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 811-07332

Barclays Global Investors Funds

(Exact name of registrant as specified in charter)

c/o: State Street Bank and Trust Company

200 Clarendon Street, Boston, MA 02116-5021

(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: 1-877-244-1544

Date of fiscal year end: December 31, 2008

Date of reporting period: June 30, 2008

Item 1. Reports to Stockholders.

TABLE OF CONTENTS

Fund Performance Overviews	1
Shareholder Expenses	3
Barclays Global Investors Funds
Financial Statements	4
Financial Highlights	6
Notes to Financial Statements	8
Master Investment Portfolio
Schedules of Investments	11
Bond Index Master Portfolio	11
S&P 500 Index Master Portfolio	18
Portfolio Allocations	26
Financial Statements	27
Notes to Financial Statements	30
Board Review and Approval of Investment Advisory Contracts	36

Fund Performance Overview

Bond Index Fund

Performance as of June 30, 2008

The Bond Index Fund (the “Fund”) seeks to provide investment results that correspond to the total return performance of fixed-income securities in the aggregate, as represented by the Lehman Brothers U.S. Aggregate Index (the “Index”). The Index is comprised of U.S. government securities and investment-grade corporate bonds, as well as mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. The Fund invests in a representative sample of these securities. 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 months ended June 30, 2008, the Fund returned 1.47%, while the Index returned 1.13%.

Average Annual Total Returns
One-Year	7.71%
Five-Year	3.89%
Ten-Year	5.57%

“Average Annual Total Returns” represent the Fund’s average annual increase or decrease in value during the time periods noted above.

Performance figures assume that dividends and capital gain distributions have been reinvested in the Fund at net asset value. The Fund’s “net asset value” is the value of one share of the Fund. The performance shown in the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption 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. The Fund’s past performance is no guarantee of future results.

The Fund is organized as a “feeder” fund in a “master-feeder” structure. Instead of investing directly in individual securities, the feeder fund, which is offered to the public, holds interests in the net assets of its corresponding Master Portfolio. It is the Master Portfolio that actually invests in individual securities. References to “the Fund” are to the feeder fund or the Master Portfolio, as the context requires. Barclays Global Fund Advisors (BGFA) advises the Master Portfolio.

1

Fund Performance Overview

S&P 500 Stock Fund

Performance as of June 30, 2008

The S&P 500 Stock Fund (the “Fund”) seeks to provide investment results that correspond to the total return performance of publicly-traded common stocks in the aggregate, as represented by the Standard & Poor’s 500 Stock Index (the “Index”). The Index is a capitalization-weighted index from a broad range of industries chosen for market size, liquidity and industry group representation, and is composed of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The component stocks of the Index are weighted according to the total float-adjusted market value of their outstanding shares. The percentage of the Fund’s assets invested in a given stock is approximately the same as the percentage such stock represents in the Index. For the six months ended June 30, 2008, the Fund declined 11.96%, while the Index declined 11.91%.

Average Annual Total Returns
One-Year	(13.20)%
Five-Year	7.40%
Ten-Year	2.68%

“Average Annual Total Returns” represent the Fund’s average annual increase or decrease in value during the time periods noted above.

Performance figures assume that dividends and capital gain distributions have been reinvested in the Fund at net asset value. The Fund’s “net asset value” is the value of one share of the Fund. The performance shown in the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption 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. The Fund’s past performance is no guarantee of future results.

The Fund is organized as a “feeder” fund in a “master-feeder” structure. Instead of investing directly in individual securities, the feeder fund, which is offered to the public, holds interests in the net assets of its corresponding Master Portfolio. It is the Master Portfolio that actually invests in individual securities. References to “the Fund” are to the feeder fund or the Master Portfolio, as the context requires. Barclays Global Fund Advisors (BGFA) advises the Master Portfolio.

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BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Bond Index
Actual	$1,000.00	$1,014.70	0.23	%	$1.15
Hypothetical (5% return before expenses)	1,000.00	1,023.70	0.23		1.16
S&P 500 Stock
Actual	1,000.00	880.40	0.20		0.94
Hypothetical (5% return before expenses)	1,000.00	1,023.90	0.20		1.01

^(a) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(b) 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 (182 days) and divided by the number of days in the year (366 days).

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BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Bond Index Fund			S&P 500 Stock Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	130,211,202		$	272,332,919
Receivables:
Capital shares sold		149,378			664,940
Total Assets		130,360,580			272,997,859
LIABILITIES
Payables:
Capital shares redeemed		507,374			1,051,184
Distribution to shareholders		53,648			216,781
Administration fees (Note 2)		14,500			34,257
Accrued expenses:
Professional fees (Note 2)		5,932			6,017
Independent trustees’ fees (Note 2)		44			39
Total Liabilities		581,498			1,308,278
NET ASSETS	$	129,779,082		$	271,689,581
Net assets consist of:
Paid-in capital	$	132,641,104		$	602,486,317
Undistributed net investment income		20,162			32,613
Accumulated net realized loss		(3,092,439	)		(220,864,042	)
Net unrealized appreciation (depreciation)		210,255			(109,965,307	)
NET ASSETS	$	129,779,082		$	271,689,581
Shares outstanding(a)		13,454,851			1,777,577
Net asset value and offering price per share	$	9.65		$	152.84
(a)     No par value, unlimited number of shares authorized.
STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 2008 (Unaudited)
	Bond Index Fund			S&P 500 Stock Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Dividends	$	—		$	3,183,235
Interest		3,037,552			157,017
Expenses(a)		(47,535	)		(76,998	)
Net investment income allocated from corresponding Master Portfolio		2,990,017			3,263,254
FUND EXPENSES (Note 2)
Administration fees		89,095			231,101
Professional fees		5,786			5,968
Independent trustees’ fees		546			1,396
Total fund expenses		95,427			238,465
Less expense reductions (Note 2)		(6,332	)		(7,364	)
Net fund expenses		89,095			231,101
Net investment income		2,900,922			3,032,153
REALIZED AND UNREALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain (loss)		313,513			(2,927,155	)
Net change in unrealized appreciation (depreciation)		(1,707,515	)		(37,918,620	)
Net realized and unrealized loss		(1,394,002	)		(40,845,775	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,506,920		$	(37,813,622	)

^(a) Net of investment advisory fee reductions in the amounts of $10,775 and $2,885, respectively.

The accompanying notes are an integral part of these financial statements.

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BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Bond Index Fund						S&P 500 Stock Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,900,922		$	5,493,880		$	3,032,153		$	5,149,616
Net realized gain (loss)		313,513			(166,090	)		(2,927,155	)		15,525,276
Net change in unrealized appreciation (depreciation)		(1,707,515	)		2,512,235			(37,918,620	)		(4,394,884	)
Net increase (decrease) in net assets resulting from operations		1,506,920			7,840,025			(37,813,622	)		16,280,008
Distributions to shareholders:
From net investment income		(2,883,011	)		(5,934,820	)		(3,052,430	)		(5,135,176	)
Total distributions to shareholders		(2,883,011	)		(5,934,820	)		(3,052,430	)		(5,135,176	)
Capital share transactions:
Proceeds from shares sold		29,583,150			35,280,179			53,372,006			141,267,048
Net asset value of shares issued in reinvestment of dividends and distributions		2,546,713			5,371,180			2,542,242			4,123,108
Cost of shares redeemed		(12,821,657	)		(34,302,036	)		(74,250,154	)		(96,050,373	)
Net increase (decrease) in net assets resulting from capital share transactions		19,308,206			6,349,323			(18,335,906	)		49,339,783
Increase (decrease) in net assets		17,932,115			8,254,528			(59,201,953	)		60,484,615
NET ASSETS:
Beginning of period		111,846,967			103,592,439			330,891,539			270,406,924
End of period	$	129,779,082		$	111,846,967		$	271,689,581		$	330,891,539
Undistributed net investment income included in net assets at end of period	$	20,162		$	2,251		$	32,613		$	52,890
SHARES ISSUED AND REDEEMED:
Shares sold		3,021,527			3,684,740			327,095			809,680
Shares issued in reinvestment of dividends and distributions		260,122			560,466			16,360			23,357
Shares redeemed		(1,311,778	)		(3,558,558	)		(451,573	)		(542,336	)
Net increase (decrease) in shares outstanding		1,969,871			686,648			(108,118	)		290,701

The accompanying notes are an integral part of these financial statements.

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BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Bond Index Fund
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	9.74		$	9.59		$	9.64		$	9.93		$	10.02		$	10.14
Income from investment operations:
Net investment income		0.23			0.48			0.46			0.44			0.45			0.52
Net realized and unrealized gain (loss)		(0.09	)		0.19			(0.02	)		(0.23	)		(0.05	)		(0.13	)
Total from investment operations		0.14			0.67			0.44			0.21			0.40			0.39
Less distributions from:
Net investment income		(0.23	)		(0.52	)		(0.49	)		(0.50	)		(0.49	)		(0.51	)
Total distributions		(0.23	)		(0.52	)		(0.49	)		(0.50	)		(0.49	)		(0.51	)
Net asset value, end of period	$	9.65		$	9.74		$	9.59		$	9.64		$	9.93		$	10.02
Total return		1.47	%(a)		7.16	%		4.76	%		2.12	%		4.05	%		3.92	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	129,779		$	111,847		$	103,592		$	203,771		$	217,013		$	178,217
Ratio of expenses to average net assets(b)		0.23	%		0.23	%		0.23	%		0.23	%		0.23	%		0.23	%
Ratio of expenses to average net assets prior to expense reductions(b)		0.26	%		0.28	%		0.26	%		n/a			n/a			n/a
Ratio of net investment income to average net assets(b)		4.88	%		5.00	%		4.83	%		4.42	%		4.34	%		4.09	%
Portfolio turnover rate(c)		36	%		61	%		57	%		76	%		148	%		67	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include the Fund’s share of net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the Fund’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

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BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	S&P 500 Stock Fund
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	175.47		$	169.53		$	150.07		$	145.95		$	134.74		$	106.71
Income from investment operations:
Net investment income		1.64			3.14			3.04			2.66			3.51			1.86
Net realized and unrealized gain (loss)		(22.62	)		5.94			20.11			4.07			10.69			28.06
Total from investment operations		(20.98	)		9.08			23.15			6.73			14.20			29.92
Less distributions from:
Net investment income		(1.65	)		(3.14	)		(3.68	)		(2.61	)		(2.99	)		(1.89	)
Return of capital		—			—			(0.01	)		—			—			—
Total distributions		(1.65	)		(3.14	)		(3.69	)		(2.61	)		(2.99	)		(1.89	)
Net asset value, end of period	$	152.84		$	175.47		$	169.53		$	150.07		$	145.95		$	134.74
Total return		(11.96	)%(a)		5.39	%		15.60	%		4.72	%		10.67	%		28.37	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	271,690		$	330,892		$	270,407		$	308,836		$	440,365		$	1,394,613
Ratio of expenses to average net assets(b)		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%		0.20	%
Ratio of expenses to average net assets prior to expense reductions(b)		0.21	%		0.21	%		0.21	%		n/a			n/a			n/a
Ratio of net investment income to average net assets(b)		1.97	%		1.83	%		1.78	%		1.69	%		1.63	%		1.59	%
Portfolio turnover rate(c)		3	%		7	%		14	%		10	%		14	%		8	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include the Fund’s share of net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the Fund’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Bond Index and S&P 500 Stock Funds (each, a “Fund,” collectively, the “Funds”).

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (99.99% and 10.74% for the Bond Index and S&P 500 Stock Funds, respectively, as of June 30, 2008).

Effective January 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized, tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

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BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Bond Index Fund are declared and distributed monthly. Distributions to shareholders from net investment income of the S&P 500 Stock Fund, if any, are declared and distributed quarterly. For each Fund, distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually.

Due to the timing of distributions and the differences in accounting for income and realized gains (losses) for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains (losses) were recorded by 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 June 30, 2008.

The Funds had tax basis net capital loss carryforwards as of December 31, 2007, the tax year-end of the Funds, as follows:

Fund	Expiring 2008		Expiring 2010		Expiring 2011		Expiring 2012		Expiring 2013		Expiring 2014		Expiring 2015		Total
Bond Index	$	1,845,447	$	—	$	159,923	$	—	$	1,501,172	$	2,280,081	$	450,134	$	6,236,757
S&P 500 Stock		—		72,553,461		—		1,601,227		21,068,838		31,394,394		18,209,354		144,827,274

Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first.

The Funds 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. SEI does not receive a fee from the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary

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BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

operating expenses, excluding, generally, investment advisory fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.15% of the average daily net assets from each Fund. From time to time, BGI may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI credited administration fees of $6,332 and $7,364 for the Bond Index and S&P 500 Stock Funds, respectively.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each Fund are disclosed in detail in the Funds’ Statements of Changes in Net Assets.

10

BOND INDEX MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Principal		Value
CORPORATE BONDS & NOTES – 22.72%
AEROSPACE & DEFENSE – 0.23%
Boeing Co. (The)
6.13%, 02/15/33	$	100,000	$	101,202
Lockheed Martin Corp.
6.15%, 09/01/36		100,000		98,934
United Technologies Corp.
6.10%, 05/15/12		100,000		105,807
				305,943
AUTO MANUFACTURERS – 0.28%
DaimlerChrysler North America
Holding Corp.
7.20%, 09/01/09		350,000		359,996
				359,996
BANKS – 3.65%
Abbey National PLC
7.95%, 10/26/29		100,000		101,706
American Express Centurion Bank
5.20%, 11/26/10		200,000		200,282
Bank of America Corp.
5.49%, 03/15/19		200,000		181,328
Bank of New York Mellon Corp. (The)
4.95%, 11/01/12		250,000		249,273
Capital One Financial Corp.
6.75%, 09/15/17		100,000		99,083
Deutsche Bank AG London
5.38%, 10/12/12		100,000		101,473
HSBC Holdings PLC
5.25%, 12/12/12		300,000		299,985
KfW
0.00%, 04/18/36		250,000		59,330
3.25%, 02/15/11		400,000		400,290
3.25%, 03/15/13(a)		500,000		487,910
Landwirtschaftliche Rentenbank
3.88%, 03/15/10		500,000		507,206
NationsBank Corp.
7.75%, 08/15/15		250,000		269,123
Royal Bank of Scotland Group PLC
5.00%, 10/01/14		250,000		239,578
Sanwa Bank Ltd.
7.40%, 06/15/11		200,000		211,626
Swiss Bank Corp.
7.00%, 10/15/15		150,000		159,155
US Bank N.A.
6.38%, 08/01/11		250,000		261,122
Wachovia Bank N.A.
6.60%, 01/15/38		50,000		43,569
Wachovia Corp.
5.50%, 08/01/35		150,000		113,354
Wells Fargo & Co.
4.20%, 01/15/10		500,000		501,457

Security	Principal		Value
BANKS (Continued)
Wells Fargo Bank N.A.
7.55%, 06/21/10	$	250,000	$	263,674
				4,750,524
BEVERAGES – 0.36%
Anheuser-Busch Companies Inc.
6.45%, 09/01/37		100,000		95,573
Bottling Group LLC
4.63%, 11/15/12		100,000		101,118
Coca-Cola Enterprises Inc.
8.50%, 02/01/22		100,000		122,775
Diageo Capital PLC
5.20%, 01/30/13		150,000		150,171
				469,637
BUILDING MATERIALS – 0.15%
Masco Corp.
5.88%, 07/15/12		200,000		190,984
				190,984
CHEMICALS – 0.23%
Dow Chemical Co. (The)
6.00%, 10/01/12		100,000		103,618
E.I. du Pont de Nemours and Co.
6.88%, 10/15/09		100,000		104,230
Praxair Inc.
4.63%, 03/30/15		100,000		96,017
				303,865
COMPUTERS – 0.42%
Dell Inc.
5.65%, 04/15/18(b)		300,000		289,492
International Business Machines Corp.
4.75%, 11/29/12		250,000		253,460
				542,952
COSMETICS & PERSONAL CARE – 0.28%
Procter & Gamble Co. (The)
6.88%, 09/15/09		350,000		364,722
				364,722
DIVERSIFIED FINANCIAL SERVICES – 4.63%
American General Finance Corp.
6.90%, 12/15/17		200,000		174,313
Bear Stearns Companies Inc. (The)
5.70%, 11/15/14		200,000		193,283
CIT Group Funding Co. of Canada
4.65%, 07/01/10		250,000		209,102
Citigroup Capital XXI
8.30%, 12/21/37		50,000		47,216

11

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
DIVERSIFIED FINANCIAL SERVICES (Continued)
Citigroup Inc.
5.00%, 09/15/14	$	177,000	$	163,931
5.30%, 10/17/12		250,000		243,861
6.63%, 06/15/32		100,000		91,264
6.88%, 03/05/38		100,000		96,499
Credit Suisse First Boston USA Inc.
6.50%, 01/15/12		100,000		103,775
Credit Suisse USA Inc.
6.13%, 11/15/11		250,000		256,668
General Electric Capital Corp.
5.63%, 05/01/18		300,000		290,116
5.88%, 01/14/38		100,000		90,627
6.75%, 03/15/32		250,000		251,737
Goldman Sachs Group Inc. (The)
5.95%, 01/18/18		300,000		287,987
6.13%, 02/15/33		200,000		179,148
6.88%, 01/15/11		400,000		415,234
Household Finance Corp.
8.00%, 07/15/10		250,000		261,425
HSBC Finance Corp.
5.50%, 01/19/16		100,000		96,063
International Lease Finance Corp.
5.45%, 03/24/11		250,000		234,936
John Deere Capital Corp.
7.00%, 03/15/12		150,000		161,330
JPMorgan Chase Capital XVIII
6.95%, 08/17/36		100,000		92,240
JPMorgan Chase & Co.
5.13%, 09/15/14		250,000		243,083
6.00%, 01/15/18		250,000		243,535
6.40%, 05/15/38		100,000		92,754
Lehman Brothers Holdings Inc.
4.80%, 03/13/14		150,000		134,677
6.50%, 07/19/17		100,000		92,512
6.75%, 12/28/17		50,000		46,971
7.50%, 05/11/38		50,000		46,379
Merrill Lynch & Co. Inc.
6.05%, 08/15/12		200,000		195,743
6.11%, 01/29/37		100,000		79,421
6.15%, 04/25/13		300,000		290,760
Morgan Stanley
4.75%, 04/01/14		450,000		410,054
National Rural Utilities Cooperative Finance Corp.
7.25%, 03/01/12		200,000		212,900
				6,029,544
ELECTRIC – 1.71%
Alabama Power Co. Series Q
5.50%, 10/15/17		100,000		100,728
Arizona Public Service Co.
6.50%, 03/01/12		100,000		100,842
Cincinnati Gas & Electric Co.
5.70%, 09/15/12		100,000		101,608

Security	Principal		Value
ELECTRIC (Continued)
Consumers Energy Co.
5.00%, 02/15/12	$	150,000	$	148,596
Florida Power & Light Co.
5.95%, 02/01/38		100,000		98,856
Indiana Michigan Power Co.
6.05%, 03/15/37		100,000		87,382
MidAmerican Energy Holdings Co.
6.13%, 04/01/36		100,000		96,027
Northern States Power Co.
8.00%, 08/28/12		100,000		111,780
Oncor Electric Delivery Co.
6.38%, 05/01/12		150,000		151,954
Ontario Hydro Canada
7.45%, 03/31/13		150,000		168,446
Pacific Gas and Electric Co.
6.05%, 03/01/34		100,000		96,423
Pepco Holdings Inc.
6.45%, 08/15/12		100,000		101,845
Progress Energy Inc.
7.10%, 03/01/11		175,000		184,142
Public Service Electric & Gas Co.
5.13%, 09/01/12		100,000		101,071
San Diego Gas & Electric Co.
6.13%, 09/15/37		100,000		100,016
Southern California Edison Co.
5.00%, 01/15/16		200,000		197,064
Toledo Edison Co.
6.15%, 05/15/37		100,000		86,727
Virginia Electric and Power Co.
4.75%, 03/01/13		200,000		196,823
				2,230,330
ENVIRONMENTAL CONTROL – 0.08%
Waste Management Inc.
7.00%, 07/15/28		100,000		100,748
				100,748
FOOD – 0.96%
Archer-Daniels-Midland Co.
8.38%, 04/15/17		150,000		176,156
Kellogg Co.
6.60%, 04/01/11		250,000		263,025
Kraft Foods Inc.
5.63%, 11/01/11		150,000		151,342
Kroger Co. (The)
6.15%, 01/15/20		100,000		98,942
Safeway Inc.
7.50%, 09/15/09		285,000		294,323
Unilever Capital Corp.
7.13%, 11/01/10		250,000		266,780
				1,250,568

12

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
HEALTH CARE – PRODUCTS – 0.10%
Johnson & Johnson
5.15%, 08/15/12	$	125,000	$	130,933
				130,933
HEALTH CARE – SERVICES – 0.22%
Aetna Inc.
6.75%, 12/15/37		50,000		47,356
WellPoint Inc.
5.25%, 01/15/16		250,000		234,974
				282,330
HOUSEHOLD PRODUCTS & WARES – 0.16%
Kimberly-Clark Corp.
6.13%, 08/01/17		200,000		207,670
				207,670
INSURANCE – 0.81%
Allstate Corp. (The)
7.20%, 12/01/09		250,000		260,219
American International Group Inc.
6.25%, 03/15/37		100,000		78,277
Berkshire Hathaway Finance Corp.
5.10%, 07/15/14		100,000		101,305
Hartford Financial Services Group Inc.
6.10%, 10/01/41		100,000		87,743
ING Capital Funding Trust III
8.44%, 12/31/10		100,000		101,040
MetLife Inc.
5.38%, 12/15/12		200,000		201,833
5.70%, 06/15/35		100,000		88,175
Prudential Financial Inc. Series S
6.63%, 12/01/37		50,000		47,198
Travelers Property Casualty Corp.
6.38%, 03/15/33		100,000		95,510
				1,061,300
MACHINERY – 0.20%
Caterpillar Inc.
5.70%, 08/15/16		250,000		254,695
				254,695
MANUFACTURING – 0.38%
General Electric Co.
5.00%, 02/01/13		100,000		100,720
5.25%, 12/06/17		100,000		96,133
Honeywell International Inc.
5.30%, 03/01/18		100,000		98,508
Tyco International Group SA
6.38%, 10/15/11		200,000		204,666
				500,027

Security	Principal		Value
MEDIA – 1.04%
AOL Time Warner Inc.
6.88%, 05/01/12	$	350,000	$	358,068
Comcast Corp.
6.45%, 03/15/37		100,000		93,069
Cox Communications Inc.
5.50%, 10/01/15		100,000		96,385
News America Inc.
6.20%, 12/15/34		100,000		92,218
TCI Communications Inc.
8.75%, 08/01/15		200,000		226,075
Time Warner Cable Inc.
6.55%, 05/01/37		100,000		92,100
Viacom Inc.
5.63%, 08/15/12(a)		200,000		197,356
6.88%, 04/30/36		100,000		93,909
Walt Disney Co. (The)
6.38%, 03/01/12		100,000		106,391
				1,355,571
MINING – 0.36%
Alcan Inc.
4.88%, 09/15/12		150,000		146,022
Alcoa Inc.
5.90%, 02/01/27		150,000		133,126
BHP Billiton Finance (USA) Ltd.
4.80%, 04/15/13		100,000		97,619
Vale Overseas Ltd.
6.88%, 11/21/36		100,000		92,874
				469,641
MULTI-NATIONAL – 0.89%
European Investment Bank
4.88%, 02/16/16		250,000		258,784
5.13%, 09/13/16		225,000		236,454
International Bank for Reconstruction & Development
4.13%, 08/12/09		650,000		658,039
				1,153,277
OIL & GAS – 1.21%
Alberta Energy Co. Ltd.
7.38%, 11/01/31		100,000		106,264
Anadarko Petroleum Corp.
6.45%, 09/15/36		100,000		98,709
Apache Corp.
6.00%, 01/15/37		100,000		98,123
Burlington Resources Finance Co.
7.20%, 08/15/31		100,000		113,392
Canadian Natural Resources Ltd.
5.70%, 05/15/17		250,000		244,914
Devon Financing Corp. ULC
6.88%, 09/30/11		250,000		265,340

13

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
OIL & GAS (Continued)
Enterprise Products Operating LP
5.60%, 10/15/14	$	200,000	$	195,920
Marathon Oil Corp.
6.13%, 03/15/12		150,000		154,064
Suncor Energy Inc.
6.50%, 06/15/38		100,000		97,011
Transocean Inc.
5.25%, 03/15/13		100,000		101,045
XTO Energy Inc.
6.25%, 04/15/13		100,000		102,980
				1,577,762
PHARMACEUTICALS – 0.82%
Abbott Laboratories
5.60%, 11/30/17		150,000		151,301
AstraZeneca PLC
5.90%, 09/15/17		200,000		205,000
Eli Lilly and Co.
5.50%, 03/15/27		50,000		47,864
GlaxoSmithKline Capital Inc.
6.38%, 05/15/38		250,000		248,158
Merck & Co. Inc.
5.95%, 12/01/28		100,000		98,015
Pharmacia Corp.
6.50%, 12/01/18		150,000		164,504
Wyeth
5.50%, 03/15/13		150,000		153,095
				1,067,937
PIPELINES – 0.27%
Kinder Morgan Energy Partners LP
6.50%, 02/01/37		100,000		94,555
Tennessee Gas Pipeline Co.
7.50%, 04/01/17		100,000		105,363
TransCanada PipeLines Ltd.
6.20%, 10/15/37		50,000		45,833
Williams Companies Inc. (The)
7.63%, 07/15/19		100,000		105,000
				350,751
REAL ESTATE INVESTMENT TRUSTS – 0.37%
Boston Properties LP
6.25%, 01/15/13		200,000		203,683
Health Care Property Investors Inc.
6.00%, 01/30/17		100,000		86,060
Simon Property Group LP
5.63%, 08/15/14		200,000		193,391
				483,134
RETAIL – 0.60%
Home Depot Inc.
5.88%, 12/16/36		100,000		81,693

Security	Principal		Value
RETAIL (Continued)
J.C. Penney Co. Inc.
6.38%, 10/15/36	$	50,000	$	41,760
May Department Stores Co. (The)
6.65%, 07/15/24		125,000		101,216
McDonald’s Corp.
5.35%, 03/01/18		100,000		97,564
Target Corp.
6.50%, 10/15/37		100,000		96,198
Wal-Mart Stores Inc.
5.25%, 09/01/35		100,000		86,881
6.20%, 04/15/38		100,000		98,255
6.88%, 08/10/09		175,000		181,433
				785,000
SAVINGS & LOANS – 0.15%
Washington Mutual Bank
5.65%, 08/15/14		250,000		195,000
				195,000
TELECOMMUNICATIONS – 1.79%
AT&T Wireless Services Inc.
7.88%, 03/01/11		250,000		266,164
BellSouth Corp.
6.88%, 10/15/31		150,000		149,840
British Telecom PLC
8.63%, 12/15/10		250,000		268,438
Deutsche Telekom International Finance AG
8.75%, 06/15/30		100,000		114,738
Embarq Corp.
7.08%, 06/01/16		100,000		94,975
France Telecom SA
7.75%, 03/01/11		150,000		158,856
Motorola Inc.
7.63%, 11/15/10		16,000		16,310
SBC Communications Inc.
5.10%, 09/15/14		300,000		294,081
Telecom Italia Capital SA
5.25%, 11/15/13		150,000		141,697
Telefonica Europe BV
8.25%, 09/15/30		50,000		57,398
Verizon Global Funding Corp.
4.38%, 06/01/13		250,000		240,460
7.75%, 12/01/30		250,000		268,570
Verizon Pennsylvania Inc.
5.65%, 11/15/11		150,000		151,056
Vodafone Group PLC
7.88%, 02/15/30		100,000		109,865
				2,332,448
TRANSPORTATION – 0.37%
Burlington Northern Santa Fe Corp.
7.13%, 12/15/10		250,000		263,197

14

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
TRANSPORTATION (Continued)
Norfolk Southern Corp.
7.70%, 05/15/17	$	150,000	$	166,980
Union Pacific Corp.
6.15%, 05/01/37		50,000		47,853
				478,030
TOTAL CORPORATE BONDS & NOTES
(Cost: $30,268,268)				29,585,319
ASSET-BACKED SECURITIES – 0.79%
Connecticut RRB Special Purpose Trust CL&P Series 2001-1 Class A5
6.21%, 12/30/11		1,000,000		1,033,132
TOTAL ASSET-BACKED SECURITIES
(Cost: $1,033,242)				1,033,132
COLLATERALIZED MORTGAGE OBLIGATIONS – 5.30%
MORTGAGE-BACKED SECURITIES – 5.30%
Credit Suisse First Boston Mortgage Securities Corp. Series 1999-C1 Class A2
7.29%, 09/15/41		564,304		576,782
Credit Suisse First Boston Mortgage Securities Corp. Series 2004-C2 Class A2
5.42%, 05/15/36		1,000,000		972,210
Greenwich Capital Commercial Funding Corp. Series 2007-GG9 Class A4
5.44%, 01/10/17		1,000,000		931,793
JP Morgan Chase Commercial Mortgage Finance Corp. Series 2000-C10 Class A2
7.37%, 08/15/32		727,379		749,268
JP Morgan Chase Commercial Mortgage Securities Corp. Series 2004-C3 Class A5
4.88%, 01/15/42		500,000		474,901
JP Morgan Chase Commercial Mortgage Securities Corp. Series 2005-CB11 Class A2
5.02%, 08/12/37		210,000		210,054
LB-UBS Commercial Mortgage Trust Series 2004-C2 Class A4
4.37%, 03/15/36		500,000		466,247
LB-UBS Commercial Mortgage Trust Series 2005-C5 Class A2
4.89%, 09/15/40		1,000,000		997,820
LB-UBS Commercial Mortgage Trust Series 2006-C4 Class AM
6.10%, 06/15/38		600,000		566,475

Security	Principal		Value
MORTGAGE-BACKED SECURITIES (Continued)
Morgan Stanley Capital I Series 2006-HQ8 Class A4
5.56%, 03/12/44	$	1,000,000	$	960,094
				6,905,644
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost: $7,278,347)				6,905,644
FOREIGN GOVERNMENT BONDS & NOTES(c) – 1.61%
Brazil (Federative Republic of)
7.13%, 01/20/37		100,000		110,350
8.00%, 01/15/18		100,000		111,050
British Columbia (Province of)
6.50%, 01/15/26		100,000		117,856
Finland (Republic of)
6.95%, 02/15/26		100,000		120,373
Hydro-Quebec
6.30%, 05/11/11		150,000		159,547
Israel (State of)
4.63%, 06/15/13		100,000		100,169
Italy (Republic of)
6.88%, 09/27/23		200,000		240,756
Nova Scotia (Province of)
5.75%, 02/27/12		150,000		158,375
Ontario (Province of)
5.00%, 10/18/11		500,000		518,373
Quebec (Province of)
6.13%, 01/22/11		150,000		158,630
United Mexican States
8.13%, 12/30/19		250,000		302,500
TOTAL FOREIGN GOVERNMENT BONDS & NOTES
(Cost: $2,005,605)				2,097,979
MUNICIPAL DEBT OBLIGATIONS – 0.28%
ILLINOIS – 0.14%
Illinois State
5.10%, 06/01/33		200,000		188,268
				188,268
NEW JERSEY – 0.14%
New Jersey State Turnpike Authority
4.25%, 01/01/16		190,000		177,439
				177,439
TOTAL MUNICIPAL DEBT OBLIGATIONS
(Cost: $372,659)				365,707

15

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
U.S. GOVERNMENT & AGENCY OBLIGATIONS – 69.04%
MORTGAGE-BACKED SECURITIES – 37.26%
Federal Home Loan Mortgage Corp.
4.00%, 05/01/19	$	630,360	$	597,861
4.50%, 04/01/18		916,221		895,720
4.50%, 11/01/18		733,103		716,700
4.50%, 01/01/19		126,976		124,135
4.50%, 02/01/19		757,442		740,494
5.00%, 10/01/18		1,079,276		1,076,890
5.00%, 02/01/34		629,030		606,633
5.00%, 08/01/35		838,654		806,435
5.00%, 08/01/37		1,500,000		1,438,623
5.50%, 09/01/22		1,076,493		1,083,845
5.50%, 04/01/33		1,625,464		1,610,479
5.50%, 10/01/35		3,663,966		3,619,883
6.00%, 08/01/34		3,324,624		3,371,311
6.50%, 06/01/31		232,954		242,267
6.50%, 07/01/38(d)		1,500,000		1,546,641
8.00%, 12/01/24		669,606		723,141
Federal National Mortgage Association
4.05%, 10/01/36		3,380,235		3,391,882
5.00%, 01/01/19		2,708,636		2,705,222
5.00%, 11/01/33		5,293,839		5,107,004
5.50%, 07/01/33		3,658,132		3,627,240
5.50%, 12/01/33		752,427		746,063
5.50%, 03/01/34		76,785		75,992
5.50%, 10/01/35		1,436,970		1,420,776
5.50%, 07/01/38(d)		500,000		492,734
5.85%, 11/01/36		679,241		692,167
6.00%, 07/01/37		1,809,462		1,827,702
6.00%, 12/01/37		947,827		957,381
6.00%, 07/01/38(d)		2,000,000		2,017,500
6.50%, 11/01/37		949,367		978,518
7.00%, 02/01/32		140,102		148,087
Government National Mortgage Association
5.50%, 12/15/32		674,207		673,976
5.50%, 07/01/38(d)		1,000,000		994,844
6.00%, 03/15/35		641,712		652,988
6.00%, 07/01/38(d)		1,000,000		1,015,000
6.50%, 09/15/36		841,265		870,329
7.50%, 12/15/23		857,817		922,921
				48,519,384
U.S. GOVERNMENT AGENCY OBLIGATIONS – 9.57%
Federal Home Loan Bank
3.75%, 08/18/09		1,000,000		1,009,346
4.88%, 03/12/10		500,000		514,653
5.00%, 09/18/09		2,500,000		2,561,617

Security	Principal		Value
U.S. GOVERNMENT AGENCY OBLIGATIONS (Continued)
Federal Home Loan Mortgage Corp.
4.63%, 10/25/12	$	990,000	$	1,014,505
4.88%, 08/16/10		750,000		774,672
6.25%, 07/15/32(a)		420,000		480,738
Federal National Mortgage Association
4.38%, 09/15/12		500,000		508,163
4.38%, 03/15/13(a)		500,000		505,324
4.63%, 10/15/13(a)		2,500,000		2,548,480
5.38%, 11/15/11(a)		500,000		526,253
6.25%, 02/01/11		500,000		524,272
7.25%, 01/15/10(a)		500,000		531,778
Financing Corp.
8.60%, 09/26/19		200,000		262,739
Tennessee Valley Authority
6.25%, 12/15/17		400,000		444,344
7.13%, 05/01/30		200,000		248,874
				12,455,758
U.S. GOVERNMENT OBLIGATIONS – 22.21%
U.S. Treasury Bonds
4.38%, 02/15/38(a)		300,000		292,406
4.50%, 02/15/36		300,000		297,867
4.75%, 02/15/37(a)		600,000		619,594
6.13%, 11/15/27(a)		600,000		717,515
6.25%, 08/15/23(a)		925,000		1,100,534
7.25%, 05/15/16(a)		1,000,000		1,228,672
7.63%, 02/15/25(a)		350,000		476,711
8.00%, 11/15/21(a)		400,000		542,531
8.13%, 05/15/21(a)		500,000		681,094
8.75%, 05/15/17		500,000		673,633
8.75%, 05/15/20		500,000		702,813
12.50%, 08/15/14		400,000		442,781
U.S. Treasury Notes
1.75%, 03/31/10(a)		500,000		493,555
2.13%, 04/30/10(a)		3,300,000		3,276,022
3.13%, 04/30/13		750,000		743,731
3.50%, 05/31/13		1,000,000		1,007,422
3.63%, 07/15/09(a)		750,000		760,019
3.63%, 06/30/13		4,000,000		4,007,188
3.88%, 05/15/18(a)		500,000		495,821
4.00%, 02/15/15(a)		400,000		411,156
4.25%, 11/15/14(a)		1,400,000		1,461,687
4.25%, 08/15/15(a)		1,150,000		1,194,832
4.25%, 11/15/17(a)		275,000		280,908
4.38%, 08/15/12(a)		500,000		523,789
4.50%, 11/15/10(a)		500,000		520,508
4.50%, 02/28/11(a)		250,000		260,625
4.50%, 05/15/17(a)		750,000		781,172
4.63%, 10/31/11(a)		750,000		787,207
4.63%, 11/15/16(a)		250,000		263,692
4.75%, 02/15/10(a)		500,000		517,852
4.88%, 06/30/12(a)		650,000		690,726
4.88%, 08/15/16(a)		1,000,000		1,072,109
5.13%, 05/15/16(a)		250,000		272,578

16

BOND INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares or Principal		Value
U.S. GOVERNMENT OBLIGATIONS (Continued)
5.75%, 08/15/10(a)	$	600,000	$	638,110
6.00%, 08/15/09(a)		300,000		311,648
6.50%, 02/15/10(a)		350,000		372,422
				28,920,930
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost: $88,715,491)				89,896,072
SHORT-TERM INVESTMENTS – 24.23%
MONEY MARKET FUNDS – 24.23%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares 2.58%(e)(f)		4,959,503		4,959,503
BGI Cash Premier Fund LLC 2.63%(e)(f)(g)		26,582,208		26,582,208
				31,541,711
TOTAL SHORT-TERM INVESTMENTS
(Cost: $31,541,711)				31,541,711
TOTAL INVESTMENTS IN SECURITIES – 123.97%
(Cost: $161,215,323)				161,425,564
Other Assets, Less Liabilities – (23.97)%				(31,214,122	)
NET ASSETS – 100.00%			$	130,211,442

^(a) All or a portion of this security represents a security on loan. See Note 4.

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

^(c) Investments are denominated in U.S. dollars.

^(d) To-be-announced (TBA). See Note 1.

^(e) Affiliated issuer. See Note 2.

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

^(g) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

17

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
COMMON STOCKS – 98.04%
ADVERTISING – 0.16%
Interpublic Group of Companies Inc. (The)(a)(b)	104,483	$	898,554
Omnicom Group Inc.(b)	71,227		3,196,668
			4,095,222
AEROSPACE & DEFENSE – 2.19%
Boeing Co. (The)	168,817		11,094,653
General Dynamics Corp.	89,324		7,521,081
Goodrich Corp.	27,774		1,318,154
L-3 Communications Holdings Inc.(b)	27,197		2,471,391
Lockheed Martin Corp.	76,132		7,511,183
Northrop Grumman Corp.	75,054		5,021,113
Raytheon Co.(b)	94,700		5,329,716
Rockwell Collins Inc.(b)	36,094		1,731,068
United Technologies Corp.	217,940		13,446,898
			55,445,257
AGRICULTURE – 2.33%
Altria Group Inc.	468,172		9,625,616
Archer-Daniels-Midland Co.	142,942		4,824,293
Lorillard Inc.(a)	38,588		2,668,746
Monsanto Co.	121,679		15,385,093
Philip Morris International Inc.	468,108		23,119,854
Reynolds American Inc.	37,996		1,773,273
UST Inc.(b)	33,229		1,814,636
			59,211,511
AIRLINES – 0.08%
Southwest Airlines Co.(b)	163,364		2,130,267
			2,130,267
APPAREL – 0.40%
Coach Inc.(a)(b)	78,196		2,258,300
Jones Apparel Group Inc.(b)	19,370		266,337
Liz Claiborne Inc.(b)	21,450		303,517
Nike Inc. Class B	85,041		5,069,294
Polo Ralph Lauren Corp.(b)	13,109		822,983
VF Corp.(b)	19,506		1,388,437
			10,108,868
AUTO MANUFACTURERS – 0.28%
Ford Motor Co.(a)(b)	490,340		2,358,535
General Motors Corp.(b)	125,747		1,446,090
PACCAR Inc.(b)	81,451		3,407,095
			7,211,720
AUTO PARTS & EQUIPMENT – 0.19%
Goodyear Tire & Rubber Co. (The)(a)	53,236		949,198
Johnson Controls Inc.(b)	131,895		3,782,749
			4,731,947

Security	Shares	Value
BANKS – 3.88%
Bank of America Corp.	1,014,563	$	24,217,619
Bank of New York Mellon Corp. (The)	253,449		9,587,976
BB&T Corp.(b)	121,344		2,763,003
Comerica Inc.(b)	33,327		854,171
Discover Financial Services LLC	105,989		1,395,875
Fifth Third Bancorp	118,419		1,205,505
First Horizon National Corp.	27,800		206,554
Huntington Bancshares Inc.(b)	81,116		468,039
KeyCorp	89,010		977,330
M&T Bank Corp.(b)	17,097		1,206,022
Marshall & Ilsley Corp.(b)	58,280		893,432
National City Corp.(b)	140,842		671,816
Northern Trust Corp.	42,643		2,924,031
PNC Financial Services Group Inc. (The)	75,694		4,322,127
Regions Financial Corp.(b)	154,125		1,681,504
State Street Corp.	93,927		6,010,389
SunTrust Banks Inc.(b)	77,935		2,822,806
U.S. Bancorp(b)	384,093		10,712,354
Wachovia Corp.(b)	472,498		7,337,894
Wells Fargo & Co.(b)	732,009		17,385,214
Zions Bancorporation(b)	23,844		750,848
			98,394,509
BEVERAGES – 2.42%
Anheuser-Busch Companies Inc.	158,811		9,865,339
Brown-Forman Corp. Class B(b)	18,758		1,417,542
Coca-Cola Co. (The)	443,760		23,066,645
Coca-Cola Enterprises Inc.	64,581		1,117,251
Constellation Brands Inc. Class A(a)(b)	43,465		863,215
Molson Coors Brewing Co. Class B	30,580		1,661,411
Pepsi Bottling Group Inc.	30,535		852,537
PepsiCo Inc.	354,818		22,562,877
			61,406,817
BIOTECHNOLOGY – 1.04%
Amgen Inc.(a)	241,519		11,390,036
Biogen Idec Inc.(a)	66,143		3,696,732
Celgene Corp.(a)(b)	96,630		6,171,758
Genzyme Corp.(a)(b)	59,452		4,281,733
Millipore Corp.(a)(b)	12,251		831,353
			26,371,612
BUILDING MATERIALS – 0.05%
Masco Corp.(b)	81,101		1,275,719
			1,275,719
CHEMICALS – 1.49%
Air Products and Chemicals Inc.(b)	47,634		4,709,097
Ashland Inc.	12,475		601,295
Dow Chemical Co. (The)	208,662		7,284,390
E.I. du Pont de Nemours and Co.(b)	199,714		8,565,733

18

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
CHEMICALS (Continued)
Eastman Chemical Co.(b)	17,744	$	1,221,852
Ecolab Inc.(b)	38,979		1,675,707
Hercules Inc.(b)	25,729		435,592
International Flavors & Fragrances Inc.(b)	18,006		703,314
PPG Industries Inc.(b)	36,409		2,088,784
Praxair Inc.(b)	69,571		6,556,371
Rohm and Haas Co.(b)	27,878		1,294,654
Sherwin-Williams Co. (The)(b)	22,673		1,041,371
Sigma-Aldrich Corp.(b)	28,769		1,549,498
			37,727,658
COAL – 0.45%
CONSOL Energy Inc.	40,543		4,555,817
Massey Energy Co.	17,916		1,679,625
Peabody Energy Corp.(b)	60,200		5,300,610
			11,536,052
COMMERCIAL SERVICES – 0.65%
Apollo Group Inc. Class A(a)	30,439		1,347,230
Convergys Corp.(a)	28,872		429,038
Equifax Inc.(b)	28,848		969,870
H&R Block Inc.	72,307		1,547,370
McKesson Corp.	63,825		3,568,456
Monster Worldwide Inc.(a)(b)	27,478		566,322
Moody’s Corp.(b)	45,729		1,574,907
R.R. Donnelley & Sons Co.	47,709		1,416,480
Robert Half International Inc.(b)	35,459		849,952
Western Union Co.	166,533		4,116,696
			16,386,321
COMPUTERS – 4.89%
Affiliated Computer Services Inc. Class A(a)	21,353		1,142,172
Apple Inc.(a)	195,131		32,672,735
Cognizant Technology Solutions Corp.(a)(b)	64,086		2,083,436
Computer Sciences Corp.(a)(b)	35,856		1,679,495
Dell Inc.(a)	453,514		9,922,886
Electronic Data Systems Corp.	112,821		2,779,909
EMC Corp.(a)(b)	466,487		6,852,694
Hewlett-Packard Co.	547,370		24,199,228
International Business Machines Corp.	306,643		36,346,395
Lexmark International Inc. Class A(a)(b)	21,396		715,268
NetApp Inc.(a)(b)	76,368		1,654,131
SanDisk Corp.(a)(b)	50,682		947,753
Sun Microsystems Inc.(a)	176,195		1,917,002
Teradata Corp.(a)	40,109		928,122
Unisys Corp.(a)	75,179		296,957
			124,138,183
COSMETICS & PERSONAL CARE – 2.11%
Avon Products Inc.(b)	94,810		3,415,056

Security	Shares	Value
COSMETICS & PERSONAL CARE (Continued)
Colgate-Palmolive Co.	113,218	$	7,823,364
Estee Lauder Companies Inc. (The) Class A(b)	25,389		1,179,319
Procter & Gamble Co. (The)	675,928		41,103,182
			53,520,921
DISTRIBUTION & WHOLESALE – 0.11%
Genuine Parts Co.	36,756		1,458,478
W.W. Grainger Inc.	14,928		1,221,110
			2,679,588
DIVERSIFIED FINANCIAL SERVICES – 5.03%
American Express Co.	256,715		9,670,454
Ameriprise Financial Inc.	50,440		2,051,395
Capital One Financial Corp.(b)	82,857		3,149,395
Charles Schwab Corp. (The)	208,561		4,283,843
CIT Group Inc.	42,384		288,635
Citigroup Inc.	1,200,287		20,116,810
CME Group Inc.(b)	11,844		4,538,502
E*TRADE Financial Corp.(a)(b)	105,624		331,659
Federal Home Loan Mortgage Corp.	143,530		2,353,892
Federal National Mortgage Association	235,484		4,594,293
Federated Investors Inc. Class B	18,897		650,435
Franklin Resources Inc.(b)	34,938		3,202,068
Goldman Sachs Group Inc. (The)(b)	87,733		15,344,502
IntercontinentalExchange Inc.(a)	15,665		1,785,810
Janus Capital Group Inc.(b)	32,881		870,360
JPMorgan Chase & Co.	762,542		26,162,816
Legg Mason Inc.(b)	29,977		1,306,098
Lehman Brothers Holdings Inc.	149,490		2,961,397
Merrill Lynch & Co. Inc.	215,749		6,841,401
Morgan Stanley	245,284		8,847,394
NYSE Euronext Inc.	58,871		2,982,405
SLM Corp.(a)	103,693		2,006,460
T. Rowe Price Group Inc.(b)	58,599		3,309,086
			127,649,110
ELECTRIC – 3.60%
AES Corp. (The)(a)	148,709		2,856,700
Allegheny Energy Inc.	37,035		1,855,824
Ameren Corp.(b)	46,395		1,959,261
American Electric Power Co. Inc.	88,957		3,578,740
CenterPoint Energy Inc.	72,998		1,171,618
CMS Energy Corp.(b)	49,800		742,020
Consolidated Edison Inc.(b)	60,478		2,364,085
Constellation Energy Group Inc.	39,530		3,245,413
Dominion Resources Inc.(b)	127,674		6,063,238
DTE Energy Co.(b)	36,295		1,540,360
Duke Energy Corp.(b)	280,502		4,875,125
Dynegy Inc. Class A(a)	110,140		941,697
Edison International	72,380		3,718,884
Entergy Corp.	42,463		5,115,942

19

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
ELECTRIC (Continued)
Exelon Corp.	146,825	$	13,208,377
FirstEnergy Corp.	67,708		5,574,400
FPL Group Inc.	90,476		5,933,416
Integrys Energy Group Inc.	16,933		860,704
Pepco Holdings Inc.	44,500		1,141,425
PG&E Corp.	79,043		3,137,217
Pinnacle West Capital Corp.(b)	22,223		683,802
PPL Corp.	82,940		4,335,274
Progress Energy Inc.(b)	57,803		2,417,899
Public Service Enterprise Group Inc.	112,938		5,187,242
Southern Co. (The)(b)	169,841		5,930,848
TECO Energy Inc.(b)	46,582		1,001,047
Xcel Energy Inc.(b)	95,767		1,922,044
			91,362,602
ELECTRICAL COMPONENTS & EQUIPMENT – 0.37%
Emerson Electric Co.	174,814		8,644,552
Molex Inc.(b)	31,316		764,424
			9,408,976
ELECTRONICS – 0.63%
Agilent Technologies Inc.(a)	81,109		2,882,614
Applied Biosystems Group	37,231		1,246,494
Jabil Circuit Inc.	46,308		759,914
PerkinElmer Inc.	25,769		717,667
Thermo Fisher Scientific Inc.(a)(b)	92,975		5,181,497
Tyco Electronics Ltd.	108,272		3,878,303
Waters Corp.(a)	22,232		1,433,964
			16,100,453
ENGINEERING & CONSTRUCTION – 0.23%
Fluor Corp.	19,682		3,662,427
Jacobs Engineering Group Inc.(a)(b)	26,966		2,176,156
			5,838,583
ENTERTAINMENT – 0.07%
International Game Technology Inc.	69,514		1,736,460
			1,736,460
ENVIRONMENTAL CONTROL – 0.20%
Allied Waste Industries Inc.(a)	73,709		930,208
Waste Management Inc.	110,038		4,149,533
			5,079,741
FOOD – 1.83%
Campbell Soup Co.(b)	48,669		1,628,465
ConAgra Foods Inc.(b)	108,354		2,089,065
Dean Foods Co.(a)(b)	32,930		646,087
General Mills Inc.	74,804		4,545,839
H.J. Heinz Co.	70,016		3,350,266
Hershey Co. (The)(b)	37,408		1,226,234
Kellogg Co.(b)	57,903		2,780,502
Kraft Foods Inc.	340,485		9,686,798

Security	Shares	Value
FOOD (Continued)
Kroger Co. (The)(b)	149,435	$	4,314,188
McCormick & Co. Inc. NVS(b)	28,442		1,014,242
Safeway Inc.	97,806		2,792,361
Sara Lee Corp.	158,290		1,939,052
SUPERVALU Inc.(b)	46,943		1,450,069
Sysco Corp.(b)	134,081		3,688,568
Tyson Foods Inc. Class A	60,753		907,650
Whole Foods Market Inc.(b)	31,059		735,788
Wm. Wrigley Jr. Co.	48,083		3,739,896
			46,535,070
FOREST PRODUCTS & PAPER – 0.28%
International Paper Co.(b)	94,911		2,211,426
MeadWestvaco Corp.	38,694		922,465
Plum Creek Timber Co. Inc.(b)	38,264		1,634,255
Weyerhaeuser Co.(b)	46,563		2,381,232
			7,149,378
GAS – 0.19%
Nicor Inc.(b)	9,693		412,825
NiSource Inc.	60,778		1,089,142
Sempra Energy(b)	57,610		3,252,084
			4,754,051
HAND & MACHINE TOOLS – 0.09%
Black & Decker Corp. (The)(b)	13,564		780,066
Snap-On Inc.(b)	13,001		676,182
Stanley Works (The)	17,429		781,342
			2,237,590
HEALTH CARE – PRODUCTS – 3.64%
Baxter International Inc.	140,888		9,008,379
Becton, Dickinson and Co.	54,212		4,407,436
Boston Scientific Corp.(a)	298,365		3,666,906
C.R. Bard Inc.(b)	22,302		1,961,461
Covidien Ltd.	110,776		5,305,063
Intuitive Surgical Inc.(a)(b)	8,585		2,312,799
Johnson & Johnson	628,898		40,463,297
Medtronic Inc.(b)	249,371		12,904,949
Patterson Companies Inc.(a)	28,790		846,138
St. Jude Medical Inc.(a)	76,436		3,124,704
Stryker Corp.(b)	52,985		3,331,697
Varian Medical Systems Inc.(a)(b)	27,773		1,440,030
Zimmer Holdings Inc.(a)	51,804		3,525,262
			92,298,121
HEALTH CARE – SERVICES – 0.95%
Aetna Inc.	110,302		4,470,540
Coventry Health Care Inc.(a)	34,401		1,046,478
Humana Inc.(a)	37,768		1,502,033
Laboratory Corp. of America Holdings(a)(b)	24,566		1,710,531
Quest Diagnostics Inc.(b)	34,963		1,694,657

20

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
HEALTH CARE – SERVICES (Continued)
Tenet Healthcare Corp.(a)(b)	104,381	$	580,358
UnitedHealth Group Inc.	277,062		7,272,877
WellPoint Inc.(a)	119,358		5,688,602
			23,966,076
HOLDING COMPANIES – DIVERSIFIED – 0.07%
Leucadia National Corp.	37,600		1,764,944
			1,764,944
HOME BUILDERS – 0.08%
Centex Corp.(b)	26,832		358,744
D.R. Horton Inc.(b)	61,285		664,942
KB Home(b)	17,404		294,650
Lennar Corp. Class A(b)	30,690		378,715
Pulte Homes Inc.(b)	46,744		450,145
			2,147,196
HOME FURNISHINGS – 0.06%
Harman International Industries Inc.(b)	13,430		555,868
Whirlpool Corp.(b)	16,811		1,037,743
			1,593,611
HOUSEHOLD PRODUCTS & WARES – 0.41%
Avery Dennison Corp.(b)	23,652		1,039,032
Clorox Co. (The)	30,871		1,611,466
Fortune Brands Inc.(b)	34,076		2,126,683
Kimberly-Clark Corp.	93,340		5,579,865
			10,357,046
HOUSEWARES – 0.04%
Newell Rubbermaid Inc.	62,010		1,041,148
			1,041,148
INSURANCE – 3.56%
ACE Ltd.	73,279		4,036,940
Aflac Inc.	105,437		6,621,444
Allstate Corp. (The)	124,467		5,674,451
American International Group Inc.	598,024		15,823,715
Aon Corp.(b)	67,882		3,118,499
Assurant Inc.	21,114		1,392,679
Chubb Corp.	82,245		4,030,827
CIGNA Corp.(b)	62,243		2,202,780
Cincinnati Financial Corp.(b)	36,878		936,701
Genworth Financial Inc. Class A	96,163		1,712,663
Hartford Financial Services Group Inc. (The)(b)	69,748		4,503,628
Lincoln National Corp.	58,782		2,664,000
Loews Corp.	80,326		3,767,289
Marsh & McLennan Companies Inc.	115,763		3,073,508
MBIA Inc.(b)	45,402		199,315
MetLife Inc.	157,483		8,310,378
MGIC Investment Corp.(b)	26,907		164,402

Security	Shares	Value
INSURANCE (Continued)
Principal Financial Group Inc.(b)	57,404	$	2,409,246
Progressive Corp. (The)	150,728		2,821,628
Prudential Financial Inc.	98,687		5,895,561
Safeco Corp.	19,961		1,340,581
Torchmark Corp.	20,323		1,191,944
Travelers Companies Inc. (The)	137,089		5,949,663
Unum Group(b)	77,128		1,577,268
XL Capital Ltd. Class A(b)	39,666		815,533
			90,234,643
INTERNET – 2.10%
Akamai Technologies Inc.(a)(b)	37,168		1,293,075
Amazon.com Inc.(a)	68,508		5,023,692
eBay Inc.(a)	247,728		6,770,406
Expedia Inc.(a)	46,389		852,630
Google Inc. Class A(a)	51,489		27,104,839
IAC/InterActiveCorp(a)	40,226		775,557
Symantec Corp.(a)(b)	188,029		3,638,361
VeriSign Inc.(a)(b)	43,289		1,636,324
Yahoo! Inc.(a)	296,955		6,135,090
			53,229,974
INVESTMENT COMPANIES – 0.04%
American Capital Strategies Ltd.(b)	43,378		1,031,095
			1,031,095
IRON & STEEL – 0.52%
AK Steel Holding Corp.	24,923		1,719,687
Allegheny Technologies Inc.(b)	22,387		1,327,101
Nucor Corp.	69,532		5,191,954
United States Steel Corp.(b)	26,167		4,835,138
			13,073,880
LEISURE TIME – 0.20%
Carnival Corp.(b)	96,977		3,196,362
Harley-Davidson Inc.(b)	53,009		1,922,106
			5,118,468
LODGING – 0.16%
Marriott International Inc. Class A(b)	66,886		1,755,089
Starwood Hotels & Resorts Worldwide Inc.(b)	41,852		1,677,010
Wyndham Worldwide Corp.	39,074		699,815
			4,131,914
MACHINERY – 0.93%
Caterpillar Inc.(b)	138,246		10,205,320
Cummins Inc.	44,924		2,943,420
Deere & Co.	96,834		6,984,636
Manitowoc Co. Inc. (The)(b)	28,805		937,027
Rockwell Automation Inc.(b)	32,981		1,442,259
Terex Corp.(a)	22,591		1,160,500
			23,673,162

21

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
MANUFACTURING – 4.38%
Cooper Industries Ltd.(b)	39,184	$	1,547,768
Danaher Corp.(b)	56,564		4,372,397
Dover Corp.(b)	42,655		2,063,222
Eastman Kodak Co.(b)	63,900		922,077
Eaton Corp.	36,435		3,095,882
General Electric Co.	2,216,982		59,171,249
Honeywell International Inc.	165,301		8,311,334
Illinois Tool Works Inc.(b)	88,951		4,226,062
Ingersoll-Rand Co. Ltd. Class A(b)	69,494		2,601,160
ITT Industries Inc.	40,348		2,555,239
Leggett & Platt Inc.(b)	36,984		620,222
Pall Corp.	27,168		1,078,026
Parker Hannifin Corp.(b)	37,438		2,670,078
Textron Inc.(b)	55,251		2,648,180
3M Co.	157,139		10,935,303
Tyco International Ltd.	107,720		4,313,109
			111,131,308
MEDIA – 2.63%
CBS Corp. Class B(b)	151,241		2,947,687
Clear Channel Communications Inc.	110,605		3,893,296
Comcast Corp. Class A	664,730		12,609,928
DIRECTV Group Inc. (The)(a)	158,270		4,100,776
E.W. Scripps Co. (The) Class A	19,857		824,860
Gannett Co. Inc.(b)	50,714		1,098,972
McGraw-Hill Companies Inc. (The)	71,721		2,877,447
Meredith Corp.(b)	8,222		232,600
New York Times Co. (The) Class A(b)	31,693		487,755
News Corp. Class A	510,948		7,684,658
Time Warner Inc.	794,130		11,753,124
Viacom Inc. Class B(a)	142,351		4,347,400
Walt Disney Co. (The)	418,117		13,045,250
Washington Post Co. (The) Class B(b)	1,293		758,862
			66,662,615
METAL FABRICATE & HARDWARE – 0.12%
Precision Castparts Corp.(b)	30,865		2,974,460
			2,974,460
MINING – 0.92%
Alcoa Inc.	180,859		6,442,198
Freeport-McMoRan Copper & Gold Inc.(b)	84,999		9,961,033
Newmont Mining Corp.(b)	100,686		5,251,782
Titanium Metals Corp.(b)	21,235		297,078
Vulcan Materials Co.(b)	24,092		1,440,220
			23,392,311
OFFICE & BUSINESS EQUIPMENT – 0.17%
Pitney Bowes Inc.	46,932		1,600,381
Xerox Corp.	203,892		2,764,776
			4,365,157

Security	Shares	Value
OIL & GAS – 12.20%
Anadarko Petroleum Corp.	103,948	$	7,779,468
Apache Corp.	73,945		10,278,355
Cabot Oil & Gas Corp.	21,761		1,473,873
Chesapeake Energy Corp.(b)	106,821		7,045,913
Chevron Corp.	461,065		45,705,373
ConocoPhillips	344,538		32,520,942
Devon Energy Corp.	98,680		11,857,389
ENSCO International Inc.	31,906		2,576,090
EOG Resources Inc.	54,860		7,197,632
Exxon Mobil Corp.	1,177,354		103,760,208
Hess Corp.	61,943		7,816,587
Marathon Oil Corp.	157,446		8,166,724
Murphy Oil Corp.(b)	42,149		4,132,709
Nabors Industries Ltd.(a)	62,372		3,070,574
Noble Corp.	59,681		3,876,878
Noble Energy Inc.	38,174		3,838,777
Occidental Petroleum Corp.	182,644		16,412,390
Range Resources Corp.	33,157		2,173,110
Rowan Companies Inc.(b)	24,646		1,152,200
Southwestern Energy Co.(a)	75,821		3,609,838
Sunoco Inc.(b)	26,306		1,070,391
Tesoro Corp.	30,403		601,067
Transocean Inc.(a)	70,560		10,752,638
Valero Energy Corp.	118,746		4,889,960
XTO Energy Inc.(b)	113,335		7,764,581
			309,523,667
OIL & GAS SERVICES – 2.72%
Baker Hughes Inc.	68,717		6,001,743
BJ Services Co.(b)	65,118		2,079,869
Cameron International Corp.(a)(b)	48,512		2,685,139
Halliburton Co.	195,454		10,372,744
National Oilwell Varco Inc.(a)	91,772		8,142,012
Schlumberger Ltd.	265,926		28,568,430
Smith International Inc.(b)	44,613		3,709,125
Weatherford International Ltd.(a)	150,676		7,472,023
			69,031,085
PACKAGING & CONTAINERS – 0.11%
Ball Corp.	21,702		1,036,053
Bemis Co. Inc.(b)	21,997		493,173
Pactiv Corp.(a)(b)	29,266		621,317
Sealed Air Corp.(b)	35,723		679,094
			2,829,637
PHARMACEUTICALS – 5.48%
Abbott Laboratories	343,211		18,179,887
Allergan Inc.	67,962		3,537,422
AmerisourceBergen Corp.(b)	36,160		1,446,038
Barr Pharmaceuticals Inc.(a)(b)	23,898		1,077,322
Bristol-Myers Squibb Co.	439,550		9,023,961
Cardinal Health Inc.(b)	79,211		4,085,703
Eli Lilly and Co.	219,657		10,139,367

22

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
PHARMACEUTICALS (Continued)
Express Scripts Inc.(a)(b)	56,160	$	3,522,355
Forest Laboratories Inc.(a)	69,198		2,403,939
Gilead Sciences Inc.(a)(b)	206,262		10,921,573
Hospira Inc.(a)	35,553		1,426,031
King Pharmaceuticals Inc.(a)	53,838		563,684
Medco Health Solutions Inc.(a)	115,318		5,443,010
Merck & Co. Inc.	480,776		18,120,447
Mylan Inc.(a)(b)	66,943		808,002
Pfizer Inc.	1,501,124		26,224,636
Schering-Plough Corp.	359,998		7,088,361
Watson Pharmaceuticals Inc.(a)(b)	22,859		621,079
Wyeth	297,096		14,248,724
			138,881,541
PIPELINES – 0.61%
El Paso Corp.(b)	155,708		3,385,092
Questar Corp.	38,401		2,728,007
Spectra Energy Corp.	140,521		4,038,574
Williams Companies Inc. (The)	129,945		5,238,083
			15,389,756
REAL ESTATE – 0.03%
CB Richard Ellis Group Inc. Class A(a)(b)	38,689		742,829
			742,829
REAL ESTATE INVESTMENT TRUSTS – 1.08%
Apartment Investment and Management Co. Class A(b)	20,430		695,846
AvalonBay Communities Inc.(b)	17,085		1,523,299
Boston Properties Inc.(b)	26,540		2,394,439
Developers Diversified Realty Corp.	26,581		922,627
Equity Residential	59,923		2,293,253
General Growth Properties Inc.(b)	59,284		2,076,719
HCP Inc.	49,157		1,563,684
Host Hotels & Resorts Inc.(b)	116,166		1,585,666
Kimco Realty Corp.(b)	56,200		1,940,024
ProLogis(b)	57,364		3,117,733
Public Storage(b)	27,667		2,235,217
Simon Property Group Inc.	49,543		4,453,420
Vornado Realty Trust	29,990		2,639,120
			27,441,047
RETAIL – 5.22%
Abercrombie & Fitch Co. Class A(b)	19,108		1,197,689
AutoNation Inc.(a)(b)	30,092		301,522
AutoZone Inc.(a)	9,564		1,157,340
Bed Bath & Beyond Inc.(a)(b)	58,234		1,636,375
Best Buy Co. Inc.	78,282		3,099,967
Big Lots Inc.(a)(b)	18,145		566,850
Costco Wholesale Corp.	96,555		6,772,368
CVS Caremark Corp.	317,947		12,581,163
Darden Restaurants Inc.(b)	31,654		1,011,029

Security	Shares	Value
RETAIL (Continued)
Dillard’s Inc. Class A(b)	12,440	$	143,931
Family Dollar Stores Inc.	31,470		627,512
GameStop Corp. Class A(a)	35,865		1,448,946
Gap Inc. (The)	101,095		1,685,254
Home Depot Inc.	374,756		8,776,786
J.C. Penney Co. Inc.(b)	49,285		1,788,553
Kohl’s Corp.(a)(b)	69,693		2,790,508
Limited Brands Inc.(b)	69,122		1,164,706
Lowe’s Companies Inc.	324,814		6,739,890
Macy’s Inc.	96,232		1,868,825
McDonald’s Corp.	254,299		14,296,690
Nordstrom Inc.	39,813		1,206,334
Office Depot Inc.(a)	60,361		660,349
RadioShack Corp.	29,264		359,069
Sears Holdings Corp.(a)(b)	16,224		1,195,060
Staples Inc.	155,730		3,698,588
Starbucks Corp.(a)	162,292		2,554,476
Target Corp.(b)	175,568		8,162,156
Tiffany & Co.(b)	28,246		1,151,024
TJX Companies Inc. (The)	97,100		3,055,737
Walgreen Co.(b)	220,164		7,157,532
Wal-Mart Stores Inc.	519,912		29,219,054
Wendy’s International Inc.	19,489		530,491
Yum! Brands Inc.(b)	105,627		3,706,451
			132,312,225
SAVINGS & LOANS – 0.15%
Hudson City Bancorp Inc.	115,223		1,921,920
Sovereign Bancorp Inc.	82,617		608,061
Washington Mutual Inc.(b)	235,178		1,159,428
			3,689,409
SEMICONDUCTORS – 2.54%
Advanced Micro Devices Inc.(a)(b)	133,658		779,226
Altera Corp.	68,333		1,414,493
Analog Devices Inc.	65,327		2,075,439
Applied Materials Inc.(b)	300,639		5,739,199
Broadcom Corp. Class A(a)	103,865		2,834,476
Intel Corp.	1,280,150		27,497,622
KLA-Tencor Corp.(b)	37,809		1,539,204
Linear Technology Corp.(b)	49,122		1,599,904
LSI Corp.(a)	147,109		903,249
MEMC Electronic Materials Inc.(a)	50,746		3,122,909
Microchip Technology Inc.(b)	41,984		1,282,191
Micron Technology Inc.(a)	168,598		1,011,588
National Semiconductor Corp.	50,481		1,036,880
Novellus Systems Inc.(a)(b)	22,742		481,903
NVIDIA Corp.(a)	123,443		2,310,853
QLogic Corp.(a)	30,539		445,564
Teradyne Inc.(a)	38,831		429,859
Texas Instruments Inc.	294,531		8,293,993
Xilinx Inc.(b)	63,657		1,607,339
			64,405,891

23

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
SOFTWARE – 3.82%
Adobe Systems Inc.(a)	118,126	$	4,652,983
Autodesk Inc.(a)	51,322		1,735,197
Automatic Data Processing Inc.	116,114		4,865,177
BMC Software Inc.(a)(b)	42,717		1,537,812
CA Inc.	87,099		2,011,116
Citrix Systems Inc.(a)(b)	41,209		1,211,957
Compuware Corp.(a)	60,599		578,114
Electronic Arts Inc.(a)	70,377		3,126,850
Fidelity National Information Services Inc.	38,036		1,403,909
Fiserv Inc.(a)(b)	36,549		1,658,228
IMS Health Inc.	40,768		949,894
Intuit Inc.(a)	72,845		2,008,337
Microsoft Corp.	1,777,043		48,886,453
Novell Inc.(a)	78,525		462,512
Oracle Corp.(a)	878,190		18,441,990
Paychex Inc.	71,930		2,249,970
Total System Services Inc.	43,963		976,858
			96,757,357
TELECOMMUNICATIONS – 5.73%
American Tower Corp. Class A(a)(b)	89,910		3,798,698
AT&T Inc.	1,325,634		44,660,609
CenturyTel Inc.(b)	23,747		845,156
Ciena Corp.(a)(b)	19,409		449,707
Cisco Systems Inc.(a)	1,319,401		30,689,267
Citizens Communications Co.(b)	73,277		830,961
Corning Inc.	349,622		8,058,787
Embarq Corp.	34,025		1,608,362
JDS Uniphase Corp.(a)	50,359		572,078
Juniper Networks Inc.(a)	116,330		2,580,199
Motorola Inc.(b)	500,849		3,676,232
QUALCOMM Inc.	357,993		15,884,149
Qwest Communications International Inc.(b)	341,858		1,343,502
Sprint Nextel Corp.	632,756		6,011,182
Tellabs Inc.(a)	92,277		429,088
Verizon Communications Inc.	637,441		22,565,411
Windstream Corp.	100,975		1,246,032
			145,249,420
TEXTILES – 0.03%
Cintas Corp.	29,056		770,275
			770,275
TOYS, GAMES & HOBBIES – 0.10%
Hasbro Inc.(b)	31,727		1,133,288
Mattel Inc.	80,023		1,369,994
			2,503,282
TRANSPORTATION – 2.00%
Burlington Northern Santa Fe Corp.(b)	65,730		6,565,770
C.H. Robinson Worldwide Inc.(b)	37,931		2,080,136
CSX Corp.	89,586		5,626,897

Security	Shares or Principal			Value
TRANSPORTATION (Continued)
Expeditors International Washington Inc.(b)		47,373		$	2,037,039
FedEx Corp.		68,731			5,415,315
Norfolk Southern Corp.		83,586			5,238,335
Ryder System Inc.(b)		12,849			885,039
Union Pacific Corp.		115,786			8,741,843
United Parcel Service Inc. Class B		228,990			14,076,015
					50,666,389
TOTAL COMMON STOCKS
(Cost: $2,364,157,359)					2,486,605,125
SHORT-TERM INVESTMENTS – 16.32%
MONEY MARKET FUNDS – 16.20%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(c)(d)		45,092,872			45,092,872
BGI Cash Premier Fund LLC
2.63%(c)(d)(e)		365,907,522			365,907,522
					411,000,394
U.S. TREASURY OBLIGATIONS – 0.12%
U.S. Treasury Bill
1.68%, 09/25/08(f)(g)	$	3,050,000			3,037,431
					3,037,431
TOTAL SHORT-TERM INVESTMENTS
(Cost: $414,037,405)					414,037,825
TOTAL INVESTMENTS IN SECURITIES – 114.36%
(Cost: $2,778,194,764)					2,900,642,950
SHORT POSITIONS(h) – (0.00)%
COMMON STOCKS – (0.00)%
E.W. Scripps Co. (The) Class A When Issued		(19,857	)		(60,961	)
					(60,961	)
TOTAL SHORT POSITIONS
(Proceeds: $60,913)					(60,961	)
Other Assets, Less Liabilities – (14.36)%					(364,236,164	)
NET ASSETS – 100.00%				$	2,536,345,825

NVS – Non-Voting Shares

^(a) Non-income earning security.

