SEC Takes Steps to Make the First TIPS and Broad U.S. Bond Market Exchange Traded Funds Available to Investors

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 20, 2003--The U.S. Securities and Exchange Commission took action to authorize the creation of new fixed income iShares exchange traded funds (ETFs). The iShares Lehman U.S. Treasury Inflation Protected Securities and U.S. Aggregate Bond Funds are scheduled to launch on the American Stock Exchange in the 4th quarter of this year, pending issuance of all regulatory relief by the SEC. Each fund will have an expense ratio of 0.20%, beating the average expense ratio of 0.42% of bond index mutual funds(1).

The iShares Lehman U.S. Treasury Inflation Protected Securities Fund will be designed to track the Lehman Brothers U.S. Treasury Inflation Notes Index that measures the performance of the inflation protected public obligations of the U.S. Treasury, also known as "TIPS." The iShares Lehman U.S. Aggregate Bond Fund will be designed to track the dominant broad U.S. investment grade bond index that includes multiple asset classes and maturity ranges.

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"Our clients have been asking for more fixed income iShares since iShares launched the first four fixed income ETFs in July 2002, so we're pleased that the SEC has taken action," said Lee Kranefuss, CEO of BGI's Intermediary Business. "Many institutional and individual investors are seeing fixed income iShares as an investment solution to the volatile bond market. The iShares Lehman U.S. Aggregate Fund will provide investors with fixed income exposure across multiple sectors in a single trade, while the iShares Lehman TIPS Fund may be of interest to investors who think inflation will rise."

"With fixed income iShares, investors also enjoy the added benefits of cost efficiency, transparency of price and holdings, and the ability to purchase a basket of bonds with the ease of buying a stock," Kranefuss added.

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 because of their relatively low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial adviser, or online broker, and hold the funds in any type of brokerage account. Fixed income iShares are the only fixed income ETFs available to U.S. investors. For a list of currently available iShares, visit www.ishares.com.

Barclays Global Investors is one of the world's largest asset managers(2) providing structured investment strategies such as indexing, tactical asset allocation, and risk-controlled active strategies. In the U.S., BGI is one of the largest active managers,(3) set apart by its risk-controlled approach. BGI managed over $897 billion in assets as of 6/30/03, and over 2,000 funds for more than 2,200 clients in 39 countries around the world. BGI is an innovator in investment management, applying science and technology to the investment process. BGI is owned by Barclays PLC.

iShares are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an adviser 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 is affiliated with SEI.

For complete information, including charges and expenses, request a prospectus by calling 1-800-iSHARES (1-800-474-2737). 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.

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.

A registration statement relating to the iShares Lehman U.S. Treasury Inflation Protected Securities Fund has been filed with the Securities and Exchange Commission but has not yet become effective. Shares of the Fund may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Fund in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

Lehman Brothers, Lehman Brothers U.S. Aggregate Index and Lehman Brothers U.S. Treasury Inflation Protected Notes Index are trademarks of Lehman Brothers and have been licensed for use for certain purposes by BGI. The Funds that are based on the Lehman Brothers indices are not sponsored or endorsed by Lehman Brothers, and Lehman Brothers makes no representations regarding the advisability of investing in iShares.

iShares is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

(1) Morningstar data as of 6/30/03, indexfunds.com.

(2) Source: "Special Report: Global Leaders," Pensions & Investments, September 2, 2002, p. 14.

(3) Source: "Special Report: Money Manager Directory," Pensions & Investments, May 27, 2002, p. 40.