		(0.31	)		(7.15	)		3.27			12.60			6.10			17.16


Less distributions from:
Net investment income		(0.34	)		(0.65	)		(0.50	)		(0.43	)		(0.49	)		(0.29	)
Return of capital		–			(0.00	)^c		–			(0.02	)		–			(0.01	)

Total distributions		(0.34	)		(0.65	)		(0.50	)		(0.45	)		(0.49	)		(0.30	)

Net asset value, end of period	$	59.50		$	60.15		$	67.95		$	65.18		$	53.03		$	47.42


Total return		(0.46	)%^d		(10.62	)%		5.07	%		23.86	%		12.91	%		56.27	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,733,521		$	4,018,178		$	4,746,230		$	4,966,594		$	3,245,465		$	2,226,535
Ratio of expenses to average net assets^e		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assets^e		1.18	%		0.99	%		0.76	%		0.93	%		0.95	%		0.73	%
Portfolio turnover rate^f		9	%		14	%		16	%		16	%		14	%		11	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Rounds to less than $0.01.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		63

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P SmallCap 600 Growth Index Fund
	Six months ended Sep. 30, 2008^a (Unaudited)			Year ended Mar. 31, 2008^a			Year ended Mar. 31, 2007^a			Year ended Mar. 31, 2006^a			Year ended Mar. 31, 2005^a			Year ended Mar. 31, 2004^a

Net asset value, beginning of period	$	61.58		$	66.75		$	64.75		$	52.69		$	46.81		$	31.28


Income from investment operations:
Net investment income		0.16	^b		0.28	^b		0.16	^b		0.31			0.22			0.16
Net realized and unrealized gain (loss)^c		(0.85	)		(5.17	)		2.01			12.02			5.89			15.53

Total from investment operations		(0.69	)		(4.89	)		2.17			12.33			6.11			15.69


Less distributions from:
Net investment income		(0.14	)		(0.28	)		(0.17	)		(0.27	)		(0.23	)		(0.16	)

Total distributions		(0.14	)		(0.28	)		(0.17	)		(0.27	)		(0.23	)		(0.16	)

Net asset value, end of period	$	60.75		$	61.58		$	66.75		$	64.75		$	52.69		$	46.81


Total return		(1.13	)%^d		(7.37	)%		3.36	%		23.47	%		13.07	%		50.24	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,458,090		$	1,219,261		$	1,428,496		$	1,476,318		$	990,554		$	688,137
Ratio of expenses to average net assets^e		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%
Ratio of net investment income to average net assets^e		0.49	%		0.40	%		0.25	%		0.53	%		0.45	%		0.39	%
Portfolio turnover rate^f		12	%		29	%		32	%		30	%		45	%		37	%

^a	Per share amounts were adjusted to reflect a two-for-one stock split effective July 24, 2008. See Note 4.

^b	Based on average shares outstanding throughout the period

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


64		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P SmallCap 600 Value Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	65.45		$	76.78		$	72.86		$	59.34		$	53.44		$	33.31


Income from investment operations:
Net investment income		0.59	^a		1.06	^a		0.82	^a		0.77			0.71			0.42
Net realized and unrealized gain (loss)^b		(0.71	)		(11.33	)		3.96			13.41			5.97			20.14

Total from investment operations		(0.12	)		(10.27	)		4.78			14.18			6.68			20.56


Less distributions from:
Net investment income		(0.54	)		(1.04	)		(0.86	)		(0.61	)		(0.78	)		(0.41	)
Return of capital		–			(0.02	)		–			(0.05	)		–			(0.02	)

Total distributions		(0.54	)		(1.06	)		(0.86	)		(0.66	)		(0.78	)		(0.43	)

Net asset value, end of period	$	64.79		$	65.45		$	76.78		$	72.86		$	59.34		$	53.44


Total return		(0.19	)%^c		(13.57	)%		6.64	%		24.00	%		12.55	%		61.91	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,529,090		$	1,380,952		$	2,007,691		$	1,861,528		$	1,572,405		$	1,020,634
Ratio of expenses to average net assets^d		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%
Ratio of net investment income to average net assets^d		1.74	%		1.43	%		1.14	%		1.20	%		1.36	%		0.95	%
Portfolio turnover rate^e		7	%		23	%		28	%		16	%		13	%		12	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		65

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P 1500 Index Fund
	Six months ended Sep. 30, 2008^b (Unaudited)			Year ended Mar. 31, 2008^b			Year ended Mar. 31, 2007^b			Year ended Mar. 31, 2006^b			Year ended Mar. 31, 2005^b			Period from Jan. 20, 2004^a to Mar. 31, 2004^b

Net asset value, beginning of period	$	58.84		$	63.36		$	57.98		$	52.08		$	49.60		$	50.02


Income from investment operations:
Net investment income		0.56	^c		1.10	^c		1.01	^c		0.87			0.89			0.15
Net realized and unrealized gain (loss)^d		(6.52	)		(4.54	)		5.34			5.80			2.59			(0.43	)

Total from investment operations		(5.96	)		(3.44	)		6.35			6.67			3.48			(0.28	)


Less distributions from:
Net investment income		(0.56	)		(1.08	)		(0.97	)		(0.76	)		(1.00	)		(0.14	)
Return of capital		–			–			–			(0.01	)		–			–

Total distributions		(0.56	)		(1.08	)		(0.97	)		(0.77	)		(1.00	)		(0.14	)


Net asset value, end of period	$	52.32		$	58.84		$	63.36		$	57.98		$	52.08		$	49.60


Total return		(10.20	)%^e		(5.59	)%		11.02	%		12.84	%		7.08	%		(0.57	)%^e


Ratios/Supplemental data:
Net assets, end of period (000s)	$	232,831		$	217,693		$	202,730		$	133,342		$	72,915		$	59,516
Ratio of expenses to average net assets^f		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of net investment income to average net assets^f		1.90	%		1.69	%		1.68	%		1.61	%		1.73	%		1.52	%
Portfolio turnover rate^g		2	%		4	%		4	%		6	%		5	%		1	%

^a	Commencement of operations.

^b	Per share amounts were adjusted to reflect a two-for-one stock split effective July 24, 2008. See Note 4.

^c	Based on average shares outstanding throughout the period.

^d	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^e	Not annualized.

^f	Annualized for periods of less than one year.

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

See notes to financial statements.


66		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P U.S. Preferred Stock Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Mar. 26, 2007^a to Mar. 31, 2007

Net asset value, beginning of period	$	42.30		$	50.06		$	49.96


Income from investment operations:
Net investment income^b		1.55			3.27			0.14
Net realized and unrealized loss^c		(14.83	)		(8.15	)		(0.04	)

Total from investment operations		(13.28	)		(4.88	)		0.10


Less distributions from:
Net investment income		(1.36	)		(2.88	)		–

Total distributions		(1.36	)		(2.88	)		–

Net asset value, end of period	$	27.66		$	42.30		$	50.06


Total return		(32.37	)%^d		(9.99	)%		0.20	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	305,676		$	171,304		$	25,031
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		8.05	%		7.23	%		21.16	%
Portfolio turnover rate^f		15	%		24	%		0	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		67

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares Nasdaq Biotechnology Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	75.94		$	75.80		$	82.27		$	63.86		$	77.39		$	51.09


Income from investment operations:
Net investment income (loss)		0.01	^a		(0.09	)^a		(0.21	)^a		(0.23	)		(0.29	)		(0.23	)
Net realized and unrealized gain (loss)^b		5.29			0.32			(6.26	)		18.64			(13.24	)		26.53

Total from investment operations		5.30			0.23			(6.47	)		18.41			(13.53	)		26.30


Less distributions from:
Net investment income		(0.18	)		–			–			–			–			–
Return of capital		–			(0.09	)		–			–			–			–

Total distributions		(0.18	)		(0.09	)		–			–			–			–

Net asset value, end of period	$	81.06		$	75.94		$	75.80		$	82.27		$	63.86		$	77.39


Total return		6.98	%^c		0.30	%		(7.87	)%		28.83	%		(17.48	)%		51.48	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,754,913		$	1,344,161		$	1,364,424		$	2,032,024		$	1,079,203		$	1,036,973
Ratio of expenses to average net assets^d		0.48	%		0.48	%		0.48	%		0.50	%		0.50	%		0.50	%
Ratio of net investment income (loss) to average net assets^d		0.02	%		(0.11	)%		(0.27	)%		(0.37	)%		(0.40	)%		(0.43	)%
Portfolio turnover rate^e		5	%		19	%		18	%		15	%		14	%		36	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


68		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited)

iSHARES^® TRUST

iShares Trust (the “Trust”) 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 statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.

These financial statements relate only to the iShares S&P 100, iShares S&P MidCap 400, iShares S&P MidCap 400 Growth, iShares S&P MidCap 400 Value, iShares S&P SmallCap 600, iShares S&P SmallCap 600 Growth, iShares S&P SmallCap 600 Value, iShares S&P 1500, iShares S&P U.S. Preferred Stock and iShares Nasdaq Biotechnology Index Funds (each, a “Fund,” collectively, the “Funds”).

The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to achieve each Fund’s investment objective. Each of the Funds is classified as a diversified fund under the 1940 Act, except for the iShares S&P 100 Index Fund, iShares S&P U.S. Preferred Stock Index Fund and iShares Nasdaq Biotechnology Index Fund, which are classified as non-diversified funds. Non-diversified funds generally hold securities of fewer companies than diversified funds and may be more susceptible to the risks associated with these particular companies, or to a single economic, political or regulatory occurrence affecting these companies.

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

1. SIGNIFICANT ACCOUNTING POLICIES

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

SECURITY VALUATION

The securities and other assets of each Fund are generally valued using market valuations. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. The investment adviser may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued pursuant to the pricing policy and procedures approved by the Board of Trustees of the Trust (the “Board”).


NOTES TO FINANCIAL STATEMENTS		69

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the three broad levels listed below.

•

Level 1 – quoted prices in active markets for identical investments

•

Level 2 – other significant observable inputs (including, but not limited to, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

Investments that use Level 2 or Level 3 inputs may include, but are not limited to: (i) an unlisted security related to corporate actions; (ii) a restricted security (e.g., one that may not be publicly sold without registration under the Securities Act of 1933, as amended); (iii) a security whose trading has been suspended or which has been de-listed from its primary trading exchange; (iv) a security that is thinly traded; (v) a security in default or bankruptcy proceedings for which there is no current market quotation; (vi) a security affected by currency controls or restrictions; and (vii) a security affected by a significant event (e.g., an event that occurs after the close of the markets on which the security is traded but before the time as of which a Fund’s net asset value is computed and that may materially affect the value of the Fund’s investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations.

The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments.

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

The following table summarizes the inputs used in valuing the Funds’ investments as of September 30, 2008:


Investments in Securities
iShares Index Fund	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
S&P 100	$	2,860,113,843	$	–	$	–	$	2,860,113,843
S&P MidCap 400		5,333,493,516		–		–		5,333,493,516
S&P MidCap 400 Growth		2,132,678,507		–		–		2,132,678,507
S&P MidCap 400 Value		2,066,945,323		–		–		2,066,945,323
S&P SmallCap 600		5,371,933,035		–		–		5,371,933,035
S&P SmallCap 600 Growth		1,663,939,417		–		–		1,663,939,417
S&P SmallCap 600 Value		1,667,741,300		–		–		1,667,741,300
S&P 1500		234,344,126		–		–		234,344,126
S&P U.S. Preferred Stock		304,211,494		–		–		304,211,494
Nasdaq Biotechnology		1,999,985,104		–		–		1,999,985,104


70		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

SECURITY TRANSACTIONS AND INCOME RECOGNITION

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

DISTRIBUTIONS TO SHAREHOLDERS

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

The tax character of current year distributions will be determined at the end of the current fiscal year.

FEDERAL INCOME TAXES

Each Fund is treated as a separate entity for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes was required for the six months ended September 30, 2008.

The Funds had tax basis net capital loss carryforwards as of March 31, 2008, the tax year-end of the Funds, as follows:


iShares Index Fund	Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Total
S&P 100	$	2,233,710	$	3,096,882	$	741,460	$	–	$	360,546	$	2,374,610	$	2,327,988	$	11,135,196
S&P MidCap 400		–		–		6,096,922		–		–		7,070,414		12,559,634		25,726,970
S&P MidCap 400 Growth		–		–		10,588,183		7,127,634		–		–		–		17,715,817
S&P MidCap 400 Value		89,552		4,082,966		21,364,144		1,843,451		3,470,622		14,542,508		–		45,393,243
S&P SmallCap 600		–		14,800,654		5,484,940		–		1,541,664		–		–		21,827,258
S&P SmallCap 600 Growth		–		–		–		–		6,711,998		–		–		6,711,998
S&P SmallCap 600 Value		–		–		6,867,473		3,277,415		194,198		–		10,940,333		21,279,419
S&P 1500		–		–		–		–		38,110		–		–		38,110
S&P U.S. Preferred Stock		–		–		–		–		–		–		506,620		506,620
Nasdaq Biotechnology		2,280,865		29,163,198		11,433,188		39,449,891		24,158,638		18,800,299		5,156,780		130,442,859

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

For the six months ended September 30, 2008, the Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of shares or multiples thereof (“Creation Units”). Because such gains or losses are not taxable to the Funds and are not distributed


NOTES TO FINANCIAL STATEMENTS		71

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to paid-in-capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or net asset values per share. The net realized in-kind gains or losses for the six months ended September 30, 2008 are disclosed in the Funds’ Statements of Operations.

As of September 30, 2008, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:


iShares Index Fund	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Depreciation
S&P 100	$	3,793,855,198	$	6,499,407	$	(940,240,762	)	$	(933,741,355	)
S&P MidCap 400		6,219,763,032		13,597,853		(899,867,369	)		(886,269,516	)
S&P MidCap 400 Growth		2,529,362,639		8,911,531		(405,595,663	)		(396,684,132	)
S&P MidCap 400 Value		2,430,066,715		29,749,167		(392,870,559	)		(363,121,392	)
S&P SmallCap 600		6,699,310,449		968,478		(1,328,345,892	)		(1,327,377,414	)
S&P SmallCap 600 Growth		1,897,941,854		15,127,681		(249,130,118	)		(234,002,437	)
S&P SmallCap 600 Value		1,933,785,044		48,057,597		(314,101,341	)		(266,043,744	)
S&P 1500		282,633,184		3,240,901		(51,529,959	)		(48,289,058	)
S&P U.S. Preferred Stock		438,936,511		–		(134,725,017	)		(134,725,017	)
Nasdaq Biotechnology		2,497,140,600		3,755,535		(500,911,031	)		(497,155,496	)

The Funds adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for uncertainty in a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and disclosures of tax positions, along with accounting for the related interest and penalties. Management has reviewed the tax positions as of September 30, 2008, inclusive of the prior three open tax return years, as applicable, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

SHORT POSITIONS

From time to time, in order to track the performance of their respective benchmark index, the Funds may sell non-index securities that they will receive through corporate actions occurring on the opening of market trading on the following business day. Such short positions are valued consistent with how securities are valued as described under “Security Valuation.” The obligation to deliver the securities is recorded as a liability on the Funds’ Statements of Assets and Liabilities and is equal to the current market value of the securities to be delivered. Any market fluctuations between the value of the obligation to sell these securities and the current market value are reflected as unrealized appreciation (depreciation) in the Funds’ Statements of Operations. Upon receipt of the securities related to corporate actions, the Funds record a realized gain (loss). Details of the short positions resulting from the non-index securities sold by the Funds, if any, are included in their respective Schedules of Investments.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES


72		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

audit and other services, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees and extraordinary expenses.

For its investment advisory services to each Fund, BGFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:


iShares Index Fund	Investment Advisory Fee
S&P 100	0.20	%
S&P MidCap 400	0.20
S&P MidCap 400 Growth	0.25
S&P MidCap 400 Value	0.25
S&P SmallCap 600	0.20


iShares Index Fund	Investment Advisory Fee
S&P SmallCap 600 Growth	0.25	%
S&P SmallCap 600 Value	0.25
S&P 1500	0.20
S&P U.S. Preferred Stock	0.48
Nasdaq Biotechnology	0.48

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

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

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds are permitted to lend portfolio securities to Barclays Capital Inc. (“BarCap”). Pursuant to the same exemptive order, Barclays Global Investors, N.A. (“BGI”) serves as securities lending agent for the Funds. BarCap and BGI are affiliates of BGFA, the Funds’ investment adviser. As securities lending agent, BGI receives, as fees, a share of the income earned on investment of the cash collateral received for the loan of securities. For the six months ended September 30, 2008, BGI earned securities lending agent fees as follows:


iShares Index Fund	Securities Lending Agent Fees
S&P 100	$	55,321
S&P MidCap 400		3,265,202
S&P MidCap 400 Growth		1,435,267
S&P MidCap 400 Value		1,146,683
S&P SmallCap 600		3,738,527


iShares Index Fund	Securities Lending Agent Fees
S&P SmallCap 600 Growth	$	1,411,752
S&P SmallCap 600 Value		1,077,353
S&P 1500		22,253
Nasdaq Biotechnology		1,224,011


NOTES TO FINANCIAL STATEMENTS		73

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

Cross trades for the six months ended September 30, 2008, if any, were executed by the Funds pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which BGFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

Each Fund may invest in the Institutional Shares of certain money market funds managed by BGFA, the Funds’ investment adviser, including the Government Money Market Fund (“GMMF”), Institutional Money Market Fund (“IMMF”), Prime Money Market Fund (“PMMF”) and Treasury Money Market Fund (“TMMF”) of Barclays Global Investors Funds. The GMMF, IMMF, PMMF and TMMF are feeder funds in a master/feeder fund structure that invest substantially all of their assets in the Government Money Market Master Portfolio, Money Market Master Portfolio, Prime Money Market Master Portfolio and Treasury Money Market Master Portfolio (collectively, the “Money Market Master Portfolios”), respectively, which are also managed by BGFA. While the GMMF, IMMF, PMMF and TMMF do not directly charge an investment advisory fee, the Money Market Master Portfolios in which they invest do charge an investment advisory fee. Income distributions from the GMMF, IMMF, PMMF and TMMF are declared daily and paid monthly from net investment income. Income distributions earned by the Funds from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Funds from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

Each Fund may invest its securities lending cash collateral, if any, in the BGI Cash Premier Fund LLC (“Premier Fund”), an affiliated private money market fund managed by BGFA. Although the Premier Fund is not registered as an investment company under the 1940 Act, it intends to operate as a money market fund in compliance with Rule 2a-7 under the 1940 Act. See Note 5 for additional information regarding the Premier Fund.

For the six months ended September 30, 2008, the iShares S&P U.S. Preferred Stock Index Fund had direct investments (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:


Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	Value at End of Period		Dividend Income		Net Realized Gain
Barclays Bank PLC	146	343	16	473	$	7,013,970	$	237,755	$	9,000

Certain trustees and officers of the Trust are also officers of BGI and/or BGFA.


74		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended September 30, 2008 were as follows:


iShares Index Fund	Purchases		Sales
S&P 100	$	160,171,694	$	159,804,869
S&P MidCap 400		477,017,822		458,783,699
S&P MidCap 400 Growth		331,643,185		324,677,355
S&P MidCap 400 Value		139,523,671		136,933,987
S&P SmallCap 600		474,800,782		402,619,792
S&P SmallCap 600 Growth		186,922,746		154,625,407
S&P SmallCap 600 Value		121,563,790		105,552,509
S&P 1500		6,231,425		5,477,165
S&P U.S. Preferred Stock		48,837,053		42,731,960
Nasdaq Biotechnology		95,086,064		78,482,322

In-kind transactions (see Note 4) for the six months ended September 30, 2008 were as follows:


iShares Index Fund	In-kind Purchases		In-kind Sales
S&P 100	$	756,602,192	$	1,399,960,419
S&P MidCap 400		2,012,969,903		1,304,725,085
S&P MidCap 400 Growth		756,005,716		614,679,313
S&P MidCap 400 Value		243,075,494		280,338,742
S&P SmallCap 600		2,410,261,562		1,627,654,513
S&P SmallCap 600 Growth		544,342,428		280,142,306
S&P SmallCap 600 Value		314,948,645		149,554,193
S&P 1500		81,071,570		38,993,168
S&P U.S. Preferred Stock		284,799,136		16,039,888
Nasdaq Biotechnology		3,589,128,740		3,274,481,890

4. CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.

The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes a substantial replication, or a portfolio sampling representation, of the securities involved in the relevant Fund’s underlying index and an amount of cash. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee directly to State Street, the administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.


NOTES TO FINANCIAL STATEMENTS		75

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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

The Board authorized a two-for-one stock split for the iShares S&P SmallCap 600 Growth and iShares S&P 1500 Index Funds, effective July 24, 2008, for the shareholders of record on July 21, 2008. The impact of the stock split was to increase the number of shares outstanding by a factor of two, while decreasing the net asset value per share by a factor of two, resulting in no effect to total net assets of these Funds. The financial statements for these Funds have been adjusted to reflect the stock splits.

5. LOANS OF PORTFOLIO SECURITIES

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

As of September 30, 2008, certain Funds had loaned securities which were collateralized by cash. The cash collateral received was invested in the Premier Fund. The Premier Fund seeks to achieve its investment objective by investing in a portfolio of high-quality, short-term fixed-income instruments, including money market funds (which may be managed by BGFA or its affiliate) and other instruments that, at the time of investment, have remaining maturities of 397 calendar days or less from the date of acquisition.

The market value of the securities on loan as of September 30, 2008 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Funds’ Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to BGI as securities lending agent.


76		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract (Unaudited)

iSHARES^® TRUST

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider the Investment Advisory Contract between the Trust and BGFA (the “Advisory Contract”) on behalf of the Funds. As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on June 18-19, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contract, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

The Board anticipated that there would be no diminution in the scope of services required of BGFA under the Advisory Contract for the coming year as compared to the scope of services provided by BGFA over the past year. In reviewing the scope of these services, the Board considered BGFA’s investment philosophy and experience, noting that BGFA and its affiliates have committed significant resources over time, including over the past year, including investment in technology and increasing the number of their employees supporting the Funds. The Board also considered BGFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board further noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the iShares S&P 100 Index, iShares S&P MidCap 400 Index, iShares S&P MidCap 400 Growth Index, iShares S&P MidCap 400 Value Index, iShares S&P SmallCap 600 Index, iShares S&P SmallCap 600 Growth Index, iShares S&P SmallCap 600 Value Index, iShares S&P 1500 Index, iShares S&P U.S. Preferred Stock Index and iShares Nasdaq Biotechnology Index Funds; therefore, comparative performance information was generally not available for those particular Funds. The Board also noted that the Funds had met their investment objectives consistently since their respective inception dates. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contract were appropriate and mitigated in favor of the Board’s approval of the Advisory Contract for the coming year.

FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising such Fund’s applicable peer group pursuant to Lipper’s proprietary methodology and, in many cases, registered investment companies that would otherwise have been excluded from Lipper’s comparison group due to certain differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Funds, the Lipper Groups included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three- and five-year periods, as applicable, and the “last quarter” period ended March 31, 2008,


BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT		77

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

iSHARES^® TRUST

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

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

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

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

ECONOMIES OF SCALE

In connection with its review of the Funds’ profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ assets. The Board noted that the Advisory Contract did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board further noted that possible future economies of scale for the Funds had been taken into consideration by fixing the investment advisory fees at rates at the lower end of the marketplace, effectively giving Fund shareholders, from inception, the benefits of the lower average fee shareholders would have received from a fee structure with declining breakpoints where the initial fee was higher. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. In light of this history, the Board determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture for the Funds. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees reflects appropriate sharing of economies of scale with the Funds’ shareholders.


78		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Board Review and Approval of Investment Advisory Contract

(Unaudited) (Continued)

iSHARES^® TRUST

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

The Board received and considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts for which BGFA or BGI, an affiliate of BGFA, provides investment advisory/management services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that comparative investment advisory/management fee information was available for the iShares S&P MidCap 400 Index and iShares S&P MidCap 400 Growth Index Funds but not the other Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as any of the Funds. However, the Board also noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. In reviewing the comparative investment advisory/management fee information for the Funds for which such information was available, the Board considered the general structure of investment advisory/management fees in relation to the nature and extent of services provided to the Funds in comparison with the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the Funds and the Other Accounts under differing regulatory requirements and client guidelines. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for the Other Accounts for which BGFA or BGI provides investment advisory/management services, but that the differences appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the Other Accounts. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

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


BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT		79

Notes:


80		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds

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

iShares S&P Domestic Index Funds

iShares S&P 1500 (ISI)

iShares S&P 100 (OEF)

iShares S&P 500 (IVV)

iShares S&P 500 Growth (IVW)

iShares S&P 500 Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400 Growth (IJK)

iShares S&P MidCap 400 Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600 Growth (IJT)

iShares S&P SmallCap 600 Value (IJS)

iShares S&P North American Natural Resources Sector (IGE)

iShares S&P North American Technology-Multimedia Networking (IGN)

iShares S&P North American Technology- Semiconductors (IGW)

iShares S&P North American Technology-Software (IGV)

iShares S&P North American Technology Sector (IGM)

iShares Domestic Sector Index Funds

iShares Cohen & Steers Realty Majors (ICF)

iShares Dow Jones U.S. Basic Materials Sector (IYM)

iShares Dow Jones U.S. Consumer Services Sector (IYC)

iShares Dow Jones U.S. Consumer Goods Sector (IYK)

iShares Dow Jones U.S. Energy Sector (IYE)

iShares Dow Jones U.S. Financial Sector (IYF)

iShares Dow Jones U.S. Financial Services (IYG)

iShares Dow Jones U.S. Healthcare Sector (IYH)

iShares Dow Jones U.S. Industrial Sector (IYJ)

iShares Dow Jones U.S. Real Estate (IYR)

iShares Dow Jones U.S. Technology Sector (IYW)

iShares Dow Jones U.S. Telecommunications Sector (IYZ)

iShares Dow Jones Transportation Average (IYT)

iShares Dow Jones U.S. Utilities Sector (IDU)

iShares Dow Jones U.S. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment & Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares Russell Microcap (IWC)

iShares International Country Index Funds

iShares FTSE China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (EWN)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Barclays Agency (AGZ)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P Short Term National Municipal (SUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM(KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Developed ex-U.S. Property (WPS)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)


iSHARES FAMILY OF FUNDS		81

The iShares^® Family of Funds (Continued)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

iShares NYSE Index Funds

iShares NYSE Composite (NYC)

iShares NYSE 100 (NY)

iShares S&P Allocation Funds

iShares S&P Conservative (AOK)

iShares S&P Moderate (AOM)

iShares S&P Growth (AOR)

iShares S&P Aggressive (AOA)

iShares S&P Target Date Index Funds

iShares S&P Target Date Retirement Income (TGR)

iShares S&P Target Date 2010 (TZD)

iShares S&P Target Date 2015 (TZE)

iShares S&P Target Date 2020 (TZG)

iShares S&P Target Date 2025 (TZI)

iShares S&P Target Date 2030 (TZL)

iShares S&P Target Date 2035 (TZO)

iShares S&P Target Date 2040 (TZV)

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

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

This advertising section does not constitute part of the 2008 Semi-Annual Report.

iS-0043 1108


82		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

LOGO

For more information:

www.iShares.com

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

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

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Standard & Poor’s or The NASDAQ Stock Market, Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above.

^©2008 Barclays Global Investors. All rights reserved. iShares^® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

Investing involves risk, including possible loss of principal.

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

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

The Funds’ complete schedules of portfolio holdings for this report are also available without charge, upon request, by calling toll-free 1-800-474-2737.

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

BCI-SAR-31-0908

LOGO

2008 SEMI-ANNUAL REPORT TO SHAREHOLDERS

iSHARES® S&P SERIES

SEPTEMBER 30, 2008

Would you prefer to receive materials like this electronically?

See inside cover for details.

iShares S&P Global 100 Index Fund

iShares S&P Global Clean Energy Index Fund

iShares S&P Global Consumer Discretionary Sector Index Fund

iShares S&P Global Consumer Staples Sector Index Fund

iShares S&P Global Energy Sector Index Fund

iShares S&P Global Financials Sector Index Fund

iShares S&P Global Healthcare Sector Index Fund

iShares S&P Global Industrials Sector Index Fund

iShares S&P Global Infrastructure Index Fund

iShares S&P Global Materials Sector Index Fund

iShares S&P Global Nuclear Energy Index Fund

iShares S&P Global Technology Sector Index Fund

iShares S&P Global Telecommunications Sector Index Fund

iShares S&P Global Timber & Forestry Index Fund

iShares S&P Global Utilities Sector Index Fund

iShares®

LOGO

Dear iShares Shareholder:

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

Go to www.icsdelivery.com.

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

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

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

Table of Contents


Fund Performance Overviews		1
Shareholder Expenses		20
Schedules of Investments		22
iShares S&P Global 100 Index Fund		22
iShares S&P Global Clean Energy Index Fund		24
iShares S&P Global Consumer Discretionary Sector Index Fund		26
iShares S&P Global Consumer Staples Sector Index Fund		30
iShares S&P Global Energy Sector Index Fund		32
iShares S&P Global Financials Sector Index Fund		34
iShares S&P Global Healthcare Sector Index Fund		39
iShares S&P Global Industrials Sector Index Fund		41
iShares S&P Global Infrastructure Index Fund		45
iShares S&P Global Materials Sector Index Fund		48
iShares S&P Global Nuclear Energy Index Fund		51
iShares S&P Global Technology Sector Index Fund		52
iShares S&P Global Telecommunications Sector Index Fund		55
iShares S&P Global Timber & Forestry Index Fund		57
iShares S&P Global Utilities Sector Index Fund		58
Financial Statements		60
Financial Highlights		76
Notes to Financial Statements		91
Board Review and Approval of Investment Advisory Contract		100
iShares Family of Funds		109

Fund Performance Overview

iSHARES^® S&P GLOBAL 100 INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global 100 Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global 100 Index™ (the “Index”). The Index is designed to measure the performance of 100 large-capitalization global companies. These companies are highly liquid and represent some of the largest multinational businesses in the world. The Index is a subset of the S&P Global 1200 Index and contains 100 common stocks, screened for sector representation, liquidity and size. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (14.53)%, while the total return for the Index was (14.52)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(23.44)%	(22.75)%	(23.72)%	6.08%	6.16%	6.06%	(0.57)%	(0.44)%	(0.44)%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(23.44)%	(22.75)%	(23.72)%	34.31%	34.87%	34.18%	(4.37)%	(3.38)%	(3.38)%

Total returns for the period since inception are calculated from the inception date of the Fund (12/05/00). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (12/08/00), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	24.53	%

Financial	17.57

Energy	15.27

Technology	10.82

Consumer Cyclical	8.67

Industrial	7.95

Communications	6.98

Basic Materials	4.40

Utilities	3.03

Diversified	0.32

Short-Term and Other Net Assets	0.46


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	5.71	%

General Electric Co.	3.58

Procter & Gamble Co. (The)	3.00

Microsoft Corp.	2.97

Johnson & Johnson	2.74

HSBC Holdings PLC (United Kingdom)	2.73

Chevron Corp.	2.41

JPMorgan Chase & Co.	2.41

Nestle SA Registered (Switzerland)	2.34

International Business Machines Corp.	2.25


TOTAL	30.14	%


FUND PERFORMANCE OVERVIEWS		1

Fund Performance Overview

iSHARES^® S&P GLOBAL CLEAN ENERGY INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Clean Energy Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Clean Energy Index™ (the “Index”). The Index is designed to track the performance of approximately 30 of the most liquid and tradable global companies which represent the listed clean energy universe. The Index includes clean energy production companies and clean energy equipment and technology providers. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from June 24, 2008 (inception date of the Fund) through September 30, 2008, the total return for the Fund was (30.45)%, while the total return for the Index was (30.36)%.