^(b) All or a portion of this security represents a security on loan. See Note 4.

^(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 4.

^(f) The rate quoted is the yield to maturity.

^(g) This U.S. Treasury Bill is held in a segregated account in connection with the Master Portfolio’s holdings of futures contracts. See Note 1.

^(h) See Note 1.

24

S&P 500 INDEX MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

As of June 30, 2008, the open futures contracts held by the Master Portfolio were as follows:

Futures Contracts (Expiration Date)	Number of Contracts	Notional Contract Value		Net Unrealized Depreciation
S&P 500 Index (September 2008)	767	$	49,130,185	$	(2,791,055	)
				$	(2,791,055	)

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Bond Index Master Portfolio
Sector/Investment Type	Value			% of Net Assets
Mortgage-Backed Securities	$	55,425,028		42.56	%
U.S. Government & Agency		41,376,688		31.78
Financial		12,519,502		9.61
Consumer Non-Cyclical		3,773,797		2.90
Communications		3,688,019		2.83
Utilities		2,230,330		1.71
Foreign Government		2,097,979		1.61
Energy		1,928,513		1.48
Industrial		1,830,427		1.41
Multi-National		1,153,277		0.89
Consumer Cyclical		1,144,996		0.88
Asset-Backed Securities		1,033,132		0.79
Basic Materials		773,506		0.59
Technology		542,952		0.42
Municipal Debt Obligations		365,707		0.28
Short-Term and Other Net Assets		327,589		0.26
TOTAL	$	130,211,442		100.00	%
S&P 500 Index Master Portfolio
Sector/Investment Type	Value			% of Net Assets
Consumer Non-Cyclical	$	528,935,036		20.86	%
Energy		405,480,560		15.98
Financial		349,182,642		13.77
Technology		289,666,588		11.42
Industrial		286,661,275		11.30
Communications		269,237,231		10.62
Consumer Cyclical		178,216,969		7.02
Utilities		96,116,653		3.79
Basic Materials		81,343,227		3.21
Diversified		1,764,944		0.07
Futures Contracts		(2,791,055	)	(0.11	)
Short-Term and Other Net Assets		52,531,755		2.07
TOTAL	$	2,536,345,825		100.00	%

These tables are not part of the financial statements.

26

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Bond Index Master Portfolio		S&P 500 Index Master Portfolio
ASSETS
Investments, at cost:
Unaffiliated issuers	$	129,673,612	$	2,367,194,370
Affiliated issuers (Note 2)		31,541,711		411,000,394
Total cost of investments	$	161,215,323	$	2,778,194,764
Investments in securities, at fair value (including securities on loan(a)) (Note 1):
Unaffiliated issuers	$	129,883,853	$	2,489,642,556
Affiliated issuers (Note 2)		31,541,711		411,000,394
Total fair value of investments		161,425,564		2,900,642,950
Receivables:
Investment securities sold		1,677,304		608,524
Dividends and interest		1,198,210		3,532,385
Due from broker – variation margin		—		37,778
Total Assets		164,301,078		2,904,821,637
LIABILITIES
Payables:
Investment securities purchased		7,490,444		2,387,517
Collateral for securities on loan (Note 4)		26,582,208		365,907,522
Short positions, at fair value (Proceeds: $— and $60,913, respectively) (Note 1)		—		60,961
Investment advisory fees (Note 2)		6,571		105,663
Accrued expenses:
Professional fees (Note 2)		10,369		13,946
Independent trustees’ fees (Note 2)		44		203
Total Liabilities		34,089,636		368,475,812
NET ASSETS	$	130,211,442	$	2,536,345,825

^(a) Securities on loan with market values of $26,069,279 and $357,195,714, respectively. See Note 4.

The accompanying notes are an integral part of these financial statements.

27

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Bond Index Master Portfolio			S&P 500 Index Master Portfolio
NET INVESTMENT INCOME
Dividends from unaffiliated issuers	$	—		$	27,774,465
Interest from unaffiliated issuers		2,909,700			59,001
Interest from affiliated issuers (Note 2)		70,583			632,974
Securities lending income from affiliated issuers (Note 2)		57,274			682,045
Total investment income		3,037,557			29,148,485
EXPENSES (Note 2)
Investment advisory fees		47,535			672,840
Professional fees		10,229			13,229
Independent trustees’ fees		546			11,939
Total expenses		58,310			698,008
Less expense reductions (Note 2)		(10,775	)		(25,168	)
Net expenses		47,535			672,840
Net investment income		2,990,022			28,475,645
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from sale of investments in unaffiliated issuers		313,529			(16,742,476	)
Net realized gain from short positions (Note 1)		—			187
Net realized loss on futures contracts		—			(9,580,554	)
Net change in unrealized appreciation (depreciation) of investments		(1,707,533	)		(346,980,002	)
Net change in unrealized appreciation (depreciation) of futures contracts		—			270,338
Net change in unrealized appreciation (depreciation) of short positions (Note 1)		—			139
Net realized and unrealized loss		(1,394,004	)		(373,032,368	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,596,018		$	(344,556,723	)

The accompanying notes are an integral part of these financial statements.

28

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Bond Index Master Portfolio						S&P 500 Index Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,990,022		$	5,658,566		$	28,475,645		$	56,196,080
Net realized gain (loss)		313,529			(166,092	)		(26,322,843	)		66,144,882
Net change in unrealized appreciation (depreciation)		(1,707,533	)		2,512,239			(346,709,525	)		49,858,427
Net increase (decrease) in net assets resulting from operations		1,596,018			8,004,713			(344,556,723	)		172,199,389
Interestholder transactions:
Contributions		29,445,385			35,317,257			347,817,529			979,975,026	(a)
Withdrawals		(20,737,364	)		(27,110,256	)		(387,662,651	)		(958,876,075	)
Net increase (decrease) in net assets resulting from interestholder transactions		8,708,021			8,207,001			(39,845,122	)		21,098,951
Increase (decrease) in net assets		10,304,039			16,211,714			(384,401,845	)		193,298,340
NET ASSETS:
Beginning of period		119,907,403			103,695,689			2,920,747,670			2,727,449,330
End of period	$	130,211,442		$	119,907,403		$	2,536,345,825		$	2,920,747,670

(a) Includes a contribution of securities with unrealized appreciation of $19,641,824.

The accompanying notes are an integral part of these financial statements.

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MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Bond Index and S&P 500 Index Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolio 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 MIP (the “Board”).

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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 Master Portfolios’ 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 the Master Portfolios’ net assets are computed and that may materially affect the

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value of the Master Portfolios’ investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations.

Fair value pricing could result in a difference between the prices used to calculate a Master Portfolio’s net assets and the prices used by the Master Portfolio’s benchmark index, which, in turn, could result in a difference between the Master Portfolio’s performance and the performance of the Master Portfolio’s benchmark index. The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments.

The following tables summarize the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices			Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Bond Index	$	60,462,641		$	100,962,923	$	—	$	161,425,564
S&P 500 Index		2,900,642,950			—		—		2,900,642,950
Other Financial Instruments(a)
Master Portfolio	Level 1 – Quoted Prices			Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
S&P 500 Index	$	(2,791,055	)	$	—	$	—	$	(2,791,055	)

^(a) Other financial instruments include futures contracts.

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 June 30, 2008:

Master Portfolio	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
Bond Index	$	815,869	$	—	$	(5,702	)	$	(124,664	)	$	(685,503	)	$	—	$	—

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 tax withheld at source, and interest income is accrued daily. Distributions received by the S&P 500 Index Master Portfolio 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. The Master Portfolios amortize premiums and accrete discounts on debt securities purchased using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing

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substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes for the Master Portfolios were as follows:

Master Portfolio	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Bond Index	$	161,686,539	$	2,258,626	$	(2,519,601	)	$	(260,975	)
S&P 500 Index		2,826,429,576		609,672,281		(535,458,907	)		74,213,374

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

FUTURES CONTRACTS

The Master Portfolios may purchase futures contracts to gain exposure to market changes, as this may be more efficient or cost effective than actually buying the securities. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date and is exchange-traded. Upon entering into a futures contract, a Master Portfolio is required to pledge to the broker and hold in a segregated account, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum “initial margin” requirements of the exchange. Pursuant to the contract, the Master Portfolio agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the Master Portfolio as receivables or payables in the accompanying Statements of Assets and Liabilities. When the contract is closed, the Master Portfolio records a “realized gain (loss) on futures contracts” in its Statement of Operations, equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include the possibility that there may be an illiquid market and that a change in the value of the contracts may not correlate with changes in the value of the underlying securities. The amount at risk for futures contracts may exceed the amount reflected in the financial statements.

As of June 30, 2008, the S&P 500 Index Master Portfolio has pledged to brokers a U.S. Treasury Bill with a face amount of $3,050,000 for initial margin requirements on outstanding futures contracts.

WHEN ISSUED/TBA TRANSACTIONS

The Bond Index Master Portfolio may purchase mortgage pass-through securities on a when-issued or to-be-announced (“TBA”) basis, with payment and delivery scheduled for a future date. The Master Portfolio may enter into a TBA agreement, sell the obligation to purchase the pools stipulated in the TBA agreement prior to the stipulated settlement date and enter into a new TBA agreement for future delivery of pools of mortgage pass-through securities (a “TBA roll”). A TBA roll is treated by the Master Portfolio as a purchase transaction and a sale transaction in which the Master Portfolio realizes a gain or loss. The Master Portfolio’s use of TBA rolls may cause the Master Portfolio to experience higher portfolio turnover and higher transaction costs. The Master Portfolio could be exposed to possible risk if there is adverse market action, expenses or delays in connection with the TBA transactions, or if the counterparty fails to complete the transaction.

SHORT POSITIONS

From time to time, in order to track the performance of their respective benchmark index, the Master Portfolios 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 Master Portfolios’ 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

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appreciation (depreciation) in the Master Portfolios’ Statements of Operations. Upon receipt of the securities related to corporate actions, the Master Portfolios record a realized gain (loss). Details of the short positions resulting from the non-index securities sold by the Master Portfolios, if any, are included in their respective Schedules of Investments.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with each Master Portfolio, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.08% and 0.05% of the average daily net assets of the Bond Index and S&P 500 Index Master Portfolios, respectively, as compensation for investment advisory services. From time to time, BGFA may waive a portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA credited investment advisory fees for the Bond Index and S&P 500 Index Master Portfolios in the amounts of $10,775 and $25,168, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), BGI serves as securities lending agent for MIP. BGI is an affiliate of BGFA, the Master Portfolios’ 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 June 30, 2008, BGI earned securities lending agent fees as follows:

Master Portfolio	Securities Lending Agent Fees
Bond Index	$	57,274
S&P 500 Index		682,045

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

Cross trades for the six months ended June 30, 2008, if any, were executed by the Master Portfolios 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 Master Portfolio may invest in the Institutional Shares of certain money market funds managed by BGFA, the Master Portfolios’ 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

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

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 Master Portfolios from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Master Portfolios from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

Each Master Portfolio 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. See Note 4 for additional information regarding the Premier Fund.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Investment transactions (excluding short-term investments) for the Master Portfolios for the six months ended June 30, 2008 were as follows:

	U.S. Government Obligations				Other Securities
Master Portfolio	Purchases		Sales		Purchases		Sales
Bond Index	$	47,933,847	$	41,784,863	$	7,163,709	$	1,104,394
S&P 500 Index		—		—		124,328,552		66,820,414

4. PORTFOLIO SECURITIES LOANED

Each Master Portfolio may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Master Portfolio 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 Master Portfolio is required to have a value of at least 102% of the market value of the loaned securities plus the interest accrued on such securities, if any, 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 plus accrued interest, if any. The risks to the Master Portfolios of securities lending are that the borrower may not provide additional collateral when required or may not return the securities when due.

As of June 30, 2008, the Master Portfolios 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 June 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 Master Portfolios’ 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.

5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT

In March 2008, the FASB issued Financial Accounting Standards Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“FAS 161”). FAS 161 requires enhanced disclosures for derivative instruments and hedging activities and is effective for fiscal years and interim periods beginning after November 15, 2008. MIP is currently evaluating the impact the adoption of FAS 161 will have on the financial statements.

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6. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Bond Index
Ratio of expenses to average net assets(a)	0.08	%	0.08	%	0.08	%	0.08	%	0.08	%	0.08	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.11	%	0.10	%	n/a		n/a		n/a
Ratio of net investment income to average net assets(a)	5.03	%	5.15	%	4.97	%	4.56	%	4.17	%	4.24	%
Portfolio turnover rate(b)	36	%	61	%	57	%	76	%	148	%	67	%
Total return	1.55	%(c)	7.31	%	4.91	%	2.27	%	4.20	%	4.07	%
S&P 500 Index
Ratio of expenses to average net assets(a)	0.05	%	0.05	%	0.05	%	0.05	%	0.05	%	0.05	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.05	%	0.05	%	0.05	%	n/a		n/a		n/a
Ratio of net investment income to average net assets(a)	2.12	%	1.98	%	1.93	%	1.84	%	1.91	%	1.74	%
Portfolio turnover rate(b)	3	%	7	%	14	%	10	%	14	%	8	%
Total return	(11.89	)%(c)	5.54	%	15.75	%	4.87	%	10.82	%	28.52	%

^(a) Annualized for periods of less than one year.

^(b) Portfolio turnover rates include in-kind transactions, if any.

^(c) Not annualized.

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MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Bond Index Master Portfolio and S&P 500 Index Master Portfolio (together, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies as an industry leader in index management, including the effective use of its proprietary investment model that maximizes efficiencies in implementing index changes and in maintaining fully invested portfolios. The Board also considered services provided by BGFA and its affiliates in connection with analyzing corporate actions (for the S&P 500 Index Master Portfolio), managing risk and diversification (for the Bond Index Master Portfolio), employing customized trading strategies, reviewing securities lending opportunities and overseeing intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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. In addition, the Board reviewed the performance of (i) other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios for which BGFA provides investment advisory services, and (ii) the Master Portfolios’ published performance benchmarks, the S&P 500 Index or the Lehman Brothers U.S. Aggregate Index, as applicable. The Board noted that the S&P 500 Index Master Portfolio, net of expenses, underperformed its published benchmark on an annualized basis over five years, three years and in 2007, which would be expected, such underperformance being attributable to the effect of fees, and noted that the published benchmark is an index, which does not have expenses. The Board also noted that the Bond Index Master Portfolio outperformed its published benchmark in 2007 and on an annualized basis over three years and over five years. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives consistently over time. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other registered investment companies, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year periods (or since inception) ended December 31, 2007, as applicable, as compared to the performance of other registered investment companies

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BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Index Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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 noted that the Master Portfolios outperformed the median performance of the funds in their respective Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the S&P 500 Index Master Portfolio and the Bond Index Master Portfolio were generally lower than the advisory fee rates of the funds in their respective Lipper Expense Groups, and the overall expenses for both the Master Portfolios were generally lower than the overall expenses of the funds in their respective Lipper Expense Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Expense Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ 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 MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that with respect to the Bond Index Master Portfolio, BGFA and its affiliates are generally providing services at a loss, with the S&P 500 Index Master Portfolio and the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts 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

37

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

services, including other funds registered under the 1940 Act, collective funds and separate accounts (together, the “Other Accounts”). The Board noted that BGFA had provided information distinguishing the level of services provided to the Other Accounts from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios 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 Master Portfolios and the Other Accounts under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rate under the Advisory Contract for the Bond Index Master Portfolio was generally lower than or in line with the investment advisory fee rates for other funds registered under the 1940 Act, higher than the investment management fee rates for separate accounts and higher than the investment management fee rates for the collective funds. The Board noted that the investment advisory fee rate under the Advisory Contract for the S&P 500 Index Master Portfolio was generally within the ranges of the investment advisory/management fee rates for the Other Accounts. The Board further noted that any differences between the investment advisory fee rates for certain of the Master Portfolios and the investment advisory/management fee rates for the Other Accounts 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 Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as any payment of revenue to BGI, MIP’s securities lending agent, for loaning any portfolio securities, payment of administration fees to BGI, MIP’s administrator, and payment of advisory fees and/or administration fees to BGFA and BGI in connection with any investments by the Master Portfolios in other funds for which BGFA provides investment advisory services and/or BGI provides administration services, as well as the associated voluntary waivers by BGFA and/or its affiliates of these fees, if any. 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 Master Portfolios. The Board further noted that during the past year no portfolio transactions were placed through a BGFA affiliate, as would be required to be reported to and considered by the Board pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

38

TABLE OF CONTENTS

Fund Performance Overview	1
Shareholder Expenses	2
Barclays Global Investors Funds
Financial Statements	4
Financial Highlights	11
Notes to Financial Statements	26
Master Investment Portfolio
Schedules of Investments	31
LifePath Retirement Master Portfolio	31
LifePath 2010 Master Portfolio	32
LifePath 2020 Master Portfolio	33
LifePath 2030 Master Portfolio	34
LifePath 2040 Master Portfolio	35
Active Stock Master Portfolio	36
CoreAlpha Bond Master Portfolio	41
Portfolio Allocations	52
Financial Statements	53
Notes to Financial Statements	61
Board Review and Approval of Investment Advisory Contracts	73

Fund Performance Overview

LifePath^® Portfolios

Performance as of June 30, 2008

Each LifePath Portfolio seeks to maximize return consistent with the quantitatively measured risk that investors on average may be willing to accept given their investment time horizon. An investor’s time horizon marks the point when the investor plans to start making net withdrawals from his or her investments. Each LifePath Portfolio has its own time horizon, which affects the targeted risk level of the LifePath Portfolio and, in turn, its asset allocation. The LifePath Portfolios are currently invested in a combination of equity securities, bond and money market funds for which Barclays Global Fund Advisors (“BGFA”) is the investment adviser.

The LifePath 2050 Portfolio commenced operations on June 30, 2008; total return information is not applicable.

Average Annual Total Returns
	Six-Month	One-Year	Five-Year	Ten-Year
Class I Shares
LifePath Retirement Portfolio	(2.26)%	(0.59)%	5.43%	4.81%
LifePath 2010 Portfolio	(2.87)%	(1.88)%	6.37%	4.51%
LifePath 2020 Portfolio	(5.05)%	(5.76)%	7.45%	4.11%
LifePath 2030 Portfolio	(6.64)%	(8.57)%	8.14%	3.87%
LifePath 2040 Portfolio	(8.04)%	(11.00)%	8.70%	3.44%
	Six-Month	One-Year	Five-Year	Since Inception(a)
Class R Shares
LifePath Retirement Portfolio	(2.31)%	(0.84)%	5.17%	6.99%
LifePath 2010 Portfolio	(3.01)%	(2.12)%	6.10%	4.23%
LifePath 2020 Portfolio	(5.16)%	(6.01)%	7.20%	4.51%
LifePath 2030 Portfolio	(6.77)%	(8.84)%	7.85%	9.55%
LifePath 2040 Portfolio	(8.12)%	(11.18)%	8.44%	10.31%
	Since Inception(b)
Class S Shares
LifePath Retirement Portfolio	(2.87)%
LifePath 2010 Portfolio	(3.35)%
LifePath 2020 Portfolio	(5.07)%
LifePath 2030 Portfolio	(6.32)%
LifePath 2040 Portfolio	(7.31)%

^(a) Total returns are calculated from an inception date of April 11, 2003 for the LifePath Retirement Portfolio, an inception date of March 7, 2002 for the LifePath 2010 and LifePath 2020 Portfolios, and an inception date of April 8, 2003 for the LifePath 2030 and LifePath 2040 Portfolios. These inception dates represent the date investors began investing in the Class R shares of the respective LifePath Portfolios. To establish the new share class, the LifePath Portfolios’ distributor privately seeded each Portfolio’s Class R on April 30, 2001. The class had no activity from April 30, 2001 until investment began on the Class R inception date for the relevant LifePath Portfolio. Since inception returns calculated from April 30, 2001 for the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030 and LifePath 2040 Portfolios were 4.24%, 3.69%, 3.38%, 3.21% and 3.08%, respectively.

^(b) Total returns are calculated from an inception date of May 30, 2008 for the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030 and LifePath 2040 Portfolios.

Average Annual Total Returns represent each LifePath Portfolio’s average annual increase or decrease in value during the time periods noted above.

Performance figures for each class of each LifePath Portfolio assume that dividends and capital gain distributions have been reinvested in the applicable class of the applicable LifePath Portfolio at net asset value. The “net asset value” of a class of a LifePath Portfolio is the value of one share of that class. The performance shown in the table above does not reflect the deduction of taxes that a shareholder would pay on LifePath Portfolio distributions or the redemption of LifePath Portfolio shares. The investment return and principal value of shares of each LifePath Portfolio will vary with changes in market conditions. Shares of each LifePath Portfolio may be worth more or less than their original cost when they are redeemed. Each LifePath Portfolio’s past performance is no guarantee of future results.

The LifePath Portfolios are organized as “feeder” funds in a “master-feeder” structure. Instead of investing directly in individual securities, the feeder fund, which is offered to the public, holds interests in the net assets of its corresponding Master Portfolio. It is the Master Portfolio that directly invests in individual securities. References to “the LifePath Portfolios” are to the feeder funds or the Master Portfolios, as the context requires. BGFA advises the Master Portfolios.

1

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a LifePath Portfolio, you incur 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 LifePath Portfolio 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 January 1, 2008 to June 30, 2008.

ACTUAL EXPENSES

The first line under each share class of each LifePath Portfolio 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 share class of your LifePath Portfolio 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 share class of each LifePath Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the LifePath Portfolio’s actual expense ratio of each share class and an assumed rate of return of 5% per year before expenses, which is not the LifePath Portfolio’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 share class of your LifePath Portfolio 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. Therefore, the second line under each share class of each LifePath Portfolio in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds.

Portfolio	Beginning Account Value (1/1/08)(a)	Ending Account Value (6/30/08)(a)	Annualized Expense Ratio(b)		Expenses Paid During Period(c) (1/1/08 to 6/30/08)
LifePath Retirement
Class I Shares
Actual	$1,000.00	$    977.40	0.77	%	$3.79
Hypothetical (5% return before expenses)	1,000.00	1,021.00	0.77		3.87
Class R Shares
Actual	1,000.00	976.90	1.02		5.01
Hypothetical (5% return before expenses)	1,000.00	1,019.80	1.02		5.12
Class S Shares
Actual	1,000.00	971.30	0.41		0.34
Hypothetical (5% return before expenses)	1,000.00	1,022.80	0.41		2.06
LifePath 2010
Class I Shares
Actual	1,000.00	971.30	0.77		3.77
Hypothetical (5% return before expenses)	1,000.00	1,021.00	0.77		3.87
Class R Shares
Actual	1,000.00	969.90	1.02		5.00
Hypothetical (5% return before expenses)	1,000.00	1,019.80	1.02		5.12
Class S Shares
Actual	1,000.00	966.50	0.41		0.34
Hypothetical (5% return before expenses)	1,000.00	1,022.80	0.41		2.06

2

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited) (Continued)

Portfolio	Beginning Account Value (1/1/08)(a)	Ending Account Value (6/30/08)(a)	Annualized Expense Ratio(b)		Expenses Paid During Period(c) (1/1/08 to 6/30/08)
LifePath 2020
Class I Shares
Actual	$1,000.00	$    949.50	0.73	%	$3.54
Hypothetical (5% return before expenses)	1,000.00	1,021.20	0.73		3.67
Class R Shares
Actual	1,000.00	948.40	0.98		4.75
Hypothetical (5% return before expenses)	1,000.00	1,020.00	0.98		4.92
Class S Shares
Actual	1,000.00	949.30	0.38		0.31
Hypothetical (5% return before expenses)	1,000.00	1,023.00	0.38		1.91
LifePath 2030
Class I Shares
Actual	1,000.00	933.60	0.71		3.41
Hypothetical (5% return before expenses)	1,000.00	1,021.30	0.71		3.57
Class R Shares
Actual	1,000.00	932.30	0.96		4.61
Hypothetical (5% return before expenses)	1,000.00	1,020.10	0.96		4.82
Class S Shares
Actual	1,000.00	936.80	0.36		0.30
Hypothetical (5% return before expenses)	1,000.00	1,023.10	0.36		1.81
LifePath 2040
Class I Shares
Actual	1,000.00	919.60	0.70		3.34
Hypothetical (5% return before expenses)	1,000.00	1,021.40	0.70		3.52
Class R Shares
Actual	1,000.00	918.80	0.95		4.53
Hypothetical (5% return before expenses)	1,000.00	1,020.10	0.95		4.77
Class S Shares
Actual	1,000.00	926.90	0.34		0.28
Hypothetical (5% return before expenses)	1,000.00	1,023.20	0.34		1.71

The LifePath 2050 Portfolio commenced operations on June 30, 2008 and did not incur any expenses.

^(a) Account values are based on a start date of May 30, 2008 (commencement of operations) for the Class S of LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030 and LifePath 2040 Portfolios.

^(b) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Portfolio’s expense reductions during the period.

^(c) Except for the actual expenses for the Class S of LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030 and LifePath 2040 Portfolios, actual and hypothetical expenses are calculated using each LifePath Portfolio’s annualized expense ratio for each share class (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days). Actual expenses for the Class S of LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030 and LifePath 2040 Portfolios, which commenced operations on May 30, 2008, are calculated using each LifePath Portfolio’s Class 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 (31 days) and divided by the number of days in the year (366 days).

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	LifePath Retirement Portfolio			LifePath 2010 Portfolio			LifePath 2020 Portfolio
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	137,095,212		$	407,407,881		$	769,470,371
Receivables:
Capital shares sold		516,018			1,060,368			3,556,453
Total Assets		137,611,230			408,468,249			773,026,824
LIABILITIES
Payables:
Capital shares redeemed		57,687			890,552			751,540
Distribution to shareholders		114,472			299,833			335,622
Administration fees (Note 2)		64,629			192,755			397,303
Distribution fees – Class R Shares (Note 2)		18,793			68,544			140,768
Accrued expenses:
Professional fees (Note 2)		5,823			6,205			6,607
Independent trustees’ fees (Note 2)		45			64			50
Total Liabilities		261,449			1,457,953			1,631,890
NET ASSETS	$	137,349,781		$	407,010,296		$	771,394,934
Net assets consist of:
Paid-in capital	$	137,142,876		$	399,245,353		$	734,001,572
Distributions in excess of net investment income		(550,067	)		(1,305,147	)		(1,553,447	)
Accumulated net realized loss		(648,580	)		(2,566,397	)		(10,298,041	)
Net unrealized appreciation		1,405,552			11,636,487			49,244,850
NET ASSETS	$	137,349,781		$	407,010,296		$	771,394,934
Class I Shares
Net Assets	$	106,997,072		$	298,446,527		$	543,507,620
Shares outstanding(a)		9,740,081			23,835,467			34,439,577
Net asset value and offering price per share	$	10.99		$	12.52		$	15.78
Class R Shares
Net Assets	$	30,309,363		$	108,522,819		$	227,749,115
Shares outstanding(a)		2,958,985			8,820,909			15,109,319
Net asset value and offering price per share	$	10.24		$	12.30		$	15.07
Class S Shares
Net Assets	$	43,346		$	40,950		$	138,199
Shares outstanding(a)		3,951			3,276			8,771
Net asset value and offering price per share	$	10.97		$	12.50		$	15.76

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES (Continued)

June 30, 2008 (Unaudited)

	LifePath 2030 Portfolio			LifePath 2040 Portfolio			LifePath 2050 Portfolio(a)
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	581,532,291		$	451,763,739		$	250,000
Receivables:
Capital shares sold		850,788			1,153,341			—
Total Assets		582,383,079			452,917,080			250,000
LIABILITIES
Payables:
Capital shares redeemed		529,817			949,090			—
Distribution to shareholders		260,252			166,125			—
Administration fees (Note 2)		291,438			208,107			—
Distribution fees – Class R Shares (Note 2)		109,847			85,272			—
Accrued expenses:
Professional fees (Note 2)		6,291			6,070			—
Independent trustees’ fees (Note 2)		73			54			—
Total Liabilities		1,197,718			1,414,718			—
NET ASSETS	$	581,185,361		$	451,502,362		$	250,000
Net assets consist of:
Paid-in capital	$	594,654,146		$	440,230,976		$	250,000
Distributions in excess of net investment income		(561,133	)		(210,243	)		—
Accumulated net realized loss		(18,337,380	)		(13,905,622	)		—
Net unrealized appreciation		5,429,728			25,387,251			—
NET ASSETS	$	581,185,361		$	451,502,362		$	250,000
Class I Shares
Net Assets	$	407,555,207		$	317,058,618		$	190,000
Shares outstanding(b)		27,439,382			17,205,812			9,500
Net asset value and offering price per share	$	14.85		$	18.43		$	20.00
Class R Shares
Net Assets	$	173,571,843		$	134,434,589		$	50,000
Shares outstanding(b)		11,907,175			7,622,530			2,500
Net asset value and offering price per share	$	14.58		$	17.64		$	20.00
Class S Shares
Net Assets	$	58,311		$	9,155		$	10,000
Shares outstanding(b)		3,932			497	(c)		500
Net asset value and offering price per share	$	14.83		$	18.41		$	20.00

^(a) The LifePath 2050 Portfolio commenced operations on June 30, 2008. There were no activities to report in the Statement of Operations and Financial Highlights.

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

^(c) The shares outstanding have been rounded for financial statement presentation. The net asset value and offering price per share are calculated based on the actual shares outstanding of 497.265.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	LifePath Retirement Portfolio			LifePath 2010 Portfolio			LifePath 2020 Portfolio
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Dividends	$	1,059,416		$	3,328,764		$	8,052,458
Interest		1,948,177			5,314,577			7,038,913
Expenses(a)		(215,380	)		(624,276	)		(1,107,541	)
Net investment income allocated from corresponding Master Portfolio		2,792,213			8,019,065			13,983,830
FUND EXPENSES (Note 2)
Administration fees		394,089			1,177,798			2,348,561
Distribution fees – Class R Shares		34,309			127,239			254,889
Professional fees		5,847			6,097			6,521
Independent trustees’ fees		729			2,115			4,057
Total fund expenses		434,974			1,313,249			2,614,028
Less expense reductions (Note 2)		(6,576	)		(8,212	)		(10,578	)
Net fund expenses		428,398			1,305,037			2,603,450
Net investment income		2,363,815			6,714,028			11,380,380
REALIZED AND UNREALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized loss		(1,256,814	)		(3,063,661	)		(15,719,587	)
Net change in unrealized appreciation (depreciation)		(4,627,416	)		(17,549,734	)		(45,273,817	)
Net realized and unrealized loss		(5,884,230	)		(20,613,395	)		(60,993,404	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(3,520,415	)	$	(13,899,367	)	$	(49,613,024	)

^(a) Net of investment advisory fee reductions of $265,677, $789,877 and $1,586,941, respectively.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS (Continued)

For the Six Months Ended June 30, 2008 (Unaudited)

	LifePath 2030 Portfolio			LifePath 2040 Portfolio
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Dividends	$	6,592,533		$	4,966,445
Interest		3,256,201			1,301,458
Expenses(a)		(734,407	)		(477,321	)
Net investment income allocated from corresponding Master Portfolio		9,114,327			5,790,582
FUND EXPENSES (Note 2)
Administration fees		1,710,807			1,199,049
Distribution fees – Class R Shares		197,211			153,245
Professional fees		6,278			6,089
Independent trustees’ fees		2,974			2,063
Total fund expenses		1,917,270			1,360,446
Less expense reductions (Note 2)		(9,252	)		(8,152	)
Net fund expenses		1,908,018			1,352,294
Net investment income		7,206,309			4,438,288
REALIZED AND UNREALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized loss		(16,337,301	)		(13,982,194	)
Net change in unrealized appreciation (depreciation)		(38,623,879	)		(31,244,676	)
Net realized and unrealized loss		(54,961,180	)		(45,226,870	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(47,754,871	)	$	(40,788,582	)

^(a) Net of investment advisory fee reductions in the amount of $1,165,537 and $826,937, respectively.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	LifePath Retirement Portfolio						LifePath 2010 Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,363,815		$	4,366,611		$	6,714,028		$	14,428,287
Net realized gain (loss)		(1,256,814	)		1,958,256			(3,063,661	)		11,420,133
Net change in unrealized appreciation (depreciation)		(4,627,416	)		(1,110,126	)		(17,549,734	)		(8,100,639	)
Net increase (decrease) in net assets resulting from operations		(3,520,415	)		5,214,741			(13,899,367	)		17,747,781
Distributions to shareholders:
From net investment income:
Class I Shares		(1,860,958	)		(3,717,806	)		(5,082,182	)		(12,288,725	)
Class R Shares		(464,478	)		(672,262	)		(1,551,862	)		(2,264,750	)
Class S Shares(a)		(466	)		—			(439	)		—
		(2,325,902	)		(4,390,068	)		(6,634,483	)		(14,553,475	)
From net realized gain:
Class I Shares		(404,249	)		(2,999,383	)		(2,184,496	)		(14,667,893	)
Class R Shares		(123,205	)		(549,177	)		(806,849	)		(3,067,910	)
Class S Shares(a)		(165	)		—			(301	)		—
		(527,619	)		(3,548,560	)		(2,991,646	)		(17,735,803	)
Total distributions to shareholders		(2,853,521	)		(7,938,628	)		(9,626,129	)		(32,289,278	)
Capital share transactions (Note 3):
Class I Shares		(24,773,870	)		47,670,600			(74,904,671	)		69,950,577
Class R Shares		9,346,047			9,182,749			23,398,915			40,744,013
Class S Shares(a)		44,222			—			41,979			—
Net increase (decrease) in net assets resulting from capital share transactions		(15,383,601	)		56,853,349			(51,463,777	)		110,694,590
Increase (decrease) in net assets		(21,757,537	)		54,129,462			(74,989,273	)		96,153,093
NET ASSETS:
Beginning of period		159,107,318			104,977,856			481,999,569			385,846,476
End of period	$	137,349,781		$	159,107,318		$	407,010,296		$	481,999,569
Distributions in excess of net investment income included in net assets at end of period	$	(550,067	)	$	(587,980	)	$	(1,305,147	)	$	(1,384,692	)

^(a) For the period from May 30, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	LifePath 2020 Portfolio						LifePath 2030 Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	11,380,380		$	21,566,906		$	7,206,309		$	12,591,090
Net realized gain (loss)		(15,719,587	)		28,504,691			(16,337,301	)		22,193,230
Net change in unrealized appreciation (depreciation)		(45,273,817	)		(24,831,070	)		(38,623,879	)		(22,405,405	)
Net increase (decrease) in net assets resulting from operations		(49,613,024	)		25,240,527			(47,754,871	)		12,378,915
Distributions to shareholders:
From net investment income:
Class I Shares		(8,453,081	)		(18,175,660	)		(5,405,672	)		(11,107,717	)
Class R Shares		(2,975,653	)		(3,866,745	)		(1,947,291	)		(2,314,007	)
Class S Shares(a)		(1,501	)		—			(596	)		—
		(11,430,235	)		(22,042,405	)		(7,353,559	)		(13,421,724	)
From net realized gain:
Class I Shares		(4,015,828	)		(29,282,358	)		(2,175,943	)		(27,050,578	)
Class R Shares		(1,742,585	)		(6,834,109	)		(945,972	)		(6,389,077	)
Class S Shares(a)		(1,023	)		—			(312	)		—
		(5,759,436	)		(36,116,467	)		(3,122,227	)		(33,439,655	)
Total distributions to shareholders		(17,189,671	)		(58,158,872	)		(10,475,786	)		(46,861,379	)
Capital share transactions (Note 3):
Class I Shares		(186,187,566	)		208,970,610			(111,569,886	)		183,031,183
Class R Shares		61,985,108			69,209,689			50,893,888			65,030,427
Class S Shares(a)		140,992			—			59,749			—
Net increase (decrease) in net assets resulting from capital share transactions		(124,061,466	)		278,180,299			(60,616,249	)		248,061,610
Increase (decrease) in net assets		(190,864,161	)		245,261,954			(118,846,906	)		213,579,146
NET ASSETS:
Beginning of period		962,259,095			716,997,141			700,032,267			486,453,121
End of period	$	771,394,934		$	962,259,095		$	581,185,361		$	700,032,267
Distributions in excess of net investment income included in net assets at end of period	$	(1,553,447	)	$	(1,503,592	)	$	(561,133	)	$	(413,883	)

^(a) For the period from May 30, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	LifePath 2040 Portfolio						LifePath 2050 Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the day ended June 30, 2008(a) (Unaudited)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	4,438,288		$	7,300,830		$	—
Net realized gain (loss)		(13,982,194	)		17,600,925			—
Net change in unrealized appreciation (depreciation)		(31,244,676	)		(19,104,691	)		—
Net increase (decrease) in net assets resulting from operations		(40,788,582	)		5,797,064			—
Distributions to shareholders:
From net investment income:
Class I Shares		(3,337,052	)		(6,193,757	)		—
Class R Shares		(1,259,373	)		(1,521,873	)		—
Class S Shares(b)		(81	)		—			—
		(4,596,506	)		(7,715,630	)		—
From net realized gain:
Class I Shares		(1,286,530	)		(12,381,050	)		—
Class R Shares		(570,781	)		(3,585,960	)		—
Class S Shares(b)		(38	)		—			—
		(1,857,349	)		(15,967,010	)		—
Total distributions to shareholders		(6,453,855	)		(23,682,640	)		—
Capital share transactions (Note 3):
Class I Shares		(30,670,504	)		117,968,854			190,000
Class R Shares		35,486,390			49,916,101			50,000
Class S Shares		10,000	(b)		—			10,000
Net increase in net assets resulting from capital share transactions		4,825,886			167,884,955			250,000
Increase (decrease) in net assets		(42,416,551	)		149,999,379			250,000
NET ASSETS:
Beginning of period		493,918,913			343,919,534			—
End of period	$	451,502,362		$	493,918,913		$	250,000
Distributions in excess of net investment income included in net assets at end of period	$	(210,243	)	$	(52,025	)	$	—

^(a) Commencement of operations.

^(b) For the period from May 30, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

10

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	LifePath Retirement Portfolio – Class I Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	11.46		$	11.59		$	11.22		$	11.18		$	11.03		$	10.03
Income from investment operations:
Net investment income		0.18			0.39			0.39			0.30			0.20			0.19
Net realized and unrealized gain (loss)		(0.43	)		0.12			0.58			0.17			0.49			1.00
Total from investment operations		(0.25	)		0.51			0.97			0.47			0.69			1.19
Less distributions from:
Net investment income		(0.18	)		(0.37	)		(0.39	)		(0.33	)		(0.24	)		(0.19	)
Net realized gain		(0.04	)		(0.27	)		(0.21	)		(0.10	)		(0.30	)		(0.00	)(a)
Total distributions		(0.22	)		(0.64	)		(0.60	)		(0.43	)		(0.54	)		(0.19	)
Net asset value, end of period	$	10.99		$	11.46		$	11.59		$	11.22		$	11.18		$	11.03
Total return		(2.26	)%(b)		4.50	%		8.80	%		4.32	%		6.35	%		11.95	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	106,997		$	136,923		$	91,518		$	99,349		$	90,871		$	60,944
Ratio of expenses to average net assets(c)		0.77	%		0.77	%		0.78	%		0.81	%		0.82	%		0.85	%
Ratio of expenses to average net assets prior to expense reductions(c)		1.12	%		1.12	%		1.13	%		1.15	%		1.10	%		n/a
Ratio of net investment income to average net assets(c)		3.03	%		3.43	%		3.28	%		2.72	%		1.92	%		1.81	%
Portfolio turnover rate(d)		7	%		6	%		10	%		11	%		138	%		29	%

^(a) Rounds to less than $0.01.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

11

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath Retirement Portfolio – Class R Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Period from Apr. 11, 2003 (a) to Dec. 31, 2003
Net asset value, beginning of period	$	10.70		$	10.87		$	10.56		$	10.55		$	10.44		$	9.05
Income from investment operations:
Net investment income		0.17			0.36			0.35			0.28			0.18			0.17
Net realized and unrealized gain (loss)		(0.42	)		0.09			0.53			0.14			0.45			1.39
Total from investment operations		(0.25	)		0.45			0.88			0.42			0.63			1.56
Less distributions from:
Net investment income		(0.17	)		(0.35	)		(0.36	)		(0.31	)		(0.22	)		(0.17	)
Net realized gain		(0.04	)		(0.27	)		(0.21	)		(0.10	)		(0.30	)		(0.00	)(b)
Total distributions		(0.21	)		(0.62	)		(0.57	)		(0.41	)		(0.52	)		(0.17	)
Net asset value, end of period	$	10.24		$	10.70		$	10.87		$	10.56		$	10.55		$	10.44
Total return		(2.31	)%(c)		4.17	%		8.52	%		4.05	%		6.07	%		16.75	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	30,309		$	22,185		$	13,460		$	9,567		$	6,064		$	2,807
Ratio of expenses to average net assets(d)		1.02	%		1.02	%		1.03	%		1.06	%		1.07	%		1.10	%
Ratio of expenses to average net assets prior to expense reductions(d)		1.37	%		1.37	%		1.38	%		1.40	%		1.35	%		n/a
Ratio of net investment income to average net assets(d)		2.85	%		3.06	%		3.18	%		2.51	%		1.69	%		1.52	%
Portfolio turnover rate(e)		7	%		6	%		10	%		11	%		138	%		29	%(f)

^(a) Commencement of operations. April 11, 2003 is the date investors began investing in Class R of the LifePath Portfolio. To establish the new share class, the LifePath Portfolio’s distributor privately seeded Class R on April 30, 2001. The class had no activity from that date until investment began on April 11, 2003.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(e) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

^(f) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio for the year ended December 31, 2003.

The accompanying notes are an integral part of these financial statements.

12

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

LifePath Retirement Portfolio – Class S Shares
	Period from May 30, 2008 (a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	11.46
Income from investment operations:
Net investment income		0.01
Net realized and unrealized loss		(0.34	)
Total from investment operations		(0.33	)
Less distributions from:
Net investment income		(0.12	)
Net realized gain		(0.04	)
Total distributions		(0.16	)
Net asset value, end of period	$	10.97
Total return		(2.87	)%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	43
Ratio of expenses to average net assets(c)		0.41	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.76	%
Ratio of net investment income to average net assets(c)		6.00	%
Portfolio turnover rate(d)		7	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

13

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2010 Portfolio – Class I Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	13.19		$	13.52		$	12.92		$	12.74		$	12.30		$	10.82
Income from investment operations:
Net investment income		0.20			0.43			0.41			0.31			0.20			0.18
Net realized and unrealized gain (loss)		(0.58	)		0.14			0.90			0.34			0.69			1.49
Total from investment operations		(0.38	)		0.57			1.31			0.65			0.89			1.67
Less distributions from:
Net investment income		(0.20	)		(0.42	)		(0.42	)		(0.34	)		(0.24	)		(0.19	)
Net realized gain		(0.09	)		(0.48	)		(0.29	)		(0.13	)		(0.21	)		—
Total distributions		(0.29	)		(0.90	)		(0.71	)		(0.47	)		(0.45	)		(0.19	)
Net asset value, end of period	$	12.52		$	13.19		$	13.52		$	12.92		$	12.74		$	12.30
Total return		(2.87	)%(a)		4.18	%		10.15	%		5.20	%		7.38	%		15.66	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	298,447		$	391,606		$	333,298		$	350,226		$	296,439		$	172,075
Ratio of expenses to average net assets(b)		0.77	%		0.76	%		0.77	%		0.80	%		0.81	%		0.85	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.11	%		1.10	%		1.11	%		1.14	%		1.09	%		n/a
Ratio of net investment income to average net assets(b)		2.89	%		3.14	%		2.96	%		2.45	%		1.78	%		1.64	%
Portfolio turnover rate(c)		7	%		7	%		12	%		12	%		130	%		23	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

14

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2010 Portfolio – Class R Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	12.97		$	13.31		$	12.74		$	12.57		$	12.13		$	10.67
Income from investment operations:
Net investment income		0.18			0.39			0.38			0.29			0.18			0.16
Net realized and unrealized gain (loss)		(0.57	)		0.14			0.86			0.32			0.68			1.47
Total from investment operations		(0.39	)		0.53			1.24			0.61			0.86			1.63
Less distributions from:
Net investment income		(0.19	)		(0.39	)		(0.38	)		(0.31	)		(0.21	)		(0.17	)
Net realized gain		(0.09	)		(0.48	)		(0.29	)		(0.13	)		(0.21	)		—
Total distributions		(0.28	)		(0.87	)		(0.67	)		(0.44	)		(0.42	)		(0.17	)
Net asset value, end of period	$	12.30		$	12.97		$	13.31		$	12.74		$	12.57		$	12.13
Total return		(3.01	)%(a)		3.92	%		9.89	%		4.94	%		7.23	%		15.45	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	108,523		$	90,393		$	52,548		$	31,306		$	16,957		$	10,258
Ratio of expenses to average net assets(b)		1.02	%		1.01	%		1.02	%		1.05	%		1.06	%		1.10	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.36	%		1.35	%		1.36	%		1.39	%		1.34	%		n/a
Ratio of net investment income to average net assets(b)		2.70	%		2.88	%		2.87	%		2.23	%		1.56	%		1.21	%
Portfolio turnover rate(c)		7	%		7	%		12	%		12	%		130	%		23	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

15

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

LifePath 2010 Portfolio – Class S Shares
	Period from May 30, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	13.17
Income from investment operations:
Net investment income		0.02
Net realized and unrealized loss		(0.46	)
Total from investment operations		(0.44	)
Less distributions from:
Net investment income		(0.14	)
Net realized gain		(0.09	)
Total distributions		(0.23	)
Net asset value, end of period	$	12.50
Total return		(3.35	)%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	41
Ratio of expenses to average net assets(c)		0.41	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.75	%
Ratio of net investment income to average net assets(c)		6.13	%
Portfolio turnover rate(d)		7	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

16

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2020 Portfolio – Class I Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	16.98		$	17.48		$	15.85		$	15.19		$	14.13		$	11.89
Income from investment operations:
Net investment income		0.23			0.45			0.40			0.30			0.21			0.19
Net realized and unrealized gain (loss)		(1.09	)		0.14			1.64			0.68			1.09			2.24
Total from investment operations		(0.86	)		0.59			2.04			0.98			1.30			2.43
Less distributions from:
Net investment income		(0.22	)		(0.44	)		(0.41	)		(0.32	)		(0.24	)		(0.19	)
Net realized gain		(0.12	)		(0.65	)		—			—			—			—
Total distributions		(0.34	)		(1.09	)		(0.41	)		(0.32	)		(0.24	)		(0.19	)
Net asset value, end of period	$	15.78		$	16.98		$	17.48		$	15.85		$	15.19		$	14.13
Total return		(5.05	)%(a)		3.34	%		13.01	%		6.54	%		9.27	%		20.61	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	543,508		$	781,519		$	598,633		$	578,497		$	446,486		$	386,387
Ratio of expenses to average net assets(b)		0.73	%		0.74	%		0.75	%		0.78	%		0.79	%		0.85	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.07	%		1.08	%		1.08	%		1.12	%		1.07	%		n/a
Ratio of net investment income to average net assets(b)		2.46	%		2.52	%		2.37	%		2.01	%		1.49	%		1.54	%
Portfolio turnover rate(c)		9	%		7	%		16	%		17	%		140	%		23	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

17

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2020 Portfolio – Class R Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	16.24		$	16.77		$	15.22		$	14.60		$	13.59		$	11.44
Income from investment operations:
Net investment income		0.18			0.38			0.37			0.27			0.19			0.17
Net realized and unrealized gain (loss)		(1.02	)		0.13			1.56			0.64			1.03			2.14
Total from investment operations		(0.84	)		0.51			1.93			0.91			1.22			2.31
Less distributions from:
Net investment income		(0.21	)		(0.39	)		(0.38	)		(0.29	)		(0.21	)		(0.16	)
Net realized gain		(0.12	)		(0.65	)		—			—			—			—
Total distributions		(0.33	)		(1.04	)		(0.38	)		(0.29	)		(0.21	)		(0.16	)
Net asset value, end of period	$	15.07		$	16.24		$	16.77		$	15.22		$	14.60		$	13.59
Total return		(5.16	)%(a)		3.06	%		12.77	%		6.28	%		9.01	%		20.37	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	227,749		$	180,740		$	118,364		$	57,525		$	28,692		$	17,299
Ratio of expenses to average net assets(b)		0.98	%		0.99	%		1.00	%		1.03	%		1.04	%		1.10	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.32	%		1.33	%		1.33	%		1.37	%		1.32	%		n/a
Ratio of net investment income to average net assets(b)		2.29	%		2.26	%		2.31	%		1.82	%		1.33	%		1.26	%
Portfolio turnover rate(c)		9	%		7	%		16	%		17	%		140	%		23	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

18

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

LifePath 2020 Portfolio – Class S Shares
	Period from May 30, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	16.90
Income from investment operations:
Net investment income		0.01
Net realized and unrealized loss		(0.86	)
Total from investment operations		(0.85	)
Less distributions from:
Net investment income		(0.17	)
Net realized gain		(0.12	)
Total distributions		(0.29	)
Net asset value, end of period	$	15.76
Total return		(5.07	)%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	138
Ratio of expenses to average net assets(c)		0.38	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.72	%
Ratio of net investment income to average net assets(c)		7.63	%
Portfolio turnover rate(d)		9	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

19

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2030 Portfolio – Class I Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	16.19		$	16.90		$	15.39		$	14.87		$	14.13		$	11.56
Income from investment operations:
Net investment income		0.20			0.34			0.32			0.24			0.19			0.18
Net realized and unrealized gain (loss)		(1.27	)		0.11			1.99			0.88			1.32			2.55
Total from investment operations		(1.07	)		0.45			2.31			1.12			1.51			2.73
Less distributions from:
Net investment income		(0.19	)		(0.35	)		(0.36	)		(0.26	)		(0.19	)		(0.16	)
Net realized gain		(0.08	)		(0.81	)		(0.44	)		(0.34	)		(0.58	)		—
Total distributions		(0.27	)		(1.16	)		(0.80	)		(0.60	)		(0.77	)		(0.16	)
Net asset value, end of period	$	14.85		$	16.19		$	16.90		$	15.39		$	14.87		$	14.13
Total return		(6.64	)%(a)		2.64	%		15.12	%		7.63	%		10.78	%		23.86	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	407,555		$	564,348		$	408,564		$	352,800		$	265,166		$	176,647
Ratio of expenses to average net assets(b)		0.71	%		0.73	%		0.74	%		0.76	%		0.78	%		0.85	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.05	%		1.07	%		1.08	%		1.10	%		1.06	%		n/a
Ratio of net investment income to average net assets(b)		2.14	%		2.10	%		1.95	%		1.69	%		1.37	%		1.48	%
Portfolio turnover rate(c)		10	%		7	%		22	%		24	%		138	%		32	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

20

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2030 Portfolio – Class R Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Period from Apr. 8, 2003(a) to Dec. 31, 2003
Net asset value, beginning of period	$	15.90		$	16.62		$	15.15		$	14.65		$	13.94		$	11.33
Income from investment operations:
Net investment income		0.15			0.31			0.28			0.22			0.15			0.17
Net realized and unrealized gain (loss)		(1.22	)		0.09			1.95			0.85			1.30			2.59
Total from investment operations		(1.07	)		0.40			2.23			1.07			1.45			2.76
Less distributions from:
Net investment income		(0.17	)		(0.31	)		(0.32	)		(0.23	)		(0.16	)		(0.15	)
Net realized gain		(0.08	)		(0.81	)		(0.44	)		(0.34	)		(0.58	)		—
Total distributions		(0.25	)		(1.12	)		(0.76	)		(0.57	)		(0.74	)		(0.15	)
Net asset value, end of period	$	14.58		$	15.90		$	16.62		$	15.15		$	14.65		$	13.94
Total return		(6.77	)%(b)		2.38	%		14.83	%		7.37	%		10.51	%		23.85	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	173,572		$	135,684		$	77,890		$	39,134		$	19,163		$	6,776
Ratio of expenses to average net assets(c)		0.96	%		0.98	%		0.99	%		1.01	%		1.04	%		1.10	%
Ratio of expenses to average net assets prior to expense reductions(c)		1.30	%		1.32	%		1.33	%		1.35	%		1.32	%		n/a
Ratio of net investment income to average net assets(c)		1.98	%		1.85	%		1.84	%		1.52	%		1.24	%		1.27	%
Portfolio turnover rate(d)		10	%		7	%		22	%		24	%		138	%		32	%(e)

^(a) Commencement of operations. April 8, 2003 is the date investors began investing in Class R of the LifePath Portfolio. To establish the new share class, the LifePath Portfolio’s distributor privately seeded Class R on April 30, 2001. The class had no activity from that date until investment began on April 8, 2003.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

^(e) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio for the year ended December 31, 2003.

The accompanying notes are an integral part of these financial statements.

21

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

LifePath 2030 Portfolio – Class S Shares
	Period from May 30, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	16.07
Income from investment operations:
Net investment income		0.01
Net realized and unrealized loss		(1.02	)
Total from investment operations		(1.01	)
Less distributions from:
Net investment income		(0.15	)
Net realized gain		(0.08	)
Total distributions		(0.23	)
Net asset value, end of period	$	14.83
Total return		(6.32	)%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	58
Ratio of expenses to average net assets(c)		0.36	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.70	%
Ratio of net investment income to average net assets(c)		7.19	%
Portfolio turnover rate(d)		10	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

22

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2040 Portfolio – Class I Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	20.32		$	20.90		$	18.18		$	17.03		$	15.47		$	12.27
Income from investment operations:
Net investment income		0.19			0.34			0.31			0.21			0.21			0.18
Net realized and unrealized gain (loss)		(1.81	)		0.08			2.76			1.18			1.55			3.18
Total from investment operations		(1.62	)		0.42			3.07			1.39			1.76			3.36
Less distributions from:
Net investment income		(0.19	)		(0.35	)		(0.35	)		(0.24	)		(0.20	)		(0.16	)
Net realized gain		(0.08	)		(0.65	)		—			—			—			—
Total distributions		(0.27	)		(1.00	)		(0.35	)		(0.24	)		(0.20	)		(0.16	)
Net asset value, end of period	$	18.43		$	20.32		$	20.90		$	18.18		$	17.03		$	15.47
Total return		(8.04	)%(a)		2.03	%		16.97	%		8.24	%		11.43	%		27.64	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	317,059		$	383,391		$	278,716		$	221,359		$	125,063		$	127,357
Ratio of expenses to average net assets(b)		0.70	%		0.72	%		0.73	%		0.76	%		0.78	%		0.85	%
Ratio of expenses to average net assets prior to expense reductions(b)		1.05	%		1.06	%		1.07	%		1.09	%		1.06	%		n/a
Ratio of net investment income to average net assets(b)		1.89	%		1.71	%		1.62	%		1.45	%		1.15	%		1.36	%
Portfolio turnover rate(c)		10	%		8	%		29	%		38	%		147	%		29	%

^(a) Not annualized.

^(b) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(c) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

23

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	LifePath 2040 Portfolio – Class R Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Period from Apr. 8, 2003(a) to Dec. 31, 2003
Net asset value, beginning of period	$	19.46		$	20.06		$	17.47		$	16.37		$	14.89		$	11.74
Income from investment operations:
Net investment income		0.15			0.30			0.25			0.19			0.16			0.17
Net realized and unrealized gain (loss)		(1.72	)		0.06			2.64			1.11			1.48			3.13
Total from investment operations		(1.57	)		0.36			2.89			1.30			1.64			3.30
Less distributions from:
Net investment income		(0.17	)		(0.31	)		(0.30	)		(0.20	)		(0.16	)		(0.15	)
Net realized gain		(0.08	)		(0.65	)		—			—			—			—
Total distributions		(0.25	)		(0.96	)		(0.30	)		(0.20	)		(0.16	)		(0.15	)
Net asset value, end of period	$	17.64		$	19.46		$	20.06		$	17.47		$	16.37		$	14.89
Total return		(8.12	)%(b)		1.78	%		16.64	%		8.01	%		11.08	%		27.65	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	134,435		$	110,528		$	65,203		$	34,710		$	23,126		$	14,860
Ratio of expenses to average net assets(c)		0.95	%		0.97	%		0.98	%		1.01	%		1.03	%		1.10	%
Ratio of expenses to average net assets prior to expense reductions(c)		1.30	%		1.31	%		1.32	%		1.34	%		1.31	%		n/a
Ratio of net investment income to average net assets(c)		1.72	%		1.49	%		1.46	%		1.20	%		1.06	%		1.07	%
Portfolio turnover rate(d)		10	%		8	%		29	%		38	%		147	%		29	%(e)

^(a) Commencement of operations. April 8, 2003 is the date investors began investing in Class R of the LifePath Portfolio. To establish the new share class, the LifePath Portfolio’s distributor privately seeded Class R on April 30, 2001. The class had no activity from that date until investment began on April 8, 2003.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

^(e) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio for the year ended December 31, 2003.

The accompanying notes are an integral part of these financial statements.

24

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

LifePath 2040 Portfolio – Class S Shares
	Period from May 30, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	20.11
Income from investment operations:
Net investment income		0.11
Net realized and unrealized loss		(1.57	)
Total from investment operations		(1.46	)
Less distributions from:
Net investment income		(0.16	)
Net realized gain		(0.08	)
Total distributions		(0.24	)
Net asset value, end of period	$	18.41
Total return		(7.31	)%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	9
Ratio of expenses to average net assets(c)		0.34	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.69	%
Ratio of net investment income to average net assets(c)		6.73	%
Portfolio turnover rate(d)		10	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

^(d) Represents the portfolio turnover rate of the LifePath Portfolio’s corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

25

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios (each, a “LifePath Portfolio,” collectively, the “LifePath Portfolios”).

The LifePath Portfolios offer three classes of shares: Class I, Class R and Class S. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Class S shares commenced operations on May 30, 2008.

Pursuant to the Trust’s organizational documents, the LifePath Portfolios’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the LifePath Portfolios. Additionally, in the normal course of business, the LifePath Portfolios enter into contracts with service providers that contain general indemnification clauses. The LifePath Portfolios’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the LifePath Portfolios 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.

