ishares S&P Latin American 40 ILF

Transcription

1 Thomson Financial Closed End Funds ishares S&P Latin American 40 ILF Prepared By January 28, 2008 Henry Russell Your Local Firm 123 Same Street Rockvill, MD UNITED STATES Mutual funds, annuities, and other investment products: - are not FDIC insured. - are not deposits or obligations of, or guaranteed by, any financial institution. - are subject to investment risks, including possible loss of the principal invested. - may involve sales charges and other fees. This report is not complete unless all pages, as noted below, are included. Please read the information in 'Important Disclosures' found at the beginning of this report. Page 1 of 7

2 Important Disclosures Standardized Average Annual Total Returns For the Quarter Ended 12/31/2007 Security Name Inception Date Maximum Sales Charge 1 Year 5 Years 10 Years Since Inception ishares S&P Latin American 40 - MKT 10/25/ % 48.84% % ishares S&P Latin American 40 - NAV 10/25/ % 49.08% % MSCI EAFE Equity Index 12/31/1969 N/A 11.63% 22.08% 9.04% 11.57% Standardized Average Annual Total Returns For the Month Ended 12/31/2007 Security Name Inception Date Maximum Sales Charge 1 Year 5 Years 10 Years Since Inception ishares S&P Latin American 40 - MKT 10/25/ % 48.84% % ishares S&P Latin American 40 - NAV 10/25/ % 49.08% % MSCI EAFE Equity Index 12/31/1969 N/A 11.63% 22.08% 9.04% 11.57% Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment in the fund(s) will fluctuate so that an investor's shares when redeemed may be worth more or less than their original cost. The current performance for the fund(s) illustrated may be higher or lower than the performance data quoted. Please visit for the most recent month-end performance information. Investors should consider the investment objectives, risks, charges and expenses of each fund carefully before investing. This illustration, including any accompanying reports and graphs, must be preceded or accompanied by a current prospectus for each security included. The prospectus contains full details on fees and expenses and should be read carefully before investing or sending money. This historical information represents past performance and should not be considered indicative of future results. Principal value and investment return will fluctuate, so that an investor's shares/units when redeemed may be worth more or less than the original amount. Mutual funds, annuities, and other investment products: - are not FDIC insured. - are not deposits or obligations of, or guaranteed by, any financial institution. - are subject to investment risks, including possible loss of the principal invested. - may involve sales charges and other fees. Exchange-traded Funds are sold by prospectus. Please consider the investment objectives, risk, charges and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest. Investment return and principal value of the fund will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Brokerage commissions will reduce returns. Performance data represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Exchange-traded funds must distribute most realized gains to shareholders. Fund transactions will result in brokerage commissions and will generate tax consequences. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Index returns are for illustrative purposes only and do not represent actual closed-end funds performance. Certain sectors and markets can outperform relative to other sectors and markets based on current market conditions. Exchange traded Funds could potentially benefit from that performance. This outperformance can result in increased market volatility, and should not be expected to be repeated. A closed-end fund and ETF have both a net asset value (NAV) and a price, and these two values may differ. A closed-end fund's and Page 2 of 7