Cumulative Total Returns

Inception to 9/30/08

NAV	MARKET	INDEX
(30.45)%	(29.33)%	(30.36)%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 6/24/08.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/25/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Energy – Alternate Sources	42.79	%

Power Converters/Power Supply Equipment	22.96

Electric – Integrated	16.25

Electronic Components – Semiconductors	7.71

Agricultural Operations	4.38

Building – Heavy Construction	3.44

Independent Power Producer	2.38

Short-Term and Other Net Assets	0.09


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Vestas Wind Systems A/S (Denmark)	7.37	%

Companhia Energetica de Minas Gerais Preferred SP ADR (Brazil)	6.73

First Solar Inc.	6.66

Gamesa Corporacion Tecnologica SA (Spain)	5.75

Covanta Holding Corp.	5.61

SolarWorld AG (Germany)	5.22

Companhia Paranaense de Energia Preferred SP ADR (Brazil)	5.07

Q-Cells AG (Germany)	4.88

LDK Solar Co. Ltd. SP ADR (China)	4.76

SunPower Corp. Class A	4.54


TOTAL	56.59	%


2		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Consumer Discretionary Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Consumer Discretionary Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P^® deems to be part of the consumer discretionary sector of the economy and that S&P believes are important to global markets. Component companies include consumer product manufacturing, service, media and retail companies. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (16.05)%, while the total return for the Index was (16.06)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(28.38)%

(27.56)%

(28.39)%

(8.22)%

(7.71)%

(7.98)%

(16.14)%

(15.18)%

(15.71)%

Total returns for the period since inception are calculated from the inception date of the Fund (9/12/06). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (9/21/06), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


FUND PERFORMANCE OVERVIEWS		3

Fund Performance Overview (Continued)

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Retail	25.55	%

Media	21.58

Auto Manufacturers	20.39

Auto Parts & Equipment	4.97

Home Furnishings	4.34

Apparel	4.20

Advertising	2.25

Lodging	1.93

Leisure Time	1.89

Internet	1.49

Holding Companies – Diversified	1.29

Distribution & Wholesale	1.24

Home Builders	1.19

Entertainment	1.06

Food Service	1.01

Manufacturing	0.92

Commercial Services	0.83

Electrical Components & Equipment	0.71

Toys, Games & Hobbies	0.67

Hand & Machine Tools	0.58

Household Products & Wares	0.49

Chemicals	0.30

Housewares	0.27

Cosmetics & Personal Care	0.25

Health Care – Products	0.20

Short-Term and Other Net Assets	0.40


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets

Toyota Motor Corp. (Japan)	6.19	%

McDonald’s Corp.	3.95

Walt Disney Co. (The)	3.26

Comcast Corp. Class A	3.24

Volkswagen AG (Germany)	3.19

Daimler AG Registered (Germany)	2.69

Time Warner Inc.	2.60

Honda Motor Co. Ltd. (Japan)	2.54

Home Depot Inc.	2.47

Target Corp.	2.13


TOTAL	32.26	%


4		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL CONSUMER STAPLES SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Consumer Staples Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Consumer Staples Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the consumer staples sector of the economy and that S&P believes are important to global markets. Component companies include manufacturers and distributors of food, producers of non-durable household goods, and food and drug retailing companies. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (8.18)%, while the total return for the Index was (8.07)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(6.96)%

(6.23)%

(7.01)%

5.32%

5.93%

5.48%

11.22%

12.55%

11.60%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (9/21/06), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Food	32.16	%

Beverages	20.17

Cosmetics & Personal Care	15.36

Agriculture	13.82

Retail	13.52

Household Products & Wares	3.31

Manufacturing	0.83

Food Service	0.21

Forest Products & Paper	0.11

Short-Term and Other Net Assets	0.51


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Procter & Gamble Co. (The)	9.85	%

Nestle SA Registered (Switzerland)	7.70

Wal-Mart Stores Inc.	6.32

PepsiCo Inc.	5.21

Coca-Cola Co. (The)	4.89

Philip Morris International Inc.	4.65

Tesco PLC (United Kingdom)	2.52

Kraft Foods Inc.	2.31

CVS Caremark Corp.	2.25

Unilever NV (Netherlands)	2.22


TOTAL	47.92	%


FUND PERFORMANCE OVERVIEWS		5

Fund Performance Overview

iSHARES^® S&P GLOBAL ENERGY SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Energy Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Energy Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the energy sector of the economy and that S&P believes are important to global markets. Component companies include oil equipment and services, oil exploration and production, oil refining, oil storage and transportation, and coal and uranium mining companies. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (13.68)%, while the total return for the Index was (13.58)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.18)%	(16.28)%	(17.43)%	19.41%	19.58%	19.33%	14.12%	14.29%	13.70%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(17.18)%	(16.28)%	(17.43)%	142.73%	144.50%	141.95%	148.32%	150.87%	142.23%

Total returns for the period since inception are calculated from the inception date of the Fund (11/12/01). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Oil & Gas	86.05	%

Oil & Gas Services	8.85

Pipelines	2.93

Coal	0.88

Metal Fabricate & Hardware	0.39

Mining	0.36

Engineering & Construction	0.19

Short-Term and Other Net Assets	0.35


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	16.35	%

Chevron Corp.	6.87

BP PLC (United Kingdom)	6.28

Total SA (France)	5.77

ConocoPhillips	4.53

Royal Dutch Shell PLC Class A (United Kingdom)	4.12

Schlumberger Ltd.	3.78

Royal Dutch Shell PLC Class B (United Kingdom)	3.09

Eni SpA (Italy)	2.61

BG Group PLC (United Kingdom)	2.41


TOTAL	55.81	%


6		2008 iSHARES SEMI-ANNUAL TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Financials Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Financials Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the financial sector of the economy and that S&P believes are important to global markets. Component companies include major banks, diversified financial companies, insurance companies, real estate companies, savings and loan associations and securities brokers. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (20.77)%, while the total return for the Index was (20.82)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(36.19)%	(34.84)%	(36.60)%	3.57%	3.94%	3.61%	2.92%	3.20%	3.00%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(36.19)%	(34.84)%	(36.60)%	19.17%	21.29%	19.38%	21.91%	24.26%	22.63%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


FUND PERFORMANCE OVERVIEWS		7

Fund Performance Overview (Continued)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Banks	53.83	%

Insurance	20.22

Diversified Financial Services	17.37

Real Estate	3.37

Real Estate Investment Trusts	3.08

Holding Companies – Diversified	0.81

Investment Companies	0.29

Savings & Loans	0.27

Commercial Services	0.16

Venture Capital	0.11

Home Builders	0.10

Short-Term and Other Net Assets	0.39


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
HSBC Holdings PLC (United Kingdom)	4.30	%

JPMorgan Chase & Co.	3.81

Bank of America Corp.	3.57

Wells Fargo & Co.	2.77

Citigroup Inc.	2.48

Banco Santander SA (Spain)	2.05

BNP Paribas (France)	1.87

Mitsubishi UFJ Financial Group Inc. (Japan)	1.86

Royal Bank of Canada (Canada)	1.39

U.S. Bancorp	1.38


TOTAL	25.48	%


8		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL HEALTHCARE SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Healthcare Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Healthcare Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be a part of the healthcare sector of the economy and that S&P believes are important to global markets. Component companies include health care providers, biotechnology companies and manufacturers of medical supplies, advanced medical devices and pharmaceuticals. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (3.13)%, while the total return for the Index was (2.96)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(13.54)%	(12.93)%	(13.57)%	4.49%	4.50%	4.69%	1.21%	1.28%	1.36%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(13.54)%	(12.93)%	(13.57)%	24.54%	24.64%	25.77%	8.67%	9.11%	9.79%

Total returns for the period since inception are calculated from the inception date of the Fund (11/13/01). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/21/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Pharmaceuticals	59.73	%

Health Care – Products	22.61

Biotechnology	6.31

Health Care – Services	5.24

Chemicals	2.67

Electronics	1.79

Commercial Services	0.71

Insurance	0.44

Software	0.17

Manufacturing	0.05

Short-Term and Other Net Assets	0.28


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Johnson & Johnson	9.31	%

Novartis AG Registered (Switzerland)	6.61

Pfizer Inc.	5.97

GlaxoSmithKline PLC (United Kingdom)	5.43

Roche Holding AG Genusschein (Switzerland)	5.23

Abbott Laboratories	4.26

Merck & Co. Inc.	3.24

Sanofi-Aventis (France)	3.24

AstraZeneca PLC (United Kingdom)	3.05

Amgen Inc.	3.01


TOTAL	49.35	%


FUND PERFORMANCE OVERVIEWS		9

Fund Performance Overview

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Industrials Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Industrials Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the industrials sector of the economy and that S&P believes are important to global markets. Component companies include manufacturers and distributors of capital goods, providers of commercial services and supplies and transportation service providers. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (21.92)%, while the total return for the Index was (21.89)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(29.72)%

(30.34)%

(29.86)%

(3.12)%

(3.41)%

(2.66)%

(6.30)%

(6.87)%

(5.39)%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (9/21/06), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


10		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview (Continued)

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Manufacturing	26.94	%

Transportation	17.95

Aerospace & Defense	13.84

Engineering & Construction	6.60

Machinery	5.46

Commercial Services	4.64

Distribution & Wholesale	4.61

Electrical Components & Equipment	3.50

Electronics	2.42

Airlines	2.07

Hand & Machine Tools	1.95

Building Materials	1.90

Metal Fabricate & Hardware	1.57

Holding Companies – Diversified	1.40

Auto Manufacturers	0.90

Environmental Control	0.89

Machinery – Diversified	0.76

Machinery – Construction & Mining	0.69

Food	0.32

Water	0.30

Office & Business Equipment	0.24

Household Products & Wares	0.21

Textiles	0.18

Energy – Alternate Sources	0.13

Housewares	0.05

Short-Term and Other Net Assets	0.48


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
General Electric Co.	11.80	%

Siemens AG Registered (Germany)	3.94

United Parcel Service Inc. Class B	2.96

United Technologies Corp.	2.69

3M Co.	2.24

ABB Ltd. Registered (Switzerland)	2.04

Boeing Co. (The)	2.00

Caterpillar Inc.	1.72

Lockheed Martin Corp.	1.69

Union Pacific Corp.	1.68


TOTAL	32.76	%


FUND PERFORMANCE OVERVIEWS		11

Fund Performance Overview

iSHARES^® S&P GLOBAL INFRASTRUCTURE INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Infrastructure Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Infrastructure Index™ (the “Index”). The Index is designed to track performance of the stocks of large infrastructure companies around the world. The Index includes companies involved in utilities, energy and transportation infrastructure, such as the management or ownership of oil and gas storage and transportation; airport services; highway and rail tracks; marine ports and services; and electric, gas and water utilities. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (19.28)%, while the total return for the Index was (19.48)%.


Cumulative Total Returns

Inception to 9/30/08

NAV	MARKET	INDEX
(27.43)%	(26.47)%	(27.63)%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 12/10/07.

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


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Electric	33.72	%

Commercial Services	23.98

Pipelines	17.62

Engineering & Construction	7.54

Transportation	6.04

Gas	5.44

Holding Companies – Diversified	2.13

Water	1.05

Storage & Warehousing	1.04

Aerospace & Defense	0.53

Oil & Gas	0.25

Short-Term and Other Net Assets	0.66


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
E.ON AG (Germany)	4.91	%

TransCanada Corp. (Canada)	4.71

GDF SUEZ (France)	4.37

Atlantia SpA (Italy)	4.11

Abertis Infraestructuras SA (Spain)	4.07

Williams Companies Inc. (The)	3.69

Spectra Energy Corp.	3.52

Transurban Group (Australia)	3.25

Enbridge Inc. (Canada)	3.11

Iberdrola SA (Spain)	3.09


TOTAL	38.83	%


12		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL MATERIALS SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Materials Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Materials Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the materials sector of the economy and that S&P believes are important to global markets. Component companies include those companies engaged in a wide variety of commodity-related manufacturing and mining activities. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (28.71)%, while the total return for the Index was (29.08)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(31.12)%

(31.26)%

(31.79)%

5.70%

5.78%

5.80%

12.04%

12.22%

12.27%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (9/21/06), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Mining	38.43	%

Chemicals	28.95

Iron & Steel	14.56

Forest Products & Paper	4.16

Building Materials	4.12

Agriculture	3.81

Packaging & Containers	1.78

Engineering & Construction	0.97

Textiles	0.83

Coal	0.70

Manufacturing	0.47

Oil & Gas	0.31

Biotechnology	0.31

Short-Term and Other Net Assets	0.60


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
BHP Billiton Ltd. (Australia)	5.78	%

Rio Tinto PLC (United Kingdom)	3.81

Monsanto Co.	3.81

BHP Billiton PLC (United Kingdom)	3.49

BASF SE (Germany)	3.16

Anglo American PLC (United Kingdom)	3.08

ArcelorMittal (Netherlands)	2.85

Potash Corp. of Saskatchewan Inc. (Canada)	2.80

E.I. du Pont de Nemours and Co.	2.64

Companhia Vale do Rio Doce Preferred SP ADR (Brazil)	2.60


TOTAL	34.02	%


FUND PERFORMANCE OVERVIEWS		13

Fund Performance Overview

iSHARES^® S&P GLOBAL NUCLEAR ENERGY INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Nuclear Energy Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Nuclear Energy Index™ (the “Index”). The Index is comprised of approximately 24 of the largest publicly-traded companies in nuclear energy-related businesses that meet investability requirements. The Index is designed to provide liquid exposure to publicly listed companies in the global nuclear energy business from both developed and emerging markets. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from June 24, 2008 (inception date of the Fund) through September 30, 2008, the total return for the Fund was (31.50)%, while the total return for the Index was (32.91)%.


Cumulative Total Returns

Inception to 9/30/08

NAV	MARKET	INDEX
(31.50)%	(30.41)%	(32.91)%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 6/24/08.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/25/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Electric – Integrated	59.96	%

Non-Ferrous Metals	18.25

Energy – Alternate Sources	8.30

Engineering/Research and Development Services	6.10

Electric – Generation	3.86

Diversified Minerals	3.35

Short-Term and Other Net Assets	0.18


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
AREVA SA (France)	8.30	%

E.ON AG (Germany)	8.09

Exelon Corp.	7.34

Electricite de France (France)	6.73

Tokyo Electric Power Co. Inc. (The) (Japan)	6.35

Kansai Electric Power Co. Inc. (The) (Japan)	6.18

McDermott International Inc.	6.10

Cameco Corp. (Canada)	5.64

FirstEnergy Corp.	5.34

FPL Group Inc.	4.99


TOTAL	65.06	%


14		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Technology Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Information Technology Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the information technology sector of the economy and that S&P believes are important to global markets. Component companies include those involved in the development and production of technology products, including computer hardware and software, telecommunications equipment, microcomputer components, integrated computer circuits and office equipment utilizing technology. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (13.64)%, while the total return for the Index was (14.08)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(26.86)%	(26.78)%	(27.31)%	2.00%	2.03%	2.45%	(0.98)%	(0.93)%	(0.45)%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(26.86)%	(26.78)%	(27.31)%	10.39%	10.58%	12.87%	(6.56)%	(6.24)%	(3.04)%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


FUND PERFORMANCE OVERVIEWS		15

Fund Performance Overview (Continued)

iSHARES^® S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Computers	23.76	%

Software	21.40

Semiconductors	18.47

Telecommunications	16.46

Internet	7.78

Electronics	4.08

Office & Business Equipment	2.70

Toys, Games & Hobbies	1.94

Electrical Components & Equipment	1.61

Commercial Services	0.85

Manufacturing	0.78

Short-Term and Other Net Assets	0.17


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Microsoft Corp.	9.36	%

International Business Machines Corp.	7.10

Cisco Systems Inc.	5.91

Hewlett-Packard Co.	5.09

Intel Corp.	4.68

Apple Inc.	4.51

Google Inc. Class A	4.25

Oracle Corp.	3.56

Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR (Taiwan)	3.11

QUALCOMM Inc.	3.08


TOTAL	50.65	%


16		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Telecommunications Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Telecommunications Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the telecommunications sector of the economy and that S&P believes are important to global markets. Component companies include diversified communication carriers and wireless communications companies. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (17.50)%, while the total return for the Index was (17.62)%.


Average Annual Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(27.10)%	(26.61)%	(27.32)%	9.06%	9.22%	9.11%	2.97%	3.12%	3.01%

Cumulative Total Returns

Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
(27.10)%	(26.61)%	(27.32)%	54.31%	55.41%	54.63%	22.31%	23.54%	22.69%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (11/16/01), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.



PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Telecommunications	97.18	%

Media	1.61

Internet	0.84

Short-Term and Other Net Assets	0.37


TOTAL	100.00	%



TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
AT&T Inc.	15.23	%

Vodafone Group PLC (United Kingdom)	10.69

Telefonica SA (Spain)	10.29

Verizon Communications Inc.	8.45

France Telecom SA (France)	4.76

China Mobile Ltd. (China)	4.76

Deutsche Telekom AG Registered (Germany)	4.20

Nippon Telegraph and Telephone Corp. (Japan)	3.46

America Movil SAB de CV Series L ADR (Mexico)	3.31

Telstra Corp. Ltd. (Australia)	3.16


TOTAL	68.31	%


FUND PERFORMANCE OVERVIEWS		17

Fund Performance Overview

iSHARES^® S&P GLOBAL TIMBER & FORESTRY INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Timber & Forestry Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Timber & Forestry Index™ (the “Index”). The Index is comprised of approximately 25 of the largest publicly-traded companies engaged in the ownership, management or upstream supply chain of forests and timberlands. The Index includes forest products companies, timber real estate investment trusts (REITs), paper products companies, paper packaging companies and agricultural products companies. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from June 24, 2008 (inception date of the Fund) through September 30, 2008, the total return for the Fund was (7.73)%, while the total return for the Index was (7.86)%.


Cumulative Total Returns

Inception to 9/30/08

NAV	MARKET	INDEX
(7.73)%	(7.01)%	(7.86)%

“Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated and are calculated from an inception date of 6/24/08.

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (6/25/08), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.


PORTFOLIO ALLOCATION As of 9/30/08
Industry	Percentage of Net Assets
Paper & Related Products	51.29	%

Forestry	41.00

Containers – Paper/Plastic	6.09

Building Products – Wood	0.99

Short-Term and Other Net Assets	0.63


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Rayonier Inc.	8.87	%

Weyerhaeuser Co.	8.52

Plum Creek Timber Co. Inc.	8.47

Sino-Forest Corp. (Canada)	6.61

Potlatch Corp.	6.27

West Fraser Timber Co. Ltd. (Canada)	4.91

Oji Paper Co. Ltd. (Japan)	4.46

Sappi Ltd. (South Africa)	4.06

International Paper Co.	3.97

Packaging Corp. of America	3.90


TOTAL	60.04	%


18		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview

iSHARES^® S&P GLOBAL UTILITIES SECTOR INDEX FUND

Performance as of September 30, 2008

The iShares S&P Global Utilities Sector Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Utilities Sector Index™ (the “Index”). The Index is a subset of the S&P Global 1200 Index, and measures the performance of companies that S&P deems to be part of the utilities sector of the economy and that S&P believes are important to global markets. Component companies include providers of electric, gas or water utilities, or companies that operate as independent producers and/or distributors of power. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for the Fund was (14.57)%, while the total return for the Index was (14.49)%.

Average Annual Total Returns

Cumulative Total Returns

Year Ended 9/30/08

Inception to 9/30/08

NAV

MARKET

INDEX

NAV

MARKET

INDEX

NAV

MARKET

INDEX

(15.90)%

(15.04)%

(16.01)%

4.77%

5.35%

4.95%

10.04%

11.30%

10.44%

The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until several days after the Fund’s inception, for the period from inception to the first day of secondary market trading in shares of the Fund (9/21/06), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively.



PORTFOLIO ALLOCATION
As of 9/30/08
Industry	Percentage of Net Assets
Electric	80.73	%

Gas	14.91

Water	2.82

Pipelines	0.70

Engineering & Construction	0.40

Short-Term and Other Net Assets	0.44


TOTAL	100.00	%



TEN LARGEST FUND HOLDINGS
As of 9/30/08
Security	Percentage of Net Assets
E.ON AG (Germany)	9.86	%

GDF SUEZ (France)	7.10

Iberdrola SA (Spain)	4.93

RWE AG (Germany)	4.13

Exelon Corp.	4.06

Enel SpA (Italy)	3.42

National Grid PLC (United Kingdom)	3.10

Southern Co. (The)	2.86

Tokyo Electric Power Co. Inc. (The) (Japan)	2.74

Dominion Resources Inc.	2.45


TOTAL	44.65	%


FUND PERFORMANCE OVERVIEWS		19

Shareholder Expenses (Unaudited)

iSHARES^® TRUST

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2008 to September 30, 2008.

ACTUAL EXPENSES

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES


iShares Index Fund	Beginning Account Value (4/1/08)^a	Ending Account Value (9/30/08)^a	Annualized Expense Ratio		Expenses Paid During Period^b (4/1/08 to 9/30/08)
S&P Global 100
Actual	$1,000.00	$ 854.70	0.40	%	$1.86
Hypothetical (5% return before expenses)	1,000.00	1,023.10	0.40		2.03
S&P Global Clean Energy
Actual	1,000.00	695.50	0.48		1.09
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Consumer Discretionary Sector
Actual	1,000.00	839.50	0.48		2.21
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Consumer Staples Sector
Actual	1,000.00	918.20	0.48		2.31
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43


20		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Shareholder Expenses (Unaudited) (Continued)

iSHARES^® TRUST


iShares Index Fund	Beginning Account Value (4/1/08)^a	Ending Account Value (9/30/08)^a	Annualized Expense Ratio		Expenses Paid During Period^b (4/1/08 to 9/30/08)
S&P Global Energy Sector
Actual	$1,000.00	$ 863.20	0.48	%	$2.24
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Financials Sector
Actual	1,000.00	792.30	0.48		2.16
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Healthcare Sector
Actual	1,000.00	968.70	0.48		2.37
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Industrials Sector
Actual	1,000.00	780.80	0.48		2.14
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Infrastructure
Actual	1,000.00	807.20	0.48		2.17
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Materials Sector
Actual	1,000.00	712.90	0.48		2.06
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Nuclear Energy
Actual	1,000.00	685.00	0.48		1.09
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Technology Sector
Actual	1,000.00	863.60	0.48		2.24
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Telecommunications Sector
Actual	1,000.00	825.00	0.48		2.20
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Timber & Forestry
Actual	1,000.00	922.70	0.48		1.24
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43
S&P Global Utilities Sector
Actual	1,000.00	854.30	0.48		2.23
Hypothetical (5% return before expenses)	1,000.00	1,022.70	0.48		2.43

^a	Account values are based on a start date of June 24, 2008 (commencement of operations) for the iShares S&P Global Clean Energy Index Fund, iShares S&P Global Nuclear Energy Index Fund and iShares S&P Global Timber & Forestry Index Fund.

Except for the actual expenses of the iShares S&P Global Clean Energy Index Fund, iShares S&P Global Nuclear Energy Index Fund and iShares S&P Global Timber & Forestry Index Fund, actual and hypothetical expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (183 days) and divided by the number of days in the year (365 days). Actual expenses for the iShares S&P Global Clean Energy Index Fund, iShares S&P Global Nuclear Energy Index Fund and iShares S&P Global Timber & Forestry Index Fund, which commenced operations on June 24, 2008, are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (98 days) and divided by the number of days in the year (365 days).


SHAREHOLDER EXPENSES		21

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL 100 INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.54%

AUSTRALIA – 1.16%
BHP Billiton Ltd.	422,823	$	10,339,206

			10,339,206

BELGIUM – 0.20%
Fortis^a	295,372		1,784,045

			1,784,045

FINLAND – 0.97%
Nokia OYJ	28,227		511,473
Nokia OYJ SP ADR	438,647		8,180,767

			8,692,240

FRANCE – 9.10%
Alcatel-Lucent^b	302,640		1,146,504
AXA	222,663		7,160,722
BNP Paribas	114,977		10,672,081
Carrefour SA	67,379		3,132,714
France Telecom SA	239,537		6,662,020
GDF SUEZ	178,674		9,160,567
L’Oreal SA^a	31,448		3,059,010
LVMH Moet Hennessy Louis Vuitton SA	32,608		2,828,325
Sanofi-Aventis	129,786		8,486,247
Societe Generale	74,582		6,495,220
Total SA	300,312		17,961,660
Vivendi	145,209		4,491,371

			81,256,441

GERMANY – 8.13%
Allianz SE Registered	57,048		7,715,154
BASF SE	118,728		5,628,531
Bayer AG	96,632		7,031,028
Daimler AG Registered	123,093		6,120,751
Deutsche Bank AG Registered	67,221		4,677,193
Deutsche Telekom AG Registered	377,870		5,716,448
E.ON AG	250,551		12,521,899
RWE AG	56,425		5,349,873
Siemens AG Registered	115,834		10,697,934
Volkswagen AG^a	18,337		7,160,722

			72,619,533

ITALY – 0.56%
Assicurazioni Generali SpA	151,396		4,971,953

			4,971,953


Security	Shares	Value
JAPAN – 4.60%
Bridgestone Corp.	87,300	$	1,611,718
Canon Inc.	147,550		5,309,104
FUJIFILM Holdings Corp.	58,400		1,479,734
Honda Motor Co. Ltd.	203,700		5,928,818
Matsushita Electric Industrial Co. Ltd.	240,200		4,061,216
Nissan Motor Co. Ltd.	291,000		1,910,488
Seven & I Holdings Co. Ltd.	87,320		2,463,367
Sony Corp.	122,800		3,666,708
Toshiba Corp.	351,000		1,491,085
Toyota Motor Corp.	320,100		13,206,217

			41,128,455

NETHERLANDS – 1.83%
Aegon NV	159,899		1,392,533
ING Groep NV	268,779		5,636,678
Koninklijke Philips Electronics NV NYS	123,687		3,370,471
Unilever NV	15,413		429,966
Unilever NV NYS	195,785		5,513,306

			16,342,954

SOUTH KOREA – 0.78%
Samsung Electronics Co. Ltd. GDR^c	31,233		6,996,192

			6,996,192

SPAIN – 4.12%
Banco Bilbao Vizcaya Argentaria SA	473,457		7,621,374
Banco Santander SA	793,944		11,709,741
Repsol YPF SA	113,944		3,345,075
Telefonica SA	597,714		14,096,531

			36,772,721

SWEDEN – 0.38%
Telefonaktiebolaget LM Ericsson AB Class B	118,205		1,084,955
Telefonaktiebolaget LM Ericsson AB Class B SP ADR^a	249,983		2,357,340

			3,442,295

SWITZERLAND – 5.90%
Credit Suisse Group AG Registered	126,003		5,607,625
Nestle SA Registered	486,487		20,912,975
Novartis AG Registered	336,068		17,548,969
Swiss Reinsurance Co. Registered	45,052		2,438,935
UBS AG Registered^b	377,405		6,213,508

			52,722,012


22		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL 100 INDEX FUND

September 30, 2008


Security	Shares	Value
UNITED KINGDOM – 14.20%
Anglo American PLC	168,489	$	5,570,996
AstraZeneca PLC	182,462		8,000,643
Barclays PLC^d	1,024,916		5,964,703
BP PLC	2,374,560		19,638,960
Diageo PLC	323,301		5,445,731
GlaxoSmithKline PLC	666,209		14,380,434
HSBC Holdings PLC	1,519,499		24,402,963
Royal Dutch Shell PLC Class A	24,159		696,747
Royal Dutch Shell PLC Class A ADR	210,341		12,412,222
Royal Dutch Shell PLC Class B	345,126		9,707,380
Standard Chartered PLC	150,738		3,613,786
Vodafone Group PLC	6,656,334		14,557,843
Xstrata PLC	79,734		2,438,811

			126,831,219

UNITED STATES – 47.61%
Bristol-Myers Squibb Co.	249,387		5,199,719
Caterpillar Inc.	78,027		4,650,409
Chevron Corp.	261,028		21,529,589
Citigroup Inc.	694,908		14,252,563
Coca-Cola Co. (The)	249,678		13,202,973
Colgate-Palmolive Co.	64,602		4,867,761
Covidien Ltd.	63,438		3,410,427
Dell Inc.^b	219,414		3,615,943
Dow Chemical Co. (The)	117,855		3,745,432
E.I. du Pont de Nemours and Co.	113,199		4,561,920
EMC Corp.^b	261,900		3,132,324
Exxon Mobil Corp.	656,787		51,006,078
Ford Motor Co.^a,b	274,413		1,426,948
General Electric Co.	1,253,628		31,967,514
General Motors Corp.^a	72,750		687,487
Hewlett-Packard Co.	308,169		14,249,735
Intel Corp.	708,003		13,260,896
International Business Machines Corp.	171,968		20,113,377
Johnson & Johnson	353,856		24,515,144
JPMorgan Chase & Co.	460,653		21,512,495
Kimberly-Clark Corp.	52,671		3,415,188
McDonald’s Corp.	143,754		8,869,622
Merck & Co. Inc.	271,794		8,577,819
Microsoft Corp.	995,007		26,556,737
Morgan Stanley	139,680		3,212,640
News Corp. Class A	294,492		3,530,959
Nike Inc. Class B	48,306		3,231,671


