Barclays Global Investors Announces iShares Offers the First Exchange-Traded Fund to Track MSCI EAFE Index.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 17, 2001

New iShares MSCI EAFE Exchange-Traded Fund is Designed to Provide

Cost-Effective Broad International Exposure

Barclays Global Investors (BGI) announced that the iShares MSCI EAFE(R) exchange traded fund (AMEX:EFA) will begin trading on the American Stock Exchange today. Adding the iShares MSCI EAFE Fund to the iShares family offers investors the world's leading international investing benchmark in a cost-effective, tax efficient form. The new iShares MSCI EAFE fund is the only exchange traded fund (ETF) tracking MSCI's new Provisional EAFE Index, which represents broad coverage of developed markets outside of North America: Europe, Australasia and the Far East. The new iShares will be managed by Barclays Global Fund Advisors, a subsidiary of Barclays Global Investors, N.A., and the manager of the largest selection of ETFs, known as iShares. BGI has managed institutional EAFE index funds for over 20 years. Susquehanna Specialists Inc., the specialist in over 20 ETFs and widely recognized as one of the largest liquidity providers in ETF products, will be the specialist firm in this new product.

"The iShares MSCI EAFE Fund may represent best the simplicity and value of iShares exchange traded funds," said Lee Kranefuss, CEO of BGI's Individual Investor Business. "The fund provides a cost effective, tax efficient way for investors to gain exposure in developed markets outside of North America in a single transaction. Investors also gain added flexibility and ease in implementing international asset allocation strategies using this broad international fund and the other 21 iShares MSCI funds. In addition, the iShares MSCI EAFE Fund is an efficient investment vehicle for managing the transition to, as well as providing long-term exposure to, the MSCI Provisional EAFE Index."

Commenting on the start of trading in this newest MSCI-linked ETF, Henry Fernandez, president and CEO of MSCI said, "We are pleased that iShares has launched an ETF based on the Provisional variant of our most popular international equity benchmark -- the MSCI EAFE Index. The MSCI Provisional EAFE Index already reflects the MSCI Enhanced Methodology and therefore provides increased flexibility for investors wishing to transition to the Enhanced Methodology on their own schedule."

MSCI recently launched the Enhanced Equity Index Methodology, based on free float-adjusting constituents' index weights, and increasing target coverage. MSCI now aims to include in its indices 85% of free float-adjusted market capitalization in each industry group, within each country. MSCI intends to implement the enhanced methodology in the MSCI Standard Indices in two phases, scheduled to be completed by May 31, 2002. In the interim, MSCI has provided Provisional Indices that fully reflect the enhancements. As of July 31, 2001, the MSCI Provisional EAFE Index contained 1,039 securities with a total market capitalization of over USD 6.5 trillion.

iShares are index funds that are bought and sold like common stocks on national securities exchanges as well as certain foreign exchanges. iShares are attractive to many individual and institutional investors and financial intermediaries because of their relatively low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. Because iShares can be traded like stocks, they offer intraday liquidity. The liquidity of iShares is driven by the liquidity of the underlying securities, thus as long as the stocks in the portfolio can be bought and sold easily, any supply and demand requirements can be met. Similar to many index funds, iShares are designed to have relatively low portfolio turnover, which reduces transaction costs incurred by the fund and minimizes capital gains distributions to investors. For a list of currently available iShares, visit www.ishares.com.

Barclays Global Investors is the world's largest institutional investment manager, and the world's largest provider of structured investment strategies such as indexing, tactical asset allocation, and quantitative active strategies/a. BGI managed more than $770 billion in assets as of 6/30/01, and over 1,500 funds, which track over 200 global indexes, for nearly 2,000 clients in 37 countries around the world. As the creator of the first index strategy 30 years ago, BGI is an innovator in investment management, applying science and technology to the investment process. BGI has approximately 2,000 employees worldwide and is owned by Barclays PLC, one of the UK's largest companies, and one of the world's leading global financial services providers, with operations in over 60 countries worldwide.

MSCI is a leading provider of global indices and benchmark related products and services to investors worldwide. MSCI's products are used by investment managers, consultants, academics, broker-dealers and other investment professionals worldwide.

iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to iShares. Barclays Global Investor Services (BGIS) assists in the marketing of iShares. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., none of which are affiliated with SEI. For complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (800/474-2737). Read it carefully before you invest.

iShares transactions will result in brokerage commissions and will generate tax consequences. Mutual funds and iShares are obliged to distribute portfolio gains to shareholders.

The investment return and principal value of an iShares investment will fluctuate so that an investor's shares, when sold, or Creation Unit(s) when redeemed, may be worth more or less than their original cost. Equity investing involves risk, including possible loss of principal. iShares may be sold throughout the day at market value on stock exchanges through any brokerage account. However, iShares may only be redeemed directly from the fund by Authorized Participants, in very large Creation/Redemption Units.

Morgan Stanley Capital International Inc. (MSCI) is a leading provider of global indices and benchmark related products and services to investors worldwide. Morgan Stanley Dean Witter & Co., a global financial services firm and a market leader in securities, asset management, and credit services, is the majority shareholder of MSCI and The Capital Group Companies, Inc., a global investment management group, is the minority shareholder.

MSCI, Morgan Stanley Capital International and MSCI Index are service marks of Morgan Stanley Capital International and have been licensed for use by Barclays Global Investors, N.A. The iShares funds are not sponsored, endorsed, sold or promoted by Morgan Stanley Capital International. Nor does Morgan Stanley Capital International make any representation regarding the advisability of investing in any of the Funds.

iShares are not FDIC Insured. Have No Bank Guarantee. May Lose Value.

www.ishares.com 1-800-iSHARES (800/474-2737)

/a Source: "Special Report: Global Leaders" Pensions & Investments, (Sept. 2000), p. 15.