INVESTMENT POLICY AND SECURITY VALUATION

Each LifePath Portfolio invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding LifePath Portfolio. The value of each LifePath Portfolio’s investment in its corresponding Master Portfolio reflects that LifePath Portfolio’s interest in the net assets of that Master Portfolio (44.21%, 46.56%, 48.21%, 46.74%, 46.96% and 100.00% for the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios, respectively, as of June 30, 2008).

Effective January 1, 2008, the LifePath Portfolios 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 LifePath Portfolios’ 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 LifePath Portfolios’ own assumptions in determining the fair value of investments)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each LifePath Portfolio’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

26

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The performance of each LifePath Portfolio is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedules of Investments, accompanied by an unaudited summarized tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding LifePath Portfolio’s financial statements.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each LifePath Portfolio records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each LifePath Portfolio accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each LifePath Portfolio based on relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income, if any, are declared and distributed quarterly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

Due to the timing of distributions and the differences in accounting for income and realized gains (losses) for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains (losses) were recorded by the LifePath Portfolios.

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

FEDERAL INCOME TAXES

Each LifePath Portfolio is treated as a separate entity for federal income tax purposes. It is the policy of each LifePath Portfolio 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 June 30, 2008.

The LifePath Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the LifePath Portfolios’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the LifePath Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the LifePath Portfolios. State Street is entitled to receive fees for its transfer agent and dividend-disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the LifePath Portfolios.

27

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

SEI Investments Distribution Company (“SEI”) is the LifePath Portfolios’ distributor. The LifePath Portfolios have adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which authorizes Class R of the LifePath Portfolios to pay expenses relating to the distribution of its shares. Under the plan, SEI is entitled to receive an annual fee for these services of 0.25% of the average daily net assets of each LifePath Portfolio’s Class R. Class I and Class S shareholders do not pay any fees for distribution services. Class R of the LifePath Portfolios paid distribution fees for the six months ended June 30, 2008 as follows:

Portfolio	Distribution Fees
LifePath Retirement – Class R	$	34,309
LifePath 2010 – Class R		127,239
LifePath 2020 – Class R		254,889
LifePath 2030 – Class R		197,211
LifePath 2040 – Class R		153,245

The Trust has entered into an administration services arrangement with BGI which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the LifePath Portfolios’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the LifePath Portfolios for which BGI receives a fee paid by each LifePath Portfolio. BGI, in consideration thereof, has agreed to bear all of the LifePath Portfolios’ ordinary operating expenses, excluding, generally, investment advisory fees, brokerage and other expenses related to the executions of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the LifePath Portfolios. BGI is entitled to receive for these administration services an annual fee of 0.50% of the average daily net assets of each LifePath Portfolio’s Class I and Class R. BGI is entitled to receive for these administration services an annual fee of 0.15% of the average daily net assets of each LifePath Portfolio’s Class S.

The fees and expenses of the LifePath Portfolios’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the LifePath Portfolios. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the LifePath Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees as follows:

Portfolio	Administration Fees Waived/Credited
LifePath Retirement	$	6,576
LifePath 2010		8,212
LifePath 2020		10,578
LifePath 2030		9,252
LifePath 2040		8,152

BGI may delegate certain of its administration duties to sub-administrators.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

28

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the LifePath Portfolios were as follows:

	Six Months Ended June 30, 2008					Year Ended December 31, 2007
Portfolio	Shares		Amount			Shares		Amount
LifePath Retirement
Class I Shares:
Shares sold	2,854,799		$	32,271,364		8,021,227		$	94,290,518
Shares issued in reinvestment of dividends and distributions	189,597			2,098,735		537,471			6,235,052
Shares redeemed	(5,256,572	)		(59,143,969	)	(4,501,154	)		(52,854,970	)
Net increase (decrease)	(2,212,176	)	$	(24,773,870	)	4,057,544		$	47,670,600
Class R Shares:
Shares sold	1,418,726		$	14,954,547		1,785,390		$	19,652,689
Shares issued in reinvestment of dividends and distributions	55,451			571,284		110,220			1,196,585
Shares redeemed	(587,955	)		(6,179,784	)	(1,060,941	)		(11,666,525	)
Net increase	886,222		$	9,346,047		834,669		$	9,182,749
Class S Shares:(a)
Shares sold	3,906		$	43,732		—		$	—
Shares issued in reinvestment of dividends and distributions	45			490		—			—
Net increase	3,951		$	44,222		—		$	—
LifePath 2010
Class I Shares:
Shares sold	5,615,171		$	72,787,636		14,784,157		$	202,612,464
Shares issued in reinvestment of dividends and distributions	545,486			6,882,378		1,919,892			25,802,339
Shares redeemed	(12,016,062	)		(154,574,685	)	(11,659,524	)		(158,464,226	)
Net increase (decrease)	(5,855,405	)	$	(74,904,671	)	5,044,525		$	69,950,577
Class R Shares:
Shares sold	2,631,449		$	33,406,438		3,802,447		$	51,389,842
Shares issued in reinvestment of dividends and distributions	187,330			2,317,806		400,906			5,294,584
Shares redeemed	(968,213	)		(12,325,329	)	(1,180,138	)		(15,940,413	)
Net increase	1,850,566		$	23,398,915		3,023,215		$	40,744,013
Class S Shares:(a)
Shares sold	3,231		$	41,413		—		$	—
Shares issued in reinvestment of dividends and distributions	45			566		—			—
Net increase	3,276		$	41,979		—		$	—
LifePath 2020
Class I Shares:
Shares sold	6,561,374		$	107,966,766		19,736,615		$	351,697,047
Shares issued in reinvestment of dividends and distributions	760,835			12,084,962		2,675,930			46,295,187
Shares redeemed	(18,911,722	)		(306,239,294	)	(10,623,030	)		(189,021,624	)
Net increase (decrease)	(11,589,513	)	$	(186,187,566	)	11,789,515		$	208,970,610
Class R Shares:
Shares sold	4,819,931		$	75,362,050		5,398,458		$	92,421,280
Shares issued in reinvestment of dividends and distributions	308,151			4,664,597		643,941			10,654,570
Shares redeemed	(1,148,223	)		(18,041,539	)	(1,970,231	)		(33,866,161	)
Net increase	3,979,859		$	61,985,108		4,072,168		$	69,209,689

29

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

	Six Months Ended June 30, 2008					Year Ended December 31, 2007
Portfolio	Shares		Amount			Shares		Amount
Class S Shares:(a)
Shares sold	8,622		$	138,642		—		$	—
Shares issued in reinvestment of dividends and distributions	149			2,350		—			—
Net increase	8,771		$	140,992		—		$	—
LifePath 2030
Class I Shares:
Shares sold	5,695,343		$	88,374,141		16,141,246		$	277,201,934
Shares issued in reinvestment of dividends and distributions	487,725			7,281,331		2,222,876			36,941,225
Shares redeemed	(13,596,815	)		(207,225,358	)	(7,682,009	)		(131,111,976	)
Net increase (decrease)	(7,413,747	)	$	(111,569,886	)	10,682,113		$	183,031,183
Class R Shares:
Shares sold	3,891,487		$	58,914,951		4,242,406		$	72,106,135
Shares issued in reinvestment of dividends and distributions	195,779			2,862,799		529,695			8,643,961
Shares redeemed	(713,387	)		(10,883,862	)	(924,466	)		(15,719,669	)
Net increase	3,373,879		$	50,893,888		3,847,635		$	65,030,427
Class S Shares:(a)
Shares sold	3,880		$	58,987		—		$	—
Shares issued in reinvestment of dividends and distributions	52			762		—			—
Net increase	3,932		$	59,749		—		$	—
LifePath 2040
Class I Shares:
Shares sold	4,281,407		$	82,330,227		10,044,218		$	215,487,174
Shares issued in reinvestment of dividends and distributions	239,442			4,428,352		874,176			17,939,975
Shares redeemed	(6,182,712	)		(117,429,083	)	(5,386,339	)		(115,458,295	)
Net increase (decrease)	(1,661,863	)	$	(30,670,504	)	5,532,055		$	117,968,854
Class R Shares:
Shares sold	2,308,772		$	42,327,347		2,850,314		$	58,864,421
Shares issued in reinvestment of dividends and distributions	102,900			1,819,430		259,109			5,083,360
Shares redeemed	(468,850	)		(8,660,387	)	(679,819	)		(14,031,680	)
Net increase	1,942,822		$	35,486,390		2,429,604		$	49,916,101
Class S Shares:(a)
Shares sold	497		$	10,000		—		$	—
Net increase	497		$	10,000		—		$	—
LifePath 2050(b)
Class I Shares:
Shares sold	9,500		$	190,000		—		$	—
Net increase	9,500		$	190,000		—		$	—
Class R Shares:
Shares sold	2,500		$	50,000		—		$	—
Net increase	2,500		$	50,000		—		$	—
Class S Shares:
Shares sold	500		$	10,000		—		$	—
Net increase	500		$	10,000		—		$	—

^(a) For the period from May 30, 2008 (commencement of operations) to June 30, 2008.

^(b) For the day ended June 30, 2008 (commencement of operations).

30

LIFEPATH RETIREMENT MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
MASTER PORTFOLIOS – 71.02%
Active Stock Master Portfolio(a)		$	52,808,188
CoreAlpha Bond Master Portfolio(a)			167,433,063
TOTAL MASTER PORTFOLIOS			220,241,251
EXCHANGE-TRADED FUNDS – 29.02%
iShares Cohen & Steers Realty Majors Index Fund(a)(b)	44,720		3,360,261
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund(a)	128,768		4,817,211
iShares Lehman TIPS Bond Fund(a)(b)	264,363		28,511,549
iShares MSCI Canada Index Fund(a)(b)	76,142		2,530,960
iShares MSCI EAFE Index Fund(a)	341,628		23,469,844
iShares MSCI EAFE Small Cap Index Fund(a)	56,267		2,474,904
iShares MSCI Emerging Markets Index Fund(a)(b)	50,129		6,796,490
iShares S&P MidCap 400 Index Fund(a)(b)	149,778		12,206,907
iShares S&P SmallCap 600 Index Fund(a)(b)	97,224		5,849,968
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $83,837,951)			90,018,094
SHORT-TERM INVESTMENTS – 6.28%
MONEY MARKET FUNDS – 6.28%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(a)(c)	1,231,907		1,231,907
BGI Cash Premier Fund LLC
2.63%(a)(c)(d)	18,235,710		18,235,710
			19,467,617
TOTAL SHORT-TERM INVESTMENTS
(Cost: $19,467,617)			19,467,617
TOTAL INVESTMENTS – 106.32%			329,726,962
Other Assets, Less Liabilities – (6.32)%			(19,611,206	)
NET ASSETS – 100.00%		$	310,115,756

^(a) Affiliated issuer. See Note 2.

^(b) All or a portion of this security represents a security on loan. See Note 4.

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

^(d) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

31

LIFEPATH 2010 MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
MASTER PORTFOLIOS – 69.41%
Active Stock Master Portfolio(a)		$	172,874,678
CoreAlpha Bond Master Portfolio(a)			434,427,778
TOTAL MASTER PORTFOLIOS			607,302,456
EXCHANGE-TRADED FUNDS – 30.20%
iShares Cohen & Steers Realty Majors Index Fund(a)(b)	142,509		10,708,126
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund(a)	371,396		13,893,924
iShares Lehman TIPS Bond Fund(a)(b)	684,909		73,867,436
iShares MSCI Canada Index Fund(a)(b)	234,240		7,786,138
iShares MSCI EAFE Index Fund(a)(b)	1,059,215		72,768,070
iShares MSCI EAFE Small Cap Index Fund(a)	162,754		7,158,735
iShares MSCI Emerging Markets Index Fund(a)(b)	162,282		22,002,194
iShares S&P MidCap 400 Index Fund(a)(b)	465,973		37,976,799
iShares S&P SmallCap 600 Index Fund(a)(b)	299,894		18,044,622
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $243,760,876)			264,206,044
SHORT-TERM INVESTMENTS – 6.63%
MONEY MARKET FUNDS – 6.63%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
2.58%(a)(c)	3,317,714		3,317,714
BGI Cash Premier Fund LLC
2.63%(a)(c)(d)	54,730,250		54,730,250
			58,047,964
TOTAL SHORT-TERM INVESTMENTS
(Cost: $58,047,964)			58,047,964
TOTAL INVESTMENTS – 106.24%			929,556,464
Other Assets, Less Liabilities – (6.24)%			(54,628,744	)
NET ASSETS – 100.00%		$	874,927,720

^(a) Affiliated issuer. See Note 2.

^(b) All or a portion of this security represents a security on loan. See Note 4.

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

^(d) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

32

LIFEPATH 2020 MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
MASTER PORTFOLIOS – 63.30%
Active Stock Master Portfolio(a)		$	491,737,214
CoreAlpha Bond Master Portfolio(a)			518,526,073
TOTAL MASTER PORTFOLIOS			1,010,263,287
EXCHANGE-TRADED FUNDS – 36.38%
iShares Cohen & Steers Realty Majors Index Fund(a)(b)	352,456		26,483,544
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund(a)	1,075,208		40,223,531
iShares Lehman TIPS Bond Fund(a)(b)	782,848		84,430,157
iShares MSCI Canada Index Fund(a)(b)	649,891		21,602,377
iShares MSCI EAFE Index Fund(a)	2,789,528		191,640,574
iShares MSCI EAFE Small Cap Index Fund(a)	445,933		19,614,363
iShares MSCI Emerging Markets Index Fund(a)(b)	431,704		58,530,428
iShares S&P MidCap 400 Index Fund(a)	1,155,211		94,149,696
iShares S&P SmallCap 600 Index Fund(a)(b)	732,429		44,070,253
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $529,817,004)			580,744,923
SHORT-TERM INVESTMENTS – 8.85%
MONEY MARKET FUNDS – 8.85%
Barclays Global Investors Funds Institutional Money Market Fund, Institutional Shares
2.58%(a)(c)	7,311,591		7,311,591
BGI Cash Premier Fund LLC
2.63%(a)(c)(d)	133,991,671		133,991,671
			141,303,262
TOTAL SHORT-TERM INVESTMENTS
(Cost: $141,303,262)			141,303,262
TOTAL INVESTMENTS – 108.53%			1,732,311,472
Other Assets, Less Liabilities – (8.53)%			(136,213,179	)
NET ASSETS – 100.00%		$	1,596,098,293

^(a) Affiliated issuer. See Note 2.

^(b) All or a portion of this security represents a security on loan. See Note 4.

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

^(d) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

33

LIFEPATH 2030 MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
MASTER PORTFOLIOS – 58.82%
Active Stock Master Portfolio(a)		$	485,998,312
CoreAlpha Bond Master Portfolio(a)			245,892,939
TOTAL MASTER PORTFOLIOS			731,891,251
EXCHANGE-TRADED FUNDS – 40.86%
iShares Cohen & Steers Realty Majors Index Fund(a)	336,629		25,294,303
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund(a)	1,111,478		41,580,392
iShares Lehman TIPS Bond Fund(a)(b)	332,315		35,840,173
iShares MSCI Canada Index Fund(a)(b)	606,128		20,147,695
iShares MSCI EAFE Index Fund(a)(b)	2,672,520		183,602,124
iShares MSCI EAFE Small Cap Index Fund(a)	451,060		19,839,874
iShares MSCI Emerging Markets Index Fund(a)(b)	410,575		55,665,758
iShares S&P MidCap 400 Index Fund(a)(b)	1,084,908		88,420,002
iShares S&P SmallCap 600 Index Fund(a)(b)	633,016		38,088,573
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $472,329,414)			508,478,894
SHORT-TERM INVESTMENTS – 13.42%
MONEY MARKET FUNDS – 13.42%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(a)(c)	6,632,634		6,632,634
BGI Cash Premier Fund LLC
2.63%(a)(c)(d)	160,329,483		160,329,483
			166,962,117
TOTAL SHORT-TERM INVESTMENTS
(Cost: $166,962,117)			166,962,117
TOTAL INVESTMENTS – 113.10%			1,407,332,262
Other Assets, Less Liabilities – (13.10)%			(163,049,083	)
NET ASSETS – 100.00%		$	1,244,283,179

^(a) Affiliated issuer. See Note 2.

^(b) All or a portion of this security represents a security on loan. See Note 4.

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

^(d) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

34

LIFEPATH 2040 MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
MASTER PORTFOLIOS – 55.90%
Active Stock Master Portfolio(a)		$	442,659,959
CoreAlpha Bond Master Portfolio(a)			95,166,138
TOTAL MASTER PORTFOLIOS			537,826,097
EXCHANGE-TRADED FUNDS – 44.54%
iShares Cohen & Steers Realty Majors Index Fund(a)(b)	307,893		23,135,080
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund(a)	982,710		36,763,181
iShares Lehman TIPS Bond Fund(a)	74,295		8,012,716
iShares MSCI Canada Index Fund(a)(b)	538,922		17,913,767
iShares MSCI EAFE Index Fund(a)(b)	2,391,686		164,308,828
iShares MSCI EAFE Small Cap Index Fund(a)	418,510		18,408,162
iShares MSCI Emerging Markets Index Fund(a)(b)	362,361		49,128,905
iShares S&P MidCap 400 Index Fund(a)	937,742		76,425,973
iShares S&P SmallCap 600 Index Fund(a)(b)	571,460		34,384,748
TOTAL EXCHANGE-TRADED FUNDS
(Cost: $409,569,988)			428,481,360
SHORT-TERM INVESTMENTS – 18.09%
MONEY MARKET FUNDS – 18.09%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(a)(c)	7,075,473		7,075,473
BGI Cash Premier Fund LLC
2.63%(a)(c)(d)	166,928,155		166,928,155
			174,003,628
TOTAL SHORT-TERM INVESTMENTS
(Cost: $174,003,628)			174,003,628
TOTAL INVESTMENTS – 118.53%			1,140,311,085
Other Assets, Less Liabilities – (18.53)%			(178,290,902	)
NET ASSETS – 100.00%		$	962,020,183

^(a) Affiliated issuer. See Note 2.

^(b) All or a portion of this security represents a security on loan. See Note 4.

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

^(d) This security represents an investment of securities lending collateral. See Note 4.

The accompanying notes are an integral part of these financial statements.

35

ACTIVE STOCK MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Shares	Value
COMMON STOCKS – 97.92%
AEROSPACE & DEFENSE – 1.63%
Boeing Co. (The)	79,270	$	5,209,624
General Dynamics Corp.	103,805		8,740,381
Goodrich Corp.	35,135		1,667,507
Northrop Grumman Corp.(a)	167,924		11,234,116
			26,851,628
AGRICULTURE – 2.94%
Altria Group Inc.	434,770		8,938,871
Monsanto Co.(a)	127,790		16,157,768
Philip Morris International Inc.	473,395		23,380,979
			48,477,618
AIRLINES – 0.02%
AMR Corp.(a)(b)	44,034		225,454
Continental Airlines Inc. Class B(a)(b)	5,996		60,620
			286,074
APPAREL – 0.10%
Coach Inc.(b)	46,634		1,346,790
Jones Apparel Group Inc.(a)	12,486		171,682
Nike Inc. Class B	1,178		70,221
			1,588,693
AUTO MANUFACTURERS – 0.05%
General Motors Corp.(a)	77,970		896,655
			896,655
AUTO PARTS & EQUIPMENT – 0.01%
Autoliv Inc.	2,436		113,566
			113,566
BANKS – 3.43%
Bank of America Corp.(a)	501,067		11,960,469
Bank of New York Mellon Corp. (The)(a)	338,197		12,793,993
Colonial BancGroup Inc. (The)(a)	18,121		80,095
Discover Financial Services LLC	15,626		205,794
KeyCorp(a)	135,589		1,488,767
National City Corp.(a)	105,359		502,562
Northern Trust Corp.	146,667		10,056,956
Regions Financial Corp.(a)	66,303		723,366
State Street Corp.	29,103		1,862,301
UnionBanCal Corp.(a)	142,429		5,756,980
Wachovia Corp.(a)	442,210		6,867,521
Wells Fargo & Co.(a)	134,753		3,200,384
Zions Bancorporation(a)	32,024		1,008,436
			56,507,624
BEVERAGES – 2.24%
Anheuser-Busch Companies Inc.	102,528		6,369,039
Coca-Cola Co. (The)	3,308		171,950
Coca-Cola Enterprises Inc.	41,935		725,475

Security	Shares	Value
BEVERAGES (Continued)
Molson Coors Brewing Co. Class B	11,231	$	610,180
Pepsi Bottling Group Inc.(a)	178,622		4,987,126
PepsiAmericas Inc.(a)	101,605		2,009,747
PepsiCo Inc.(a)	345,308		21,958,136
			36,831,653
BIOTECHNOLOGY – 1.70%
Amgen Inc.(b)	329,546		15,541,389
Biogen Idec Inc.(b)	193,228		10,799,513
Genentech Inc.(a)(b)	20,662		1,568,246
			27,909,148
BUILDING MATERIALS – 0.02%
Lennox International Inc.(a)	12,344		357,482
			357,482
CHEMICALS – 1.32%
Airgas Inc.(a)	8,989		524,868
Ashland Inc.(a)	63,372		3,054,530
CF Industries Holdings Inc.	5,140		785,392
Cytec Industries Inc.(a)	49,581		2,705,139
Lubrizol Corp.	128,100		5,934,873
Mosaic Co. (The)(b)	57,363		8,300,426
Terra Industries Inc.(a)	8,651		426,927
			21,732,155
COAL – 0.42%
Massey Energy Co.(a)	73,591		6,899,156
			6,899,156
COMMERCIAL SERVICES – 1.59%
Accenture Ltd.	303,581		12,361,818
Apollo Group Inc. Class A(a)(b)	43,092		1,907,252
Deluxe Corp.	4,290		76,448
H&R Block Inc.(a)	46,280		990,392
ITT Educational Services Inc.(a)(b)	26,490		2,188,869
Manpower Inc.(a)	60,986		3,551,825
Moody’s Corp.(a)	51,110		1,760,228
Robert Half International Inc.(a)	12,544		300,680
Visa Inc. Class A(b)	11,960		972,468
Weight Watchers International Inc.(a)	10,882		387,508
Western Union Co.	70,760		1,749,187
			26,246,675
COMPUTERS – 4.75%
Apple Inc.(b)	126,565		21,192,044
Cadence Design Systems Inc.(b)	6,167		62,287
Computer Sciences Corp.(b)	11,724		549,152
Dell Inc.(b)	7,696		168,388
Electronic Data Systems Corp.	72,960		1,797,734
Hewlett-Packard Co.	523,989		23,165,554
International Business Machines Corp.	130,862		15,511,073
Lexmark International Inc. Class A(a)(b)	35,813		1,197,229

36

ACTIVE STOCK MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
COMPUTERS (Continued)
Seagate Technology(a)	420,034	$	8,035,250
Sun Microsystems Inc.(b)	359,235		3,908,477
Teradata Corp.(b)	113,674		2,630,416
			78,217,604
COSMETICS & PERSONAL CARE – 3.20%
Colgate-Palmolive Co.	250,782		17,329,036
Procter & Gamble Co. (The)	581,798		35,379,136
			52,708,172
DISTRIBUTION & WHOLESALE – 0.33%
W.W. Grainger Inc.(a)	67,199		5,496,878
			5,496,878
DIVERSIFIED FINANCIAL SERVICES – 5.70%
American Express Co.	146,484		5,518,052
AmeriCredit Corp.(a)(b)	56,100		483,582
Ameriprise Financial Inc.(a)	221,076		8,991,161
Capital One Financial Corp.(a)	52,785		2,006,358
CIT Group Inc.	57,870		394,095
Citigroup Inc.	1,109,896		18,601,857
Countrywide Financial Corp.(a)	79,101		336,179
Federal Home Loan Mortgage Corp.(a)	92,219		1,512,392
Federal National Mortgage Association(a)	153,574		2,996,229
Goldman Sachs Group Inc. (The)(a)	63,326		11,075,717
JPMorgan Chase & Co.	709,440		24,340,886
Lehman Brothers Holdings Inc.	99,018		1,961,547
Merrill Lynch & Co. Inc.	141,715		4,493,783
Morgan Stanley	183,727		6,627,033
NYSE Euronext Inc.	70,638		3,578,521
SLM Corp.(a)(b)	46,608		901,865
			93,819,257
ELECTRIC – 3.34%
AES Corp. (The)(a)(b)	417,007		8,010,704
Alliant Energy Corp.(a)	48,398		1,658,115
Constellation Energy Group Inc.	48,774		4,004,345
Edison International(a)	360,821		18,538,983
FirstEnergy Corp.(a)	247,643		20,388,448
Mirant Corp.(b)	7,335		287,165
Public Service Enterprise Group Inc.	46,768		2,148,054
			55,035,814
ELECTRICAL COMPONENTS & EQUIPMENT – 1.19%
Emerson Electric Co.	394,757		19,520,734
			19,520,734
ELECTRONICS – 1.10%
Agilent Technologies Inc.(a)(b)	228,040		8,104,542
Applied Biosystems Group	87,259		2,921,431
Flextronics International Ltd.(a)(b)	193,194		1,816,024
Jabil Circuit Inc.	82,749		1,357,911
Mettler-Toledo International Inc.(a)(b)	13,858		1,314,570

Security	Shares	Value
ELECTRONICS (Continued)
Tyco Electronics Ltd.	68,665	$	2,459,580
Waters Corp.(b)	2,114		136,353
			18,110,411
ENGINEERING & CONSTRUCTION – 1.47%
Fluor Corp.(a)	69,276		12,890,878
Jacobs Engineering Group Inc.(a)(b)	6,746		544,402
KBR Inc.	55,092		1,923,262
McDermott International Inc.(a)(b)	142,449		8,816,169
			24,174,711
ENVIRONMENTAL CONTROL – 0.16%
Republic Services Inc.	90,740		2,694,978
			2,694,978
FOOD – 1.59%
General Mills Inc.(a)	220,204		13,381,797
H.J. Heinz Co.(a)	38,655		1,849,642
Hormel Foods Corp.(a)	20,790		719,542
J.M. Smucker Co. (The)	8,850		359,664
Kellogg Co.	1,543		74,095
Sara Lee Corp.	397,227		4,866,031
SUPERVALU Inc.(a)	77,414		2,391,318
Tyson Foods Inc. Class A	6,285		93,898
Wm. Wrigley Jr. Co.	30,992		2,410,558
			26,146,545
FOREST PRODUCTS & PAPER – 0.25%
International Paper Co.(a)	176,029		4,101,476
			4,101,476
GAS – 0.53%
AGL Resources Inc.	1,289		44,574
Energen Corp.(a)	30,397		2,371,878
Sempra Energy(a)	85,106		4,804,234
UGI Corp.(a)	52,402		1,504,461
			8,725,147
HEALTH CARE - PRODUCTS – 4.76%
Alcon Inc.(a)	75,206		12,242,785
Baxter International Inc.(a)	288,229		18,429,362
Becton, Dickinson and Co.	180,620		14,684,406
Covidien Ltd.	7,464		357,451
Johnson & Johnson	225,200		14,489,368
Medtronic Inc.(a)	39,044		2,020,527
St. Jude Medical Inc.(a)(b)	208,138		8,508,681
Zimmer Holdings Inc.(a)(b)	112,862		7,680,259
			78,412,839
HEALTH CARE - SERVICES – 0.72%
Health Net Inc.(b)	48,154		1,158,585
Humana Inc.(b)	8,684		345,363
Lincare Holdings Inc.(a)(b)	12,902		366,417

37

ACTIVE STOCK MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
HEALTH CARE - SERVICES (Continued)
UnitedHealth Group Inc.	140,446	$	3,686,707
Universal Health Services Inc. Class B	10,656		673,672
WellCare Health Plans Inc.(a)(b)	22,609		817,315
WellPoint Inc.(a)(b)	100,587		4,793,976
			11,842,035
HOME BUILDERS – 0.22%
Centex Corp.(a)	20,943		280,008
NVR Inc.(a)(b)	6,588		3,294,527
			3,574,535
HOUSEHOLD PRODUCTS & WARES – 0.00%
Blyth Inc.	4,391		52,824
			52,824
INSURANCE – 3.15%
ACE Ltd.	194,278		10,702,775
Ambac Financial Group Inc.(a)	13,358		17,900
American International Group Inc.	171,794		4,545,669
Aon Corp.	21,663		995,198
Axis Capital Holdings Ltd.(a)	96,897		2,888,500
Genworth Financial Inc. Class A(a)	181,583		3,233,993
Lincoln National Corp.(a)	58,884		2,668,623
Marsh & McLennan Companies Inc.	58,676		1,557,848
MetLife Inc.	94,592		4,991,620
Protective Life Corp.	2,927		111,372
Prudential Financial Inc.(a)	77,471		4,628,118
StanCorp Financial Group Inc.	304		14,276
Torchmark Corp.(a)	9,148		536,530
Travelers Companies Inc. (The)	266,834		11,580,596
W.R. Berkley Corp.	71,026		1,715,988
Willis Group Holdings Ltd.	25,222		791,214
XL Capital Ltd. Class A(a)	39,336		808,748
			51,788,968
INTERNET – 1.69%
Check Point Software Technologies Ltd.(b)	78,623		1,861,006
eBay Inc.(b)	459,258		12,551,521
Google Inc. Class A(b)	22,795		11,999,744
IAC/InterActiveCorp(b)	14,144		272,696
Symantec Corp.(a)(b)	62,362		1,206,705
			27,891,672
IRON & STEEL – 0.34%
Reliance Steel & Aluminum Co.(a)	73,260		5,647,613
			5,647,613
LODGING – 0.25%
Choice Hotels International Inc.(a)	56,233		1,490,174
Starwood Hotels & Resorts Worldwide Inc.(a)	41,199		1,650,844
Wyndham Worldwide Corp.	54,904		983,331
			4,124,349

Security	Shares	Value
MACHINERY – 0.13%
Deere & Co.	20,943	$	1,510,619
Gardner Denver Inc.(b)	10,954		622,187
			2,132,806
MANUFACTURING – 2.83%
Cooper Industries Ltd.	9,676		382,202
Dover Corp.	129,870		6,281,812
General Electric Co.	893,363		23,843,858
Honeywell International Inc.	262,669		13,206,997
Tyco International Ltd.	69,660		2,789,186
			46,504,055
MEDIA – 3.03%
CBS Corp. Class B	40,976		798,622
DIRECTV Group Inc. (The)(a)(b)	611,295		15,838,653
Dish Network Corp. Class A(b)	135,083		3,955,230
McGraw-Hill Companies Inc. (The)(a)	46,454		1,863,734
Time Warner Inc.(a)	1,189,930		17,610,964
Viacom Inc. Class B(a)(b)	136,453		4,167,275
Walt Disney Co. (The)(a)	182,526		5,694,811
			49,929,289
METAL FABRICATE & HARDWARE – 0.12%
Commercial Metals Co.	18,133		683,614
Timken Co. (The)	39,762		1,309,760
			1,993,374
MINING – 0.11%
Southern Copper Corp.(a)	17,399		1,855,255
			1,855,255
OFFICE & BUSINESS EQUIPMENT – 0.06%
Xerox Corp.	67,382		913,700
			913,700
OIL & GAS – 11.97%
Apache Corp.	72,610		10,092,790
Chevron Corp.	159,238		15,785,263
ConocoPhillips	328,248		30,983,329
Devon Energy Corp.	79,208		9,517,633
ENSCO International Inc.(a)	191,663		15,474,871
Exxon Mobil Corp.	920,151		81,092,908
Noble Corp.	111,044		7,213,418
Noble Energy Inc.(a)	160,887		16,178,797
Occidental Petroleum Corp.	42,743		3,840,886
Sunoco Inc.(a)	38,078		1,549,394
Valero Energy Corp.	128,497		5,291,506
			197,020,795
OIL & GAS SERVICES – 1.85%
Baker Hughes Inc.	6,646		580,462
Dresser-Rand Group Inc.(b)	41,558		1,624,918

38

ACTIVE STOCK MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares	Value
OIL & GAS SERVICES (Continued)
FMC Technologies Inc.(a)(b)	9,482	$	729,450
Global Industries Ltd.(a)(b)	39,973		716,716
Halliburton Co.	95,812		5,084,743
National Oilwell Varco Inc.(a)(b)	104,851		9,302,381
Schlumberger Ltd.	42,080		4,520,654
Smith International Inc.	18,161		1,509,906
Superior Energy Services Inc.(a)(b)	56,892		3,137,025
Tidewater Inc.(a)	50,427		3,279,268
			30,485,523
PACKAGING & CONTAINERS – 0.54%
Crown Holdings Inc.(a)(b)	144,988		3,768,238
Owens-Illinois Inc.(b)	72,940		3,040,869
Packaging Corp. of America	4,875		104,861
Sonoco Products Co.(a)	63,680		1,970,896
			8,884,864
PHARMACEUTICALS – 5.01%
Bristol-Myers Squibb Co.	587,952		12,070,655
Cardinal Health Inc.	4,709		242,890
Eli Lilly and Co.(a)	280,244		12,936,063
Express Scripts Inc.(b)	18,671		1,171,045
Forest Laboratories Inc.(a)(b)	382,950		13,303,683
King Pharmaceuticals Inc.(a)(b)	133,148		1,394,060
Medco Health Solutions Inc.(b)	84,570		3,991,704
Merck & Co. Inc.	345,433		13,019,370
Pfizer Inc.(a)	1,380,216		24,112,374
Sepracor Inc.(a)(b)	9,983		198,861
			82,440,705
PIPELINES – 1.01%
ONEOK Inc.	3,583		174,958
Williams Companies Inc. (The)(a)	408,738		16,476,229
			16,651,187
REAL ESTATE – 0.04%
Jones Lang LaSalle Inc.(a)	9,949		598,830
			598,830
REAL ESTATE INVESTMENT TRUSTS – 0.78%
Hospitality Properties Trust(a)	14,897		364,381
Host Hotels & Resorts Inc.(a)	443,104		6,048,370
HRPT Properties Trust	13,444		91,016
ProLogis(a)	112,953		6,138,996
SL Green Realty Corp.(a)	2,200		181,984
			12,824,747
RETAIL – 5.62%
Advance Auto Parts Inc.	11,299		438,740
AutoZone Inc.(b)	5,026		608,196
Big Lots Inc.(a)(b)	96,155		3,003,882
BJ’s Wholesale Club Inc.(a)(b)	112,521		4,354,563
CBRL Group Inc.(a)	1,719		42,133

Security	Shares	Value
RETAIL (Continued)
Costco Wholesale Corp.	31,662	$	2,220,773
CVS Caremark Corp.	7,400		292,818
Dollar Tree Inc.(a)(b)	119,017		3,890,666
Family Dollar Stores Inc.(a)	92,429		1,843,034
Gap Inc. (The)(a)	434,629		7,245,265
Home Depot Inc.	179,978		4,215,085
Macy’s Inc.(a)	158,230		3,072,827
McDonald’s Corp.(a)	380,119		21,370,290
Office Depot Inc.(a)(b)	175,802		1,923,274
OfficeMax Inc.	15,483		215,214
Penske Automotive Group Inc.(a)	42,006		619,168
RadioShack Corp.(a)	125,396		1,538,609
TJX Companies Inc. (The)(a)	207,135		6,518,538
Wal-Mart Stores Inc.	518,805		29,156,841
			92,569,916
SAVINGS & LOANS – 0.26%
New York Community Bancorp Inc.	146,740		2,617,842
Sovereign Bancorp Inc.	215,865		1,588,766
			4,206,608
SEMICONDUCTORS – 2.81%
Atmel Corp.(b)	16,162		56,244
Integrated Device Technology Inc.(a)(b)	96,757		961,765
Intel Corp.(a)	1,206,718		25,920,303
LSI Corp.(a)(b)	325,224		1,996,875
National Semiconductor Corp.	31,673		650,563
NVIDIA Corp.(a)(b)	211,922		3,967,180
QLogic Corp.(b)	119,812		1,748,057
Texas Instruments Inc.(a)	387,345		10,907,635
			46,208,622
SOFTWARE – 4.50%
Adobe Systems Inc.(a)(b)	286,345		11,279,130
Autodesk Inc.(a)(b)	145,692		4,925,847
BMC Software Inc.(a)(b)	33,296		1,198,656
Broadridge Financial Solutions Inc.	47,400		997,770
CA Inc.	3,512		81,092
Dun & Bradstreet Corp. (The)(a)	24,973		2,188,634
IMS Health Inc.(a)	183,645		4,278,928
Metavante Technologies Inc.(b)	7,535		170,442
Microsoft Corp.	1,448,921		39,859,817
Oracle Corp.(b)	366,029		7,686,609
Paychex Inc.	44,245		1,383,984
			74,050,909
TELECOMMUNICATIONS – 5.30%
ADTRAN Inc.(a)	10,598		252,656
AT&T Inc.	1,037,365		34,948,827
Cisco Systems Inc.(a)(b)	513,533		11,944,778
Corning Inc.	50,790		1,170,710
Embarq Corp.(a)	24,911		1,177,543
QUALCOMM Inc.	283,781		12,591,363

39

ACTIVE STOCK MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Shares or Principal		Value
TELECOMMUNICATIONS (Continued)
Sprint Nextel Corp.(a)		761,337	$	7,232,702
Telephone and Data Systems Inc. Special		15,064		664,322
United States Cellular Corp.(a)(b)		3,653		206,577
Verizon Communications Inc.		480,701		17,016,815
				87,206,293
TOYS, GAMES & HOBBIES – 0.32%
Hasbro Inc.(a)		146,896		5,247,125
				5,247,125
TRANSPORTATION – 1.42%
CSX Corp.		40,748		2,559,382
FedEx Corp.(a)		36,156		2,848,731
Kirby Corp.(a)(b)		83,943		4,029,264
Landstar System Inc.		18,282		1,009,532
Norfolk Southern Corp.(a)		82,637		5,178,861
Union Pacific Corp.(a)		86,149		6,504,250
UTi Worldwide Inc.		2,606		51,990
YRC Worldwide Inc.(a)(b)		78,027		1,160,261
				23,342,271
TOTAL COMMON STOCKS
(Cost: $1,688,666,913)				1,611,851,563
SHORT-TERM INVESTMENTS – 18.49%
MONEY MARKET FUNDS – 18.35%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(c)(d)		31,045,166		31,045,166
BGI Cash Premier Fund LLC
2.63%(c)(d)(e)		271,045,224		271,045,224
				302,090,390
U.S. TREASURY OBLIGATIONS – 0.14%
U.S. Treasury Bill
1.68%, 09/25/08(f)(g)	$	2,200,000		2,191,066
				2,191,066
TOTAL SHORT-TERM INVESTMENTS
(Cost: $304,281,035)				304,281,456
TOTAL INVESTMENTS IN SECURITIES – 116.41%
(Cost: $1,992,947,948)				1,916,133,019
Other Assets, Less Liabilities – (16.41)%				(270,054,668	)
NET ASSETS – 100.00%			$	1,646,078,351

^(a) All or a portion of this security represents a security on loan. See Note 4.

^(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 4.

^(f) The rate quoted is the yield to maturity.

^(g) This U.S. Treasury Bill is held in a segregated account in connection with the Master Portfolio’s holdings of futures contracts. See Note 1.

As of June 30, 2008, the open futures contracts held by the Master Portfolio were as follows:

Futures Contracts (Expiration Date)	Number of Contracts	Notional Contract Value		Net Unrealized Depreciation
S&P 500 Index (September 2008)	438	$	28,056,090	$	(1,608,080	)
				$	(1,608,080	)

The accompanying notes are an integral part of these financial statements.

40

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Principal		Value
CORPORATE BONDS & NOTES – 33.43%
AEROSPACE & DEFENSE – 0.05%
Alliant Techsystems Inc.
6.75%, 04/01/16	$	500,000	$	485,000
TransDigm Inc.
7.75%, 07/15/14		250,000		246,875
				731,875
AGRICULTURE – 0.78%
Alliance One International Inc.
8.50%, 05/15/12		250,000		235,000
Philip Morris International Inc.
4.88%, 05/16/13		2,200,000		2,161,119
5.65%, 05/16/18		4,400,000		4,276,633
Reynolds American Inc.
3.48%, 06/15/11		5,060,000		4,782,004
				11,454,756
APPAREL – 0.04%
Levi Strauss & Co.
9.75%, 01/15/15		500,000		502,500
				502,500
AUTO MANUFACTURERS – 0.56%
DaimlerChrysler North America Holding Corp.
3.14%, 03/13/09		5,000,000		4,984,800
8.50%, 01/18/31		1,950,000		2,254,617
General Motors Nova Scotia Finance Co.
6.85%, 10/15/08(a)		1,000,000		967,500
				8,206,917
AUTO PARTS & EQUIPMENT – 0.09%
Goodyear Tire & Rubber Co. (The)
7.86%, 08/15/11		1,250,000		1,242,187
				1,242,187
BANKS – 3.37%
American Express Bank FSB
5.50%, 04/16/13		4,250,000		4,155,561
5.55%, 10/17/12		5,700,000		5,638,634
American Express Centurion Bank
5.20%, 11/26/10		1,200,000		1,201,691
Bank of America Corp.
5.49%, 03/15/19		3,500,000		3,173,240
5.75%, 12/01/17		1,500,000		1,408,674
HSBC Bank USA
5.88%, 11/01/34		3,000,000		2,624,343
HSBC Holdings PLC
5.25%, 12/12/12		3,000,000		2,999,853
6.50%, 09/15/37		2,400,000		2,187,802

Security	Principal		Value
BANKS (Continued)
JPMorgan Chase Bank N.A.
6.00%, 10/01/17	$	4,900,000	$	4,760,071
Marshall & Ilsley Corp.
5.63%, 08/17/09		4,890,000		4,860,949
Wachovia Bank N.A.
6.00%, 11/15/17		2,100,000		1,960,856
Wachovia Corp.
5.30%, 10/15/11		2,750,000		2,688,895
5.50%, 05/01/13		4,500,000		4,306,954
Wells Fargo & Co.
5.25%, 10/23/12		7,300,000		7,340,916
				49,308,439
BEVERAGES – 0.37%
PepsiCo Inc.
4.65%, 02/15/13		1,500,000		1,522,266
5.00%, 06/01/18		4,000,000		3,902,644
				5,424,910
BIOTECHNOLOGY – 0.10%
Genentech Inc.
4.75%, 07/15/15		1,500,000		1,487,074
				1,487,074
BUILDING MATERIALS – 0.05%
CRH America Inc.
6.00%, 09/30/16		800,000		741,930
				741,930
CHEMICALS – 0.21%
Lubrizol Corp.
4.63%, 10/01/09		2,592,000		2,579,838
Mosaic Co. (The)
7.88%, 12/01/16(b)		250,000		266,250
Nova Chemicals Corp.
6.50%, 01/15/12		250,000		223,750
				3,069,838
COMMERCIAL SERVICES – 0.11%
Avis Budget Car Rental LLC
7.63%, 05/15/14		250,000		200,000
Convergys Corp.
4.88%, 12/15/09		1,200,000		1,210,470
Service Corp. International
6.75%, 04/01/15		250,000		238,125
				1,648,595
COMPUTERS – 0.17%
Hewlett-Packard Co.
4.50%, 03/01/13		2,500,000		2,476,060
				2,476,060

41

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
DIVERSIFIED FINANCIAL SERVICES – 7.70%
Allstate Life Global Funding Trusts
5.38%, 04/30/13	$	5,250,000	$	5,229,415
Ameriprise Financial Inc.
7.52%, 06/01/16		500,000		421,647
Associates Corp. of North America
6.88%, 11/15/08		2,400,000		2,426,532
6.95%, 11/01/18		1,500,000		1,554,972
Capital One Financial Corp.
2.98%, 09/10/09		2,940,000		2,742,835
Caterpillar Financial Services Corp.
4.35%, 03/04/09		6,500,000		6,526,390
CIT Group Funding Co. of Canada
4.65%, 07/01/10		1,000,000		836,410
5.60%, 11/02/11		950,000		747,173
CIT Group Inc.
5.40%, 02/13/12		550,000		436,603
5.80%, 07/28/11		800,000		647,176
6.10%, 03/15/17		1,050,000		482,748
Citicorp
6.38%, 11/15/08		5,300,000		5,339,024
Citigroup Inc.
4.13%, 02/22/10		2,000,000		1,981,480
5.30%, 10/17/12		1,000,000		975,446
5.50%, 04/11/13		1,750,000		1,707,960
5.50%, 02/15/17		3,750,000		3,419,805
5.85%, 07/02/13		2,800,000		2,771,378
Countrywide Home Loans Inc.
4.00%, 03/22/11		800,000		728,307
Ford Motor Credit Co.
7.38%, 10/28/09		3,000,000		2,732,337
General Electric Capital Corp.
5.25%, 10/19/12		9,000,000		9,087,732
6.75%, 03/15/32		3,000,000		3,020,850
Genworth Global Funding Trusts
5.75%, 05/15/13		2,000,000		1,958,818
Goldman Sachs Group Inc. (The)
5.45%, 11/01/12		1,800,000		1,795,484
5.95%, 01/18/18		4,000,000		3,839,828
6.15%, 04/01/18		4,500,000		4,365,715
6.75%, 10/01/37		2,250,000		2,058,178
Household Finance Corp.
4.13%, 12/15/08		2,000,000		1,996,896
International Lease Finance Corp.
6.63%, 11/15/13		4,200,000		3,773,662
JPMorgan Chase & Co.
4.75%, 05/01/13		6,600,000		6,414,283
5.60%, 06/01/11		8,300,000		8,413,718
6.40%, 05/15/38		3,000,000		2,782,608
Lehman Brothers Holdings Inc.
5.00%, 01/14/11		3,000,000		2,908,932
5.25%, 02/06/12		2,750,000		2,602,418
Morgan Stanley
5.25%, 11/02/12		700,000		681,179
5.95%, 12/28/17		1,750,000		1,588,659

Security	Principal		Value
DIVERSIFIED FINANCIAL SERVICES (Continued)
6.00%, 04/28/15	$	3,400,000	$	3,250,465
6.25%, 08/28/17		1,500,000		1,398,465
Petroplus Finance Ltd.
6.75%, 05/01/14(b)		250,000		226,250
Rio Tinto Finance USA Ltd.
2.63%, 09/30/08		3,600,000		3,589,380
Williams Companies Inc. (The) Credit Linked Certificate Trust
6.75%, 04/15/09(b)		5,000,000		5,025,000
				112,486,158
ELECTRIC – 2.46%
CMS Energy Corp.
7.75%, 08/01/10		500,000		521,812
Commonwealth Edison Co.
4.70%, 04/15/15		1,000,000		928,970
5.88%, 02/01/33		3,500,000		3,164,612
Dominion Resources Inc.
6.40%, 06/15/18		5,250,000		5,296,636
DPL Inc.
8.00%, 03/31/09		3,750,000		3,846,030
Duke Energy Corp.
6.25%, 06/15/18		2,500,000		2,509,440
Edison Mission Energy
7.63%, 05/15/27		750,000		673,125
Florida Power Corp.
5.65%, 06/15/18		1,000,000		1,009,207
MidAmerican Energy Co.
5.75%, 04/01/18(b)		8,250,000		8,171,641
Mirant Americas Generation LLC
8.30%, 05/01/11		500,000		516,250
9.13%, 05/01/31		250,000		233,125
Northern States Power
5.25%, 07/15/35		2,500,000		2,225,345
Pacific Gas and Electric Co.
5.63%, 11/30/17		1,500,000		1,494,178
PSEG Power LLC
6.95%, 06/01/12		2,300,000		2,412,815
Reliant Energy Inc.
6.75%, 12/15/14		250,000		255,000
Southern California Edison Co.
5.00%, 01/15/16		1,300,000		1,280,917
Texas Competitive Electric Holdings Co. LLC
10.25%, 11/01/15(b)		250,000		245,000
Virginia Electric and Power Co.
6.35%, 11/30/37		1,250,000		1,216,995
				36,001,098
ELECTRICAL COMPONENTS & EQUIPMENT – 0.02%
Belden Inc.
7.00%, 03/15/17		250,000		240,000
				240,000

42

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
ENTERTAINMENT – 0.02%
Gaylord Entertainment Co.
8.00%, 11/15/13	$	250,000	$	240,000
				240,000
ENVIRONMENTAL CONTROL – 0.22%
Allied Waste North America Inc.
7.25%, 03/15/15		500,000		498,750
Waste Management Inc.
6.50%, 11/15/08		2,722,000		2,750,527
				3,249,277
FOOD – 0.50%
Ahold Finance USA Inc.
8.25%, 07/15/10		500,000		528,262
Dean Foods Co.
7.00%, 06/01/16		250,000		216,875
Kellogg Co.
5.13%, 12/03/12		2,300,000		2,330,250
Kraft Foods Inc.
6.00%, 02/11/13		500,000		505,161
6.13%, 08/23/18		2,000,000		1,936,840
Kroger Co. (The)
6.40%, 08/15/17		500,000		509,978
8.05%, 02/01/10		930,000		973,251
SUPERVALU Inc.
7.88%, 08/01/09		250,000		253,750
				7,254,367
FOREST PRODUCTS & PAPER – 0.03%
Domtar Corp.
7.88%, 10/15/11		250,000		251,250
Georgia-Pacific Corp.
7.13%, 01/15/17(b)		250,000		235,000
				486,250
HEALTH CARE - PRODUCTS – 0.20%
Baxter International Inc.
5.38%, 06/01/18		3,000,000		2,964,633
				2,964,633
HEALTH CARE - SERVICES – 0.79%
Community Health Systems Inc.
8.88%, 07/15/15(b)		1,000,000		1,006,250
HCA Inc.
9.25%, 11/15/16		750,000		772,500
Res-Care Inc.
7.75%, 10/15/13		250,000		238,125
UnitedHealth Group Inc.
2.98%, 06/21/10		5,320,000		5,127,725
5.50%, 11/15/12		2,500,000		2,453,340
5.80%, 03/15/36		2,400,000		1,986,461
				11,584,401

Security	Principal		Value
INSURANCE – 1.26%
American International Group Inc.
8.18%, 05/15/38(b)	$	900,000	$	846,998
Genworth Financial Inc.
6.15%, 11/15/16		2,500,000		1,965,200
John Hancock Financial
Services Inc.
5.63%, 12/01/08		4,000,000		4,034,696
Lincoln National Corp.
6.05%, 04/20/17		1,100,000		927,485
Markel Corp.
7.35%, 08/15/34		1,000,000		979,107
MetLife Inc.
5.38%, 12/15/12		4,500,000		4,541,243
6.40%, 12/15/36		1,000,000		873,119
Prudential Financial Inc.
5.15%, 01/15/13		1,750,000		1,705,676
Travelers Companies Inc. (The)
5.80%, 05/15/18		1,250,000		1,216,195
6.25%, 03/15/37		500,000		429,571
6.25%, 06/15/37		1,000,000		929,554
				18,448,844
IRON & STEEL – 0.69%
Ispat Inland ULC
9.75%, 04/01/14		8,538,000		9,125,329
Steel Dynamics Inc.
6.75%, 04/01/15		1,000,000		957,500
				10,082,829
LODGING – 0.27%
MGM MIRAGE
6.00%, 10/01/09		3,275,000		3,221,781
8.50%, 09/15/10		750,000		740,625
				3,962,406
MACHINERY – 0.14%
Case New Holland Inc.
6.00%, 06/01/09		2,000,000		1,985,000
				1,985,000
MANUFACTURING – 0.30%
Honeywell International Inc.
4.25%, 03/01/13		4,500,000		4,436,204
				4,436,204
MEDIA – 2.52%
AMFM Inc.
8.00%, 11/01/08		2,500,000		2,537,150
Comcast Corp.
5.70%, 05/15/18		12,650,000		12,001,333
CSC Holdings Inc.
7.63%, 04/01/11		500,000		490,000

43

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
MEDIA (Continued)
EchoStar DBS Corp.
5.75%, 10/01/08	$	6,100,000	$	6,100,000
6.38%, 10/01/11		500,000		482,500
Liberty Media Corp.
7.75%, 07/15/09		2,750,000		2,766,610
7.88%, 07/15/09		5,500,000		5,553,526
Time Warner Cable Inc.
6.75%, 07/01/18		5,500,000		5,536,471
Time Warner Entertainment Co.
8.38%, 07/15/33		1,300,000		1,406,933
				36,874,523
MINING – 0.12%
Vale Overseas Ltd.
6.88%, 11/21/36		1,900,000		1,764,597
				1,764,597
OFFICE & BUSINESS EQUIPMENT – 0.72%
Xerox Corp.
3.56%, 12/18/09		2,750,000		2,732,595
6.35%, 05/15/18		2,250,000		2,220,975
6.88%, 08/15/11		250,000		259,081
7.13%, 06/15/10		3,000,000		3,098,370
9.75%, 01/15/09		2,200,000		2,264,614
				10,575,635
OIL & GAS – 1.05%
Burlington Resources Finance Co.
7.20%, 08/15/31		2,300,000		2,608,021
Chesapeake Energy Corp.
6.88%, 01/15/16		500,000		482,500
Enterprise Products Operating LP
7.50%, 02/01/11		3,600,000		3,771,205
Enterprise Products Operating LP
Series B
4.63%, 10/15/09		2,000,000		1,992,842
5.75%, 03/01/35		1,500,000		1,274,762
Forest Oil Corp.
7.25%, 06/15/19		250,000		240,000
8.00%, 12/15/11		500,000		515,000
Hilcorp Energy I LP/Hilcorp
Finance Co.
7.75%, 11/01/15(b)		250,000		240,000
Marathon Oil Corp.
6.60%, 10/01/37		1,000,000		985,850
Parker Drilling Co.
9.63%, 10/01/13(a)		500,000		525,000
Range Resources Corp.
7.50%, 05/15/16		250,000		249,063
W&T Offshore Inc.
8.25%, 06/15/14		500,000		482,500
XTO Energy Inc.
5.50%, 06/15/18		2,000,000		1,909,962
				15,276,705

Security	Principal		Value
OIL & GAS SERVICES – 0.01%
National Oilwell Varco Inc.
6.13%, 08/15/15	$	100,000	$	101,552
				101,552
PACKAGING & CONTAINERS – 0.03%
Crown Americas Inc.
7.63%, 11/15/13		500,000		498,750
				498,750
PHARMACEUTICALS – 0.13%
AmerisourceBergen Corp.
5.88%, 09/15/15		250,000		244,208
Bristol-Myers Squibb Co.
5.45%, 05/01/18		1,600,000		1,578,350
				1,822,558
PIPELINES – 0.89%
Colorado Interstate Gas Co.
6.80%, 11/15/15		176,000		179,776
Copano Energy LLC
8.13%, 03/01/16		250,000		251,250
El Paso Corp.
7.80%, 08/01/31		250,000		251,766
Kinder Morgan Energy Partners LP
5.85%, 09/15/12		3,500,000		3,529,407
6.30%, 02/01/09		3,890,000		3,929,452
Pacific Energy Partners LP
6.25%, 09/15/15		250,000		247,896
Panhandle Eastern Pipe Line Co. LP
4.80%, 08/15/08		2,900,000		2,899,292
Plains All American Pipeline LP
6.70%, 05/15/36		1,000,000		951,610
SemGroup LP
8.75%, 11/15/15(b)		500,000		485,000
Williams Partners LP
7.25%, 02/01/17		250,000		250,000
				12,975,449
REAL ESTATE – 0.07%
Westfield Capital Corp. Ltd.
4.38%, 11/15/10(b)		1,000,000		981,360
				981,360
REAL ESTATE INVESTMENT TRUSTS – 0.52%
Omega Healthcare Investors Inc.
7.00%, 01/15/16		250,000		235,000
Simon Property Group LP
5.00%, 03/01/12		2,000,000		1,948,738
5.30%, 05/30/13		2,500,000		2,459,570
5.75%, 05/01/12		3,000,000		2,999,928
				7,643,236

44

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
RETAIL – 1.51%
Asbury Automotive Group Inc.
7.63%, 03/15/17	$	250,000	$	201,250
CVS Caremark Corp.
2.98%, 06/01/10		4,000,000		3,903,712
Home Depot Inc.
2.90%, 12/16/09		1,000,000		973,991
Inergy LP
6.88%, 12/15/14		750,000		697,500
8.25%, 03/01/16		250,000		246,250
J.C. Penney Co. Inc.
7.65%, 08/15/16		250,000		250,266
7.95%, 04/01/17		250,000		255,790
May Department Stores Co. (The)
5.95%, 11/01/08		4,980,000		4,975,996
McDonald’s Corp.
4.30%, 03/01/13		3,250,000		3,216,493
5.80%, 10/15/17		1,000,000		1,020,758
Rite Aid Corp.
7.50%, 03/01/17		250,000		201,875
Wal-Mart Stores Inc.
4.25%, 04/15/13		4,500,000		4,474,809
6.20%, 04/15/38		500,000		491,277
6.50%, 08/15/37		1,100,000		1,132,068
				22,042,035
SEMICONDUCTORS – 0.04%
Advanced Micro Devices Inc.
7.75%, 11/01/12(a)		162,000		139,725
Sensata Technologies BV
8.00%, 05/01/14		500,000		460,000
				599,725
SOFTWARE – 0.63%
Oracle Corp.
5.25%, 01/15/16		1,500,000		1,475,955
5.75%, 04/15/18		7,750,000		7,743,374
				9,219,329
TELECOMMUNICATIONS – 4.26%
AT&T Inc.
4.95%, 01/15/13		3,500,000		3,487,869
5.50%, 02/01/18		1,250,000		1,211,260
6.40%, 05/15/38		2,500,000		2,393,205
AT&T Wireless Services Inc.
8.75%, 03/01/31		1,000,000		1,186,579
BellSouth Corp.
6.55%, 06/15/34		4,000,000		3,863,112
Citizens Communications Co.
6.25%, 01/15/13		500,000		463,750
Deutsche Telekom International
Finance AG
8.00%, 06/15/10		5,000,000		5,289,450
8.75%, 06/15/30		3,000,000		3,442,134

Security	Principal		Value
TELECOMMUNICATIONS (Continued)
Embarq Corp.
6.74%, 06/01/13	$	1,750,000	$	1,688,545
France Telecom SA
7.75%, 03/01/11		4,000,000		4,236,160
8.50%, 03/01/31		2,000,000		2,420,880
Koninklijke KPN NV
8.00%, 10/01/10		1,500,000		1,587,057
Qwest Corp.
6.50%, 06/01/17		500,000		446,250
Rogers Wireless Inc.
6.38%, 03/01/14		2,000,000		2,002,316
7.50%, 03/15/15		750,000		793,944
Telecom Italia Capital SA
4.00%, 11/15/08		3,480,000		3,479,478
4.00%, 01/15/10		3,680,000		3,630,522
5.25%, 10/01/15		2,500,000		2,287,890
7.00%, 06/04/18		3,300,000		3,328,109
Telefonica Emisiones SAU
3.10%, 06/19/09		3,630,000		3,609,589
5.86%, 02/04/13		3,600,000		3,624,048
6.22%, 07/03/17		2,100,000		2,098,998
Verizon Communications Inc.
5.25%, 04/15/13		4,500,000		4,474,107
Vodafone Group PLC
5.63%, 02/27/17		950,000		915,116
West Corp.
9.50%, 10/15/14		250,000		225,000
				62,185,368
TRANSPORTATION – 0.43%
CNF Inc.
6.70%, 05/01/34		2,500,000		2,226,183
CSX Corp.
5.75%, 03/15/13		2,600,000		2,548,512
6.15%, 05/01/37		1,750,000		1,467,139
				6,241,834
TOTAL CORPORATE BONDS & NOTES
(Cost: $502,727,134)				488,519,204
ASSET-BACKED SECURITIES – 1.90%
Bear Stearns Asset Backed
Securities Trust Series 2005-HE7
Class 1A3
2.89%, 07/25/35		5,771,003		5,718,390
Countrywide Asset-Backed
Certificates Series 2004-10
Class AF4
4.51%, 07/25/32		3,094,895		3,026,478
Countrywide Asset-Backed
Certificates Series 2006-25
Class 2A1
2.55%, 06/25/37		8,065,003		7,928,072

45

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
Fremont Home Loan Trust
Series 2006-3 Class IIA1
2.55%, 02/25/37	$	5,768,825	$	5,648,629
Merrill Lynch Mortgage Investors Inc.
Series 2005-WMC2 Class A1B
2.65%, 04/25/36		191,532		190,029
Structured Asset Investment Loan
Trust Series 2006-3 Class A3
2.51%, 06/25/36		5,372,136		5,329,103
TOTAL ASSET-BACKED SECURITIES
(Cost: $27,813,034)				27,840,701
COLLATERALIZED MORTGAGE OBLIGATIONS – 11.42%
MORTGAGE-BACKED SECURITIES – 11.42%
Banc of America Alternative Loan
Trust Series 2003-5 Class 2A1
5.00%, 07/25/18		2,661,988		2,512,251
Bear Stearns Commercial Mortgage
Securities Series 2006-PW14
Class A4
5.20%, 12/01/38		10,000,000		9,327,790
Bear Stearns Commercial Mortgage
Securities Series 2006-T22
Class A3
5.63%, 04/12/38		7,000,000		6,896,364
Bear Stearns Commercial Mortgage
Securities Series 2007-PWR16
Class A4
5.90%, 06/11/40		3,000,000		2,853,862
Chase Mortgage Finance Corp.
Series 2006-A1 Class 1A1
6.02%, 09/25/36		2,638,714		2,614,428
Citigroup Commercial Mortgage
Trust Series 2007-C6 Class A4
5.89%, 12/10/49		8,000,000		7,602,086
Citigroup/Deutsche Bank Commercial
Mortgage Trust Series 2006-CD2
Class A1
5.30%, 01/15/46		6,588,168		6,595,531
Credit Suisse First Boston Mortgage
Securities Corp. Series 1999-C1
Class A2
7.29%, 09/15/41		4,443,897		4,542,160
Credit Suisse First Boston Mortgage
Securities Corp. Series 2004-5
Class 5A1
5.00%, 08/25/19		3,744,817		3,672,261
Credit Suisse First Boston Mortgage
Securities Corp. Series 2005-C3
Class A2
4.51%, 07/15/37		10,000,000		9,900,104

Security	Principal		Value
MORTGAGE-BACKED SECURITIES (Continued)
Eurosail PLC Series 2006-2A
Class A1B
2.83%, 12/15/30	$	4,491,122	$	4,442,999
GE Capital Commercial Mortgage
Corp. Series 2001-3 Class A1
5.56%, 06/10/38		6,056,050		6,111,502
Granite Master Issuer PLC
Series 2007-2 Class 1A1
2.51%, 04/17/32		6,177,820		6,149,723
GS Mortgage Securities Corp. II
Series 2007-GG10 Class A4
5.99%, 08/10/45		4,500,000		4,302,930
Holmes Financing PLC
Series 2004-8 Class 4A2
2.85%, 07/15/40		2,400,000		2,390,722
Holmes Master Issuer PLC
Series 2007-2A Class 1A1
2.50%, 07/15/21		4,250,000		4,254,199
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2004-CBX Class A3
4.18%, 01/12/37		1,701,000		1,687,515
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2005-LDP5 Class A3
5.37%, 12/15/44		4,000,000		3,921,305
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2006-LDP6 Class A3B
5.56%, 04/15/43		10,000,000		9,754,329
JP Morgan Chase Commercial
Mortgage Securities Corp.
Series 2007-LDPX Class A1S
4.93%, 01/15/49		9,954,629		9,612,426
Lanark Master Issuer PLC
Series 2007-1A Class 1A1
2.71%, 07/22/32		6,907,855		6,888,851
LB-UBS Commercial Mortgage
Trust Series 2002-C4 Class A2
4.02%, 09/15/26		4,047,986		4,031,060
LB-UBS Commercial Mortgage
Trust Series 2004-C1 Class A1
2.96%, 01/15/29		912,630		910,505
LB-UBS Commercial Mortgage
Trust Series 2004-C2 Class A2
3.25%, 03/15/29		4,000,000		3,970,879
LB-UBS Commercial Mortgage
Trust Series 2004-C7 Class A2
3.99%, 10/15/29		5,635,000		5,581,809
MASTR Adjustable Rate Mortgages
Trust Series 2004-11 Class 2A1
2.77%, 11/25/34		8,953		7,777
MASTR Asset Securitization Trust
Series 2003-5 Class 4A4
5.50%, 06/25/33		1,961,887		1,909,161

46

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
MORTGAGE-BACKED SECURITIES (Continued)
MASTR Asset Securitization Trust
Series 2003-7 Class 1A1
5.50%, 09/25/33	$	2,515,324	$	2,353,401
MASTR Asset Securitization Trust
Series 2003-8 Class 1A1
5.50%, 09/25/33		4,013,121		3,794,907
Merrill Lynch Mortgage Trust
Series 2006-C1 Class A1
5.53%, 05/12/39		6,680,272		6,713,277
Morgan Stanley Capital I
Series 2006-IQ11 Class A4
5.94%, 10/15/42		9,285,000		9,065,269
Residential Funding Mortgage
Securities I Series 2003-S15
Class A1
4.50%, 08/25/18		1,566,058		1,477,967
Wachovia Bank Commercial
Mortgage Trust Series 2006-C28
Class A3
5.68%, 10/15/48		10,000,000		9,636,594
Wells Fargo Mortgage-Backed
Securities Trust Series 2003-10
Class A1
4.50%, 09/25/18		1,550,860		1,459,747
				166,945,691
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost: $168,301,050)				166,945,691
U.S. GOVERNMENT & AGENCY OBLIGATIONS – 58.19%
MORTGAGE-BACKED SECURITIES – 49.08%
Federal Home Loan Mortgage Corp.
2.67%, 04/15/28		1,685,879		1,675,307
4.13%, 10/01/33		3,188,987		3,190,015
4.28%, 03/01/34		3,261,816		3,296,872
4.50%, 08/01/20		3,219,681		3,139,591
4.50%, 07/01/23(c)		14,000,000		13,514,375
4.54%, 11/01/33		9,388,242		9,482,674
4.62%, 04/01/38		26,382,591		26,042,447
5.00%, 10/01/20		5,811,871		5,769,250
5.00%, 12/15/34		1,708,834		120,743
5.00%, 08/01/37		27,500,000		26,374,756
5.00%, 07/01/38(c)		4,000,000		3,832,500
5.04%, 09/01/33		1,755,186		1,787,503
5.50%, 03/15/20		17,604		2
5.50%, 07/01/23(c)		10,000,000		10,053,125
5.50%, 05/15/24		4,398,413		154,972
5.50%, 03/15/25		1,815,569		89,443
5.50%, 11/15/26		12,415,297		12,663,957
5.50%, 02/15/27		31,192,337		31,784,475
5.50%, 05/15/29		4,492,391		382,452
5.50%, 10/01/32		12,989,550		12,877,921

Security	Principal		Value
MORTGAGE-BACKED SECURITIES (Continued)
5.50%, 05/01/34	$	67,084	$	66,339
5.50%, 10/01/34		488,508		483,088
5.50%, 12/01/36		9,452,636		9,327,093
5.50%, 07/01/38(c)		17,000,000		16,745,000
5.60%, 01/01/37		4,954,302		5,051,910
5.79%, 06/01/36		7,305,880		7,397,773
6.00%, 07/01/23(c)		10,000,000		10,240,625
6.00%, 01/15/24		4,818,053		4,903,783
6.00%, 05/15/27		6,059,975		6,205,530
6.00%, 07/15/27		6,077,753		6,238,115
6.00%, 12/01/28		4,056,124		4,137,167
6.00%, 02/15/34		5,882,670		6,002,219
6.00%, 09/01/34		1,655,507		1,678,755
6.00%, 07/01/38(c)		32,000,000		32,320,000
6.41%, 11/01/36		11,731,245		12,032,827
6.50%, 05/01/21		1,522		1,586
6.50%, 09/01/21		1,406,700		1,463,566
6.50%, 01/01/36		12,001		12,398
6.50%, 08/01/36		14,632,949		15,103,661
6.50%, 07/01/38(c)		6,000,000		6,186,563
Federal National Mortgage
Association
3.84%, 10/01/33		22,717,771		22,983,165
4.01%, 05/01/33		6,794,306		6,749,627
4.25%, 08/01/33		5,718,085		5,819,869
4.44%, 06/01/35		3,608,290		3,635,784
4.50%, 07/01/23(c)		13,850,000		13,382,563
4.50%, 08/01/35		8,035,480		7,456,988
4.56%, 06/01/35		6,440,655		6,482,098
4.75%, 02/01/36		3,030,168		3,086,530
4.99%, 07/01/35		2,594,167		2,615,970
5.00%, 01/01/18		1,087,776		1,086,744
5.00%, 09/01/18		7,083,013		7,074,085
5.00%, 12/01/18		583,886		583,150
5.00%, 01/01/19		498,641		498,013
5.00%, 06/01/19		1,132,494		1,129,662
5.00%, 08/01/19		601,499		599,237
5.00%, 09/01/19		449,700		448,009
5.00%, 11/01/19		1,161,839		1,157,470
5.00%, 01/01/20		562,809		559,285
5.00%, 05/01/20		5,553,464		5,518,697
5.00%, 06/01/20		503,082		499,933
5.00%, 11/01/33		46,543,431		44,900,775
5.00%, 12/01/33		14,715,824		14,196,459
5.00%, 03/01/34		7,420,379		7,158,492
5.00%, 09/01/35		374,795		360,514
5.10%, 01/01/36		4,081,228		4,135,087
5.11%, 04/01/37		1,963,850		1,988,936
5.24%, 05/01/35		1,824,435		1,846,475
5.43%, 07/01/36		6,772,099		6,890,747
5.43%, 01/01/37		2,642,906		2,685,600
5.50%, 09/01/19		3,809,759		3,863,294
5.50%, 10/01/19		2,831,371		2,871,158
5.50%, 07/01/33		27,206,620		26,976,533

47

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Principal		Value
MORTGAGE-BACKED SECURITIES (Continued)
5.50%, 01/01/34	$	6,278,131	$	6,225,037
5.50%, 07/01/34		10,334,314		10,227,540
5.50%, 02/01/35		4,377,642		4,332,412
5.50%, 03/01/35		1,022,699		1,011,173
5.50%, 12/01/35		4,147,433		4,100,693
5.50%, 03/01/36		4,133,081		4,081,337
5.50%, 09/01/36		12,499,842		12,394,130
5.50%, 12/01/36		5,207,850		5,142,651
5.50%, 07/01/38(c)		17,000,000		16,752,969
5.87%, 07/01/35		2,213,706		2,262,048
5.89%, 01/01/35		4,000,609		4,031,676
6.00%, 02/25/27		2,716,516		2,771,732
6.00%, 10/25/27		6,215,037		6,355,896
6.00%, 03/01/33		624,759		633,923
6.00%, 08/01/34		271,602		275,076
6.00%, 07/01/38(c)		41,200,000		41,560,500
6.02%, 12/01/36		1,787,201		1,824,990
6.05%, 09/01/36		1,874,276		1,911,032
6.50%, 08/01/38(c)		5,000,000		5,128,125
Government National Mortgage
Association
5.00%, 07/01/38(c)		7,000,000		6,780,156
5.50%, 06/15/34		1,536,958		1,534,511
5.50%, 07/01/38(c)		7,000,000		6,963,906
6.00%, 07/01/38(c)		40,000,000		40,600,000
6.50%, 07/01/38(c)		9,000,000		9,286,875
				717,259,715
U.S. GOVERNMENT AGENCY OBLIGATIONS – 5.17%
Federal Home Loan Mortgage Corp.
5.00%, 04/18/17(a)		31,000,000		31,576,693
Federal National Mortgage
Association
5.38%, 06/12/17(a)		31,000,000		32,406,067
6.25%, 02/01/11		11,000,000		11,533,995
				75,516,755
U.S. GOVERNMENT OBLIGATIONS – 3.94%
U.S. Treasury Bonds
5.38%, 02/15/31(a)		34,050,000		37,832,751
6.13%, 08/15/29(a)(d)		7,800,000		9,408,142
U.S. Treasury Notes
3.13%, 04/15/09(d)		605,000		608,640
4.00%, 02/15/14(a)(d)		9,500,000		9,797,616
				57,647,149
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost: $847,418,714)				850,423,619

Security	Shares	Value
SHORT-TERM INVESTMENTS – 17.34%
MONEY MARKET FUNDS – 17.34%
Barclays Global Investors Funds
Institutional Money Market Fund,
Institutional Shares
2.58%(e)(f)	152,495,334	$	152,495,334
BGI Cash Premier Fund LLC
2.63%(e)(f)(g)	100,853,788		100,853,788
			253,349,122
TOTAL SHORT-TERM INVESTMENTS
(Cost: $253,349,122)			253,349,122
TOTAL INVESTMENTS IN SECURITIES – 122.28%
(Cost: $1,799,609,054)			1,787,078,337
Other Assets, Less Liabilities – (22.28)%			(325,632,346	)
NET ASSETS – 100.00%		$	1,461,445,991

^(a) All or a portion of this security represents a security on loan. See Note 4.