Security	Shares	Value
PepsiCo Inc.	198,445	$	14,143,175
Pfizer Inc.	849,222		15,659,654
Philip Morris International Inc.	261,281		12,567,616
Procter & Gamble Co. (The)	384,120		26,769,323
Texas Instruments Inc.	164,706		3,541,179
3M Co.	89,628		6,122,489
Tyco Electronics Ltd.	58,155		1,608,567
Tyco International Ltd.	60,874		2,131,807
United Technologies Corp.	121,929		7,323,056
Wal-Mart Stores Inc.	286,231		17,142,375

			425,312,611


TOTAL COMMON STOCKS (Cost: $1,091,627,656)			889,211,877

SHORT-TERM INVESTMENTS – 1.07%

MONEY MARKET FUNDS – 1.07%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	102,406		102,406
BGI Cash Premier Fund LLC 2.67%^d,e,f	9,473,278		9,473,278

			9,575,684


TOTAL SHORT-TERM INVESTMENTS (Cost: $9,575,684)			9,575,684


TOTAL INVESTMENTS IN SECURITIES – 100.61% (Cost: $1,101,203,340)			898,787,561
Other Assets, Less Liabilities – (0.61)%			(5,490,805	)


NET ASSETS – 100.00%		$	893,296,756

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

NYS – New York Registered Shares

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		23

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL CLEAN ENERGY INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 88.11%

AUSTRALIA – 1.01%
Babcock & Brown Wind Partners Ltd.	132,270	$	109,551

			109,551

BRAZIL – 2.72%
Cosan Ltd. Class A^a	36,894		294,414

			294,414

CHINA – 13.65%
JA Solar Holdings Co. Ltd. ADR^a	20,730		219,323
LDK Solar Co. Ltd. SP ADR^a,b	17,130		514,243
Suntech Power Holdings Co. Ltd. ADR^a,b	11,661		418,280
Trina Solar Ltd. SP ADR^a,b	3,876		88,954
Yingli Green Energy Holding Co. Ltd. ADR^a,b	21,333		235,090

			1,475,890

DENMARK – 7.37%
Vestas Wind Systems A/S^a	9,384		796,751

			796,751

FRANCE – 4.70%
EDF Energies Nouvelles SA	9,568		470,121
Theolia SA^a	3,645		38,502

			508,623

GERMANY – 10.90%
Conergy AG^a,b	10,248		86,225
Q-Cells AG^a	6,414		527,862
SolarWorld AG	13,659		564,264

			1,178,351

NORWAY – 2.78%
Renewable Energy Corp. ASA^a	16,869		301,013

			301,013

SPAIN – 13.64%
Acciona SA	2,490		371,793
Gamesa Corporacion Tecnologica SA	18,429		621,789
Iberdrola SA	47,955		480,950

			1,474,532

UNITED STATES – 31.34%
Archer-Daniels-Midland Co.	21,630		473,913
Covanta Holding Corp.^a	25,335		606,520
Energy Conversion Devices Inc.^a	5,955		346,879


Security	Shares	Value
Evergreen Solar Inc.^a,b	11,496	$	63,458
First Solar Inc.^a	3,813		720,314
FuelCell Energy Inc.^a	10,905		65,757
MEMC Electronic Materials Inc.^a	11,289		319,027
Ormat Technologies Inc.	7,092		257,652
SunPower Corp. Class A^a	6,924		491,119
VeraSun Energy Corp.^a	14,013		43,861

			3,388,500


TOTAL COMMON STOCKS (Cost: $13,138,506)			9,527,625

PREFERRED STOCKS – 11.80%

BRAZIL – 11.80%
Companhia Energetica de Minas Gerais SP ADR	36,858		727,577
Companhia Paranaense de Energia SP ADR	39,936		547,922

			1,275,499


TOTAL PREFERRED STOCKS (Cost: $1,614,011)			1,275,499

SHORT-TERM INVESTMENTS – 11.64%

MONEY MARKET FUNDS – 11.64%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	7,745		7,745
BGI Cash Premier Fund LLC 2.67%^c,d,e	1,251,300		1,251,300

			1,259,045


TOTAL SHORT-TERM INVESTMENTS (Cost: $1,259,045)			1,259,045


TOTAL INVESTMENTS IN SECURITIES – 111.55% (Cost: $16,011,562)			12,062,169
Other Assets, Less Liabilities – (11.55)%			(1,248,955	)


NET ASSETS – 100.00%		$	10,813,214


24		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL CLEAN ENERGY INDEX FUND

September 30, 2008

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		25

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.07%

AUSTRALIA – 0.60%
Crown Ltd.	6,366	$	42,683
John Fairfax Holdings Ltd.	16,320		33,985
Tabcorp Holdings Ltd.	7,380		47,036

			123,704

CANADA – 2.08%
Canadian Tire Corp. Ltd. Class A	880		40,557
Gildan Activewear Inc.^a	1,170		26,026
Groupe Aeroplan Inc.	2,601		32,268
Magna International Inc. Class A	1,240		63,773
Shaw Communications Inc. Class B	4,220		85,495
Thomson Reuters Corp.	2,050		55,781
Tim Hortons Inc.	2,420		70,629
Yellow Pages Income Fund	5,920		55,403

			429,932

FRANCE – 8.01%
Accor SA	2,460		129,147
Christian Dior SA	680		50,690
Compagnie Generale des Etablissements Michelin Class B	1,790		114,276
Hermes International	940		151,196
Lagardere SCA	1,400		62,329
LVMH Moet Hennessy Louis Vuitton SA	3,063		265,676
PPR SA	900		79,245
PSA Peugeot Citroen SA	1,760		65,191
Publicis Groupe SA	1,720		53,369
Renault SA	2,270		142,066
Societe Television Francaise 1	650		11,331
Sodexo	1,213		70,880
Thomson^a	3,070		10,824
Valeo SA	1,130		33,729
Vivendi	13,410		414,777

			1,654,726

GERMANY – 8.26%
Adidas AG	2,490		131,859
Bayerische Motoren Werke AG	3,670		140,682
Continental AG	1,889		154,692
Daimler AG Registered	11,160		554,927
Puma AG	77		20,735


Security	Shares	Value
TUI AG^b	2,655	$	43,466
Volkswagen AG	1,690		659,956

			1,706,317

HONG KONG – 0.69%
Esprit Holdings Ltd.	14,100		85,987
Li & Fung Ltd.^b	24,000		57,432

			143,419

ITALY – 1.22%
Fiat SpA	8,530		112,268
Luxottica Group SpA	1,766		39,987
Mediaset SpA	10,150		63,765
Pirelli & C. SpA	50,110		29,070
Seat Pagine Gialle SpA^a	67,220		6,487

			251,577

JAPAN – 17.69%
Bridgestone Corp.	7,000		129,233
Denso Corp.	6,000		143,550
Dentsu Inc.	30		59,313
Honda Motor Co. Ltd.	18,000		523,901
Marui Group Co. Ltd.	3,000		22,041
Matsushita Electric Industrial Co. Ltd.	22,000		371,968
Nikon Corp.	4,000		92,498
Nippon Television Network Corp.	200		18,744
Nissan Motor Co. Ltd.	24,000		157,566
NOK Corp.	1,200		13,146
Oriental Land Co. Ltd.	1,000		67,348
Pioneer Corp.	2,000		12,867
SANYO Electric Co. Ltd.^a	24,000		40,465
Sekisui House Ltd.	7,000		62,902
Sharp Corp.	10,000		106,061
Sony Corp.	12,000		358,310
Suzuki Motor Corp.^b	4,000		72,265
Toyota Industries Corp.	2,000		49,451
Toyota Motor Corp.	31,000		1,278,953
Yamada Denki Co. Ltd.	1,000		74,507

			3,655,089

MEXICO – 0.52%
Grupo Televisa SA Series CPO	25,000		107,532

			107,532


26		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
NETHERLANDS – 0.90%
Reed Elsevier NV	7,990	$	118,169
Wolters Kluwer NV	3,450		68,983

			187,152

SOUTH KOREA – 0.97%
Hyundai Motor Co. Ltd. Class A GDR^c	6,569		200,552

			200,552

SPAIN – 0.56%
Industria de Diseno Textil SA	2,770		115,520

			115,520

SWEDEN – 1.44%
Electrolux AB Class B	4,095		46,836
Hennes & Mauritz AB Class B	6,270		249,982

			296,818

SWITZERLAND – 1.11%
Compagnie Financiere Richemont SA Class A Bearer Units	3,680		160,492
Swatch Group AG (The) Bearer	380		68,968

			229,460

UNITED KINGDOM – 6.10%
Aegis Group PLC	12,511		20,683
British Sky Broadcasting Group PLC	12,360		91,319
Carnival PLC	1,970		58,325
Compass Group PLC	22,570		138,391
Daily Mail & General Trust PLC Class A NVS	2,654		15,091
DSG International PLC	15,490		13,184
Enterprise Inns PLC	6,350		20,204
GKN PLC	10,048		35,059
Home Retail Group PLC	10,200		42,180
InterContinental Hotels Group PLC	3,250		39,856
ITV PLC	39,140		29,301
Kesa Electricals PLC	5,790		11,327
Kingfisher PLC	28,090		65,941
Ladbrokes PLC	7,610		25,298
Marks & Spencer Group PLC	18,940		68,026
Mitchells & Butlers PLC	3,850		15,046
Next PLC	2,300		41,775
Pearson PLC	8,920		95,397
Persimmon PLC	3,740		26,549
Punch Taverns PLC	2,700		6,497


Security	Shares	Value
Reed Elsevier PLC	12,392	$	122,589
Taylor Wimpey PLC	13,450		8,451
Thomson Reuters PLC	2,314		51,186
Trinity Mirror PLC	1,450		2,184
United Business Media Ltd.	2,872		25,084
W.H. Smith PLC	2,268		15,241
Whitbread PLC	1,988		37,490
William Hill PLC	3,770		15,691
WPP Group PLC	13,970		111,556
Yell Group PLC	7,843		10,695

			1,259,616

UNITED STATES – 48.92%
Abercrombie & Fitch Co. Class A	980		38,661
Amazon.com Inc.^a	3,728		271,249
Apollo Group Inc. Class A^a	1,360		80,648
AutoNation Inc.^a,b	870		9,779
AutoZone Inc.^a	430		53,036
Bed Bath & Beyond Inc.^a	3,080		96,743
Best Buy Co. Inc.	4,090		153,375
Big Lots Inc.^a,b	1,044		29,055
Black & Decker Corp. (The)	770		46,777
Carnival Corp.	5,260		185,941
CBS Corp. Class B	7,460		108,767
Centex Corp.	1,360		22,032
Coach Inc.^a	3,930		98,407
Comcast Corp. Class A	34,110		669,579
D.R. Horton Inc.	3,410		44,398
Darden Restaurants Inc.	1,730		49,530
Dillard’s Inc. Class A^b	730		8,614
DIRECTV Group Inc. (The)^a	7,520		196,798
Eastman Kodak Co.	3,355		51,600
Expedia Inc.^a	2,430		36,717
Family Dollar Stores Inc.	1,620		38,394
Ford Motor Co.^a	25,670		133,484
Fortune Brands Inc.	1,771		101,585
GameStop Corp. Class A^a	1,890		64,657
Gannett Co. Inc.	2,150		36,356
Gap Inc. (The)	5,270		93,701
General Motors Corp.^b	6,370		60,196
Genuine Parts Co.	2,830		113,794
Goodyear Tire & Rubber Co. (The)^a	3,020		46,236
H&R Block Inc.	4,020		91,455


SCHEDULES OF INVESTMENTS		27

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Harley-Davidson Inc.	2,780	$	103,694
Harman International Industries Inc.	733		24,973
Hasbro Inc.	1,800		62,496
Home Depot Inc.	19,670		509,256
International Game Technology Inc.	3,590		61,676
Interpublic Group of Companies Inc. (The)^a	5,455		42,276
J.C. Penney Co. Inc.	2,490		83,017
Johnson Controls Inc.	7,120		215,950
Jones Apparel Group Inc.	710		13,142
KB Home	920		18,106
Kohl’s Corp.^a	3,530		162,662
Leggett & Platt Inc.	2,060		44,887
Lennar Corp. Class A	1,570		23,848
Limited Brands Inc.	3,390		58,715
Liz Claiborne Inc.	745		12,240
Lowe’s Companies Inc.	16,960		401,782
Macy’s Inc.	4,840		87,023
Marriott International Inc. Class A	3,560		92,880
Mattel Inc.	4,220		76,129
McDonald’s Corp.	13,230		816,291
McGraw-Hill Companies Inc. (The)	3,580		113,164
Meredith Corp.	85		2,383
New York Times Co. (The) Class A^b	1,050		15,004
Newell Rubbermaid Inc.	3,188		55,025
News Corp. Class A	26,180		313,898
Nike Inc. Class B	4,450		297,705
Nordstrom Inc.	1,940		55,911
Office Depot Inc.^a	3,070		17,867
Omnicom Group Inc.	3,730		143,829
Polo Ralph Lauren Corp.	623		41,517
Pulte Homes Inc.	2,730		38,138
RadioShack Corp.	1,488		25,713
Scripps Networks Interactive Inc. Class A	1,085		39,396
Sears Holdings Corp.^a,b	710		66,385
Sherwin-Williams Co. (The)	1,100		62,876
Snap-On Inc.	700		36,862
Stanley Works (The)	860		35,896
Staples Inc.	8,100		182,250
Starbucks Corp.^a	8,660		128,774
Starwood Hotels & Resorts Worldwide Inc.	2,150		60,501


Security	Shares	Value
Target Corp.	8,970	$	439,978
Tiffany & Co.	1,444		51,291
Time Warner Inc.	41,020		537,772
TJX Companies Inc. (The)	4,840		147,717
VF Corp.	977		75,532
Viacom Inc. Class B^a	7,240		179,842
Walt Disney Co. (The)	21,960		673,952
Washington Post Co. (The) Class B	60		33,406
Whirlpool Corp.	920		72,947
Wyndham Worldwide Corp.	2,100		32,991
Yum! Brands Inc.	5,680		185,225

			10,106,354


TOTAL COMMON STOCKS (Cost: $26,023,157)			20,467,768

PREFERRED STOCKS – 0.53%

GERMANY – 0.53%
Porsche Automobil Holding SE	1,030		109,667

			109,667


TOTAL PREFERRED STOCKS (Cost: $171,305)			109,667

SHORT-TERM INVESTMENTS – 1.42%

MONEY MARKET FUNDS – 1.42%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	2,412		2,412
BGI Cash Premier Fund LLC 2.67%^d,e,f	290,768		290,768

			293,180


TOTAL SHORT-TERM INVESTMENTS (Cost: $293,180)			293,180


TOTAL INVESTMENTS IN SECURITIES – 101.02% (Cost: $26,487,642)			20,870,615
Other Assets, Less Liabilities – (1.02)%			(211,290	)


NET ASSETS – 100.00%		$	20,659,325


28		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL CONSUMER DISCRETIONARY SECTOR INDEX FUND

September 30, 2008

GDR – Global Depositary Receipts

NVS – Non-Voting Shares

^a	Non-income earning security.

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

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		29

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL CONSUMER STAPLES SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 98.77%

AUSTRALIA – 2.43%
Foster’s Group Ltd.	192,054	$	836,237
Wesfarmers Ltd.	79,098		1,776,938
Woolworths Ltd.	120,830		2,592,451

			5,205,626

BELGIUM – 0.84%
Delhaize Group	9,843		566,796
InBev	20,904		1,228,393

			1,795,189

CANADA – 0.72%
George Weston Ltd.	4,799		232,277
Loblaw Companies Ltd.	10,062		281,077
Shoppers Drug Mart Corp.	21,242		1,025,937

			1,539,291

CHILE – 0.05%
Distribucion y Servicio D&S SA ADR	4,730		104,722

			104,722

FRANCE – 4.92%
Carrefour SA	52,976		2,463,062
Casino Guichard-Perrachon SA	4,921		433,055
Groupe Danone	51,256		3,599,837
L’Oreal SA	25,026		2,434,329
Pernod Ricard SA	18,748		1,626,938

			10,557,221

GERMANY – 0.55%
Beiersdorf AG	10,062		633,326
METRO AG	11,094		553,671

			1,186,997

JAPAN – 4.77%
AEON Co. Ltd.	60,200		597,095
Ajinomoto Co. Inc.	70,000		658,692
Asahi Breweries Ltd.	39,000		675,929
Japan Tobacco Inc.	465		1,725,710
Kao Corp.	56,000		1,490,133
Kirin Holdings Co. Ltd.	82,000		1,063,571
Nippon Meat Packers Inc.	9,000		134,282
Nissin Food Products Co. Ltd.	400		14,167
Seven & I Holdings Co. Ltd.	77,400		2,183,516
Shiseido Co. Ltd.	36,000		795,177
Uni-Charm Corp.	5,400		412,000
Yakult Honsha Co. Ltd.	15,600		480,497

			10,230,769


Security	Shares	Value
MEXICO – 1.07%
Fomento Economico Mexicano SAB de CV BD Units	215,000	$	813,632
Grupo Modelo SAB de CV Series C	70,200		297,350
Kimberly-Clark de Mexico SAB de CV Series A	54,600		234,354
Wal-Mart de Mexico SAB de CV Series V^a	273,900		937,563

			2,282,899

NETHERLANDS – 3.31%
Heineken NV	24,180		962,722
Koninklijke Ahold NV	119,540		1,364,620
Unilever NV	170,882		4,766,984

			7,094,326

SOUTH KOREA – 0.50%
KT&G Corp. Class A GDR^b	28,182		1,062,461

			1,062,461

SWEDEN – 0.20%
Swedish Match AB	25,352		436,304

			436,304

SWITZERLAND – 7.70%
Nestle SA Registered	384,076		16,510,558

			16,510,558

UNITED KINGDOM – 13.74%
Associated British Foods PLC	36,062		456,379
British American Tobacco PLC	141,258		4,620,261
Cadbury PLC	133,857		1,349,246
Diageo PLC	252,374		4,251,026
Imperial Tobacco Group PLC	101,394		3,247,713
J Sainsbury PLC	134,246		832,718
Reckitt Benckiser PLC	59,358		2,868,310
SABMiller PLC	84,796		1,641,431
Tate & Lyle PLC	44,694		303,523
Tesco PLC	783,030		5,409,779
Unilever PLC	128,085		3,474,804
Wm Morrison Supermarkets PLC	217,064		1,000,151

			29,455,341

UNITED STATES – 57.97%
Altria Group Inc.	207,168		4,110,213
Anheuser-Busch Companies Inc.	71,638		4,647,873
Archer-Daniels-Midland Co.	64,500		1,413,195
Avon Products Inc.	42,048		1,747,935
Brown-Forman Corp. Class B	8,346		599,326


30		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL CONSUMER STAPLES SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Campbell Soup Co.	21,460	$	828,356
Clorox Co. (The)	13,846		868,006
Coca-Cola Co. (The)	198,230		10,482,402
Coca-Cola Enterprises Inc.	31,734		532,179
Colgate-Palmolive Co.	50,482		3,803,819
ConAgra Foods Inc.	46,268		900,375
Constellation Brands Inc. Class A^c	18,965		406,989
Costco Wholesale Corp.	43,430		2,819,910
CVS Caremark Corp.	143,104		4,816,881
Dean Foods Co.^c	15,132		353,484
Estee Lauder Companies Inc. (The) Class A	11,085		553,252
General Mills Inc.	33,368		2,293,049
H.J. Heinz Co.	31,137		1,555,916
Hershey Co. (The)	16,770		663,086
Kellogg Co.	25,054		1,405,529
Kimberly-Clark Corp.	41,624		2,698,900
Kraft Foods Inc.	151,360		4,957,040
Kroger Co. (The)	65,520		1,800,490
Lorillard Inc.	17,230		1,225,914
McCormick & Co. Inc. NVS	12,581		483,739
Molson Coors Brewing Co. Class B	15,050		703,588
Pepsi Bottling Group Inc.	13,513		394,174
PepsiCo Inc.	156,600		11,160,882
Philip Morris International Inc.	207,088		9,960,933
Procter & Gamble Co. (The)	302,978		21,114,537
Reynolds American Inc.	17,010		827,026
Safeway Inc.	43,430		1,030,160
Sara Lee Corp.	69,739		880,804
SUPERVALU Inc.	21,586		468,416
Sysco Corp.	60,286		1,858,617
Tyson Foods Inc. Class A	29,928		357,340
UST Inc.	14,964		995,705
Walgreen Co.	98,556		3,051,294
Wal-Mart Stores Inc.	226,266		13,551,071
Whole Foods Market Inc.^a	13,330		267,000
Wm. Wrigley Jr. Co.	21,216		1,684,550

			124,273,955


TOTAL COMMON STOCKS (Cost: $232,877,449)			211,735,659


Security	Shares	Value
PREFERRED STOCKS – 0.72%

BRAZIL – 0.41%
Companhia de Bebidas das Americas ADR	16,210	$	885,228

			885,228

GERMANY – 0.31%
Henkel AG & Co. KGaA	18,060		655,763

			655,763


TOTAL PREFERRED STOCKS (Cost: $2,094,284)			1,540,991

SHORT-TERM INVESTMENTS – 0.27%

MONEY MARKET FUNDS – 0.27%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	105,723		105,723
BGI Cash Premier Fund LLC 2.67%^d,e,f	485,062		485,062

			590,785


TOTAL SHORT-TERM INVESTMENTS (Cost: $590,785)			590,785


TOTAL INVESTMENTS IN SECURITIES – 99.76% (Cost: $235,562,518)			213,867,435
Other Assets, Less Liabilities – 0.24%			509,249


NET ASSETS – 100.00%		$	214,376,684

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

NVS – Non-Voting Shares

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

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

^c	Non-income earning security.

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		31

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL ENERGY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 97.27%

ARGENTINA – 0.39%
Tenaris SA ADR	74,871	$	2,791,940

			2,791,940

AUSTRALIA – 1.78%
Origin Energy Ltd.	264,603		3,362,461
Santos Ltd.	178,665		2,691,781
Woodside Petroleum Ltd.	134,224		5,399,670
WorleyParsons Ltd.	58,240		1,391,973

			12,845,885

AUSTRIA – 0.24%
OMV AG	42,244		1,740,385

			1,740,385

CANADA – 10.68%
Cameco Corp.	105,690		2,292,336
Canadian Natural Resources Ltd.	159,120		10,925,282
Canadian Oil Sands Trust	141,440		5,156,334
Enbridge Inc.	106,470		3,943,556
EnCana Corp.	217,593		13,908,597
Enerplus Resources Fund	45,110		1,648,772
Husky Energy Inc.	75,217		3,126,967
Imperial Oil Ltd.	76,830		3,293,747
Nexen Inc.	159,120		3,696,637
Penn West Energy Trust	106,990		2,546,950
Petro-Canada	144,560		4,813,228
Suncor Energy Inc.	269,490		11,152,709
Talisman Energy Inc.	307,970		4,350,742
TransCanada Corp.	166,400		5,973,935
Uranium One Inc.^a	139,230		301,194

			77,130,986

CHINA – 1.66%
CNOOC Ltd.	4,810,000		5,482,558
PetroChina Co. Ltd. ADR	62,861		6,457,711

			11,940,269

FRANCE – 6.01%
Technip SA	32,322		1,787,441
Total SA	696,020		41,628,954

			43,416,395

ITALY – 2.91%
Eni SpA	721,240		18,843,470
Saipem SpA	73,710		2,164,953

			21,008,423


Security	Shares	Value
JAPAN – 0.41%
Nippon Oil Corp.	390,000	$	1,928,602
TonenGeneral Sekiyu K.K.	130,000		1,056,751

			2,985,353

NORWAY – 1.17%
StatoilHydro ASA SP ADR	355,006		8,449,143

			8,449,143

SPAIN – 1.09%
Repsol YPF SA	138,202		4,057,222
Repsol YPF SA SP ADR	128,500		3,811,310

			7,868,532

UNITED KINGDOM – 15.90%
BG Group PLC	963,170		17,391,208
BP PLC	5,483,010		45,347,607
Royal Dutch Shell PLC Class A	1,032,330		29,772,439
Royal Dutch Shell PLC Class B	793,130		22,308,416

			114,819,670

UNITED STATES – 55.03%
Anadarko Petroleum Corp.	136,760		6,634,228
Apache Corp.	96,980		10,113,074
Baker Hughes Inc.	91,260		5,524,880
BJ Services Co.	85,930		1,643,841
Cameron International Corp.^a	63,310		2,439,967
Chesapeake Energy Corp.	151,840		5,444,982
Chevron Corp.	600,990		49,569,655
ConocoPhillips	446,550		32,709,787
CONSOL Energy Inc.	54,470		2,499,628
Devon Energy Corp.	130,130		11,867,856
El Paso Corp.	212,030		2,705,503
ENSCO International Inc.	42,770		2,464,835
EOG Resources Inc.	72,150		6,454,539
Exxon Mobil Corp.	1,520,220		118,060,285
Halliburton Co.	256,620		8,311,922
Hess Corp.	82,550		6,775,704
Marathon Oil Corp.	209,170		8,339,608
Murphy Oil Corp.	55,770		3,577,088
Nabors Industries Ltd.^a	82,680		2,060,386
National Oilwell Varco Inc.^a	121,030		6,079,337
Noble Corp.	77,740		3,412,786
Noble Energy Inc.	51,090		2,840,093
Occidental Petroleum Corp.	236,860		16,686,787
Peabody Energy Corp.	85,755		3,858,975
Pioneer Natural Resources Co.	34,710		1,814,639
Range Resources Corp.	44,720		1,917,146


32		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL ENERGY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Rowan Companies Inc.	33,133	$	1,012,213
Schlumberger Ltd.	349,180		27,267,466
Smith International Inc.	61,620		3,613,397
Southwestern Energy Co.^a	100,620		3,072,935
Spectra Energy Corp.	183,300		4,362,540
Sunoco Inc.	35,360		1,258,109
Tesoro Corp.	49,920		823,181
Transocean Inc.^a	97,755		10,737,409
Valero Energy Corp.	157,690		4,778,007
Weatherford International Ltd.^a	198,380		4,987,273
Williams Companies Inc. (The)	172,900		4,089,085
XTO Energy Inc.	160,290		7,456,691

			397,265,837


TOTAL COMMON STOCKS (Cost: $743,465,726)			702,262,818

PREFERRED STOCKS – 2.38%

BRAZIL – 2.38%
Petroleo Brasileiro SA SP ADR	458,640		17,162,309

			17,162,309


TOTAL PREFERRED STOCKS (Cost: $12,663,186)			17,162,309

SHORT-TERM INVESTMENTS – 0.08%

MONEY MARKET FUNDS – 0.08%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^b,c	594,533		594,533

			594,533


TOTAL SHORT-TERM INVESTMENTS (Cost: $594,533)			594,533


TOTAL INVESTMENTS IN SECURITIES – 99.73% (Cost: $756,723,445)			720,019,660
Other Assets, Less Liabilities – 0.27%			1,968,392


NET ASSETS – 100.00%		$	721,988,052

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

^b	Affiliated issuer. See Note 2.

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

See notes to financial statements.