3 ETF NAV is the total value of the securities in the portfolio minus any liabilities, divided by the fund's number of common shares outstanding. The fund's price is the market value at which the fund trades on an exchange. Changes in investor demand for a particular closed-end fund or ETF may cause the fund to trade at a price that is greater (lower) than the NAV; in that case the fund is trading at a premium (discount) to its NAV. Since a fund's premium or discount to its NAV may narrow or widen, a closed-end fund's or ETF's price return may differ from its NAV return. This is especially true in the short-term. In the long-term, price returns and NAV returns tend to converge. This information sheet must be preceded or accompanied by a current prospectus. Please refer to this prospectus for complete information and read it carefully before investing. Total Returns are calculated separately based on the Market Price and the Net Asset Value (as indicated) of the closed-end mutual fund, including reinvestment of dividends and capital gains, and DO NOT include the effects of commissions. Annual expenses, such as management fees, are accounted for in the figures. Top Holdings, Composition, and Sector Weighting data is based on information obtained from the investment company, is updated as of the date shown in the section's title, and will vary over time. The Modern Portfolio Theory (MPT) Statistics section shows the Standard Deviation, Alpha, Beta, R-squared, Sharpe and Treynor statistics for the item. Definitions of these statistics are included at the end of the disclosures. The Rank in Category shows the security's rank against all securities within its investment category based on total return and DOES NOT include the effects of sales charges. Each rank is expressed as a percentile where 1=best and 100=worst. The Growth of $10,000 graph shown on this report illustrates the growth of a $10,000 investment in the security over a period of 11 years or the security's lifetime in relation to its benchmark index, whichever is shorter. The effects of any applicable sales charges and fees are included. The Returns Comparison section compares the Returns statistics of the chosen security against the average Return statistics of all securities in its investment category and the Market Index relative to that investment category. The investment category for the security can be found in the header section at the top of each profile page and the relative Market Index can be found below the section. The scatter chart shows the risk-to-reward relationship of the current security along with all securities in its investment category (or family, contract, and advisor peer groups) and the market index corresponding to that investment category. Securities are represented by shaded circles and indexes are represented by colored circles with black outlines. Risk, or volatility, as measured by standard deviation, is plotted along the horizontal axis. Reward, as measured by total return without regard to sales charges, is plotted along the vertical axis. The triangle represents the current item. Securities and indexes plotted further to the right of the chart have experienced higher historical risk. Those plotted closer to the top of the chart have experienced higher historical return. For details about material differences as they pertain to indexes in this illustration, please refer to index descriptions found below. The Peer Group Diagram shows how a security's total return (excluding sales charges) for a given period compares with the range of returns for all securities within the category and with a relevant market index. The "category" shown at the top of the profile page indicates the category of securities as defined by Thomson Financial, the ranking entity, and includes all securities classified within that category. The range of returns represented includes all securities in the 5th through 95th percentiles (this eliminates the effects of "outlying" securities). For each time period, the data beneath the graph give the actual total return of the security and the index, the total return at the 5th and 95th percentiles, the median total return, the number of securities within the category, the absolute rank of the security, and the quartile into which the security falls (1 = top 25%; 4 = bottom 25%). Returns Based Style analysis is a statistical method used to determine the investment characteristics of a security. The factors represent the sensitivity of the monthly returns of a security to the monthly returns of the indexes representing a series of global asset classes. For example, if the US Large Cap Value factor were 80 (out of a possible 100), that should be interpreted to mean the security performs as if it invests primarily in large stocks. The factors relative to one another will give you a good idea of the types of securities in which the security invests as based on the analysis of its total returns. Although the security's total return performance may be similar to that of an index comprised of global asset classes, it should not be assumed that the security holds securities found in that index. The factors are NOT based on examination of the actual holdings of a security; rather they are statistically derived by comparing the security's performance to the performance of indexes which represent the different asset classes. Standard deviation is a measure of a security's volatility, or variability in expected return. As such, it is a measure of risk since risk can be defined as the uncertainty of the expected return. Higher numbers indicate higher historical volatility. Standard deviation is most Page 3 of 7