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

^(c) To-be-announced (TBA). See Note 1.

^(d) All or a portion of this U.S. Treasury Bond or Note is held in a segregated account in connection with the Master Portfolio’s holdings of futures contracts. See Note 1.

^(e) Affiliated issuer. See Note 2.

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

^(g) This security represents an investment of securities lending collateral. See Note 4.

As of June 30, 2008, the open futures contracts held by the Master Portfolio were as follows:

Futures Contracts (Expiration Date)	Number of Contracts		Notional Contract Value			Net Unrealized Appreciation (Depreciation)
2-Year U.S Treasury Notes (October 2008)	355		$	74,977,109		$	495,061
5-Year U.S. Treasury Notes (October 2008)	(256	)		(28,302,000	)		(17,955	)
10-Year U.S. Treasury Notes (September 2008)	732			83,390,813			87,946
30-Year U.S. Treasury Bonds (September 2008)	(13	)		(1,502,719	)		1,185
90-Day Eurodollar (September 2009)	640			153,944,000			113,525
90-Day Eurodollar (December 2009)	640			153,496,000			98,725
90-Day Eurodollar (March 2010)	640			153,192,000			101,295
90-Day Eurodollar (June 2010)	640			152,920,000			96,964

48

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Futures Contracts (Expiration Date)	Number of Contracts		Notional Contract Value			Net Unrealized Appreciation (Depreciation)
90-Day Eurodollar (September 2010)	(640	)	$	(152,712,000	)	$	(100,074	)
90-Day Eurodollar (December 2010)	(640	)		(152,528,000	)		(110,870	)
90-Day Eurodollar (March 2011)	(640	)		(152,448,000	)		(113,440	)
90-Day Eurodollar (June 2011)	(640	)		(152,360,000	)		(101,352	)
						$	551,010

As of June 30, 2008, the Master Portfolio held the following open swap contracts:

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Credit Default Swaps
Agreement with Goldman Sachs Group Inc. dated 7/26/07 to receive 3.33% per year times the notional amount. The Master Portfolio makes payment only upon a default event of L-3 Communications Corp. 7.63% due 6/15/12. Expiring 9/20/12.	$	2,750,000	$	173,077
Agreement with JPMorgan Chase & Co. dated 8/10/06 to pay 0.65% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Con-Way Inc. 8.88% due 5/1/10. Expiring 9/20/13.		2,500,000		166,797
Agreement with JPMorgan Chase & Co. dated 10/16/06 to pay 0.71% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Con-Way Inc. 6.70% due 5/1/34. Expiring 12/20/13.		3,000,000		198,209
Agreement with JPMorgan Chase & Co. dated 7/12/07 to receive 5.00% per year times the notional amount. The Master Portfolio makes payment only upon a default event of Charter Communications Holdings LLC 10.00% due 4/1/09. Expiring 9/20/12.		1,000,000		(659,291	)

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Credit Default Swaps (Continued)
Agreement with JPMorgan Chase & Co. dated 7/13/07 to receive 5.00% per year times the notional amount. The Master Portfolio makes payment only upon a default event of Charter Communications Holdings LLC 10.00% due 4/1/09. Expiring 9/20/12.	$	1,500,000	$	(988,936	)
Agreement with JPMorgan Chase & Co. dated 7/26/07 to receive 4.90% per year times the notional amount. The Master Portfolio makes payment only upon a default event of MGM MIRAGE 5.88% due 2/27/14. Expiring 9/20/12.		4,250,000		(134,170	)
Agreement with JPMorgan Chase & Co. dated 7/27/07 to receive 4.70% per year times the notional amount. The Master Portfolio makes payment only upon a default event of AK Steel Corp. 7.75% due 6/15/12. Expiring 9/20/12.		1,500,000		109,870
Agreement with JPMorgan Chase & Co. dated 9/14/07 to receive 0.41% per year times the notional amount. The Master Portfolio makes payment only upon a default event of American International Group Inc. 4.25% due 5/15/13. Expiring 9/20/08.		7,050,000		(29,533	)
Agreement with JPMorgan Chase & Co. dated 10/1/07 to pay 3.75% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Dow Jones Credit Derivatives Index, Investment Grade High Volatility. Expiring 12/20/12.		36,283,500		3,317,747
Agreement with JPMorgan Chase & Co. dated 2/20/08 to pay 5.00% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Charter Communications Holdings LLC 10.00% due 4/1/09. Expiring 3/20/13.		2,500,000		1,650,494

49

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Credit Default Swaps (Continued)
Agreement with JPMorgan Chase & Co. dated 5/20/08 to pay 5.00% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Dow Jones Credit Derivatives Index, Investment Grade High Volatility. Expiring 6/20/13.	$	12,000,000	$	750,351
Agreement with Lehman Brothers Inc. dated 8/1/07 to receive 3.60% per year times the notional amount. The Master Portfolio makes payment only upon a default event of Domtar Inc. 7.13% due 8/15/15. Expiring 9/20/12.		4,000,000		58,938
Agreement with Morgan Stanley dated 5/29/08 to pay 1.55% per year times the notional amount. The Master Portfolio receives payment only upon a default event of Dow Jones Credit Derivatives Index, Investment Grade High Volatility. Expiring 6/20/13.		15,750,000		(84,473	)
Agreement with UBS AG dated 7/26/07 to receive 3.30% per year times the notional amount. The Master Portfolio makes payment only upon a default event of Pride International Inc. 7.38% due 7/15/14. Expiring 9/20/12.		750,000		23,064
Agreement with UBS AG dated 7/27/07 to receive 3.35% per year times the notional amount. The Master Portfolio makes payment only upon a default event of L-3 Communications Corp. 7.63% due 6/15/12. Expiring 9/20/12.		500,000		31,939
Agreement with UBS AG dated 8/10/07 to receive 2.00% per year times the notional amount. The Master Portfolio makes payment only upon a default event of CIT Group Inc. 7.75% due 4/2/12. Expiring 9/20/08.		3,600,000		(67,943	)
			$	4,516,140

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Interest-Rate Swaps
Agreement with Deutsche Bank AG dated 12/1/05 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.98%. Expiring 12/5/10.	$	9,000,000	$	264,643
Agreement with Deutsche Bank AG dated 12/1/05 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 5.10%. Expiring 12/5/15.		5,000,000		185,501
Agreement with Deutsche Bank AG dated 3/24/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.16%. Expiring 3/28/13.		10,000,000		(400,573	)
Agreement with Deutsche Bank AG dated 5/16/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.46%. Expiring 5/18/11.		5,000,000		(217,036	)
Agreement with Deutsche Bank AG dated 8/22/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.22%. Expiring 8/24/09.		2,500,000		(57,331	)
Agreement with Goldman Sachs Group Inc. dated 5/17/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.53%. Expiring 5/19/11.		2,400,000		(108,335	)
Agreement with Goldman Sachs Group Inc. dated 5/22/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.43%. Expiring 5/24/11.		10,500,000		(451,181	)
Agreement with Goldman Sachs Group Inc. dated 10/13/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.26%. Expiring 10/17/08.		7,100,000		(47,241	)

50

COREALPHA BOND MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Interest-Rate Swaps (Continued)
Agreement with Goldman Sachs Group Inc. dated 10/13/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.27%. Expiring 10/17/11.	$	1,250,000	$	(49,625	)
Agreement with Goldman Sachs Group Inc. dated 5/11/07 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.05%. Expiring 5/15/11.		10,700,000		(344,698	)
Agreement with Goldman Sachs Group Inc. dated 11/28/07 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.07%. Expiring 11/30/10.		107,000,000		894,885
Agreement with Goldman Sachs Group Inc. dated 12/19/07 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.28%. Expiring 12/21/12.		13,600,000		50,390
Agreement with Goldman Sachs Group Inc. dated 2/14/08 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 2.75%. Expiring 2/19/10.		47,000,000		(494,053	)
Agreement with Goldman Sachs Group Inc. dated 3/6/08 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 2.62%. Expiring 3/10/10.		253,000,000		3,241,403
Agreement with JPMorgan Chase & Co. dated 1/5/06 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.90%. Expiring 1/9/16.		6,250,000		148,540
Agreement with JPMorgan Chase & Co. dated 3/8/06 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 5.28%. Expiring 7/3/08.		4,000,000		195,628

Description	Notional Amount		Net Unrealized Appreciation (Depreciation)
Interest-Rate Swaps (Continued)
Agreement with JPMorgan Chase & Co. dated 3/8/06 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 5.32%. Expiring 3/10/26.	$	2,000,000	$	100,994
Agreement with JPMorgan Chase & Co. dated 8/2/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.40%. Expiring 8/4/08.		7,000,000		(15,918	)
Agreement with JPMorgan Chase & Co. dated 8/24/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.27%. Expiring 8/29/11.		1,000,000		(39,571	)
Agreement with JPMorgan Chase & Co. dated 8/24/06 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.31%. Expiring 8/29/08.		5,600,000		(22,315	)
Agreement with JPMorgan Chase & Co. dated 5/11/07 paying the notional amount multiplied by the three-month LIBOR rate and receiving a fixed rate of 5.06%. Expiring 5/17/10.		14,000,000		(392,524	)
Agreement with Lehman Brothers Inc. dated 12/19/07 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.89%. Expiring 7/3/08.		7,000,000		40,950
Agreement with Lehman Brothers Inc. dated 12/19/07 receiving the notional amount multiplied by the three-month LIBOR rate and paying a fixed rate of 4.98%. Expiring 12/21/27.		4,100,000		27,574
			$	2,510,107

The accompanying notes are an integral part of these financial statements.

51

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

LifePath Retirement Master Portfolio
Security Type	Value			% of Net Assets
Domestic Fixed Income	$	195,944,612		63.18	%
Domestic Equity		74,225,324		23.93
Foreign Equity		40,089,409		12.93
Short-Term and Other Net Assets		(143,589	)	(0.04	)
TOTAL	$	310,115,756		100.00	%
LifePath 2010 Master Portfolio
Security Type	Value			% of Net Assets
Domestic Fixed Income	$	508,295,214		58.10	%
Domestic Equity		239,604,225		27.39
Foreign Equity		123,609,061		14.13
Short-Term and Other Net Assets		3,419,220		0.38
TOTAL	$	874,927,720		100.00	%
LifePath 2020 Master Portfolio
Security Type	Value			% of Net Assets
Domestic Equity	$	656,440,707		41.13	%
Domestic Fixed Income		602,956,230		37.78
Foreign Equity		331,611,273		20.78
Short-Term and Other Net Assets		5,090,083		0.31
TOTAL	$	1,596,098,293		100.00	%
LifePath 2030 Master Portfolio
Security Type	Value			% of Net Assets
Domestic Equity	$	637,801,190		51.26	%
Foreign Equity		320,835,843		25.78
Domestic Fixed Income		281,733,112		22.64
Short-Term and Other Net Assets		3,913,034		0.32
TOTAL	$	1,244,283,179		100.00	%
LifePath 2040 Master Portfolio
Security Type	Value			% of Net Assets
Domestic Equity	$	576,605,760		59.94	%
Foreign Equity		286,522,843		29.78
Domestic Fixed Income		103,178,854		10.73
Short-Term and Other Net Assets		(4,287,274	)	(0.45	)
TOTAL	$	962,020,183		100.00	%

Active Stock Master Portfolio
Sector/Investment Type	Value			% of Net Assets
Consumer Non-Cyclical	$	391,068,214		23.75	%
Energy		251,056,661		15.25
Financial		219,746,034		13.36
Technology		199,390,835		12.12
Industrial		174,567,314		10.61
Communications		165,027,254		10.02
Consumer Cyclical		113,897,791		6.92
Utilities		63,760,961		3.87
Basic Materials		33,336,499		2.02
Futures Contracts		(1,608,080	)	(0.10	)
Short-Term and Other Net Assets		35,834,868		2.18
TOTAL	$	1,646,078,351		100.00	%
CoreAlpha Bond Master Portfolio
Sector/Investment Type	Value			% of Net Assets
Mortgage-Backed Securities	$	884,205,406		60.50	%
Financial		188,868,037		12.92
Communications		99,059,891		6.78
U.S. Government & Agency		133,163,904		9.11
Consumer Non-Cyclical		43,641,294		2.98
Consumer Cyclical		36,196,045		2.49
Utilities		36,001,098		2.46
Energy		28,353,706		1.95
Asset-Backed Securities		27,840,701		1.90
Technology		22,870,749		1.56
Industrial		18,124,870		1.24
Basic Materials		15,403,514		1.05
Futures Contracts		(551,010	)	(0.04	)
Swap Agreements		7,026,247		0.48
Short-Term and Other Net Assets		(78,758,459	)	(5.38	)
TOTAL	$	1,461,445,991		100.00	%

These tables are not part of the financial statements.

52

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	LifePath Retirement Master Portfolio		LifePath 2010 Master Portfolio		LifePath 2020 Master Portfolio
ASSETS
Investments, at cost:
Affiliated issuers (Note 2)	$	103,305,568	$	301,808,840	$	671,120,266
Total cost of investments	$	103,305,568	$	301,808,840	$	671,120,266
Investments, at fair value (including securities on loan(a)) (Note 1):
Affiliated issuers (Note 2)	$	109,485,711	$	322,254,008	$	722,048,185
Affiliated Master Portfolios		220,241,251		607,302,456		1,010,263,287
Total fair value of investments		329,726,962		929,556,464		1,732,311,472
Receivables:
Investment securities sold		7,846,387		20,941,820		60,823,893
Dividends and interest		11,165		30,123		78,995
Contributions		785,759		160,116		1,959,049
Total Assets		338,370,273		950,688,523		1,795,173,409
LIABILITIES
Payables:
Investment securities purchased		8,008,027		21,010,954		62,555,902
Collateral for securities on loan (Note 4)		18,235,710		54,730,250		133,991,671
Investment advisory fees (Note 2)		3,661		11,787		18,930
Withdrawals		2,000,000		—		2,500,000
Accrued expenses:
Professional fees (Note 2)		7,076		7,709		8,460
Independent trustees’ fees (Note 2)		43		103		153
Total Liabilities		28,254,517		75,760,803		199,075,116
NET ASSETS	$	310,115,756	$	874,927,720	$	1,596,098,293

^(a) Securities on loan with market values of $17,871,439, $53,498,937 and $131,219,254, respectively. See Note 4.

The accompanying notes are an integral part of these financial statements.

53

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES (Continued)

June 30, 2008 (Unaudited)

	LifePath 2030 Master Portfolio		LifePath 2040 Master Portfolio		LifePath 2050 Master Portfolio(a)
ASSETS
Investments, at cost:
Affiliated issuers (Note 2)	$	639,291,531	$	583,573,616	$	—
Total cost of investments	$	639,291,531	$	583,573,616	$	—
Investments, at fair value (including securities on loan(b)) (Note 1):
Affiliated issuers (Note 2)	$	675,441,011	$	602,484,988	$	—
Affiliated Master Portfolios		731,891,251		537,826,097		—
Total fair value of investments		1,407,332,262		1,140,311,085		—
Cash		—		—		250,000
Receivables:
Investment securities sold		63,587,781		61,699,902		—
Dividends and interest		66,735		57,379		—
Contributions		517,186		353,197		—
Total Assets		1,471,503,964		1,202,421,563		250,000
LIABILITIES
Payables:
Investment securities purchased		63,871,498		63,209,993		—
Collateral for securities on loan (Note 4)		160,329,483		166,928,155		—
Investment advisory fees (Note 2)		11,784		5,543		—
Withdrawals		3,000,000		10,250,000		—
Accrued expenses:
Professional fees (Note 2)		7,889		7,579		—
Independent trustees’ fees (Note 2)		131		110		—
Total Liabilities		227,220,785		240,401,380		—
NET ASSETS	$	1,244,283,179	$	962,020,183	$	250,000

^(a) The LifePath 2050 Master Portfolio commenced operations on June 30, 2008. There were no activities to report in the Statement of Operations and Financial Highlights.

^(b) Securities on loan with market values of $156,801,823, $163,309,855 and $— , respectively. See Note 4.

The accompanying notes are an integral part of these financial statements.

54

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES (Continued)

June 30, 2008 (Unaudited)

	Active Stock Master Portfolio		CoreAlpha Bond Master Portfolio
ASSETS
Investments, at cost:
Unaffiliated issuers	$	1,690,857,558	$	1,546,259,932
Affiliated issuers (Note 2)		302,090,390		253,349,122
Total cost of investments	$	1,992,947,948	$	1,799,609,054
Investments in securities, at fair value (including securities on loan(a)) (Note 1):
Unaffiliated issuers	$	1,614,042,629	$	1,533,729,215
Affiliated issuers (Note 2)		302,090,390		253,349,122
Total fair value of investments		1,916,133,019		1,787,078,337
Swaps at fair value (Premiums paid $– and $3,845,288, respectively)		—		5,999,125
Receivables:
Investment securities sold		576,262		99,066,205
Dividends and interest		1,885,148		12,360,478
Due from broker – variation margin		30,321		—
Open swap contracts (Note 1)		—		607,585
Total Assets		1,918,624,750		1,905,111,730
LIABILITIES
Payables:
Investment securities purchased		989,478		336,560,600
Due to broker – variation margin		—		57,734
Collateral for securities on loan (Note 4)		271,045,224		100,853,788
Collateral for open swap contracts		—		4,246,830
Swaps at fair value (Premiums received $– and $863,515, respectively)		—		1,482,985
Investment advisory fees (Note 2)		349,910		322,523
Administration fees (Note 2)		148,923		125,260
Accrued expenses:
Professional fees (Note 2)		12,711		15,877
Independent trustees’ fees (Note 2)		153		142
Total Liabilities		272,546,399		443,665,739
NET ASSETS	$	1,646,078,351	$	1,461,445,991

^(a) Securities on loan with market values of $263,922,547 and $99,323,438, respectively. See Note 4.

The accompanying notes are an integral part of these financial statements.

55

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	LifePath Retirement Master Portfolio			LifePath 2010 Master Portfolio			LifePath 2020 Master Portfolio
NET INVESTMENT INCOME
Dividends from affiliated issuers (Note 2)	$	1,628,912		$	4,709,801		$	9,500,871
Dividends allocated from Master Portfolios		582,272			1,944,331			5,606,775
Interest from affiliated issuers (Note 2)		19,558			37,469			77,909
Interest allocated from Master Portfolios		3,964,734			10,372,555			12,697,516
Securities lending income from affiliated issuers (Note 2)		67,507			189,490			473,271
Expenses allocated from Master Portfolios(a)		(418,972	)		(1,165,876	)		(1,963,505	)
Total investment income		5,844,011			16,087,770			26,392,837
EXPENSES (Note 2)
Investment advisory fees		573,784			1,643,875			3,091,294
Professional fees		7,014			7,567			8,302
Independent trustees’ fees		1,457			4,178			7,698
Total expenses		582,255			1,655,620			3,107,294
Less expense reductions (Note 2)		(552,835	)		(1,575,830	)		(2,986,142	)
Net expenses		29,420			79,790			121,152
Net investment income		5,814,591			16,007,980			26,271,685
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from sale of investments in unaffiliated issuers		7,215			18,399			34,962
Net realized gain (loss) from sale of investments in affiliated issuers (Note 2)		(651,887	)		553,205			(10,751,373	)
Net realized loss allocated from Master Portfolios		(2,083,990	)		(6,936,034	)		(20,206,435	)
Net change in unrealized appreciation (depreciation) of investments		(3,545,153	)		(15,341,516	)		(31,734,718	)
Net change in unrealized appreciation (depreciation) allocated from Master Portfolios		(6,011,673	)		(19,480,983	)		(51,421,545	)
Net realized and unrealized loss		(12,285,488	)		(41,186,929	)		(114,079,109	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(6,470,897	)	$	(25,178,949	)	$	(87,807,424	)

^(a) Net of administration fee reductions of $9,298, $29,149 and $72,763, respectively.

The accompanying notes are an integral part of these financial statements.

56

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF OPERATIONS (Continued)

For the Six Months Ended June 30, 2008 (Unaudited)

	LifePath 2030 Master Portfolio			LifePath 2040 Master Portfolio
NET INVESTMENT INCOME
Dividends from affiliated issuers (Note 2)	$	7,584,478		$	5,592,540
Dividends allocated from Master Portfolios		5,336,544			4,557,136
Interest from affiliated issuers (Note 2)		64,992			52,607
Interest allocated from Master Portfolios		5,911,434			2,274,390
Securities lending income from affiliated issuers (Note 2)		416,303			345,132
Expenses allocated from Master Portfolios(a)		(1,367,050	)		(942,981	)
Total investment income		17,946,701			11,878,824
EXPENSES (Note 2)
Investment advisory fees		2,349,373			1,722,966
Professional fees		7,878			7,628
Independent trustees’ fees		5,826			4,248
Total expenses		2,363,077			1,734,842
Less expense reductions (Note 2)		(2,287,818	)		(1,697,217	)
Net expenses		75,259			37,625
Net investment income		17,871,442			11,841,199
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from sale of investments in unaffiliated issuers		18,474			23,401
Net realized loss from sale of investments in affiliated issuers (Note 2)		(14,234,045	)		(12,444,341	)
Net realized loss allocated from Master Portfolios		(19,451,581	)		(16,941,945	)
Net change in unrealized appreciation (depreciation) of investments		(26,355,593	)		(22,942,087	)
Net change in unrealized appreciation (depreciation) allocated from Master Portfolios		(47,723,730	)		(39,975,808	)
Net realized and unrealized loss		(107,746,475	)		(92,280,780	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(89,875,033	)	$	(80,439,581	)

^(a) Net of administration fee reductions of $65,268 and $54,009, respectively.

The accompanying notes are an integral part of these financial statements.

57

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF OPERATIONS (Continued)

For the Six Months Ended June 30, 2008 (Unaudited)

	Active Stock Master Portfolio			CoreAlpha Bond Master Portfolio
NET INVESTMENT INCOME
Dividends from unaffiliated issuers	$	18,027,058		$	—
Interest from unaffiliated issuers		32,731			29,080,328
Interest from affiliated issuers (Note 2)		619,201			4,823,476
Securities lending income from affiliated issuers (Note 2)		377,658			287,233
Total investment income		19,056,648			34,191,037
EXPENSES
Investment advisory fees (Note 2)		2,329,730			1,886,057
Administration fees (Note 2)		931,892			754,423
Professional fees (Note 2)		12,435			15,817
Independent trustees’ fees (Note 2)		8,303			6,608
Interest expense on securities sold short		—			143,608
Total expenses		3,282,360			2,806,513
Less expense reductions (Note 2)		(208,063	)		(22,425	)
Net expenses		3,074,297			2,784,088
Net investment income		15,982,351			31,406,949
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		(60,970,314	)		(5,332,639	)
Net realized loss on futures contracts		(4,797,007	)		(765,196	)
Net realized loss on sale of securities sold short		—			(88,691	)
Net realized gain on swap contracts		—			6,333,862
Net change in unrealized appreciation (depreciation) of investments		(152,233,414	)		(13,842,046	)
Net change in unrealized appreciation (depreciation) of futures contracts		(961,035	)		658,430
Net change in unrealized appreciation (depreciation) of securities sold short		—			(163,281	)
Net change in unrealized appreciation (depreciation) of swap contracts		—			1,927,619
Net realized and unrealized loss		(218,961,770	)		(11,271,942	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(202,979,419	)	$	20,135,007

The accompanying notes are an integral part of these financial statements.

58

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	LifePath Retirement Master Portfolio						LifePath 2010 Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	5,814,591		$	11,318,936		$	16,007,980		$	32,997,495
Net realized gain (loss)		(2,728,662	)		4,275,465			(6,364,430	)		21,249,163
Net change in unrealized appreciation (depreciation)		(9,556,826	)		(1,925,595	)		(34,822,499	)		(14,434,220	)
Net increase (decrease) in net assets resulting from operations		(6,470,897	)		13,668,806			(25,178,949	)		39,812,438
Interestholder transactions:
Contributions		74,299,746			158,701,423			161,708,759			383,762,831
Withdrawals		(89,446,475	)		(100,915,531	)		(260,012,089	)		(212,145,818	)
Net increase (decrease) in net assets resulting from interestholder transactions		(15,146,729	)		57,785,892			(98,303,330	)		171,617,013
Increase (decrease) in net assets		(21,617,626	)		71,454,698			(123,482,279	)		211,429,451
NET ASSETS:
Beginning of period		331,733,382			260,278,684			998,409,999			786,980,548
End of period	$	310,115,756		$	331,733,382		$	874,927,720		$	998,409,999
	LifePath 2020 Master Portfolio						LifePath 2030 Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	26,271,685		$	49,564,927		$	17,871,442		$	31,393,375
Net realized gain (loss)		(30,922,846	)		51,503,748			(33,667,152	)		42,194,986
Net change in unrealized appreciation (depreciation)		(83,156,263	)		(45,151,495	)		(74,079,323	)		(43,158,454	)
Net increase (decrease) in net assets resulting from operations		(87,807,424	)		55,917,180			(89,875,033	)		30,429,907
Interestholder transactions:
Contributions		282,616,667			694,165,722			246,779,871			582,096,808
Withdrawals		(426,598,930	)		(313,348,217	)		(305,799,963	)		(207,988,660	)
Net increase (decrease) in net assets resulting from interestholder transactions		(143,982,263	)		380,817,505			(59,020,092	)		374,108,148
Increase (decrease) in net assets		(231,789,687	)		436,734,685			(148,895,125	)		404,538,055
NET ASSETS:
Beginning of period		1,827,887,980			1,391,153,295			1,393,178,304			988,640,249
End of period	$	1,596,098,293		$	1,827,887,980		$	1,244,283,179		$	1,393,178,304

The accompanying notes are an integral part of these financial statements.

59

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	LifePath 2040 Master Portfolio						LifePath 2050 Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the day ended June 30, 2008(a) (Unaudited)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	11,841,199		$	19,675,256		$	—
Net realized gain (loss)		(29,362,885	)		33,988,595			—
Net change in unrealized appreciation (depreciation)		(62,917,895	)		(38,234,867	)		—
Net increase (decrease) in net assets resulting from operations		(80,439,581	)		15,428,984			—
Interestholder transactions:
Contributions		209,949,387			484,838,269			250,000
Withdrawals		(190,430,526	)		(185,593,608	)		—
Net increase in net assets resulting from interestholder transactions		19,518,861			299,244,661			250,000
Increase (decrease) in net assets		(60,920,720	)		314,673,645			250,000
NET ASSETS:
Beginning of period		1,022,940,903			708,267,258			—
End of period	$	962,020,183		$	1,022,940,903		$	250,000

	Active Stock Master Portfolio						CoreAlpha Bond Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	15,982,351		$	31,386,401		$	31,406,949		$	68,999,403
Net realized gain (loss)		(65,767,321	)		101,805,948			147,336			(14,849,096	)
Net change in unrealized appreciation (depreciation)		(153,194,449	)		(130,243,678	)		(11,419,278	)		13,964,579
Net increase (decrease) in net assets resulting from operations		(202,979,419	)		2,948,671			20,135,007			68,114,886
Interestholder transactions:
Contributions		272,018,478			698,360,067			316,762,360			528,768,499
Withdrawals		(508,475,155	)		(177,734,195	)		(355,339,478	)		(199,463,310	)
Net increase (decrease) in net assets resulting from interestholder transactions		(236,456,677	)		520,625,872			(38,577,118	)		329,305,189
Increase (decrease) in net assets		(439,436,096	)		523,574,543			(18,442,111	)		397,420,075
NET ASSETS:
Beginning of period		2,085,514,447			1,561,939,904			1,479,888,102			1,082,468,027
End of period	$	1,646,078,351		$	2,085,514,447		$	1,461,445,991		$	1,479,888,102

^(a) Commencement of operations.

The accompanying notes are an integral part of these financial statements.

60

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Active Stock and CoreAlpha Bond Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

Each of the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Master Portfolios (each, a “LifePath Master Portfolio,” collectively, the “LifePath Master Portfolios”) seeks to achieve its investment objective by investing in a combination of equity securities, bond and money market funds (the “Underlying Funds”) in proportions suggested by its own comprehensive investment strategy. The Underlying Funds are advised by Barclays Global Fund Advisors (“BGFA”), and include the Active Stock and CoreAlpha Bond Master Portfolios, the Barclays Global Investors Funds Institutional Money Market Fund and exchange-traded funds in the iShares^® family of funds.

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolio 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 MIP (the “Board”).

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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 Master Portfolios’ 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

61

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

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 the Master Portfolios’ net assets are computed and that may materially affect the value of the Master Portfolios’ investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations.

Fair value pricing could result in a difference between the prices used to calculate a Master Portfolio’s net assets and the prices used by the Master Portfolio’s benchmark index, which, in turn, could result in a difference between the Master Portfolio’s performance and the performance of the Master Portfolio’s benchmark index. The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments.

The following tables summarize the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
LifePath Retirement	$	329,726,962	$	—	$	—	$	329,726,962
LifePath 2010		929,556,464		—		—		929,556,464
LifePath 2020		1,732,311,472		—		—		1,732,311,472
LifePath 2030		1,407,332,262		—		—		1,407,332,262
LifePath 2040		1,140,311,085		—		—		1,140,311,085
Active Stock		1,916,133,019		—		—		1,916,133,019
CoreAlpha Bond		317,591,801		1,469,486,536		—		1,787,078,337

Other Financial Instruments(a)
Master Portfolio	Level 1 – Quoted Prices			Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Active Stock	$	(1,608,080	)	$	—	$	—	$	(1,608,080	)
CoreAlpha Bond		551,010			7,026,247		—		7,577,257

^(a) Other financial instruments include futures and swap contracts.

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 June 30, 2008:

Master Portfolio	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
CoreAlpha Bond	$	98,570,544	$	(5,001,347	)	$	545,084	$	(76,064,510	)	$	(18,049,771	)	$	—	$	—

The value of the LifePath Master Portfolio’s investment in each of the Active Stock Master Portfolio and CoreAlpha Bond Master Portfolio reflects that LifePath Master Portfolio’s proportionate interest in the net assets of that Master Portfolio. As of June 30, 2008, the interests of the Active Stock and CoreAlpha Bond Master Portfolios held by LifePath Master Portfolios were as follows:

Master Portfolio	Active Stock Master Portfolio		CoreAlpha Bond Master Portfolio
LifePath Retirement	3.21	%	11.46	%
LifePath 2010	10.50		29.73
LifePath 2020	29.87		35.48
LifePath 2030	29.53		16.82
LifePath 2040	26.89		6.51

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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 tax withheld at source, and interest income is accrued daily. Distributions received by the LifePath and Active Stock Master Portfolios 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. The Master Portfolios amortize premiums and accrete discounts on debt securities purchased using a constant yield to maturity method.

Each LifePath Master Portfolio records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of the Active Stock and CoreAlpha Bond Master Portfolios. In addition, each LifePath Master Portfolio accrues its own expenses.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes for the Master Portfolios were as follows:

Master Portfolio	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
LifePath Retirement(a)	$	104,495,270	$	5,668,813	$	(678,372	)	$	4,990,441
LifePath 2010(a)		305,536,896		19,630,437		(2,913,325	)		16,717,112
LifePath 2020(a)		682,936,730		45,856,234		(6,744,779	)		39,111,455
LifePath 2030(a)		650,069,079		31,990,731		(6,618,799	)		25,371,932
LifePath 2040(a)		594,893,870		13,998,828		(6,407,710	)		7,591,118
Active Stock		2,043,442,888		75,997,117		(203,306,986	)		(127,309,869	)
CoreAlpha Bond		1,800,044,843		8,526,299		(21,492,805	)		(12,966,506	)

^(a) Tax cost information does not include investments in the underlying Master Portfolios.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

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FUTURES CONTRACTS

The Active Stock and CoreAlpha Bond Master Portfolios may purchase futures contracts to gain exposure to market changes, as this may be more efficient or cost effective than actually buying the securities. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date and is exchange-traded. Upon entering into a futures contract, a Master Portfolio is required to pledge to the broker and hold in a segregated account, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum “initial margin” requirements of the exchange. Pursuant to the contract, the Master Portfolio agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the Master Portfolio as receivables or payables in the accompanying Statements of Assets and Liabilities. When the contract is closed, the Master Portfolio records a “realized gain (loss) on futures contracts” in its Statement of Operations, equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include the possibility that there may be an illiquid market and that a change in the value of the contracts may not correlate with changes in the value of the underlying securities. The amount at risk for futures contracts may exceed the amount reflected in the financial statements.

As of June 30, 2008, the Active Stock and CoreAlpha Bond Master Portfolios have pledged to brokers U.S. Treasury Bills and U.S. Treasury Bonds and Notes with face amounts of $2,200,000 and $2,655,000, respectively, for initial margin requirements on outstanding futures contracts.

WHEN ISSUED/TBA TRANSACTIONS

The CoreAlpha Bond Master Portfolio may purchase mortgage pass-through securities on a when-issued or to-be-announced (“TBA”) basis, with payment and delivery scheduled for a future date. The Master Portfolio may enter into a TBA agreement, sell the obligation to purchase the pools stipulated in the TBA agreement prior to the stipulated settlement date and enter into a new TBA agreement for future delivery of pools of mortgage pass-through securities (a “TBA roll”). A TBA roll is treated by the Master Portfolio as a purchase transaction and a sale transaction in which the Master Portfolio realizes a gain or loss. The Master Portfolio’s use of TBA rolls may cause the Master Portfolio to experience higher portfolio turnover and higher transaction costs. The Master Portfolio could be exposed to possible risk if there is adverse market action, expenses or delays in connection with the TBA transactions, or if the counterparty fails to complete the transaction.

SWAP TRANSACTIONS

The CoreAlpha Bond Master Portfolio may enter into swaps, including, but not limited to, interest-rate, index and credit default swaps. Swap transactions generally do not involve the delivery of securities or other underlying assets or principal. If the Master Portfolio enters into a swap transaction, cash or securities may be posted by or to the Master Portfolio as collateral in accordance with the terms of the swap agreement. If there is a default by the other party to such a transaction, the Master Portfolio will have contractual remedies pursuant to the agreements related to the transaction. Upon early termination of a swap agreement due to an event of default or termination event with respect to the Master Portfolio or the other party, the risk of loss to the Master Portfolio would generally be limited to the net amount of payments that the Master Portfolio is contractually obligated to make if, after exercising in accordance with the swap agreement the rights with respect to early close-out of the swap transaction(s), it is determined that the Master Portfolio would be obligated to make a net payment with respect to the swap transaction(s). In the event the other party to the swap transaction(s) were to owe a net amount to the Master Portfolio upon an early termination of the swap agreement as described above, the Master Portfolio could be exposed to the risk of loss in the event that any collateral held by the Master Portfolio would be insufficient. The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with conventional securities transactions. The Master Portfolio segregates liquid assets in connection with transactions in swaps.

Interest-rate swaps involve the exchange by the Master Portfolio with another party of their respective commitments to pay or receive interest (for example, an exchange of floating-rate payments or fixed-rate payments). Index swaps (sometimes referred to as total return swaps) involve the exchange by the Master Portfolio with another party of cash flows based upon the performance of an index of securities or a portion of an index of securities that usually include, but are not limited to, dividends or income. In each case, the exchange of commitments can involve payments to be made

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in the same currency or in different currencies. Details of interest-rate swaps held by the Master Portfolio as of June 30, 2008 are included in its Schedule of Investments.

A credit default swap is a contract between two parties which transfers the credit risk of an entity (the “reference entity”) for a defined period whereby if there is a Credit Event then the seller of protection pays a predetermined amount to the buyer of protection. A “Credit Event” is commonly defined as the reference entity’s (a) failing to pay principal or interest on time, (b) restructuring its debt, (c) accelerating its debt, or (d) entering bankruptcy. The buyer of credit protection pays a premium to the seller of credit protection until the earlier of a Credit Event or the scheduled termination date of the credit default swap. Credit default swaps can be used to implement BGFA’s view that a particular credit, or group of credits, will experience credit improvement. In the case of expected credit improvement, the Master Portfolio may sell credit default protection in which it receives a premium to take on the risk. In such an instance, the obligation of the Master Portfolio to make payments upon the occurrence of a Credit Event creates leveraged exposure to the credit risk of the referenced entity. The Master Portfolio may also buy credit default protection with respect to a reference entity if, in the judgment of BGFA, there is a high likelihood of credit deterioration. In such instance, the Master Portfolio will pay a premium regardless of whether there is a Credit Event. The credit default swap market in high yield securities is comparatively new and rapidly evolving compared to the credit default swap market for more seasoned and liquid investment grade securities creating the risk that the newer markets will be less liquid and it may be difficult to exit or enter into a particular transaction. In the event of counterparty default, the Master Portfolio would have rights solely against the counterparty and will have no recourse against the reference entity as a result of the counterparty default. Details of credit default swaps held by the Master Portfolio as of June 30, 2008 are included in its Schedule of Investments.

In a cash-settled credit default swap where the Master Portfolio is buying protection, the Master Portfolio makes a stream of fixed payments to the counterparty in exchange for the right to receive compensation for the loss in market value of the designated obligation that is being hedged, in the event the reference entity experiences a Credit Event. In a cash-settled credit default swap where the Master Portfolio is selling protection, the Master Portfolio would be compensated for assuming the transfer of credit risk from the counterparty by receiving the fixed premium over the life of the transaction. Alternatively, if the transaction were to be physically settled, the counterparty, as seller of protection, would agree that if a specified Credit Event occurs, it would take delivery of an obligation specified by the Master Portfolio and pay to the Master Portfolio an amount equal to the notional amount of the transaction. In exchange for this risk protection, the Master Portfolio would pay the counterparty a fixed premium over the specified life of the credit default swap. In instances where the Master Portfolio sells protection, the Master Portfolio would be compensated for assuming the transfer of credit risk from the counterparty by receiving a fixed premium over the life of the credit default swap. The Master Portfolio would be required to compensate the counterparty for the loss in market value of the designated obligation if the reference entity suffered a Credit Event and the credit default swap were to be cash settled. In the event that the transaction were to be physically settled on the occurrence of a specified Credit Event with respect to the reference entity, the Master Portfolio would be required to take physical delivery of an obligation specified at the time of the occurrence of the relevant Credit Event and would pay to the counterparty an amount equal to the notional amount of the transaction. As of June 30, 2008, the Master Portfolio did not hold any cash-settled credit default swap contracts.

The Master Portfolio may also write (sell) and purchase put and call options on swaps. An option on a swap (commonly referred to as a “swaption”) is a contract that gives a counterparty the right (but not the obligation) in return for payment of a premium, to enter into a new swap transaction at some designated future time on specified terms as described in the swaption. Depending on the terms of the particular swaption, the Master Portfolio may incur a greater degree of risk when it writes a swaption than it will incur when it purchases a swaption. When the Master Portfolio purchases a swaption, it risks losing only the amount of the premium it has paid if it decides to let the swaption expire unexercised. When the Master Portfolio writes a swaption, upon exercise of the swaption, the Master Portfolio becomes obligated according to the terms of the underlying agreement. As of June 30, 2008, the Master Portfolio did not hold any swaptions.

SHORT SALES

The CoreAlpha Bond Master Portfolio may make short sales of securities as part of its overall portfolio management strategies or to offset potential declines in long positions in similar securities. A short sale involves the sale of securities, with the ultimate obligation to deliver these securities. To make delivery to the buyer of the securities, the seller purchases or borrows the securities to offset the short obligation. When making a short sale, the Master Portfolio must cover its position. Short sales expose the Master Portfolio to the risk that it will be required to acquire, convert or exchange securities to replace the securities sold short at a time when the securities sold short have appreciated in value, thus resulting in a loss to the Master Portfolio. The successful use of short selling may be adversely affected by an

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imperfect correlation between movements in the price of the security sold short and the securities being hedged. The amount at risk for short sales may exceed the amount reflected in the financial statements. As of June 30, 2008, the Master Portfolio did not hold any short positions.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with each Master Portfolio, BGFA provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC.

For its investment advisory services to the following Master Portfolios, BGFA is entitled to receive an annual investment advisory fee based on the average daily net assets for each Master Portfolio as follows:

Master Portfolio	Investment Advisory Fee
LifePath Retirement	0.35	%
LifePath 2010	0.35
LifePath 2020	0.35
LifePath 2030	0.35
LifePath 2040	0.35
LifePath 2050	0.35
Active Stock	0.25
CoreAlpha Bond	0.25

BGFA has contractually agreed to waive investment advisory fees charged to the LifePath Master Portfolios in an amount equal to investment advisory fees and administration fees, if any, charged to the Underlying Funds through April 30, 2009.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. For those Master Portfolios that do not pay an administration fee to Barclays Global Investors, N.A. (“BGI”), BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which those Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees as follows:

Master Portfolio	Investment Advisory Fees Waived/Credited
LifePath Retirement	$	552,835
LifePath 2010		1,575,830
LifePath 2020		2,986,142
LifePath 2030		2,287,818
LifePath 2040		1,697,217

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

BGI is not entitled to compensation for providing administration services to the LifePath Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the LifePath Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the LifePath Master Portfolios.

BGI is entitled to receive a monthly fee for administration services from each of the Active Stock and CoreAlpha Bond Master Portfolios at an annual rate of 0.10% of their respective average daily net assets. BGI has agreed to bear all costs of each of these Master Portfolios, excluding, generally, investment advisory fees, administration fees, brokerage and other

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expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by each Master Portfolio. With respect to the independent expenses discussed above, BGI has contractually agreed to provide an offsetting credit against the administration fees paid by these Master Portfolios in an amount equal to the independent expenses through April 30, 2009. Effective October 2, 2007, BGI began voluntarily waiving a portion of its administration fees payable by the Active Stock Master Portfolio in an amount sufficient to maintain the investment advisory fees of the LifePath Master Portfolios, which are not to exceed 0.35% of the average daily net assets of each LifePath Master Portfolio. This arrangement is voluntary and may be terminated by BGI at any time. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, will have a favorable impact on the Master Portfolio’s performance. For the six months ended June 30, 2008, BGI credited and/or waived administration fees of $208,063 and $22,425 for the Active Stock and CoreAlpha Bond Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from BGI for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), BGI serves as securities lending agent for MIP. BGI is an affiliate of BGFA, the Master Portfolios’ 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 June 30, 2008, BGI earned securities lending agent fees as follows:

Master Portfolio	Securities Lending Agent Fees
LifePath Retirement	$	67,507
LifePath 2010		189,490
LifePath 2020		473,271
LifePath 2030		416,303
LifePath 2040		345,132
Active Stock		377,658
CoreAlpha Bond		287,233

Cross trades for the six months ended June 30, 2008, if any, were executed by the Master Portfolios 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.

The LifePath Master Portfolios may invest in the shares of exchange-traded funds (“ETFs”), including shares of ETFs of which BGI is an affiliate, to obtain exposure to the bond and stock markets while maintaining flexibility to meet the liquidity needs of the LifePath Master Portfolios.

Each Master Portfolio may invest in the Institutional Shares of certain money market funds managed by BGFA, the Master Portfolios’ 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 Master Portfolios from temporary cash investments are recorded as interest from affiliated issuers in the accompanying Statements of Operations. Income distributions earned by the Master Portfolios from the investment of securities lending collateral, if any, are included in securities lending income in the accompanying Statements of Operations.

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Each Master Portfolio 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. See Note 4 for additional information regarding the Premier Fund.

The following table provides information about the direct investment by each Master Portfolio (exclusive of short-term investments) in issuers of which BGFA is an affiliate, other than the Active Stock and CoreAlpha Bond Master Portfolios, for the six months ended June 30, 2008.

Master Portfolio 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 Gain (Loss)
LifePath Retirement
iShares Cohen & Steers Realty Majors Index Fund	105	24	84	45	$	3,360,261	$	112,582	$	(779,512	)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund	—	129	—	129		4,817,211		—		—
iShares Lehman TIPS Bond Fund	294	27	57	264		28,511,549		818,318		327,381
iShares MSCI Canada Index Fund	66	15	5	76		2,530,960		9,449		1,939
iShares MSCI EAFE Index Fund	331	88	78	341		23,469,844		513,471		(98,032	)
iShares MSCI EAFE Small Cap Index Fund	—	56	—	56		2,474,904		—		—
iShares MSCI Emerging Markets Index Fund	43	12	5	50		6,796,490		83,370		(79,816	)
iShares S&P MidCap 400 Index Fund	138	41	29	150		12,206,907		68,779		40,106
iShares S&P SmallCap 600 Index Fund	90	19	12	97		5,849,968		22,943		(63,953	)
LifePath 2010
iShares Cohen & Steers Realty Majors Index Fund	375	47	279	143		10,708,126		367,251		(2,538,039	)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund	—	371	—	371		13,893,924		—		—
iShares Lehman TIPS Bond Fund	782	61	158	685		73,867,436		2,138,005		838,087
iShares MSCI Canada Index Fund	239	20	25	234		7,786,138		29,013		457
iShares MSCI EAFE Index Fund	1,152	222	315	1,059		72,768,070		1,619,944		2,187,320
iShares MSCI EAFE Small Cap Index Fund	—	163	—	163		7,158,735		—		—
iShares MSCI Emerging Markets Index Fund	158	16	12	162		22,002,194		268,538		(240,953	)
iShares S&P MidCap 400 Index Fund	468	95	97	466		37,976,799		214,684		488,614
iShares S&P SmallCap 600 Index Fund	283	63	46	300		18,044,622		72,366		(182,281	)

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Master Portfolio 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 Gain (Loss)
LifePath 2020
iShares Cohen & Steers Realty Majors Index Fund	1,004	141	793	352	$	26,483,544	$	1,016,526	$	(8,457,228	)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund	—	1,075	—	1,075		40,223,531		—		—
iShares Lehman TIPS Bond Fund	888	94	199	783		84,430,157		2,488,575		1,131,412
iShares MSCI Canada Index Fund	620	110	80	650		21,602,377		81,393		(37,844	)
iShares MSCI EAFE Index Fund	2,992	538	740	2,790		191,640,574		4,443,108		(2,414,489	)
iShares MSCI EAFE Small Cap Index Fund	—	446	—	446		19,614,363		—		—
iShares MSCI Emerging Markets Index Fund	397	83	48	432		58,530,428		737,669		(866,432	)
iShares S&P MidCap 400 Index Fund	1,150	240	235	1,155		94,149,696		551,826		393,173
iShares S&P SmallCap 600 Index Fund	702	134	104	732		44,070,253		181,774		(499,965	)
LifePath 2030
iShares Cohen & Steers Realty Majors Index Fund	935	145	743	337		25,294,303		962,427		(8,418,775	)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund	—	1,111	—	1,111		41,580,392		—		—
iShares Lehman TIPS Bond Fund	373	52	93	332		35,840,173		1,054,992		548,210
iShares MSCI Canada Index Fund	574	98	66	606		20,147,695		76,450		(39,438	)
iShares MSCI EAFE Index Fund	2,783	490	600	2,673		183,602,124		4,144,825		(4,531,573	)
iShares MSCI EAFE Small Cap Index Fund	—	451	—	451		19,839,874		—		—
iShares MSCI Emerging Markets Index Fund	372	75	36	411		55,665,758		681,895		(687,798	)
iShares S&P MidCap 400 Index Fund	1,033	202	150	1,085		88,420,002		502,449		(300,115	)
iShares S&P SmallCap 600 Index Fund	628	164	159	633		38,088,573		161,440		(804,556	)

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Master Portfolio 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 Gain (Loss)
LifePath 2040
iShares Cohen & Steers Realty Majors Index Fund	805	120	617	308	$	23,135,080	$	819,835	$	(7,467,070	)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund	—	983	—	983		36,763,181		—		—
iShares Lehman TIPS Bond Fund	—	74	—	74		8,012,716		—		—
iShares MSCI Canada Index Fund	479	115	55	539		17,913,767		65,387		(95,402	)
iShares MSCI EAFE Index Fund	2,356	490	454	2,392		164,308,828		3,569,210		(3,366,763	)
iShares MSCI EAFE Small Cap Index Fund	—	419	—	419		18,408,162		—		—
iShares MSCI Emerging Markets Index Fund	312	76	26	362		49,128,905		585,206		(498,835	)
iShares S&P MidCap 400 Index Fund	853	192	107	938		76,425,973		415,646		(399,309	)
iShares S&P SmallCap 600 Index Fund	525	145	99	571		34,384,748		137,256		(616,962	)

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

3. INVESTMENT PORTFOLIO TRANSACTIONS

Investment transactions (excluding short-term investments and investments in any underlying Master Portfolios) for the Master Portfolios for the six months ended June 30, 2008 were as follows:

	U.S. Government Obligations				Other Securities
Master Portfolio	Purchases		Sales		Purchases		Sales
LifePath Retirement	$	—	$	—	$	24,785,305	$	22,125,771
LifePath 2010		—		—		61,081,683		74,332,057
LifePath 2020		—		—		160,504,632		167,920,249
LifePath 2030		—		—		152,016,820		137,270,118
LifePath 2040		—		—		145,454,703		98,783,039
Active Stock		—		—		900,614,131		1,025,833,826
CoreAlpha Bond		2,575,724,524		2,546,362,384		338,586,368		296,950,006

4. PORTFOLIO SECURITIES LOANED

Each Master Portfolio may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Master Portfolio 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 Master Portfolio is required to have a value of at least 102% of the market value of the loaned securities plus the interest accrued on such securities, if any, 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 plus accrued interest, if any. The risks to the Master Portfolios of securities lending are that the borrower may not provide additional collateral when required or may not return the securities when due.

As of June 30, 2008, the Master Portfolios 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

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

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 June 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 Master Portfolios’ 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.

5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT

In March 2008, the FASB issued Financial Accounting Standards Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“FAS 161”). FAS 161 requires enhanced disclosures for derivative instruments and hedging activities and is effective for fiscal years and interim periods beginning after November 15, 2008. MIP is currently evaluating the impact the adoption of FAS 161 will have on the financial statements.

6. FINANCIAL HIGHLIGHTS

The LifePath 2050 Master Portfolio commenced operations on June 30, 2008; ratios of expenses, net investment income and portfolio turnover are not applicable. Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004 (a)		Year Ended December 31, 2003
LifePath Retirement
Ratio of expenses to average net assets(b)(c)	0.27	%	0.27	%	0.28	%	0.31	%	0.31	%	0.35	%
Ratio of expenses to average net assets prior to expense reductions(b)(d)	0.61	%	0.61	%	0.61	%	0.65	%	0.60	%	n/a
Ratio of net investment income to average net assets(b)(c)	3.55	%	3.87	%	3.80	%	3.24	%	2.46	%	2.27	%
Portfolio turnover rate(e)	7	%	6	%	10	%	11	%	138	%(f)	29	%
Total return	(2.01	)%(g)	5.00	%	9.30	%	4.82	%	6.85	%	12.45	%
LifePath 2010
Ratio of expenses to average net assets(b)(c)	0.27	%	0.27	%	0.27	%	0.30	%	0.30	%	0.35	%
Ratio of expenses to average net assets prior to expense reductions(b)(d)	0.61	%	0.60	%	0.60	%	0.64	%	0.59	%	n/a
Ratio of net investment income to average net assets(b)(c)	3.41	%	3.63	%	3.49	%	2.96	%	2.32	%	2.12	%
Portfolio turnover rate(e)	7	%	7	%	12	%	12	%	130	%(f)	23	%
Total return	(2.62	)%(g)	4.68	%	10.65	%	5.70	%	7.88	%	16.16	%
LifePath 2020
Ratio of expenses to average net assets(b)(c)	0.24	%	0.25	%	0.25	%	0.28	%	0.29	%	0.35	%
Ratio of expenses to average net assets prior to expense reductions(b)(d)	0.58	%	0.58	%	0.58	%	0.62	%	0.57	%	n/a
Ratio of net investment income to average net assets(b)(c)	2.97	%	3.01	%	2.91	%	2.53	%	2.05	%	2.04	%
Portfolio turnover rate(e)	9	%	7	%	16	%	17	%	140	%(f)	23	%
Total return	(4.80	)%(g)	3.84	%	13.51	%	7.04	%	9.77	%	21.11	%
LifePath 2030
Ratio of expenses to average net assets(b)(c)	0.21	%	0.23	%	0.24	%	0.26	%	0.28	%	0.35	%
Ratio of expenses to average net assets prior to expense reductions(b)(d)	0.55	%	0.57	%	0.57	%	0.60	%	0.56	%	n/a
Ratio of net investment income to average net assets(b)(c)	2.66	%	2.57	%	2.49	%	2.22	%	1.93	%	1.98	%
Portfolio turnover rate(e)	10	%	7	%	22	%	24	%	138	%(f)	32	%
Total return	(6.39	)%(g)	3.14	%	15.62	%	8.13	%	11.28	%	24.36	%

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004 (a)		Year Ended December 31, 2003
LifePath 2040
Ratio of expenses to average net assets(b)(c)	0.20	%	0.22	%	0.23	%	0.26	%	0.28	%	0.35	%
Ratio of expenses to average net assets prior to expense reductions(b)(d)	0.54	%	0.56	%	0.56	%	0.59	%	0.56	%	n/a
Ratio of net investment income to average net assets(b)(c)	2.41	%	2.20	%	2.17	%	1.96	%	1.74	%	1.86	%
Portfolio turnover rate(e)	10	%	8	%	29	%	38	%	147	%(f)	29	%
Total return	(7.79	)%(g)	2.53	%	17.47	%	8.74	%	11.93	%	28.14	%
Active Stock
Ratio of expenses to average net assets(b)	0.33	%	0.34	%	0.35	%	0.35	%	0.35	%	n/a
Ratio of expenses to average net assets prior to expense reductions(b)	0.35	%	0.35	%	0.35	%	n/a		n/a		n/a
Ratio of net investment income to average net assets(b)	1.72	%	1.70	%	1.64	%	1.50	%	1.57	%	n/a
Portfolio turnover rate(e)	50	%	80	%	65	%	54	%	70	%	n/a
Total return	(10.09	)%(g)	0.58	%	15.65	%	8.79	%	10.40	%(g)	n/a
CoreAlpha Bond
Ratio of expenses to average net assets(b)	0.37	%	0.35	%	0.35	%	0.35	%	0.35	%	n/a
Ratio of expenses to average net assets prior to expense reductions(b)	0.37	%	0.36	%	0.36	%	n/a		n/a		n/a
Ratio of net investment income to average net assets(b)	4.16	%	5.18	%	5.11	%	4.19	%	3.08	%	n/a
Portfolio turnover rate(e)	186	%	466	%	301	%	270	%	313	%	n/a
Total return	1.32	%(g)	5.10	%	4.36	%	1.98	%	1.30	%(g)	n/a

^(a) For the period from March 15, 2004 (commencement of operations) to December 31, 2004 for the Active Stock and CoreAlpha Bond Master Portfolios.

^(b) Annualized for periods of less than one year.

^(c) After March 15, 2004, the date the LifePath Master Portfolio converted to a fund-of-funds structure, the expense ratio includes the LifePath Master Portfolio’s pro rata portion of the advisory and administration fees of the Active Stock and CoreAlpha Bond Master Portfolios. The ratio does not reflect the LifePath Master Portfolio’s pro rata portion of the advisory and administration fees charged to the IMMF and the iShares exchange-traded funds. The expense ratio does reflect BGFA’s/BGI’s waiver/credit of the pro rata advisory and administration fees charged to all the Underlying Funds. (See Note 2 above)

^(d) After March 15, 2004, the date the LifePath Master Portfolio converted to a fund-of-funds structure, the expense ratio includes the LifePath Master Portfolio’s pro rata portion of the advisory and administration fees of the Active Stock and CoreAlpha Bond Master Portfolios.

^(e) Portfolio turnover rates include in-kind transactions, if any.

^(f) Portfolio turnover rate reflects the restructure of the LifePath Master Portfolio to a fund-of-funds structure.

^(g) Not annualized.