SCHEDULES OF INVESTMENTS		33

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 98.55%

AUSTRALIA – 5.53%
AMP Ltd.	121,000	$	666,205
ASX Ltd.	10,100		240,201
Australia and New Zealand Banking Group Ltd.	118,700		1,755,573
AXA Asia Pacific Holdings Ltd.	52,100		206,715
Commonwealth Bank of Australia	80,538		2,707,579
Goodman Group^a	96,800		185,545
GPT Group	142,100		196,155
Insurance Australia Group Ltd.	118,100		381,945
Lend Lease Corp. Ltd.	23,400		169,444
Macquarie Group Ltd.^a	16,800		490,318
National Australia Bank Ltd.	101,800		1,948,074
QBE Insurance Group Ltd.	55,300		1,155,947
St. George Bank Ltd.	34,900		787,333
Stockland Corp. Ltd.	86,100		366,745
Suncorp-Metway Ltd.	61,900		454,089
Westfield Group	106,400		1,396,567
Westpac Banking Corp.	112,200		1,901,052

			15,009,487

AUSTRIA – 0.23%
Erste Group Bank AG	12,706		614,846

			614,846

BELGIUM – 1.06%
Dexia SA^a	48,109		506,822
Fortis	138,700		837,747
Groupe Bruxelles Lambert SA	5,047		428,440
KBC Group NV	13,100		1,099,087

			2,872,096

BRAZIL – 0.27%
Unibanco - Uniao de Bancos Brasileiros SA Units GDR	7,308		737,523

			737,523

CANADA – 6.59%
Bank of Montreal	31,000		1,339,776
Bank of Nova Scotia	59,100		2,668,172
Brookfield Asset Management Inc. Class A	31,200		841,919
Canadian Imperial Bank of Commerce	23,500		1,350,056


Security	Shares	Value
Manulife Financial Corp.	91,800	$	3,305,215
National Bank of Canada	9,000		411,823
Royal Bank of Canada	79,700		3,785,600
Sun Life Financial Inc.	35,000		1,224,605
Toronto-Dominion Bank (The)	49,050		2,956,287

			17,883,453

CHILE – 0.10%
Banco de Chile ADR	2,540		101,600
Banco Santander Chile SA ADR	4,000		171,160

			272,760

CHINA – 1.73%
China Construction Bank Class H	2,100,000		1,363,153
China Life Insurance Co. Ltd. Class H	424,000		1,559,075
Industrial and Commercial Bank of China Class H	3,000,000		1,769,627

			4,691,855

DENMARK – 0.27%
Danske Bank A/S	31,000		728,049

			728,049

FINLAND – 0.17%
Sampo OYJ Class A	20,500		455,542

			455,542

FRANCE – 5.03%
AXA	108,300		3,482,870
BNP Paribas	54,600		5,067,932
Credit Agricole SA	52,516		988,841
Societe Generale	35,500		3,091,635
Unibail-Rodamco	5,100		1,018,107

			13,649,385

GERMANY – 3.62%
Allianz SE Registered	27,600		3,732,616
Commerzbank AG	42,300		617,934
Deutsche Bank AG Registered	34,592		2,406,888
Deutsche Boerse AG	12,100		1,085,551
Hypo Real Estate Holding AG^a	11,400		66,454
Muenchener Rueckversicherungs- Gesellschaft AG Registered	12,800		1,909,605

			9,819,048


34		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
GREECE – 0.61%
National Bank of Greece SA ADR	200,900	$1,657,425
		1,657,425

HONG KONG – 1.60%
BOC Hong Kong (Holdings) Ltd.	200,000	350,319
Cheung Kong (Holdings) Ltd.	100,000	1,110,846
Hang Seng Bank Ltd.	40,000	743,398
Hong Kong Exchanges and Clearing Ltd.^a	59,000	707,451
Sun Hung Kai Properties Ltd.	100,000	1,009,743
Swire Pacific Ltd. Class A	50,000	434,035
		4,355,792
IRELAND – 0.39%
Allied Irish Banks PLC	55,824	454,796
Anglo Irish Bank Corp. PLC	47,500	256,475
Bank of Ireland	61,100	339,005
		1,050,276
ITALY – 4.12%
Alleanza Assicurazioni SpA	26,013	235,860
Assicurazioni Generali SpA	72,300	2,374,384
Banca Monte dei Paschi di Siena SpA	221,989	542,561
Banca Popolare di Milano Scrl	29,600	246,555
Banco Popolare SpA	38,900	595,039
Intesa Sanpaolo SpA	552,800	2,985,606
Mediobanca SpA	26,300	350,767
Mediolanum SpA	24,821	111,480
UniCredito SpA	800,600	2,921,052
Unione di Banche Italiane ScpA	38,200	827,401
		11,190,705
JAPAN – 7.98%
Credit Saison Co. Ltd.	11,500	183,172
Daiwa House Industry Co. Ltd.	28,000	260,576
Daiwa Securities Group Inc.	100,000	695,144
Mitsubishi Estate Co. Ltd.	62,000	1,173,833
Mitsubishi UFJ Financial Group Inc.	600,000	5,046,861
Mitsui Fudosan Co. Ltd.	36,000	664,965
Mitsui Sumitomo Insurance Group Holdings Inc.	30,000	986,201
Mizuho Financial Group Inc.	700	2,914,331


Security	Shares	Value
Nipponkoa Insurance Co. Ltd.	16,000	$	86,808
Nomura Holdings Inc.	130,000		1,623,699
ORIX Corp.	6,000		710,969
Promise Co. Ltd.	6,150		116,726
Shinsei Bank Ltd.	100,000		293,882
Sompo Japan Insurance Inc.	38,000		310,328
Sumitomo Mitsui Financial Group Inc.	500		2,967,080
Sumitomo Realty & Development Co. Ltd.	17,000		354,684
Sumitomo Trust and Banking Co. Ltd. (The)	100,000		631,093
T&D Holdings Inc.	15,000		771,441
Takefuji Corp.	9,000		113,936
Tokio Marine Holdings Inc.	50,000		1,761,409
			21,667,138
NETHERLANDS – 1.21%
Aegon NV	75,400		656,646
ING Groep NV	125,616		2,634,347
			3,290,993
NORWAY – 0.12%
DnB NOR ASA	44,327		332,885
			332,885
PORTUGAL – 0.23%
Banco Comercial Portugues SA Registered	250,600		401,990
Banco Espirito Santo SA Registered	19,550		237,537
			639,527
SINGAPORE – 1.05%
DBS Group Holdings Ltd.	100,000		1,173,673
Oversea-Chinese Banking Corp.	100,000		501,504
United Overseas Bank Ltd.	100,000		1,175,072
			2,850,249
SOUTH KOREA – 0.53%
KB Financial Group Inc. SP ADR^b	31,300		1,430,097
			1,430,097
SPAIN – 4.03%
Banco Bilbao Vizcaya Argentaria SA	226,800		3,650,865
Banco Popular Espanol SA^a	79,100		921,084
Banco Sabadell SA	73,900		565,730


SCHEDULES OF INVESTMENTS		35

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Banco Santander SA	377,700	$	5,570,631
Bankinter SA^a	18,000		221,485
			10,929,795
SWEDEN – 1.24%
Investor AB Class B	26,600		485,440
Nordea Bank AB	126,300		1,468,994
Skandinaviska Enskilda Banken AB Class A	31,900		479,226
Svenska Handelsbanken AB Class A	28,500		621,276
Swedbank AB Class A	24,900		313,359
			3,368,295
SWITZERLAND – 3.80%
Baloise Holding Registered	2,900		194,497
Credit Suisse Group AG Registered	60,500		2,692,486
Julius Baer Holding AG Registered	13,100		635,576
Swiss Life Holding AG Registered^b	2,200		315,701
Swiss Reinsurance Co. Registered	21,800		1,180,165
UBS AG Registered^b	178,547		2,939,556
Zurich Financial Services AG Registered	8,600		2,347,023
			10,305,004
UNITED KINGDOM – 10.95%
Alliance & Leicester PLC	28,700		136,971
Aviva PLC	159,000		1,360,366
Barclays PLC^c	487,000		2,834,193
British Land Co. PLC	31,600		419,343
Friends Provident PLC	154,800		259,644
Hammerson PLC	18,900		327,114
HBOS PLC	317,652		693,027
HSBC Holdings PLC	727,400		11,681,953
Land Securities Group PLC	28,300		630,542
Legal & General Group PLC	343,400		612,093
Lloyds TSB Group PLC	340,400		1,374,280
London Stock Exchange Group PLC	14,800		227,662
Man Group PLC	105,800		635,054
Old Mutual PLC	335,900		461,018
Provident Financial PLC	7,100		107,761
Prudential PLC	150,000		1,356,890
Royal Bank of Scotland Group PLC	996,371		3,179,007
RSA Insurance Group PLC	192,700		511,782
Schroders PLC	8,400		151,672


Security	Shares	Value
SEGRO PLC	27,850	$	206,880
Standard Chartered PLC	70,800		1,697,356
Standard Life PLC	129,700		554,841
3i Group PLC	22,800		287,730
			29,707,179
UNITED STATES – 36.09%
Aflac Inc.	29,300		1,721,375
Allstate Corp. (The)	32,900		1,517,348
American Capital Ltd.^a	11,900		303,569
American Express Co.	67,719		2,399,284
American International Group Inc.	163,800		545,454
Ameriprise Financial Inc.	13,000		496,600
Aon Corp.	17,400		782,304
Apartment Investment and Management Co. Class A	6,259		219,190
Assurant Inc.	6,300		346,500
AvalonBay Communities Inc.^a	4,800		472,416
Bank of America Corp.	276,800		9,688,000
Bank of New York Mellon Corp. (The)	68,600		2,234,988
BB&T Corp.	33,100		1,251,180
Boston Properties Inc.	7,200		674,352
Capital One Financial Corp.	22,900		1,167,900
CB Richard Ellis Group Inc. Class A^b	11,600		155,092
Charles Schwab Corp. (The)	56,900		1,479,400
Chubb Corp.	21,300		1,169,370
Cincinnati Financial Corp.	10,700		304,308
CIT Group Inc.	19,100		132,936
Citigroup Inc.	328,600		6,739,586
CME Group Inc.	4,100		1,523,191
Comerica Inc.	9,300		304,947
Developers Diversified Realty Corp.	7,600		240,844
Discover Financial Services LLC	30,100		415,982
E*TRADE Financial Corp.^a,b	31,900		89,320
Equity Residential	16,392		727,969
Federated Investors Inc. Class B	4,300		124,055
Fifth Third Bancorp	36,200		430,780
First Horizon National Corp.	12,677		118,657
Franklin Resources Inc.	9,300		819,609
General Growth Properties Inc.	16,600		250,660
Genworth Financial Inc. Class A	27,300		235,053
Goldman Sachs Group Inc. (The)	26,300		3,366,400


36		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Hartford Financial Services Group Inc. (The)	18,700	$	766,513
HCP Inc.	14,300		573,859
Host Hotels & Resorts Inc.	31,000		411,990
Hudson City Bancorp Inc.	31,600		583,020
Huntington Bancshares Inc.	23,400		186,966
IntercontinentalExchange Inc.^b	4,800		387,264
Invesco Ltd.	23,421		491,373
Janus Capital Group Inc.	9,600		233,088
JPMorgan Chase & Co.	221,600		10,348,720
KeyCorp	30,000		358,200
Kimco Realty Corp.	14,600		539,324
Legg Mason Inc.	8,700		331,122
Leucadia National Corp.	10,700		486,208
Lincoln National Corp.	16,200		693,522
Loews Corp.	22,500		888,525
M&T Bank Corp.^a	4,300		383,775
Marsh & McLennan Companies Inc.	32,000		1,016,320
Marshall & Ilsley Corp.	16,400		330,460
MBIA Inc.^a	13,800		164,220
Merrill Lynch & Co. Inc.	93,600		2,368,080
MetLife Inc.	42,900		2,402,400
MGIC Investment Corp.	7,721		54,279
Moody’s Corp.	12,900		438,600
Morgan Stanley	66,600		1,531,800
National City Corp.^a	49,500		86,625
Northern Trust Corp.	13,100		945,820
NYSE Euronext Inc.	16,400		642,552
Plum Creek Timber Co. Inc.	10,400		518,544
PNC Financial Services Group Inc. (The)	20,500		1,531,350
Principal Financial Group Inc.	15,689		682,315
Progressive Corp. (The)	42,700		742,980
ProLogis	16,600		685,082
Prudential Financial Inc.	26,500		1,908,000
Public Storage	7,700		762,377
Regions Financial Corp.	42,300		406,080
Simon Property Group Inc.	13,700		1,328,900
SLM Corp.^b	29,100		359,094
Sovereign Bancorp Inc.	31,900		126,005
State Street Corp.	25,800		1,467,504
SunTrust Banks Inc.	21,700		976,283


Security	Shares	Value
T. Rowe Price Group Inc.	15,500	$	832,505
Torchmark Corp.	4,800		287,040
Travelers Companies Inc. (The)	35,900		1,622,680
U.S. Bancorp	103,900		3,742,478
Unum Group	22,000		552,200
Vornado Realty Trust	8,200		745,790
Wachovia Corp.	133,500		467,250
Wells Fargo & Co.	200,100		7,509,753
XL Capital Ltd. Class A	18,000		322,920
Zions Bancorporation^a	7,300		282,510
			97,952,884

TOTAL COMMON STOCKS
(Cost: $359,868,037)			267,462,288

PREFERRED STOCKS – 1.06%

BRAZIL – 1.06%
Banco Bradesco SA SP ADR	93,700		1,508,570
Banco Itau Holding Financiera SA ADR	78,108		1,366,890
			2,875,460

TOTAL PREFERRED STOCKS
(Cost: $2,618,172)			2,875,460

SHORT-TERM INVESTMENTS – 1.42%

MONEY MARKET FUNDS – 1.42%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	210,031		210,031
BGI Cash Premier Fund LLC 2.67%^c,d,e	3,642,923		3,642,923
			3,852,954

TOTAL SHORT-TERM INVESTMENTS
(Cost: $3,852,954)			3,852,954

TOTAL INVESTMENTS IN SECURITIES – 101.03%
(Cost: $366,339,163)			274,190,702

Other Assets, Less Liabilities – (1.03)%			(2,788,097	)

NET ASSETS – 100.00%		$	271,402,605


SCHEDULES OF INVESTMENTS		37

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL FINANCIALS SECTOR INDEX FUND

September 30, 2008

ADR – American Depositary Receipts

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


38		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL HEALTHCARE SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.72%

AUSTRALIA – 0.83%
CSL Ltd.	189,880	$5,586,695
		5,586,695
BELGIUM – 0.23%
AGFA-Gevaert NV^a	46,364	290,458
UCB SA	35,108	1,227,437
		1,517,895
CANADA – 0.12%
Biovail Corp.	41,272	392,069
MDS Inc.^a	33,232	397,271
		789,340
DENMARK – 1.20%
Novo Nordisk A/S Class B	158,388	8,080,716
		8,080,716
FRANCE – 3.73%
Essilor International SA	67,536	3,330,691
Sanofi-Aventis	334,196	21,851,893
		25,182,584
GERMANY – 3.46%
Bayer AG	247,632	18,017,920
Fresenius Medical Care AG & Co. KGaA	59,764	3,078,355
Merck KGaA	21,440	2,270,724
		23,366,999
IRELAND – 0.23%
Elan Corp. PLC^a	152,224	1,571,588
		1,571,588
JAPAN – 4.27%
Astellas Pharma Inc.	139,535	5,743,587
Daiichi Sankyo Co. Ltd.	214,493	5,444,908
Eisai Co. Ltd.	80,500	3,101,257
Taisho Pharmaceutical Co. Ltd.	59,000	1,153,158
Takeda Pharmaceutical Co. Ltd.	214,400	10,602,364
Terumo Corp.	53,600	2,751,566
		28,796,840
SWITZERLAND – 12.41%
Nobel Biocare Holding AG Registered	40,736	1,346,422
Novartis AG Registered	855,188	44,656,640
Roche Holding AG Bearer	15,886	2,480,837


Security	Shares	Value
Roche Holding AG Genusschein^b	226,996	$35,327,360
		83,811,259
UNITED KINGDOM – 9.34%
AstraZeneca PLC	470,340	20,623,595
GlaxoSmithKline PLC	1,697,244	36,635,809
Shire Ltd.	179,828	2,831,922
Smith & Nephew PLC	284,025	2,991,999
		63,083,325
UNITED STATES – 63.90%
Abbott Laboratories	499,016	28,733,341
Aetna Inc.	153,028	5,525,841
Allergan Inc.	99,160	5,106,740
AmerisourceBergen Corp.	52,796	1,987,769
Amgen Inc.^a	342,772	20,316,096
Applied Biosystems Inc.	54,136	1,854,158
Barr Pharmaceuticals Inc.^a	34,840	2,275,052
Baxter International Inc.	202,608	13,297,163
Becton, Dickinson and Co.	78,697	6,316,221
Biogen Idec Inc.^a	94,068	4,730,680
Boston Scientific Corp.^a	483,740	5,935,490
Bristol-Myers Squibb Co.	639,984	13,343,666
C.R. Bard Inc.	32,428	3,076,444
Cardinal Health Inc.	116,312	5,731,855
Celgene Corp.^a	147,132	9,310,513
CIGNA Corp.	88,440	3,005,191
Coventry Health Care Inc.^a	48,508	1,578,935
Covidien Ltd.	162,676	8,745,462
DaVita Inc.^a	33,768	1,925,114
Eli Lilly and Co.	322,672	14,207,248
Express Scripts Inc.^a	79,596	5,875,777
Forest Laboratories Inc.^a	98,356	2,781,508
Genzyme Corp.^a	87,100	7,045,519
Gilead Sciences Inc.^a	297,748	13,571,354
Hospira Inc.^a	51,292	1,959,354
Humana Inc.^a	54,136	2,230,403
IMS Health Inc.	59,228	1,120,002
Intuitive Surgical Inc.^a	12,596	3,035,384
Johnson & Johnson	906,912	62,830,862
King Pharmaceuticals Inc.^a	80,936	775,367
Laboratory Corp. of America Holdings^a	36,261	2,520,140
McKesson Corp.	89,512	4,816,641


SCHEDULES OF INVESTMENTS		39

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL HEALTHCARE SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Medco Health Solutions Inc.^a	164,016	$	7,380,720
Medtronic Inc.	364,212		18,247,021
Merck & Co. Inc.	692,512		21,855,679
Millipore Corp.^a	17,688		1,216,934
Mylan Inc.^a,b	98,624		1,126,286
Patterson Companies Inc.^a	30,284		920,936
PerkinElmer Inc.	38,988		973,530
Pfizer Inc.	2,184,468		40,281,590
Quest Diagnostics Inc.	50,920		2,631,036
Schering-Plough Corp.	526,352		9,721,721
St. Jude Medical Inc.^a	109,280		4,752,587
Stryker Corp.	79,596		4,958,831
Tenet Healthcare Corp.^a	135,072		749,650
Thermo Fisher Scientific Inc.^a	135,072		7,428,960
UnitedHealth Group Inc.	395,836		10,050,276
Varian Medical Systems Inc.^a	40,468		2,311,937
Waters Corp.^a	32,160		1,871,069
Watson Pharmaceuticals Inc.^a	34,095		971,708
WellPoint Inc.^a	165,624		7,746,235
Wyeth	430,676		15,909,171
Zimmer Holdings Inc.^a	73,432		4,740,770
			431,411,937

TOTAL COMMON STOCKS
(Cost: $747,560,831)			673,199,178

SHORT-TERM INVESTMENTS – 1.50%

MONEY MARKET FUNDS – 1.50%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	296,221		296,221
BGI Cash Premier Fund LLC 2.67%^c,d,e	9,865,542		9,865,542
			10,161,763

TOTAL SHORT-TERM INVESTMENT
(Cost: $10,161,763)			10,161,763

TOTAL INVESTMENTS IN SECURITIES – 101.22%
(Cost: $757,722,594)			683,360,941

Other Assets, Less Liabilities – (1.22)%			(8,250,694	)

NET ASSETS – 100.00%		$	675,110,247

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


40		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.52%

AUSTRALIA – 1.67%
Brambles Ltd.	71,865	$	436,491
Leighton Holdings Ltd.	7,400		219,184
Macquarie Airports	80,865		172,223
Macquarie Infrastructure Group	118,530		215,977
Qantas Airways Ltd.	97,875		241,648
Toll Holdings Ltd.	32,805		179,584
Transurban Group	59,985		264,024
			1,729,131
BRAZIL – 0.17%
Empresa Brasileira de Aeronautica SA ADR	6,570		177,456
			177,456
CANADA – 2.05%
Bombardier Inc. Class B	70,650		384,083
Canadian National Railway Co.	22,725		1,085,380
Canadian Pacific Railway Ltd.	7,465		400,703
Groupe Aeroplan Inc.	94		1,166
Jazz Air Income Fund^a	133		656
SNC-Lavalin Group Inc.	6,750		244,300
			2,116,288
CHINA – 0.32%
China Communications Construction Co. Ltd. Class H	225,000		192,418
China COSCO Holdings Co. Ltd. Class H	157,500		139,358
			331,776
DENMARK – 1.14%
A.P. Moller - Maersk A/S Class B	48		410,256
Vestas Wind Systems A/S^b	9,045		767,969
			1,178,225
FINLAND – 0.43%
Kone OYJ Class B	10,530		281,028
Metso OYJ	6,885		165,084
			446,112
FRANCE – 5.52%
Air France-KLM	6,795		152,666
ALSTOM	10,080		747,093


Security	Shares	Value
Bouygues SA	10,878	$	485,133
Compagnie de Saint-Gobain	13,635		692,264
European Aeronautic Defence and Space Co.	19,036		320,867
Safran SA	9,180		158,605
Schneider Electric SA	12,061		1,020,640
Suez Environnement SA^b	12,893		316,747
Thales SA	4,230		210,513
Vallourec SA	2,610		553,807
Vinci SA	22,680		1,050,659
			5,708,994
GERMANY – 5.38%
Deutsche Lufthansa AG Registered	10,215		198,009
Deutsche Post AG Registered	40,185		834,270
Hochtief AG	2,303		108,272
MAN AG	5,172		343,627
Siemens AG Registered	44,100		4,072,888
			5,557,066
HONG KONG – 0.70%
Hutchison Whampoa Ltd.	95,000		719,442
			719,442
ITALY – 0.57%
Atlantia SpA	13,504		274,473
Finmeccanica SpA	14,490		310,186
			584,659
JAPAN – 14.91%
All Nippon Airways Co. Ltd.^c	90,000		317,901
Asahi Glass Co. Ltd.	45,000		388,264
Central Japan Railway Co.	90		843,498
Dai Nippon Printing Co. Ltd.	8,000		106,928
Daikin Industries Ltd.	13,500		441,247
East Japan Railway Co.	180		1,332,643
Fanuc Ltd.	9,000		656,148
Fujikura Ltd.	30,000		113,314
Furukawa Electric Co. Ltd. (The)	45,000		192,436
ITOCHU Corp.	90,000		527,292
Japan Airlines Corp.^b,c	90,000		183,111
JS Group Corp.	9,000		111,901
Kajima Corp.	45,000		132,671
Kawasaki Heavy Industries Ltd.	90,000		184,807
Kintetsu Corp.	45,000		155,984


SCHEDULES OF INVESTMENTS		41

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Komatsu Ltd.	45,000	$	709,980
Kubota Corp.	46,000		280,771
Marubeni Corp.	90,000		396,741
Matsushita Electric Works Ltd.	3,000		25,997
Mitsubishi Corp.	68,100		1,382,334
Mitsubishi Electric Corp.	90,000		585,786
Mitsubishi Heavy Industries Ltd.	180,000		756,181
Mitsui & Co. Ltd.	90,000		1,083,408
Mitsui O.S.K. Lines Ltd.	52,000		432,986
NGK Insulators Ltd.	12,000		142,420
Nippon Express Co. Ltd.	45,000		196,675
Nippon Yusen Kabushiki Kaisha	46,000		289,436
NSK Ltd.	17,000		95,276
Obayashi Corp.	45,000		221,683
Odakyu Electric Railway Co. Ltd.	45,000		330,617
Secom Co. Ltd.	9,000		368,766
Shimizu Corp.	45,000		208,967
SMC Corp.	4,500		459,897
Sumitomo Corp.	54,000		488,805
Sumitomo Electric Industries Ltd.	36,000		384,194
Taisei Corp.	45,000		115,292
Tokyu Corp.	45,000		211,087
Toppan Printing Co. Ltd.	8,000		61,640
TOTO Ltd.^c	7,000		50,704
West Japan Railway Co.	90		383,177
Yamato Holdings Co. Ltd.	6,000		66,463
			15,417,428
MEXICO – 0.24%
Alfa SAB de CV Series A	22,500		100,711
Grupo Carso SA de CV Series A1	40,500		151,349
			252,060
NETHERLANDS – 1.89%
Koninklijke Philips Electronics NV	49,635		1,330,602
Randstad Holding NV	5,445		141,150
TNT NV	17,775		486,869
			1,958,621
NORWAY – 0.45%
Orkla ASA	37,485		335,395
Renewable Energy Corp. ASA^b	7,281		129,923
			465,318


Security	Shares	Value
PORTUGAL – 0.12%
BRISA – Auto-estradas de Portugal SA	12,337	$	121,304

			121,304
SINGAPORE – 0.76%
Keppel Corp. Ltd.	60,000		329,440
Singapore Airlines Ltd.	45,667		454,211
			783,651
SPAIN – 1.02%
Abertis Infraestructuras SA	16,878		327,640
Actividades de Construcciones y Servicios SA	11,340		453,491
Grupo Ferrovial SA	3,555		160,991
Sacyr Vallehermoso SA^c	6,750		109,889
			1,052,011
SWEDEN – 2.59%
Assa Abloy AB Class B	15,840		187,415
Atlas Copco AB Class A	30,645		340,610
Sandvik AB	52,380		540,871
Scania AB Class B	19,125		229,711
Securitas AB Class B	14,850		163,456
Skanska AB Class B	18,270		203,066
SKF AB Class B	21,420		267,260
Volvo AB Class A	28,530		236,292
Volvo AB Class B	57,850		510,240
			2,678,921
SWITZERLAND – 2.34%
ABB Ltd. Registered^b	112,185		2,113,130
Adecco SA Registered	7,110		305,896
			2,419,026
UNITED KINGDOM – 4.49%
BAE Systems PLC	166,860		1,225,369
BBA Aviation PLC	25,875		52,463
British Airways PLC	27,945		83,781
Bunzl PLC	19,890		232,926
Capita Group PLC	27,180		338,160
Cobham PLC	50,850		172,121
Cookson Group PLC	10,800		89,707
Experian PLC	48,600		318,354


42		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
FirstGroup PLC	21,330	$	202,455
G4S PLC	57,105		206,118
Hays PLC	75,600		107,803
IMI PLC	18,585		123,646
Invensys PLC^b	40,635		148,662
Rentokil Initial PLC	100,485		123,586
Rolls-Royce Group PLC^b	87,840		526,859
Smiths Group PLC	16,650		300,339
Tomkins PLC	51,525		141,205
Wolseley PLC	34,127		253,508
			4,647,062
UNITED STATES – 52.76%
Allied Waste Industries Inc.^b	15,930		176,982
Avery Dennison Corp.	4,860		216,173
Boeing Co. (The)	36,135		2,072,342
Burlington Northern Santa Fe Corp.	13,725		1,268,602
C.H. Robinson Worldwide Inc.	8,370		426,535
Caterpillar Inc.	29,811		1,776,736
Cintas Corp.	6,300		180,873
Cooper Industries Ltd.	9,320		372,334
CSX Corp.	19,125		1,043,651
Cummins Inc.	10,125		442,665
Danaher Corp.	12,195		846,333
Deere & Co.	20,925		1,035,788
Dover Corp.	9,855		399,620
Eaton Corp.	8,068		453,260
Emerson Electric Co.	38,475		1,569,395
Equifax Inc.	6,276		216,208
Expeditors International Washington Inc.	10,170		354,323
Fastenal Co.^c	6,527		322,369
FedEx Corp.	14,805		1,170,187
Fluor Corp.	8,460		471,222
General Dynamics Corp.	18,135		1,335,099
General Electric Co.	478,215		12,194,483
Goodrich Corp.	6,030		250,848
Honeywell International Inc.	35,415		1,471,493
Illinois Tool Works Inc.	20,070		892,112
Ingersoll-Rand Co. Ltd. Class A	15,129		471,571
ITT Industries Inc.	9,000		500,490


Security	Shares	Value
Jacobs Engineering Group Inc.^b	5,895	$	320,157
L-3 Communications Holdings Inc.	5,985		588,445
Lockheed Martin Corp.	15,975		1,751,978
Manitowoc Co. Inc. (The)	6,840		106,362
Masco Corp.	16,830		301,930
Monster Worldwide Inc.^b	6,255		93,262
Norfolk Southern Corp.	17,976		1,190,191
Northrop Grumman Corp.	15,390		931,711
PACCAR Inc.	18,479		705,713
Pall Corp.	6,435		221,300
Parker Hannifin Corp.	8,505		450,765
Pitney Bowes Inc.	7,605		252,942
Precision Castparts Corp.	6,615		521,130
R.R. Donnelley & Sons Co.	10,440		256,093
Raytheon Co.	20,340		1,088,393
Robert Half International Inc.	7,861		194,560
Rockwell Automation Inc.	7,920		295,733
Rockwell Collins Inc.	7,965		383,037
Ryder System Inc.	2,541		157,542
Southwest Airlines Co.	34,560		501,466
Terex Corp.^b	5,177		158,002
Textron Inc.	12,195		357,070
3M Co.	33,975		2,320,832
Tyco International Ltd.	23,535		824,196
Union Pacific Corp.	24,390		1,735,592
United Parcel Service Inc. Class B	48,735		3,064,944
United Technologies Corp.	46,260		2,778,376
W.W. Grainger Inc.	3,672		319,354
Waste Management Inc.	23,580		742,534
			54,545,304

TOTAL COMMON STOCKS
(Cost: $149,441,754)			102,889,855


SCHEDULES OF INVESTMENTS		43

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL INDUSTRIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.61%

MONEY MARKET FUNDS – 0.61%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	10,207	$	10,207
BGI Cash Premier Fund LLC 2.67%^d,e,f	619,481		619,481
			629,688

TOTAL SHORT-TERM INVESTMENTS
(Cost: $629,688)			629,688

TOTAL INVESTMENTS IN SECURITIES – 100.13%
(Cost: $150,071,442)			103,519,543

Other Assets, Less Liabilities – (0.13)%			(136,847)

NET ASSETS – 100.00%		$	103,382,696

ADR – American Depositary Receipts

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

^b	Non-income earning security.

