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iShares iFTSE ExUK (IEUR)

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Friday 25 May, 2001

iShares iFTSE ExUK

Operating Results

iShares PLC  iFTSE ExUK
25 May 2001


iShares plc: Preliminary Announcement of Annual Results, for the period
ending 28 February 2001 
 
Please note that copies of the Annual Report & Accounts will be sent to
registered shareholders in due course, and will be available for collection
from the Administrator:     

               Bank of Ireland Securities Services Limited
               New Century House
               International Financial Services Centre
               Mayor Street Lower
               Dublin 1
               Ireland
 
iShares plc  

Company information

 
 
iShares Public Limited Company ('iShares') is an open-ended investment
company with variable capital incorporated as a public limited company under
the Companies Acts, 1963 to 1999 on 21 January 2000. iShares was approved as
a UCITS on 14 February 2000 and authorised by the Central Bank of Ireland.
 
iShares has an umbrella structure, so that different funds may be established
within the company, subject to the prior approval of the Central Bank. The
assets of each fund will be separate from one another and will be invested in
accordance with the investment objectives and policies applicable to each
fund. Each fund will be treated as bearing its own liabilities. However,
irrespective of whatever fund they are attributable to, all liabilities shall
be binding on iShares as a whole.
 
As at 28 February 2001 the following Funds were in existence:
 
                         Base currency of fund     Listed 
 
iFTSE 100 Fund                               £     LSE
iFTSE TMT Fund                               £     LSE
iFTSE ExUK Fund                              £     LSE
iBloomberg European Financials Fund          Euro  Euronext/LSE
iBloomberg European Pharmaceuticals Fund     Euro  Euronext/LSE
iBloomberg European Technology Fund          Euro  Euronext/LSE
iBloomberg European Telecoms Fund            Euro  Euronext/LSE
 
All figures relating to each fund are shown in the relevant base currency.
The financial statements of the company are shown in pounds sterling.
 
These funds are traded as exchange traded funds or 'Trackers'.


iShares plc  
Report of the Investment Manager 
 

Fund review

The investment objectives of the iShares Funds are to provide investors with
a total return, taking account of capital and income, which reflects the
returns on the equity markets associated with the Funds. To achieve this the
Investment Manager will normally invest in securities that mirror the
indices. The benchmark indices for these Funds are shown below:

 

                                                                              
  Fund                                  Index                                 
  iFTSE 100                             FTSE 100                            
  iFTSE TMT                             FTSE TMT                            
  iFTSE ExUK                            FTSE ExUK                           
  iBloomberg European Financials        Bloomberg European Investable         
                                        Financials                            
  iBloomberg European Pharmaceuticals   Bloomberg European Investable         
                                        Pharmaceuticals                       
  iBloomberg European Technology        Bloomberg European Investable         
                                        Technology                            
  iBloomberg European Telecoms          Bloomberg European Investable Telecoms
 
 
The performance of the Funds for the period under review is shown below.
 

                                                                              
              Launch   Net      Net        Capital  Capital    Fund    Index
              date     asset    asset      NAV      NAV per    return  return
                       value    value at   per      share at   since   since 
                       at       28/02/2001 share    28/02/2001 launch  launch
                       launch              at launch
 
                       Million  Million                                    
iFTSE 100     27/04/00 £60.00   £119.66    £10.00   £9.57      -4.27% -4.23%
                                                             
iFTSE TMT     16/10/00 £22.70   £17.71     £15.00   £11.49     -25.85%-25.96%
                  
iFTSE ExUK    15/12/00 £19.20   £18.58     £19.20   £18.59     -3.26% -3.10%
                     
iBloomberg    09/02/01 Eur41.60 Eur39.67   Eur9.92  Eur9.45    -4.83% -4.82%
European                                
Financials                                                                  

iBloomberg    09/02/01 Eur43.30 Eur43.11   Eur10.33 Euro10.26  -0.61% -0.46%
European                         
Pharmaceuticals                                                               
                                                                          

iBloomberg    09/02/01 Eur38.50 Eur34.20   Eur9.17  Eur8.15    -11.20%-10.93%
European                                  
Technology                                                                  

iBloomberg    09/02/01 Eur36.20 Eur31.72   Eur8.63  Eur7.55    -12.46%-12.27%
European       
Telecoms                                                                    

 
 
iShares plc 

Market background

 

UK equities

In common with most other equity markets, UK equities had a disappointing
period giving back some performance after strong rises in previous years. The
main declines were concentrated in the Technology, Media and Telecoms (TMT)
sectors which all suffered major downturns after the large speculative gains
of the two previous years. Sectors offering high yields, such as utilities,
put in strong performances, as did so-called 'defensive' sectors such as food
and pharmaceuticals. These sectors are seen to offer some protection to
investors during periods of economic slowdown.
 
The UK market experienced high interest rates relative to the rest of Europe,
and a strong currency, at least up to mid year, had a downward impact on
earnings prospects. Thus, although economic growth was relatively robust, the
strong pound and a lack of pricing power both at the factory gate and in the
high street, meant that profit margins remained under pressure
 

European equities

Continental Europe was one of the few areas where equity investors saw
positive results in 2000. The Euro, which was in steady decline for much of
the year, managed to recover in November and December. This meant that, in
contrast to the previous year, returns on both the currency and market were
positive to sterling investors.
 