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MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)

I. LifePath Master Portfolios (excluding LifePath 2050 Master Portfolio), Active Stock Master Portfolio and CoreAlpha Bond Master Portfolio

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of the LifePath Retirement Master Portfolio, LifePath 2010 Master Portfolio, LifePath 2020 Master Portfolio, LifePath 2030 Master Portfolio, LifePath 2040 Master Portfolio (each, a “LifePath Master Portfolio,” collectively, the “LifePath Master Portfolios”), CoreAlpha Bond Master Portfolio and Active Stock Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios 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 BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 registered investment company with substantially similar investment objectives and strategies as any LifePath Master Portfolio; therefore, no such comparisons were available with respect to the LifePath Master Portfolios. The Board further noted that BGFA does not serve as investment adviser for any other registered investment company with substantially similar investment objectives and strategies as the Active Stock and CoreAlpha Bond Master Portfolios; therefore, no such comparisons were available with respect to those Master Portfolios. The Board also noted that all the Master Portfolios had met their investment objectives since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other registered investment companies, objectively selected by Lipper as comprising such Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered investment companies that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (each a “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five- and ten-year (or “since inception”) periods ended December 31, 2007, as applicable, as compared to the performance of other registered

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investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered investment companies that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (each a “Lipper Performance Group”, and together with the Lipper Expense Groups, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds LifePath Portfolios than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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 noted that each of the LifePath Master Portfolios and the Active Stock Master Portfolio performed below the median performance of their respective Lipper Performance Groups over the one-year period ended December 31, 2007, performed in line with or outperformed the median of their respective Lipper Performance Groups over the three-year period ended December 31, 2007, and, to the extent that sufficient data was available, performed just below or in line with the median of their respective Lipper Performance Groups over the five-year period ended December 31, 2007. The CoreAlpha Bond Master Portfolio performed above the median performance of its Lipper Performance Group over the one-year period ended December 31, 2007, performed just below the median performance of its Lipper Performance Group over the three-year period ended December 31, 2007, and performed below the median performance of its Lipper Performance Group over the five-year period ended December 31, 2007. The Board noted that the CoreAlpha Bond Master Portfolio’s underperformance in relation to its benchmark was in part attributable to the effect of fees, as has been the case historically, and, in particular with respect to this year, in part attributable to liquidity crises, increased volatility, and decreased opportunities for security outperformance relative to market performance during the periods covered. The Board noted the inherent challenges of comparing the performance of the LifePath Master Portfolios to other lifecycle funds, as lifecycle funds can differ significantly in their asset components and mixes. BGFA has developed custom benchmarks for purposes of providing a comparison for the performance of the LifePath Master Portfolios, but the custom benchmarks are composed of indices and do not reflect the fees, expenses and taxes incurred by funds. The Board noted that the Active Stock Master Portfolio’s underperformance in relation to its benchmark was in part attributable to the effect of fees, as has been the case historically, and, in particular with respect to this year, certain unusual market conditions, such as the effects of short sellers being forced to sell their higher quality “value” stocks (of the type typically held by the Active Stock Master Portfolio) in order to cover their eroding short positions in lower quality stocks (of the type typically not held by the Active Stock Master Portfolio), thus putting downward pressure on the price of higher quality stocks and driving up the price of lower quality stocks. The Board noted that the LifePath Master Portfolios underperformed their custom benchmarks in 2007 and on an annualized basis over five years. The Board also noted that the advisory fees, net of applicable waivers and reimbursements, and overall expenses for the LifePath Master Portfolios were generally lower than the advisory fee rates and overall expenses of the funds in their respective Lipper Expense Groups. The Board noted BGFA’s voluntary waiver of certain advisory fee amounts based on the advisory fees and/or administrative fees received by BGFA and/or BGI from the funds in which the LifePath Master Portfolios invested during the year ended December 31, 2007 and BGFA’s agreement to contractually waive certain advisory fee amounts based on the advisory fees and/or administrative fees received by BGFA and/or BGI from the funds in which the LifePath Master Portfolios will invest for the period May 1, 2008 through April 30, 2009. The Board noted that the advisory fees, net of applicable waivers and reimbursements, for each of the Active Stock and CoreAlpha Bond Master Portfolios were generally lower than the advisory fee rates of the funds in their respective Lipper Expense Groups, and the overall expenses, net of applicable waivers and reimbursements, for each of the Active Stock and the CoreAlpha Bond Master Portfolios were the lowest of the overall expenses of the funds in their respective Lipper Expense Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations

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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 MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other master portfolios and funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios and the profitability to BGFA and its affiliates of those Master Portfolios in which the LifePath Master Portfolios invest, as reflected in the materials, and noted the profitability to BGFA and its affiliates of the other funds advised by BGFA in which the LifePath Master Portfolios invest, as represented by BGFA during the meetings. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that with respect to each Master Portfolio, BGFA and its affiliates are providing services at a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts 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 BGFA had provided information distinguishing the level of services provided to the Other Accounts from the level of services provided to the LifePath Master Portfolios and the Active Stock Master Portfolio. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the LifePath Master Portfolios and the Active Stock Master Portfolio to the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the LifePath Master Portfolios and the Active Stock Master Portfolio and the Other Accounts under differing regulatory requirements and client guidelines. BGFA and its affiliates do not provide investment advisory/management services to other funds registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the CoreAlpha Bond Master Portfolio.

The Board noted that: (i) the investment advisory fee rates under the LifePath Master Portfolios’Advisory Contracts were within the ranges of the investment management fee rates for the Other Accounts; and (ii) the investment advisory fee rate under the Advisory Contract for the Active Stock Master Portfolio was within the ranges of the investment management fee rates for the Other Accounts. The Board noted that any differences between the investment advisory fee rates for the Master Portfolios and the investment advisory/management fee rates for the Other Accounts 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 Contracts 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 Contracts are fair and reasonable.

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BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

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 MIP and the Master Portfolios by BGFA, such as any payment of revenue to BGI, MIP’s securities lending agent, for loaning any portfolio securities, payment of administration fees to BGI, MIP’s administrator, and payment of advisory fees and/or administration fees to BGFA and BGI in connection with any investments by the Master Portfolios in other funds for which BGFA provides investment advisory services and/or BGI provides administration services, as well as the associated voluntary waivers by BGFA and/or its affiliates of these fees, if any. 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 Master Portfolios. The Board further noted that during the past year no portfolio transactions were placed through a BGFA affiliate, as would be required to be reported to and considered by the Board pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

II. LifePath 2050 Master Portfolio

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of MIP (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required to consider the MIP entering into an Investment Advisory Contract with BGFA (the “Advisory Contract”) on behalf of the LifePath 2050 Master Portfolio (the “New Series”). 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 25-26, 2008, the Board approved the selection of BGFA and 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 New Series, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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. The Board anticipated that the scope of services to be provided by BGFA under the Advisory Contract would be consistent with the scope of services provided by BGFA to other LifePath Master Portfolios (the “LifePath Master Portfolios”). In reviewing the scope of services to be provided to the New Series 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 MIP. The Board considered in particular that BGFA’s services for the LifePath Master Portfolios 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 BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the LifePath Master Portfolios. 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 LifePath Master Portfolios. 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 registered investment companies with substantially similar investment objectives and strategies as the LifePath Master Portfolios; therefore, comparative performance information was generally not available with respect to the New Series. Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the New Series under the Advisory Contract were appropriate and supported the Board’s selection of BGFA as investment adviser to the New Series.

76

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

NEW SERIES’ EXPENSES

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 estimated expenses of the New Series in comparison with the same actual information for other funds registered under the 1940 Act objectively selected by Lipper as comprising the New Series’ applicable peer group pursuant to Lipper’s proprietary methodology and registered investment companies that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Group”). 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 New Series. The Board noted that the investment advisory fee rates and overall expense components for the New Series were lower than the median or average investment advisory fee rate and overall estimated expenses of the funds in their respective Lipper Groups. Based on this review, the Board concluded that the investment advisory fees and expense levels of the New Series, as proposed to be managed by BGFA, as compared to the investment advisory fees and expense levels of the funds in the relevant Lipper Group, were satisfactory for the purposes of approving the Advisory Contract.

COSTS OF SERVICES TO BE PROVIDED TO NEW SERIES AND PROFITS TO BE REALIZED BY BGFA AND AFFILIATES

The Board did not consider the profitability of the New Series 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 New Series 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 noted that the Advisory Contract for the New Series does not provide for breakpoints in the investment advisory fee rate as a result of any increases in the asset level of the New Series. However, the Board noted that possible future economies of scale had been taken into consideration by fixing the investment advisory fees at a rate generally at the lower end of that offered in the marketplace for similar products, effectively giving New Series interestholders, from inception, the benefits of the lower average fee interestholders would have received from a fee structure with declining breakpoints where the initial fee was higher. 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 at present reflects the sharing of potential economies of scale with the New Series’ interestholders.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the New Series’ annual investment advisory fee rate under the Advisory Contract in comparison to the investment advisory/management fee rates for other funds/accounts with substantially similar investment objectives and strategies, for which BGFA (or its affiliate, BGI) provides investment advisory/management services, including collective funds and separate accounts (together, the “Other Accounts”). The Board noted that BGFA had provided information distinguishing the level of services provided to the Other Accounts from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services expected to be provided to the New Series to the nature and extent of services provided to the Other Accounts, including, among other things, the level of complexity in managing the New Series and the Other Accounts under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rate under the New Series’ Advisory Contract was within the ranges of the investment management fee rates for the Other Accounts. The Board noted that any differences between the investment advisory fee rate for the New Series and the investment advisory/management fee rates for the Other Accounts 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, as well as the discussions described above in connection with the Lipper Group comparisons, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services expected to

77

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

be rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rate under the Advisory Contract is fair and reasonable.

OTHER BENEFITS TO BGFA AND/OR ITS AFFILIATES

Except as noted below, the Board did not consider any ancillary revenue actually received by BGFA and/or its affiliates in connection with the services to be provided to the New Series 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 New Series. The Board did, however, consider the potential for revenue to BGI, MIP’s securities lending agent, in the event of any loaning of portfolio securities of the New Series. The Board further noted that any portfolio transactions on behalf of the New Series placed through a BGFA affiliate will be reported to the Board pursuant to Rule 17e-1 under the 1940 Act.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rate thereunder, is fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the New Series and their shareholders to approve the Advisory Contract.

78

TABLE OF CONTENTS

Shareholder Expenses	1
Barclays Global Investors Funds
Financial Statements	2
Financial Highlights	6
Notes to Financial Statements	10
Master Investment Portfolio
Schedules of Investments	13
Government Money Market Master Portfolio	13
Money Market Master Portfolio	14
Prime Money Market Master Portfolio	19
Treasury Money Market Master Portfolio	22
Portfolio Allocations	23
Financial Statements	24
Notes to Financial Statements	26
Board Review and Approval of Investment Advisory Contracts	30

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Government Money Market
Institutional Shares
Actual	$1,000.00	$1,013.60	0.05	%	$0.25
Hypothetical (5% return before expenses)	1,000.00	1,024.60	0.05		0.25
Institutional Money Market
Institutional Shares
Actual	1,000.00	1,016.70	0.12		0.60
Hypothetical (5% return before expenses)	1,000.00	1,024.30	0.12		0.60
Prime Money Market
Institutional Shares
Actual	1,000.00	1,016.80	0.09		0.45
Hypothetical (5% return before expenses)	1,000.00	1,024.40	0.09		0.45
Treasury Money Market
Institutional Shares
Actual	1,000.00	1,011.20	0.03		0.15
Hypothetical (5% return before expenses)	1,000.00	1,024.70	0.03		0.15

^(a) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(b) Expenses are calculated using each Fund’s annualized expense ratio of the Institutional Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Fund		Institutional Money Market Fund		Prime Money Market Fund		Treasury Money Market Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	111,317,179	$	2,357,681,486	$	13,140,946,089	$	49,034,301
Total Assets		111,317,179		2,357,681,486		13,140,946,089		49,034,301
LIABILITIES
Payables:
Distribution to shareholders		192,305		6,979,789		27,632,310		78,678
Administration fees (Note 2)		6,114		213,750		740,030		1,891
Distribution fees – Aon Captives Shares (Note 2)		—		23,081		—		—
Accrued expenses:
Professional fees (Note 2)		5,649		13,840		17,277		5,613
Independent trustees’ fees (Note 2)		61		857		964		49
Total Liabilities		204,129		7,231,317		28,390,581		86,231
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Net assets consist of:
Paid-in capital	$	111,113,050	$	2,350,387,203	$	13,112,079,273	$	48,948,070
Undistributed net investment income		—		400		146		—
Undistributed net realized gain		—		62,566		476,089		—
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Aon Captives Shares
Net Assets	$	—	$	98,066,537	$	—	$	—
Shares outstanding(a)		—		98,065,035		—		—
Net asset value and offering price per share	$	—	$	1.00	$	—	$	—
Capital Shares
Net Assets	$	100,000	$	100,000	$	144,023,946	$	100,000
Shares outstanding(a)		100,000		100,000		144,023,937		100,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Institutional Shares
Net Assets	$	11,715,262	$	1,748,872,052	$	9,707,477,952	$	15,814,810
Shares outstanding(a)		11,715,262		1,748,837,223		9,707,137,602		15,814,810
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Premium Shares
Net Assets	$	98,322,680	$	430,878,939	$	3,184,486,804	$	21,216,341
Shares outstanding(a)		98,322,680		430,856,442		3,184,363,836		21,216,341
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Select Shares
Net Assets	$	925,108	$	6,560,362	$	76,516,806	$	11,766,919
Shares outstanding(a)		925,108		6,560,291		76,503,898		11,766,919
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Trust Shares
Net Assets	$	50,000	$	65,972,279	$	50,000	$	50,000
Shares outstanding(a)		50,000		65,972,001		50,000		50,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Fund			Institutional Money Market Fund			Prime Money Market Fund			Treasury Money Market Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Interest	$	2,265,183		$	79,899,651		$	212,905,601		$	1,643,838
Expenses(a)		(5,131	)		(1,599,953	)		(2,691,437	)		(1,723	)
Net investment income allocated from corresponding Master Portfolio		2,260,052			78,299,698			210,214,164			1,642,115
FUND EXPENSES (Note 2)
Administration fees		69,556			1,618,474			4,013,896			48,302
Distribution fees – Aon Captives Shares		—			44,777			—			—
Professional fees		5,908			11,009			15,282			5,908
Independent trustees’ fees		911			21,852			51,883			789
Total fund expenses		76,375			1,696,112			4,081,061			54,999
Less expense reductions (Note 2)		(21,316	)		(33,500	)		(316,393	)		(19,749	)
Net fund expenses		55,059			1,662,612			3,764,668			35,250
Net investment income		2,204,993			76,637,086			206,449,496			1,606,865
REALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain		—			54,453			465,491			—
Net realized gain		—			54,453			465,491			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,204,993		$	76,691,539		$	206,914,987		$	1,606,865

^(a) Net of investment advisory fee reductions in the amounts of $80,644, $708,796, $1,987,163 and $75,523, respectively.

The accompanying notes are an integral part of these financial statements.

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Fund						Institutional Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,204,993		$	7,312,759		$	76,637,086		$	339,579,002
Net realized gain		—			—			54,453			8,933
Net increase in net assets resulting from operations		2,204,993			7,312,759			76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		—			—			(1,441,790	)		(4,052,238	)
Capital Shares(a)		(485	)		—			(611	)		—
Institutional Shares		(597,932	)		(1,172,179	)		(50,072,921	)		(245,584,218	)
Premium Shares		(1,558,004	)		(4,856,791	)		(23,957,127	)		(82,147,008	)
Select Shares		(47,980	)		(1,279,756	)		(103,036	)		(326,865	)
Trust Shares		(592	)		(4,033	)		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(2,204,993	)		(7,312,759	)		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		—			—			7,873,281			21,109,582
Capital Shares(a)		100,000			—			100,000			—
Institutional Shares		8,684,533			2,635,467			(4,904,900,026	)		2,455,028,191
Premium Shares		8,498,952			(33,708,376	)		(315,719,969	)		(574,454,848	)
Select Shares		(13,344,330	)		(28,413,242	)		1,753,077			3,578,273
Trust Shares		—			(57,892	)		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		3,939,155			(59,544,043	)		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		3,939,155			(59,544,043	)		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		107,173,895			166,717,938			7,581,092,352			5,787,558,343
End of period	$	111,113,050		$	107,173,895		$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	Prime Money Market Fund						Treasury Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	206,449,496		$	501,618,559		$	1,606,865		$	7,891,235
Net realized gain		465,491			10,598			—			—
Net increase in net assets resulting from operations		206,914,987			501,629,157			1,606,865			7,891,235
Distributions to shareholders:
From net investment income:
Capital Shares(a)		(304,828	)		—			(413	)		—
Institutional Shares		(152,251,591	)		(395,738,229	)		(1,089,037	)		(6,006,336	)
Premium Shares		(50,979,387	)		(98,980,240	)		(434,307	)		(513,487	)
Select Shares		(2,912,940	)		(6,958,678	)		(82,607	)		(1,367,486	)
Trust Shares		(750	)		(4,135	)		(501	)		(3,926	)
Total distributions to shareholders		(206,449,496	)		(501,681,282	)		(1,606,865	)		(7,891,235	)
Capital share transactions (Note 3):
Capital Shares(a)		144,023,937			—			100,000			—
Institutional Shares		1,343,357,622			2,447,990,425			(115,375,464	)		4,672,699
Premium Shares		1,388,887,780			243,844,111			(40,296,904	)		59,401,698
Select Shares		(191,848,386	)		246,709,511			1,716,919			(45,868,956	)
Trust Shares		—			(58,148	)		—			(57,775	)
Net increase (decrease) in net assets resulting from capital share transactions		2,684,420,953			2,938,485,899			(153,855,449	)		18,147,666
Increase (decrease) in net assets		2,684,886,444			2,938,433,774			(153,855,449	)		18,147,666
NET ASSETS:
Beginning of period		10,427,669,064			7,489,235,290			202,803,519			184,655,853
End of period	$	13,112,555,508		$	10,427,669,064		$	48,948,070		$	202,803,519
Undistributed net investment income included in net assets at end of period	$	146		$	146		$	—		$	—

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Government Money Market Fund – Institutional Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.36	%(b)		5.15	%		5.04	%		3.28	%		0.64	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	11,715		$	3,031		$	395		$	169,200		$	448,100
Ratio of expenses to average net assets(c)		0.05	%		0.12	%		0.12	%		0.03	%		0.00	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.17	%		0.18	%		0.16	%		0.12	%		0.12	%
Ratio of net investment income to average net assets(c)		3.16	%		4.67	%		4.75	%		3.04	%		1.93	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Institutional Money Market Fund – Institutional Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01			0.01
Net realized gain (loss)		0.00	(a)		0.00	(a)		0.00	(a)		(0.00	)(a)		(0.00	)(a)		0.00	(a)
Total from investment operations		0.02			0.05			0.05			0.03			0.01			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net realized gain		—			—			—			—			—			(0.00	)(a)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.67	%(b)		5.36	%		5.11	%		3.29	%		1.39	%		1.14	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	1,748,872		$	6,653,737		$	4,198,724		$	3,485,876		$	3,624,503		$	3,998,225
Ratio of expenses to average net assets(c)		0.12	%		0.11	%		0.10	%		0.05	%		0.06	%		0.12	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.15	%		0.16	%		0.14	%		0.12	%		0.12	%		n/a
Ratio of net investment income to average net assets(c)		3.37	%		5.25	%		4.97	%		3.26	%		1.37	%		1.13	%

^(a) Rounds to less than $0.01.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Prime Money Market Fund – Institutional Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Period from Apr. 16, 2003(a) to Dec. 31, 2003
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01			0.01
Net realized gain (loss)		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		(0.00	)(b)
Total from investment operations		0.02			0.05			0.05			0.03			0.01			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net realized gain		—			—			—			—			(0.00	)(b)		(0.00	)(b)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.68	%(c)		5.32	%		5.07	%		3.26	%		1.40	%		0.80	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	9,707,478		$	8,363,790		$	5,915,836		$	6,521,818		$	6,000,944		$	2,967,075
Ratio of expenses to average net assets(d)		0.09	%		0.12	%		0.11	%		0.08	%		0.04	%		0.03	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.15	%		0.15	%		0.14	%		0.12	%		0.12	%		n/a
Ratio of net investment income to average net assets(d)		3.29	%		5.19	%		4.93	%		3.28	%		1.45	%		1.10	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Treasury Money Market Fund – Institutional Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.12	%(b)		4.95	%		5.04	%		3.20	%		0.61	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	15,815		$	131,190		$	126,518		$	100,343		$	100
Ratio of expenses to average net assets(c)		0.03	%		0.04	%		0.00	%		0.00	%		0.00	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.17	%		0.18	%		0.19	%		0.12	%		0.12	%
Ratio of net investment income to average net assets(c)		2.32	%		4.74	%		5.03	%		4.03	%		1.82	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Institutional Shares of the Government Money Market Fund (the “GMMF”), Institutional Money Market Fund (the “IMMF”), Prime Money Market Fund (the “PMMF”) and Treasury Money Market Fund (the “TMMF”), (each, a “Fund,” collectively, the “Funds”). In addition, the GMMF, PMMF and TMMF offer Capital Shares, Premium Shares, Select Shares and Trust Shares. The IMMF also offers Aon Captives Shares, Capital Shares, Premium Shares, Select Shares and Trust Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (100.00%, 7.57%, 91.95% and 100.00% for the GMMF, IMMF, PMMF and TMMF, respectively, as of June 30, 2008).

Effective January 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, use of amortized cost, 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized,

10

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

Each Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Funds will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Funds are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

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 June 30, 2008.

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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. The IMMF has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. This fee is an expense of the Aon Captives Shares only; SEI does not receive a fee from the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares of the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.05% of the average daily net assets of each Fund’s Institutional Shares. From time to time, BGI may waive such fees in whole or in part. Any

11

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees of $4,692, $21,361, $218,974 and $12,783 for the Institutional Shares of the GMMF, IMMF, PMMF and TMMF, respectively.

Each Master Portfolio of MIP and other investment companies managed by Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser, may invest in the Institutional Shares of the Funds.

Certain officers and trustees of the Trust are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Institutional Shares of the Funds were as follows:

	Six Months Ended June 30, 2008 (Unaudited)					Year Ended December 31, 2007
Fund	Shares		Amount			Shares		Amount
Government Money Market
Shares sold	650,460,875		$	650,460,875		1,144,619,699		$	1,144,619,699
Shares issued in reinvestment of dividends and distributions	100,139			100,139		106,812			106,812
Shares redeemed	(641,876,481	)		(641,876,481	)	(1,142,091,044	)		(1,142,091,044	)
Net increase	8,684,533		$	8,684,533		2,635,467		$	2,635,467
Institutional Money Market
Shares sold	21,330,068,467		$	21,330,068,467		64,235,452,702		$	64,235,452,702
Shares issued in reinvestment of dividends and distributions	19,053,958			19,053,958		101,090,313			101,090,313
Shares redeemed	(26,254,022,451	)		(26,254,022,451	)	(61,881,514,824	)		(61,881,514,824	)
Net increase (decrease)	(4,904,900,026	)	$	(4,904,900,026	)	2,455,028,191		$	2,455,028,191
Prime Money Market
Shares sold	38,813,444,202		$	38,813,444,202		68,291,293,195		$	68,291,293,195
Shares issued in reinvestment of dividends and distributions	41,579,617			41,579,617		166,203,742			166,203,742
Shares redeemed	(37,511,666,197	)		(37,511,666,197	)	(66,009,506,512	)		(66,009,506,512	)
Net increase	1,343,357,622		$	1,343,357,622		2,447,990,425		$	2,447,990,425
Treasury Money Market
Shares sold	247,605,554		$	247,605,554		1,067,993,360		$	1,067,993,360
Shares issued in reinvestment of dividends and distributions	265,146			265,146		274,888			274,888
Shares redeemed	(363,246,164	)		(363,246,164	)	(1,063,595,549	)		(1,063,595,549	)
Net increase (decrease)	(115,375,464	)	$	(115,375,464	)	4,672,699		$	4,672,699

12

GOVERNMENT MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.00%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $26,001,806 (collateralized by U.S. government obligations, value $26,520,000, 5.00%, 3/1/34).	$	26,000,000	$	26,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $10,000,694 (collateralized by U.S. government obligations, value $10,200,000, 5.50%, 3/1/35).		10,000,000		10,000,000
Credit Suisse First Boston Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $16,101,118 (collateralized by U.S. government obligations, value $16,422,655, 4.62% to 5.79%, 4/1/35 to 10/1/37).		16,100,000		16,100,000
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $23,216,548 (collateralized by U.S. government obligations, value $23,679,300, 5.50% to 7.00%, 4/15/28 to 4/15/38).		23,215,000		23,215,000
Lehman Brothers Holdings Inc. Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $26,001,733 (collateralized by U.S. government obligations, value $26,524,289, 5.50%, 6/1/37).		26,000,000		26,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.74%, dated 6/30/08, due 7/1/08, maturity value $10,000,761 (collateralized by U.S. government obligations, value $10,302,489, 5.50% to 6.50%, 12/25/35 to 8/25/36).		10,000,000		10,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $111,315,000)				111,315,000
TOTAL INVESTMENTS IN SECURITIES – 100.00%
(Cost: $111,315,000)				111,315,000
Other Assets, Less Liabilities – 0.00%				2,179
NET ASSETS – 100.00%			$	111,317,179

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury Services PLC
2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

14

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$	488,371,000	$	486,537,574
2.67%, 07/25/08(a)		125,000,000		124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)		100,000,000		99,927,778
2.72%, 08/15/08(a)		136,137,000		135,674,134
Royal Bank of Scotland
2.87%, 08/01/08		150,000,000		149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)		145,000,000		144,905,750
Thames Asset Global Securitization No. 1 Inc.
2.58%, 07/09/08(a)		160,741,000		160,648,842
2.75%, 07/07/08(a)		200,000,000		199,908,333
2.78%, 08/15/08(a)		100,000,000		99,652,500
2.80%, 07/17/08(a)		150,000,000		149,813,334
2.80%, 08/07/08(a)		160,000,000		159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)		175,000,000		174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)		150,000,000		149,820,000
2.75%, 07/15/08(a)		82,008,000		81,920,297
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		100,000,000		99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)		110,000,000		109,610,417
2.60%, 09/04/08(a)		100,000,000		99,530,556
2.87%, 07/18/08(a)		125,000,000		124,830,590
Westpac Banking Corp.
2.62%, 03/06/09		250,000,000		245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09		200,000,000		196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)		200,000,000		199,871,500
2.57%, 07/22/08(a)		250,000,000		249,625,208
2.70%, 08/14/08(a)		145,000,000		144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)		130,973,000		130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)				11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09		250,000,000		250,000,000
Federal National Mortgage Association
2.30%, 12/18/08		330,000,000		326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)		300,000,000		300,000,000
US Bank N.A.
2.60%, 02/19/09		300,000,000		300,000,000
2.70%, 09/08/08		150,000,000		150,000,000
2.75%, 01/05/09		330,000,000		330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)				1,656,415,833

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$	40,000,000	$	40,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).		90,000,000		90,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).		465,000,000		465,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).		485,000,000		485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).		300,000,000		300,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).		1,040,000,000		1,040,000,000
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).		175,000,000		175,000,000
Goldman Sachs & Co. Tri-Party 2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)		150,000,000		150,000,000

15

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party 2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party 2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale
2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037

16

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Allstate Life Global Funding Trusts
2.48%, 09/04/08	$	125,000,000	$	124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504
American Express Bank FSB
2.50%, 06/12/09		50,000,000		49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd. London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000

Security	Face Amount		Value
Jordan Brick Co. Inc.
2.58%, 07/02/08	$	45,220,000	$	45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976
Kommunalkredit Austria AG
2.46%, 08/08/08(a)		40,000,000		40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000

17

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)	$	54,273,000	$	54,273,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		187,623,000		187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

18

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 13.21%
Banco Bilbao Vizcaya Argentaria SA
4.57%, 07/03/08	$	175,000,000	$	175,019,603
Bank of Nova Scotia
2.51%, 04/01/09		150,000,000		150,011,134
3.00%, 01/29/09		75,000,000		74,975,587
Bank of Scotland
4.98%, 07/07/08		135,000,000		135,000,000
BNP Paribas
2.58%, 08/20/08		92,500,000		92,499,953
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		200,000,000		200,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		110,000,000		110,000,000
5.40%, 07/10/08		100,000,000		100,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		85,000,000		85,000,000
Fortis Bank NY
2.41%, 10/02/08		30,000,000		29,973,436
Rabobank Nederland NV
2.54%, 08/22/08		50,000,000		50,002,871
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,391
2.64%, 04/09/09		75,000,000		75,002,861
Societe Generale NY
4.51%, 11/21/08		25,000,000		25,000,950
SunTrust Banks Inc.
2.50%, 07/17/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		75,000,000		75,000,000
UniCredito Italiano NY
2.95%, 12/08/08		85,000,000		85,001,860
Wachovia Bank N.A.
2.92%, 01/12/09		5,000,000		5,002,025
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $1,887,493,179)				1,887,493,179
COMMERCIAL PAPER – 41.01%
Amstel Funding Corp.
2.85%, 07/08/08(a)		175,000,000		174,903,021
2.95%, 07/28/08(a)		160,000,000		159,646,000
2.95%, 08/04/08(a)		50,000,000		49,860,694
3.00%, 07/18/08(a)		100,000,000		99,858,333
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
Bank of Scotland
2.65%, 07/09/08		125,000,000		124,926,389
CAFCO LLC
2.52%, 07/14/08(a)		250,000,000		249,772,500
2.52%, 07/28/08(a)		75,000,000		74,858,250
2.55%, 07/14/08(a)		71,200,000		71,134,437

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.55%, 07/09/08(a)	$	100,000,000	$	99,943,333
2.60%, 07/14/08(a)		100,000,000		99,906,111
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
2.95%, 08/01/08(a)		150,000,000		149,618,959
Chariot Funding LLC
2.50%, 07/21/08(a)		100,000,000		99,861,111
2.55%, 07/14/08(a)		166,580,000		166,426,608
2.55%, 08/22/08(a)		75,497,000		75,218,919
Charta LLC
2.54%, 07/28/08(a)		250,000,000		249,523,750
2.54%, 07/30/08(a)		50,000,000		49,897,695
CRC Funding LLC
2.59%, 07/30/08(a)		125,000,000		124,739,202
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		100,000,000		99,721,944
Falcon Asset Securitization Co. LLC
2.43%, 07/08/08(a)		125,277,000		125,217,807
2.60%, 07/18/08(a)		175,000,000		174,785,139
General Electric Capital Corp.
2.45%, 08/01/08		100,000,000		99,789,028
3.92%, 10/03/08		125,000,000		123,720,555
4.39%, 08/25/08		60,000,000		59,597,584
General Electric Capital Services Inc.
4.39%, 08/25/08		60,000,000		59,597,584
Govco Inc.
2.65%, 08/25/08(a)		134,250,000		133,706,474
Grampian Funding LLC
2.68%, 07/14/08(a)		200,000,000		199,806,444
2.75%, 07/10/08(a)		100,000,000		99,931,250
Jupiter Securitization Corp.
2.50%, 07/21/08(a)		75,000,000		74,895,833
2.55%, 08/22/08(a)		110,728,000		110,320,152
2.65%, 07/22/08(a)		100,000,000		99,845,417
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		100,000,000		99,931,945
Nationwide Building Society
2.95%, 08/01/08		100,000,000		99,745,971
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		75,000,000		74,970,000
Ranger Funding Co. LLC
2.67%, 07/25/08(a)		75,000,000		74,866,500
Royal Bank of Scotland
2.87%, 08/01/08		100,000,000		99,752,861
Solitaire Funding Ltd.
2.60%, 07/11/08(a)		250,000,000		249,819,445
Thames Asset Global Securitization No. 1 Inc.
2.80%, 07/07/08(a)		136,477,000		136,413,311
2.80%, 07/17/08(a)		100,000,000		99,875,556
2.80%, 07/21/08(a)		30,879,000		30,830,966
2.82%, 07/18/08(a)		58,572,000		58,494,002
Thunder Bay Funding LLC
2.55%, 07/16/08(a)		153,647,000		153,483,750
2.57%, 07/11/08(a)		103,799,000		103,724,899

19

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ticonderoga Master Funding Ltd.
2.50%, 07/02/08(a)	$	102,420,000	$	102,412,887
Tulip Funding Corp.
2.60%, 07/08/08(a)		100,000,000		99,949,444
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		50,000,000		49,737,292
Variable Funding Capital Corp.
2.87%, 07/18/08(a)		125,000,000		124,830,590
Yorktown Capital LLC
2.55%, 07/22/08(a)		121,320,000		121,139,536
2.67%, 07/24/08(a)		100,000,000		99,829,417
2.80%, 07/18/08(a)		125,119,000		124,953,565
TOTAL COMMERCIAL PAPER
(Cost: $5,860,539,557)				5,860,539,557
MEDIUM-TERM NOTES – 4.96%
ASIF Global Financing
3.90%, 10/22/08(a)		15,670,000		15,616,123
Berkshire Hathaway Finance Corp.
3.38%, 10/15/08		65,200,000		65,309,904
Federal National Mortgage Association
2.30%, 12/18/08		170,000,000		168,153,611
MassMutual Global Funding II
3.80%, 04/15/09(a)		40,000,000		40,395,644
Metropolitan Life Global Funding I
3.80%, 01/20/09(a)		250,000,000		250,000,000
US Bank N.A.
2.75%, 01/05/09		170,000,000		170,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $709,475,282)				709,475,282
REPURCHASE AGREEMENTS – 14.62%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50%, 6/1/33).		40,000,000		40,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $400,030,222 (collateralized by non-U.S. government debt securities, value $440,000,000, 0.00% to 10.00%, 2/23/36).		400,000,000		400,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $175,012,882 (collateralized by non-U.S. government debt securities, value $180,251,815, 3.21% to 7.71%, 11/1/08 to 10/15/36).		175,000,000		175,000,000

Security	Face Amount		Value
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $125,009,549 (collateralized by non-U.S. government debt securities, value $128,753,713, 4.65% to 7.75%, 2/15/10 to 10/1/66).	$	125,000,000	$	125,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $300,022,333 (collateralized by non-U.S. government debt securities, value $315,000,000, 0.00% to 16.07%, 2/25/09 to 2/10/51).		300,000,000		300,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $375,027,083 (collateralized by non-U.S. government debt securities, value $393,751,820, 0.00% to 12.87%, 1/15/13 to 6/11/50).		375,000,000		375,000,000
J.P. Morgan Securities Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $250,019,097 (collateralized by U.S. government obligations, value $255,001,131, 5.00% to 6.00%, 1/1/36 to 10/1/36).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $100,007,222 (collateralized by U.S. government obligations, value $102,000,291, 4.50% to 6.00%, 11/1/16 to 4/1/28).		100,000,000		100,000,000
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $125,072,917 (collateralized by non-U.S. government debt securities, value $131,254,412, 1.63% to 14.88%, 10/1/08 to 12/20/54).		125,000,000		125,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $211,970,792, 0.00% to 10.00%, 5/18/10 to 12/20/49).		200,000,000		200,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $2,090,000,000)				2,090,000,000

20

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
TIME DEPOSITS – 0.48%
Societe Generale
2.50%, 07/01/08	$	67,882,000	$	67,882,000
TOTAL TIME DEPOSITS
(Cost: $67,882,000)				67,882,000
VARIABLE & FLOATING RATE NOTES – 25.44%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		160,000,000		160,001,148
2.52%, 11/07/08(a)		58,000,000		58,001,937
2.53%, 11/14/08(a)		85,000,000		85,006,654
Allstate Life Global Funding Trusts
2.48%, 09/04/08		45,000,000		45,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Bank of America N.A.
3.21%, 07/02/09		75,000,000		75,000,000
Bank of Ireland
2.67%, 09/12/08(a)		35,000,000		35,000,000
Citigroup Global Markets Holdings Inc.
2.65%, 10/21/08		350,000,000		350,000,000
DEPFA Bank PLC
2.84%, 07/14/08		50,000,000		50,000,000
Deutsche Bank AG
2.43%, 09/30/08		100,000,000		100,000,000
Dexia Credit SA NY
2.43%, 09/29/08		31,770,000		31,726,677
General Electric Capital Corp.
2.50%, 04/24/09		65,000,000		65,000,000
2.77%, 01/05/09		13,800,000		13,788,118
2.82%, 03/16/09		2,900,000		2,897,070
2.88%, 06/15/09		25,000,000		24,995,767
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		125,000,000		125,000,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,000,000
ING Bank NV
3.16%, 06/17/09(a)		100,000,000		100,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		65,000,000		65,000,000
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
Metropolitan Life Global Funding I
2.50%, 11/06/08(a)		139,680,000		139,681,688
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
3.00%, 07/25/08(b)		50,000,000		50,000,000
Metropolitan Life Insurance Funding
3.02%, 04/01/09(a)(b)		15,000,000		15,000,000
Monumental Global Funding III
2.79%, 08/29/08(a)		50,000,000		50,000,000
Morgan Stanley
2.61%, 12/03/08		100,000,000		100,000,000

Security	Face Amount		Value
National Australia Bank Ltd.
2.88%, 03/06/09(a)	$	75,000,000	$	74,866,757
Nationwide Building Society
2.51%, 10/06/08(a)		135,000,000		135,003,930
2.88%, 10/27/08(a)		50,000,000		50,000,000
Rabobank Nederland NV NY
2.66%, 11/14/08(a)		140,000,000		140,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		100,000,000		100,000,000
Royal Bank of Scotland PLC
2.87%, 07/21/08(a)		20,000,000		20,000,515
Societe Generale
2.46%, 08/29/08(a)		5,000,000		4,998,696
Toyota Motor Credit Corp.
2.06%, 10/20/08		25,000,000		24,955,173
Toyota Motor Credit Corp. Series 1
2.53%, 01/12/09		200,000,000		200,000,000
UBS AG Stamford
2.46%, 08/15/08		100,000,000		100,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)		23,000,000		23,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		80,000,000		80,000,000
Wachovia Bank N.A.
2.65%, 10/03/08		31,200,000		31,193,095
2.84%, 03/23/09		50,000,000		49,853,708
2.91%, 05/01/09		250,000,000		250,000,000
2.99%, 11/25/08		40,000,000		39,995,084
Wells Fargo & Co.
3.55%, 05/01/09		50,000,000		50,021,111
Westpac Banking Corp.
2.92%, 06/10/09		175,000,000		175,000,000
World Savings Bank FSB
2.80%, 05/08/09		3,100,000		3,081,978
2.81%, 03/02/09		2,600,000		2,590,079
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $3,635,665,995)				3,635,665,995
TOTAL INVESTMENTS IN SECURITIES – 99.72%
(Cost: $14,251,056,013)				14,251,056,013
Other Assets, Less Liabilities – 0.28%				40,280,226
NET ASSETS – 100.00%			$	14,291,336,239

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

21

TREASURY MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.01%
Banc of America Securities LLC Tri-Party 1.50%, dated 6/30/08, due 7/1/08, maturity value $8,200,342 (collateralized by U.S. government obligations, value $8,364,029, 4.88%, 8/31/08).	$	8,200,000	$	8,200,000
Credit Suisse First Boston Tri-Party 1.75%, dated 6/30/08, due 7/1/08, maturity value $8,200,399 (collateralized by U.S. government obligations, value $8,367,816, 4.88%, 5/31/09).		8,200,000		8,200,000
Goldman Sachs Group Inc. (The) Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $8,938,310 (collateralized by U.S. government obligations, value $9,116,862, 8.75%, 5/15/20).		8,938,000		8,938,000
Lehman Brothers Holdings Inc. Tri-Party 0.25%, dated 6/30/08, due 7/1/08, maturity value $8,200,057 (collateralized by U.S. government obligations, value $8,369,933, 7.13%, 2/15/23).		8,200,000		8,200,000
Merrill Lynch & Co. Inc. Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $15,500,538 (collateralized by U.S. government obligations, value $15,815,611, 4.13% to 5.25%, 9/1/09 to 9/15/17).		15,500,000		15,500,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $49,038,000)				49,038,000
TOTAL INVESTMENTS IN SECURITIES – 100.01%
(Cost: $49,038,000)				49,038,000
Other Assets, Less Liabilities – (0.01)%				(3,699	)
NET ASSETS – 100.00%			$	49,034,301

The accompanying notes are an integral part of these financial statements.

22

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Government Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	111,315,000		100.00	%
Other Net Assets		2,179		0.00
TOTAL	$	111,317,179		100.00	%
Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	11,932,235,376		38.29	%
Variable & Floating Rate Notes		7,855,885,973		25.21
Repurchase Agreements		6,175,000,000		19.82
Certificates of Deposit		3,300,008,879		10.59
Medium-Term Notes		1,656,415,833		5.32
Time Deposits		178,626,000		0.57
Other Net Assets		62,281,372		0.20
TOTAL	$	31,160,453,433		100.00	%
Prime Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	5,860,539,557		41.01	%
Variable & Floating Rate Notes		3,635,665,995		25.44
Repurchase Agreements		2,090,000,000		14.62
Certificates of Deposit		1,887,493,179		13.21
Medium-Term Notes		709,475,282		4.96
Time Deposits		67,882,000		0.48
Other Net Assets		40,280,226		0.28
TOTAL	$	14,291,336,239		100.00	%
Treasury Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	49,038,000		100.01	%
Other Net Assets		(3,699	)	(0.01	)
TOTAL	$	49,034,301		100.00	%

These tables are not part of the financial statements.

23

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio		Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio
ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	—	$	24,923,172,061	$	12,161,056,013	$	—
Repurchase agreements, at value and cost (Note 1)		111,315,000		6,175,000,000		2,090,000,000		49,038,000
Total investments		111,315,000		31,098,172,061		14,251,056,013		49,038,000
Cash		151		11		625		32
Receivables:
Interest		7,660		64,201,148		41,181,122		1,646
Due from investment adviser		1,057		—		—		1,265
Total Assets		111,323,868		31,162,373,220		14,292,237,760		49,040,943
LIABILITIES
Payables:
Investment advisory fees (Note 2)		—		1,885,710		879,693		—
Accrued expenses:
Professional fees (Note 2)		6,629		28,358		20,542		6,594
Independent trustees’ fees (Note 2)		60		5,719		1,286		48
Total Liabilities		6,689		1,919,787		901,521		6,642
NET ASSETS	$	111,317,179	$	31,160,453,433	$	14,291,336,239	$	49,034,301

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio			Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio
NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	2,265,184		$	552,894,094		$	229,517,108		$	1,643,838
Total investment income		2,265,184			552,894,094			229,517,108			1,643,838
EXPENSES (Note 2)
Investment advisory fees		78,214			16,228,714			6,794,100			69,807
Professional fees		6,650			30,871			16,461			6,650
Independent trustees’ fees		911			139,013			56,250			789
Total expenses		85,775			16,398,598			6,866,811			77,246
Less expense reductions (Note 2)		(80,644	)		(5,038,498	)		(3,962,835	)		(75,523	)
Net expenses		5,131			11,360,100			2,903,976			1,723
Net investment income		2,260,053			541,533,994			226,613,132			1,642,115
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		—			(2,995,721	)		(290,351	)		—
Payment from affiliate (Note 2)		—			3,399,402			814,069			—
Net realized gain		—			403,681			523,718			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,260,053		$	541,937,675		$	227,136,850		$	1,642,115

The accompanying notes are an integral part of these financial statements.

24

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Master Portfolio						Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,260,053		$	7,459,087		$	541,533,994		$	1,082,958,398
Net realized gain		—			—			403,681			42,548
Net increase in net assets resulting from operations		2,260,053			7,459,087			541,937,675			1,083,000,946
Interestholder transactions:
Contributions		1,558,317,449			1,739,584,764			24,050,846,582			66,603,193,729
Withdrawals		(1,557,095,598	)		(1,806,493,585	)		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		1,221,851			(66,908,821	)		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		3,481,904			(59,449,734	)		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		107,835,275			167,285,009			31,492,403,778			6,924,964,889
End of period	$	111,317,179		$	107,835,275		$	31,160,453,433		$	31,492,403,778
	Prime Money Market Master Portfolio						Treasury Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	226,613,132		$	559,112,567		$	1,642,115		$	7,969,862
Net realized gain		523,718			11,956			—			—
Net increase in net assets resulting from operations		227,136,850			559,124,523			1,642,115			7,969,862
Interestholder transactions:
Contributions		58,414,645,861			99,288,703,149			384,220,217			1,637,092,248
Withdrawals		(55,372,727,474	)		(97,098,629,295	)		(540,250,452	)		(1,627,123,957	)
Net increase (decrease) in net assets resulting from interestholder transactions		3,041,918,387			2,190,073,854			(156,030,235	)		9,968,291
Increase (decrease) in net assets		3,269,055,237			2,749,198,377			(154,388,120	)		17,938,153
NET ASSETS:
Beginning of period		11,022,281,002			8,273,082,625			203,422,421			185,484,268
End of period	$	14,291,336,239		$	11,022,281,002		$	49,034,301		$	203,422,421

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolios use the amortized cost method of valuation to determine the value of their portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolios’ net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolios’ amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Master Portfolios’ 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.

26

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Government Money Market	$	—	$	111,315,000	$	—	$	111,315,000
Money Market		—		31,098,172,061		—		31,098,172,061
Prime Money Market		—		14,251,056,013		—		14,251,056,013
Treasury Money Market		—		49,038,000		—		49,038,000

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolios amortize premium and accrete discount using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

In the case of Master Portfolios with only one interestholder, such as the Government Money Market and Treasury Money Market Master Portfolios, MIP believes that such Master Portfolios will not be treated as a separate entity for federal income tax purposes, and, therefore, will not be subject to any federal income tax on their income and gains (if any). Rather, such Master Portfolios’ assets and interest, dividends and gains or losses will be treated as assets and interest, dividends and gains or losses of the interestholders.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolios’ costs of investments for federal income tax purposes were the same as for financial reporting purposes.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

REPURCHASE AGREEMENTS

The Master Portfolios may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

27

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolios, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of each of the Master Portfolios, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%. From time to time, BGFA may waive an additional portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees of $80,644, $5,038,498, $3,962,835 and $75,523 for the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Prime Money Market Master Portfolio and Money Market Master Portfolio for cash at $34,998,569 and $181,990,742, respectively, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statements of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

28

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Government Money Market
Ratio of expenses to average net assets(a)	0.01	%	0.07	%	0.08	%	0.03	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.11	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.89	%	4.93	%	4.90	%	3.16	%	1.93	%(b)	n/a
Total return	1.38	%(c)	5.20	%	5.08	%	3.28	%	0.64	%(b)(c)	n/a
Money Market
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(c)(d)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%
Prime Money Market
Ratio of expenses to average net assets(a)	0.04	%	0.07	%	0.08	%	0.08	%	0.03	%	0.03	%(e)
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%(e)
Ratio of net investment income to average net assets(a)	3.33	%	5.23	%	4.95	%	3.22	%	1.52	%	1.12	%(e)
Total return	1.70	%(c)(d)	5.37	%	5.11	%	3.26	%	1.40	%	0.80	%(c)(e)
Treasury Money Market
Ratio of expenses to average net assets(a)	0.00	%	0.01	%	0.00	%	0.00	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.13	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.35	%	4.81	%	5.03	%	3.99	%	1.82	%(b)	n/a
Total return	1.14	%(c)	4.98	%	5.04	%	3.20	%	0.61	%(b)(c)	n/a

^(a) Annualized for periods of less than one year.

^(b) For the period from September 1, 2004 (commencement of operations) to December 31, 2004.

^(c) Not annualized.

^(d) For the six months ended June 30, 2008, 0.01% of the Master Portfolio’s total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68% for the Money Market Master Portfolio and 1.69% for the Prime Money Market Master Portfolio.

^(e) For the period from April 16, 2003 (commencement of operations) to December 31, 2003.

29

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio, Government Money Market Master Portfolio, and Treasury Money Market Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, as applicable, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Money Market Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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.

30

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

The Board noted that each Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the Master Portfolios were generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolios were generally lower than the overall expenses for the funds in their Lipper Expense Groups, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for certain of the Master Portfolios during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations for the last calendar year. The Board analyzed the Master Portfolios’ expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to certain of the Master Portfolios while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios in comparison with the

31

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolios and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rates under the Master Portfolios’ Advisory Contracts were within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rates for certain of the Master Portfolios and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolios. The Board further noted that the Master Portfolios may, but generally do not, participate in securities lending activities and generally do not execute transactions with affiliated brokers, as do other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

32

Notes:

Notes:

TABLE OF CONTENTS

Shareholder Expenses	1
Institutional Money Market Fund
Financial Statements	2
Financial Highlights	5
Notes to Financial Statements	6
Money Market Master Portfolio
Schedule of Investments	9
Portfolio Allocation	14
Financial Statements	15
Notes to Financial Statements	16
Board Review and Approval of Investment Advisory Contract	19

INSTITUTIONAL MONEY MARKET FUND

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees and other fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.

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

ACTUAL EXPENSES

The first line under the 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 the 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 the Fund in the table below provides information about hypothetical account values and hypothetical expenses based on the 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 the 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. Therefore, the second line under the 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.

	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Aon Captives Shares
Actual	$1,000.00	$1,016.20	0.22	%	$1.10
Hypothetical (5% return before expenses)	1,000.00	1,023.80	0.22		1.11

^(a) This ratio includes net expenses charged to the Money Market Master Portfolio and includes the Fund’s expense reductions during the period.

^(b) Expenses are calculated using the Fund’s annualized expense ratio of the Aon Captives Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

INSTITUTIONAL MONEY MARKET FUND

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

ASSETS
Investment in Money Market Master Portfolio (“Master Portfolio”), at fair value (Note 1)	$	2,357,681,486
Total Assets		2,357,681,486
LIABILITIES
Payables:
Distribution to shareholders		6,979,789
Administration fees (Note 2)		213,750
Distribution fees – Aon Captives Shares (Note 2)		23,081
Accrued expenses:
Professional fees (Note 2)		13,840
Independent trustees’ fees (Note 2)		857
Total Liabilities		7,231,317
NET ASSETS	$	2,350,450,169
Net assets consist of:
Paid-in capital	$	2,350,387,203
Undistributed net investment income		400
Undistributed net realized gain		62,566
NET ASSETS	$	2,350,450,169
Aon Captives Shares
Net Assets	$	98,066,537
Shares outstanding(a)		98,065,035
Net asset value and offering price per share	$	1.00
Capital Shares
Net Assets	$	100,000
Shares outstanding(a)		100,000
Net asset value and offering price per share	$	1.00
Institutional Shares
Net Assets	$	1,748,872,052
Shares outstanding(a)		1,748,837,223
Net asset value and offering price per share	$	1.00
Premium Shares
Net Assets	$	430,878,939
Shares outstanding(a)		430,856,442
Net asset value and offering price per share	$	1.00
Select Shares
Net Assets	$	6,560,362
Shares outstanding(a)		6,560,291
Net asset value and offering price per share	$	1.00
Trust Shares
Net Assets	$	65,972,279
Shares outstanding(a)		65,972,001
Net asset value and offering price per share	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

INSTITUTIONAL MONEY MARKET FUND

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

NET INVESTMENT INCOME ALLOCATED FROM MASTER PORTFOLIO
Interest	$	79,899,651
Expenses(a)		(1,599,953	)
Net investment income allocated from Master Portfolio		78,299,698
FUND EXPENSES (Note 2)
Administration fees		1,618,474
Distribution fees – Aon Captives Shares		44,777
Professional fees		11,009
Independent trustees’ fees		21,852
Total fund expenses		1,696,112
Less expense reductions (Note 2)		(33,500	)
Net fund expenses		1,662,612
Net investment income		76,637,086
REALIZED GAIN (LOSS) ALLOCATED FROM MASTER PORTFOLIO
Net realized gain		54,453
Net realized gain		54,453
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	76,691,539

^(a) Net of investment advisory fee reductions in the amount of $708,796.

The accompanying notes are an integral part of these financial statements.

3

INSTITUTIONAL MONEY MARKET FUND

STATEMENTS OF CHANGES IN NET ASSETS

	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	76,637,086		$	339,579,002
Net realized gain		54,453			8,933
Net increase in net assets resulting from operations		76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		(1,441,790	)		(4,052,238	)
Capital Shares(a)		(611	)		—
Institutional Shares		(50,072,921	)		(245,584,218	)
Premium Shares		(23,957,127	)		(82,147,008	)
Select Shares		(103,036	)		(326,865	)
Trust Shares		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		7,873,281			21,109,582
Capital Shares(a)		100,000			—
Institutional Shares		(4,904,900,026	)		2,455,028,191
Premium Shares		(315,719,969	)		(574,454,848	)
Select Shares		1,753,077			3,578,273
Trust Shares		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		7,581,092,352			5,787,558,343
End of period	$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

INSTITUTIONAL MONEY MARKET FUND

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Aon Captives Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01			0.01
Net realized gain		0.00	(a)		0.00	(a)		0.00	(a)		0.00	(a)		0.00	(a)		0.00	(a)
Total from investment operations		0.02			0.05			0.05			0.03			0.01			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net realized gain		—			—			—			—			—			(0.00	)(a)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.62	%(b)		5.26	%		5.00	%		3.19	%		1.29	%		1.04	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	98,067		$	90,192		$	69,083		$	77,899		$	106,433		$	55,399
Ratio of expenses to average net assets(c)		0.22	%		0.21	%		0.19	%		0.15	%		0.15	%		0.22	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.25	%		0.26	%		0.23	%		0.22	%		0.22	%		n/a
Ratio of net investment income to average net assets(c)		3.22	%		5.12	%		4.86	%		3.07	%		1.35	%		0.97	%

^(a) Rounds to less than $0.01.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

5

INSTITUTIONAL MONEY MARKET FUND

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Aon Captives Shares of the Institutional Money Market Fund (the “Fund”). In addition, the Fund offers Capital Shares, Institutional Shares, Premium Shares, Select Shares and Trust Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by the 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.

INVESTMENT POLICY AND SECURITY VALUATION

The Fund invests all of its assets in the Money Market Master Portfolio (the “Master Portfolio”) of Master Investment Portfolio (“MIP”). The Master Portfolio has the same or substantially similar investment objective as the Fund. The value of the Fund’s investment in the Master Portfolio reflects the Fund’s interest in the net assets of the Master Portfolio (7.57%, as of June 30, 2008).

Effective January 1, 2008, the Fund 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 Fund’s 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

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

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing the Fund’s investment in the Master Portfolio.

The input and method by which the Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of the Fund is directly affected by the performance of the Master Portfolio. The financial statements of the Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized, tabular presentation, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

6

INSTITUTIONAL MONEY MARKET FUND

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Fund will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

The Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of the Master Portfolio. In addition, the Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of the Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Fund are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

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

FEDERAL INCOME TAXES

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

The Fund 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Fund’s financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Fund. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Fund. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Fund.

SEI Investments Distribution Company (“SEI”) is the Fund’s distributor. The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. Under the plan, SEI is entitled to receive an annual fee for these services of 0.10% of the average daily net assets of the Aon Captives Shares. This fee is an expense of the Aon Captives Shares only and is not borne by the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Fund’s transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Fund for which BGI receives a fee paid by the Fund. BGI, in consideration thereof, has agreed to bear all of the Fund’s ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Fund. BGI is entitled to receive for these administration services an annual fee of 0.05% of the average daily net assets of the Fund’s Aon Captives Shares. From time to time, BGI may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

7

INSTITUTIONAL MONEY MARKET FUND

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The fees and expenses of the Fund’s trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Fund. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Fund in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees of $645 for the Aon Captives Shares of the Fund.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolio’s investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Aon Captives Shares of the Fund were as follows:

	Six Months Ended June 30, 2008 (Unaudited)					Year Ended December 31, 2007
	Shares		Amount			Shares		Amount
Shares sold	14,493,884		$	14,493,884		29,764,201		$	29,764,201
Shares issued in reinvestment of dividends and distributions	652,397			652,397		1,288,381			1,288,381
Shares redeemed	(7,273,000	)		(7,273,000	)	(9,943,000	)		(9,943,000	)
Net increase	7,873,281		$	7,873,281		21,109,582		$	21,109,582

8

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury Services PLC
2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

9

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$	488,371,000	$	486,537,574
2.67%, 07/25/08(a)		125,000,000		124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)		100,000,000		99,927,778
2.72%, 08/15/08(a)		136,137,000		135,674,134
Royal Bank of Scotland
2.87%, 08/01/08		150,000,000		149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)		145,000,000		144,905,750
Thames Asset Global Securitization No. 1 Inc.
2.58%, 07/09/08(a)		160,741,000		160,648,842
2.75%, 07/07/08(a)		200,000,000		199,908,333
2.78%, 08/15/08(a)		100,000,000		99,652,500
2.80%, 07/17/08(a)		150,000,000		149,813,334
2.80%, 08/07/08(a)		160,000,000		159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)		175,000,000		174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)		150,000,000		149,820,000
2.75%, 07/15/08(a)		82,008,000		81,920,297
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		100,000,000		99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)		110,000,000		109,610,417
2.60%, 09/04/08(a)		100,000,000		99,530,556
2.87%, 07/18/08(a)		125,000,000		124,830,590
Westpac Banking Corp.
2.62%, 03/06/09		250,000,000		245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09		200,000,000		196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)		200,000,000		199,871,500
2.57%, 07/22/08(a)		250,000,000		249,625,208
2.70%, 08/14/08(a)		145,000,000		144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)		130,973,000		130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)				11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09		250,000,000		250,000,000
Federal National Mortgage Association
2.30%, 12/18/08		330,000,000		326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)		300,000,000		300,000,000
US Bank N.A.
2.60%, 02/19/09		300,000,000		300,000,000
2.70%, 09/08/08		150,000,000		150,000,000
2.75%, 01/05/09		330,000,000		330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)				1,656,415,833

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$	40,000,000	$	40,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).		90,000,000		90,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).		465,000,000		465,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).		485,000,000		485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).		300,000,000		300,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).		1,040,000,000		1,040,000,000
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).		175,000,000		175,000,000
Goldman Sachs & Co. Tri-Party 2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)		150,000,000		150,000,000

10

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party 2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party 2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale
2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037
Allstate Life Global Funding Trusts
2.48%, 09/04/08		125,000,000		124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504

11

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
American Express Bank FSB
2.50%, 06/12/09	$	50,000,000	$	49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd. London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000
Jordan Brick Co. Inc.
2.58%, 07/02/08		45,220,000		45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976

Security	Face Amount		Value
Kommunalkredit Austria AG
2.46%, 08/08/08(a)	$	40,000,000	$	40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)		54,273,000		54,273,000

12

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)	$	187,623,000	$	187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Portfolio Allocation (Unaudited)

June 30, 2008

Asset Type	Value		% of Net Assets
Commercial Paper	$	11,932,235,376	38.29	%
Variable & Floating Rate Notes		7,855,885,973	25.21
Repurchase Agreements		6,175,000,000	19.82
Certificates of Deposit		3,300,008,879	10.59
Medium-Term Notes		1,656,415,833	5.32
Time Deposits		178,626,000	0.57
Other Net Assets		62,281,372	0.20
TOTAL	$	31,160,453,433	100.00	%

This table is not part of the financial statements.

14

MONEY MARKET MASTER PORTFOLIO

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	24,923,172,061
Repurchase agreements, at value and cost (Note 1)		6,175,000,000
Total investments		31,098,172,061
Cash		11
Receivables:
Interest		64,201,148
Total Assets		31,162,373,220
LIABILITIES
Payables:
Investment advisory fees (Note 2)		1,885,710
Accrued expenses:
Professional fees (Note 2)		28,358
Independent trustees’ fees (Note 2)		5,719
Total Liabilities		1,919,787
NET ASSETS	$	31,160,453,433

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	552,894,094
Total investment income		552,894,094
EXPENSES (Note 2)
Investment advisory fees		16,228,714
Professional fees		30,871
Independent trustees’ fees		139,013
Total expenses		16,398,598
Less expense reductions (Note 2)		(5,038,498	)
Net expenses		11,360,100
Net investment income		541,533,994
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		(2,995,721	)
Payment from affiliate (Note 2)		3,399,402
Net realized gain		403,681
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	541,937,675

STATEMENTS OF CHANGES IN NET ASSETS	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	541,533,994		$	1,082,958,398
Net realized gain		403,681			42,548
Net increase in net assets resulting from operations		541,937,675			1,083,000,946
Interestholder transactions:
Contributions		24,050,846,582			66,603,193,729
Withdrawals		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		31,492,403,778			6,924,964,889
End of period	$	31,160,453,433		$	31,492,403,778

The accompanying notes are an integral part of these financial statements.

15

MONEY MARKET MASTER PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Money Market Master Portfolio (the “Master Portfolio”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolio uses the amortized cost method of valuation to determine the value of its portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolio’s net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolio’s amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolio 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 Master Portfolio’s 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Master Portfolio’s 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.

16

MONEY MARKET MASTER PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolio’s investments, as of June 30, 2008:

Investments in Securities
	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Money Market Master Portfolio	$	—	$	31,098,172,061	$	—	$	31,098,172,061

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolio amortizes premiums and accretes discounts using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that the Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that the Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in the Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, the Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

It is intended that the Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolio’s cost of investments for federal income tax purposes was the same as for financial reporting purposes.

The Master Portfolio 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolio’s financial statements.

REPURCHASE AGREEMENTS

The Master Portfolio may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolio, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to the Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of the Master Portfolio, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%.

17

MONEY MARKET MASTER PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

From time to time, BGFA may waive an additional portion of its advisory fees. Any such waiver will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolio’s trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolio. BGFA has contractually agreed to cap the expenses of the Master Portfolio at the rate at which the Master Portfolio pays an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolio in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees in the amount of $5,038,498 for the Master Portfolio.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolio. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolio.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolio. SEI does not receive any fee from the Master Portfolio for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolio’s custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolio. BGI is not entitled to compensation for providing administration services to the Master Portfolio, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolio, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolio. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Money Market Master Portfolio for cash at $181,990,742, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statement of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolio were as follows:

	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(b)(c)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%

^(a) Annualized for periods of less than one year.

^(b) Not annualized.

^(c) For the six months ended June 30, 2008, 0.01% of the total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68%.

18

MONEY MARKET MASTER PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT

(Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (an “Advisory Contract”) on behalf of Money Market Master Portfolio (the “Master Portfolio”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contract. At a meeting held on March 25-26, 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 Master Portfolio, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolio. The Board considered in particular that BGFA’s services for the Master Portfolio capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolio. 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 Master Portfolio. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolio; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolio has met its investment objective. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolio under the Advisory Contract were appropriate and supported the Board’s approval of the Advisory Contract for the coming year.

MASTER PORTFOLIO’S EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIO

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of the Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising of the Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising of the Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Institutional Money Market Fund than to the underlying Master Portfolio, which is not available for investment except to other investment companies. 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.

19

MONEY MARKET MASTER PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT

(Unaudited) (Continued)

The Board noted that the Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fee for the Master Portfolio was generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolio were generally lower than the overall expenses for the funds in its Lipper Expense Group, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for the Master Portfolio during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for the Master Portfolio, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fee and expense levels and the historical performance of the Master Portfolio, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contract for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIO AND PROFIT REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolio and the Barclays Global Investors Funds, separately and together, 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 Master Portfolio’s operations for the last calendar year. The Board analyzed the Master Portfolio’s expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by the Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for the Master Portfolio), and any fee revenue from any investments by the Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolio. 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 Master Portfolio 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolio’s asset level. The Board noted that the Advisory Contract does not provide any breakpoints in the investment advisory fee rate as a result of any increases in the asset level of the Master Portfolio. However, the Board noted that the investment advisory fee rate for the Master Portfolio had been set initially at the lower end of the marketplace so as to afford the Master Portfolio’s interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for the Master Portfolio, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to the Master Portfolio while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset level of the Master Portfolio increases. In light of this analysis and the relatively low investment advisory fee rate for the Master Portfolio, the Board determined that whether further economies of scale may be realized by the Master Portfolio or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contract.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolio’s annual investment advisory fee rate under the Advisory Contract in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolio. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolio in comparison with the

20

MONEY MARKET MASTER PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT

(Unaudited) (Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolio and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rate under the Master Portfolio’s Advisory Contract was within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rate for the Master Portfolio and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rate under the Advisory Contract does not constitute fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that the investment advisory fee rate under the Advisory Contract is fair and reasonable.

OTHER BENEFITS TO 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 MIP and the Master Portfolio by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolio. The Board further noted that the Master Portfolio may, but generally do not, participate in securities lending activities and generally does not execute transactions with affiliated brokers, as does other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolio’s interestholders.

Based on this analysis, the Board determined that the Advisory Contract, including the investment advisory fee rate thereunder, is fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolio and its interestholders to approve the Advisory Contract for the coming year.