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


44		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL INFRASTRUCTURE INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.00%

AUSTRALIA – 8.59%
ConnectEast Group	1,358,289	$	873,206
Macquarie Airports	1,518,845		3,234,775
Macquarie Infrastructure Group	2,050,656		3,736,558
Transurban Group	1,087,566		4,786,926
			12,631,465
AUSTRIA – 0.48%
Flughafen Wien AG	11,357		709,253
			709,253
BELGIUM – 0.17%
Euronav SA	9,225		252,161
			252,161
BRAZIL – 0.19%
Companhia de Saneamento Basico do Estado de Sao Paulo ADR	6,314		179,002
CPFL Energia SA ADR	1,927		107,642
			286,644
CANADA – 8.05%
Enbridge Inc.	123,615		4,578,592
Pembina Pipeline Income Fund	22,229		336,822
TransCanada Corp.	192,864		6,924,021
			11,839,435
CHILE – 0.25%
Enersis SA SP ADR	22,140		361,325
			361,325
CHINA – 5.21%
Beijing Capital International Airport Co. Ltd. Class H	1,148,000		931,488
China Merchants Holdings (International) Co. Ltd.	984,000		3,092,287
COSCO Pacific Ltd.	1,230,000		1,387,727
Dalian Port (PDA) Co. Ltd. Class H^a	1,312,000		456,239
Guangdong Investment Ltd.	164,000		38,020
Huaneng Power International Inc. SP ADR	6,232		165,896
Jiangsu Expressway Co. Ltd. Class H	1,066,000		788,069


Security	Shares	Value
Zhejiang Expressway Co. Ltd. Class H^a	1,394,000	$	811,514

			7,671,240
DENMARK – 0.19%
Dampskibsselskabet TORM A/S	11,521		272,203
			272,203
FINLAND – 0.89%
Fortum OYJ	39,442		1,306,384
			1,306,384
FRANCE – 8.77%
Aeroports de Paris	24,149		1,965,377
Electricite de France	21,156		1,513,624
GDF SUEZ	125,337		6,425,993
Societe des Autoroutes Paris-Rhin-Rhone	18,860		1,631,889
Veolia Environnement	33,825		1,371,442
			12,908,325
GERMANY – 10.07%
E.ON AG	144,566		7,225,040
Fraport AG	42,968		2,534,910
Hamburger Hafen und Logistik AG	20,705		1,221,498
RWE AG	40,426		3,832,946
			14,814,394
ITALY – 6.08%
Atlantia SpA	297,537		6,047,524
Enel SpA	349,607		2,892,435
			8,939,959
JAPAN – 5.43%
Japan Airport Terminal Co. Ltd.	77,900		774,854
Kamigumi Co. Ltd.	246,000		1,816,644
Kansai Electric Power Co. Inc. (The)	61,500		1,361,324
Mitsubishi Logistics Corp.	123,000		1,528,159
Tokyo Electric Power Co. Inc. (The)	102,500		2,500,589
			7,981,570
MEXICO – 1.24%
Grupo Aeroportuario del Pacifico SA de CV ADR	32,964		842,560
Grupo Aeroportuario del Sureste SA de CV Series B ADR	19,844		985,453
			1,828,013


SCHEDULES OF INVESTMENTS		45

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL INFRASTRUCTURE INDEX FUND

September 30, 2008


Security	Shares	Value
NETHERLANDS – 1.79%
Royal Vopak NV	33,551	$	1,560,860
Smit Internationale NV	12,557		1,075,930
			2,636,790
NEW ZEALAND – 0.79%
Auckland International Airport Ltd.	894,743		1,165,318
			1,165,318
NORWAY – 0.58%
Frontline Ltd.	18,327		849,348
			849,348
PORTUGAL – 2.01%
BRISA - Auto-estradas de Portugal SA	300,038		2,950,139
			2,950,139
SOUTH KOREA – 0.38%
Korea Electric Power Corp. SP ADR	44,854		555,741
			555,741
SPAIN – 8.55%
Abertis Infraestructuras SA	308,689		5,992,351
Cintra Concesiones de Infraestructuras de Transporte SA^a	175,357		2,032,100
Iberdrola SA	453,501		4,548,253
			12,572,704
SWITZERLAND – 0.82%
Flughafen Zurich AG Registered	3,772		1,211,918
			1,211,918
UNITED KINGDOM – 4.75%
BBA Aviation PLC	387,122		784,904
Centrica PLC	281,629		1,576,247
Forth Ports PLC	29,110		739,391
National Grid PLC	194,299		2,472,784
Scottish & Southern Energy PLC	55,883		1,421,415
			6,994,741
UNITED STATES – 23.72%
American Electric Power Co. Inc.	33,579		1,243,430
Crosstex Energy Inc.	14,842		370,605
Dominion Resources Inc.	46,248		1,978,489
Duke Energy Corp.	97,990		1,707,966
El Paso Corp.	271,625		3,465,935


Security	Shares	Value
Entergy Corp.	17,302	$	1,540,051
Exelon Corp.	58,302		3,650,871
FirstEnergy Corp.	26,281		1,760,564
FPL Group Inc.	36,121		1,816,886
General Maritime Corp.	11,029		214,845
Kinder Morgan Inc.^b	193,685		19
Nordic American Tanker Shipping Ltd.	11,275		361,476
PPL Corp.	35,137		1,300,772
Public Service Enterprise Group Inc.	47,560		1,559,492
Ship Finance International Ltd.	16,236		350,048
Southern Co. (The)	60,393		2,276,212
Spectra Energy Corp.	217,751		5,182,474
Teekay Corp.	16,236		428,306
Tsakos Energy Navigation Ltd.	8,897		263,885
Williams Companies Inc. (The)	229,436		5,426,161
			34,898,487

TOTAL COMMON STOCKS
(Cost: $179,405,423)			145,637,557

PREFERRED STOCKS – 0.34%

BRAZIL – 0.34%
Companhia Energetica de Minas Gerais SP ADR	25,379		500,982

			500,982


TOTAL PREFERRED STOCKS
(Cost: $537,953)			500,982

SHORT-TERM INVESTMENTS – 0.84%

MONEY MARKET FUNDS – 0.84%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	147,833		147,833
BGI Cash Premier Fund LLC 2.67%^c,d,e	1,091,900		1,091,900
			1,239,733

TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,239,733)			1,239,733


46		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL INFRASTRUCTURE INDEX FUND

September 30, 2008


	Value

TOTAL INVESTMENTS IN SECURITIES – 100.18%
(Cost: $181,183,109)	$	147,378,272

Other Assets, Less Liabilities – (0.18)%		(270,850	)

NET ASSETS – 100.00%	$	147,107,422

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		47

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL MATERIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 96.11%

AUSTRALIA – 10.60%
Alumina Ltd.	317,016	$	767,691
Amcor Ltd.	206,127		878,002
BHP Billiton Ltd.	704,961		17,238,270
BlueScope Steel Ltd.	149,517		863,314
Fortescue Metals Group Ltd.^a	271,395		997,596
Incitec Pivot Ltd.	246,198		984,599
Lihir Gold Ltd.^a	472,638		1,043,887
Newcrest Mining Ltd.	95,793		2,087,765
OneSteel Ltd.	125,874		456,731
Orica Ltd.	84,039		1,388,775
OZ Minerals Ltd.	718,947		910,204
Rio Tinto Ltd.	59,829		3,987,818
			31,604,652
AUSTRIA – 0.24%
voestalpine AG	23,014		703,104
			703,104
BELGIUM – 0.83%
Solvay SA	14,208		1,722,312
Umicore	24,975		757,226
			2,479,538
BRAZIL – 2.76%
Companhia Siderurgica Nacional SP ADR^b	93,018		1,977,563
Companhia Vale do Rio Doce ADR	327,339		6,268,542
			8,246,105
CANADA – 11.06%
Agnico-Eagle Mines Ltd.	29,415		1,607,422
Agrium Inc.	32,856		1,838,725
Barrick Gold Corp.	182,111		6,675,005
First Quantum Minerals Ltd.	13,764		517,833
Fording Canadian Coal Trust	25,414		2,086,042
Goldcorp Inc.	147,820		4,653,438
Inmet Mining Corp.	9,435		439,803
Kinross Gold Corp.	136,974		2,201,736
Lundin Mining Corp.^a	82,917		246,443
NOVA Chemicals Corp.	24,443		537,737
Potash Corp. of Saskatchewan Inc.	64,380		8,354,504
Teck Cominco Ltd. Class B	91,686		2,606,049
Yamana Gold Inc.	147,075		1,210,408
			32,975,145


Security	Shares	Value
CHILE – 0.28%
Sociedad Quimica y Minera de Chile SA SP ADR	33,594	$	846,905

			846,905
DENMARK – 0.31%
Novozymes A/S Class B	10,434		913,402
			913,402
FINLAND – 0.94%
Stora Enso OYJ Class R	131,515		1,261,723
UPM-Kymmene OYJ	100,566		1,545,385
			2,807,108
FRANCE – 2.99%
Lafarge SA	28,749		2,979,809
L’Air Liquide SA	54,509		5,927,362
			8,907,171
GERMANY – 5.23%
ALTANA AG	26,973		396,305
BASF SE	199,023		9,435,071
Linde AG	27,350		2,899,729
Salzgitter AG	8,214		816,414
ThyssenKrupp AG	69,153		2,042,765
			15,590,284
IRELAND – 0.80%
CRH PLC	113,109		2,383,178
			2,383,178
JAPAN – 8.67%
Asahi Kasei Corp.	222,000		917,986
JFE Holdings Inc.	111,000		3,324,825
JSR Corp.	46,900		606,102
Kobe Steel Ltd.	444,000		865,709
Kuraray Co. Ltd.	68,500		665,224
Mitsubishi Chemical Holdings Corp.	222,000		1,156,370
Mitsubishi Materials Corp.	222,000		681,694
Mitsui Chemicals Inc.	148,000		638,478
Mitsui Mining & Smelting Co. Ltd.	111,000		254,067
Nippon Paper Group Inc.	229		660,048
Nippon Steel Corp.	1,110,000		4,046,249
Nitto Denko Corp.	34,000		843,875
Oji Paper Co. Ltd.	139,000		689,992
Shin-Etsu Chemical Co. Ltd.	77,700		3,578,891
Sumitomo Chemical Co. Ltd.	333,000		1,427,165


48		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL MATERIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
Sumitomo Metal Industries Ltd.	666,000	$	1,988,621
Sumitomo Metal Mining Co. Ltd.	118,000		1,157,048
Teijin Ltd.	224,000		658,296
Toray Industries Inc.	255,000		1,169,736
Toyo Seikan Kaisha Ltd.	34,500		519,295
			25,849,671
MEXICO – 1.09%
Cemex SAB de CV Series CPO^a	1,909,249		3,258,134
			3,258,134
NETHERLANDS – 4.43%
Akzo Nobel NV	57,276		2,704,419
ArcelorMittal^b	172,494		8,510,566
Koninklijke DSM NV	42,624		1,997,024
			13,212,009
NORWAY – 0.76%
Norsk Hydro ASA	142,746		935,576
Yara International ASA	38,739		1,330,111
			2,265,687
PORTUGAL – 0.18%
CIMPOR – Cimentos de Portugal SGPS SA	83,052		524,149
			524,149
SOUTH KOREA – 1.83%
POSCO ADR	58,386		5,451,501
			5,451,501
SPAIN – 0.14%
Acerinox SA	22,991		405,616
			405,616
SWEDEN – 0.82%
Boliden AB	70,707		287,989
Holmen AB Class B	12,210		388,745
SSAB Svenskt Stal AB Class A	32,856		506,546
Svenska Cellulosa AB Class B	123,321		1,277,823
			2,461,103
SWITZERLAND – 3.26%
Ciba Holding AG Registered	14,652		620,709
Clariant AG Registered^a	60,051		574,133
Givaudan SA Registered	1,332		1,105,397
Holcim Ltd. Registered	43,290		3,127,304
Syngenta AG Registered	20,323		4,299,323
			9,726,866


Security	Shares	Value
TAIWAN – 1.46%
China Steel Corp. SP GDR^b	223,899	$	4,366,030

			4,366,030
UNITED KINGDOM – 12.85%
Anglo American PLC	278,166		9,197,405
BHP Billiton PLC	463,314		10,397,250
Johnson Matthey PLC	43,401		1,044,362
Lonmin PLC	29,415		1,192,276
Rexam PLC	146,631		1,027,154
Rio Tinto PLC	183,594		11,358,748
Xstrata PLC	134,421		4,111,514
			38,328,709
UNITED STATES – 24.58%
Air Products and Chemicals Inc.	44,663		3,058,969
AK Steel Holding Corp.	22,644		586,932
Alcoa Inc.	170,607		3,852,306
Allegheny Technologies Inc.	21,423		633,050
Ashland Inc.	14,327		418,921
Ball Corp.	22,422		885,445
Bemis Co. Inc.	19,869		520,766
CF Industries Holdings Inc.	11,361		1,039,077
Dow Chemical Co. (The)	204,129		6,487,220
E.I. du Pont de Nemours and Co.	195,693		7,886,428
Eastman Chemical Co.	19,686		1,083,911
Ecolab Inc.	40,182		1,949,631
Freeport-McMoRan Copper & Gold Inc.	80,467		4,574,549
Hercules Inc.	29,193		577,729
International Flavors & Fragrances Inc.	17,104		674,924
International Paper Co.	95,016		2,487,519
MeadWestvaco Corp.	37,074		864,195
Monsanto Co.	114,663		11,349,344
Newmont Mining Corp.	93,906		3,639,797
Nucor Corp.	63,472		2,507,144
Pactiv Corp.^a	30,414		755,180
PPG Industries Inc.	36,075		2,103,894
Praxair Inc.	65,601		4,706,216
Rohm and Haas Co.	28,344		1,984,080
Sealed Air Corp.	35,187		773,762
Sigma-Aldrich Corp.	27,084		1,419,743
Titanium Metals Corp.	21,423		242,937


SCHEDULES OF INVESTMENTS		49

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL MATERIALS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
United States Steel Corp.	24,087	$	1,869,392
Vulcan Materials Co.^b	22,866		1,703,517
Weyerhaeuser Co.	43,956		2,662,854
			73,299,432

TOTAL COMMON STOCKS
(Cost: $445,967,164)			286,605,499

PREFERRED STOCKS – 3.29%

BRAZIL – 3.29%
Aracruz Celulose SA SP ADR^b	16,095		590,848
Companhia Vale do Rio Doce SP ADR	437,673		7,746,812
Gerdau SA SP ADR^b	132,864		1,474,790
			9,812,450

TOTAL PREFERRED STOCKS
(Cost: $16,637,376)			9,812,450

SHORT-TERM INVESTMENTS – 1.56%

MONEY MARKET FUNDS – 1.56%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	125,221		125,221
BGI Cash Premier Fund LLC 2.67%^c,d,e	4,528,028		4,528,028
			4,653,249

TOTAL SHORT-TERM INVESTMENTS
(Cost: $4,653,249)			4,653,249

TOTAL INVESTMENTS IN SECURITIES – 100.96%
(Cost: $467,257,789)			301,071,198

Other Assets, Less Liabilities – (0.96)%			(2,876,718	)

NET ASSETS – 100.00%		$	298,194,480

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

SP GDR – Sponsored Global Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


50		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL NUCLEAR ENERGY INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.82%

AUSTRALIA – 7.31%
Energy Resources of Australia Ltd.	14,287	$	191,583
Paladin Energy Ltd.^a	52,633		161,916
			353,499
CANADA – 12.28%
Aurora Energy Resources Inc.^a	10,550		14,686
Cameco Corp.	12,593		273,133
Denison Mines Corp.^a	24,594		72,635
UEX Corp.^a	26,618		37,804
Uranium One Inc.^a	64,512		139,558
Uranium Participation Corp.^a	9,660		56,150
			593,966
FINLAND – 4.40%
Fortum OYJ	6,433		213,072
			213,072
FRANCE – 15.03%
AREVA SA	525		401,669
Electricite de France	4,550		325,534
			727,203
GERMANY – 8.09%
E.ON AG	7,833		391,473
			391,473
JAPAN – 12.53%
Kansai Electric Power Co. Inc. (The)	13,500		298,827
Tokyo Electric Power Co. Inc. (The)	12,600		307,389
			606,216
SOUTH KOREA – 4.08%
Korea Electric Power Corp. SP ADR	15,939		197,484
			197,484
UNITED KINGDOM – 4.37%
British Energy Group PLC	13,794		186,862
Nufcor Uranium Ltd.^a	9,653		24,777
			211,639
UNITED STATES – 31.73%
El Paso Electric Co.^a	3,969		83,349
Entergy Corp.	2,576		229,290
Exelon Corp.	5,670		355,055
FirstEnergy Corp.	3,857		258,380
FPL Group Inc.	4,802		241,541


Security	Shares	Value
McDermott International Inc.^a	11,550	$	295,102
USEC Inc.^a,b	13,472		72,884
			1,535,601

TOTAL COMMON STOCKS
(Cost: $6,568,778)			4,830,153

SHORT-TERM INVESTMENTS – 0.91%

MONEY MARKET FUNDS – 0.91%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	202		202
BGI Cash Premier Fund LLC 2.67%^c,d,e	44,000		44,000
			44,202

TOTAL SHORT-TERM INVESTMENTS
(Cost: $44,202)			44,202

TOTAL INVESTMENTS IN SECURITIES – 100.73%
(Cost: $6,612,980)			4,874,355

Other Assets, Less Liabilities – (0.73)%			(35,467	)

NET ASSETS – 100.00%		$	4,838,888

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		51

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.83%

CANADA – 1.50%
Research In Motion Ltd.^a	85,860	$5,791,028
		5,791,028
FINLAND – 3.01%
Nokia OYJ	642,680	11,645,352
		11,645,352
FRANCE – 1.12%
Alcatel-Lucent^a	402,674	1,525,467
Cap Gemini SA	24,993	1,165,533
Dassault Systemes SA	8,427	445,426
STMicroelectronics NV	120,840	1,193,427
		4,329,853
GERMANY – 2.26%
Infineon Technologies AG^a	138,966	764,202
SAP AG^b	150,573	7,967,294
		8,731,496
JAPAN – 10.36%
Advantest Corp.^b	31,800	652,984
Canon Inc.	190,800	6,865,313
FUJIFILM Holdings Corp.	79,500	2,014,364
Fujitsu Ltd.	320,000	1,757,265
Hirose Electric Co. Ltd.	3,700	346,423
Hitachi Ltd.	530,000	3,584,421
Hoya Pentax HD Corp.	63,600	1,234,079
Keyence Corp.	4,000	783,686
Konica Minolta Holdings Inc.	88,500	989,493
Kyocera Corp.	31,800	2,360,326
Murata Manufacturing Co. Ltd.	31,800	1,249,056
NEC Corp.	337,000	1,396,694
Nintendo Co. Ltd.	18,300	7,480,997
NTT Data Corp.	224	873,508
Ricoh Co. Ltd.	159,000	2,167,127
Rohm Co. Ltd.	16,900	908,953
TDK Corp.	20,100	973,146
Tokyo Electron Ltd.	31,800	1,395,827
Toshiba Corp.	504,000	2,141,045
Yahoo! Japan Corp.	2,703	858 ,014
		40,032,721


Security	Shares	Value
NETHERLANDS – 0.34%
ASML Holding NV	76,684	$	1,336,733

			1,336,733
SOUTH KOREA – 2.60%
Samsung Electronics Co. Ltd. GDR^c	44,838		10,043,712
			10,043,712
SWEDEN – 1.21%
Telefonaktiebolaget LM Ericsson AB Class B	509,595		4,677,363
			4,677,363
TAIWAN – 4.51%
AU Optronics Corp. SP ADR	202,249		2,297,549
Taiwan Semiconductor Manufacturing Co. Ltd. SP ADR	1,282,812		12,019,948
United Microelectronics Corp. SP ADR^b	1,595,846		3,111,900
			17,429,397
UNITED KINGDOM – 0.52%
ARM Holdings PLC	265,530		449,629
Electrocomponents PLC	65,031		189,520
Logica PLC	258,375		497,384
Misys PLC	90,471		195,931
Sage Group PLC	191,118		665,306
			1,997,770
UNITED STATES – 72.40%
Adobe Systems Inc.^a	93,651		3,696,405
Advanced Micro Devices Inc.^a,b	105,517		553,964
Affiliated Computer Services Inc. Class A^a	13,044		660,418
Agilent Technologies Inc.^a	64,236		1,905,240
Akamai Technologies Inc.^a	29,097		507,452
Altera Corp.	57,399		1,187,011
Amphenol Corp. Class A	23,055		925,428
Analog Devices Inc.	48,972		1,290,412
Apple Inc.^a	153,276		17,421,350
Applied Materials Inc.	232,776		3,521,901
Autodesk Inc.^a	39,973		1,341,094
Automatic Data Processing Inc.	86,736		3,707,964
BMC Software Inc.^a	33,708		965,060
Broadcom Corp. Class A^a	79,500		1,481,085


52		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
CA Inc.	65,349	$	1,304,366
Cisco Systems Inc.^a	1,012,194		22,835,097
Citrix Systems Inc.^a,b	33,231		839,415
Cognizant Technology Solutions Corp.^a	50,403		1,150,700
Computer Sciences Corp.^a	27,383		1,100,523
Compuware Corp.^a	47,541		460,672
Convergys Corp.^a	11,647		172,143
Corning Inc.	268,869		4,205,111
Dell Inc.^a	335,331		5,526,255
eBay Inc.^a	193,245		4,324,823
Electronic Arts Inc.^a	54,378		2,011,442
EMC Corp.^a	360,612		4,312,919
Fidelity National Information Services Inc.	27,534		508,278
Fiserv Inc.^a	24,486		1,158,677
Google Inc. Class A^a	41,022		16,430,131
Harris Corp.	17,808		822,730
Hewlett-Packard Co.	425,702		19,684,460
Intel Corp.	966,084		18,094,753
International Business Machines Corp.	234,525		27,430,044
Intuit Inc.^a	55,717		1,761,214
Jabil Circuit Inc.	31,164		297,305
JDS Uniphase Corp.^a	40,545		343,011
Juniper Networks Inc.^a	91,743		1,933,025
KLA-Tencor Corp.	29,733		941,049
Lexmark International Inc. Class A^a	16,536		538,577
Linear Technology Corp.	37,047		1,135,861
LSI Corp.^a	124,338		666,452
MasterCard Inc. Class A	12,402		2,199,247
MEMC Electronic Materials Inc.^a	40,495		1,144,389
Microchip Technology Inc.	33,231		977,988
Micron Technology Inc.^a	99,534		403,113
Microsoft Corp.	1,356,111		36,194,603
Molex Inc.	22,419		503,307
Motorola Inc.	368,173		2,628,755
National Semiconductor Corp.	38,796		667,679
NetApp Inc.^a,b	61,851		1,127,544
Novell Inc.^a	64,236		330,173
Novellus Systems Inc.^a	20,829		409,082
NVIDIA Corp.^a	96,831		1,037,060


Security	Shares	Value
Oracle Corp.^a	677,022	$	13,750,317
Paychex Inc.	55,809		1,843,371
QLogic Corp.^a	25,281		388,316
QUALCOMM Inc.	277,137		11,908,577
Salesforce.com Inc.^a	17,808		861,907
SanDisk Corp.^a	38,955		761,570
Sun Microsystems Inc.^a	150,732		1,145,563
Symantec Corp.^a	148,029		2,898,408
Tellabs Inc.^a	54,219		220,129
Teradata Corp.^a	29,097		567,391
Teradyne Inc.^a	32,754		255,809
Texas Instruments Inc.	225,780		4,854,270
Total System Services Inc.	30,051		492,836
Tyco Electronics Ltd.	79,023		2,185,776
Unisys Corp.^a	70,166		192,956
VeriSign Inc.^a	36,411		949,599
Western Union Co.	127,359		3,141,946
Xerox Corp.	122,112		1,407,951
Xilinx Inc.	48,813		1,144,665
Yahoo! Inc.^a	236,274		4,087,540
			279,835,654

TOTAL COMMON STOCKS
(Cost: $498,923,169)			385,851,079

SHORT-TERM INVESTMENTS – 2.03%

MONEY MARKET FUNDS – 2.03%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^d,e	344,562		344,562
BGI Cash Premier Fund LLC 2.67%^d,e,f	7,507,291		7,507,291
			7,851,853

TOTAL SHORT-TERM INVESTMENTS
(Cost: $7,851,853)			7,851,853

TOTAL INVESTMENTS IN SECURITIES – 101.86%
(Cost: $506,775,022)			393,702,932

Other Assets, Less Liabilities – (1.86)%			(7,174,656	)

NET ASSETS – 100.00%		$	386,528,276


SCHEDULES OF INVESTMENTS		53

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL TECHNOLOGY SECTOR INDEX FUND

September 30, 2008

GDR – Global Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

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

^d	Affiliated issuer. See Note 2.

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

^f	This security represents an investment of securities lending collateral. See Note 5.


54		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 99.00%

AUSTRALIA – 3.16%
Telstra Corp. Ltd.	2,181,900	$	7,194,126

			7,194,126

AUSTRIA – 0.54%
Telekom Austria AG	70,728		1,230,923

			1,230,923

BELGIUM – 0.56%
Belgacom SA	34,356		1,278,117

			1,278,117

CANADA – 5.28%
BCE Inc.	169,596		5,854,188
Rogers Communications Inc. Class B	112,392		3,649,146
TELUS Corp.	68,510		2,504,687

			12,008,021

CHILE – 0.07%
Compania de Telecomunicaciones de Chile SA SP ADR	24,228		164,993

			164,993

CHINA – 4.76%
China Mobile Ltd.	1,092,000		10,815,432

			10,815,432

FRANCE – 4.76%
France Telecom SA	389,508		10,833,024

			10,833,024

GERMANY – 4.20%
Deutsche Telekom AG Registered	631,428		9,552,294

			9,552,294

GREECE – 0.45%
Hellenic Telecommunications Organization SA SP ADR	113,370		1,020,330

			1,020,330

ITALY – 1.41%
Telecom Italia SpA	2,172,187		3,209,823

			3,209,823

JAPAN – 6.46%
Nippon Telegraph and Telephone Corp.	1,779		7,859,002


Security	Shares	Value
NTT DoCoMo Inc.	3,108	$	4,915,304
SoftBank Corp.	151,200		1,912,698

			14,687,004

MEXICO – 5.50%
America Movil SAB de CV Series L	1,444,800		3,301,867
America Movil SAB de CV Series L ADR	162,457		7,531,507
Telefonos de Mexico SAB de CV Series L	109,200		138,644
Telefonos de Mexico SAB de CV Series L SP ADR^a	59,307		1,527,155

			12,499,173

NETHERLANDS – 2.41%
Koninklijke KPN NV	382,116		5,470,446

			5,470,446

NEW ZEALAND – 0.30%
Telecom Corp. of New Zealand Ltd.	378,756		681,179

			681,179

NORWAY – 0.86%
Telenor ASA	161,454		1,960,726

			1,960,726

PORTUGAL – 0.89%
Portugal Telecom SGPS SA Registered	10,164		101,437
Portugal Telecom SGPS SA SP ADR	191,436		1,929,675

			2,031,112

SINGAPORE – 1.51%
Singapore Telecommunications Ltd.	1,512,550		3,438,335

			3,438,335

SOUTH KOREA – 0.65%
SKTelecom Co. Ltd. ADR	78,462		1,476,655

			1,476,655

SPAIN – 10.29%
Telefonica SA	992,208		23,400,306

			23,400,306

SWEDEN – 1.16%
TeliaSonera AB	468,792		2,628,772

			2,628,772


SCHEDULES OF INVESTMENTS		55

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL TELECOMMUNICATIONS SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value

SWITZERLAND – 0.61%
Swisscom AG Registered	1,225	$	362,174
Swisscom AG SP ADR	35,515		1,033,487

			1,395,661

TAIWAN – 1.02%
Chunghwa Telecom Co. Ltd. SP ADR^b	98,053		2,320,915

			2,320,915

UNITED KINGDOM – 13.44%
BT Group PLC	1,629,516		4,679,199
Cable & Wireless PLC	531,048		1,566,568
Vodafone Group PLC	11,117,400		24,314,489

			30,560,256

UNITED STATES – 28.71%
American Tower Corp. Class A^b	82,992		2,985,222
AT&T Inc.	1,240,596		34,637,440
CenturyTel Inc.	21,599		791,603
Embarq Corp.	29,988		1,216,013
Frontier Communications Corp.	66,269		762,093
Qwest Communications International Inc.	310,800		1,003,884
Sprint Nextel Corp.	598,080		3,648,288
Verizon Communications Inc.	599,172		19,227,429
Windstream Corp.	93,324		1,020,965

			65,292,937

TOTAL COMMON STOCKS
(Cost: $310,957,623)			225,150,560

PREFERRED STOCKS – 0.63%

BRAZIL – 0.63%
Brasil Telecom Participacoes SA ADR	9,650		471,499
Tele Norte Leste Participacoes SA ADR	55,440		967,982

			1,439,481

TOTAL PREFERRED STOCKS
(Cost: $1,884,330)			1,439,481


Security	Shares	Value
SHORT-TERM INVESTMENTS – 0.78%

MONEY MARKET FUNDS – 0.78%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	237,797	$	237,797
BGI Cash Premier Fund LLC 2.67%^c,d,e	1,530,121		1,530,121

			1,767,918

TOTAL SHORT-TERM INVESTMENTS
(Cost: $1,767,918)			1,767,918

TOTAL INVESTMENTS IN SECURITIES – 100.41%
(Cost: $314,609,871)			228,357,959
Other Assets, Less Liabilities – (0.41)%			(931,840	)

NET ASSETS – 100.00%		$	227,426,119

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


56		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL TIMBER & FORESTRY INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 92.80%

AUSTRALIA – 2.84%
Gunns Ltd.	482,520	$	439,607
Timbercorp Ltd.	266,160		129,117

			568,724

CANADA – 18.46%
Canfor Corp.^a	100,350		770,181
Sino-Forest Corp.^a	104,895		1,323,027
TimberWest Forest Corp. Stapled Units	54,210		622,049
West Fraser Timber Co. Ltd.	29,940		982,512

			3,697,769

FINLAND – 7.55%
Stora Enso OYJ Class R	77,550		743,996
UPM-Kymmene OYJ	49,935		767,345

			1,511,341

HONG KONG – 0.99%
China Grand Forestry Green Resources Group Ltd.^a,b	3,960,000		198,909

			198,909

JAPAN – 4.46%
Oji Paper Co. Ltd.	180,000		893,515

			893,515

SOUTH AFRICA – 4.07%
Sappi Ltd.	84,270		814,139

			814,139

SPAIN – 2.24%
Grupo Empresarial ENCE SA	61,710		448,140

			448,140

SWEDEN – 7.29%
Holmen AB Class B	23,655		753,133
Svenska Cellulosa AB Class B	68,280		707,501

			1,460,634

UNITED STATES – 44.90%
Deltic Timber Corp.	8,550		544,122
International Paper Co.	30,405		796,003
Packaging Corp. of America	33,690		780,934
Plum Creek Timber Co. Inc.	34,005		1,695,489
Potlatch Corp.	27,075		1,256,009
Rayonier Inc.	37,530		1,777,045


Security	Shares	Value
Smurfit-Stone Container Corp.^a	93,120	$	437,664
Weyerhaeuser Co.	28,155		1,705,630

			8,992,896


TOTAL COMMON STOCKS
(Cost: $19,144,395)			18,586,067

PREFERRED STOCKS – 6.57%

BRAZIL – 6.57%
Aracruz Celulose SA SP ADR	17,730		650,868
Votorantim Celulose e Papel SA SP ADR	43,170		665,250

			1,316,118

TOTAL PREFERRED STOCKS
(Cost: $1,924,886)			1,316,118

SHORT-TERM INVESTMENTS – 0.51%

MONEY MARKET FUNDS – 0.51%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	28,767		28,767
BGI Cash Premier Fund LLC 2.67%^c,d,e	74,000		74,000

			102,767

TOTAL SHORT-TERM INVESTMENTS
(Cost: $102,767)			102,767

TOTAL INVESTMENTS IN SECURITIES – 99.88%
(Cost: $21,172,048)			20,004,952
Other Assets, Less Liabilities – 0.12%			24,440

NET ASSETS – 100.00%		$	20,029,392

SP ADR – Sponsored American Depositary Receipts

^a	Non-income earning security.