Despite rising interest rates through the year, economic growth remained
strong due largely to demand for TMT stocks from investors. However, concern
over rising interest rates led to old economy sectors including oil, banking
and pharmaceuticals gaining favour as investors speculated that technology
shares would become increasingly expensive. This saw the market broadening as
investors showed interest in stocks trading at lower valuations such as
financial services or pharmaceuticals.
 
Barclays Global Investors
24 May 2001
 
 
 
iShares plc

Statement of operations

For the period from 21 January 2000 to 28 February 2001     
 

                                                                       
                                                                   £000s 
         Realised losses on investments                          (1,095)
         Net unrealised loss on investments                     (19,241)
         Currency loss                                              (50)

              Income                                              2,027
              Expenses                                             (441)
                                                                  ------ 
         Net income                                               1,586 
                                                             
         Dividends                                               (1,602)

         Decrease in net assets resulting from operations       (20,402) 
 

Statement of changes in net assets

For the period from 21 January 2000 to 28 February 2001
 

                                                                      
                                                                   £000s 
          Net assets at beginning of the period                       -
          Decrease in net assets resulting from operations      (20,402)
          Capital transactions                                        
          Value of assets received on share creation            271,157
          Value of assets transferred on share redemption             -
                                                                -------
          Net assets at the end of the period                   250,755 


iShares plc

Statement of net assets
As at 28 February 2001
 
                                                             
                                                                   £000s 
                   Current assets                            
                        Investments                             249,304
                        Debtors                                     784
                        Cash and bank balances                    1,653
                        Other assets                                417 
                                                                -------
                                                                252,158
 
                        Creditors                                  (684)
                        Dividends payable                          (719)
                                                                -------  
                                                                 (1,403) 
         
                   Net current assets                           250,755
                   Total net assets                             250,755
 
                   Shareholders' equity                     250,755,442
 

The statement of changes in net assets has been used in place of a cash flow
statement.


Dividends
 
The Company intends to declare dividends on the Shares of each fund on offer
pursuant to the Prospectus which, over a financial year, will be equal to the
total income of the Fund net of any expenses. The Directors intend to
maintain a dividend policy that enables the Company to qualify each financial
year as a distributing fund under Chapter V of part XVII of the Income and
Corporation Taxes Act 1988, of the United Kingdom.
 
Dividends on shares will be declared and paid with such frequency as the
Directors may from time to time determine. The third iFTSE 100 distribution
for this period will be paid on 15 March 2001. The fourth iFTSE 100
distribution will be paid on 15 June 2001. The first iBloomberg Financials
distribution will be paid on 15 June 2001.
 

                                              XD date      Pay date     £000s 
1st iFTSE 100 distribution paid               31.08.00     15.09.00      650
2nd iFTSE 100 distribution paid               30.11.00     15.12.00      233
3rd iFTSE 100 distribution payable            28.02.01     15.03.01      235
4th iFTSE 100 distribution* payable           30.05.01     15.06.01      429
1st iBloomberg Euro Financials                30.05.01     15.06.01       55
distribution*payable     
                                                                        ----
Total distribution                                                     1,602

*The net asset values per share of the fund published on 28 February 2001 do
not reflect this distribution.
 
 
Share capital 
 
Participating shares - issued and fully paid
 
                                                  No of shares,000s £000s 
Balance at the beginning of the period            -                 -
Issued during the period                          31,840            271,157
Redeemed during the period                        -                 -
Net decrease in assets resulting from operations  -                (20,402) 
                                                  ------            -------
Balance at the end of the period                  31,840            250,755

 
The issued and fully paid participating share capital is at all times equal
to the net asset value of the Company.

 

iFTSE ExUK Fund 
 
Statement of operations
For the period from 15 December 2000 to 28 February 2001     
 
                                                                     
                                                               £000s 
          Realised gains on investments                           2   
          Net unrealised loss on investment                    (480)
          Currency loss                                        (150)

               Income                                            11   
               Expenses                                         (22)  
                                                                ---
          Net income/(deficit)                                  (11)  
                                                 
          Dividends                                               -

          Decrease in net assets resulting from operations     (639) 
 


Statement of changes in net assets
For the period from 15 December 2000 to 28 February 2001
 

                                                                     
                                                               £000s 
          Net assets at beginning of the period                   -
          Decrease in net assets resulting from operations     (639)
          Capital transactions                               19,217
          Value of assets received on share creation              -
          Value of assets transferred on share redemption           
                                                             ------
          Net assets at the end of the period                18,578 
 
 
  
Statement of net assets 
As at 28 February 2001
 
 

                                                             
                                                              £000s 
                   Current assets                            
                        Investments                         18,577     
                        Debtors                                 21
                        Cash and bank balances                  13
                        Other assets                            31
                                                            ------ 
                                                            18,642
                                                                   
                        Creditors                              (64)
                                                               --- 
                                                               (64)
 
                   Net current assets                       18,578
                   Total net assets                         18,578 

                   Shareholders' equity                 18,577,920
                   Shares in issue                       1,000,000

                   Net asset value per share                £18.58
 

Dividends

 
Dividends will normally be declared semi annually with a view to their being
paid on or about 15 of June and December of each year. No dividends have been
declared for this period.
 

Share capital

 
Participating shares - issued and fully paid
 
                                                 No of shares 000s  £000s  
Balance at the beginning of the period           -                   -
Issued during the period                         1,000               19,217
Redeemed during the period                       -                   -
Net decrease in assets resulting from operations -                  (639)
                                                 -----               ------
Balance at the end of the period                 1,000               18,578

 
The issued and fully paid participating share capital is at all times equal
to the net asset value of the Company.