21

Notes:

TABLE OF CONTENTS

Shareholder Expenses	1
Barclays Global Investors Funds
Financial Statements	2
Financial Highlights	6
Notes to Financial Statements	10
Master Investment Portfolio
Schedules of Investments	13
Government Money Market Master Portfolio	13
Money Market Master Portfolio	14
Prime Money Market Master Portfolio	19
Treasury Money Market Master Portfolio	22
Portfolio Allocations	23
Financial Statements	24
Notes to Financial Statements	26
Board Review and Approval of Investment Advisory Contracts	30

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Government Money Market
Premium Shares
Actual	$1,000.00	$1,013.30	0.09	%	$0.45
Hypothetical (5% return before expenses)	1,000.00	1,024.40	0.09		0.45
Institutional Money Market
Premium Shares
Actual	1,000.00	1,016.50	0.17		0.85
Hypothetical (5% return before expenses)	1,000.00	1,024.00	0.17		0.86
Prime Money Market
Premium Shares
Actual	1,000.00	1,016.50	0.14		0.70
Hypothetical (5% return before expenses)	1,000.00	1,024.20	0.14		0.70
Treasury Money Market
Premium Shares
Actual	1,000.00	1,011.00	0.09		0.45
Hypothetical (5% return before expenses)	1,000.00	1,024.40	0.09		0.45

^(a) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(b) Expenses are calculated using each Fund’s annualized expense ratio of the Premium Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Fund		Institutional Money Market Fund		Prime Money Market Fund		Treasury Money Market Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	111,317,179	$	2,357,681,486	$	13,140,946,089	$	49,034,301
Total Assets		111,317,179		2,357,681,486		13,140,946,089		49,034,301
LIABILITIES
Payables:
Distribution to shareholders		192,305		6,979,789		27,632,310		78,678
Administration fees (Note 2)		6,114		213,750		740,030		1,891
Distribution fees – Aon Captives Shares (Note 2)		—		23,081		—		—
Accrued expenses:
Professional fees (Note 2)		5,649		13,840		17,277		5,613
Independent trustees’ fees (Note 2)		61		857		964		49
Total Liabilities		204,129		7,231,317		28,390,581		86,231
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Net assets consist of:
Paid-in capital	$	111,113,050	$	2,350,387,203	$	13,112,079,273	$	48,948,070
Undistributed net investment income		—		400		146		—
Undistributed net realized gain		—		62,566		476,089		—
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Aon Captives Shares
Net Assets	$	—	$	98,066,537	$	—	$	—
Shares outstanding(a)		—		98,065,035		—		—
Net asset value and offering price per share	$	—	$	1.00	$	—	$	—
Capital Shares
Net Assets	$	100,000	$	100,000	$	144,023,946	$	100,000
Shares outstanding(a)		100,000		100,000		144,023,937		100,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Institutional Shares
Net Assets	$	11,715,262	$	1,748,872,052	$	9,707,477,952	$	15,814,810
Shares outstanding(a)		11,715,262		1,748,837,223		9,707,137,602		15,814,810
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Premium Shares
Net Assets	$	98,322,680	$	430,878,939	$	3,184,486,804	$	21,216,341
Shares outstanding(a)		98,322,680		430,856,442		3,184,363,836		21,216,341
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Select Shares
Net Assets	$	925,108	$	6,560,362	$	76,516,806	$	11,766,919
Shares outstanding(a)		925,108		6,560,291		76,503,898		11,766,919
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Trust Shares
Net Assets	$	50,000	$	65,972,279	$	50,000	$	50,000
Shares outstanding(a)		50,000		65,972,001		50,000		50,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Fund			Institutional Money Market Fund			Prime Money Market Fund			Treasury Money Market Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Interest	$	2,265,183		$	79,899,651		$	212,905,601		$	1,643,838
Expenses(a)		(5,131	)		(1,599,953	)		(2,691,437	)		(1,723	)
Net investment income allocated from corresponding Master Portfolio		2,260,052			78,299,698			210,214,164			1,642,115
FUND EXPENSES (Note 2)
Administration fees		69,556			1,618,474			4,013,896			48,302
Distribution fees — Aon Captives Shares		—			44,777			—			—
Professional fees		5,908			11,009			15,282			5,908
Independent trustees’ fees		911			21,852			51,883			789
Total fund expenses		76,375			1,696,112			4,081,061			54,999
Less expense reductions (Note 2)		(21,316	)		(33,500	)		(316,393	)		(19,749	)
Net fund expenses		55,059			1,662,612			3,764,668			35,250
Net investment income		2,204,993			76,637,086			206,449,496			1,606,865
REALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain		—			54,453			465,491			—
Net realized gain		—			54,453			465,491			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,204,993		$	76,691,539		$	206,914,987		$	1,606,865

^(a) Net of investment advisory fee reductions in the amounts of $80,644, $708,796, $1,987,163 and $75,523, respectively.

The accompanying notes are an integral part of these financial statements.

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Fund						Institutional Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,204,993		$	7,312,759		$	76,637,086		$	339,579,002
Net realized gain		—			—			54,453			8,933
Net increase in net assets resulting from operations		2,204,993			7,312,759			76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		—			—			(1,441,790	)		(4,052,238	)
Capital Shares(a)		(485	)		—			(611	)		—
Institutional Shares		(597,932	)		(1,172,179	)		(50,072,921	)		(245,584,218	)
Premium Shares		(1,558,004	)		(4,856,791	)		(23,957,127	)		(82,147,008	)
Select Shares		(47,980	)		(1,279,756	)		(103,036	)		(326,865	)
Trust Shares		(592	)		(4,033	)		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(2,204,993	)		(7,312,759	)		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		—			—			7,873,281			21,109,582
Capital Shares(a)		100,000			—			100,000			—
Institutional Shares		8,684,533			2,635,467			(4,904,900,026	)		2,455,028,191
Premium Shares		8,498,952			(33,708,376	)		(315,719,969	)		(574,454,848	)
Select Shares		(13,344,330	)		(28,413,242	)		1,753,077			3,578,273
Trust Shares		—			(57,892	)		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		3,939,155			(59,544,043	)		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		3,939,155			(59,544,043	)		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		107,173,895			166,717,938			7,581,092,352			5,787,558,343
End of period	$	111,113,050		$	107,173,895		$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	Prime Money Market Fund						Treasury Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	206,449,496		$	501,618,559		$	1,606,865		$	7,891,235
Net realized gain		465,491			10,598			—			—
Net increase in net assets resulting from operations		206,914,987			501,629,157			1,606,865			7,891,235
Distributions to shareholders:
From net investment income:
Capital Shares(a)		(304,828	)		—			(413	)		—
Institutional Shares		(152,251,591	)		(395,738,229	)		(1,089,037	)		(6,006,336	)
Premium Shares		(50,979,387	)		(98,980,240	)		(434,307	)		(513,487	)
Select Shares		(2,912,940	)		(6,958,678	)		(82,607	)		(1,367,486	)
Trust Shares		(750	)		(4,135	)		(501	)		(3,926	)
Total distributions to shareholders		(206,449,496	)		(501,681,282	)		(1,606,865	)		(7,891,235	)
Capital share transactions (Note 3):
Capital Shares(a)		144,023,937			—			100,000			—
Institutional Shares		1,343,357,622			2,447,990,425			(115,375,464	)		4,672,699
Premium Shares		1,388,887,780			243,844,111			(40,296,904	)		59,401,698
Select Shares		(191,848,386	)		246,709,511			1,716,919			(45,868,956	)
Trust Shares		—			(58,148	)		—			(57,775	)
Net increase (decrease) in net assets resulting from capital share transactions		2,684,420,953			2,938,485,899			(153,855,449	)		18,147,666
Increase (decrease) in net assets		2,684,886,444			2,938,433,774			(153,855,449	)		18,147,666
NET ASSETS:
Beginning of period		10,427,669,064			7,489,235,290			202,803,519			184,655,853
End of period	$	13,112,555,508		$	10,427,669,064		$	48,948,070		$	202,803,519
Undistributed net investment income included in net assets at end of period	$	146		$	146		$	—		$	—

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Government Money Market Fund – Premium Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.33	%(b)		5.09	%		4.99	%		3.23	%		0.62	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	98,323		$	89,824		$	123,532		$	183,243		$	100
Ratio of expenses to average net assets(c)		0.09	%		0.17	%		0.17	%		0.08	%		0.05	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.22	%		0.23	%		0.21	%		0.17	%		0.17	%
Ratio of net investment income to average net assets(c)		2.70	%		4.84	%		4.88	%		3.54	%		1.86	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Institutional Money Market Fund – Premium Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Year ended Dec. 31, 2003
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01			0.01
Net realized gain (loss)		0.00	(a)		0.00	(a)		0.00	(a)		0.00	(a)		(0.00	)(a)		0.00	(a)
Total from investment operations		0.02			0.05			0.05			0.03			0.01			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net realized gain		—			—			—			—			—			(0.00	)(a)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.65	%(b)		5.31	%		5.05	%		3.24	%		1.34	%		1.10	%
Ratios/Supplemental data:
Net assets, end of period (000s)	$	430,879		$	746,582		$	1,321,042		$	1,803,171		$	1,217,388		$	290,099
Ratio of expenses to average net assets(c)		0.17	%		0.16	%		0.15	%		0.10	%		0.10	%		0.17	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.20	%		0.21	%		0.19	%		0.17	%		0.17	%		n/a
Ratio of net investment income to average net assets(c)		3.35	%		5.21	%		4.93	%		3.24	%		1.45	%		0.98	%

^(a) Rounds to less than $0.01.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Prime Money Market Fund – Premium Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Year ended Dec. 31, 2004			Period from Apr. 16, 2003(a) to Dec. 31, 2003
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01			0.01
Net realized gain (loss)		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		(0.00	)(b)
Total from investment operations		0.02			0.05			0.05			0.03			0.01			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net realized gain		—			—			—			—			(0.00	)(b)		(0.00	)(b)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.65	%(c)		5.27	%		5.02	%		3.21	%		1.35	%		0.75	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	3,184,487		$	1,795,477		$	1,551,648		$	3,233,738		$	5,247,105		$	964,243
Ratio of expenses to average net assets(d)		0.14	%		0.17	%		0.16	%		0.13	%		0.07	%		0.09	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.20	%		0.20	%		0.19	%		0.17	%		0.17	%		n/a
Ratio of net investment income to average net assets(d)		3.25	%		5.14	%		4.88	%		3.08	%		1.62	%		1.02	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Treasury Money Market Fund – Premium Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.10	%(b)		4.90	%		4.99	%		3.15	%		0.59	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	21,216		$	61,513		$	2,112		$	2,546		$	100
Ratio of expenses to average net assets(c)		0.09	%		0.09	%		0.05	%		0.05	%		0.05	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.23	%		0.23	%		0.23	%		0.17	%		0.17	%
Ratio of net investment income to average net assets(c)		2.32	%		4.44	%		4.61	%		3.83	%		1.77	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Premium Shares of the Government Money Market Fund (the “GMMF”), Institutional Money Market Fund (the “IMMF”), Prime Money Market Fund (the “PMMF”) and Treasury Money Market Fund (the “TMMF”), (each, a “Fund,” collectively, the “Funds”). In addition, the GMMF, PMMF and TMMF offer Capital Shares, Institutional Shares, Select Shares and Trust Shares. The IMMF also offers Aon Captives Shares, Capital Shares, Institutional Shares, Select Shares and Trust Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (100.00%, 7.57%, 91.95% and 100.00% for the GMMF, IMMF, PMMF and TMMF, respectively, as of June 30, 2008).

Effective January 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, use of amortized cost, 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized,

10

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

Each Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Funds will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Funds are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

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 June 30, 2008.

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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. The IMMF has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. This fee is an expense of the Aon Captives Shares only; SEI does not receive a fee from the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares of the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.10% of the average daily net assets of each Fund’s Premium Shares. From time to time, BGI may waive such fees in whole or in part. Any

11

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees of $15,873, $10,301, $74,721 and $5,022 for the Premium Shares of the GMMF, IMMF, PMMF and TMMF, respectively.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Premium Shares of the Funds were as follows:

	Six Months Ended June 30, 2008 (Unaudited)					Year Ended December 31, 2007
Fund	Shares		Amount			Shares		Amount
Government Money Market
Shares sold	906,455,676		$	906,455,676		594,165,015		$	594,165,015
Shares issued in reinvestment of dividends and distributions	1,667,127			1,667,127		3,635,678			3,635,678
Shares redeemed	(899,623,851	)		(899,623,851	)	(631,509,069	)		(631,509,069	)
Net increase (decrease)	8,498,952		$	8,498,952		(33,708,376	)	$	(33,708,376	)
Institutional Money Market
Shares sold	7,086,367,389		$	7,086,367,389		12,563,777,405		$	12,563,777,405
Shares issued in reinvestment of dividends and distributions	18,951,982			18,951,982		76,479,979			76,479,979
Shares redeemed	(7,421,039,340	)		(7,421,039,340	)	(13,214,712,232	)		(13,214,712,232	)
Net decrease	(315,719,969	)	$	(315,719,969	)	(574,454,848	)	$	(574,454,848	)
Prime Money Market
Shares sold	16,131,616,089		$	16,131,616,089		20,584,658,678		$	20,584,658,678
Shares issued in reinvestment of dividends and distributions	39,204,564			39,204,564		81,012,698			81,012,698
Shares redeemed	(14,781,932,873	)		(14,781,932,873	)	(20,421,827,265	)		(20,421,827,265	)
Net increase	1,388,887,780		$	1,388,887,780		243,844,111		$	243,844,111
Treasury Money Market
Shares sold	46,032,072		$	46,032,072		383,415,469		$	383,415,469
Shares issued in reinvestment of dividends and distributions	554,238			554,238		332,811			332,811
Shares redeemed	(86,883,214	)		(86,883,214	)	(324,346,582	)		(324,346,582	)
Net increase (decrease)	(40,296,904	)	$	(40,296,904	)	59,401,698		$	59,401,698

12

GOVERNMENT MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.00%
Banc of America Securities LLC Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $26,001,806 (collateralized by U.S. government obligations, value $26,520,000, 5.00%, 3/1/34).	$	26,000,000	$	26,000,000
Bank of America N.A. Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $10,000,694 (collateralized by U.S. government obligations, value $10,200,000, 5.50%, 3/1/35).		10,000,000		10,000,000
Credit Suisse First Boston Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $16,101,118 (collateralized by U.S. government obligations, value $16,422,655, 4.62% to 5.79%, 4/1/35 to 10/1/37).		16,100,000		16,100,000
Goldman Sachs Group Inc. (The) Tri-Party
2.40%, dated 6/30/08, due 7/1/08, maturity value $23,216,548 (collateralized by U.S. government obligations, value $23,679,300, 5.50% to 7.00%, 4/15/28 to 4/15/38).		23,215,000		23,215,000
Lehman Brothers Holdings Inc. Tri-Party
2.40%, dated 6/30/08, due 7/1/08, maturity value $26,001,733 (collateralized by U.S. government obligations, value $26,524,289, 5.50%, 6/1/37).		26,000,000		26,000,000
Merrill Lynch & Co. Inc. Tri-Party
2.74%, dated 6/30/08, due 7/1/08, maturity value $10,000,761 (collateralized by U.S. government obligations, value $10,302,489, 5.50% to 6.50%, 12/25/35 to 8/25/36).		10,000,000		10,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $111,315,000)				111,315,000
TOTAL INVESTMENTS IN SECURITIES – 100.00%
(Cost: $111,315,000)				111,315,000
Other Assets, Less Liabilities – 0.00%				2,179
NET ASSETS – 100.00%			$	111,317,179

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury
Services PLC 2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital
Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

14

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$	488,371,000	$	486,537,574
2.67%, 07/25/08(a)		125,000,000		124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)		100,000,000		99,927,778
2.72%, 08/15/08(a)		136,137,000		135,674,134
Royal Bank of Scotland
2.87%, 08/01/08		150,000,000		149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)		145,000,000		144,905,750
Thames Asset Global
Securitization No. 1 Inc.
2.58%, 07/09/08(a)		160,741,000		160,648,842
2.75%, 07/07/08(a)		200,000,000		199,908,333
2.78%, 08/15/08(a)		100,000,000		99,652,500
2.80%, 07/17/08(a)		150,000,000		149,813,334
2.80%, 08/07/08(a)		160,000,000		159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)		175,000,000		174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)		150,000,000		149,820,000
2.75%, 07/15/08(a)		82,008,000		81,920,297
UniCredito Italiano
Bank (Ireland) PLC
2.91%, 09/04/08		100,000,000		99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)		110,000,000		109,610,417
2.60%, 09/04/08(a)		100,000,000		99,530,556
2.87%, 07/18/08(a)		125,000,000		124,830,590
Westpac Banking Corp.
2.62%, 03/06/09		250,000,000		245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09		200,000,000		196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)		200,000,000		199,871,500
2.57%, 07/22/08(a)		250,000,000		249,625,208
2.70%, 08/14/08(a)		145,000,000		144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)		130,973,000		130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)				11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09		250,000,000		250,000,000
Federal National Mortgage
Association
2.30%, 12/18/08		330,000,000		326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)		300,000,000		300,000,000
US Bank N.A.
2.60%, 02/19/09		300,000,000		300,000,000
2.70%, 09/08/08		150,000,000		150,000,000
2.75%, 01/05/09		330,000,000		330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)				1,656,415,833

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$	40,000,000	$	40,000,000
Bank of America N.A. Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).		90,000,000		90,000,000
Bank of America N.A. Tri-Party
2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).		465,000,000		465,000,000
Bank of America N.A. Tri-Party
2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).		485,000,000		485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).		300,000,000		300,000,000
Credit Suisse First Boston Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).		1,040,000,000		1,040,000,000
Credit Suisse First Boston Tri-Party
2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).		175,000,000		175,000,000
Goldman Sachs & Co. Tri-Party
2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)		150,000,000		150,000,000

15

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party
2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party
2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party
2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party
2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party
2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party
2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party
2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party
3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party
2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party
2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale
2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037

16

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Allstate Life Global Funding Trusts
2.48%, 09/04/08	$	125,000,000	$	124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504
American Express Bank FSB
2.50%, 06/12/09		50,000,000		49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd.
London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand
Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida
Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC
Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life
Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000

Security	Face Amount		Value
Jordan Brick Co. Inc.
2.58%, 07/02/08	$	45,220,000	$	45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976
Kommunalkredit Austria AG
2.46%, 08/08/08(a)		40,000,000		40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000

17

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class A4M
2.48%, 07/17/08(a)	$	54,273,000	$	54,273,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		187,623,000		187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

18

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 13.21%
Banco Bilbao Vizcaya Argentaria SA
4.57%, 07/03/08	$	175,000,000	$	175,019,603
Bank of Nova Scotia
2.51%, 04/01/09		150,000,000		150,011,134
3.00%, 01/29/09		75,000,000		74,975,587
Bank of Scotland
4.98%, 07/07/08		135,000,000		135,000,000
BNP Paribas
2.58%, 08/20/08		92,500,000		92,499,953
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		200,000,000		200,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		110,000,000		110,000,000
5.40%, 07/10/08		100,000,000		100,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		85,000,000		85,000,000
Fortis Bank NY
2.41%, 10/02/08		30,000,000		29,973,436
Rabobank Nederland NV
2.54%, 08/22/08		50,000,000		50,002,871
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,391
2.64%, 04/09/09		75,000,000		75,002,861
Societe Generale NY
4.51%, 11/21/08		25,000,000		25,000,950
SunTrust Banks Inc.
2.50%, 07/17/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		75,000,000		75,000,000
UniCredito Italiano NY
2.95%, 12/08/08		85,000,000		85,001,860
Wachovia Bank N.A.
2.92%, 01/12/09		5,000,000		5,002,025
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $1,887,493,179)				1,887,493,179
COMMERCIAL PAPER – 41.01%
Amstel Funding Corp.
2.85%, 07/08/08(a)		175,000,000		174,903,021
2.95%, 07/28/08(a)		160,000,000		159,646,000
2.95%, 08/04/08(a)		50,000,000		49,860,694
3.00%, 07/18/08(a)		100,000,000		99,858,333
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
Bank of Scotland
2.65%, 07/09/08		125,000,000		124,926,389
CAFCO LLC
2.52%, 07/14/08(a)		250,000,000		249,772,500
2.52%, 07/28/08(a)		75,000,000		74,858,250
2.55%, 07/14/08(a)		71,200,000		71,134,437

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.55%, 07/09/08(a)	$	100,000,000	$	99,943,333
2.60%, 07/14/08(a)		100,000,000		99,906,111
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
2.95%, 08/01/08(a)		150,000,000		149,618,959
Chariot Funding LLC
2.50%, 07/21/08(a)		100,000,000		99,861,111
2.55%, 07/14/08(a)		166,580,000		166,426,608
2.55%, 08/22/08(a)		75,497,000		75,218,919
Charta LLC
2.54%, 07/28/08(a)		250,000,000		249,523,750
2.54%, 07/30/08(a)		50,000,000		49,897,695
CRC Funding LLC
2.59%, 07/30/08(a)		125,000,000		124,739,202
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		100,000,000		99,721,944
Falcon Asset Securitization Co. LLC
2.43%, 07/08/08(a)		125,277,000		125,217,807
2.60%, 07/18/08(a)		175,000,000		174,785,139
General Electric Capital Corp.
2.45%, 08/01/08		100,000,000		99,789,028
3.92%, 10/03/08		125,000,000		123,720,555
4.39%, 08/25/08		60,000,000		59,597,584
General Electric Capital Services Inc.
4.39%, 08/25/08		60,000,000		59,597,584
Govco Inc.
2.65%, 08/25/08(a)		134,250,000		133,706,474
Grampian Funding LLC
2.68%, 07/14/08(a)		200,000,000		199,806,444
2.75%, 07/10/08(a)		100,000,000		99,931,250
Jupiter Securitization Corp.
2.50%, 07/21/08(a)		75,000,000		74,895,833
2.55%, 08/22/08(a)		110,728,000		110,320,152
2.65%, 07/22/08(a)		100,000,000		99,845,417
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		100,000,000		99,931,945
Nationwide Building Society
2.95%, 08/01/08		100,000,000		99,745,971
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		75,000,000		74,970,000
Ranger Funding Co. LLC
2.67%, 07/25/08(a)		75,000,000		74,866,500
Royal Bank of Scotland
2.87%, 08/01/08		100,000,000		99,752,861
Solitaire Funding Ltd.
2.60%, 07/11/08(a)		250,000,000		249,819,445
Thames Asset Global
Securitization No. 1 Inc.
2.80%, 07/07/08(a)		136,477,000		136,413,311
2.80%, 07/17/08(a)		100,000,000		99,875,556
2.80%, 07/21/08(a)		30,879,000		30,830,966
2.82%, 07/18/08(a)		58,572,000		58,494,002
Thunder Bay Funding LLC
2.55%, 07/16/08(a)		153,647,000		153,483,750
2.57%, 07/11/08(a)		103,799,000		103,724,899

19

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ticonderoga Master Funding Ltd.
2.50%, 07/02/08(a)	$	102,420,000	$	102,412,887
Tulip Funding Corp.
2.60%, 07/08/08(a)		100,000,000		99,949,444
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		50,000,000		49,737,292
Variable Funding Capital Corp.
2.87%, 07/18/08(a)		125,000,000		124,830,590
Yorktown Capital LLC
2.55%, 07/22/08(a)		121,320,000		121,139,536
2.67%, 07/24/08(a)		100,000,000		99,829,417
2.80%, 07/18/08(a)		125,119,000		124,953,565
TOTAL COMMERCIAL PAPER
(Cost: $5,860,539,557)				5,860,539,557
MEDIUM-TERM NOTES – 4.96%
ASIF Global Financing
3.90%, 10/22/08(a)		15,670,000		15,616,123
Berkshire Hathaway Finance Corp.
3.38%, 10/15/08		65,200,000		65,309,904
Federal National Mortgage Association
2.30%, 12/18/08		170,000,000		168,153,611
MassMutual Global Funding II
3.80%, 04/15/09(a)		40,000,000		40,395,644
Metropolitan Life Global Funding I
3.80%, 01/20/09(a)		250,000,000		250,000,000
US Bank N.A.
2.75%, 01/05/09		170,000,000		170,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $709,475,282)				709,475,282
REPURCHASE AGREEMENTS – 14.62%
Banc of America Securities LLC Tri-Party
2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50%, 6/1/33).		40,000,000		40,000,000
Bank of America N.A. Tri-Party
2.72%, dated 6/30/08, due 7/1/08, maturity value $400,030,222 (collateralized by non-U.S. government debt securities, value $440,000,000, 0.00% to 10.00%, 2/23/36).		400,000,000		400,000,000
Credit Suisse First Boston Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $175,012,882 (collateralized by non-U.S. government debt securities, value $180,251,815, 3.21% to 7.71%, 11/1/08 to 10/15/36).		175,000,000		175,000,000

Security	Face Amount		Value
Credit Suisse First Boston Tri-Party
2.75%, dated 6/30/08, due 7/1/08, maturity value $125,009,549 (collateralized by non-U.S. government debt securities, value $128,753,713, 4.65% to 7.75%, 2/15/10 to 10/1/66).	$	125,000,000	$	125,000,000
Goldman Sachs Group Inc. (The) Tri-Party
2.68%, dated 6/30/08, due 7/1/08, maturity value $300,022,333 (collateralized by non-U.S. government debt securities, value $315,000,000, 0.00% to 16.07%, 2/25/09 to 2/10/51).		300,000,000		300,000,000
J.P. Morgan Securities Inc. Tri-Party
2.60%, dated 6/30/08, due 7/1/08, maturity value $375,027,083 (collateralized by non-U.S. government debt securities, value $393,751,820, 0.00% to 12.87%, 1/15/13 to 6/11/50).		375,000,000		375,000,000
J.P. Morgan Securities Inc. Tri-Party
2.75%, dated 6/30/08, due 7/1/08, maturity value $250,019,097 (collateralized by U.S. government obligations, value $255,001,131, 5.00% to 6.00%, 1/1/36 to 10/1/36).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party
2.60%, dated 6/30/08, due 7/1/08, maturity value $100,007,222 (collateralized by U.S. government obligations, value $102,000,291, 4.50% to 6.00%, 11/1/16 to 4/1/28).		100,000,000		100,000,000
Lehman Brothers Holdings Inc. Tri-Party
3.00%, dated 6/30/08, due 7/7/08, maturity value $125,072,917 (collateralized by non-U.S. government debt securities, value $131,254,412, 1.63% to 14.88%, 10/1/08 to 12/20/54).		125,000,000		125,000,000
Morgan Stanley Tri-Party
2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $211,970,792, 0.00% to 10.00%, 5/18/10 to 12/20/49).		200,000,000		200,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $2,090,000,000)				2,090,000,000

20

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
TIME DEPOSITS – 0.48%
Societe Generale
2.50%, 07/01/08	$	67,882,000	$	67,882,000
TOTAL TIME DEPOSITS
(Cost: $67,882,000)				67,882,000
VARIABLE & FLOATING RATE NOTES – 25.44%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		160,000,000		160,001,148
2.52%, 11/07/08(a)		58,000,000		58,001,937
2.53%, 11/14/08(a)		85,000,000		85,006,654
Allstate Life Global Funding Trusts
2.48%, 09/04/08		45,000,000		45,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Bank of America N.A.
3.21%, 07/02/09		75,000,000		75,000,000
Bank of Ireland
2.67%, 09/12/08(a)		35,000,000		35,000,000
Citigroup Global Markets
Holdings Inc.
2.65%, 10/21/08		350,000,000		350,000,000
DEPFA Bank PLC
2.84%, 07/14/08		50,000,000		50,000,000
Deutsche Bank AG
2.43%, 09/30/08		100,000,000		100,000,000
Dexia Credit SA NY
2.43%, 09/29/08		31,770,000		31,726,677
General Electric Capital Corp.
2.50%, 04/24/09		65,000,000		65,000,000
2.77%, 01/05/09		13,800,000		13,788,118
2.82%, 03/16/09		2,900,000		2,897,070
2.88%, 06/15/09		25,000,000		24,995,767
Granite Master Issuer PLC
Series 2005-3 Class A
2.48%, 08/20/08(a)		125,000,000		125,000,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,000,000
ING Bank NV
3.16%, 06/17/09(a)		100,000,000		100,000,000
ING USA Annuity & Life
Insurance Co.
3.13%, 01/12/09(b)		65,000,000		65,000,000
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
Metropolitan Life Global Funding I
2.50%, 11/06/08(a)		139,680,000		139,681,688
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
3.00%, 07/25/08(b)		50,000,000		50,000,000
Metropolitan Life Insurance Funding
3.02%, 04/01/09(a)(b)		15,000,000		15,000,000
Monumental Global Funding III
2.79%, 08/29/08(a)		50,000,000		50,000,000
Morgan Stanley
2.61%, 12/03/08		100,000,000		100,000,000

Security	Face Amount		Value
National Australia Bank Ltd.
2.88%, 03/06/09(a)	$	75,000,000	$	74,866,757
Nationwide Building Society
2.51%, 10/06/08(a)		135,000,000		135,003,930
2.88%, 10/27/08(a)		50,000,000		50,000,000
Rabobank Nederland NV NY
2.66%, 11/14/08(a)		140,000,000		140,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		100,000,000		100,000,000
Royal Bank of Scotland PLC
2.87%, 07/21/08(a)		20,000,000		20,000,515
Societe Generale
2.46%, 08/29/08(a)		5,000,000		4,998,696
Toyota Motor Credit Corp.
2.06%, 10/20/08		25,000,000		24,955,173
Toyota Motor Credit Corp. Series 1
2.53%, 01/12/09		200,000,000		200,000,000
UBS AG Stamford
2.46%, 08/15/08		100,000,000		100,000,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class A4M
2.48%, 07/17/08(a)		23,000,000		23,000,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class AMM
2.50%, 07/17/08(a)		80,000,000		80,000,000
Wachovia Bank N.A.
2.65%, 10/03/08		31,200,000		31,193,095
2.84%, 03/23/09		50,000,000		49,853,708
2.91%, 05/01/09		250,000,000		250,000,000
2.99%, 11/25/08		40,000,000		39,995,084
Wells Fargo & Co.
3.55%, 05/01/09		50,000,000		50,021,111
Westpac Banking Corp.
2.92%, 06/10/09		175,000,000		175,000,000
World Savings Bank FSB
2.80%, 05/08/09		3,100,000		3,081,978
2.81%, 03/02/09		2,600,000		2,590,079
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $3,635,665,995)				3,635,665,995
TOTAL INVESTMENTS IN SECURITIES – 99.72%
(Cost: $14,251,056,013)				14,251,056,013
Other Assets, Less Liabilities – 0.28%				40,280,226
NET ASSETS – 100.00%			$	14,291,336,239

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

21

TREASURY MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.01%
Banc of America Securities LLC Tri-Party
1.50%, dated 6/30/08, due 7/1/08, maturity value $8,200,342 (collateralized by U.S. government obligations, value $8,364,029, 4.88%, 8/31/08).	$	8,200,000	$	8,200,000
Credit Suisse First Boston Tri-Party
1.75%, dated 6/30/08, due 7/1/08, maturity value $8,200,399 (collateralized by U.S. government obligations, value $8,367,816, 4.88%, 5/31/09).		8,200,000		8,200,000
Goldman Sachs Group Inc. (The) Tri-Party
1.25%, dated 6/30/08, due 7/1/08, maturity value $8,938,310 (collateralized by U.S. government obligations, value $9,116,862, 8.75%, 5/15/20).		8,938,000		8,938,000
Lehman Brothers Holdings Inc. Tri-Party
0.25%, dated 6/30/08, due 7/1/08, maturity value $8,200,057 (collateralized by U.S. government obligations, value $8,369,933, 7.13%, 2/15/23).		8,200,000		8,200,000
Merrill Lynch & Co. Inc. Tri-Party
1.25%, dated 6/30/08, due 7/1/08, maturity value $15,500,538 (collateralized by U.S. government obligations, value $15,815,611, 4.13% to 5.25%, 9/1/09 to 9/15/17).		15,500,000		15,500,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $49,038,000)				49,038,000
TOTAL INVESTMENTS IN SECURITIES – 100.01%
(Cost: $49,038,000)				49,038,000
Other Assets, Less Liabilities – (0.01)%				(3,699	)
NET ASSETS – 100.00%			$	49,034,301

The accompanying notes are an integral part of these financial statements.

22

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Government Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	111,315,000		100.00	%
Other Net Assets		2,179		0.00
TOTAL	$	111,317,179		100.00	%
Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	11,932,235,376		38.29	%
Variable & Floating Rate Notes		7,855,885,973		25.21
Repurchase Agreements		6,175,000,000		19.82
Certificates of Deposit		3,300,008,879		10.59
Medium-Term Notes		1,656,415,833		5.32
Time Deposits		178,626,000		0.57
Other Net Assets		62,281,372		0.20
TOTAL	$	31,160,453,433		100.00	%
Prime Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	5,860,539,557		41.01	%
Variable & Floating Rate Notes		3,635,665,995		25.44
Repurchase Agreements		2,090,000,000		14.62
Certificates of Deposit		1,887,493,179		13.21
Medium-Term Notes		709,475,282		4.96
Time Deposits		67,882,000		0.48
Other Net Assets		40,280,226		0.28
TOTAL	$	14,291,336,239		100.00	%
Treasury Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	49,038,000		100.01	%
Other Net Assets		(3,699	)	(0.01	)
TOTAL	$	49,034,301		100.00	%

These tables are not part of the financial statements.

23

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio		Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio
ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	—	$	24,923,172,061	$	12,161,056,013	$	—
Repurchase agreements, at value and cost (Note 1)		111,315,000		6,175,000,000		2,090,000,000		49,038,000
Total investments		111,315,000		31,098,172,061		14,251,056,013		49,038,000
Cash		151		11		625		32
Receivables:
Interest		7,660		64,201,148		41,181,122		1,646
Due from investment adviser		1,057		—		—		1,265
Total Assets		111,323,868		31,162,373,220		14,292,237,760		49,040,943
LIABILITIES
Payables:
Investment advisory fees (Note 2)		—		1,885,710		879,693		—
Accrued expenses:
Professional fees (Note 2)		6,629		28,358		20,542		6,594
Independent trustees’ fees (Note 2)		60		5,719		1,286		48
Total Liabilities		6,689		1,919,787		901,521		6,642
NET ASSETS	$	111,317,179	$	31,160,453,433	$	14,291,336,239	$	49,034,301

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio			Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio
NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	2,265,184		$	552,894,094		$	229,517,108		$	1,643,838
Total investment income		2,265,184			552,894,094			229,517,108			1,643,838
EXPENSES (Note 2)
Investment advisory fees		78,214			16,228,714			6,794,100			69,807
Professional fees		6,650			30,871			16,461			6,650
Independent trustees’ fees		911			139,013			56,250			789
Total expenses		85,775			16,398,598			6,866,811			77,246
Less expense reductions (Note 2)		(80,644	)		(5,038,498	)		(3,962,835	)		(75,523	)
Net expenses		5,131			11,360,100			2,903,976			1,723
Net investment income		2,260,053			541,533,994			226,613,132			1,642,115
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		—			(2,995,721	)		(290,351	)		—
Payment from affiliate (Note 2)		—			3,399,402			814,069			—
Net realized gain		—			403,681			523,718			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,260,053		$	541,937,675		$	227,136,850		$	1,642,115

The accompanying notes are an integral part of these financial statements.

24

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Master Portfolio						Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,260,053		$	7,459,087		$	541,533,994		$	1,082,958,398
Net realized gain		—			—			403,681			42,548
Net increase in net assets resulting from operations		2,260,053			7,459,087			541,937,675			1,083,000,946
Interestholder transactions:
Contributions		1,558,317,449			1,739,584,764			24,050,846,582			66,603,193,729
Withdrawals		(1,557,095,598	)		(1,806,493,585	)		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		1,221,851			(66,908,821	)		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		3,481,904			(59,449,734	)		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		107,835,275			167,285,009			31,492,403,778			6,924,964,889
End of period	$	111,317,179		$	107,835,275		$	31,160,453,433		$	31,492,403,778
	Prime Money Market Master Portfolio						Treasury Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	226,613,132		$	559,112,567		$	1,642,115		$	7,969,862
Net realized gain		523,718			11,956			—			—
Net increase in net assets resulting from operations		227,136,850			559,124,523			1,642,115			7,969,862
Interestholder transactions:
Contributions		58,414,645,861			99,288,703,149			384,220,217			1,637,092,248
Withdrawals		(55,372,727,474	)		(97,098,629,295	)		(540,250,452	)		(1,627,123,957	)
Net increase (decrease) in net assets resulting from interestholder transactions		3,041,918,387			2,190,073,854			(156,030,235	)		9,968,291
Increase (decrease) in net assets		3,269,055,237			2,749,198,377			(154,388,120	)		17,938,153
NET ASSETS:
Beginning of period		11,022,281,002			8,273,082,625			203,422,421			185,484,268
End of period	$	14,291,336,239		$	11,022,281,002		$	49,034,301		$	203,422,421

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolios use the amortized cost method of valuation to determine the value of their portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolios’ net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolios’ amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Master Portfolios’ 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.

26

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Government Money Market	$	—	$	111,315,000	$	—	$	111,315,000
Money Market		—		31,098,172,061		—		31,098,172,061
Prime Money Market		—		14,251,056,013		—		14,251,056,013
Treasury Money Market		—		49,038,000		—		49,038,000

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolios amortize premium and accrete discount using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

In the case of Master Portfolios with only one interestholder, such as the Government Money Market and Treasury Money Market Master Portfolios, MIP believes that such Master Portfolios will not be treated as a separate entity for federal income tax purposes, and, therefore, will not be subject to any federal income tax on their income and gains (if any). Rather, such Master Portfolios’ assets and interest, dividends and gains or losses will be treated as assets and interest, dividends and gains or losses of the interestholders.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolios’ costs of investments for federal income tax purposes were the same as for financial reporting purposes.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

REPURCHASE AGREEMENTS

The Master Portfolios may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

27

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolios, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of each of the Master Portfolios, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%. From time to time, BGFA may waive an additional portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees of $80,644, $5,038,498, $3,962,835 and $75,523 for the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Prime Money Market Master Portfolio and Money Market Master Portfolio for cash at $34,998,569 and $181,990,742, respectively, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statements of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

28

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Government Money Market
Ratio of expenses to average net assets(a)	0.01	%	0.07	%	0.08	%	0.03	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.11	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.89	%	4.93	%	4.90	%	3.16	%	1.93	%(b)	n/a
Total return	1.38	%(c)	5.20	%	5.08	%	3.28	%	0.64	%(b)(c)	n/a
Money Market
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(c)(d)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%
Prime Money Market
Ratio of expenses to average net assets(a)	0.04	%	0.07	%	0.08	%	0.08	%	0.03	%	0.03	%(e)
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%(e)
Ratio of net investment income to average net assets(a)	3.33	%	5.23	%	4.95	%	3.22	%	1.52	%	1.12	%(e)
Total return	1.70	%(c)(d)	5.37	%	5.11	%	3.26	%	1.40	%	0.80	%(c)(e)
Treasury Money Market
Ratio of expenses to average net assets(a)	0.00	%	0.01	%	0.00	%	0.00	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.13	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.35	%	4.81	%	5.03	%	3.99	%	1.82	%(b)	n/a
Total return	1.14	%(c)	4.98	%	5.04	%	3.20	%	0.61	%(b)(c)	n/a

^(a) Annualized for periods of less than one year.

^(b) For the period from September 1, 2004 (commencement of operations) to December 31, 2004.

^(c) Not annualized.

^(d) For the six months ended June 30, 2008, 0.01% of the Master Portfolio’s total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68% for the Money Market Master Portfolio and 1.69% for the Prime Money Market Master Portfolio.

^(e) For the period from April 16, 2003 (commencement of operations) to December 31, 2003.

29

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio, Government Money Market Master Portfolio, and Treasury Money Market Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, as applicable, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Money Market Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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.

30

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)(Continued)

The Board noted that each Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the Master Portfolios were generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolios were generally lower than the overall expenses for the funds in their Lipper Expense Groups, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for certain of the Master Portfolios during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations for the last calendar year. The Board analyzed the Master Portfolios’ expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to certain of the Master Portfolios while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios in comparison with the

31

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)(Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolios and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rates under the Master Portfolios’ Advisory Contracts were within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rates for certain of the Master Portfolios and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolios. The Board further noted that the Master Portfolios may, but generally do not, participate in securities lending activities and generally do not execute transactions with affiliated brokers, as do other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

32

Notes:

Notes:

TABLE OF CONTENTS

Shareholder Expenses	1
Barclays Global Investors Funds
Financial Statements	2
Financial Highlights	6
Notes to Financial Statements	10
Master Investment Portfolio
Schedules of Investments	13
Government Money Market Master Portfolio	13
Money Market Master Portfolio	14
Prime Money Market Master Portfolio	19
Treasury Money Market Master Portfolio	22
Portfolio Allocations	23
Financial Statements	24
Notes to Financial Statements	26
Board Review and Approval of Investment Advisory Contracts	30

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)(a)	Ending Account Value (6/30/08)(a)	Annualized Expense Ratio(b)		Expenses Paid During Period(c) (1/1/08 to 6/30/08)
Government Money Market
Capital Shares
Actual	$1,000.00	$1,007.70	0.05	%	$0.17
Hypothetical (5% return before expenses)	1,000.00	1,024.60	0.05		0.25
Institutional Money Market
Capital Shares
Actual	1,000.00	1,009.90	0.14		0.48
Hypothetical (5% return before expenses)	1,000.00	1,024.20	0.14		0.70
Prime Money Market
Capital Shares
Actual	1,000.00	1,009.90	0.13		0.44
Hypothetical (5% return before expenses)	1,000.00	1,024.20	0.13		0.65
Treasury Money Market
Capital Shares
Actual	1,000.00	1,006.40	0.05		0.17
Hypothetical (5% return before expenses)	1,000.00	1,024.60	0.05		0.25

^(a) Account values of the actual expenses for the Capital Shares are based on a start date of February 28, 2008 (commencement of operations).

^(b) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(c) Actual expenses are calculated using each Fund’s annualized expense ratio of the Capital Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (124 days) and divided by the number of days in the year (366 days). Hypothetical expenses are calculated using each Fund’s annualized expense ratio of the Capital Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Fund		Institutional Money Market Fund		Prime Money Market Fund		Treasury Money Market Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	111,317,179	$	2,357,681,486	$	13,140,946,089	$	49,034,301
Total Assets		111,317,179		2,357,681,486		13,140,946,089		49,034,301
LIABILITIES
Payables:
Distribution to shareholders		192,305		6,979,789		27,632,310		78,678
Administration fees (Note 2)		6,114		213,750		740,030		1,891
Distribution fees – Aon Captives Shares (Note 2)		—		23,081		—		—
Accrued expenses:
Professional fees (Note 2)		5,649		13,840		17,277		5,613
Independent trustees’ fees (Note 2)		61		857		964		49
Total Liabilities		204,129		7,231,317		28,390,581		86,231
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Net assets consist of:
Paid-in capital	$	111,113,050	$	2,350,387,203	$	13,112,079,273	$	48,948,070
Undistributed net investment income		—		400		146		—
Undistributed net realized gain		—		62,566		476,089		—
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Aon Captives Shares
Net Assets	$	—	$	98,066,537	$	—	$	—
Shares outstanding(a)		—		98,065,035		—		—
Net asset value and offering price per share	$	—	$	1.00	$	—	$	—
Capital Shares
Net Assets	$	100,000	$	100,000	$	144,023,946	$	100,000
Shares outstanding(a)		100,000		100,000		144,023,937		100,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Institutional Shares
Net Assets	$	11,715,262	$	1,748,872,052	$	9,707,477,952	$	15,814,810
Shares outstanding(a)		11,715,262		1,748,837,223		9,707,137,602		15,814,810
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Premium Shares
Net Assets	$	98,322,680	$	430,878,939	$	3,184,486,804	$	21,216,341
Shares outstanding(a)		98,322,680		430,856,442		3,184,363,836		21,216,341
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Select Shares
Net Assets	$	925,108	$	6,560,362	$	76,516,806	$	11,766,919
Shares outstanding(a)		925,108		6,560,291		76,503,898		11,766,919
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Trust Shares
Net Assets	$	50,000	$	65,972,279	$	50,000	$	50,000
Shares outstanding(a)		50,000		65,972,001		50,000		50,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Fund			Institutional Money Market Fund			Prime Money Market Fund			Treasury Money Market Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Interest	$	2,265,183		$	79,899,651		$	212,905,601		$	1,643,838
Expenses(a)		(5,131	)		(1,599,953	)		(2,691,437	)		(1,723	)
Net investment income allocated from corresponding Master Portfolio		2,260,052			78,299,698			210,214,164			1,642,115
FUND EXPENSES (Note 2)
Administration fees		69,556			1,618,474			4,013,896			48,302
Distribution fees – Aon Captives Shares		—			44,777			—			—
Professional fees		5,908			11,009			15,282			5,908
Independent trustees’ fees		911			21,852			51,883			789
Total fund expenses		76,375			1,696,112			4,081,061			54,999
Less expense reductions (Note 2)		(21,316	)		(33,500	)		(316,393	)		(19,749	)
Net fund expenses		55,059			1,662,612			3,764,668			35,250
Net investment income		2,204,993			76,637,086			206,449,496			1,606,865
REALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain		—			54,453			465,491			—
Net realized gain		—			54,453			465,491			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,204,993		$	76,691,539		$	206,914,987		$	1,606,865

^(a) Net of investment advisory fee reductions in the amounts of $80,644, $708,796, $1,987,163 and $75,523, respectively.

The accompanying notes are an integral part of these financial statements.

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Fund						Institutional Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,204,993		$	7,312,759		$	76,637,086		$	339,579,002
Net realized gain		—			—			54,453			8,933
Net increase in net assets resulting from operations		2,204,993			7,312,759			76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		—			—			(1,441,790	)		(4,052,238	)
Capital Shares(a)		(485	)		—			(611	)		—
Institutional Shares		(597,932	)		(1,172,179	)		(50,072,921	)		(245,584,218	)
Premium Shares		(1,558,004	)		(4,856,791	)		(23,957,127	)		(82,147,008	)
Select Shares		(47,980	)		(1,279,756	)		(103,036	)		(326,865	)
Trust Shares		(592	)		(4,033	)		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(2,204,993	)		(7,312,759	)		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		—			—			7,873,281			21,109,582
Capital Shares(a)		100,000			—			100,000			—
Institutional Shares		8,684,533			2,635,467			(4,904,900,026	)		2,455,028,191
Premium Shares		8,498,952			(33,708,376	)		(315,719,969	)		(574,454,848	)
Select Shares		(13,344,330	)		(28,413,242	)		1,753,077			3,578,273
Trust Shares		—			(57,892	)		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		3,939,155			(59,544,043	)		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		3,939,155			(59,544,043	)		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		107,173,895			166,717,938			7,581,092,352			5,787,558,343
End of period	$	111,113,050		$	107,173,895		$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	Prime Money Market Fund						Treasury Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	206,449,496		$	501,618,559		$	1,606,865		$	7,891,235
Net realized gain		465,491			10,598			—			—
Net increase in net assets resulting from operations		206,914,987			501,629,157			1,606,865			7,891,235
Distributions to shareholders:
From net investment income:
Capital Shares(a)		(304,828	)		—			(413	)		—
Institutional Shares		(152,251,591	)		(395,738,229	)		(1,089,037	)		(6,006,336	)
Premium Shares		(50,979,387	)		(98,980,240	)		(434,307	)		(513,487	)
Select Shares		(2,912,940	)		(6,958,678	)		(82,607	)		(1,367,486	)
Trust Shares		(750	)		(4,135	)		(501	)		(3,926	)
Total distributions to shareholders		(206,449,496	)		(501,681,282	)		(1,606,865	)		(7,891,235	)
Capital share transactions (Note 3):
Capital Shares(a)		144,023,937			—			100,000			—
Institutional Shares		1,343,357,622			2,447,990,425			(115,375,464	)		4,672,699
Premium Shares		1,388,887,780			243,844,111			(40,296,904	)		59,401,698
Select Shares		(191,848,386	)		246,709,511			1,716,919			(45,868,956	)
Trust Shares		—			(58,148	)		—			(57,775	)
Net increase (decrease) in net assets resulting from capital share transactions		2,684,420,953			2,938,485,899			(153,855,449	)		18,147,666
Increase (decrease) in net assets		2,684,886,444			2,938,433,774			(153,855,449	)		18,147,666
NET ASSETS:
Beginning of period		10,427,669,064			7,489,235,290			202,803,519			184,655,853
End of period	$	13,112,555,508		$	10,427,669,064		$	48,948,070		$	202,803,519
Undistributed net investment income included in net assets at end of period	$	146		$	146		$	—		$	—

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout the period)

Government Money Market Fund – Capital Shares
	Period from Feb. 28, 2008(a)  to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	1.00
Income from investment operations:
Net investment income		0.01
Total from investment operations		0.01
Less distributions from:
Net investment income		(0.01	)
Total distributions		(0.01	)
Net asset value, end of period	$	1.00
Total return		0.77	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	100
Ratio of expenses to average net assets(c)		0.05	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.19	%
Ratio of net investment income to average net assets(c)		2.25	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

Institutional Money Market Fund – Capital Shares
	Period from Feb. 28, 2008(a)  to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	1.00
Income from investment operations:
Net investment income		0.01
Net realized gain		0.00	(b)
Total from investment operations		0.01
Less distributions from:
Net investment income		(0.01	)
Total distributions		(0.01	)
Net asset value, end of period	$	1.00
Total return		0.99	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	100
Ratio of expenses to average net assets(d)		0.14	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.17	%
Ratio of net investment income to average net assets(d)		2.83	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

Prime Money Market Fund – Capital Shares
	Period from Feb. 28, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	1.00
Income from investment operations:
Net investment income		0.01
Net realized gain		0.00	(b)
Total from investment operations		0.01
Less distributions from:
Net investment income		(0.01	)
Total distributions		(0.01	)
Net asset value, end of period	$	1.00
Total return		0.99	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	144,024
Ratio of expenses to average net assets(d)		0.13	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.19	%
Ratio of net investment income to average net assets(d)		2.73	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout the period)

Treasury Money Market Fund – Capital Shares
	Period from Feb. 28, 2008(a) to Jun. 30, 2008 (Unaudited)
Net asset value, beginning of period	$	1.00
Income from investment operations:
Net investment income		0.01
Total from investment operations		0.01
Less distributions from:
Net investment income		(0.01	)
Total distributions		(0.01	)
Net asset value, end of period	$	1.00
Total return		0.64	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	100
Ratio of expenses to average net assets(c)		0.05	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.20	%
Ratio of net investment income to average net assets(c)		1.91	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Capital Shares of the Government Money Market Fund (the “GMMF”), Institutional Money Market Fund (the “IMMF”), Prime Money Market Fund (the “PMMF”) and Treasury Money Market Fund (the “TMMF”), (each, a “Fund,” collectively, the “Funds”). In addition, the GMMF, PMMF and TMMF offer Institutional Shares, Premium Shares, Select Shares and Trust Shares. The IMMF also offers Aon Captives Shares, Institutional Shares, Premium Shares, Select Shares and Trust Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (100.00%, 7.57%, 91.95% and 100.00% for the GMMF, IMMF, PMMF and TMMF, respectively, as of June 30, 2008).

Effective January 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, use of amortized cost, 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

10

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized, tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

Each Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Funds will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Funds are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

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 period ended June 30, 2008.

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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. The IMMF has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. This fee is an expense of the Aon Captives Shares only; SEI does not receive a fee from the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares of the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.07% of the average

11

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

daily net assets of each Fund’s Capital Shares. From time to time, BGI may waive such fees in whole or in part. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the period ended June 30, 2008, BGI waived and/or credited administration fees of $8, $–, $175 and $8 for the Capital Shares of the GMMF, IMMF, PMMF and TMMF, respectively.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Capital Shares of the Funds were as follows:

	Period from February 28, 2008(a) to June 30, 2008 (Unaudited)
Fund	Shares		Amount
Government Money Market
Shares sold	100,105		$	100,105
Shares redeemed	(105	)		(105	)
Net increase	100,000		$	100,000
Institutional Money Market
Shares sold	100,100		$	100,100
Shares redeemed	(100	)		(100	)
Net increase	100,000		$	100,000
Prime Money Market
Shares sold	404,867,483		$	404,867,483
Shares issued in reinvestment of dividends and distributions	128,774			128,774
Shares redeemed	(260,972,320	)		(260,972,320	)
Net increase	144,023,937		$	144,023,937
Treasury Money Market
Shares sold	100,110		$	100,110
Shares redeemed	(110	)		(110	)
Net increase	100,000		$	100,000

^(a) Commencement of operations.

12

GOVERNMENT MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount	Value
REPURCHASE AGREEMENTS – 100.00%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $26,001,806 (collateralized by U.S. government obligations, value $26,520,000, 5.00%, 3/1/34).	$26,000,000	$	26,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $10,000,694 (collateralized by U.S. government obligations, value $10,200,000, 5.50%, 3/1/35).	10,000,000		10,000,000
Credit Suisse First Boston Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $16,101,118 (collateralized by U.S. government obligations, value $16,422,655, 4.62% to 5.79%, 4/1/35 to 10/1/37).	16,100,000		16,100,000
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $23,216,548 (collateralized by U.S. government obligations, value $23,679,300, 5.50% to 7.00%, 4/15/28 to 4/15/38).	23,215,000		23,215,000
Lehman Brothers Holdings Inc. Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $26,001,733 (collateralized by U.S. government obligations, value $26,524,289, 5.50%, 6/1/37).	26,000,000		26,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.74%, dated 6/30/08, due 7/1/08, maturity value $10,000,761 (collateralized by U.S. government obligations, value $10,302,489, 5.50% to 6.50%, 12/25/35 to 8/25/36).	10,000,000		10,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $111,315,000)			111,315,000
TOTAL INVESTMENTS IN SECURITIES – 100.00%
(Cost: $111,315,000)			111,315,000
Other Assets, Less Liabilities – 0.00%			2,179
NET ASSETS – 100.00%		$	111,317,179

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury
Services PLC
2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

14

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount	Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$488,371,000	$     486,537,574
2.67%, 07/25/08(a)	125,000,000	124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)	100,000,000	99,927,778
2.72%, 08/15/08(a)	136,137,000	135,674,134
Royal Bank of Scotland
2.87%, 08/01/08	150,000,000	149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)	145,000,000	144,905,750
Thames Asset Global
Securitization No. 1 Inc.
2.58%, 07/09/08(a)	160,741,000	160,648,842
2.75%, 07/07/08(a)	200,000,000	199,908,333
2.78%, 08/15/08(a)	100,000,000	99,652,500
2.80%, 07/17/08(a)	150,000,000	149,813,334
2.80%, 08/07/08(a)	160,000,000	159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)	175,000,000	174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)	150,000,000	149,820,000
2.75%, 07/15/08(a)	82,008,000	81,920,297
UniCredito Italiano
Bank (Ireland) PLC
2.91%, 09/04/08	100,000,000	99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)	110,000,000	109,610,417
2.60%, 09/04/08(a)	100,000,000	99,530,556
2.87%, 07/18/08(a)	125,000,000	124,830,590
Westpac Banking Corp.
2.62%, 03/06/09	250,000,000	245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09	200,000,000	196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)	200,000,000	199,871,500
2.57%, 07/22/08(a)	250,000,000	249,625,208
2.70%, 08/14/08(a)	145,000,000	144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)	130,973,000	130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)		11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09	250,000,000	250,000,000
Federal National Mortgage
Association
2.30%, 12/18/08	330,000,000	326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)	300,000,000	300,000,000
US Bank N.A.
2.60%, 02/19/09	300,000,000	300,000,000
2.70%, 09/08/08	150,000,000	150,000,000
2.75%, 01/05/09	330,000,000	330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)		1,656,415,833

Security	Face Amount	Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$  40,000,000	$   40,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).	90,000,000	90,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).	465,000,000	465,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).	485,000,000	485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).	300,000,000	300,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).	1,040,000,000	1,040,000,000
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).	175,000,000	175,000,000
Goldman Sachs & Co. Tri-Party 2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)	150,000,000	150,000,000

15

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party 2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party 2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale
2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037

16

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Allstate Life Global Funding Trusts
2.48%, 09/04/08	$	125,000,000	$	124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504
American Express Bank FSB
2.50%, 06/12/09		50,000,000		49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd.
London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand
Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida
Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC
Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life
Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000

Security	Face Amount		Value
Jordan Brick Co. Inc.
2.58%, 07/02/08	$	45,220,000	$	45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976
Kommunalkredit Austria AG
2.46%, 08/08/08(a)		40,000,000		40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000

17

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class A4M
2.48%, 07/17/08(a)	$	54,273,000	$	54,273,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class AMM
2.50%, 07/17/08(a)		187,623,000		187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

18

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 13.21%
Banco Bilbao Vizcaya Argentaria SA
4.57%, 07/03/08	$	175,000,000	$	175,019,603
Bank of Nova Scotia
2.51%, 04/01/09		150,000,000		150,011,134
3.00%, 01/29/09		75,000,000		74,975,587
Bank of Scotland
4.98%, 07/07/08		135,000,000		135,000,000
BNP Paribas
2.58%, 08/20/08		92,500,000		92,499,953
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		200,000,000		200,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		110,000,000		110,000,000
5.40%, 07/10/08		100,000,000		100,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		85,000,000		85,000,000
Fortis Bank NY
2.41%, 10/02/08		30,000,000		29,973,436
Rabobank Nederland NV
2.54%, 08/22/08		50,000,000		50,002,871
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,391
2.64%, 04/09/09		75,000,000		75,002,861
Societe Generale NY
4.51%, 11/21/08		25,000,000		25,000,950
SunTrust Banks Inc.
2.50%, 07/17/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		75,000,000		75,000,000
UniCredito Italiano NY
2.95%, 12/08/08		85,000,000		85,001,860
Wachovia Bank N.A.
2.92%, 01/12/09		5,000,000		5,002,025
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $1,887,493,179)				1,887,493,179
COMMERCIAL PAPER – 41.01%
Amstel Funding Corp.
2.85%, 07/08/08(a)		175,000,000		174,903,021
2.95%, 07/28/08(a)		160,000,000		159,646,000
2.95%, 08/04/08(a)		50,000,000		49,860,694
3.00%, 07/18/08(a)		100,000,000		99,858,333
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
Bank of Scotland
2.65%, 07/09/08		125,000,000		124,926,389
CAFCO LLC
2.52%, 07/14/08(a)		250,000,000		249,772,500
2.52%, 07/28/08(a)		75,000,000		74,858,250
2.55%, 07/14/08(a)		71,200,000		71,134,437

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.55%, 07/09/08(a)	$	100,000,000	$	99,943,333
2.60%, 07/14/08(a)		100,000,000		99,906,111
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
2.95%, 08/01/08(a)		150,000,000		149,618,959
Chariot Funding LLC
2.50%, 07/21/08(a)		100,000,000		99,861,111
2.55%, 07/14/08(a)		166,580,000		166,426,608
2.55%, 08/22/08(a)		75,497,000		75,218,919
Charta LLC
2.54%, 07/28/08(a)		250,000,000		249,523,750
2.54%, 07/30/08(a)		50,000,000		49,897,695
CRC Funding LLC
2.59%, 07/30/08(a)		125,000,000		124,739,202
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		100,000,000		99,721,944
Falcon Asset Securitization Co. LLC
2.43%, 07/08/08(a)		125,277,000		125,217,807
2.60%, 07/18/08(a)		175,000,000		174,785,139
General Electric Capital Corp.
2.45%, 08/01/08		100,000,000		99,789,028
3.92%, 10/03/08		125,000,000		123,720,555
4.39%, 08/25/08		60,000,000		59,597,584
General Electric Capital Services Inc.
4.39%, 08/25/08		60,000,000		59,597,584
Govco Inc.
2.65%, 08/25/08(a)		134,250,000		133,706,474
Grampian Funding LLC
2.68%, 07/14/08(a)		200,000,000		199,806,444
2.75%, 07/10/08(a)		100,000,000		99,931,250
Jupiter Securitization Corp.
2.50%, 07/21/08(a)		75,000,000		74,895,833
2.55%, 08/22/08(a)		110,728,000		110,320,152
2.65%, 07/22/08(a)		100,000,000		99,845,417
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		100,000,000		99,931,945
Nationwide Building Society
2.95%, 08/01/08		100,000,000		99,745,971
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		75,000,000		74,970,000
Ranger Funding Co. LLC
2.67%, 07/25/08(a)		75,000,000		74,866,500
Royal Bank of Scotland
2.87%, 08/01/08		100,000,000		99,752,861
Solitaire Funding Ltd.
2.60%, 07/11/08(a)		250,000,000		249,819,445
Thames Asset Global
Securitization No. 1 Inc.
2.80%, 07/07/08(a)		136,477,000		136,413,311
2.80%, 07/17/08(a)		100,000,000		99,875,556
2.80%, 07/21/08(a)		30,879,000		30,830,966
2.82%, 07/18/08(a)		58,572,000		58,494,002
Thunder Bay Funding LLC
2.55%, 07/16/08(a)		153,647,000		153,483,750
2.57%, 07/11/08(a)		103,799,000		103,724,899

19

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ticonderoga Master Funding Ltd.
2.50%, 07/02/08(a)	$	102,420,000	$	102,412,887
Tulip Funding Corp.
2.60%, 07/08/08(a)		100,000,000		99,949,444
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		50,000,000		49,737,292
Variable Funding Capital Corp.
2.87%, 07/18/08(a)		125,000,000		124,830,590
Yorktown Capital LLC
2.55%, 07/22/08(a)		121,320,000		121,139,536
2.67%, 07/24/08(a)		100,000,000		99,829,417
2.80%, 07/18/08(a)		125,119,000		124,953,565
TOTAL COMMERCIAL PAPER
(Cost: $5,860,539,557)				5,860,539,557
MEDIUM-TERM NOTES – 4.96%
ASIF Global Financing
3.90%, 10/22/08(a)		15,670,000		15,616,123
Berkshire Hathaway Finance Corp.
3.38%, 10/15/08		65,200,000		65,309,904
Federal National Mortgage
Association
2.30%, 12/18/08		170,000,000		168,153,611
MassMutual Global Funding II
3.80%, 04/15/09(a)		40,000,000		40,395,644
Metropolitan Life Global Funding I
3.80%, 01/20/09(a)		250,000,000		250,000,000
US Bank N.A.
2.75%, 01/05/09		170,000,000		170,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $709,475,282)				709,475,282
REPURCHASE AGREEMENTS – 14.62%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50%, 6/1/33).		40,000,000		40,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $400,030,222 (collateralized by non-U.S. government debt securities, value $440,000,000, 0.00% to 10.00%, 2/23/36).		400,000,000		400,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $175,012,882 (collateralized by non-U.S. government debt securities, value $180,251,815, 3.21% to 7.71%, 11/1/08 to 10/15/36).		175,000,000		175,000,000

Security	Face Amount		Value
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $125,009,549 (collateralized by non-U.S. government debt securities, value $128,753,713, 4.65% to 7.75%, 2/15/10 to 10/1/66).	$	125,000,000	$	125,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $300,022,333 (collateralized by non-U.S. government debt securities, value $315,000,000, 0.00% to 16.07%, 2/25/09 to 2/10/51).		300,000,000		300,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $375,027,083 (collateralized by non-U.S. government debt securities, value $393,751,820, 0.00% to 12.87%, 1/15/13 to 6/11/50).		375,000,000		375,000,000
J.P. Morgan Securities Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $250,019,097 (collateralized by U.S. government obligations, value $255,001,131, 5.00% to 6.00%, 1/1/36 to 10/1/36).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $100,007,222 (collateralized by U.S. government obligations, value $102,000,291, 4.50% to 6.00%, 11/1/16 to 4/1/28).		100,000,000		100,000,000
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $125,072,917 (collateralized by non-U.S. government debt securities, value $131,254,412, 1.63% to 14.88%, 10/1/08 to 12/20/54).		125,000,000		125,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $211,970,792, 0.00% to 10.00%, 5/18/10 to 12/20/49).		200,000,000		200,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $2,090,000,000)				2,090,000,000

20

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
TIME DEPOSITS – 0.48%
Societe Generale
2.50%, 07/01/08	$	67,882,000	$	67,882,000
TOTAL TIME DEPOSITS
(Cost: $67,882,000)				67,882,000
VARIABLE & FLOATING RATE NOTES – 25.44%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		160,000,000		160,001,148
2.52%, 11/07/08(a)		58,000,000		58,001,937
2.53%, 11/14/08(a)		85,000,000		85,006,654
Allstate Life Global Funding Trusts
2.48%, 09/04/08		45,000,000		45,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Bank of America N.A.
3.21%, 07/02/09		75,000,000		75,000,000
Bank of Ireland
2.67%, 09/12/08(a)		35,000,000		35,000,000
Citigroup Global Markets Holdings Inc.
2.65%, 10/21/08		350,000,000		350,000,000
DEPFA Bank PLC
2.84%, 07/14/08		50,000,000		50,000,000
Deutsche Bank AG
2.43%, 09/30/08		100,000,000		100,000,000
Dexia Credit SA NY
2.43%, 09/29/08		31,770,000		31,726,677
General Electric Capital Corp.
2.50%, 04/24/09		65,000,000		65,000,000
2.77%, 01/05/09		13,800,000		13,788,118
2.82%, 03/16/09		2,900,000		2,897,070
2.88%, 06/15/09		25,000,000		24,995,767
Granite Master Issuer PLC
Series 2005-3 Class A
2.48%, 08/20/08(a)		125,000,000		125,000,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,000,000
ING Bank NV
3.16%, 06/17/09(a)		100,000,000		100,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		65,000,000		65,000,000
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
Metropolitan Life Global Funding I
2.50%, 11/06/08(a)		139,680,000		139,681,688
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
3.00%, 07/25/08(b)		50,000,000		50,000,000
Metropolitan Life Insurance Funding
3.02%, 04/01/09(a)(b)		15,000,000		15,000,000
Monumental Global Funding III
2.79%, 08/29/08(a)		50,000,000		50,000,000
Morgan Stanley
2.61%, 12/03/08		100,000,000		100,000,000

Security	Face Amount		Value
National Australia Bank Ltd.
2.88%, 03/06/09(a)	$	75,000,000	$	74,866,757
Nationwide Building Society
2.51%, 10/06/08(a)		135,000,000		135,003,930
2.88%, 10/27/08(a)		50,000,000		50,000,000
Rabobank Nederland NV NY
2.66%, 11/14/08(a)		140,000,000		140,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		100,000,000		100,000,000
Royal Bank of Scotland PLC
2.87%, 07/21/08(a)		20,000,000		20,000,515
Societe Generale
2.46%, 08/29/08(a)		5,000,000		4,998,696
Toyota Motor Credit Corp.
2.06%, 10/20/08		25,000,000		24,955,173
Toyota Motor Credit Corp. Series 1
2.53%, 01/12/09		200,000,000		200,000,000
UBS AG Stamford
2.46%, 08/15/08		100,000,000		100,000,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class A4M
2.48%, 07/17/08(a)		23,000,000		23,000,000
Wachovia Bank Commercial
Mortgage Trust Series 2007-C32
Class AMM
2.50%, 07/17/08(a)		80,000,000		80,000,000
Wachovia Bank N.A.
2.65%, 10/03/08		31,200,000		31,193,095
2.84%, 03/23/09		50,000,000		49,853,708
2.91%, 05/01/09		250,000,000		250,000,000
2.99%, 11/25/08		40,000,000		39,995,084
Wells Fargo & Co.
3.55%, 05/01/09		50,000,000		50,021,111
Westpac Banking Corp.
2.92%, 06/10/09		175,000,000		175,000,000
World Savings Bank FSB
2.80%, 05/08/09		3,100,000		3,081,978
2.81%, 03/02/09		2,600,000		2,590,079
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $3,635,665,995)				3,635,665,995
TOTAL INVESTMENTS IN SECURITIES – 99.72%
(Cost: $14,251,056,013)				14,251,056,013
Other Assets, Less Liabilities – 0.28%				40,280,226
NET ASSETS – 100.00%			$	14,291,336,239

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

21

TREASURY MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.01%
Banc of America Securities LLC Tri-Party 1.50%, dated 6/30/08, due 7/1/08, maturity value $8,200,342 (collateralized by U.S. government obligations, value $8,364,029, 4.88%, 8/31/08).	$	8,200,000	$	8,200,000
Credit Suisse First Boston Tri-Party 1.75%, dated 6/30/08, due 7/1/08, maturity value $8,200,399 (collateralized by U.S. government obligations, value $8,367,816, 4.88%, 5/31/09).		8,200,000		8,200,000
Goldman Sachs Group Inc. (The) Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $8,938,310 (collateralized by U.S. government obligations, value $9,116,862, 8.75%, 5/15/20).		8,938,000		8,938,000
Lehman Brothers Holdings Inc. Tri-Party 0.25%, dated 6/30/08, due 7/1/08, maturity value $8,200,057 (collateralized by U.S. government obligations, value $8,369,933, 7.13%, 2/15/23).		8,200,000		8,200,000
Merrill Lynch & Co. Inc. Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $15,500,538 (collateralized by U.S. government obligations, value $15,815,611, 4.13% to 5.25%, 9/1/09 to 9/15/17).		15,500,000		15,500,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $49,038,000)				49,038,000
TOTAL INVESTMENTS IN SECURITIES – 100.01%
(Cost: $49,038,000)				49,038,000
Other Assets, Less Liabilities – (0.01)%				(3,699	)
NET ASSETS – 100.00%			$	49,034,301

The accompanying notes are an integral part of these financial statements.