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

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		57

Schedule of Investments (Unaudited)

iSHARES^® S&P GLOBAL UTILITIES SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
COMMON STOCKS – 98.65%

AUSTRALIA – 0.47%
AGL Energy Ltd.	97,709	$	1,055,898

			1,055,898

BRAZIL – 0.27%
Centrais Eletricas Brasileiras SA SP ADR	42,863		613,742

			613,742

CANADA – 0.53%
TransAlta Corp.	44,016		1,184,027

			1,184,027

CHILE – 0.89%
Empresa Nacional de Electricidad SA SP ADR	24,364		1,084,442
Enersis SA SP ADR	56,280		918,490

			2,002,932

FINLAND – 1.42%
Fortum OYJ	96,180		3,185,640

			3,185,640

FRANCE – 10.46%
Electricite de France	60,931		4,359,360
GDF SUEZ	310,632		15,926,017
Veolia Environnement	78,553		3,184,949

			23,470,326

GERMANY – 13.99%
E.ON AG	442,434		22,111,722
RWE AG	97,801		9,272,892

			31,384,614

HONG KONG – 2.44%
CLP Holdings Ltd.^a	420,500		3,376,738
Hong Kong and China Gas Co. Ltd. (The)	924,550		2,090,980

			5,467,718

ITALY – 3.90%
Enel SpA	926,184		7,662,680
Snam Rete Gas SpA	179,508		1,076,663

			8,739,343

JAPAN – 8.15%
Chubu Electric Power Co. Inc.	142,900		3,344,855
Kansai Electric Power Co. Inc. (The)	159,600		3,532,803


Security	Shares	Value
Kyushu Electric Power Co. Inc.	84,000	$	1,740,687
Osaka Gas Co. Ltd.	420,000		1,432,110
Tokyo Electric Power Co. Inc. (The)	252,000		6,147,789
Tokyo Gas Co. Ltd.	504,000		2,074,582

			18,272,826

PORTUGAL – 0.96%
Energias de Portugal SA	522,152		2,155,582

			2,155,582

SPAIN – 8.12%
Acciona SA	6,048		903,053
Gas Natural SDG SA	59,006		2,161,583
Iberdrola SA	1,103,172		11,063,934
Red Electrica Corporacion SA	24,108		1,213,999
Union Fenosa SA	118,255		2,863,683

			18,206,252

UNITED KINGDOM – 11.51%
British Energy Group PLC	227,976		3,088,304
Centrica PLC	817,626		4,576,165
Drax Group PLC	74,928		1,004,337
International Power PLC	331,548		2,137,826
National Grid PLC	546,336		6,953,050
Scottish & Southern Energy PLC	192,791		4,903,747
Severn Trent PLC	52,500		1,267,055
United Utilities Group PLC	151,368		1,875,151

			25,805,635

UNITED STATES – 35.54%
AES Corp. (The)^b	148,176		1,732,177
Allegheny Energy Inc.	37,044		1,362,108
Ameren Corp.	46,704		1,822,857
American Electric Power Co. Inc.	88,872		3,290,930
CenterPoint Energy Inc.	75,628		1,101,900
CMS Energy Corp.	49,812		621,156
Consolidated Edison Inc.	60,655		2,605,739
Constellation Energy Group Inc.	16,212		393,952
Dominion Resources Inc.	128,448		5,495,005
DTE Energy Co.	36,547		1,466,266
Duke Energy Corp.	280,492		4,888,975
Dynegy Inc. Class A^b	114,997		411,689
Edison International	72,072		2,875,673
Entergy Corp.	42,336		3,768,327
Exelon Corp.	145,581		9,116,282


58		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments (Unaudited) (Continued)

iSHARES^® S&P GLOBAL UTILITIES SECTOR INDEX FUND

September 30, 2008


Security	Shares	Value
FirstEnergy Corp.	67,284	$	4,507,355
FPL Group Inc.	90,474		4,550,842
Integrys Energy Group Inc.	16,901		844,036
Nicor Inc.	9,828		435,872
NiSource Inc.	60,964		899,829
Pepco Holdings Inc.	45,121		1,033,722
PG&E Corp.	79,128		2,963,344
Pinnacle West Capital Corp.	22,596		777,528
PPL Corp.	82,918		3,069,624
Progress Energy Inc.	57,960		2,499,815
Public Service Enterprise Group Inc.	112,904		3,702,122
Questar Corp.	38,388		1,570,837
Sempra Energy	55,043		2,778,020
Southern Co. (The)	170,445		6,424,072
TECO Energy Inc.	46,809		736,305
Xcel Energy Inc.	98,740		1,973,813

			79,720,172


TOTAL COMMON STOCKS
(Cost: $276,465,029)			221,264,707

PREFERRED STOCKS – 0.91%

BRAZIL – 0.91%
Centrais Eletricas Brasileiras SA ADR	39,001		484,845
Companhia Energetica de Minas Gerais SP ADR^a	62,412		1,232,013
Companhia Paranaense de Energia SP ADR	23,107		317,028

			2,033,886

TOTAL PREFERRED STOCKS
(Cost: $2,050,012)			2,033,886


Security	Shares	Value
SHORT-TERM INVESTMENTS – 1.56%

MONEY MARKET FUNDS – 1.56%
Barclays Global Investors Funds Treasury Money Market Fund, Institutional Shares 0.47%^c,d	251,000	$	251,000
BGI Cash Premier Fund LLC 2.67%^c,d,e	3,241,000		3,241,000

			3,492,000

TOTAL SHORT-TERM INVESTMENTS
(Cost: $3,492,000)			3,492,000

TOTAL INVESTMENTS IN SECURITIES – 101.12%
(Cost: $282,007,041)			226,790,593
Other Assets, Less Liabilities – (1.12)%			(2,506,044	)

NET ASSETS – 100.00%		$	224,284,549

ADR – American Depositary Receipts

SP ADR – Sponsored American Depositary Receipts

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

^b	Non-income earning security.

^c	Affiliated issuer. See Note 2.

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

^e	This security represents an investment of securities lending collateral. See Note 5.

See notes to financial statements.


SCHEDULES OF INVESTMENTS		59

Statements of Assets and Liabilities (Unaudited)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	Global 100 Index Fund			Global Clean Energy Index Fund			Global Consumer Discretionary Sector Index Fund			Global Consumer Staples Sector Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	1,080,895,313		$	14,752,517		$	26,194,462		$	234,971,733
Affiliated issuers (Note 2)		20,308,027			1,259,045			293,180			590,785

Total cost of investments	$	1,101,203,340		$	16,011,562		$	26,487,642		$	235,562,518

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	883,247,174		$	10,803,124		$	20,577,435		$	213,276,650
Affiliated issuers (Note 2)		15,540,387			1,259,045			293,180			590,785

Total fair value of investments		898,787,561			12,062,169			20,870,615			213,867,435
Foreign currencies, at value^b		386,636			27,814			9,704			251,285
Receivables:
Investment securities sold		2,768,133			–			19,655			–
Dividends and interest		2,771,218			2,614			58,937			830,224

Total Assets		904,713,548			12,092,597			20,958,911			214,948,944


LIABILITIES
Payables:
Investment securities purchased		1,519,259			23,384			–			–
Securities related to in-kind transactions (Note 4)		97,905			–			–			–
Collateral for securities on loan (Note 5)		9,473,278			1,251,300			290,768			485,062
Investment advisory fees (Note 2)		326,350			4,699			8,818			87,198

Total Liabilities		11,416,792			1,279,383			299,586			572,260


NET ASSETS	$	893,296,756		$	10,813,214		$	20,659,325		$	214,376,684


Net assets consist of:
Paid-in capital	$	1,061,725,557		$	14,770,945		$	26,376,320		$	232,530,852
Undistributed net investment income (accumulated net investment loss)		7,429,657			(1,002	)		89,702			1,327,770
Undistributed net realized gain (accumulated net realized loss)		26,652,559			(7,376	)		(188,928	)		2,244,454
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(202,511,017	)		(3,949,353	)		(5,617,769	)		(21,726,392	)


NET ASSETS	$	893,296,756		$	10,813,214		$	20,659,325		$	214,376,684


Shares outstanding^c		14,550,000			300,000			500,000			3,900,000

Net asset value per share	$	61.39		$	36.04		$	41.32		$	54.97

^a	Securities on loan with market values of $8,934,221, $1,210,328, $265,810 and $465,273, respectively. See Note 5.

^b	Cost of foreign currencies: $403,457, $28,006, $9,931 and $258,253, respectively.

^c	No par value, unlimited number of shares authorized.

See notes to financial statements.


60		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	Global Energy Sector Index Fund			Global Financials Sector Index Fund			Global Healthcare Sector Index Fund			Global Industrials Sector Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	756,128,912		$	357,801,521		$	747,560,831		$	149,441,754
Affiliated issuers (Note 2)		594,533			8,537,642			10,161,763			629,688

Total cost of investments	$	756,723,445		$	366,339,163		$	757,722,594		$	150,071,442

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	719,425,127		$	267,503,555		$	673,199,178		$	102,889,855
Affiliated issuers (Note 2)		594,533			6,687,147			10,161,763			629,688

Total fair value of investments		720,019,660			274,190,702			683,360,941			103,519,543
Foreign currencies, at value^b		1,582,649			206,744			471,451			69,274
Receivables:
Investment securities sold		–			579,378			120,646			194,731
Due from custodian (Note 4)		58,029			37,765			–			–
Dividends and interest		695,957			985,100			1,427,901			415,056

Total Assets		722,356,295			275,999,689			685,380,939			104,198,604


LIABILITIES
Payables:
Investment securities purchased		58,029			840,037			–			147,156
Securities related to in-kind transactions (Note 4)		–			–			120,646			–
Collateral for securities on loan (Note 5)		–			3,642,923			9,865,542			619,481
Capital shares redeemed		–			–			12,512			–
Investment advisory fees (Note 2)		310,214			114,124			271,992			49,271

Total Liabilities		368,243			4,597,084			10,270,692			815,908


NET ASSETS	$	721,988,052		$	271,402,605		$	675,110,247		$	103,382,696


Net assets consist of:
Paid-in capital	$	698,240,548		$	377,160,921		$	758,223,910		$	158,447,032
Undistributed net investment income		4,108,526			1,735,261			2,225,127			711,509
Undistributed net realized gain (accumulated net realized loss)		56,384,765			(15,302,309	)		(10,896,502	)		(9,220,351	)
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(36,745,787	)		(92,191,268	)		(74,442,288	)		(46,555,494	)


NET ASSETS	$	721,988,052		$	271,402,605		$	675,110,247		$	103,382,696


Shares outstanding^c		19,500,000	^d		5,000,000			13,400,000			2,250,000

Net asset value per share	$	37.03	^d	$	54.28		$	50.38		$	45.95

^a	Securities on loan with market values of $–, $3,260,323, $9,370,535 and $558,149, respectively. See Note 5.

^b	Cost of foreign currencies: $1,613,319, $214,079, $486,588 and $70,480, respectively.

^c	No par value, unlimited number of shares authorized.

^d	Shares outstanding and net asset value per share reflect a three-for-one stock split effective July 24, 2008. See Note 4.

See notes to financial statements.


FINANCIAL STATEMENTS		61

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	Global Infrastructure Index Fund			Global Materials Sector Index Fund			Global Nuclear Energy Index Fund			Global Technology Sector Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	179,943,376		$	462,604,540		$	6,568,778		$	498,923,169
Affiliated issuers (Note 2)		1,239,733			4,653,249			44,202			7,851,853

Total cost of investments	$	181,183,109		$	467,257,789		$	6,612,980		$	506,775,022

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	146,138,539		$	296,417,949		$	4,830,153		$	385,851,079
Affiliated issuers (Note 2)		1,239,733			4,653,249			44,202			7,851,853

Total fair value of investments		147,378,272			301,071,198			4,874,355			393,702,932
Foreign currencies, at value^b		206,976			2,165,155			7,584			145,520
Receivables:
Due from bank		–			23,768			–			–
Investment securities sold		12,306,108			–			–			1,416,143
Due from custodian (Note 4)		–			–			–			1,816,079
Dividends and interest		275,051			973,002			7,486			426,860

Total Assets		160,166,407			304,233,123			4,889,425			397,507,534


LIABILITIES
Payables:
Investment securities purchased		11,908,397			1,345,977			4,879			2,818,031
Securities related to in-kind transactions (Note 4)		–			–			–			486,065
Collateral for securities on loan (Note 5)		1,091,900			4,528,028			44,000			7,507,291
Capital shares redeemed		–			23,434			–			–
Investment advisory fees (Note 2)		58,688			141,204			1,658			167,871

Total Liabilities		13,058,985			6,038,643			50,537			10,979,258


NET ASSETS	$	147,107,422		$	298,194,480		$	4,838,888		$	386,528,276


Net assets consist of:
Paid-in capital	$	182,568,236		$	460,280,663		$	6,559,344		$	496,023,619
Undistributed net investment income		1,717,145			2,371,412			15,072			1,191,654
Undistributed net realized gain (accumulated net realized loss)		(3,359,691	)		1,785,473			3,152			2,392,479
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(33,818,268	)		(166,243,068	)		(1,738,680	)		(113,079,476	)


NET ASSETS	$	147,107,422		$	298,194,480		$	4,838,888		$	386,528,276


Shares outstanding^c		4,100,000			5,550,000			140,000			7,950,000

Net asset value per share	$	35.88		$	53.73		$	34.56		$	48.62

^a	Securities on loan with market values of $1,030,818, $4,383,344, $42,592 and $7,154,434, respectively. See Note 5.

^b	Cost of foreign currencies: $213,906, $2,297,809, $7,891 and $151,730, respectively.

^c	No par value, unlimited number of shares authorized.

See notes to financial statements.


62		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities (Unaudited) (Continued)

iSHARES^® TRUST

September 30, 2008


	iShares S&P
	Global Telecommunications Sector Index Fund			Global Timber & Forestry Index Fund			Global Utilities Sector Index Fund

ASSETS
Investments, at cost:
Unaffiliated issuers	$	312,841,953		$	21,069,281		$	278,515,041
Affiliated issuers (Note 2)		1,767,918			102,767			3,492,000

Total cost of investments	$	314,609,871		$	21,172,048		$	282,007,041

Investments in securities, at fair value (including securities on loan^a) (Note 1):
Unaffiliated issuers	$	226,590,041		$	19,902,185		$	223,298,593
Affiliated issuers (Note 2)		1,767,918			102,767			3,492,000

Total fair value of investments		228,357,959			20,004,952			226,790,593
Foreign currencies, at value^b		577,208			13,677			370,906
Receivables:
Investment securities sold		–			1,570,552			770,743
Due from custodian (Note 4)		13,671			83,527			–
Dividends and interest		443,579			42,889			590,402

Total Assets		229,392,417			21,715,597			228,522,644


LIABILITIES
Payables:
Investment securities purchased		341,191			1,605,539			903,876
Collateral for securities on loan (Note 5)		1,530,121			74,000			3,241,000
Investment advisory fees (Note 2)		94,986			6,666			93,219

Total Liabilities		1,966,298			1,686,205			4,238,095


NET ASSETS	$	227,426,119		$	20,029,392		$	224,284,549


Net assets consist of:
Paid-in capital	$	310,483,306		$	21,252,813		$	273,797,308
Undistributed net investment income		2,696,502			84,927			4,822,487
Undistributed net realized gain (accumulated net realized loss)		527,854			(140,384	)		908,695
Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies		(86,281,543	)		(1,167,964	)		(55,243,941	)


NET ASSETS	$	227,426,119		$	20,029,392		$	224,284,549


Shares outstanding^c		4,200,000			450,000			4,200,000

Net asset value per share	$	54.15		$	44.51		$	53.40

^a	Securities on loan with market values of $1,498,095, $37,142 and $3,127,289, respectively. See Note 5.

^b	Cost of foreign currencies: $597,842, $14,019 and $385,959, respectively.

^c	No par value, unlimited number of shares authorized.

See notes to financial statements.


FINANCIAL STATEMENTS		63

Statements of Operations (Unaudited)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
		Global 100 Index Fund			Global Clean Energy Index Fund	^a		Global Consumer Discretionary Sector Index Fund			Global Consumer Staples Sector Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^b	$	24,512,727		$	7,914		$	384,558		$	4,190,737
Dividends from affiliated issuers (Note 2)		243,638			–			–			–
Interest from affiliated issuers (Note 2)		16,498			62			240			3,021
Securities lending income from affiliated issuers (Note 2)		31,508			2,546			3,439			1,702

Total investment income		24,804,371			10,522			388,237			4,195,460


EXPENSES
Investment advisory fees (Note 2)		2,370,012			11,524			59,112			664,816

Total expenses		2,370,012			11,524			59,112			664,816

Net investment income (loss)		22,434,359			(1,002	)		329,125			3,530,644


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(33,088,817	)		(6,616	)		(279,453	)		(1,236,733	)
Investments in affiliated issuers (Note 2)		(101,712	)		–			–			–
In-kind redemptions		69,927,473			–			556,202			4,080,446
Foreign currency transactions		(91,549	)		(760	)		(4,906	)		(54,462	)

Net realized gain (loss)		36,645,395			(7,376	)		271,843			2,789,251

Net change in unrealized appreciation (depreciation) on:
Investments		(247,197,078	)		(3,949,393	)		(4,497,255	)		(29,617,971	)
Translation of assets and liabilities in foreign currencies		(160,840	)		40			(622	)		(37,241	)

Net change in unrealized appreciation (depreciation)		(247,357,918	)		(3,949,353	)		(4,497,877	)		(29,655,212	)

Net realized and unrealized loss		(210,712,523	)		(3,956,729	)		(4,226,034	)		(26,865,961	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(188,278,164	)	$	(3,957,731	)	$	(3,896,909	)	$	(23,335,317	)

^a	For the period from June 24, 2008 (commencement of operations) to September 30, 2008.

^b	Net of foreign withholding tax of $2,141,744, $1,032, $35,752 and $230,085, respectively.

See notes to financial statements.


64		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
	Global Energy Sector Index Fund			Global Financials Sector Index Fund			Global Healthcare Sector Index Fund			Global Industrials Sector Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^a	$	12,128,864		$	6,873,607		$	6,412,660		$	2,155,442
Dividends from affiliated issuers (Note 2)		–			99,794			–			–
Interest from affiliated issuers (Note 2)		11,371			3,975			8,445			1,569
Securities lending income from affiliated issuers (Note 2)		7,416			44,070			3,142			11,859

Total investment income		12,147,651			7,021,446			6,424,247			2,168,870


EXPENSES
Investment advisory fees (Note 2)		2,314,592			695,926			1,496,513			368,724

Total expenses		2,314,592			695,926			1,496,513			368,724

Net investment income		9,833,059			6,325,520			4,927,734			1,800,146


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(6,051,380	)		(13,444,744	)		(9,018,541	)		(1,873,845	)
Investments in affiliated issuers (Note 2)		–			(116,852	)		–			–
In-kind redemptions		69,444,234			2,994,506			9,015,888			(5,468,940	)
Foreign currency transactions		(82,557	)		(9,847	)		29,923			(25,641	)

Net realized gain (loss)		63,310,297			(10,576,937	)		27,270			(7,368,426	)

Net change in unrealized appreciation (depreciation) on:
Investments		(185,022,060	)		(69,070,523	)		(32,278,065	)		(27,385,528	)
Translation of assets and liabilities in foreign currencies		(45,616	)		(60,595	)		(182,109	)		(5,325	)

Net change in unrealized appreciation (depreciation)		(185,067,676	)		(69,131,118	)		(32,460,174	)		(27,390,853	)

Net realized and unrealized loss		(121,757,379	)		(79,708,055	)		(32,432,904	)		(34,759,279	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(111,924,320	)	$	(73,382,535	)	$	(27,505,170	)	$	(32,959,133	)

^a	Net of foreign withholding tax of $920,582, $603,846, $191,932 and $135,000, respectively.

See notes to financial statements.


FINANCIAL STATEMENTS		65

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
		Global Infrastructure Index Fund			Global Materials Sector Index Fund			Global Nuclear Energy Index Fund	^a		Global Technology Sector Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^b	$	2,855,711		$	5,973,001		$	20,864		$	3,075,080
Interest from affiliated issuers (Note 2)		1,314			4,938			15			5,129
Securities lending income from affiliated issuers (Note 2)		5,794			27,660			27			8,944

Total investment income		2,862,819			6,005,599			20,906			3,089,153


EXPENSES
Investment advisory fees (Note 2)		272,376			1,179,839			5,834			971,828

Total expenses		272,376			1,179,839			5,834			971,828

Net investment income		2,590,443			4,825,760			15,072			2,117,325


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(3,149,087	)		(3,653,816	)		3,338			(8,948,308	)
In-kind redemptions		–			7,974,951			–			16,979,443
Foreign currency transactions		(63,181	)		(43,497	)		(186	)		(17,560	)

Net realized gain (loss)		(3,212,268	)		4,277,638			3,152			8,013,575

Net change in unrealized appreciation (depreciation) on:
Investments		(31,914,727	)		(173,794,522	)		(1,738,625	)		(69,026,410	)
Translation of assets and liabilities in foreign currencies		(13,103	)		(66,025	)		(55	)		(14,324	)

Net change in unrealized appreciation (depreciation)		(31,927,830	)		(173,860,547	)		(1,738,680	)		(69,040,734	)

Net realized and unrealized loss		(35,140,098	)		(169,582,909	)		(1,735,528	)		(61,027,159	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(32,549,655	)	$	(164,757,149	)	$	(1,720,456	)	$	(58,909,834	)

^a	For the period from June 24, 2008 (commencement of operations) to September 30, 2008.

^b	Net of foreign withholding tax of $172,707, $605,362, $1,297 and $232,044, respectively.

See notes to financial statements.


66		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations (Unaudited) (Continued)

iSHARES^® TRUST

Six months ended September 30, 2008


	iShares S&P
		Global Telecommunications Sector Index Fund			Global Timber & Forestry Index Fund	^a		Global Utilities Sector Index Fund

NET INVESTMENT INCOME
Dividends from unaffiliated issuers^b	$	11,035,882		$	100,144		$	9,004,762
Interest from affiliated issuers (Note 2)		5,547			136			3,597
Securities lending income from affiliated issuers (Note 2)		20,322			97			19,456

Total investment income		11,061,751			100,377			9,027,815


EXPENSES
Investment advisory fees (Note 2)		885,782			15,450			661,067

Total expenses		885,782			15,450			661,067

Net investment income		10,175,969			84,927			8,366,748


NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments in unaffiliated issuers		(4,426,878	)		(141,458	)		(3,702,023	)
In-kind redemptions		8,513,533			–			5,739,640
Foreign currency transactions		5,773			1,074			(73,375	)

Net realized gain (loss)		4,092,428			(140,384	)		1,964,242

Net change in unrealized appreciation (depreciation) on:
Investments		(70,135,643	)		(1,167,096	)		(48,304,351	)
Translation of assets and liabilities in foreign currencies		(26,143	)		(868	)		(25,069	)

Net change in unrealized appreciation (depreciation)		(70,161,786	)		(1,167,964	)		(48,329,420	)

Net realized and unrealized loss		(66,069,358	)		(1,308,348	)		(46,365,178	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(55,893,389	)	$	(1,223,421	)	$	(37,998,430	)

^a	For the period from June 24, 2008 (commencement of operations) to September 30, 2008.

^b	Net of foreign withholding tax of $917,072, $5,214 and $567,387, respectively.

See notes to financial statements.


FINANCIAL STATEMENTS		67

Statements of Changes in Net Assets

iSHARES^® TRUST


	iShares S&P Global 100 Index Fund						iShares S&P Global Clean Energy Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Period from June 24, 2008^a to September 30, 2008 (Unaudited)

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income (loss)	$	22,434,359		$	18,675,231		$	(1,002	)
Net realized gain (loss)		36,645,395			14,638,635			(7,376	)
Net change in unrealized appreciation (depreciation)		(247,357,918	)		(54,413,783	)		(3,949,353	)

Net decrease in net assets resulting from operations		(188,278,164	)		(21,099,917	)		(3,957,731	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(20,317,758	)		(16,722,739	)		–

Total distributions to shareholders		(20,317,758	)		(16,722,739	)		–


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		516,478,852			335,969,031			14,770,945
Cost of shares redeemed		(356,587,061	)		(36,919,051	)		–

Net increase in net assets from capital share transactions		159,891,791			299,049,980			14,770,945

INCREASE (DECREASE) IN NET ASSETS		(48,704,131	)		261,227,324			10,813,214

NET ASSETS
Beginning of period		942,000,887			680,773,563			–

End of period	$	893,296,756		$	942,000,887		$	10,813,214

Undistributed net investment income (accumulated net investment loss) included in net assets at end of period	$	7,429,657		$	5,313,056		$	(1,002	)


SHARES ISSUED AND REDEEMED
Shares sold		6,750,000			4,200,000			300,000
Shares redeemed		(5,100,000	)		(500,000	)		–

Net increase in shares outstanding		1,650,000			3,700,000			300,000

^a	Commencement of operations.

See notes to financial statements.


68		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Consumer Discretionary Sector Index Fund						iShares S&P Global Consumer Staples Sector Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	329,125		$	468,207		$	3,530,644		$	2,136,983
Net realized gain		271,843			632,034			2,789,251			189,590
Net change in unrealized appreciation (depreciation)		(4,497,877	)		(5,100,700	)		(29,655,212	)		5,380,990

Net increase (decrease) in net assets resulting from operations		(3,896,909	)		(4,000,459	)		(23,335,317	)		7,707,563


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(380,367	)		(426,683	)		(3,426,409	)		(1,019,689	)

Total distributions to shareholders		(380,367	)		(426,683	)		(3,426,409	)		(1,019,689	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		–			10,356,629			–			274,798,336
Cost of shares redeemed		(5,076,459	)		(8,314,177	)		(67,814,971	)		(3,111,484	)

Net increase (decrease) in net assets from capital share transactions		(5,076,459	)		2,042,452			(67,814,971	)		271,686,852

INCREASE (DECREASE) IN NET ASSETS		(9,353,735	)		(2,384,690	)		(94,576,697	)		278,374,726

NET ASSETS
Beginning of period		30,013,060			32,397,750			308,953,381			30,578,655

End of period	$	20,659,325		$	30,013,060		$	214,376,684		$	308,953,381

Undistributed net investment income included in net assets at end of period	$	89,702		$	140,944		$	1,327,770		$	1,223,535


SHARES ISSUED AND REDEEMED
Shares sold		–			200,000			–			4,600,000
Shares redeemed		(100,000	)		(150,000	)		(1,200,000	)		(50,000	)

Net increase (decrease) in shares outstanding		(100,000	)		50,000			(1,200,000	)		4,550,000

See notes to financial statements.


FINANCIAL STATEMENTS		69

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Energy Sector Index Fund						iShares S&P Global Financials Sector Index Fund
	Six months ended September 30, 2008^a (Unaudited)			Year ended March 31, 2008^a			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	9,833,059		$	21,243,787		$	6,325,520		$	8,036,506
Net realized gain (loss)		63,310,297			61,899,117			(10,576,937	)		11,934,454
Net change in unrealized appreciation (depreciation)		(185,067,676	)		51,125,350			(69,131,118	)		(71,154,226	)

Net increase (decrease) in net assets resulting from operations		(111,924,320	)		134,268,254			(73,382,535	)		(51,183,266	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(8,669,789	)		(20,736,029	)		(5,896,587	)		(8,478,329	)

Total distributions to shareholders		(8,669,789	)		(20,736,029	)		(5,896,587	)		(8,478,329	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		138,400,771			270,063,538			141,805,608			24,924,901
Cost of shares redeemed		(229,720,897	)		(206,368,029	)		(29,132,634	)		(48,485,315	)

Net increase (decrease) in net assets from capital share transactions		(91,320,126	)		63,695,509			112,672,974			(23,560,414	)

INCREASE (DECREASE) IN NET ASSETS		(211,914,235	)		177,227,734			33,393,852			(83,222,009	)

NET ASSETS
Beginning of period		933,902,287			756,674,553			238,008,753			321,230,762

End of period	$	721,988,052		$	933,902,287		$	271,402,605		$	238,008,753

Undistributed net investment income included in net assets at end of period	$	4,108,526		$	2,945,256		$	1,735,261		$	1,306,328


SHARES ISSUED AND REDEEMED
Shares sold		2,850,000			6,150,000			2,100,000			350,000
Shares redeemed		(4,950,000	)		(4,950,000	)		(500,000	)		(550,000	)

Net increase (decrease) in shares outstanding		(2,100,000	)		1,200,000			1,600,000			(200,000	)

^a	Share transactions were adjusted to reflect a three-for-one stock split effective July 24, 2008. See Note 4.

See notes to financial statements.


70		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Healthcare Sector Index Fund						iShares S&P Global Industrials Sector Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	4,927,734		$	12,076,643		$	1,800,146		$	2,046,648
Net realized gain (loss)		27,270			47,329,175			(7,368,426	)		1,728,104
Net change in unrealized appreciation (depreciation)		(32,460,174	)		(100,171,514	)		(27,390,853	)		(21,173,937	)

Net decrease in net assets resulting from operations		(27,505,170	)		(40,765,696	)		(32,959,133	)		(17,399,185	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(7,560,719	)		(12,195,867	)		(2,056,133	)		(1,229,349	)

Total distributions to shareholders		(7,560,719	)		(12,195,867	)		(2,056,133	)		(1,229,349	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		177,206,529			104,144,805			–			227,635,677
Cost of shares redeemed		(89,065,660	)		(229,634,435	)		(37,498,961	)		(50,583,806	)

Net increase (decrease) in net assets from capital share transactions		88,140,869			(125,489,630	)		(37,498,961	)		177,051,871

INCREASE (DECREASE) IN NET ASSETS		53,074,980			(178,451,193	)		(72,514,227	)		158,423,337

NET ASSETS
Beginning of period		622,035,267			800,486,460			175,896,923			17,473,586

End of period	$	675,110,247		$	622,035,267		$	103,382,696		$	175,896,923

Undistributed net investment income included in net assets at end of period	$	2,225,127		$	4,858,112		$	711,509		$	967,496


SHARES ISSUED AND REDEEMED
Shares sold		3,300,000			1,750,000			–			3,500,000
Shares redeemed		(1,700,000	)		(3,850,000	)		(700,000	)		(850,000	)

Net increase (decrease) in shares outstanding		1,600,000			(2,100,000	)		(700,000	)		2,650,000

See notes to financial statements.


FINANCIAL STATEMENTS		71

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Infrastructure Index Fund						iShares S&P Global Materials Sector Index Fund
	Six months ended September 30, 2008 (Unaudited)			Period from December 10, 2007^a to March 31, 2008			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	2,590,443		$	116,628		$	4,825,760		$	4,166,398
Net realized gain (loss)		(3,212,268	)		(145,628	)		4,277,638			17,736,069
Net change in unrealized appreciation (depreciation)		(31,927,830	)		(1,890,438	)		(173,860,547	)		1,077,229

Net increase (decrease) in net assets resulting from operations		(32,549,655	)		(1,919,438	)		(164,757,149	)		22,979,696


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(973,684	)		(18,037	)		(4,414,320	)		(2,604,122	)

Total distributions to shareholders		(973,684	)		(18,037	)		(4,414,320	)		(2,604,122	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		131,339,105			51,229,131			245,088,813			383,371,570
Cost of shares redeemed		–			–			(168,472,108	)		(87,788,731	)

Net increase in net assets from capital share transactions		131,339,105			51,229,131			76,616,705			295,582,839

INCREASE (DECREASE) IN NET ASSETS		97,815,766			49,291,656			(92,554,764	)		315,958,413

NET ASSETS
Beginning of period		49,291,656			–			390,749,244			74,790,831

End of period	$	147,107,422		$	49,291,656		$	298,194,480		$	390,749,244

Undistributed net investment income included in net assets at end of period	$	1,717,145		$	100,386		$	2,371,412		$	1,959,972


SHARES ISSUED AND REDEEMED
Shares sold		3,000,000			1,100,000			2,900,000			5,150,000
Shares redeemed		–			–			(2,500,000	)		(1,200,000	)

Net increase in shares outstanding		3,000,000			1,100,000			400,000			3,950,000

^a	Commencement of operations.