4 often used as a measure of risk relative to other securities or indexes. Standard Deviation does not measure all aspects of investment risks. The Beta coefficient is a measure of a security's volatility relative to the market. An index relevant to the security's stated investment category is used as the proxy for the market, and is considered to have a 1.00 Beta. Therefore, if a security has a Beta of 1.50, it has been historically 50% more volatile than the market for the period of years shown. The Alpha coefficient is a measure of risk-adjusted return. This number represents the difference between the security's actual performance and the performance anticipated in light of the security's risk posture and the market's behavior. A positive Alpha indicates that the manager has been successful at security selection and/or market timing, and has produced a rate of return which is more than commensurate with the security's risk posture. R-squared is a measure of diversification relative to the market, as represented by an index relevant to the security's stated investment category. It tells us, in precise percentage terms, just how closely a security's performance variation paralleled the market over the time period shown. The Sharpe and Treynor Ratios are measures of risk-adjusted performance. Higher values are desirable and indicate greater return per unit of risk. The Sharpe and Treynor Ratios measure risk by standard deviation and beta, respectively. Returns Based Style Analysis Duration assesses a security's sensitivity to interest rate changes. The greater the duration of a security, the greater its sensitivity to interest rates changes. For every percentage point decline (increase) in interest rates, a security's price will approximately increase (decrease) by the bond's duration. For example, for a security with a duration of 6 years, a one percentage point increase (decrease) in interest rates would result in a decrease (increase) in price of approximately 6%. Returns Based Style Analysis Alpha is a measure of the portfolio manager's added value, as calculated from the style factor analysis. Portfolio managers try to add value through market timing and security selections. The aggregate outcome of these decisions equals the manager's total value added, or alpha. Geographic Breakdown displays the concentration by region of the underlying fund holdings. The data represented is the most current as of the data date listed in the section title and will vary over time. MSCI EAFE Index is a total return index, reported in U.S. dollars, based on share prices and reinvested gross dividends of approximately 1100 companies (only those securities deemed sufficiently liquid for trading by investors) from the following 20 countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The securities represented in this index may experience loss of invested principal and are subject to investment risk. In exchange for greater growth potential, investments in foreign securities can have added risks. These include changes in currency rates, economic and monetary policy, differences in auditing standards and risks related to political and economic developments. The information included in this report is based upon data obtained from public sources believed to be reliable; however, Thomson Financial does not guarantee the completeness or accuracy thereof. Thomson Financial, an independent information services firm, has been the leading provider of information and analytical services on investment products to financial professionals for more than 55 years. Thomson Financial information and software is used by more than 140 financial institutions nationwide, representing more than 200,000 investment professionals. Page 4 of 7

5 Category: Non-US Equity Data as of 12/31/2007 Composition (as of 11/30/2007) % Of Portfolio US Stocks 0.0 Non-US Stocks 94.1 Bonds 5.7 Cash 0.2 Geographic Breakdown (% Of Total) North America 18.3 Europe 2.4 Asia 0.0 South/Central America 79.3 Asia-Pacific 0.0 Australia/New Zealand 0.0 Middle East 0.0 Africa 0.0 Unclassified 0.0 Operations Fund Family BGFA URL Phone (800) CUSIP Exchange NYSE Fund Inception Date 10/25/2001 Expense Ratio 0.50% Net Assets (9/30/2007) $2, Mil Turnover (9/30/2007) 2.00% Shares Outstanding (9/30/2007) 12,400,000 Average Volume (12 Month) 3, Market Price (MKT) $ Last Income Dividend (12/24/2007) $ Last Capital Gain - Dividend Yield (12 months) 1.39% Dividend Yield (30 days) 1.39% Mgr 1(10/25/2001) Patrick O'Connor / S. Jane Leung Mgr 2 - Top Holdings % of Holdings % of Holdings 1. Petroleo Brasileiro Sa Pe Companhia Vale do Rio Doc Companhia Vale do Rio Doc America Movil SAB de CV Bco Itau Holding Financie Banco Bradesco SA Unibanco-Uniao De Bancos Petroleo Brasileiro Sa Pe Cemex SAB de CV Companhia Siderurgica Nac 3.4 Holdings, Sector, and Geographic data as of 11/30/2007 Growth of $10,000 (MKT) For the period of 10/31/01-12/31/07, the ending value is $68,027. $75,000 $60,000 $45,000 $30,000 $15,000 $0 Fund Index Fund Description The Fund seeks investment results that correspond to the performance of companies in the Mexican and South American equity markets as represented by the S&P Latin America 40 Index. The Index includes highly liquid securities from major economic sectors of the Mexican and South American equity markets. MPT Stats (MKT) 3 Year 5 Year 10 Year Standard Deviation Alpha (%) Beta R-Squared (%) Sharpe Treynor Sector Weightings (% Of Total) Technology 0.0 Financials 0.0 Utilities 0.0 Telecommunications 0.0 Consumer Services 0.0 Healthcare 0.0 Consumer Goods 0.0 Industrials 0.0 Basic Materials 0.0 Oil and Gas 0.0 Unclassified Total Returns (%) MKT Year-To-Date Month Month Year Year Year Year Average - 15 Year Average - 20 Year Average - Since Inception Fund % Index % Benchmark Index: MSCI EAFE Index Page 5 of 7