22

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Government Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	111,315,000		100.00	%
Other Net Assets		2,179		0.00
TOTAL	$	111,317,179		100.00	%
Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	11,932,235,376		38.29	%
Variable & Floating Rate Notes		7,855,885,973		25.21
Repurchase Agreements		6,175,000,000		19.82
Certificates of Deposit		3,300,008,879		10.59
Medium-Term Notes		1,656,415,833		5.32
Time Deposits		178,626,000		0.57
Other Net Assets		62,281,372		0.20
TOTAL	$	31,160,453,433		100.00	%
Prime Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	5,860,539,557		41.01	%
Variable & Floating Rate Notes		3,635,665,995		25.44
Repurchase Agreements		2,090,000,000		14.62
Certificates of Deposit		1,887,493,179		13.21
Medium-Term Notes		709,475,282		4.96
Time Deposits		67,882,000		0.48
Other Net Assets		40,280,226		0.28
TOTAL	$	14,291,336,239		100.00	%
Treasury Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	49,038,000		100.01	%
Other Net Assets		(3,699	)	(0.01	)
TOTAL	$	49,034,301		100.00	%

These tables are not part of the financial statements.

23

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio		Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio
ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	—	$	24,923,172,061	$	12,161,056,013	$	—
Repurchase agreements, at value and cost (Note 1)		111,315,000		6,175,000,000		2,090,000,000		49,038,000
Total investments		111,315,000		31,098,172,061		14,251,056,013		49,038,000
Cash		151		11		625		32
Receivables:
Interest		7,660		64,201,148		41,181,122		1,646
Due from investment adviser		1,057		—		—		1,265
Total Assets		111,323,868		31,162,373,220		14,292,237,760		49,040,943
LIABILITIES
Payables:
Investment advisory fees (Note 2)		—		1,885,710		879,693		—
Accrued expenses:
Professional fees (Note 2)		6,629		28,358		20,542		6,594
Independent trustees’ fees (Note 2)		60		5,719		1,286		48
Total Liabilities		6,689		1,919,787		901,521		6,642
NET ASSETS	$	111,317,179	$	31,160,453,433	$	14,291,336,239	$	49,034,301

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio			Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio
NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	2,265,184		$	552,894,094		$	229,517,108		$	1,643,838
Total investment income		2,265,184			552,894,094			229,517,108			1,643,838
EXPENSES (Note 2)
Investment advisory fees		78,214			16,228,714			6,794,100			69,807
Professional fees		6,650			30,871			16,461			6,650
Independent trustees’ fees		911			139,013			56,250			789
Total expenses		85,775			16,398,598			6,866,811			77,246
Less expense reductions (Note 2)		(80,644	)		(5,038,498	)		(3,962,835	)		(75,523	)
Net expenses		5,131			11,360,100			2,903,976			1,723
Net investment income		2,260,053			541,533,994			226,613,132			1,642,115
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		—			(2,995,721	)		(290,351	)		—
Payment from affiliate (Note 2)		—			3,399,402			814,069			—
Net realized gain		—			403,681			523,718			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,260,053		$	541,937,675		$	227,136,850		$	1,642,115

The accompanying notes are an integral part of these financial statements.

24

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Master Portfolio						Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,260,053		$	7,459,087		$	541,533,994		$	1,082,958,398
Net realized gain		—			—			403,681			42,548
Net increase in net assets resulting from operations		2,260,053			7,459,087			541,937,675			1,083,000,946
Interestholder transactions:
Contributions		1,558,317,449			1,739,584,764			24,050,846,582			66,603,193,729
Withdrawals		(1,557,095,598	)		(1,806,493,585	)		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		1,221,851			(66,908,821	)		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		3,481,904			(59,449,734	)		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		107,835,275			167,285,009			31,492,403,778			6,924,964,889
End of period	$	111,317,179		$	107,835,275		$	31,160,453,433		$	31,492,403,778

	Prime Money Market Master Portfolio						Treasury Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	226,613,132		$	559,112,567		$	1,642,115		$	7,969,862
Net realized gain		523,718			11,956			—			—
Net increase in net assets resulting from operations		227,136,850			559,124,523			1,642,115			7,969,862
Interestholder transactions:
Contributions		58,414,645,861			99,288,703,149			384,220,217			1,637,092,248
Withdrawals		(55,372,727,474	)		(97,098,629,295	)		(540,250,452	)		(1,627,123,957	)
Net increase (decrease) in net assets resulting from interestholder transactions		3,041,918,387			2,190,073,854			(156,030,235	)		9,968,291
Increase (decrease) in net assets		3,269,055,237			2,749,198,377			(154,388,120	)		17,938,153
NET ASSETS:
Beginning of period		11,022,281,002			8,273,082,625			203,422,421			185,484,268
End of period	$	14,291,336,239		$	11,022,281,002		$	49,034,301		$	203,422,421

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolios use the amortized cost method of valuation to determine the value of their portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolios’ net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolios’ amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Master Portfolios’ 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.

26

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

	Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Government Money Market	$	—	$	111,315,000	$	—	$	111,315,000
Money Market		—		31,098,172,061		—		31,098,172,061
Prime Money Market		—		14,251,056,013		—		14,251,056,013
Treasury Money Market		—		49,038,000		—		49,038,000

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolios amortize premium and accrete discount using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

In the case of Master Portfolios with only one interestholder, such as the Government Money Market and Treasury Money Market Master Portfolios, MIP believes that such Master Portfolios will not be treated as a separate entity for federal income tax purposes, and, therefore, will not be subject to any federal income tax on their income and gains (if any). Rather, such Master Portfolios’ assets and interest, dividends and gains or losses will be treated as assets and interest, dividends and gains or losses of the interestholders.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolios’ costs of investments for federal income tax purposes were the same as for financial reporting purposes.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

REPURCHASE AGREEMENTS

The Master Portfolios may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

27

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolios, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of each of the Master Portfolios, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%. From time to time, BGFA may waive an additional portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees of $80,644, $5,038,498, $3,962,835 and $75,523 for the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Prime Money Market Master Portfolio and Money Market Master Portfolio for cash at $34,998,569 and $181,990,742, respectively, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statements of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

28

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Government Money Market
Ratio of expenses to average net assets(a)	0.01	%	0.07	%	0.08	%	0.03	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.11	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.89	%	4.93	%	4.90	%	3.16	%	1.93	%(b)	n/a
Total return	1.38	%(c)	5.20	%	5.08	%	3.28	%	0.64	%(b)(c)	n/a
Money Market
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(c)(d)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%
Prime Money Market
Ratio of expenses to average net assets(a)	0.04	%	0.07	%	0.08	%	0.08	%	0.03	%	0.03	%(e)
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%(e)
Ratio of net investment income to average net assets(a)	3.33	%	5.23	%	4.95	%	3.22	%	1.52	%	1.12	%(e)
Total return	1.70	%(c)(d)	5.37	%	5.11	%	3.26	%	1.40	%	0.80	%(c)(e)
Treasury Money Market
Ratio of expenses to average net assets(a)	0.00	%	0.01	%	0.00	%	0.00	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.13	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.35	%	4.81	%	5.03	%	3.99	%	1.82	%(b)	n/a
Total return	1.14	%(c)	4.98	%	5.04	%	3.20	%	0.61	%(b)(c)	n/a

^(a) Annualized for periods of less than one year.

^(b) For the period from September 1, 2004 (commencement of operations) to December 31, 2004.

^(c) Not annualized.

^(d) For the six months ended June 30, 2008, 0.01% of the Master Portfolio’s total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68% for the Money Market Master Portfolio and 1.69% for the Prime Money Market Master Portfolio.

^(e) For the period from April 16, 2003 (commencement of operations) to December 31, 2003.

29

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio, Government Money Market Master Portfolio, and Treasury Money Market Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, as applicable, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Money Market Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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.

30

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited) (Continued)

The Board noted that each Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the Master Portfolios were generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolios were generally lower than the overall expenses for the funds in their Lipper Expense Groups, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for certain of the Master Portfolios during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations for the last calendar year. The Board analyzed the Master Portfolios’ expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to certain of the Master Portfolios while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios in comparison with the

31

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited) (Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolios and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rates under the Master Portfolios’ Advisory Contracts were within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rates for certain of the Master Portfolios and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolios. The Board further noted that the Master Portfolios may, but generally do not, participate in securities lending activities and generally do not execute transactions with affiliated brokers, as do other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

32

Notes:

Notes:

TABLE OF CONTENTS

Shareholder Expenses	1
Barclays Global Investors Funds
Financial Statements	2
Financial Highlights	6
Notes to Financial Statements	10
Master Investment Portfolio
Schedules of Investments	13
Government Money Market Master Portfolio	13
Money Market Master Portfolio	14
Prime Money Market Master Portfolio	19
Treasury Money Market Master Portfolio	22
Portfolio Allocations	23
Financial Statements	24
Notes to Financial Statements	26
Board Review and Approval of Investment Advisory Contracts	30

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Government Money Market
Select Shares
Actual	$1,000.00	$1,013.20	0.12	%	$0.60
Hypothetical (5% return before expenses)	1,000.00	1,024.30	0.12		0.60
Institutional Money Market
Select Shares
Actual	1,000.00	1,016.30	0.20		1.00
Hypothetical (5% return before expenses)	1,000.00	1,023.90	0.20		1.01
Prime Money Market
Select Shares
Actual	1,000.00	1,016.40	0.16		0.80
Hypothetical (5% return before expenses)	1,000.00	1,024.10	0.16		0.81
Treasury Money Market
Select Shares
Actual	1,000.00	1,010.80	0.11		0.55
Hypothetical (5% return before expenses)	1,000.00	1,024.30	0.11		0.55

^(a) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(b) Expenses are calculated using each Fund’s annualized expense ratio of the Select Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Fund		Institutional Money Market Fund		Prime Money Market Fund		Treasury Money Market Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	111,317,179	$	2,357,681,486	$	13,140,946,089	$	49,034,301
Total Assets		111,317,179		2,357,681,486		13,140,946,089		49,034,301
LIABILITIES
Payables:
Distribution to shareholders		192,305		6,979,789		27,632,310		78,678
Administration fees (Note 2)		6,114		213,750		740,030		1,891
Distribution fees – Aon Captives Shares (Note 2)		—		23,081		—		—
Accrued expenses:
Professional fees (Note 2)		5,649		13,840		17,277		5,613
Independent trustees’ fees (Note 2)		61		857		964		49
Total Liabilities		204,129		7,231,317		28,390,581		86,231
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Net assets consist of:
Paid-in capital	$	111,113,050	$	2,350,387,203	$	13,112,079,273	$	48,948,070
Undistributed net investment income		—		400		146		—
Undistributed net realized gain		—		62,566		476,089		—
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Aon Captives Shares
Net Assets	$	—	$	98,066,537	$	—	$	—
Shares outstanding(a)		—		98,065,035		—		—
Net asset value and offering price per share	$	—	$	1.00	$	—	$	—
Capital Shares
Net Assets	$	100,000	$	100,000	$	144,023,946	$	100,000
Shares outstanding(a)		100,000		100,000		144,023,937		100,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Institutional Shares
Net Assets	$	11,715,262	$	1,748,872,052	$	9,707,477,952	$	15,814,810
Shares outstanding(a)		11,715,262		1,748,837,223		9,707,137,602		15,814,810
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Premium Shares
Net Assets	$	98,322,680	$	430,878,939	$	3,184,486,804	$	21,216,341
Shares outstanding(a)		98,322,680		430,856,442		3,184,363,836		21,216,341
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Select Shares
Net Assets	$	925,108	$	6,560,362	$	76,516,806	$	11,766,919
Shares outstanding(a)		925,108		6,560,291		76,503,898		11,766,919
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Trust Shares
Net Assets	$	50,000	$	65,972,279	$	50,000	$	50,000
Shares outstanding(a)		50,000		65,972,001		50,000		50,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Fund			Institutional Money Market Fund			Prime Money Market Fund			Treasury Money Market Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Interest	$	2,265,183		$	79,899,651		$	212,905,601		$	1,643,838
Expenses(a)		(5,131	)		(1,599,953	)		(2,691,437	)		(1,723	)
Net investment income allocated from corresponding Master Portfolio		2,260,052			78,299,698			210,214,164			1,642,115
FUND EXPENSES (Note 2)
Administration fees		69,556			1,618,474			4,013,896			48,302
Distribution fees – Aon Captives Shares		—			44,777			—			—
Professional fees		5,908			11,009			15,282			5,908
Independent trustees’ fees		911			21,852			51,883			789
Total fund expenses		76,375			1,696,112			4,081,061			54,999
Less expense reductions (Note 2)		(21,316	)		(33,500	)		(316,393	)		(19,749	)
Net fund expenses		55,059			1,662,612			3,764,668			35,250
Net investment income		2,204,993			76,637,086			206,449,496			1,606,865
REALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain		—			54,453			465,491			—
Net realized gain		—			54,453			465,491			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,204,993		$	76,691,539		$	206,914,987		$	1,606,865

^(a) Net of investment advisory fee reductions in the amounts of $80,644, $708,796, $1,987,163 and $75,523, respectively.

The accompanying notes are an integral part of these financial statements.

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Fund						Institutional Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,204,993		$	7,312,759		$	76,637,086		$	339,579,002
Net realized gain		—			—			54,453			8,933
Net increase in net assets resulting from operations		2,204,993			7,312,759			76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		—			—			(1,441,790	)		(4,052,238	)
Capital Shares(a)		(485	)		—			(611	)		—
Institutional Shares		(597,932	)		(1,172,179	)		(50,072,921	)		(245,584,218	)
Premium Shares		(1,558,004	)		(4,856,791	)		(23,957,127	)		(82,147,008	)
Select Shares		(47,980	)		(1,279,756	)		(103,036	)		(326,865	)
Trust Shares		(592	)		(4,033	)		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(2,204,993	)		(7,312,759	)		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		—			—			7,873,281			21,109,582
Capital Shares(a)		100,000			—			100,000			—
Institutional Shares		8,684,533			2,635,467			(4,904,900,026	)		2,455,028,191
Premium Shares		8,498,952			(33,708,376	)		(315,719,969	)		(574,454,848	)
Select Shares		(13,344,330	)		(28,413,242	)		1,753,077			3,578,273
Trust Shares		—			(57,892	)		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		3,939,155			(59,544,043	)		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		3,939,155			(59,544,043	)		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		107,173,895			166,717,938			7,581,092,352			5,787,558,343
End of period	$	111,113,050		$	107,173,895		$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	Prime Money Market Fund						Treasury Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	206,449,496		$	501,618,559		$	1,606,865		$	7,891,235
Net realized gain		465,491			10,598			—			—
Net increase in net assets resulting from operations		206,914,987			501,629,157			1,606,865			7,891,235
Distributions to shareholders:
From net investment income:
Capital Shares(a)		(304,828	)		—			(413	)		—
Institutional Shares		(152,251,591	)		(395,738,229	)		(1,089,037	)		(6,006,336	)
Premium Shares		(50,979,387	)		(98,980,240	)		(434,307	)		(513,487	)
Select Shares		(2,912,940	)		(6,958,678	)		(82,607	)		(1,367,486	)
Trust Shares		(750	)		(4,135	)		(501	)		(3,926	)
Total distributions to shareholders		(206,449,496	)		(501,681,282	)		(1,606,865	)		(7,891,235	)
Capital share transactions (Note 3):
Capital Shares(a)		144,023,937			—			100,000			—
Institutional Shares		1,343,357,622			2,447,990,425			(115,375,464	)		4,672,699
Premium Shares		1,388,887,780			243,844,111			(40,296,904	)		59,401,698
Select Shares		(191,848,386	)		246,709,511			1,716,919			(45,868,956	)
Trust Shares		—			(58,148	)		—			(57,775	)
Net increase (decrease) in net assets resulting from capital share transactions		2,684,420,953			2,938,485,899			(153,855,449	)		18,147,666
Increase (decrease) in net assets		2,684,886,444			2,938,433,774			(153,855,449	)		18,147,666
NET ASSETS:
Beginning of period		10,427,669,064			7,489,235,290			202,803,519			184,655,853
End of period	$	13,112,555,508		$	10,427,669,064		$	48,948,070		$	202,803,519
Undistributed net investment income included in net assets at end of period	$	146		$	146		$	—		$	—

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Government Money Market Fund – Select Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a)  to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.32	%(b)		5.06	%		4.94	%		3.18	%		0.60	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	925		$	14,269		$	42,683		$	40,712		$	100
Ratio of expenses to average net assets(c)		0.12	%		0.20	%		0.21	%		0.13	%		0.10	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.27	%		0.28	%		0.26	%		0.22	%		0.22	%
Ratio of net investment income to average net assets(c)		3.04	%		5.03	%		4.84	%		3.90	%		1.81	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Institutional Money Market Fund – Select Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Jan. 26, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01
Net realized gain		0.00	(b)		0.00	(b)		—			0.00	(b)		—
Total from investment operations		0.02			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.63	%(c)		5.26	%		5.00	%		3.19	%		1.22	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	6,560		$	4,807		$	1,229		$	24,940		$	6,712
Ratio of expenses to average net assets(d)		0.20	%		0.20	%		0.19	%		0.15	%		0.10	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.25	%		0.25	%		0.23	%		0.22	%		0.22	%
Ratio of net investment income to average net assets(d)		3.24	%		5.11	%		4.55	%		3.50	%		1.93	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Prime Money Market Fund – Select Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Jan. 26, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01
Net realized gain		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		—
Total from investment operations		0.02			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.64	%(c)		5.24	%		4.97	%		3.16	%		1.23	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	76,517		$	268,352		$	21,642		$	81,359		$	170,336
Ratio of expenses to average net assets(d)		0.16	%		0.20	%		0.21	%		0.18	%		0.10	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.25	%		0.25	%		0.24	%		0.22	%		0.22	%
Ratio of net investment income to average net assets(d)		3.59	%		5.06	%		4.67	%		3.05	%		2.11	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Treasury Money Market Fund – Select Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.08	%(b)		4.86	%		4.94	%		3.10	%		0.58	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	11,767		$	10,050		$	55,919		$	103		$	100
Ratio of expenses to average net assets(c)		0.11	%		0.10	%		0.10	%		0.10	%		0.10	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.27	%		0.27	%		0.30	%		0.22	%		0.22	%
Ratio of net investment income to average net assets(c)		2.06	%		5.06	%		5.15	%		3.06	%		1.70	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Select Shares of the Government Money Market Fund (the “GMMF”), Institutional Money Market Fund (the “IMMF”), Prime Money Market Fund (the “PMMF”) and Treasury Money Market Fund (the “TMMF”), (each, a “Fund,” collectively, the “Funds”). In addition, the GMMF, PMMF and TMMF offer Capital Shares, Institutional Shares, Premium Shares and Trust Shares. The IMMF also offers Aon Captives Shares, Capital Shares, Institutional Shares, Premium Shares and Trust Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (100.00%, 7.57%, 91.95% and 100.00% for the GMMF, IMMF, PMMF and TMMF, respectively, as of June 30, 2008).

Effective January 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, use of amortized cost, 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized, tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

10

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

Each Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Funds will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Funds are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

The tax character of the 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 June 30, 2008.

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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. The IMMF has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. This fee is an expense of the Aon Captives Shares only; SEI does not receive a fee from the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares of the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.15% of the average daily net assets of each Fund’s Select Shares. BGI has contractually agreed to waive a portion of its administration fees through April 30, 2009. After giving effect to such contractual waiver, the administration fees will be 0.13%. From time

11

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

to time, BGI may waive an additional portion of its administration fees. Any such waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees of $738, $685, $22,522 and $1,905 for the Select Shares of the GMMF, IMMF, PMMF and TMMF, respectively.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Select Shares of the Funds were as follows:

	Six Months Ended June 30, 2008 (Unaudited)					Year Ended December 31, 2007
Fund	Shares		Amount			Shares		Amount
Government Money Market
Shares sold	1,250,794		$	1,250,794		800,050		$	800,050
Shares issued in reinvestment of dividends and distributions	92,957			92,957		1,418,098			1,418,098
Shares redeemed	(14,688,081	)		(14,688,081	)	(30,631,390	)		(30,631,390	)
Net decrease	(13,344,330	)	$	(13,344,330	)	(28,413,242	)	$	(28,413,242	)
Institutional Money Market
Shares sold	13,285,592		$	13,285,592		19,717,390		$	19,717,390
Shares issued in reinvestment of dividends and distributions	122,547			122,547		294,057			294,057
Shares redeemed	(11,655,062	)		(11,655,062	)	(16,433,174	)		(16,433,174	)
Net increase	1,753,077		$	1,753,077		3,578,273		$	3,578,273
Prime Money Market
Shares sold	1,715,413,940		$	1,715,413,940		3,032,880,142		$	3,032,880,142
Shares issued in reinvestment of dividends and distributions	3,153,288			3,153,288		5,129,323			5,129,323
Shares redeemed	(1,910,415,614	)		(1,910,415,614	)	(2,791,299,954	)		(2,791,299,954	)
Net increase (decrease)	(191,848,386	)	$	(191,848,386	)	246,709,511		$	246,709,511
Treasury Money Market
Shares sold	90,432,482		$	90,432,482		185,683,419		$	185,683,419
Shares issued in reinvestment of dividends and distributions	86,548			86,548		1,641,256			1,641,256
Shares redeemed	(88,802,111	)		(88,802,111	)	(233,193,631	)		(233,193,631	)
Net increase (decrease)	1,716,919		$	1,716,919		(45,868,956	)	$	(45,868,956	)

12

GOVERNMENT MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.00%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $26,001,806 (collateralized by U.S. government obligations, value $26,520,000, 5.00%, 3/1/34).	$	26,000,000	$	26,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $10,000,694 (collateralized by U.S. government obligations, value $10,200,000, 5.50%, 3/1/35).		10,000,000		10,000,000
Credit Suisse First Boston Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $16,101,118 (collateralized by U.S. government obligations, value $16,422,655, 4.62% to 5.79%, 4/1/35 to 10/1/37).		16,100,000		16,100,000
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $23,216,548 (collateralized by U.S. government obligations, value $23,679,300, 5.50% to 7.00%, 4/15/28 to 4/15/38).		23,215,000		23,215,000
Lehman Brothers Holdings Inc. Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $26,001,733 (collateralized by U.S. government obligations, value $26,524,289, 5.50%, 6/1/37).		26,000,000		26,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.74%, dated 6/30/08, due 7/1/08, maturity value $10,000,761 (collateralized by U.S. government obligations, value $10,302,489, 5.50% to 6.50%, 12/25/35 to 8/25/36).		10,000,000		10,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $111,315,000)				111,315,000
TOTAL INVESTMENTS IN SECURITIES – 100.00%
(Cost: $111,315,000)				111,315,000
Other Assets, Less Liabilities – 0.00%				2,179
NET ASSETS – 100.00%			$	111,317,179

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury Services PLC
2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital
Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

14

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$	488,371,000	$	486,537,574
2.67%, 07/25/08(a)		125,000,000		124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)		100,000,000		99,927,778
2.72%, 08/15/08(a)		136,137,000		135,674,134
Royal Bank of Scotland
2.87%, 08/01/08		150,000,000		149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)		145,000,000		144,905,750
Thames Asset Global
Securitization No. 1 Inc.
2.58%, 07/09/08(a)		160,741,000		160,648,842
2.75%, 07/07/08(a)		200,000,000		199,908,333
2.78%, 08/15/08(a)		100,000,000		99,652,500
2.80%, 07/17/08(a)		150,000,000		149,813,334
2.80%, 08/07/08(a)		160,000,000		159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)		175,000,000		174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)		150,000,000		149,820,000
2.75%, 07/15/08(a)		82,008,000		81,920,297
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		100,000,000		99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)		110,000,000		109,610,417
2.60%, 09/04/08(a)		100,000,000		99,530,556
2.87%, 07/18/08(a)		125,000,000		124,830,590
Westpac Banking Corp.
2.62%, 03/06/09		250,000,000		245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09		200,000,000		196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)		200,000,000		199,871,500
2.57%, 07/22/08(a)		250,000,000		249,625,208
2.70%, 08/14/08(a)		145,000,000		144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)		130,973,000		130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)				11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09		250,000,000		250,000,000
Federal National Mortgage Association
2.30%, 12/18/08		330,000,000		326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)		300,000,000		300,000,000
US Bank N.A.
2.60%, 02/19/09		300,000,000		300,000,000
2.70%, 09/08/08		150,000,000		150,000,000
2.75%, 01/05/09		330,000,000		330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)				1,656,415,833

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$	40,000,000	$	40,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).		90,000,000		90,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).		465,000,000		465,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).		485,000,000		485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).		300,000,000		300,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).		1,040,000,000		1,040,000,000
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).		175,000,000		175,000,000
Goldman Sachs & Co. Tri-Party 2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)		150,000,000		150,000,000

15

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party 2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party 2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale 2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037

16

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Allstate Life Global Funding Trusts
2.48%, 09/04/08	$	125,000,000	$	124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504
American Express Bank FSB
2.50%, 06/12/09		50,000,000		49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd. London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000

Security	Face Amount		Value
Jordan Brick Co. Inc.
2.58%, 07/02/08	$	45,220,000	$	45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976
Kommunalkredit Austria AG
2.46%, 08/08/08(a)		40,000,000		40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000

17

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)	$	54,273,000	$	54,273,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		187,623,000		187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

18

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 13.21%
Banco Bilbao Vizcaya Argentaria SA
4.57%, 07/03/08	$	175,000,000	$	175,019,603
Bank of Nova Scotia
2.51%, 04/01/09		150,000,000		150,011,134
3.00%, 01/29/09		75,000,000		74,975,587
Bank of Scotland
4.98%, 07/07/08		135,000,000		135,000,000
BNP Paribas
2.58%, 08/20/08		92,500,000		92,499,953
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		200,000,000		200,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		110,000,000		110,000,000
5.40%, 07/10/08		100,000,000		100,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		85,000,000		85,000,000
Fortis Bank NY
2.41%, 10/02/08		30,000,000		29,973,436
Rabobank Nederland NV
2.54%, 08/22/08		50,000,000		50,002,871
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,391
2.64%, 04/09/09		75,000,000		75,002,861
Societe Generale NY
4.51%, 11/21/08		25,000,000		25,000,950
SunTrust Banks Inc.
2.50%, 07/17/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		75,000,000		75,000,000
UniCredito Italiano NY
2.95%, 12/08/08		85,000,000		85,001,860
Wachovia Bank N.A.
2.92%, 01/12/09		5,000,000		5,002,025
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $1,887,493,179)				1,887,493,179
COMMERCIAL PAPER – 41.01%
Amstel Funding Corp.
2.85%, 07/08/08(a)		175,000,000		174,903,021
2.95%, 07/28/08(a)		160,000,000		159,646,000
2.95%, 08/04/08(a)		50,000,000		49,860,694
3.00%, 07/18/08(a)		100,000,000		99,858,333
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
Bank of Scotland
2.65%, 07/09/08		125,000,000		124,926,389
CAFCO LLC
2.52%, 07/14/08(a)		250,000,000		249,772,500
2.52%, 07/28/08(a)		75,000,000		74,858,250
2.55%, 07/14/08(a)		71,200,000		71,134,437

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.55%, 07/09/08(a)	$	100,000,000	$	99,943,333
2.60%, 07/14/08(a)		100,000,000		99,906,111
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
2.95%, 08/01/08(a)		150,000,000		149,618,959
Chariot Funding LLC
2.50%, 07/21/08(a)		100,000,000		99,861,111
2.55%, 07/14/08(a)		166,580,000		166,426,608
2.55%, 08/22/08(a)		75,497,000		75,218,919
Charta LLC
2.54%, 07/28/08(a)		250,000,000		249,523,750
2.54%, 07/30/08(a)		50,000,000		49,897,695
CRC Funding LLC
2.59%, 07/30/08(a)		125,000,000		124,739,202
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		100,000,000		99,721,944
Falcon Asset Securitization Co. LLC
2.43%, 07/08/08(a)		125,277,000		125,217,807
2.60%, 07/18/08(a)		175,000,000		174,785,139
General Electric Capital Corp.
2.45%, 08/01/08		100,000,000		99,789,028
3.92%, 10/03/08		125,000,000		123,720,555
4.39%, 08/25/08		60,000,000		59,597,584
General Electric Capital Services Inc.
4.39%, 08/25/08		60,000,000		59,597,584
Govco Inc.
2.65%, 08/25/08(a)		134,250,000		133,706,474
Grampian Funding LLC
2.68%, 07/14/08(a)		200,000,000		199,806,444
2.75%, 07/10/08(a)		100,000,000		99,931,250
Jupiter Securitization Corp.
2.50%, 07/21/08(a)		75,000,000		74,895,833
2.55%, 08/22/08(a)		110,728,000		110,320,152
2.65%, 07/22/08(a)		100,000,000		99,845,417
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		100,000,000		99,931,945
Nationwide Building Society
2.95%, 08/01/08		100,000,000		99,745,971
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		75,000,000		74,970,000
Ranger Funding Co. LLC
2.67%, 07/25/08(a)		75,000,000		74,866,500
Royal Bank of Scotland
2.87%, 08/01/08		100,000,000		99,752,861
Solitaire Funding Ltd.
2.60%, 07/11/08(a)		250,000,000		249,819,445
Thames Asset Global
Securitization No. 1 Inc.
2.80%, 07/07/08(a)		136,477,000		136,413,311
2.80%, 07/17/08(a)		100,000,000		99,875,556
2.80%, 07/21/08(a)		30,879,000		30,830,966
2.82%, 07/18/08(a)		58,572,000		58,494,002
Thunder Bay Funding LLC
2.55%, 07/16/08(a)		153,647,000		153,483,750
2.57%, 07/11/08(a)		103,799,000		103,724,899

19

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ticonderoga Master Funding Ltd.
2.50%, 07/02/08(a)	$	102,420,000	$	102,412,887
Tulip Funding Corp.
2.60%, 07/08/08(a)		100,000,000		99,949,444
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		50,000,000		49,737,292
Variable Funding Capital Corp.
2.87%, 07/18/08(a)		125,000,000		124,830,590
Yorktown Capital LLC
2.55%, 07/22/08(a)		121,320,000		121,139,536
2.67%, 07/24/08(a)		100,000,000		99,829,417
2.80%, 07/18/08(a)		125,119,000		124,953,565
TOTAL COMMERCIAL PAPER
(Cost: $5,860,539,557)				5,860,539,557
MEDIUM-TERM NOTES – 4.96%
ASIF Global Financing
3.90%, 10/22/08(a)		15,670,000		15,616,123
Berkshire Hathaway Finance Corp.
3.38%, 10/15/08		65,200,000		65,309,904
Federal National Mortgage Association
2.30%, 12/18/08		170,000,000		168,153,611
MassMutual Global Funding II
3.80%, 04/15/09(a)		40,000,000		40,395,644
Metropolitan Life Global Funding I
3.80%, 01/20/09(a)		250,000,000		250,000,000
US Bank N.A.
2.75%, 01/05/09		170,000,000		170,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $709,475,282)				709,475,282
REPURCHASE AGREEMENTS – 14.62%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50%, 6/1/33).		40,000,000		40,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $400,030,222 (collateralized by non-U.S. government debt securities, value $440,000,000, 0.00% to 10.00%, 2/23/36).		400,000,000		400,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $175,012,882 (collateralized by non-U.S. government debt securities, value $180,251,815, 3.21% to 7.71%, 11/1/08 to 10/15/36).		175,000,000		175,000,000

Security	Face Amount		Value
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $125,009,549 (collateralized by non-U.S. government debt securities, value $128,753,713, 4.65% to 7.75%, 2/15/10 to 10/1/66).	$	125,000,000	$	125,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $300,022,333 (collateralized by non-U.S. government debt securities, value $315,000,000, 0.00% to 16.07%, 2/25/09 to 2/10/51).		300,000,000		300,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $375,027,083 (collateralized by non-U.S. government debt securities, value $393,751,820, 0.00% to 12.87%, 1/15/13 to 6/11/50).		375,000,000		375,000,000
J.P. Morgan Securities Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $250,019,097 (collateralized by U.S. government obligations, value $255,001,131, 5.00% to 6.00%, 1/1/36 to 10/1/36).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $100,007,222 (collateralized by U.S. government obligations, value $102,000,291, 4.50% to 6.00%, 11/1/16 to 4/1/28).		100,000,000		100,000,000
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $125,072,917 (collateralized by non-U.S. government debt securities, value $131,254,412, 1.63% to 14.88%, 10/1/08 to 12/20/54).		125,000,000		125,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $211,970,792, 0.00% to 10.00%, 5/18/10 to 12/20/49).		200,000,000		200,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $2,090,000,000)				2,090,000,000

20

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
TIME DEPOSITS – 0.48%
Societe Generale
2.50%, 07/01/08	$	67,882,000	$	67,882,000
TOTAL TIME DEPOSITS
(Cost: $67,882,000)				67,882,000
VARIABLE & FLOATING RATE NOTES – 25.44%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		160,000,000		160,001,148
2.52%, 11/07/08(a)		58,000,000		58,001,937
2.53%, 11/14/08(a)		85,000,000		85,006,654
Allstate Life Global Funding Trusts
2.48%, 09/04/08		45,000,000		45,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Bank of America N.A.
3.21%, 07/02/09		75,000,000		75,000,000
Bank of Ireland
2.67%, 09/12/08(a)		35,000,000		35,000,000
Citigroup Global Markets Holdings Inc.
2.65%, 10/21/08		350,000,000		350,000,000
DEPFA Bank PLC
2.84%, 07/14/08		50,000,000		50,000,000
Deutsche Bank AG
2.43%, 09/30/08		100,000,000		100,000,000
Dexia Credit SA NY
2.43%, 09/29/08		31,770,000		31,726,677
General Electric Capital Corp.
2.50%, 04/24/09		65,000,000		65,000,000
2.77%, 01/05/09		13,800,000		13,788,118
2.82%, 03/16/09		2,900,000		2,897,070
2.88%, 06/15/09		25,000,000		24,995,767
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		125,000,000		125,000,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,000,000
ING Bank NV
3.16%, 06/17/09(a)		100,000,000		100,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		65,000,000		65,000,000
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
Metropolitan Life Global Funding I
2.50%, 11/06/08(a)		139,680,000		139,681,688
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
3.00%, 07/25/08(b)		50,000,000		50,000,000
Metropolitan Life Insurance Funding
3.02%, 04/01/09(a)(b)		15,000,000		15,000,000
Monumental Global Funding III
2.79%, 08/29/08(a)		50,000,000		50,000,000
Morgan Stanley
2.61%, 12/03/08		100,000,000		100,000,000

Security	Face Amount		Value
National Australia Bank Ltd.
2.88%, 03/06/09(a)	$	75,000,000	$	74,866,757
Nationwide Building Society
2.51%, 10/06/08(a)		135,000,000		135,003,930
2.88%, 10/27/08(a)		50,000,000		50,000,000
Rabobank Nederland NV NY
2.66%, 11/14/08(a)		140,000,000		140,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		100,000,000		100,000,000
Royal Bank of Scotland PLC
2.87%, 07/21/08(a)		20,000,000		20,000,515
Societe Generale
2.46%, 08/29/08(a)		5,000,000		4,998,696
Toyota Motor Credit Corp.
2.06%, 10/20/08		25,000,000		24,955,173
Toyota Motor Credit Corp. Series 1
2.53%, 01/12/09		200,000,000		200,000,000
UBS AG Stamford
2.46%, 08/15/08		100,000,000		100,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)		23,000,000		23,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		80,000,000		80,000,000
Wachovia Bank N.A.
2.65%, 10/03/08		31,200,000		31,193,095
2.84%, 03/23/09		50,000,000		49,853,708
2.91%, 05/01/09		250,000,000		250,000,000
2.99%, 11/25/08		40,000,000		39,995,084
Wells Fargo & Co.
3.55%, 05/01/09		50,000,000		50,021,111
Westpac Banking Corp.
2.92%, 06/10/09		175,000,000		175,000,000
World Savings Bank FSB
2.80%, 05/08/09		3,100,000		3,081,978
2.81%, 03/02/09		2,600,000		2,590,079
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $3,635,665,995)				3,635,665,995
TOTAL INVESTMENTS IN SECURITIES – 99.72%
(Cost: $14,251,056,013)				14,251,056,013
Other Assets, Less Liabilities – 0.28%				40,280,226
NET ASSETS – 100.00%			$	14,291,336,239

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

21

TREASURY MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.01%
Banc of America Securities LLC Tri-Party 1.50%, dated 6/30/08, due 7/1/08, maturity value $8,200,342 (collateralized by U.S. government obligations, value $8,364,029, 4.88%, 8/31/08).	$	8,200,000	$	8,200,000
Credit Suisse First Boston Tri-Party 1.75%, dated 6/30/08, due 7/1/08, maturity value $8,200,399 (collateralized by U.S. government obligations, value $8,367,816, 4.88%, 5/31/09).		8,200,000		8,200,000
Goldman Sachs Group Inc. (The) Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $8,938,310 (collateralized by U.S. government obligations, value $9,116,862, 8.75%, 5/15/20).		8,938,000		8,938,000
Lehman Brothers Holdings Inc. Tri-Party 0.25%, dated 6/30/08, due 7/1/08, maturity value $8,200,057 (collateralized by U.S. government obligations, value $8,369,933, 7.13%, 2/15/23).		8,200,000		8,200,000
Merrill Lynch & Co. Inc. Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $15,500,538 (collateralized by U.S. government obligations, value $15,815,611, 4.13% to 5.25%, 9/1/09 to 9/15/17).		15,500,000		15,500,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $49,038,000)				49,038,000
TOTAL INVESTMENTS IN SECURITIES – 100.01%
(Cost: $49,038,000)				49,038,000
Other Assets, Less Liabilities – (0.01)%				(3,699	)
NET ASSETS – 100.00%			$	49,034,301

The accompanying notes are an integral part of these financial statements.

22

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Government Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	111,315,000		100.00	%
Other Net Assets		2,179		0.00
TOTAL	$	111,317,179		100.00	%
Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	11,932,235,376		38.29	%
Variable & Floating Rate Notes		7,855,885,973		25.21
Repurchase Agreements		6,175,000,000		19.82
Certificates of Deposit		3,300,008,879		10.59
Medium-Term Notes		1,656,415,833		5.32
Time Deposits		178,626,000		0.57
Other Net Assets		62,281,372		0.20
TOTAL	$	31,160,453,433		100.00	%
Prime Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	5,860,539,557		41.01	%
Variable & Floating Rate Notes		3,635,665,995		25.44
Repurchase Agreements		2,090,000,000		14.62
Certificates of Deposit		1,887,493,179		13.21
Medium-Term Notes		709,475,282		4.96
Time Deposits		67,882,000		0.48
Other Net Assets		40,280,226		0.28
TOTAL	$	14,291,336,239		100.00	%
Treasury Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	49,038,000		100.01	%
Other Net Assets		(3,699	)	(0.01	)
TOTAL	$	49,034,301		100.00	%

These tables are not part of the financial statements.

23

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio		Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio
ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	—	$	24,923,172,061	$	12,161,056,013	$	—
Repurchase agreements, at value and cost (Note 1)		111,315,000		6,175,000,000		2,090,000,000		49,038,000
Total investments		111,315,000		31,098,172,061		14,251,056,013		49,038,000
Cash		151		11		625		32
Receivables:
Interest		7,660		64,201,148		41,181,122		1,646
Due from investment adviser		1,057		—		—		1,265
Total Assets		111,323,868		31,162,373,220		14,292,237,760		49,040,943
LIABILITIES
Payables:
Investment advisory fees (Note 2)		—		1,885,710		879,693		—
Accrued expenses:
Professional fees (Note 2)		6,629		28,358		20,542		6,594
Independent trustees’ fees (Note 2)		60		5,719		1,286		48
Total Liabilities		6,689		1,919,787		901,521		6,642
NET ASSETS	$	111,317,179	$	31,160,453,433	$	14,291,336,239	$	49,034,301

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio			Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio
NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	2,265,184		$	552,894,094		$	229,517,108		$	1,643,838
Total investment income		2,265,184			552,894,094			229,517,108			1,643,838
EXPENSES (Note 2)
Investment advisory fees		78,214			16,228,714			6,794,100			69,807
Professional fees		6,650			30,871			16,461			6,650
Independent trustees’ fees		911			139,013			56,250			789
Total expenses		85,775			16,398,598			6,866,811			77,246
Less expense reductions (Note 2)		(80,644	)		(5,038,498	)		(3,962,835	)		(75,523	)
Net expenses		5,131			11,360,100			2,903,976			1,723
Net investment income		2,260,053			541,533,994			226,613,132			1,642,115
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		—			(2,995,721	)		(290,351	)		—
Payment from affiliate (Note 2)		—			3,399,402			814,069			—
Net realized gain		—			403,681			523,718			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,260,053		$	541,937,675		$	227,136,850		$	1,642,115

The accompanying notes are an integral part of these financial statements.

24

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Master Portfolio						Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,260,053		$	7,459,087		$	541,533,994		$	1,082,958,398
Net realized gain		—			—			403,681			42,548
Net increase in net assets resulting from operations		2,260,053			7,459,087			541,937,675			1,083,000,946
Interestholder transactions:
Contributions		1,558,317,449			1,739,584,764			24,050,846,582			66,603,193,729
Withdrawals		(1,557,095,598	)		(1,806,493,585	)		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		1,221,851			(66,908,821	)		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		3,481,904			(59,449,734	)		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		107,835,275			167,285,009			31,492,403,778			6,924,964,889
End of period	$	111,317,179		$	107,835,275		$	31,160,453,433		$	31,492,403,778
	Prime Money Market Master Portfolio						Treasury Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	226,613,132		$	559,112,567		$	1,642,115		$	7,969,862
Net realized gain		523,718			11,956			—			—
Net increase in net assets resulting from operations		227,136,850			559,124,523			1,642,115			7,969,862
Interestholder transactions:
Contributions		58,414,645,861			99,288,703,149			384,220,217			1,637,092,248
Withdrawals		(55,372,727,474	)		(97,098,629,295	)		(540,250,452	)		(1,627,123,957	)
Net increase (decrease) in net assets resulting from interestholder transactions		3,041,918,387			2,190,073,854			(156,030,235	)		9,968,291
Increase (decrease) in net assets		3,269,055,237			2,749,198,377			(154,388,120	)		17,938,153
NET ASSETS:
Beginning of period		11,022,281,002			8,273,082,625			203,422,421			185,484,268
End of period	$	14,291,336,239		$	11,022,281,002		$	49,034,301		$	203,422,421

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolios use the amortized cost method of valuation to determine the value of their portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolios’ net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolios’ amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Master Portfolios’ 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.

26

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Government Money Market	$	—	$	111,315,000	$	—	$	111,315,000
Money Market		—		31,098,172,061		—		31,098,172,061
Prime Money Market		—		14,251,056,013		—		14,251,056,013
Treasury Money Market		—		49,038,000		—		49,038,000

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolios amortize premium and accrete discount using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

In the case of Master Portfolios with only one interestholder, such as the Government Money Market and Treasury Money Market Master Portfolios, MIP believes that such Master Portfolios will not be treated as a separate entity for federal income tax purposes, and, therefore, will not be subject to any federal income tax on their income and gains (if any). Rather, such Master Portfolios’ assets and interest, dividends and gains or losses will be treated as assets and interest, dividends and gains or losses of the interestholders.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolios’ costs of investments for federal income tax purposes were the same as for financial reporting purposes.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

REPURCHASE AGREEMENTS

The Master Portfolios may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

27

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolios, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of each of the Master Portfolios, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%. From time to time, BGFA may waive an additional portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees of $80,644, $5,038,498, $3,962,835 and $75,523 for the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Prime Money Market Master Portfolio and Money Market Master Portfolio for cash at $34,998,569 and $181,990,742, respectively, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statements of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

28

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Government Money Market
Ratio of expenses to average net assets(a)	0.01	%	0.07	%	0.08	%	0.03	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.11	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.89	%	4.93	%	4.90	%	3.16	%	1.93	%(b)	n/a
Total return	1.38	%(c)	5.20	%	5.08	%	3.28	%	0.64	%(b)(c)	n/a
Money Market
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(c)(d)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%
Prime Money Market
Ratio of expenses to average net assets(a)	0.04	%	0.07	%	0.08	%	0.08	%	0.03	%	0.03	%(e)
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%(e)
Ratio of net investment income to average net assets(a)	3.33	%	5.23	%	4.95	%	3.22	%	1.52	%	1.12	%(e)
Total return	1.70	%(c)(d)	5.37	%	5.11	%	3.26	%	1.40	%	0.80	%(c)(e)
Treasury Money Market
Ratio of expenses to average net assets(a)	0.00	%	0.01	%	0.00	%	0.00	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.13	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.35	%	4.81	%	5.03	%	3.99	%	1.82	%(b)	n/a
Total return	1.14	%(c)	4.98	%	5.04	%	3.20	%	0.61	%(b)(c)	n/a

^(a) Annualized for periods of less than one year.

^(b) For the period from September 1, 2004 (commencement of operations) to December 31, 2004. ^(c) Not annualized.

^(d) For the six months ended June 30, 2008, 0.01% of the Master Portfolio’s total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68% for the Money Market Master Portfolio and 1.69% for the Prime Money Market Master Portfolio.

^(e) For the period from April 16, 2003 (commencement of operations) to December 31, 2003.

29

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio, Government Money Market Master Portfolio, and Treasury Money Market Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, as applicable, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Money Market Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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.

30

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited) (Continued)

The Board noted that each Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the Master Portfolios were generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolios were generally lower than the overall expenses for the funds in their Lipper Expense Groups, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for certain of the Master Portfolios during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations for the last calendar year. The Board analyzed the Master Portfolios’ expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to certain of the Master Portfolios while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios in comparison with the

31

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS

(Unaudited) (Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolios and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rates under the Master Portfolios’ Advisory Contracts were within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rates for certain of the Master Portfolios and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolios. The Board further noted that the Master Portfolios may, but generally do not, participate in securities lending activities and generally do not execute transactions with affiliated brokers, as do other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

32

Notes:

Notes:

TABLE OF CONTENTS

Shareholder Expenses	1
Barclays Global Investors Funds
Financial Statements	2
Financial Highlights	6
Notes to Financial Statements	10
Master Investment Portfolio
Schedules of Investments	13
Government Money Market Master Portfolio	13
Money Market Master Portfolio	14
Prime Money Market Master Portfolio	19
Treasury Money Market Master Portfolio	22
Portfolio Allocations	23
Financial Statements	24
Notes to Financial Statements	26
Board Review and Approval of Investment Advisory Contracts	30

BARCLAYS GLOBAL INVESTORS FUNDS

SHAREHOLDER EXPENSES (Unaudited)

As a shareholder of a Fund, you incur 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 January 1, 2008 to June 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. 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.

Fund	Beginning Account Value (1/1/08)	Ending Account Value (6/30/08)	Annualized Expense Ratio(a)		Expenses Paid During Period(b) (1/1/08 to 6/30/08)
Government Money Market
Trust Shares
Actual	$1,000.00	$1,011.90	0.37	%	$1.85
Hypothetical (5% return before expenses)	1,000.00	1,023.00	0.37		1.86
Institutional Money Market
Trust Shares
Actual	1,000.00	1,015.10	0.45		2.25
Hypothetical (5% return before expenses)	1,000.00	1,022.60	0.45		2.26
Prime Money Market
Trust Shares
Actual	1,000.00	1,015.10	0.42		2.10
Hypothetical (5% return before expenses)	1,000.00	1,022.80	0.42		2.11
Treasury Money Market
Trust Shares
Actual	1,000.00	1,010.10	0.27		1.35
Hypothetical (5% return before expenses)	1,000.00	1,023.50	0.27		1.36

^(a) This ratio includes net expenses charged to the corresponding Master Portfolio and includes each Fund’s expense reductions during the period.

^(b) Expenses are calculated using each Fund’s annualized expense ratio of the Trust Shares (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (182 days) and divided by the number of days in the year (366 days).

1

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Fund		Institutional Money Market Fund		Prime Money Market Fund		Treasury Money Market Fund
ASSETS
Investments:
In corresponding Master Portfolio, at fair value (Note 1)	$	111,317,179	$	2,357,681,486	$	13,140,946,089	$	49,034,301
Total Assets		111,317,179		2,357,681,486		13,140,946,089		49,034,301
LIABILITIES
Payables:
Distribution to shareholders		192,305		6,979,789		27,632,310		78,678
Administration fees (Note 2)		6,114		213,750		740,030		1,891
Distribution fees – Aon Captives Shares (Note 2)		—		23,081		—		—
Accrued expenses:
Professional fees (Note 2)		5,649		13,840		17,277		5,613
Independent trustees’ fees (Note 2)		61		857		964		49
Total Liabilities		204,129		7,231,317		28,390,581		86,231
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Net assets consist of:
Paid-in capital	$	111,113,050	$	2,350,387,203	$	13,112,079,273	$	48,948,070
Undistributed net investment income		—		400		146		—
Undistributed net realized gain		—		62,566		476,089		—
NET ASSETS	$	111,113,050	$	2,350,450,169	$	13,112,555,508	$	48,948,070
Aon Captives Shares
Net Assets	$	—	$	98,066,537	$	—	$	—
Shares outstanding(a)		—		98,065,035		—		—
Net asset value and offering price per share	$	—	$	1.00	$	—	$	—
Capital Shares
Net Assets	$	100,000	$	100,000	$	144,023,946	$	100,000
Shares outstanding(a)		100,000		100,000		144,023,937		100,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Institutional Shares
Net Assets	$	11,715,262	$	1,748,872,052	$	9,707,477,952	$	15,814,810
Shares outstanding(a)		11,715,262		1,748,837,223		9,707,137,602		15,814,810
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Premium Shares
Net Assets	$	98,322,680	$	430,878,939	$	3,184,486,804	$	21,216,341
Shares outstanding(a)		98,322,680		430,856,442		3,184,363,836		21,216,341
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Select Shares
Net Assets	$	925,108	$	6,560,362	$	76,516,806	$	11,766,919
Shares outstanding(a)		925,108		6,560,291		76,503,898		11,766,919
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00
Trust Shares
Net Assets	$	50,000	$	65,972,279	$	50,000	$	50,000
Shares outstanding(a)		50,000		65,972,001		50,000		50,000
Net asset value and offering price per share	$	1.00	$	1.00	$	1.00	$	1.00

^(a) No par value, unlimited number of shares authorized.

The accompanying notes are an integral part of these financial statements.

2

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Fund			Institutional Money Market Fund			Prime Money Market Fund			Treasury Money Market Fund
NET INVESTMENT INCOME ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Interest	$	2,265,183		$	79,899,651		$	212,905,601		$	1,643,838
Expenses(a)		(5,131	)		(1,599,953	)		(2,691,437	)		(1,723	)
Net investment income allocated from corresponding Master Portfolio		2,260,052			78,299,698			210,214,164			1,642,115
FUND EXPENSES (Note 2)
Administration fees		69,556			1,618,474			4,013,896			48,302
Distribution fees – Aon Captives Shares		—			44,777			—			—
Professional fees		5,908			11,009			15,282			5,908
Independent trustees’ fees		911			21,852			51,883			789
Total fund expenses		76,375			1,696,112			4,081,061			54,999
Less expense reductions (Note 2)		(21,316	)		(33,500	)		(316,393	)		(19,749	)
Net fund expenses		55,059			1,662,612			3,764,668			35,250
Net investment income		2,204,993			76,637,086			206,449,496			1,606,865
REALIZED GAIN (LOSS) ALLOCATED FROM CORRESPONDING MASTER PORTFOLIO
Net realized gain		—			54,453			465,491			—
Net realized gain		—			54,453			465,491			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,204,993		$	76,691,539		$	206,914,987		$	1,606,865

^(a) Net of investment advisory fee reductions in the amounts of $80,644, $708,796, $1,987,163 and $75,523, respectively.

The accompanying notes are an integral part of these financial statements.

3

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Fund						Institutional Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,204,993		$	7,312,759		$	76,637,086		$	339,579,002
Net realized gain		—			—			54,453			8,933
Net increase in net assets resulting from operations		2,204,993			7,312,759			76,691,539			339,587,935
Distributions to shareholders:
From net investment income:
Aon Captives Shares		—			—			(1,441,790	)		(4,052,238	)
Capital Shares(a)		(485	)		—			(611	)		—
Institutional Shares		(597,932	)		(1,172,179	)		(50,072,921	)		(245,584,218	)
Premium Shares		(1,558,004	)		(4,856,791	)		(23,957,127	)		(82,147,008	)
Select Shares		(47,980	)		(1,279,756	)		(103,036	)		(326,865	)
Trust Shares		(592	)		(4,033	)		(1,061,600	)		(7,499,594	)
Total distributions to shareholders		(2,204,993	)		(7,312,759	)		(76,637,085	)		(339,609,923	)
Capital share transactions (Note 3):
Aon Captives Shares		—			—			7,873,281			21,109,582
Capital Shares(a)		100,000			—			100,000			—
Institutional Shares		8,684,533			2,635,467			(4,904,900,026	)		2,455,028,191
Premium Shares		8,498,952			(33,708,376	)		(315,719,969	)		(574,454,848	)
Select Shares		(13,344,330	)		(28,413,242	)		1,753,077			3,578,273
Trust Shares		—			(57,892	)		(19,803,000	)		(111,705,201	)
Net increase (decrease) in net assets resulting from capital share transactions		3,939,155			(59,544,043	)		(5,230,696,637	)		1,793,555,997
Increase (decrease) in net assets		3,939,155			(59,544,043	)		(5,230,642,183	)		1,793,534,009
NET ASSETS:
Beginning of period		107,173,895			166,717,938			7,581,092,352			5,787,558,343
End of period	$	111,113,050		$	107,173,895		$	2,350,450,169		$	7,581,092,352
Undistributed net investment income included in net assets at end of period	$	—		$	—		$	400		$	399

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

4

BARCLAYS GLOBAL INVESTORS FUNDS

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	Prime Money Market Fund						Treasury Money Market Fund
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	206,449,496		$	501,618,559		$	1,606,865		$	7,891,235
Net realized gain		465,491			10,598			—			—
Net increase in net assets resulting from operations		206,914,987			501,629,157			1,606,865			7,891,235
Distributions to shareholders:
From net investment income:
Capital Shares(a)		(304,828	)		—			(413	)		—
Institutional Shares		(152,251,591	)		(395,738,229	)		(1,089,037	)		(6,006,336	)
Premium Shares		(50,979,387	)		(98,980,240	)		(434,307	)		(513,487	)
Select Shares		(2,912,940	)		(6,958,678	)		(82,607	)		(1,367,486	)
Trust Shares		(750	)		(4,135	)		(501	)		(3,926	)
Total distributions to shareholders		(206,449,496	)		(501,681,282	)		(1,606,865	)		(7,891,235	)
Capital share transactions (Note 3):
Capital Shares(a)		144,023,937			—			100,000			—
Institutional Shares		1,343,357,622			2,447,990,425			(115,375,464	)		4,672,699
Premium Shares		1,388,887,780			243,844,111			(40,296,904	)		59,401,698
Select Shares		(191,848,386	)		246,709,511			1,716,919			(45,868,956	)
Trust Shares		—			(58,148	)		—			(57,775	)
Net increase (decrease) in net assets resulting from capital share transactions		2,684,420,953			2,938,485,899			(153,855,449	)		18,147,666
Increase (decrease) in net assets		2,684,886,444			2,938,433,774			(153,855,449	)		18,147,666
NET ASSETS:
Beginning of period		10,427,669,064			7,489,235,290			202,803,519			184,655,853
End of period	$	13,112,555,508		$	10,427,669,064		$	48,948,070		$	202,803,519
Undistributed net investment income included in net assets at end of period	$	146		$	146		$	—		$	—

^(a) For the period from February 28, 2008 (commencement of operations) to June 30, 2008.

The accompanying notes are an integral part of these financial statements.

5

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each period)

	Government Money Market Fund – Trust Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.19	%(b)		4.80	%		4.69	%		2.94	%		0.53	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	50		$	50		$	108		$	103		$	100
Ratio of expenses to average net assets(c)		0.37	%		0.45	%		0.45	%		0.36	%		0.33	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.49	%		0.51	%		0.49	%		0.45	%		0.45	%
Ratio of net investment income to average net assets(c)		2.38	%		4.78	%		4.60	%		2.91	%		1.58	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

6

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Institutional Money Market Fund – Trust Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Jun. 10, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Net realized gain		0.00	(b)		0.00	(b)		0.00	(b)		—			—
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.51	%(c)		5.01	%		4.76	%		2.96	%		0.74	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	65,972		$	85,774		$	197,480		$	103		$	101
Ratio of expenses to average net assets(d)		0.45	%		0.43	%		0.43	%		0.38	%		0.35	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.48	%		0.48	%		0.47	%		0.45	%		0.45	%
Ratio of net investment income to average net assets(d)		3.01	%		4.93	%		4.95	%		2.92	%		1.33	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

7

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Prime Money Market Fund – Trust Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Jun. 10, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.02			0.05			0.05			0.03			0.01
Net realized gain		0.00	(b)		0.00	(b)		0.00	(b)		0.00	(b)		—
Total from investment operations		0.02			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.02	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.51	%(c)		4.98	%		4.72	%		2.93	%		0.75	%(c)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	50		$	50		$	108		$	103		$	101
Ratio of expenses to average net assets(d)		0.42	%		0.45	%		0.45	%		0.41	%		0.34	%
Ratio of expenses to average net assets prior to expense reductions(d)		0.49	%		0.48	%		0.47	%		0.45	%		0.45	%
Ratio of net investment income to average net assets(d)		3.02	%		4.89	%		4.63	%		2.89	%		1.34	%

^(a) Commencement of operations.

^(b) Rounds to less than $0.01.

^(c) Not annualized.

^(d) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

8

BARCLAYS GLOBAL INVESTORS FUNDS

FINANCIAL HIGHLIGHTS (Continued)

(For a share outstanding throughout each period)

	Treasury Money Market Fund – Trust Shares
	Six months ended Jun. 30, 2008 (Unaudited)			Year ended Dec. 31, 2007			Year ended Dec. 31, 2006			Year ended Dec. 31, 2005			Period from Sep. 1, 2004(a) to Dec. 31, 2004
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.01			0.05			0.05			0.03			0.01
Total from investment operations		0.01			0.05			0.05			0.03			0.01
Less distributions from:
Net investment income		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.01	)		(0.05	)		(0.05	)		(0.03	)		(0.01	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		1.01	%(b)		4.61	%		4.70	%		2.86	%		0.50	%(b)
Ratios/Supplemental data:
Net assets, end of period (000s)	$	50		$	50		$	108		$	103		$	100
Ratio of expenses to average net assets(c)		0.27	%		0.36	%		0.33	%		0.33	%		0.33	%
Ratio of expenses to average net assets prior to expense reductions(c)		0.50	%		0.51	%		0.52	%		0.45	%		0.45	%
Ratio of net investment income to average net assets(c)		2.02	%		4.65	%		4.60	%		2.83	%		1.49	%

^(a) Commencement of operations.

^(b) Not annualized.

^(c) Annualized for periods of less than one year. These ratios include net expenses charged to the corresponding Master Portfolio.

The accompanying notes are an integral part of these financial statements.

9

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Barclays Global Investors Funds (the “Trust”), a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company. The Trust, formerly known as Barclays Global Investors Funds, Inc., was redomiciled from a Maryland corporation to a Delaware statutory trust effective January 11, 2002. As of June 30, 2008, the Trust offered the following series: Bond Index, Government Money Market, Institutional Money Market, Prime Money Market, S&P 500 Stock and Treasury Money Market Funds and the LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040 and LifePath 2050 Portfolios. The LifePath 2050 Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Trust Shares of the Government Money Market Fund (the “GMMF”), Institutional Money Market Fund (the “IMMF”), Prime Money Market Fund (the “PMMF”) and Treasury Money Market Fund (the “TMMF”), (each, a “Fund,” collectively, the “Funds”). In addition, the GMMF, PMMF and TMMF offer Capital Shares, Institutional Shares, Premium Shares and Select Shares. The IMMF also offers Aon Captives Shares, Capital Shares, Institutional Shares, Premium Shares and Select Shares. All classes of shares have equal rights to assets and earnings, and differ principally in administration and distribution fees. The Capital Shares commenced operations on February 28, 2008.

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.

INVESTMENT POLICY AND SECURITY VALUATION

Each Fund invests all of its assets in a separate series (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”). Each Master Portfolio has the same or substantially similar investment objective as its corresponding Fund. The value of each Fund’s investment in its corresponding Master Portfolio reflects that Fund’s interest in the net assets of that Master Portfolio (100.00%, 7.57%, 91.95% and 100.00% for the GMMF, IMMF, PMMF and TMMF, respectively, as of June 30, 2008).

Effective January 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, use of amortized cost, 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)

As of June 30, 2008, Level 1 inputs such as the availability of daily valued and quoted prices were used in valuing each Fund’s investment in their respective Master Portfolio.