See notes to financial statements.


72		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Nuclear Energy Index Fund			iShares S&P Global Technology Sector Index Fund
	Period from June 24, 2008^a to September 30, 2008 (Unaudited)			Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	15,072		$	2,117,325		$	1,965,515
Net realized gain		3,152			8,013,575			7,620,651
Net change in unrealized appreciation (depreciation)		(1,738,680	)		(69,040,734	)		(46,990,969	)

Net decrease in net assets resulting from operations		(1,720,456	)		(58,909,834	)		(37,404,803	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		–			(1,332,071	)		(1,664,421	)

Total distributions to shareholders		–			(1,332,071	)		(1,664,421	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		6,559,344			182,485,678			317,562,536
Cost of shares redeemed		–			(131,186,572	)		(80,214,152	)

Net increase in net assets from capital share transactions		6,559,344			51,299,106			237,348,384

INCREASE (DECREASE) IN NET ASSETS		4,838,888			(8,942,799	)		198,279,160

NET ASSETS
Beginning of period		–			395,471,075			197,191,915

End of period	$	4,838,888		$	386,528,276		$	395,471,075

Undistributed net investment income included in net assets at end of period	$	15,072		$	1,191,654		$	406,400


SHARES ISSUED AND REDEEMED
Shares sold		140,000			3,250,000			4,950,000
Shares redeemed		–			(2,300,000	)		(1,400,000	)

Net increase in shares outstanding		140,000			950,000			3,550,000

^a	Commencement of operations.

See notes to financial statements.


FINANCIAL STATEMENTS		73

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Telecommunications Sector Index Fund						iShares S&P Global Timber & Forestry Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008			Period from June 24, 2008^a to September 30, 2008 (Unaudited)

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	10,175,969		$	12,216,708		$	84,927
Net realized gain (loss)		4,092,428			23,756,267			(140,384	)
Net change in unrealized appreciation (depreciation)		(70,161,786	)		(49,861,020	)		(1,167,964	)

Net decrease in net assets resulting from operations		(55,893,389	)		(13,888,045	)		(1,223,421	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(9,354,455	)		(11,105,395	)		–

Total distributions to shareholders		(9,354,455	)		(11,105,395	)		–


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		45,583,240			334,858,071			21,252,813
Cost of shares redeemed		(212,583,892	)		(82,427,565	)		–

Net increase (decrease) in net assets from capital share transactions		(167,000,652	)		252,430,506			21,252,813

INCREASE (DECREASE) IN NET ASSETS		(232,248,496	)		227,437,066			20,029,392

NET ASSETS
Beginning of period		459,674,615			232,237,549			–

End of period	$	227,426,119		$	459,674,615		$	20,029,392

Undistributed net investment income included in net assets at end of period	$	2,696,502		$	1,874,988		$	84,927


SHARES ISSUED AND REDEEMED
Shares sold		700,000			4,500,000			450,000
Shares redeemed		(3,350,000	)		(1,200,000	)		–

Net increase (decrease) in shares outstanding		(2,650,000	)		3,300,000			450,000

^a	Commencement of operations.

See notes to financial statements.


74		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets (Continued)

iSHARES^® TRUST


	iShares S&P Global Utilities Sector Index Fund
	Six months ended September 30, 2008 (Unaudited)			Year ended March 31, 2008

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
Net investment income	$	8,366,748		$	2,340,564
Net realized gain (loss)		1,964,242			(16,471	)
Net change in unrealized appreciation (depreciation)		(48,329,420	)		(10,092,487	)

Net decrease in net assets resulting from operations		(37,998,430	)		(7,768,394	)


DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income		(4,603,323	)		(1,398,624	)

Total distributions to shareholders		(4,603,323	)		(1,398,624	)


CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold		9,953,090			287,063,866
Cost of shares redeemed		(41,601,761	)		(6,472,600	)

Net increase (decrease) in net assets from capital share transactions		(31,648,671	)		280,591,266

INCREASE (DECREASE) IN NET ASSETS		(74,250,424	)		271,424,248

NET ASSETS
Beginning of period		298,534,973			27,110,725

End of period	$	224,284,549		$	298,534,973

Undistributed net investment income included in net assets at end of period	$	4,822,487		$	1,059,062


SHARES ISSUED AND REDEEMED
Shares sold		150,000			4,350,000
Shares redeemed		(650,000	)		(100,000	)

Net increase (decrease) in shares outstanding		(500,000	)		4,250,000

See notes to financial statements.


FINANCIAL STATEMENTS		75

Financial Highlights

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global 100 Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	73.02		$	74.00		$	65.76		$	60.67		$	57.20		$	42.03


Income from investment operations:
Net investment income		1.35	^a		1.70	^a		1.61	^a		1.22			1.04			0.66
Net realized and unrealized gain (loss)^b		(11.83	)		(1.30	)		7.99			5.07			3.46			15.16

Total from investment operations		(10.48	)		0.40			9.60			6.29			4.50			15.82


Less distributions from:
Net investment income		(1.15	)		(1.38	)		(1.36	)		(1.20	)		(1.03	)		(0.65	)

Total distributions		(1.15	)		(1.38	)		(1.36	)		(1.20	)		(1.03	)		(0.65	)

Net asset value, end of period	$	61.39		$	73.02		$	74.00		$	65.76		$	60.67		$	57.20


Total return		(14.53	)%^c		0.37	%		14.60	%		10.44	%		7.85	%		37.68	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	893,297		$	942,001		$	680,774		$	460,329		$	342,782		$	168,736
Ratio of expenses to average net assets^d		0.40	%		0.40	%		0.40	%		0.40	%		0.40	%		0.40	%
Ratio of net investment income to average net assets^d		3.79	%		2.17	%		2.28	%		2.05	%		2.24	%		1.63	%
Portfolio turnover rate^e		4	%		5	%		3	%		6	%		4	%		4	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


76		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)


	iShares S&P Global Clean Energy Index Fund
	Period from Jun. 24, 2008^a to Sep. 30, 2008 (Unaudited)

Net asset value, beginning of period	$	51.82


Income from investment operations:
Net investment loss^b		(0.01	)
Net realized and unrealized loss^c		(15.77	)

Total from investment operations		(15.78	)

Net asset value, end of period	$	36.04


Total return		(30.45	)%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	10,813
Ratio of expenses to average net assets^e		0.48	%
Ratio of net investment loss to average net assets^e		(0.04	)%
Portfolio turnover rate^f		3	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout the period.

^c	The amount reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		77

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Consumer Discretionary Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Sep. 12, 2006^a to Mar. 31, 2007

Net asset value, beginning of period	$	50.02		$	58.91		$	51.03


Income from investment operations:
Net investment income^b		0.64			0.87			0.37
Net realized and unrealized gain (loss)^c		(8.58	)		(8.91	)		7.71

Total from investment operations		(7.94	)		(8.04	)		8.08


Less distributions from:
Net investment income		(0.76	)		(0.85	)		(0.20	)

Total distributions		(0.76	)		(0.85	)		(0.20	)

Net asset value, end of period	$	41.32		$	50.02		$	58.91


Total return		(16.05	)%^d		(13.77	)%		15.85	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	20,659		$	30,013		$	32,398
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		2.67	%		1.52	%		1.19	%
Portfolio turnover rate^f		4	%		6	%		3	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


78		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Consumer Staples Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Sep. 12, 2006^a to Mar. 31, 2007

Net asset value, beginning of period	$	60.58		$	55.60		$	50.56


Income from investment operations:
Net investment income^b		0.75			1.12			0.47
Net realized and unrealized gain (loss)^c		(5.69	)		4.22			4.85

Total from investment operations		(4.94	)		5.34			5.32


Less distributions from:
Net investment income		(0.67	)		(0.36	)		(0.28	)

Total distributions		(0.67	)		(0.36	)		(0.28	)

Net asset value, end of period	$	54.97		$	60.58		$	55.60


Total return		(8.18	)%^d		9.59	%		10.54	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	214,377		$	308,953		$	30,579
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		2.55	%		1.89	%		1.64	%
Portfolio turnover rate^f		5	%		5	%		2	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		79

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Energy Sector Index Fund
	Six months ended Sep. 30, 2008^a (Unaudited)			Year ended Mar. 31, 2008^a			Year ended Mar. 31, 2007^a			Year ended Mar. 31, 2006^a			Year ended Mar. 31, 2005^a			Year ended Mar. 31, 2004^a

Net asset value, beginning of period	$	43.24		$	37.09		$	33.85		$	27.63		$	20.02		$	14.82


Income from investment operations:
Net investment income		0.47	^b		1.02	^b		0.62	^b		0.46	^b		0.44			0.23
Net realized and unrealized gain (loss)^c		(6.28	)		6.06			3.22			6.13			7.59			5.18

Total from investment operations		(5.81	)		7.08			3.84			6.59			8.03			5.41


Less distributions from:
Net investment income		(0.40	)		(0.93	)		(0.60	)		(0.37	)		(0.42	)		(0.21	)

Total distributions		(0.40	)		(0.93	)		(0.60	)		(0.37	)		(0.42	)		(0.21	)

Net asset value, end of period	$	37.03		$	43.24		$	37.09		$	33.85		$	27.63		$	20.02


Total return		(13.68	)%^d		18.87	%		11.37	%		23.91	%		40.40	%		36.55	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	721,988		$	933,902		$	756,675		$	685,415		$	323,296		$	90,100
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.49	%		0.65	%		0.65	%		0.65	%
Ratio of net investment income to average net assets^e		2.04	%		2.34	%		1.73	%		1.46	%		2.00	%		1.92	%
Portfolio turnover rate^f		3	%		6	%		10	%		5	%		5	%		4	%

^a	Per share amounts were adjusted to reflect a three-for-one stock split effective July 24, 2008. See Note 4.

^b	Based on average shares outstanding throughout the period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


80		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Financials Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	70.00		$	89.23		$	78.83		$	64.22		$	60.26		$	39.98


Income from investment operations:
Net investment income		1.42	^a		2.43	^a		1.81	^a		1.52	^a		0.86			1.38
Net realized and unrealized gain (loss)^b		(15.78	)		(18.88	)		9.80			14.29			4.00			20.21

Total from investment operations		(14.36	)		(16.45	)		11.61			15.81			4.86			21.59


Less distributions from:
Net investment income		(1.36	)		(2.78	)		(1.21	)		(1.20	)		(0.90	)		(1.31	)

Total distributions		(1.36	)		(2.78	)		(1.21	)		(1.20	)		(0.90	)		(1.31	)

Net asset value, end of period	$	54.28		$	70.00		$	89.23		$	78.83		$	64.22		$	60.26


Total return		(20.77	)%^c		(18.81	)%		14.74	%		24.73	%		8.02	%		54.23	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	271,403		$	238,009		$	321,231		$	141,895		$	70,642		$	30,129
Ratio of expenses to average net assets^d		0.48	%		0.48	%		0.49	%		0.65	%		0.65	%		0.65	%
Ratio of net investment income to average net assets^d		4.36	%		2.85	%		2.13	%		2.17	%		2.11	%		2.14	%
Portfolio turnover rate^e		7	%		9	%		5	%		7	%		5	%		8	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		81

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Healthcare Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	52.71		$	57.59		$	53.67		$	48.13		$	46.66		$	39.81


Income from investment operations:
Net investment income		0.42	^a		0.96	^a		0.82	^a		0.53	^a		0.39			0.31
Net realized and unrealized gain (loss)^b		(2.06	)		(4.84	)		3.59			5.38			1.44			6.84

Total from investment operations		(1.64	)		(3.88	)		4.41			5.91			1.83			7.15


Less distributions from:
Net investment income		(0.69	)		(1.00	)		(0.49	)		(0.37	)		(0.36	)		(0.30	)

Total distributions		(0.69	)		(1.00	)		(0.49	)		(0.37	)		(0.36	)		(0.30	)

Net asset value, end of period	$	50.38		$	52.71		$	57.59		$	53.67		$	48.13		$	46.66


Total return		(3.13	)%^c		(6.91	)%		8.22	%		12.28	%		3.93	%		17.98	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	675,110		$	622,035		$	800,486		$	488,414		$	228,613		$	130,656
Ratio of expenses to average net assets^d		0.48	%		0.48	%		0.49	%		0.65	%		0.65	%		0.65	%
Ratio of net investment income to average net assets^d		1.58	%		1.64	%		1.46	%		1.02	%		1.12	%		1.25	%
Portfolio turnover rate^e		5	%		4	%		5	%		5	%		10	%		6	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


82		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Industrials Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Sep. 12, 2006^a to Mar. 31, 2007

Net asset value, beginning of period	$	59.63		$	58.25		$	50.25


Income from investment operations:
Net investment income^b		0.67			0.99			0.48
Net realized and unrealized gain (loss)^c		(13.59	)		0.77			7.81

Total from investment operations		(12.92	)		1.76			8.29


Less distributions from:
Net investment income		(0.76	)		(0.38	)		(0.29	)

Total distributions		(0.76	)		(0.38	)		(0.29	)

Net asset value, end of period	$	45.95		$	59.63		$	58.25


Total return		(21.92	)%^d		2.99	%		16.52	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	103,383		$	175,897		$	17,474
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		2.34	%		1.58	%		1.60	%
Portfolio turnover rate^f		4	%		11	%		3	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		83

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Infrastructure Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Period from Dec. 10, 2007^a to Mar. 31, 2008

Net asset value, beginning of period	$	44.81		$	50.03


Income from investment operations:
Net investment income^b		0.97			0.23
Net realized and unrealized loss^c		(9.53	)		(5.27	)

Total from investment operations		(8.56	)		(5.04	)


Less distributions from:
Net investment income		(0.37	)		(0.18	)

Total distributions		(0.37	)		(0.18	)

Net asset value, end of period	$	35.88		$	44.81


Total return		(19.28	)%^d		(10.10	)%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	147,107		$	49,292
Ratio of expenses to average net assets^e		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		4.57	%		1.66	%
Portfolio turnover rate^f		13	%		1	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


84		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Materials Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Sep. 12, 2006^a to Mar. 31, 2007

Net asset value, beginning of period	$	75.87		$	62.33		$	48.72


Income from investment operations:
Net investment income^b		0.75			1.05			0.66
Net realized and unrealized gain (loss)^c		(22.34	)		12.97			13.11

Total from investment operations		(21.59	)		14.02			13.77


Less distributions from:
Net investment income		(0.55	)		(0.48	)		(0.16	)

Total distributions		(0.55	)		(0.48	)		(0.16	)

Net asset value, end of period	$	53.73		$	75.87		$	62.33


Total return		(28.71	)%^d		22.49	%		28.31	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	298,194		$	390,749		$	74,791
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		1.96	%		1.41	%		2.11	%
Portfolio turnover rate^f		7	%		10	%		5	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		85

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)


	iShares S&P Global Nuclear Energy Index Fund
	Period from Jun. 24, 2008^a to Sep. 30, 2008 (Unaudited)

Net asset value, beginning of period	$	50.45


Income from investment operations:
Net investment income^b		0.15
Net realized and unrealized loss^c		(16.04	)

Total from investment operations		(15.89	)

Net asset value, end of period	$	34.56


Total return		(31.50	)%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	4,839
Ratio of expenses to average net assets^e		0.48	%
Ratio of net investment income to average net assets^e		1.24	%
Portfolio turnover rate^f		2	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout the period.

^c	The amount reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


86		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Technology Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	56.50		$	57.16		$	55.74		$	47.65		$	50.99		$	33.46


Income from investment operations:
Net investment income (loss)		0.30	^a		0.37	^a		0.15	^a		0.05			0.59			(0.04	)
Net realized and unrealized gain (loss)^b		(7.97	)		(0.80	)		1.40			8.06			(3.31	)		17.57

Total from investment operations		(7.67	)		(0.43	)		1.55			8.11			(2.72	)		17.53


Less distributions from:
Net investment income		(0.21	)		(0.23	)		(0.13	)		(0.02	)		(0.57	)		–
Return of capital		–			–			–			–			(0.05	)		–

Total distributions		(0.21	)		(0.23	)		(0.13	)		(0.02	)		(0.62	)		–

Net asset value, end of period	$	48.62		$	56.50		$	57.16		$	55.74		$	47.65		$	50.99


Total return		(13.64	)%^c		(0.81	)%		2.77	%		17.03	%		(5.40	)%		52.39	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	386,528		$	395,471		$	197,192		$	108,695		$	42,887		$	28,045
Ratio of expenses to average net assets^d		0.48	%		0.48	%		0.49	%		0.66	%		0.66	%		0.65	%
Ratio of net investment income (loss) to average net assets^d		1.05	%		0.60	%		0.27	%		0.16	%		1.25	%		(0.14	)%
Portfolio turnover rate^e		3	%		6	%		6	%		13	%		7	%		5	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		87

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Telecommunications Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Year ended Mar. 31, 2007			Year ended Mar. 31, 2006			Year ended Mar. 31, 2005			Year ended Mar. 31, 2004

Net asset value, beginning of period	$	67.11		$	65.42		$	50.98		$	50.00		$	46.10		$	33.40


Income from investment operations:
Net investment income		1.81	^a		2.17	^a		2.17	^a		1.37	^a		0.75			0.62
Net realized and unrealized gain (loss)^b		(13.34	)		1.04			13.78			0.84			3.82			12.73

Total from investment operations		(11.53	)		3.21			15.95			2.21			4.57			13.35


Less distributions from:
Net investment income		(1.43	)		(1.52	)		(1.51	)		(1.23	)		(0.67	)		(0.65	)

Total distributions		(1.43	)		(1.52	)		(1.51	)		(1.23	)		(0.67	)		(0.65	)

Net asset value, end of period	$	54.15		$	67.11		$	65.42		$	50.98		$	50.00		$	46.10


Total return		(17.50	)%^c		4.60	%		31.40	%		4.55	%		9.84	%		40.06	%


Ratios/Supplemental data:
Net assets, end of period (000s)	$	227,426		$	459,675		$	232,238		$	71,378		$	42,499		$	20,747
Ratio of expenses to average net assets^d		0.48	%		0.48	%		0.49	%		0.65	%		0.65	%		0.65	%
Ratio of net investment income to average net assets^d		5.51	%		2.96	%		3.65	%		2.72	%		2.24	%		1.54	%
Portfolio turnover rate^e		6	%		7	%		8	%		11	%		13	%		7	%

^a	Based on average shares outstanding throughout the period.

^b	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^c	Not annualized.

^d	Annualized for periods of less than one year.

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

See notes to financial statements.


88		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout the period)


	iShares S&P Global Timber & Forestry Index Fund
	Period from Jun. 24, 2008^a to Sep. 30, 2008 (Unaudited)

Net asset value, beginning of period	$	48.24


Income from investment operations:
Net investment income^b		0.34
Net realized and unrealized loss^c		(4.07	)

Total from investment operations		(3.73	)

Net asset value, end of period	$	44.51


Total return		(7.73	)%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	20,029
Ratio of expenses to average net assets^e		0.48	%
Ratio of net investment income to average net assets^e		2.64	%
Portfolio turnover rate^f		14	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout the period.

^c	The amount reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


FINANCIAL HIGHLIGHTS		89

Financial Highlights (Continued)

iSHARES^® TRUST

(For a share outstanding throughout each period)


	iShares S&P Global Utilities Sector Index Fund
	Six months ended Sep. 30, 2008 (Unaudited)			Year ended Mar. 31, 2008			Period from Sep. 12, 2006^a to Mar. 31, 2007

Net asset value, beginning of period	$	63.52		$	60.25		$	49.99


Income from investment operations:
Net investment income^b		1.92			1.28			0.58
Net realized and unrealized gain (loss)^c		(10.99	)		2.53			10.01

Total from investment operations		(9.07	)		3.81			10.59


Less distributions from:
Net investment income		(1.05	)		(0.54	)		(0.33	)

Total distributions		(1.05	)		(0.54	)		(0.33	)

Net asset value, end of period	$	53.40		$	63.52		$	60.25


Total return		(14.57	)%^d		6.26	%		21.23	%^d


Ratios/Supplemental data:
Net assets, end of period (000s)	$	224,285		$	298,535		$	27,111
Ratio of expenses to average net assets^e		0.48	%		0.48	%		0.48	%
Ratio of net investment income to average net assets^e		6.08	%		1.96	%		1.91	%
Portfolio turnover rate^f		5	%		10	%		4	%

^a	Commencement of operations.

^b	Based on average shares outstanding throughout each period.

^c	The amounts reported may not accord with the change in aggregate gains and losses in securities due to the timing of capital share transactions.

^d	Not annualized.

^e	Annualized for periods of less than one year.

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

See notes to financial statements.


90		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited)

iSHARES^® TRUST

These financial statements relate only to the iShares S&P Global 100, iShares S&P Global Clean Energy, iShares S&P Global Consumer Discretionary Sector, iShares S&P Global Consumer Staples Sector, iShares S&P Global Energy Sector, iShares S&P Global Financials Sector, iShares S&P Global Healthcare Sector, iShares S&P Global Industrials Sector, iShares S&P Global Infrastructure, iShares S&P Global Materials Sector, iShares S&P Global Nuclear Energy, iShares S&P Global Technology Sector, iShares S&P Global Telecommunications Sector, iShares S&P Global Timber & Forestry, and iShares S&P Global Utilities Sector Index Funds (each, a “Fund,” collectively, the “Funds”). The iShares S&P Global Clean Energy, iShares S&P Global Nuclear Energy, and iShares S&P Global Timber & Forestry Index Funds commenced operations on June 24, 2008.

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

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

1. SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATION


NOTES TO FINANCIAL STATEMENTS		91

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

indication of value supplied by an exchange, a pricing service or a major market maker (or dealer) or (iii) based on amortized cost. In the case of shares of funds that are not traded on an exchange, a market valuation means such fund’s published net asset value per share. The investment adviser may use various pricing services or discontinue the use of any pricing service. A price obtained from a pricing service based on such pricing service’s valuation matrix may be considered a market valuation. In the event that current market valuations are not readily available or such valuations do not reflect current market values, the affected investments will be valued pursuant to the pricing policy and procedures approved by the Board of Trustees of the Trust (the “Board”).

Effective April 1, 2008, the Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the three broad levels listed below.

•

Level 1 – quoted prices in active markets for identical investments

•

Level 2 – other significant observable inputs (including, but not limited to, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments.

The following table summarizes the inputs used in valuing the Funds’ investments as of September 30, 2008:


Investments in Securities
iShares Index Fund	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
S&P Global 100	$	898,787,561	$	–	$	–	$	898,787,561
S&P Global Clean Energy		12,062,169		–		–		12,062,169
S&P Global Consumer Discretionary Sector		20,870,615		–		–		20,870,615
S&P Global Consumer Staples Sector		213,867,435		–		–		213,867,435


92		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST


Investments in Securities
iShares Index Fund	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
S&P Global Energy Sector	$	720,019,660	$	–	$	–	$	720,019,660
S&P Global Financials Sector		274,190,702		–		–		274,190,702
S&P Global Healthcare Sector		683,360,941		–		–		683,360,941
S&P Global Industrials Sector		103,518,887		–		656		103,519,543
S&P Global Infrastructure		147,378,253		–		19		147,378,272
S&P Global Materials Sector		301,071,198		–		–		301,071,198
S&P Global Nuclear Energy		4,874,355		–		–		4,874,355
S&P Global Technology Sector		393,702,932		–		–		393,702,932
S&P Global Telecommunications Sector		228,357,959		–		–		228,357,959
S&P Global Timber & Forestry		20,004,952		–		–		20,004,952
S&P Global Utilities Sector		226,790,593		–		–		226,790,593

The following table provides the reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the six months ended September 30, 2008:


iShares Index Fund	Balance at Beginning of Period		(Amortized Premiums) Accreted Discounts		Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation)		Net Purchases (Sales)			Net Transfers in or out		Balance at End of Period		Net Change in Unrealized Appreciation (Depreciation) from Investments Still Held at End of Period
S&P Global Financials Sector	$	687,959	$	–	115,588		$	(803,547	)	$	–	$	–	$	–
S&P Global Industrials Sector		23,801		–	(566	)		(22,579	)		–		656		(369	)
S&P Global Infrastructure		5		–	14			–			–		19		14

SECURITY TRANSACTIONS AND INCOME RECOGNITION

FOREIGN CURRENCY TRANSLATION

The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.


NOTES TO FINANCIAL STATEMENTS		93

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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

FOREIGN TAXES

The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, capital gains on investments or currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are disclosed in their Statements of Operations. Foreign taxes payable as of September 30, 2008, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

DISTRIBUTIONS TO SHAREHOLDERS

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

The tax character of current year distributions will be determined at the end of the current fiscal year.

FEDERAL INCOME TAXES

Certain Funds had tax basis net capital loss carryforwards as of March 31, 2008, the tax year-end of the Funds, as follows:


iShares Index Fund	Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Expiring 2016		Total
S&P Global 100	$	–	$	–	$	–	$	949,071	$	2,131,997	$	–	$	3,081,068
S&P Global Consumer Discretionary Sector		–		–		–		–		21,774		140,985		162,759
S&P Global Consumer Staples Sector		–		–		–		–		–		110,998		110,998
S&P Global Energy Sector		37,853		113,031		43,806		408,088		3,379,767		172,682		4,155,227
S&P Global Financials Sector		–		65,059		20,625		374,711		–		279,616		740,011
S&P Global Healthcare Sector		–		–		119,040		2,328,014		–		2,165,971		4,613,025
S&P Global Industrials Sector		–		–		–		–		175		241,597		241,772
S&P Global Materials Sector		–		–		–		–		2,966		455,218		458,184
S&P Global Telechnology Sector		114,472		244,568		111,285		401,105		358,238		418,537		1,648,205
S&P Global Telecommunications Sector		356,911		231,569		–		–		259,855		–		848,335
S&P Global Utilities Sector		–		–		–		–		4,149		298,224		302,373


94		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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

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

For the six months ended September 30, 2008, certain Funds realized net capital gains or losses resulting from in-kind redemptions of large blocks of shares or multiples thereof (“Creation Units”). Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to paid-in-capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or net asset values per share. The net realized in-kind gains or losses for the six months ended September 30, 2008 are disclosed in the Funds’ Statements of Operations.

As of September 30, 2008, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:


iShares Index Fund	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Depreciation
S&P Global 100	$	1,109,541,877	$	4,948,791	$	(215,703,107	)	$	(210,754,316	)
S&P Global Clean Energy		16,018,896		–		(3,956,727	)		(3,956,727	)
S&P Global Consumer Discretionary Sector		26,558,876		857,987		(6,546,248	)		(5,688,261	)
S&P Global Consumer Staples Sector		235,899,067		5,322,060		(27,353,692	)		(22,031,632	)
S&P Global Energy Sector		760,119,085		39,822,312		(79,921,737	)		(40,099,425	)
S&P Global Financials Sector		369,721,731		1,887,017		(97,418,046	)		(95,531,029	)
S&P Global Healthcare Sector		764,077,767		19,353,743		(100,070,569	)		(80,716,826	)
S&P Global Industrials Sector		150,354,341		624,809		(47,459,607	)		(46,834,798	)
S&P Global Infrastructure		183,420,575		–		(36,042,303	)		(36,042,303	)
S&P Global Materials Sector		468,800,686		209,335		(167,938,823	)		(167,729,488	)
S&P Global Nuclear Energy		6,612,980		9,946		(1,748,571	)		(1,738,625	)
S&P Global Technology Sector		503,591,583		3,376,865		(113,265,516	)		(109,888,651	)
S&P Global Telecommunications Sector		317,869,639		–		(89,511,680	)		(89,511,680	)
S&P Global Timber & Forestry		21,070,135		725,504		(1,790,687	)		(1,065,183	)
S&P Global Utilities Sector		282,976,248		534,225		(56,719,880	)		(56,185,655	)

The Funds adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for uncertainty in a tax position taken or expected to be taken in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and disclosures of tax positions, along with accounting for the related interest and penalties. Management has reviewed the tax positions as of September 30, 2008, inclusive of the prior three open tax return years, as applicable, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.


NOTES TO FINANCIAL STATEMENTS		95

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

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 the Investment Advisory 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 execution of portfolio transactions, distribution fees and extraordinary expenses.

The Board approved a change to the investment advisory fee structure effective August 1, 2008. For its investment advisory services to the Funds (except for the iShares S&P Global 100 Index Fund), BGFA is entitled to annual investment advisory fees based on each Fund’s allocable portion of the aggregate of the average daily net assets of these Funds and certain other iShares Funds as follows:


Investment Advisory Fee		Aggregate Average Daily Net Assets
0.48%		First $10 billion
0.43		Over $10 billion

Prior to August 1, 2008, BGFA was entitled to an annual investment advisory fee of 0.48% of the average daily net assets of each Fund (except for the iShares S&P Global 100 Index Fund) for investment advisory services to each Fund.

For its investment advisory services to the iShares S&P Global 100 Index Fund, BGFA is entitled to an annual investment advisory fee of 0.40% of the average daily net assets of the Fund.


96		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

For the six months ended September 30, 2008, BGI earned securities lending agent fees as follows:


iShares Index Fund	Securities Lending Agent Fees
S&P Global 100	$	31,508
S&P Global Clean Energy		2,546
S&P Global Consumer Discretionary Sector		3,439
S&P Global Consumer Staples Sector		1,702
S&P Global Energy Sector		7,416
S&P Global Financials Sector		44,070
S&P Global Healthcare Sector		3,142
S&P Global Industrials Sector		11,859
S&P Global Infrastructure		5,794
S&P Global Materials Sector		27,660
S&P Global Nuclear Energy		27
S&P Global Technology Sector		8,944
S&P Global Telecommunications Sector		20,322
S&P Global Timber & Forestry		97
S&P Global Utilities Sector		19,456

For the six months ended September 30, 2008, certain Funds had direct investments (exclusive of short-term investments) in issuers of which BGFA is an affiliate or issuers of which the Fund owns 5% or more of the outstanding voting securities as follows:


iShares Index Fund and Name of Affiliated Issuer	Number of Shares Held Beginning of Period (in 000s)	Gross Additions (in 000s)	Gross Reductions (in 000s)	Number of Shares Held End of Period (in 000s)	Value at End of Period		Dividend Income		Net Realized Loss

S&P Global 100
Barclays PLC	737	642	354	1,025	$	5,964,703	$	243,638	$	(101,712	)

S&P Global Financials Sector
Barclays PLC	278	337	128	487		2,834,193		99,794		(116,852	)

Certain trustees and officers of the Trust are also officers of BGI and/or BGFA.