6 Category: Non-US Equity Data as of 12/31/2007 Peer Group Returns 60 % 5th Percentile Peer Group Range 95th Percentile Fund Index Category Median 40 % 20 % 0 % -20 % MKT Total Returns 15 Years 10 Years 5 Years 3 Years 1 Year Fund Index th Percentile th Percentile Category Median #of Funds In Category Fund Rank In Category Quartile Top 25% Bottom 25% Peer Group Index: MSCI EAFE Index Return Statistics (MKT) Last Bull (2/ /2007) % Last Bear (11/2002-2/2003) -7.82% # of Yrs with Positive Returns 5 # of Yrs with Negative Returns 1 Best 1 Yr Ttl Rtrn (end 4/2006) 90.54% Worst 1 Yr Ttl Rtrn (end 2/2003) % Best 3 Yr Ttl Rtrn (end 2/2006) % Worst 3 Yr Ttl Rtrn (end 3/2005) 62.97% Important Information The Total Return % Rank within Category shows the security's rank against all securities within its investment category based on total return and DOES NOT include the effects of sales charges. Each rank is expressed as a percentile where 1=best and 100=worst. Returns Comparison (MKT) 800 % Fund Index Category Average 600 % 400 % 200 % 0 % -200 % Last Bear Last Bull 15Yr. 10Yr. 5 Yr. Return /- 3 Yr. 1 Yr. 3 Month 1 Month /-Index Peer Group Index: MSCI EAFE Index Yr.To Date Rank in Category (MKT) Top 1% Percentile Rank In Category Outperformed or Underperformed Category Average 5% 13% 7% Based on Total Returns 100% 15 Years 10 Years 5 Years 3 Years 1 Year Fund Rank in Category # of Funds in Category Investment Category: Non-US Equity Page 6 of 7

7 Category: Non-US Equity Data as of 12/31/2007 Risk vs. Reward (MKT) Reward (1 Year Average Return) Peers With Lower Risk & higher Reward 0 Risk (1 Year Standard Deviation) Peers With Higher Risk & Higher Reward Returns Based Analysis First introduced by Nobel laureate William F. Sharpe in 1988, Returns-based style analysis is a statistical technique that estimates a fund s style by determining the mix of passive benchmarks (e.g., the S&P 500) that best matched the actual returns of the fund over a specified time period. Returns-based style analysis provides a historical perspective of how a fund has behaved, and how it might behave in the future. It is important to remember that for all of its strengths, returns-based style analysis is an estimate and it not tied to the actual holdings of a mutual fund or sub account. Thomson offers this alternate analysis style as a compliment to the fundamental analysis found within this report. Returns Based Style Analysis Peers With Lower Risk & Lower Reward Peers With Higher Risk & Lower Reward This Fund MSCI EAFE Index Category Peers Small Cap. Growth 1.8 Pacific Basin 2.0 Emerging Markets 96.2 Bond Quality Breakdown % of Total AAA - AA - A - BBB - BB - B - <B - Not Rated - Data as of (9/30/2007) Price Premium/Discount to NAV 1.97 % 1.31 % 0.66 % 0.01 % % Equity Holdings Statistics Average Price/Earnings - Average Price/Book - Median Market Cap. (Mil) - Data as of (9/30/2007) Bond Holdings Statistics Average Duration - Average Maturity - Average Coupon - Average Quality - Data as of (9/30/2007) Returns Based Style Statistics U.S. Factor Total 2.0 International Factor Total 98.0 Equity Factor Total Fixed Income Factor Total - Alpha 11.9% Alpha Confidence Y Duration - R-Squared 78% % Page 7 of 7