The inputs and methods by which each Master Portfolio values its investments are disclosed in Note 1 of MIP’s Notes to Financial Statements, which are included elsewhere in this report.

The performance of each Fund is directly affected by the performance of its corresponding Master Portfolio. The financial statements of each Master Portfolio, including the Schedule of Investments, accompanied by an unaudited summarized,

10

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

tabular presentation, are included elsewhere in this report and should be read in conjunction with the corresponding Fund’s financial statements.

Each Fund seeks to maintain a constant net asset value of $1.00 per share for each of the classes of shares. There is no assurance that the Funds will meet this objective.

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Each Fund records daily its proportionate interest in the net investment income and realized and unrealized capital gains and losses of its corresponding Master Portfolio. In addition, each Fund accrues its own expenses. Net investment income, common fund expenses and realized and unrealized gains and losses are allocated among the classes of shares of each Fund based on the relative net assets of each class.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income of the Funds are declared daily and distributed monthly. Distributions to shareholders from net realized capital gains, if any, are declared and distributed at least annually. Dividends are determined separately for each class based on income and expenses allocable to each class.

The tax character of the 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 June 30, 2008.

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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Funds’ financial statements.

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

State Street Bank and Trust Company (“State Street”) serves as the custodian, sub-administrator, transfer agent and dividend disbursement agent of the Funds. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Funds. State Street is entitled to receive fees for its transfer agent and dividend disbursing agent services, which BGI has agreed to pay out of the fees it receives for administration services to the Funds.

SEI Investments Distribution Company (“SEI”) is the Funds’ distributor. The IMMF has adopted a plan pursuant to Rule 12b-1 under the 1940 Act, which allows the Fund to pay expenses relating to the distribution of its Aon Captives Shares. This fee is an expense of the Aon Captives Shares only; SEI does not receive a fee from the Capital Shares, Institutional Shares, Premium Shares, Select Shares or Trust Shares of the Funds for its distribution services.

The Trust has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Funds’ transfer agent, custodian, financial printer, legal counsel and independent registered public accounting firm), to the Funds for which BGI receives a fee paid by each Fund. BGI, in consideration thereof, has agreed to bear all of the Funds’ ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne directly by the Funds. BGI is entitled to receive for these administration services an annual fee of 0.38% of the average daily net assets of each Fund’s Trust Shares. From time to time, BGI may waive such fees in whole or in part. Any such

11

BARCLAYS GLOBAL INVESTORS FUNDS

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

waiver will reduce the expenses of the Fund and, accordingly, have a favorable impact on its performance. BGI may delegate certain of its administration duties to sub-administrators.

The fees and expenses of the Funds’ trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and the Trust’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Funds. BGI has contractually agreed to provide an offsetting credit against the administration fees paid by the Funds in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGI waived and/or credited administration fees of $5, $508, $1 and $31 for the Trust Shares of the GMMF, IMMF, PMMF and TMMF, respectively.

Certain officers and trustees of the Trust are also officers of BGI and/or Barclays Global Fund Advisors (“BGFA”), the Master Portfolios’ investment adviser. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of the outstanding shares of the Trust.

3. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for the Trust Shares of the Funds were as follows:

	Six Months Ended June 30, 2008 (Unaudited)					Year Ended December 31, 2007
Fund	Shares		Amount			Shares		Amount
Government Money Market
Shares sold	50,000		$	50,000		—		$	—
Shares issued in reinvestment of dividends and distributions	—			—		2,203			2,203
Shares redeemed	(50,000	)		(50,000	)	(60,095	)		(60,095	)
Net decrease	—		$	—		(57,892	)	$	(57,892	)
Institutional Money Market
Shares sold	233,864,500		$	233,864,500		409,660,000		$	409,660,000
Shares issued in reinvestment of dividends and distributions	—			—		2,239			2,239
Shares redeemed	(253,667,500	)		(253,667,500	)	(521,367,440	)		(521,367,440	)
Net decrease	(19,803,000	)	$	(19,803,000	)	(111,705,201	)	$	(111,705,201	)
Prime Money Market
Shares sold	50,000		$	50,000		—		$	—
Shares issued in reinvestment of dividends and distributions	—			—		2,219			2,219
Shares redeemed	(50,000	)		(50,000	)	(60,367	)		(60,367	)
Net decrease	—		$	—		(58,148	)	$	(58,148	)
Treasury Money Market
Shares sold	50,000		$	50,000		—		$	—
Shares issued in reinvestment of dividends and distributions	—			—		2,212			2,212
Shares redeemed	(50,000	)		(50,000	)	(59,987	)		(59,987	)
Net decrease	—		$	—		(57,775	)	$	(57,775	)

12

GOVERNMENT MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.00%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $26,001,806 (collateralized by U.S. government obligations, value $26,520,000, 5.00%, 3/1/34).	$	26,000,000	$	26,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $10,000,694 (collateralized by U.S. government obligations, value $10,200,000, 5.50%, 3/1/35).		10,000,000		10,000,000
Credit Suisse First Boston Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $16,101,118 (collateralized by U.S. government obligations, value $16,422,655, 4.62% to 5.79%, 4/1/35 to 10/1/37).		16,100,000		16,100,000
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $23,216,548 (collateralized by U.S. government obligations, value $23,679,300, 5.50% to 7.00%, 4/15/28 to 4/15/38).		23,215,000		23,215,000
Lehman Brothers Holdings Inc. Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $26,001,733 (collateralized by U.S. government obligations, value $26,524,289, 5.50%, 6/1/37).		26,000,000		26,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.74%, dated 6/30/08, due 7/1/08, maturity value $10,000,761 (collateralized by U.S. government obligations, value $10,302,489, 5.50% to 6.50%, 12/25/35 to 8/25/36).		10,000,000		10,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $111,315,000)				111,315,000
TOTAL INVESTMENTS IN SECURITIES – 100.00%
(Cost: $111,315,000)				111,315,000
Other Assets, Less Liabilities – 0.00%				2,179
NET ASSETS – 100.00%			$	111,317,179

The accompanying notes are an integral part of these financial statements.

13

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 10.59%
Abbey National Treasury Services PLC
2.87%, 04/20/09	$	300,000,000	$	300,023,725
Banco Bilbao Vizcaya Argentaria SA
2.70%, 03/10/09		250,000,000		250,017,036
Bank of Nova Scotia
3.00%, 01/29/09		175,000,000		174,943,036
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		500,000,000		500,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		275,000,000		275,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		165,000,000		165,000,000
Rabobank Nederland NV
2.54%, 08/22/08		100,000,000		100,005,741
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,392
2.62%, 08/22/08		150,000,000		150,004,264
2.64%, 04/09/09		125,000,000		125,004,768
Societe Generale NY
4.51%, 11/21/08		75,000,000		75,002,849
SunTrust Banks Inc.
2.45%, 07/01/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		175,000,000		175,000,000
UniCredito Italiano NY
2.85%, 08/25/08		125,000,000		125,000,948
2.95%, 12/08/08		165,000,000		165,003,612
US Bank N.A.
2.82%, 08/15/08		150,000,000		150,000,000
Wachovia Bank N.A.
2.60%, 03/12/09		150,000,000		150,000,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $3,300,008,879)				3,300,008,879
COMMERCIAL PAPER – 38.29%
Allied Irish Banks
2.58%, 03/05/09		250,000,000		245,574,584
Amstel Funding Corp.
2.85%, 07/07/08(a)		178,000,000		177,915,450
2.95%, 07/23/08(a)		125,000,000		124,774,653
3.00%, 07/18/08(a)		150,000,000		149,787,500
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
2.62%, 07/14/08(a)		250,000,000		249,763,472
Bank of Scotland
2.75%, 08/07/08		200,000,000		199,434,722
Barton Capital Corp.
2.55%, 07/11/08(a)		196,448,000		196,308,849
CAFCO LLC
2.55%, 07/15/08(a)		25,000,000		24,975,208
2.70%, 08/20/08(a)		250,000,000		249,062,500

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.63%, 08/14/08(a)	$	58,000,000	$	57,813,562
2.63%, 08/18/08(a)		192,000,000		191,326,720
2.65%, 08/04/08(a)		100,000,000		99,749,722
2.65%, 08/05/08(a)		200,000,000		199,484,722
2.75%, 08/15/08(a)		125,000,000		124,570,313
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.80%, 09/16/08(a)		200,000,000		198,802,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
Chariot Funding LLC
2.50%, 07/09/08(a)		131,764,000		131,690,798
2.50%, 07/11/08(a)		188,858,000		188,726,849
2.50%, 07/21/08(a)		163,358,000		163,131,114
2.60%, 07/15/08(a)		150,000,000		149,848,333
2.65%, 08/19/08(a)		150,000,000		149,458,958
Charta LLC
2.53%, 07/22/08(a)		125,000,000		124,815,521
2.54%, 07/30/08(a)		200,000,000		199,590,778
CRC Funding LLC
2.52%, 07/22/08(a)		300,000,000		299,559,000
2.53%, 07/22/08(a)		125,000,000		124,815,521
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		150,000,000		149,582,917
Falcon Asset Securitization Co. LLC
2.55%, 07/11/08(a)		101,408,000		101,336,169
2.65%, 08/20/08(a)		225,000,000		224,171,875
2.70%, 07/03/08(a)		101,000,000		100,984,850
2.70%, 07/08/08(a)		125,914,000		125,847,895
General Electric Capital Corp.
3.65%, 10/10/08		175,000,000		173,207,952
3.92%, 10/03/08		275,000,000		272,185,222
4.39%, 08/25/08		140,000,000		139,061,027
General Electric Capital Services Inc.
3.65%, 10/10/08		100,000,000		98,975,972
4.39%, 08/25/08		140,000,000		139,061,027
Grampian Funding LLC
2.73%, 08/11/08(a)		145,000,000		144,549,171
2.73%, 08/18/08(a)		168,000,000		167,388,480
2.75%, 07/10/08(a)		100,000,000		99,931,250
2.80%, 07/31/08(a)		260,000,000		259,393,333
Jupiter Securitization Corp.
2.43%, 07/08/08		151,555,000		151,483,390
2.50%, 07/21/08(a)		101,572,000		101,430,928
2.55%, 08/21/08(a)		100,000,000		99,638,750
2.65%, 08/20/08(a)		100,000,000		99,631,944
2.70%, 07/08/08(a)		125,914,000		125,847,895
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		115,372,000		115,293,483
2.47%, 07/18/08(a)		188,983,000		188,762,572
Nationwide Building Society
2.95%, 08/01/08		150,000,000		149,618,959
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		100,562,000		100,521,775
2.55%, 07/15/08(a)		100,000,000		99,900,833
2.58%, 09/03/08(a)		80,000,000		79,633,067
2.65%, 08/19/08(a)		100,000,000		99,639,306
2.70%, 07/02/08(a)		111,578,000		111,569,632

14

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ranger Funding Co. LLC
2.65%, 08/21/08(a)	$	488,371,000	$	486,537,574
2.67%, 07/25/08(a)		125,000,000		124,777,500
Regency Markets No. 1 LLC
2.60%, 07/11/08(a)		100,000,000		99,927,778
2.72%, 08/15/08(a)		136,137,000		135,674,134
Royal Bank of Scotland
2.87%, 08/01/08		150,000,000		149,629,292
Solitaire Funding Ltd.
2.60%, 07/10/08(a)		145,000,000		144,905,750
Thames Asset Global Securitization No. 1 Inc.
2.58%, 07/09/08(a)		160,741,000		160,648,842
2.75%, 07/07/08(a)		200,000,000		199,908,333
2.78%, 08/15/08(a)		100,000,000		99,652,500
2.80%, 07/17/08(a)		150,000,000		149,813,334
2.80%, 08/07/08(a)		160,000,000		159,539,555
Ticonderoga Master Funding Ltd.
2.50%, 07/08/08(a)		175,000,000		174,914,931
Tulip Funding Corp.
2.70%, 07/17/08(a)		150,000,000		149,820,000
2.75%, 07/15/08(a)		82,008,000		81,920,297
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		100,000,000		99,474,583
Variable Funding Capital Corp.
2.55%, 08/20/08(a)		110,000,000		109,610,417
2.60%, 09/04/08(a)		100,000,000		99,530,556
2.87%, 07/18/08(a)		125,000,000		124,830,590
Westpac Banking Corp.
2.62%, 03/06/09		250,000,000		245,487,778
Westpac Securities NZ Ltd.
2.52%, 03/09/09		200,000,000		196,486,000
Windmill Funding Corp.
2.57%, 07/10/08(a)		200,000,000		199,871,500
2.57%, 07/22/08(a)		250,000,000		249,625,208
2.70%, 08/14/08(a)		145,000,000		144,521,500
Yorktown Capital LLC
2.67%, 07/24/08(a)		130,973,000		130,749,582
TOTAL COMMERCIAL PAPER
(Cost: $11,932,235,376)				11,932,235,376
MEDIUM-TERM NOTES – 5.32%
Federal Home Loan Bank
2.70%, 03/17/09		250,000,000		250,000,000
Federal National Mortgage Association
2.30%, 12/18/08		330,000,000		326,415,833
Goldman Sachs Group Inc. (The)
3.40%, 01/30/09(b)		300,000,000		300,000,000
US Bank N.A.
2.60%, 02/19/09		300,000,000		300,000,000
2.70%, 09/08/08		150,000,000		150,000,000
2.75%, 01/05/09		330,000,000		330,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $1,656,415,833)				1,656,415,833

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 19.82%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $40,800,000, 5.50% to 6.00%, 6/1/33 to 3/1/37).	$	40,000,000	$	40,000,000
Bank of America N.A. Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $90,006,250 (collateralized by U.S. government obligations, value $91,800,000, 5.00% to 5.50%, 3/1/35 to 7/1/35).		90,000,000		90,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $465,035,133 (collateralized by non-U.S. government debt securities, value $511,500,001, 0.00% to 10.00%, 2/23/36).		465,000,000		465,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $485,036,644 (collateralized by non-U.S. government debt securities, value $533,500,000, 0.00% to 10.00%, 2/23/36).		485,000,000		485,000,000
Citigroup Global Markets Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $314,309,606, 2.55% to 8.81%, 3/15/10 to 9/20/51).		300,000,000		300,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $1,040,076,556 (collateralized by non-U.S. government debt securities, value $1,071,206,199, 3.12% to 9.82%, 7/15/08 to 6/15/38).		1,040,000,000		1,040,000,000
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $175,013,368 (collateralized by non-U.S. government debt securities, value $180,251,475, 4.10% to 8.00%, 6/8/09 to 12/15/38).		175,000,000		175,000,000
Goldman Sachs & Co. Tri-Party 2.83%, dated 6/30/08, due 9/3/08, maturity value $150,766,458 (collateralized by non-U.S. government debt securities, value $156,919,105, 0.00% to 10.00%, 5/15/09 to 2/15/51).(b)		150,000,000		150,000,000

15

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Goldman Sachs Group Inc. (The) Tri-Party 2.40%, dated 6/30/08, due 7/1/08, maturity value $150,010,000 (collateralized by U.S. government obligations, value $154,500,000, 0.00% to 3.53%, 7/25/18 to 8/25/37).	$	150,000,000	$	150,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $730,054,344 (collateralized by U.S. government obligations and non-U.S. government debt securities, value $745,702,435, 0.00% to 8.94%, 8/25/08 to 3/14/51).		730,000,000		730,000,000
HSBC Securities Inc. Tri-Party 2.58%, dated 6/30/08, due 7/1/08, maturity value $100,007,167 (collateralized by non-U.S. government debt securities, value $105,002,861, 0.00% to 9.50%, 10/1/23 to 4/1/47).		100,000,000		100,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $125,009,028 (collateralized by non-U.S. government debt securities, value $131,251,997, 0.31% to 6.47%, 6/15/17 to 7/25/46).		125,000,000		125,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $150,010,833 (collateralized by non-U.S. government debt securities, value $154,503,224, 2.96% to 9.86%, 2/17/09 to 11/2/49).		150,000,000		150,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $250,018,056 (collateralized by U.S. government obligations, value $255,001,636, 5.50% to 6.00%, 10/1/35 to 5/1/38).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $206,003,795, 5.63% to 8.63%, 2/15/11 to 5/29/67).		200,000,000		200,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $100,007,639 (collateralized by non-U.S. government debt securities, value $105,000,749, 2.25% to 9.79%, 1/25/11 to 9/25/47).		100,000,000		100,000,000

Security	Face Amount		Value
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $285,166,250 (collateralized by non-U.S. government debt securities, value $299,250,166, 0.01% to 8.86%, 8/20/09 to 10/20/27).	$	285,000,000	$	285,000,000
Merrill Lynch & Co. Inc. Tri-Party 2.90%, dated 6/30/08, due 7/1/08, maturity value $100,008,056 (collateralized by non-U.S. government debt securities, value $105,004,751, 4.50% to 7.80%, 2/1/15 to 1/1/48).		100,000,000		100,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $300,022,083 (collateralized by non-U.S. government debt securities, value $315,375,643, 2.58% to 9.03%, 11/1/08 to 1/15/49).		300,000,000		300,000,000
Morgan Stanley Tri-Party 2.96%, dated 6/30/08, due 9/30/08 maturity value $342,571,911 (collateralized by non-U.S. government debt securities, value $357,140,799, 0.00% to 10.00%, 7/1/08 to 6/30/38).(b)		340,000,000		340,000,000
Wachovia Capital Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $600,044,167 (collateralized by non-U.S. government debt securities, value $630,000,001, 0.00% to 10.00%, 10/15/17 to 2/15/51).		600,000,000		600,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $6,175,000,000)				6,175,000,000
TIME DEPOSITS – 0.57%
Societe Generale
2.50%, 07/01/08		178,626,000		178,626,000
TOTAL TIME DEPOSITS
(Cost: $178,626,000)				178,626,000
VARIABLE & FLOATING RATE NOTES – 25.21%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		140,000,000		140,008,100
2.52%, 11/07/08(a)		82,000,000		82,007,417
2.53%, 11/14/08(a)		65,000,000		65,008,629
2.56%, 11/15/08(a)		80,000,000		80,016,037

16

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Allstate Life Global Funding Trusts
2.48%, 09/04/08	$	125,000,000	$	124,980,336
2.51%, 09/26/08		64,500,000		64,470,547
2.74%, 12/08/08		16,250,000		16,243,504
American Express Bank FSB
2.50%, 06/12/09		50,000,000		49,659,334
American Express Credit Corp.
2.48%, 10/17/08		5,000,000		4,995,091
ANZ National (International) Ltd. London Branch
2.46%, 09/05/08(a)		75,000,000		75,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Australia & New Zealand Banking Group Ltd.
2.51%, 10/22/08(a)		100,000,000		100,004,381
Bank of America N.A.
3.21%, 07/02/09		225,000,000		225,000,000
Bank of Ireland
2.47%, 08/18/08(a)		70,000,000		70,000,437
2.49%, 09/19/08(a)		145,000,000		144,992,575
2.67%, 09/12/08(a)		65,000,000		65,000,000
Bank of Scotland PLC
2.45%, 10/08/08(a)		91,700,000		91,623,423
BBVA US Senior SA Unipersonal
2.79%, 04/17/09(a)		50,000,000		49,841,080
BMW US Capital LLC
2.45%, 09/04/08(a)		30,000,000		30,000,156
2.51%, 11/14/08(a)		200,000,000		200,017,303
Commonwealth Bank of Australia
2.50%, 09/23/08(a)		50,000,000		50,002,427
Credit Agricole SA
2.91%, 08/22/08(a)		100,000,000		99,998,766
DEPFA Bank PLC
2.84%, 07/14/08		200,000,000		200,001,478
Dexia Credit SA NY
2.43%, 09/29/08		17,100,000		17,085,707
Fifth Third Bancorp
2.49%, 08/22/08(a)		200,000,000		200,004,276
Florida Heart Group PA/Florida Heart Group Holdings
2.58%, 07/03/08		10,325,000		10,325,000
General Electric Capital Corp.
2.50%, 04/24/09		60,000,000		60,001,643
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		375,000,000		375,000,000
Guiding Light Church
2.58%, 07/03/08		9,565,000		9,565,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,009,962
ING Bank NV
3.16%, 06/17/09(a)		325,000,000		325,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		235,000,000		235,000,000

Security	Face Amount		Value
Jordan Brick Co. Inc.
2.58%, 07/02/08	$	45,220,000	$	45,220,000
JPMorgan Chase & Co.
2.45%, 09/02/08		150,000,000		149,999,976
Kommunalkredit Austria AG
2.46%, 08/08/08(a)		40,000,000		40,000,000
Lakeline Austin Development Ltd.
2.58%, 07/03/08		11,000,000		11,000,000
Lloyds TSB Group PLC
2.44%, 09/06/08(a)		54,400,000		54,377,526
2.66%, 10/06/08(a)		15,000,000		14,993,147
Marshall & Ilsley Bank
2.48%, 09/12/08		115,000,000		115,001,522
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
MetLife Insurance Co. of Connecticut
2.80%, 08/18/08(b)		50,000,000		50,000,000
Metropolitan Life Global Funding I
2.48%, 08/21/08(a)		75,000,000		75,000,000
2.50%, 11/06/08(a)		150,000,000		150,016,774
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
2.81%, 07/18/08(b)		25,000,000		25,000,000
Monumental Global Funding III
2.49%, 02/17/09(a)		5,000,000		4,978,308
2.79%, 08/29/08(a)		150,000,000		150,000,000
Natexis Banques Populaires
2.49%, 09/12/08		125,000,000		124,996,854
National City Bank (Ohio)
2.70%, 08/13/08		150,000,000		150,000,000
Nationwide Building Society
2.51%, 10/06/08(a)		165,000,000		165,019,509
2.88%, 10/27/08(a)		315,000,000		315,046,613
Natixis
2.73%, 09/08/08(a)		100,000,000		100,000,172
Nordea Bank AB
2.47%, 09/10/08(a)		225,000,000		225,004,265
Northern Rock PLC
2.53%, 08/01/08(a)(c)		190,000,000		190,006,716
Pricoa Global Funding I
2.48%, 08/27/08(a)		200,000,000		199,998,571
2.87%, 09/12/08(a)		10,000,000		9,997,648
2.96%, 06/12/09(a)		100,000,000		100,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		200,000,000		200,000,000
Santander US Debt SA Unipersonal
2.86%, 09/19/08(a)		10,000,000		9,987,284
Skandinaviska Enskilda Banken AB
2.50%, 09/17/08		150,000,000		150,002,947
Societe Generale
2.46%, 08/29/08(a)		30,000,000		30,000,000
Trap Rock Industries Inc.
2.58%, 07/03/08		17,840,000		17,840,000
Trinitas Hospital
2.58%, 07/03/08		14,675,000		14,675,000

17

MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M
2.48%, 07/17/08(a)	$	54,273,000	$	54,273,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		187,623,000		187,623,000
Wachovia Bank N.A.
2.91%, 05/01/09		515,000,000		515,000,000
Wells Fargo & Co.
2.55%, 03/13/09(a)		50,000,000		50,010,695
3.55%, 05/01/09		164,900,000		164,947,027
Westpac Banking Corp.
2.70%, 08/14/08(a)		100,000,000		100,000,000
2.75%, 10/10/08		70,000,000		70,000,000
2.92%, 06/10/09		225,000,000		225,000,000
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $7,855,885,973)				7,855,885,973
TOTAL INVESTMENTS IN SECURITIES – 99.80%
(Cost: $31,098,172,061)				31,098,172,061
Other Assets, Less Liabilities – 0.20%				62,281,372
NET ASSETS – 100.00%			$	31,160,453,433

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

^(c) Security issued by a Structured Investment Vehicle.

The accompanying notes are an integral part of these financial statements.

18

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
CERTIFICATES OF DEPOSIT – 13.21%
Banco Bilbao Vizcaya Argentaria SA
4.57%, 07/03/08	$	175,000,000	$	175,019,603
Bank of Nova Scotia
2.51%, 04/01/09		150,000,000		150,011,134
3.00%, 01/29/09		75,000,000		74,975,587
Bank of Scotland
4.98%, 07/07/08		135,000,000		135,000,000
BNP Paribas
2.58%, 08/20/08		92,500,000		92,499,953
Branch Banking & Trust
2.81%, 11/07/08		100,000,000		100,003,508
Chase Bank USA N.A.
2.75%, 01/28/09		200,000,000		200,000,000
Credit Suisse First Boston NY
4.93%, 10/09/08		110,000,000		110,000,000
5.40%, 07/10/08		100,000,000		100,000,000
DnB NOR Bank ASA
2.84%, 12/08/08		85,000,000		85,000,000
Fortis Bank NY
2.41%, 10/02/08		30,000,000		29,973,436
Rabobank Nederland NV
2.54%, 08/22/08		50,000,000		50,002,871
Royal Bank of Scotland NY
2.40%, 07/03/08		70,000,000		69,999,391
2.64%, 04/09/09		75,000,000		75,002,861
Societe Generale NY
4.51%, 11/21/08		25,000,000		25,000,950
SunTrust Banks Inc.
2.50%, 07/17/08		250,000,000		250,000,000
Toronto-Dominion Bank (The)
2.65%, 04/13/09		75,000,000		75,000,000
UniCredito Italiano NY
2.95%, 12/08/08		85,000,000		85,001,860
Wachovia Bank N.A.
2.92%, 01/12/09		5,000,000		5,002,025
TOTAL CERTIFICATES OF DEPOSIT
(Cost: $1,887,493,179)				1,887,493,179
COMMERCIAL PAPER – 41.01%
Amstel Funding Corp.
2.85%, 07/08/08(a)		175,000,000		174,903,021
2.95%, 07/28/08(a)		160,000,000		159,646,000
2.95%, 08/04/08(a)		50,000,000		49,860,694
3.00%, 07/18/08(a)		100,000,000		99,858,333
Amsterdam Funding Corp.
2.55%, 07/03/08(a)		75,000,000		74,989,375
Bank of Scotland
2.65%, 07/09/08		125,000,000		124,926,389
CAFCO LLC
2.52%, 07/14/08(a)		250,000,000		249,772,500
2.52%, 07/28/08(a)		75,000,000		74,858,250
2.55%, 07/14/08(a)		71,200,000		71,134,437

Security	Face Amount		Value
Cancara Asset Securitisation Ltd.
2.55%, 07/09/08(a)	$	100,000,000	$	99,943,333
2.60%, 07/14/08(a)		100,000,000		99,906,111
2.80%, 07/11/08(a)		100,000,000		99,922,222
2.82%, 07/22/08(a)		100,000,000		99,835,500
2.95%, 08/01/08(a)		150,000,000		149,618,959
Chariot Funding LLC
2.50%, 07/21/08(a)		100,000,000		99,861,111
2.55%, 07/14/08(a)		166,580,000		166,426,608
2.55%, 08/22/08(a)		75,497,000		75,218,919
Charta LLC
2.54%, 07/28/08(a)		250,000,000		249,523,750
2.54%, 07/30/08(a)		50,000,000		49,897,695
CRC Funding LLC
2.59%, 07/30/08(a)		125,000,000		124,739,202
Edison Asset Securitization LLC
2.86%, 08/05/08(a)		100,000,000		99,721,944
Falcon Asset Securitization Co. LLC
2.43%, 07/08/08(a)		125,277,000		125,217,807
2.60%, 07/18/08(a)		175,000,000		174,785,139
General Electric Capital Corp.
2.45%, 08/01/08		100,000,000		99,789,028
3.92%, 10/03/08		125,000,000		123,720,555
4.39%, 08/25/08		60,000,000		59,597,584
General Electric Capital Services Inc.
4.39%, 08/25/08		60,000,000		59,597,584
Govco Inc.
2.65%, 08/25/08(a)		134,250,000		133,706,474
Grampian Funding LLC
2.68%, 07/14/08(a)		200,000,000		199,806,444
2.75%, 07/10/08(a)		100,000,000		99,931,250
Jupiter Securitization Corp.
2.50%, 07/21/08(a)		75,000,000		74,895,833
2.55%, 08/22/08(a)		110,728,000		110,320,152
2.65%, 07/22/08(a)		100,000,000		99,845,417
Kitty Hawk Funding Corp.
2.45%, 07/11/08(a)		100,000,000		99,931,945
Nationwide Building Society
2.95%, 08/01/08		100,000,000		99,745,971
Park Avenue Receivables Corp.
2.40%, 07/07/08(a)		75,000,000		74,970,000
Ranger Funding Co. LLC
2.67%, 07/25/08(a)		75,000,000		74,866,500
Royal Bank of Scotland
2.87%, 08/01/08		100,000,000		99,752,861
Solitaire Funding Ltd.
2.60%, 07/11/08(a)		250,000,000		249,819,445

Thames Asset Global Securitization No. 1 Inc.
2.80%, 07/07/08(a)	136,477,000	136,413,311
2.80%, 07/17/08(a)	100,000,000	99,875,556
2.80%, 07/21/08(a)	30,879,000	30,830,966
2.82%, 07/18/08(a)	58,572,000	58,494,002
Thunder Bay Funding LLC
2.55%, 07/16/08(a)	153,647,000	153,483,750
2.57%, 07/11/08(a)	103,799,000	103,724,899

19

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
Ticonderoga Master Funding Ltd.
2.50%, 07/02/08(a)	$	102,420,000	$	102,412,887
Tulip Funding Corp.
2.60%, 07/08/08(a)		100,000,000		99,949,444
UniCredito Italiano Bank (Ireland) PLC
2.91%, 09/04/08		50,000,000		49,737,292
Variable Funding Capital Corp.
2.87%, 07/18/08(a)		125,000,000		124,830,590
Yorktown Capital LLC
2.55%, 07/22/08(a)		121,320,000		121,139,536
2.67%, 07/24/08(a)		100,000,000		99,829,417
2.80%, 07/18/08(a)		125,119,000		124,953,565
TOTAL COMMERCIAL PAPER
(Cost: $5,860,539,557)				5,860,539,557
MEDIUM-TERM NOTES – 4.96%
ASIF Global Financing
3.90%, 10/22/08(a)		15,670,000		15,616,123
Berkshire Hathaway Finance Corp.
3.38%, 10/15/08		65,200,000		65,309,904
Federal National Mortgage Association
2.30%, 12/18/08		170,000,000		168,153,611
MassMutual Global Funding II
3.80%, 04/15/09(a)		40,000,000		40,395,644
Metropolitan Life Global Funding I
3.80%, 01/20/09(a)		250,000,000		250,000,000
US Bank N.A.
2.75%, 01/05/09		170,000,000		170,000,000
TOTAL MEDIUM-TERM NOTES
(Cost: $709,475,282)				709,475,282
REPURCHASE AGREEMENTS – 14.62%
Banc of America Securities LLC Tri-Party 2.50%, dated 6/30/08, due 7/1/08, maturity value $40,002,778 (collateralized by U.S. government obligations, value $ 40,800,000, 5.50%, 6/1/33).		40,000,000		40,000,000
Bank of America N.A. Tri-Party 2.72%, dated 6/30/08, due 7/1/08, maturity value $400,030,222 (collateralized by non-U.S. government debt securities, value $440,000,000, 0.00% to 10.00%, 2/23/36).		400,000,000		400,000,000
Credit Suisse First Boston Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $175,012,882 (collateralized by non-U.S. government debt securities, value $180,251,815, 3.21% to 7.71%, 11/1/08 to 10/15/36).		175,000,000		175,000,000

Security	Face Amount		Value
Credit Suisse First Boston Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $125,009,549 (collateralized by non-U.S. government debt securities, value $128,753,713, 4.65% to 7.75%, 2/15/10 to 10/1/66).	$	125,000,000	$	125,000,000
Goldman Sachs Group Inc. (The) Tri-Party 2.68%, dated 6/30/08, due 7/1/08, maturity value $300,022,333 (collateralized by non-U.S. government debt securities, value $315,000,000, 0.00% to 16.07%, 2/25/09 to 2/10/51).		300,000,000		300,000,000
J.P. Morgan Securities Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $375,027,083 (collateralized by non-U.S. government debt securities, value $393,751,820, 0.00% to 12.87%, 1/15/13 to 6/11/50).		375,000,000		375,000,000
J.P. Morgan Securities Inc. Tri-Party 2.75%, dated 6/30/08, due 7/1/08, maturity value $250,019,097 (collateralized by U.S. government obligations, value $255,001,131, 5.00% to 6.00%, 1/1/36 to 10/1/36).		250,000,000		250,000,000
Lehman Brothers Holdings Inc. Tri-Party 2.60%, dated 6/30/08, due 7/1/08, maturity value $100,007,222 (collateralized by U.S. government obligations, value $102,000,291, 4.50% to 6.00%, 11/1/16 to 4/1/28).		100,000,000		100,000,000
Lehman Brothers Holdings Inc. Tri-Party 3.00%, dated 6/30/08, due 7/7/08, maturity value $125,072,917 (collateralized by non-U.S. government debt securities, value $131,254,412, 1.63% to 14.88%, 10/1/08 to 12/20/54).		125,000,000		125,000,000
Morgan Stanley Tri-Party 2.65%, dated 6/30/08, due 7/1/08, maturity value $200,014,722 (collateralized by non-U.S. government debt securities, value $211,970,792, 0.00% to 10.00%, 5/18/10 to 12/20/49).		200,000,000		200,000,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $2,090,000,000)				2,090,000,000

20

PRIME MONEY MARKET MASTER PORTFOLIO

Schedule of Investments (Continued)

June 30, 2008 (Unaudited)

Security	Face Amount		Value
TIME DEPOSITS – 0.48%
Societe Generale
2.50%, 07/01/08	$	67,882,000	$	67,882,000
TOTAL TIME DEPOSITS
(Cost: $67,882,000)				67,882,000
VARIABLE & FLOATING RATE NOTES – 25.44%
Allstate Life Global Funding II
2.51%, 10/27/08(a)		160,000,000		160,001,148
2.52%, 11/07/08(a)		58,000,000		58,001,937
2.53%, 11/14/08(a)		85,000,000		85,006,654
Allstate Life Global Funding Trusts
2.48%, 09/04/08		45,000,000		45,000,000
ASIF Global Financing
2.51%, 10/22/08(a)		75,000,000		74,999,408
Bank of America N.A.
3.21%, 07/02/09		75,000,000		75,000,000
Bank of Ireland
2.67%, 09/12/08(a)		35,000,000		35,000,000
Citigroup Global Markets Holdings Inc.
2.65%, 10/21/08		350,000,000		350,000,000
DEPFA Bank PLC
2.84%, 07/14/08		50,000,000		50,000,000
Deutsche Bank AG
2.43%, 09/30/08		100,000,000		100,000,000
Dexia Credit SA NY
2.43%, 09/29/08		31,770,000		31,726,677
General Electric Capital Corp.
2.50%, 04/24/09		65,000,000		65,000,000
2.77%, 01/05/09		13,800,000		13,788,118
2.82%, 03/16/09		2,900,000		2,897,070
2.88%, 06/15/09		25,000,000		24,995,767
Granite Master Issuer PLC Series 2005-3 Class A
2.48%, 08/20/08(a)		125,000,000		125,000,000
Hartford Life Global Funding Trust
2.53%, 11/15/08		100,000,000		100,000,000
ING Bank NV
3.16%, 06/17/09(a)		100,000,000		100,000,000
ING USA Annuity & Life Insurance Co.
3.13%, 01/12/09(b)		65,000,000		65,000,000
MassMutual Global Funding II
2.61%, 02/02/09(a)		125,000,000		125,000,000
Metropolitan Life Global Funding I
2.50%, 11/06/08(a)		139,680,000		139,681,688
2.57%, 09/12/08(a)		40,000,000		40,007,402
Metropolitan Life Insurance Co.
3.00%, 07/25/08(b)		50,000,000		50,000,000
Metropolitan Life Insurance Funding
3.02%, 04/01/09(a)(b)		15,000,000		15,000,000
Monumental Global Funding III
2.79%, 08/29/08(a)		50,000,000		50,000,000
Morgan Stanley
2.61%, 12/03/08		100,000,000		100,000,000

Security	Face Amount		Value
National Australia Bank Ltd.
2.88%, 03/06/09(a)	$	75,000,000	$	74,866,757
Nationwide Building Society
2.51%, 10/06/08(a)		135,000,000		135,003,930
2.88%, 10/27/08(a)		50,000,000		50,000,000
Rabobank Nederland NV NY
2.66%, 11/14/08(a)		140,000,000		140,000,000
Royal Bank of Canada
2.44%, 09/05/08(a)		100,000,000		100,000,000
Royal Bank of Scotland PLC
2.87%, 07/21/08(a)		20,000,000		20,000,515
Societe Generale
2.46%, 08/29/08(a)		5,000,000		4,998,696
Toyota Motor Credit Corp.
2.06%, 10/20/08		25,000,000		24,955,173
Toyota Motor Credit Corp. Series 1
2.53%, 01/12/09		200,000,000		200,000,000
UBS AG Stamford
2.46%, 08/15/08		100,000,000		100,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class A4M 2.48%, 07/17/08(a)		23,000,000		23,000,000
Wachovia Bank Commercial Mortgage Trust Series 2007-C32 Class AMM
2.50%, 07/17/08(a)		80,000,000		80,000,000
Wachovia Bank N.A.
2.65%, 10/03/08		31,200,000		31,193,095
2.84%, 03/23/09		50,000,000		49,853,708
2.91%, 05/01/09		250,000,000		250,000,000
2.99%, 11/25/08		40,000,000		39,995,084
Wells Fargo & Co.
3.55%, 05/01/09		50,000,000		50,021,111
Westpac Banking Corp.
2.92%, 06/10/09		175,000,000		175,000,000
World Savings Bank FSB
2.80%, 05/08/09		3,100,000		3,081,978
2.81%, 03/02/09		2,600,000		2,590,079
TOTAL VARIABLE & FLOATING RATE NOTES
(Cost: $3,635,665,995)				3,635,665,995
TOTAL INVESTMENTS IN SECURITIES – 99.72%
(Cost: $14,251,056,013)				14,251,056,013
Other Assets, Less Liabilities – 0.28%				40,280,226
NET ASSETS – 100.00%			$	14,291,336,239

^(a) This security may be resold to qualified institutional buyers under Rule 144A or pursuant to Section 4(2) of the Securities Act of 1933.

^(b) The investment adviser has determined that this security is “illiquid,” in that it cannot be sold within seven (7) days for approximately the value at which it is carried in the Master Portfolio.

The accompanying notes are an integral part of these financial statements.

21

TREASURY MONEY MARKET MASTER PORTFOLIO

Schedule of Investments

June 30, 2008 (Unaudited)

Security	Face Amount		Value
REPURCHASE AGREEMENTS – 100.01%
Banc of America Securities LLC Tri-Party 1.50%, dated 6/30/08, due 7/1/08, maturity value $8,200,342 (collateralized by U.S. government obligations, value $8,364,029, 4.88%, 8/31/08).	$	8,200,000	$	8,200,000
Credit Suisse First Boston Tri-Party 1.75%, dated 6/30/08, due 7/1/08, maturity value $8,200,399 (collateralized by U.S. government obligations, value $8,367,816, 4.88%, 5/31/09).		8,200,000		8,200,000
Goldman Sachs Group Inc. (The) Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $8,938,310 (collateralized by U.S. government obligations, value $9,116,862, 8.75%, 5/15/20).		8,938,000		8,938,000
Lehman Brothers Holdings Inc. Tri-Party 0.25%, dated 6/30/08, due 7/1/08, maturity value $8,200,057 (collateralized by U.S. government obligations, value $8,369,933, 7.13%, 2/15/23).		8,200,000		8,200,000
Merrill Lynch & Co. Inc. Tri-Party 1.25%, dated 6/30/08, due 7/1/08, maturity value $15,500,538 (collateralized by U.S. government obligations, value $15,815,611, 4.13% to 5.25%, 9/1/09 to 9/15/17).		15,500,000		15,500,000
TOTAL REPURCHASE AGREEMENTS
(Cost: $49,038,000)				49,038,000
TOTAL INVESTMENTS IN SECURITIES – 100.01%
(Cost: $49,038,000)				49,038,000
Other Assets, Less Liabilities – (0.01)%				(3,699	)
NET ASSETS – 100.00%			$	49,034,301

The accompanying notes are an integral part of these financial statements.

22

MASTER INVESTMENT PORTFOLIO

Portfolio Allocations (Unaudited)

June 30, 2008

Government Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	111,315,000		100.00	%
Other Net Assets		2,179		0.00
TOTAL	$	111,317,179		100.00	%
Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	11,932,235,376		38.29	%
Variable & Floating Rate Notes		7,855,885,973		25.21
Repurchase Agreements		6,175,000,000		19.82
Certificates of Deposit		3,300,008,879		10.59
Medium-Term Notes		1,656,415,833		5.32
Time Deposits		178,626,000		0.57
Other Net Assets		62,281,372		0.20
TOTAL	$	31,160,453,433		100.00	%
Prime Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Commercial Paper	$	5,860,539,557		41.01	%
Variable & Floating Rate Notes		3,635,665,995		25.44
Repurchase Agreements		2,090,000,000		14.62
Certificates of Deposit		1,887,493,179		13.21
Medium-Term Notes		709,475,282		4.96
Time Deposits		67,882,000		0.48
Other Net Assets		40,280,226		0.28
TOTAL	$	14,291,336,239		100.00	%
Treasury Money Market Master Portfolio
Asset Type	Value			% of Net Assets
Repurchase Agreements	$	49,038,000		100.01	%
Other Net Assets		(3,699	)	(0.01	)
TOTAL	$	49,034,301		100.00	%

These tables are not part of the financial statements.

23

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF ASSETS AND LIABILITIES

June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio		Money Market Master Portfolio		Prime Money Market Master Portfolio		Treasury Money Market Master Portfolio
ASSETS
Investments in securities of unaffiliated issuers, at amortized cost which approximates fair value (Note 1)	$	—	$	24,923,172,061	$	12,161,056,013	$	—
Repurchase agreements, at value and cost (Note 1)		111,315,000		6,175,000,000		2,090,000,000		49,038,000
Total investments		111,315,000		31,098,172,061		14,251,056,013		49,038,000
Cash		151		11		625		32
Receivables:
Interest		7,660		64,201,148		41,181,122		1,646
Due from investment adviser		1,057		—		—		1,265
Total Assets		111,323,868		31,162,373,220		14,292,237,760		49,040,943
LIABILITIES
Payables:
Investment advisory fees (Note 2)		—		1,885,710		879,693		—
Accrued expenses:
Professional fees (Note 2)		6,629		28,358		20,542		6,594
Independent trustees’ fees (Note 2)		60		5,719		1,286		48
Total Liabilities		6,689		1,919,787		901,521		6,642
NET ASSETS	$	111,317,179	$	31,160,453,433	$	14,291,336,239	$	49,034,301

STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008 (Unaudited)

	Government Money Market Master Portfolio			Money Market Master Portfolio			Prime Money Market Master Portfolio			Treasury Money Market Master Portfolio
NET INVESTMENT INCOME
Interest from unaffiliated issuers	$	2,265,184		$	552,894,094		$	229,517,108		$	1,643,838
Total investment income		2,265,184			552,894,094			229,517,108			1,643,838
EXPENSES (Note 2)
Investment advisory fees		78,214			16,228,714			6,794,100			69,807
Professional fees		6,650			30,871			16,461			6,650
Independent trustees’ fees		911			139,013			56,250			789
Total expenses		85,775			16,398,598			6,866,811			77,246
Less expense reductions (Note 2)		(80,644	)		(5,038,498	)		(3,962,835	)		(75,523	)
Net expenses		5,131			11,360,100			2,903,976			1,723
Net investment income		2,260,053			541,533,994			226,613,132			1,642,115
REALIZED GAIN (LOSS)
Net realized loss from sale of investments in unaffiliated issuers		—			(2,995,721	)		(290,351	)		—
Payment from affiliate (Note 2)		—			3,399,402			814,069			—
Net realized gain		—			403,681			523,718			—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,260,053		$	541,937,675		$	227,136,850		$	1,642,115

The accompanying notes are an integral part of these financial statements.

24

MASTER INVESTMENT PORTFOLIO

STATEMENTS OF CHANGES IN NET ASSETS

	Government Money Market Master Portfolio						Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,260,053		$	7,459,087		$	541,533,994		$	1,082,958,398
Net realized gain		—			—			403,681			42,548
Net increase in net assets resulting from operations		2,260,053			7,459,087			541,937,675			1,083,000,946
Interestholder transactions:
Contributions		1,558,317,449			1,739,584,764			24,050,846,582			66,603,193,729
Withdrawals		(1,557,095,598	)		(1,806,493,585	)		(24,924,734,602	)		(43,118,755,786	)
Net increase (decrease) in net assets resulting from interestholder transactions		1,221,851			(66,908,821	)		(873,888,020	)		23,484,437,943
Increase (decrease) in net assets		3,481,904			(59,449,734	)		(331,950,345	)		24,567,438,889
NET ASSETS:
Beginning of period		107,835,275			167,285,009			31,492,403,778			6,924,964,889
End of period	$	111,317,179		$	107,835,275		$	31,160,453,433		$	31,492,403,778
	Prime Money Market Master Portfolio						Treasury Money Market Master Portfolio
	For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007			For the six months ended June 30, 2008 (Unaudited)			For the year ended December 31, 2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	226,613,132		$	559,112,567		$	1,642,115		$	7,969,862
Net realized gain		523,718			11,956			—			—
Net increase in net assets resulting from operations		227,136,850			559,124,523			1,642,115			7,969,862
Interestholder transactions:
Contributions		58,414,645,861			99,288,703,149			384,220,217			1,637,092,248
Withdrawals		(55,372,727,474	)		(97,098,629,295	)		(540,250,452	)		(1,627,123,957	)
Net increase (decrease) in net assets resulting from interestholder transactions		3,041,918,387			2,190,073,854			(156,030,235	)		9,968,291
Increase (decrease) in net assets		3,269,055,237			2,749,198,377			(154,388,120	)		17,938,153
NET ASSETS:
Beginning of period		11,022,281,002			8,273,082,625			203,422,421			185,484,268
End of period	$	14,291,336,239		$	11,022,281,002		$	49,034,301		$	203,422,421

The accompanying notes are an integral part of these financial statements.

25

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Master Investment Portfolio (“MIP”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company organized as a Delaware statutory trust. As of June 30, 2008, MIP offered the following separate portfolios: Active Stock, Bond Index, CoreAlpha Bond, Government Money Market, LifePath Retirement, LifePath 2010, LifePath 2020, LifePath 2030, LifePath 2040, LifePath 2050, Money Market, Prime Money Market, S&P 500 Index and Treasury Money Market Master Portfolios. The LifePath 2050 Master Portfolio commenced operations on June 30, 2008.

These financial statements relate only to the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios (each, a “Master Portfolio,” collectively, the “Master Portfolios”).

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

1. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by MIP 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 Master Portfolios use the amortized cost method of valuation to determine the value of their portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The amortized cost method, which involves valuing a security at its cost and accreting or amortizing any discount or premium, respectively, over the period until maturity, approximates market value. At such intervals as the Board of Trustees (the “Board”) may deem appropriate, a review of the deviation of the Master Portfolios’ net assets calculated by using available market quotations (or an appropriate substitute which reflects current market conditions) and the valuation based on amortized cost will be performed. If the Board determines that the extent of any deviation from the Master Portfolios’ amortized cost valuation will result in material dilution or other unfair results to investors or existing interestholders it will take such action as it deems appropriate.

Effective January 1, 2008, the Master Portfolios 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 Master Portfolios’ 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, use of amortized cost, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs (including the Master Portfolios’ 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.

26

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

The following table summarizes the inputs used in valuing the Master Portfolios’ investments, as of June 30, 2008:

Investments in Securities
Master Portfolio	Level 1 – Quoted Prices		Level 2 – Other Significant Observable Inputs		Level 3 – Significant Unobservable Inputs		Total Fair Value
Government Money Market	$	—	$	111,315,000	$	—	$	111,315,000
Money Market		—		31,098,172,061		—		31,098,172,061
Prime Money Market		—		14,251,056,013		—		14,251,056,013
Treasury Money Market		—		49,038,000		—		49,038,000

SECURITY TRANSACTIONS AND INCOME RECOGNITION

Security transactions are accounted for on trade date. Interest income is accrued daily. Realized gains and losses on investment transactions are determined using the specific identification method. The Master Portfolios amortize premium and accrete discount using a constant yield to maturity method.

FEDERAL INCOME TAXES

In general, MIP believes that each Master Portfolio has and will continue to be operated in a manner so as to qualify it as a non-publicly traded partnership for federal income tax purposes. Provided that each such Master Portfolio so qualifies, it will not be subject to any federal income tax on its income and gains (if any). However, each interestholder in such a Master Portfolio will be taxed on its distributive share of the Master Portfolio’s taxable income in determining its federal income tax liability. As a non-publicly traded partnership for federal income tax purposes, each such Master Portfolio will be deemed to have “passed through” to its interestholders any interest, dividends, gains or losses of the Master Portfolio for such purposes. The determination of such share will be made in accordance with the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder.

In the case of Master Portfolios with only one interestholder, such as the Government Money Market and Treasury Money Market Master Portfolios, MIP believes that such Master Portfolios will not be treated as a separate entity for federal income tax purposes, and, therefore, will not be subject to any federal income tax on their income and gains (if any). Rather, such Master Portfolios’ assets and interest, dividends and gains or losses will be treated as assets and interest, dividends and gains or losses of the interestholders.

It is intended that each Master Portfolio’s assets, income and distributions will be managed in such a way that an entity electing and qualifying as a “regulated investment company” under the Code can continue to so qualify by investing substantially all of its assets through the Master Portfolio, provided that the regulated investment company meets other requirements for such qualifications not within the control of the Master Portfolio (e.g., distributing at least 90% of the regulated investment company’s “investment company taxable income” annually).

As of June 30, 2008, the Master Portfolios’ costs of investments for federal income tax purposes were the same as for financial reporting purposes.

The Master Portfolios 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 June 30, 2008, inclusive of the prior three open tax return years, and has determined that the implementation of FIN 48 did not have a material impact on the Master Portfolios’ financial statements.

REPURCHASE AGREEMENTS

The Master Portfolios may enter into repurchase agreements with banks and securities dealers. These transactions involve the purchase of securities with a simultaneous commitment to resell the securities to the bank or the dealer at an agreed-upon date and price. A repurchase agreement is accounted for as an investment by the Master Portfolio, collateralized by securities, which are delivered to the Master Portfolio’s custodian or to an agent bank under a tri-party agreement. The securities are marked-to-market daily and additional securities are acquired as needed, to ensure that their value equals or exceeds the repurchase price plus accrued interest.

27

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Pursuant to an Investment Advisory Contract with the Master Portfolios, Barclays Global Fund Advisors (“BGFA”) provides investment advisory services to each Master Portfolio. BGFA is a California corporation indirectly owned by Barclays Bank PLC. BGFA is entitled to receive an annual investment advisory fee of 0.10% of the average daily net assets of each of the Master Portfolios, as compensation for investment advisory services. BGFA has contractually agreed to waive a portion of its advisory fees through April 30, 2009. After giving effect to such contractual waiver, the advisory fees will be 0.07%. From time to time, BGFA may waive an additional portion of its advisory fees. Any such waivers will reduce the expenses of the Master Portfolio and, accordingly, have a favorable impact on its performance.

The fees and expenses of the Master Portfolios’ trustees who are not “interested persons” of MIP, as defined in the 1940 Act (“Independent Trustees”), counsel to the Independent Trustees and MIP’s independent registered public accounting firm (the “independent expenses”) are paid directly by the Master Portfolios. BGFA has contractually agreed to cap the expenses of the Master Portfolios at the rate at which the Master Portfolios pay an advisory fee to BGFA by providing an offsetting credit against the investment advisory fees paid by the Master Portfolios in an amount equal to the independent expenses.

For the six months ended June 30, 2008, BGFA waived and/or credited investment advisory fees of $80,644, $5,038,498, $3,962,835 and $75,523 for the Government Money Market, Money Market, Prime Money Market and Treasury Money Market Master Portfolios, respectively.

State Street Bank and Trust Company (“State Street”) serves as the custodian and sub-administrator of the Master Portfolios. State Street will not be entitled to receive fees for its custodial services, so long as it is entitled to receive a separate fee from Barclays Global Investors, N.A. (“BGI”) for its services as sub-administrator of the Master Portfolios.

SEI Investments Distribution Company (“SEI”) is the sponsor and placement agent for the Master Portfolios. SEI does not receive any fee from the Master Portfolios for acting as placement agent.

MIP has entered into an administration services arrangement with BGI, which has agreed to provide general administration services, such as managing and coordinating third-party service relationships (e.g., the Master Portfolios’ custodian, financial printer, legal counsel and independent registered public accounting firm), to the Master Portfolios. BGI is not entitled to compensation for providing administration services to the Master Portfolios, for so long as BGI is entitled to compensation for providing administration services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolios, or BGI (or an affiliate) receives investment advisory fees from the Master Portfolios. BGI may delegate certain of its administration duties to sub-administrators.

On February 19, 2008, an affiliate of BGFA purchased securities from the Prime Money Market Master Portfolio and Money Market Master Portfolio for cash at $34,998,569 and $181,990,742, respectively, prices in excess of the securities’ then current fair value. The excess of the purchase price over fair value is disclosed in the Statements of Operations as a payment from affiliate.

Certain officers and trustees of MIP are also officers of BGI and/or BGFA. As of June 30, 2008, these officers of BGI and/or BGFA collectively owned less than 1% of MIP’s outstanding beneficial interests.

28

MASTER INVESTMENT PORTFOLIO

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

3. FINANCIAL HIGHLIGHTS

Financial highlights for the Master Portfolios were as follows:

Master Portfolio	Six Months Ended June 30, 2008 (Unaudited)		Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004		Year Ended December 31, 2003
Government Money Market
Ratio of expenses to average net assets(a)	0.01	%	0.07	%	0.08	%	0.03	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.11	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.89	%	4.93	%	4.90	%	3.16	%	1.93	%(b)	n/a
Total return	1.38	%(c)	5.20	%	5.08	%	3.28	%	0.64	%(b)(c)	n/a
Money Market
Ratio of expenses to average net assets(a)	0.07	%	0.07	%	0.08	%	0.05	%	0.05	%	0.10	%
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	n/a
Ratio of net investment income to average net assets(a)	3.34	%	5.23	%	4.99	%	3.27	%	1.40	%	1.15	%
Total return	1.69	%(c)(d)	5.40	%	5.13	%	3.28	%	1.39	%	1.16	%
Prime Money Market
Ratio of expenses to average net assets(a)	0.04	%	0.07	%	0.08	%	0.08	%	0.03	%	0.03	%(e)
Ratio of expenses to average net assets prior to expense reductions(a)	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%	0.10	%(e)
Ratio of net investment income to average net assets(a)	3.33	%	5.23	%	4.95	%	3.22	%	1.52	%	1.12	%(e)
Total return	1.70	%(c)(d)	5.37	%	5.11	%	3.26	%	1.40	%	0.80	%(c)(e)
Treasury Money Market
Ratio of expenses to average net assets(a)	0.00	%	0.01	%	0.00	%	0.00	%	0.00	%(b)	n/a
Ratio of expenses to average net assets prior to expense reductions(a)	0.11	%	0.12	%	0.13	%	0.10	%	0.10	%(b)	n/a
Ratio of net investment income to average net assets(a)	2.35	%	4.81	%	5.03	%	3.99	%	1.82	%(b)	n/a
Total return	1.14	%(c)	4.98	%	5.04	%	3.20	%	0.61	%(b)(c)	n/a

^(a) Annualized for periods of less than one year.

^(b) For the period from September 1, 2004 (commencement of operations) to December 31, 2004.

^(c) Not annualized.

^(d) For the six months ended June 30, 2008, 0.01% of the Master Portfolio’s total return consists of purchases of securities by BGFA for prices in excess of the securities’ then current fair value. Excluding these items, total return would have been 1.68% for the Money Market Master Portfolio and 1.69% for the Prime Money Market Master Portfolio.

^(e) For the period from April 16, 2003 (commencement of operations) to December 31, 2003.

29

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited)

Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Master Investment Portfolio (“MIP”) Board of Trustees (the “Board”), including a majority of Trustees who are not interested persons of MIP, as that term is defined in the 1940 Act (the “Independent Trustees”), is required annually to consider each Investment Advisory Contract between MIP and BGFA (each, an “Advisory Contract”) on behalf of Money Market Master Portfolio, Prime Money Market Master Portfolio, Government Money Market Master Portfolio, and Treasury Money Market Master Portfolio (collectively, the “Master Portfolios”). As required by Section 15(c), the Board requested and BGFA provided such information as the Board deemed to be reasonably necessary to evaluate the terms of the Advisory Contracts. At a meeting held on March 25-26, 2008, the Board approved the selection of BGFA and the continuance of the Advisory Contracts, based on its review of qualitative and quantitative information provided by BGFA. In selecting BGFA and approving the Advisory Contracts for the Master Portfolios, the Board, including the Independent Trustees, advised by their independent counsel, considered the following factors, none 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 Contracts 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, over the past several years, BGFA and its affiliates have committed significant resources to the support of the Master Portfolios. The Board considered in particular that BGFA’s services for the Master Portfolios capitalize on BGFA’s core competencies, including the effective use of integrated portfolio management and trading expertise and proprietary technology that provides real-time access to performance, analytics and risk. The Board also considered services provided by BGFA and its affiliates in connection with the review of counterparty and issuer credit risk and the oversight of intermediaries that provide BGI feeder fund shareholder support and processing functions.

The Board also considered BGFA’s compliance program and its compliance record with respect to the Master Portfolios. 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 Master Portfolios. 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 further noted that BGFA does not serve as investment adviser for any other registered investment companies with substantially similar investment objectives and strategies as the Master Portfolios; therefore, no comparative performance information was available. The Board also noted that during BGFA’s term as investment adviser, the Master Portfolios have met their investment objectives. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by BGFA to the Master Portfolios under the Advisory Contracts were appropriate and supported the Board’s approval of the Advisory Contracts for the coming year.

MASTER PORTFOLIOS’ EXPENSES AND PERFORMANCE OF THE MASTER PORTFOLIOS

The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Master Portfolio in comparison with the same information for other investment companies registered under the 1940 Act, objectively selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology (the “Lipper Expense Group”). In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of each Master Portfolio for the one-, three-, five-, and ten-year (or since inception) periods ended December 31, 2007, as applicable, and as compared to the performance of other registered investment companies with similar investment objectives, as selected by Lipper as comprising each Master Portfolio’s applicable peer group pursuant to Lipper’s proprietary methodology and registered funds that would otherwise have been excluded from Lipper’s comparison groups because of their size or other differentiating factors, but were nonetheless included at the request of BGFA (the “Lipper Performance Group”, and together with the Lipper Expense Group, the “Lipper Groups”). The Board considered that the component funds of the Lipper Groups are publicly available funds, more analogous in overall expense structure to the Barclays Global Investors Funds Money Market Funds than to the underlying Master Portfolios, which are not available for investment except to other investment companies. 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.

30

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

The Board noted that each Master Portfolio outperformed the median performance of the funds in its Lipper Performance Group over relevant periods. The Board noted that the advisory fees for the Master Portfolios were generally lower than the advisory fee rates of the funds in their Lipper Expense Groups. The Board also noted that overall expenses for the Master Portfolios were generally lower than the overall expenses for the funds in their Lipper Expense Groups, both net and gross of BGFA’s voluntary waiver of certain advisory and administration fee amounts for certain of the Master Portfolios during the year ended December 31, 2007 and BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, from May 1, 2008 through April 30, 2009. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Master Portfolios, as managed by BGFA, as compared to the investment advisory fees and expense levels and performance of the funds in the Lipper Groups, were satisfactory for the purposes of approving the Advisory Contracts for the coming year.

COSTS OF SERVICES PROVIDED TO MASTER PORTFOLIOS AND PROFITS REALIZED BY BGFA AND AFFILIATES

The Board reviewed information about the profitability to BGFA of the Master Portfolios and the Barclays Global Investors Funds, separately and together, based on the fees payable to BGFA and its affiliates (including fees under the Advisory Contracts), and all other sources of revenue and expense to BGFA and its affiliates from the Master Portfolios’ operations for the last calendar year. The Board analyzed the Master Portfolios’ expenses, including the investment advisory fees paid to BGFA. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BGI from securities lending by MIP (including any securities lending by a Master Portfolio), revenues received from transactions for MIP executed through affiliates (including any such transactions for a Master Portfolio), and any fee revenue from any investments by a Master Portfolio in other funds for which BGFA provides advisory services and/or BGI provides administration services. The Board also discussed BGFA’s contractual and voluntary fee waivers for the Master Portfolios. Based on this review, the Board concluded that the profits realized by BGFA and its affiliates under the Advisory Contracts and from other relationships between the Master Portfolios 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 BGFA’s profitability analysis, the Board received information regarding economies of scale or other efficiencies that may result from increases in the Master Portfolios’ asset levels. The Board noted that the Advisory Contracts do not provide any breakpoints in the investment advisory fee rates as a result of any increases in the asset levels of the Master Portfolios. However, the Board noted that the investment advisory fee rates for the Master Portfolios had been set initially at the lower end of the marketplace so as to afford the Master Portfolios’ interestholders the opportunity to share in anticipated economies of scale from inception and noted BGFA’s agreement to contractually waive a portion of its advisory fee for each of the Master Portfolios, as discussed above. The Board also noted the difficulty of considering the potential for economies of scale based on advisory services independently and separately from any potential for economies of scale based on other services provided by BGFA and its affiliates. Based on the profitability analysis presented to the Board, which indicated that BGFA and its affiliates are profitable with respect to certain of the Master Portfolios while providing services at a loss to certain other Master Portfolios, with the overall MIP complex posting a profit to BGFA and its affiliates for the year, the Board discussed the potential for future economies of scale as the asset levels of the Master Portfolios increase. In light of this analysis and the relatively low investment advisory fee rates for the Master Portfolios, the Board determined that whether further economies of scale may be realized by the Master Portfolios or reflected in fee levels was not a significant factor at this juncture in its consideration of whether to approve the Advisory Contracts.

FEES AND SERVICES PROVIDED FOR OTHER COMPARABLE FUNDS/ACCOUNTS MANAGED BY BGFA AND ITS AFFILIATES

The Board considered the Master Portfolios’ annual investment advisory fee rates under the Advisory Contracts in comparison to the investment advisory/management fee rates for collective funds with substantially similar investment objectives and strategies for which BGFA (or its affiliate BGI) provides investment advisory/management services. BGFA and its affiliates do not provide investment advisory/management services to other investment companies registered under the 1940 Act or separate accounts with substantially similar investment objectives and strategies as the Master Portfolios. The Board noted that BGFA had provided information distinguishing the level of services provided to the collective funds from the level of services provided to the Master Portfolios. In the context of the comparative fee analysis, the Board compared the nature and extent of services provided to the Master Portfolios in comparison with the

31

MASTER INVESTMENT PORTFOLIO

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACTS (Unaudited) (Continued)

nature and extent of services provided to the collective funds, including, among other things, the level of complexity in managing the Master Portfolios and the collective funds under differing regulatory requirements and client guidelines.

The Board noted that the investment advisory fee rates under the Master Portfolios’ Advisory Contracts were within the range of the investment management fee rates for the collective funds. The Board noted that any differences between the advisory fee rates for certain of the Master Portfolios and the investment management fee rates for the collective funds appeared to be attributable to, among other things, the type and level of services provided and/or the asset levels of the collective funds. Based on this review, the Board determined that the investment advisory fee rates under the Advisory Contracts 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 Contracts 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 MIP and the Master Portfolios by BGFA, such as payment of administration fees to BGI, MIP’s administrator. 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 Master Portfolios. The Board further noted that the Master Portfolios may, but generally do not, participate in securities lending activities and generally do not execute transactions with affiliated brokers, as do other series of MIP. The Board concluded that any ancillary benefits would not be disadvantageous to the Master Portfolios’ interestholders.

Based on this analysis, the Board determined that the Advisory Contracts, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Master Portfolios and their interestholders to approve the Advisory Contracts for the coming year.

32

Notes:

Notes:

Item 2. Code of Ethics.

Not applicable to this semi-annual filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to the Registrant.

Item 6. Schedule of Investments.

The Funds’ full schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the Registrant.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the Registrant.

Item 10. Submission of Matters to a Vote of Security Holders.

There are no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a) The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a) (1) Not applicable to this semi-annual filing.

(a) (2) Section 302 Certifications are attached.

(a) (3) Not applicable to the Registrant.

(b) Section 906 Certifications are attached.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Barclays Global Investors Funds
By:	/s/ H. Michael Williams
	H. Michael Williams, President (Principal Executive Officer)
	Date: August 22, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ H. Michael Williams
	H. Michael Williams, President (Principal Executive Officer)
	Date: August 22, 2008

By:	/s/ Geoffrey D. Flynn
	Geoffrey D. Flynn, Treasurer and Chief Financial Officer (Principal Financial Officer)
	Date: August 22, 2008