NOTES TO FINANCIAL STATEMENTS		97

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

3. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended September 30, 2008, were as follows:


iShares Index Fund	Purchases		Sales
S&P Global 100	$	58,673,765	$	44,844,345
S&P Global Clean Energy		264,966		264,605
S&P Global Consumer Discretionary Sector		1,094,501		1,089,545
S&P Global Consumer Staples Sector		14,430,312		15,330,247
S&P Global Energy Sector		29,924,638		32,046,195
S&P Global Financials Sector		25,435,694		20,120,261
S&P Global Healthcare Sector		29,939,655		30,613,178
S&P Global Industrials Sector		5,400,970		5,648,858
S&P Global Infrastructure		16,819,996		14,855,628
S&P Global Materials Sector		38,834,452		34,419,021
S&P Global Nuclear Energy		95,105		78,176
S&P Global Technology Sector		17,744,563		13,700,244
S&P Global Telecommunications Sector		22,015,939		28,409,388
S&P Global Timber & Forestry		1,767,284		1,687,187
S&P Global Utilities Sector		13,324,968		12,698,840

In-kind transactions (see Note 4) for the six months ended September 30, 2008 were as follows:


iShares Index Fund	In-kind Purchases		In-kind Sales
S&P Global 100	$	496,727,097	$	348,840,264
S&P Global Clean Energy		14,758,772		–
S&P Global Consumer Discretionary Sector		–		4,968,906
S&P Global Consumer Staples Sector		–		66,475,194
S&P Global Energy Sector		133,637,329		222,798,899
S&P Global Financials Sector		137,350,192		28,535,994
S&P Global Healthcare Sector		175,299,910		88,474,370
S&P Global Industrials Sector		–		36,989,717
S&P Global Infrastructure		129,492,056		–
S&P Global Materials Sector		239,445,450		167,047,209
S&P Global Nuclear Energy		6,548,511		–
S&P Global Technology Sector		180,181,213		129,658,343
S&P Global Telecommunications Sector		43,553,659		207,793,323
S&P Global Timber & Forestry		21,130,642		–
S&P Global Utilities Sector		9,897,307		41,432,096


98		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements (Unaudited) (Continued)

iSHARES^® TRUST

4. CAPITAL SHARE TRANSACTIONS

The Board authorized a three-for-one stock split for the iShares S&P Global Energy Sector Index Fund, effective July 24, 2008, for the shareholders of record on July 21, 2008. The impact of the stock split was to increase the number of shares outstanding by a factor of three, while decreasing the net asset value per share by a factor of three, resulting in no effect to total net assets of the Fund. The financial statements for the Fund have been adjusted to reflect the stock split.

5. LOANS OF PORTFOLIO SECURITIES


NOTES TO FINANCIAL STATEMENTS		99

Board Review and Approval of Investment Advisory Contract (Unaudited)

iSHARES^® TRUST

I. iShares S&P Global 100, iShares S&P Global Consumer Discretionary Sector, iShares S&P Global Consumer Staples Sector, iShares S&P Global Energy Sector, iShares S&P Global Financials Sector, iShares S&P Global Healthcare Sector, iShares S&P Global Industrials Sector, iShares S&P Global Infrastructure, iShares S&P Global Materials Sector, iShares S&P Global Technology Sector, iShares S&P Global Telecommunications Sector and iShares S&P Global Utilities Sector Index Funds.

NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY BGFA

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

FUNDS’ EXPENSES AND PERFORMANCE OF THE FUNDS


100		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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

iSHARES^® TRUST

methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Fund for the one-, three- and five-year periods, as applicable, and the “last quarter” period ended March 31, 2008, and a comparison of each Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as any particular Fund, Lipper also provided, and the Board reviewed, a comparison of such Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Funds generally performed in line with their respective performance benchmark indexes over the relevant periods. In considering this information, the Board noted that the Lipper Groups include funds that may have different investment objectives and/or benchmarks from the Funds. In addition, the Board noted that each Fund seeks to track its benchmark index and that during the prior year the Board received periodic reports on the Funds’ performance in comparison with their relevant benchmark indexes. Such comparative performance information was also considered by the Board.

The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than the median or average investment advisory fee rates and overall expense components of the funds in their respective Lipper Groups. The Board also reviewed statistical information from Lipper displaying the effects of the proposed breakpoints in the investment advisory fee rates for the iShares S&P Global Consumer Discretionary Sector, iShares S&P Global Consumer Staples Sector, iShares S&P Global Energy Sector, iShares S&P Global Financials Sector, iShares S&P Global Healthcare Sector, iShares S&P Global Industrials Sector, iShares S&P Global Infrastructure, iShares S&P Global Materials Sector, iShares S&P Global Technology Sector, iShares S&P Global Telecommunications Sector, and iShares S&P Global Utilities Sector Index Funds, (the “S&P Global Sector Funds”) (as discussed below) at various assets levels of such Funds as compared to their Lipper Group. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of each Fund, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

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

ECONOMIES OF SCALE


BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT		101

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

iSHARES^® TRUST

including the S&P Global Sector Funds, over the last few years. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds, including the Funds, had not yet reached scale. In light of this history, the Board determined the proposed breakpoints for the S&P Global Sector Funds were appropriate and warranted for these Funds but that further reductions in fee rates or additions of breakpoints were not warranted at this juncture for the S&P Global 100 Fund. Based on this review, as well as the discussions described above in connection with the Lipper Group and performance benchmark comparisons, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the structure of the investment advisory fees, with the proposed breakpoints for the S&P Global Sector Funds, reflects appropriate sharing of economies of scale with the Funds’ shareholders.

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

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

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rates thereunder, with the proposed breakpoints for the S&P Global Sector Funds, is fair and reasonable in light of all relevant circumstances, and concluded that it is in the best interest of the Funds and their shareholders to approve the Advisory Contract with the fee schedule to the Advisory Contract as proposed to be amended to reflect the proposed breakpoints, for the coming year.


102		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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

iSHARES^® TRUST

II. iShares S&P Global Clean Energy, iShares S&P Global Nuclear Energy and iShares S&P Global Timber & Forestry Index Funds.

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider and approve the Funds’ entering into an Investment Advisory Contract with BGFA (the “Advisory Contract”). As required by Section 15(c), the Board requested, and BGFA provided, such information as the Board deemed reasonably necessary to evaluate the terms of the proposed Advisory Contract. At a meeting held on March 4-5, 2008, the Board approved the selection of BGFA and the Advisory Contract for the Funds, based on its review of qualitative and quantitative information provided by BGFA. At a meeting held on June 18-19, 2008, the Board approved a revised Advisory Contract for the Funds, including the addition of breakpoints, as described below. In selecting BGFA and approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, no one of which was controlling, and made the following conclusions:

NATURE, EXTENT AND QUALITY OF SERVICES TO BE PROVIDED BY BGFA

The Board reviewed the scope of services to be provided by BGFA under the Advisory Contract. In reviewing the scope of services to be provided to the Funds by BGFA, the Board considered BGFA’s investment philosophy and experience, noting that over the past several years BGFA and its affiliates have committed significant resources to the support of the other iShares funds. The Board considered in particular that BGFA’s services for the other iShares funds capitalize on BGFA’s core competencies, including the effective use of its proprietary investment models analyzing securities market risk, asset class correlations and expected returns. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and securities lending opportunities and the oversight of intermediaries that provide shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the other iShares funds. The Board noted that BGFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and has made appropriate officers available as needed to provide further assistance with these matters, similar to the other iShares funds. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Funds. In addition to the above considerations, the Board reviewed and considered BGFA’s investment processes and strategies, and matters related to BGFA’s portfolio transaction policies and procedures. The Board noted that BGFA does not serve as investment adviser for any other series of registered investment companies with substantially similar investment objectives and strategies as the Funds; therefore, comparative performance information was generally not available. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Funds under the Advisory Contract were appropriate and supported the Board’s selection of BGFA as investment adviser to the Funds.

FUNDS’ EXPENSES


BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT		103

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

iSHARES^® TRUST

objective classifications, investment focuses and other characteristics (e.g., actively managed funds and funds sponsored by “at cost” service providers). In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information. The Board further noted that due to the limitations in providing comparable funds in the Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Funds. The Board noted that the investment advisory fee rates and overall expense components for the Funds were generally lower than the median or average investment advisory fee rates and overall expenses of the funds in the Lipper Groups. After discussion with BGFA management of the relative cost structures of the Funds and the funds in the applicable Lipper Groups, the Board also noted that the investment advisory fee rates applicable to the Funds were consistent with the investment advisory fee rates of other iShares funds in similar asset classes and/or index families, as well as the level of additional services provided by BGFA in comparison to the services provided by competitor providers. The Board took into account BGFA’s assertion that the other exchange traded funds do not offer similar market exposure as the Funds. Based on this review, the Board concluded that the investment advisory fees and expense levels of each Fund, as proposed to be managed by BGFA, as compared to the investment advisory fees and expense levels of the funds in the relevant Lipper Groups, were satisfactory for the purposes of approving the Advisory Contract.

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

The Board did not consider the profitability of the Funds to BGFA based on the fees payable under the Advisory Contract or revenue to be received by BGFA or its affiliates in connection with services to be provided to the Funds since the proposed relationships had not yet commenced. However, the Board noted that it would consider and monitor these matters in the future.

ECONOMIES OF SCALE

The Board was also presented with materials regarding proposed breakpoints in the investment advisory fee rates at certain asset levels of the Funds on an aggregate basis with certain other iShares funds. The Board discussed the substantial growth in assets of certain iShares funds, including the iShares funds in the group with which the Funds’ assets are aggregated for purpose of applying breakpoints in the investment advisory fee rates, over the last few years. The Board also reviewed BGFA’s historic profitability as investment adviser to the iShares fund complex and noted that BGFA had continued to make significant investments in the iShares funds, that expenses had grown at a pace similar to the growth in revenue, and that BGFA had incurred operating losses during earlier years when the iShares funds had not yet reached scale. In light of this history, the Board determined that the proposed breakpoints were appropriate and warranted. Based on this review, as well as the discussions described above in connection with the Lipper Group comparisons, the Board, recognizing its responsibility to consider this issue at least annually following an initial two-year period, concluded that the structure of the investment advisory fees, with the proposed breakpoints, reflects the sharing of potential economies of scale with the Funds’ shareholders.

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

The Board considered certain information regarding the Funds’ annual investment advisory fee rates under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts with substantially similar investment objectives and strategies, for which BGFA (or its affiliate, BGI) provides investment advisory/management services, including collective funds and separate accounts (together, the “Other Accounts”). The Board noted that comparative investment advisory/management fee information was not available for the Funds, as BGFA and its affiliates do not manage any Other Accounts with substantially similar investment objectives and strategies as the Funds. The Board noted that BGFA provided the Board with general information regarding how the level of services provided to the Other Accounts differed from the level of services provided to the Funds. Based on this review, as well as the


104		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

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

iSHARES^® TRUST

discussions described above in connection with the Lipper Group comparisons, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rates under the Advisory Contract, with the proposed breakpoints, are fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

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

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


BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT		105

Notes:


106		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Notes:


NOTES		107

Notes:


108		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

The iShares^® Family of Funds

iShares S&P Domestic Index Funds

iShares S&P 1500 (ISI)

iShares S&P 100 (OEF)

iShares S&P 500 (IVV)

iShares S&P 500 Growth (IVW)

iShares S&P 500 Value (IVE)

iShares S&P MidCap 400 (IJH)

iShares S&P MidCap 400 Growth (IJK)

iShares S&P MidCap 400 Value (IJJ)

iShares S&P SmallCap 600 (IJR)

iShares S&P SmallCap 600 Growth (IJT)

iShares S&P SmallCap 600 Value (IJS)

iShares S&P North American Natural Resources Sector (IGE)

iShares S&P North American Technology-Multimedia Networking (IGN)

iShares S&P North American Technology-Semiconductors (IGW)

iShares S&P North American Technology-Software (IGV)

iShares S&P North American Technology Sector (IGM)

iShares Domestic Sector Index Funds

iShares Cohen & Steers Realty Majors (ICF)

iShares Dow Jones U.S. Basic Materials Sector (IYM)

iShares Dow Jones U.S. Consumer Services Sector (IYC)

iShares Dow Jones U.S. Consumer Goods Sector (IYK)

iShares Dow Jones U.S. Energy Sector (IYE)

iShares Dow Jones U.S. Financial Sector (IYF)

iShares Dow Jones U.S. Financial Services (IYG)

iShares Dow Jones U.S. Healthcare Sector (IYH)

iShares Dow Jones U.S. Industrial Sector (IYJ)

iShares Dow Jones U.S. Real Estate (IYR)

iShares Dow Jones U.S. Technology Sector (IYW)

iShares Dow Jones U.S. Telecommunications Sector (IYZ)

iShares Dow Jones Transportation Average (IYT)

iShares Dow Jones U.S. Utilities Sector (IDU)

iShares Dow Jones U.S. (IYY)

iShares Nasdaq Biotechnology (IBB)

iShares Domestic Subsector Index Funds

iShares Dow Jones U.S. Aerospace & Defense (ITA)

iShares Dow Jones U.S. Broker-Dealers (IAI)

iShares Dow Jones U.S. Healthcare Providers (IHF)

iShares Dow Jones U.S. Home Construction (ITB)

iShares Dow Jones U.S. Insurance (IAK)

iShares Dow Jones U.S. Medical Devices (IHI)

iShares Dow Jones U.S. Oil & Gas Exploration & Production (IEO)

iShares Dow Jones U.S. Oil Equipment & Services (IEZ)

iShares Dow Jones U.S. Pharmaceuticals (IHE)

iShares Dow Jones U.S. Regional Banks (IAT)

iShares FTSE NAREIT Industrial/Office (FIO)

iShares FTSE NAREIT Mortgage REITs (REM)

iShares FTSE NAREIT Real Estate 50 (FTY)

iShares FTSE NAREIT Residential (REZ)

iShares Global Index Funds

iShares S&P Global 100 (IOO)

iShares S&P Global Clean Energy (ICLN)

iShares S&P Global Consumer Discretionary Sector (RXI)

iShares S&P Global Consumer Staples Sector (KXI)

iShares S&P Global Energy Sector (IXC)

iShares S&P Global Financials Sector (IXG)

iShares S&P Global Healthcare Sector (IXJ)

iShares S&P Global Industrials Sector (EXI)

iShares S&P Global Infrastructure (IGF)

iShares S&P Global Materials Sector (MXI)

iShares S&P Global Nuclear Energy (NUCL)

iShares S&P Global Technology Sector (IXN)

iShares S&P Global Telecommunications Sector (IXP)

iShares S&P Global Timber & Forestry (WOOD)

iShares S&P Global Utilities Sector (JXI)

iShares Russell Index Funds

iShares Russell 3000 (IWV)

iShares Russell 3000 Growth (IWZ)

iShares Russell 3000 Value (IWW)

iShares Russell 1000 (IWB)

iShares Russell 1000 Growth (IWF)

iShares Russell 1000 Value (IWD)

iShares Russell Midcap (IWR)

iShares Russell Midcap Growth (IWP)

iShares Russell Midcap Value (IWS)

iShares Russell 2000 (IWM)

iShares Russell 2000 Growth (IWO)

iShares Russell 2000 Value (IWN)

iShares Russell Microcap (IWC)

iShares International Country Index Funds

iShares FTSE China (HK Listed) (FCHI)

iShares FTSE/Xinhua China 25 (FXI)

iShares MSCI Australia (EWA)

iShares MSCI Austria Investable Market (EWO)

iShares MSCI Belgium Investable Market (EWK)

iShares MSCI Brazil (EWZ)

iShares MSCI Canada (EWC)

iShares MSCI Chile Investable Market (ECH)

iShares MSCI France (EWQ)

iShares MSCI Germany (EWG)

iShares MSCI Hong Kong (EWH)

iShares MSCI Israel Capped Investable Market (EIS)

iShares MSCI Italy (EWI)

iShares MSCI Japan (EWJ)

iShares MSCI Japan Small Cap (SCJ)

iShares MSCI Malaysia (EWM)

iShares MSCI Mexico Investable Market (EWW)

iShares MSCI Netherlands Investable Market (EWN)

iShares MSCI Singapore (EWS)

iShares MSCI South Africa (EZA)

iShares MSCI South Korea (EWY)

iShares MSCI Spain (EWP)

iShares MSCI Sweden (EWD)

iShares MSCI Switzerland (EWL)

iShares MSCI Taiwan (EWT)

iShares MSCI Thailand Investable Market (THD)

iShares MSCI Turkey Investable Market (TUR)

iShares MSCI United Kingdom (EWU)

iShares S&P/TOPIX 150 (ITF)

iShares Bond Funds

iShares Lehman Aggregate (AGG)

iShares Lehman MBS (MBB)

iShares Lehman Short Treasury (SHV)

iShares Lehman 1-3 Year Treasury (SHY)

iShares Lehman 3-7 Year Treasury (IEI)

iShares Lehman 7-10 Year Treasury (IEF)

iShares Lehman 10-20 Year Treasury (TLH)

iShares Lehman 20+ Year Treasury (TLT)

iShares Lehman TIPS (TIP)

iShares Barclays Agency (AGZ)

iShares Lehman Credit (CFT)

iShares Lehman 1-3 Year Credit (CSJ)

iShares Lehman Intermediate Credit (CIU)

iShares iBoxx $ Investment Grade Corporate (LQD)

iShares iBoxx $ High Yield Corporate (HYG)

iShares Lehman Government/Credit (GBF)

iShares Lehman Intermediate Government/Credit (GVI)

iShares S&P National Municipal (MUB)

iShares S&P Short Term National Municipal (SUB)

iShares S&P California Municipal (CMF)

iShares S&P New York Municipal (NYF)

iShares JPMorgan USD Emerging Markets (EMB)

iShares Specialty Index Funds

iShares KLD 400 Social (DSI)

iShares KLD Select Social^SM(KLD)

iShares Dow Jones Select Dividend (DVY)

iShares Dow Jones EPAC Select Dividend (IDV)

iShares S&P U.S. Preferred Stock (PFF)

iShares International Index Funds

iShares FTSE Developed Small Cap ex-North America (IFSM)

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL)

iShares FTSE EPRA/NAREIT North America (IFNA)

iShares FTSE EPRA/NAREIT Europe (IFEU)

iShares FTSE EPRA/NAREIT Asia (IFAS)

iShares MSCI ACWI (ACWI)

iShares MSCI ACWI ex US (ACWX)

iShares MSCI All Country Asia ex Japan (AAXJ)

iShares MSCI BRIC (BKF)

iShares MSCI EAFE (EFA)

iShares MSCI EAFE Growth (EFG)

iShares MSCI EAFE Value (EFV)

iShares MSCI EAFE Small Cap (SCZ)

iShares MSCI Emerging Markets (EEM)

iShares MSCI EMU (EZU)

iShares MSCI Kokusai (TOK)

iShares MSCI Pacific ex-Japan (EPP)

iShares S&P Asia 50 (AIA)

iShares S&P Developed ex-U.S. Property (WPS)

iShares S&P Europe 350 (IEV)

iShares S&P Latin America 40 (ILF)


iSHARES FAMILY OF FUNDS		109

The iShares^® Family of Funds (Continued)

iShares Morningstar Index Funds

iShares Morningstar Large Core (JKD)

iShares Morningstar Large Growth (JKE)

iShares Morningstar Large Value (JKF)

iShares Morningstar Mid Core (JKG)

iShares Morningstar Mid Growth (JKH)

iShares Morningstar Mid Value (JKI)

iShares Morningstar Small Core (JKJ)

iShares Morningstar Small Growth (JKK)

iShares Morningstar Small Value (JKL)

iShares NYSE Index Funds

iShares NYSE Composite (NYC)

iShares NYSE 100 (NY)

iShares S&P Allocation Funds

iShares S&P Conservative (AOK)

iShares S&P Moderate (AOM)

iShares S&P Growth (AOR)

iShares S&P Aggressive (AOA)

iShares S&P Target Date Index Funds

iShares S&P Target Date Retirement Income (TGR)

iShares S&P Target Date 2010 (TZD)

iShares S&P Target Date 2015 (TZE)

iShares S&P Target Date 2020 (TZG)

iShares S&P Target Date 2025 (TZI)

iShares S&P Target Date 2030 (TZL)

iShares S&P Target Date 2035 (TZO)

iShares S&P Target Date 2040 (TZV)

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

This advertising section does not constitute part of the 2008 Semi-Annual Report.

iS-0043 1108


110		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

LOGO

For more information:

www.iShares.com

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

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

©2008 Barclays Global Investors. All rights reserved. iShares^® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

Investing involves risk, including possible loss of principal.

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

BGI-SAR-33-0908

LOGO

2008 SEMI-ANNUAL REPORT TO SHAREHOLDERS

iSHARES® S&P SERIES

\SEPTEMBER 30, 2008

>> Would you prefer to receive materials like this electronically?

See inside cover for details.

iShares S&P 500 Index Fund

iShares S&P 500 Growth Index Fund

iShares S&P 500 Value Index Fund

iSHARES®

LOGO

Dear iShares Shareholder:

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

Go to www.icsdelivery.com.

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

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

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

Table of Contents


Fund Performance Overview		1
Shareholder Expenses		4
Summary Schedules of Investments		5
iShares S&P 500 Index Fund		5
iShares S&P 500 Growth Index Fund		9
iShares S&P 500 Value Index Fund		13
Financial Statements		17
Financial Highlights		21
Notes to Financial Statements		24
Board Review and Approval of Investment Advisory Contract		30
iShares Family of Funds		33

Fund Performance Overview

iSHARES^® S&P 500 INDEX FUNDS

Performance as of September 30, 2008


	Average Annual Total Returns

	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P 500	(21.98)%	(21.85)%	(21.98)%	5.09%	5.12%	5.17%	(0.96)%	(0.94)%	(0.89)%
S&P 500 Growth*	(19.52)%	(19.54)%	(19.44)%	3.52%	3.49%	3.70%	(3.28)%	(3.28)%	(3.11)%
S&P 500 Value*	(24.55)%	(24.23)%	(24.50)%	6.46%	6.52%	6.62%	1.88%	1.93%	2.04%

	Cumulative Total Returns

	Year Ended 9/30/08			Five Years Ended 9/30/08			Inception to 9/30/08

iSHARES INDEX FUND	NAV	MARKET	INDEX	NAV	MARKET	INDEX	NAV	MARKET	INDEX
S&P 500	(21.98)%	(21.85)%	(21.98)%	28.21%	28.38%	28.66%	(7.77)%	(7.59)%	(7.25)%
S&P 500 Growth*	(19.52)%	(19.54)%	(19.44)%	18.91%	18.72%	19.94%	(24.34)%	(24.37)%	(23.23)%
S&P 500 Value*	(24.55)%	(24.23)%	(24.50)%	36.76%	37.17%	37.76%	16.88%	17.29%	18.39%

Total returns for the periods since inception are calculated from the inception date of each Fund (5/15/00, 5/22/00 and 5/22/00, respectively). “Average Annual Total Returns” represent the average annual change in value of an investment over the period(s) indicated. “Cumulative Total Returns” represent the total change in value of an investment over the period(s) indicated.

*	Index performance reflects the S&P/BARRA methodology through December 16, 2005 and the S&P/Citigroup methodology thereafter.

Each Fund’s per share net asset value or “NAV” is the value of one share of such Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of each Fund and the market return is based on the market price per share of each Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the Funds are listed for trading, as of the time that each Fund’s NAV is calculated. Since shares of each Fund did not trade in the secondary market until several days after each Fund’s inception, for the period from inception to the first day of secondary market trading in shares of each Fund (5/19/00, 5/26/00 and 5/26/00, respectively), the NAV of each Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in each Fund at Market Price and NAV, respectively.

The iShares S&P 500 Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500^® (the “Index”). The Index measures the performance of the large-capitalization sector of the U.S. equity market. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month period ended September 30, 2008, the total return for both the Fund and the Index was (10.87)%.


FUND PERFORMANCE OVERVIEW		1

Fund Performance Overview (Continued)

iSHARES^® S&P 500 INDEX FUNDS

iShares S&P 500 Index Fund (Continued)


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	23.61	%

Financial	15.69

Energy	13.41

Industrial	11.43

Technology	11.23

Communications	10.21

Consumer Cyclical	7.87

Utilities	3.48

Basic Materials	2.84

Diversified	0.08

Short-Term and Other Net Assets	0.15


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	3.96	%

General Electric Co.	2.49

Procter & Gamble Co. (The)	2.08

Microsoft Corp.	2.06

Johnson & Johnson	1.90

JPMorgan Chase & Co.	1.69

Chevron Corp.	1.66

AT&T Inc.	1.61

Bank of America Corp.	1.56

International Business Machines Corp.	1.55


TOTAL	20.56	%

The iShares S&P 500 Growth Index Fund (the “Growth Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500/Citigroup Growth Index™ (the “Growth Index”). The Growth Index measures the performance of the large-capitalization growth sector of the U.S. equity market. The Growth Index is a subset of the S&P 500 Index and consists of those stocks in the S&P 500 Index exhibiting the strongest growth characteristics. The Growth Fund invests in a representative sample of securities included in the Growth Index that collectively has an investment profile similar to the Growth Index. Due to the use of representative sampling, the Growth Fund may or may not hold all of the securities that are included in the Growth Index. For the six-month period ended September 30, 2008, the total return for the Growth Fund was (9.47)%, while the total return for the Growth Index was (9.42)%.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Consumer Non-Cyclical	27.64	%

Energy	21.46

Technology	16.29

Communications	9.51

Industrial	8.79

Consumer Cyclical	8.74

Financial	4.93

Basic Materials	2.11

Utilities	0.26

Diversified	0.15

Short-Term and Other Net Assets	0.12


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
Exxon Mobil Corp.	7.51	%

Microsoft Corp.	3.90

Johnson & Johnson	3.60

Procter & Gamble Co. (The)	2.67

Cisco Systems Inc.	2.48

International Business Machines Corp.	2.09

PepsiCo Inc.	2.08

ConocoPhillips	2.07

Apple Inc.	1.87

Chevron Corp.	1.80


TOTAL	30.07	%


2		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Fund Performance Overview (Continued)

iSHARES^® S&P 500 INDEX FUNDS

The iShares S&P 500 Value Index Fund (the “Value Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500/Citigroup Value Index™ (the “Value Index”). The Value Index measures the performance of the large-capitalization value sector of the U.S. equity market. The Value Index is a subset of the S&P 500 Index and consists of those stocks in the S&P 500 Index exhibiting the strongest value characteristics. The Value Fund invests in a representative sample of securities included in the Value Index that collectively has an investment profile similar to the Value Index. Due to the use of representative sampling, the Value Fund may or may not hold all of the securities that are included in the Value Index. For the six-month period ended September 30, 2008, the total return for the Value Fund was (12.39)%, while the total return for the Value Index was (12.38)%.


PORTFOLIO ALLOCATION As of 9/30/08
Sector	Percentage of Net Assets
Financial	27.65	%

Consumer Non-Cyclical	19.09

Industrial	14.38

Communications	10.97

Utilities	7.07

Consumer Cyclical	6.90

Technology	5.58

Energy	4.45

Basic Materials	3.65

Short-Term and Other Net Assets	0.26


TOTAL	100.00	%


TEN LARGEST FUND HOLDINGS As of 9/30/08
Security	Percentage of Net Assets
General Electric Co.	5.26	%

JPMorgan Chase & Co.	3.57

AT&T Inc.	3.41

Bank of America Corp.	3.31

Pfizer Inc.	2.58

Wells Fargo & Co.	2.57

Citigroup Inc.	2.31

Verizon Communications Inc.	1.89

Chevron Corp.	1.51

Procter & Gamble Co. (The)	1.40


TOTAL	27.81	%


FUND PERFORMANCE OVERVIEW		3

Shareholder Expenses (Unaudited)

iSHARES^® TRUST

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2008 to September 30, 2008.

ACTUAL EXPENSES

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES


iShares Index Fund	Beginning Account Value (4/1/08)	Ending Account Value (9/30/08)	Annualized Expense Ratio		Expenses Paid During Period^a (4/1/08 to 9/30/08)
S&P 500
Actual	$1,000.00	$ 891.30	0.09	%	$0.45
Hypothetical (5% return before expenses)	1,000.00	1,024.60	0.09		0.48
S&P 500 Growth
Actual	1,000.00	905.30	0.18		0.86
Hypothetical (5% return before expenses)	1,000.00	1,024.20	0.18		0.91
S&P 500 Value
Actual	1,000.00	876.10	0.18		0.85
Hypothetical (5% return before expenses)	1,000.00	1,024.20	0.18		0.91

^a	Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (183 days) and divided by the number of days in the year (365 days).


4		2008 iSHARES SEMI-ANNUAL REPORT TO SHAREHOLDERS

Summary Schedule of Investments (Unaudited)

iSHARES^® S&P 500 INDEX FUND

September 30, 2008


Security	Shares	Value		% of Net Assets
COMMON STOCKS

ADVERTISING
Other securities^a		$	26,233,705	0.16	%

			26,233,705	0.16

AEROSPACE & DEFENSE
Boeing Co. (The)	1,216,904		69,789,444	0.41
United Technologies Corp.	1,585,309		95,213,659	0.57
Other securities^a			219,151,214	1.31

			384,154,317	2.29

AGRICULTURE
Monsanto Co.	904,150		89,492,767	0.53
Philip Morris International Inc.	3,388,385		162,981,318	0.97
Other securities^a			140,429,494	0.84

			392,903,579	2.34

AIRLINES
Other securities^a			17,530,010	0.10

			17,530,010	0.10

APPAREL
Other securities^a			79,459,607	0.47

			79,459,607	0.47

AUTO MANUFACTURERS
Other securities^a			50,972,696	0.30

			50,972,696	0.30