Exhibit (g.1)

CUSTODIAN AGREEMENT

AGREEMENT made as of this 25th day of April, 2000, between iShares TRUST, a business trust established under the laws of the state of Delaware (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the "Bank").

The Fund will issue and redeem shares of each Index Series only in aggregations of shares known as "Creation Units" which may be purchased and redeemed principally in-kind for portfolio securities of the respective Index Series, as more fully described in the then current prospectus and statement of additional information of the Fund (together, the "Prospectus") included in its registration statement on Form N-1A (the "Registration Statement") Registration Nos. 333-92935 and 811-09729.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the parties hereto agree as follows:

participation in any profit sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to a foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to, or option contract to purchase or sell any of the foregoing, and futures, forward contracts and options thereon.

electro-mechanical or electronic communication and the Fund and the Bank will agree as to procedures which shall afford adequate safeguards for the Fund's assets.

receipt for the account of the Bank pursuant to the provisions of Section 6 below, each such payment to be made at the purchase price shown on a broker's confirmation (or transaction report in the case of Book Entry Paper (as that term is defined in Section 6.6 hereof)) of purchase of the securities received by the Bank before such payment is made, as confirmed in the Proper Instructions received by the Bank before such payment is made.

(a) For payments in connection with foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery (collectively, "Foreign Exchange Agreements") which may be entered into by the Bank on behalf of the Fund upon the receipt of Proper Instructions, such Proper Instructions to specify the currency broker or banking institution (which may be the Bank, or any other subcustodian or agent hereunder, acting as principal) with which the contract or option is made, and the Bank shall have no duty with respect to the selection of such currency brokers or banking institutions with which the Fund deals or for their failure to comply with the terms of any contract or option.

(b) In order to secure any payments in connection with Foreign Exchange Agreements which may be entered into by the Bank pursuant to Proper Instructions, the Fund agrees that the Bank shall have a continuing lien and security interest, to the extent of any payment due under any Foreign Exchange Agreement, in and to any property at any time held by the Bank for the Fund's benefit or in which the Fund has an interest and which is then in the

Bank's possession or control (or in the possession or control of any third party acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole discretion, at any time to charge any such payment due under any Foreign Exchange Agreement against any balance of account standing to the credit of the Fund on the Bank's books.

The Fund will from time to time furnish to the Bank appropriate instruments to enable it to hold or deliver in proper form for transfer, or to register in the name of its registered nominee, any Portfolio Securities which may from time to time be registered in the name of the Fund.

(a) Except as provided below, the Bank shall act upon a required Response only after receipt by the Bank of Proper Instructions from the Fund no later than 5:00 p.m. on the date specified as the Response Deadline and only if the Bank (or its agent or subcustodian hereunder) has actual possession of all necessary Securities, consents and other materials no later than 5:00 p.m. on the date specified as the Response Deadline.

(b) The Bank shall have no duty to act upon a required Response if Proper Instructions relating to such Response and all necessary Securities, consents and other materials are not received by and in the possession of the Bank no later than 5:00 p.m. on the date specified as the Response Deadline, provided that the Bank has acted in accordance with the procedures set forth in this Agreement and in the SLA regarding such Corporate Action. Notwithstanding, the Bank may, in its reasonable discretion, use its best efforts to act upon a Response for which Proper Instructions and/or necessary Securities, consents or other materials are received by the Bank after 5:00 p.m. on the date specified as the Response Deadline, it being acknowledged and agreed by the parties that any undertaking by the Bank to use its best efforts in such circumstances shall in no way create any duty upon the Bank to complete such Response prior to its expiration. Notwithstanding the foregoing sentence, if the Bank has, by its negligence or failure to act in accordance with the procedures set forth in this Agreement or the SLA, caused the Fund to provide a Response on a Corporate Action after 5:00 p.m. on the date specified as the Response Deadline for such Corporate Action, the Bank will use its best efforts to act upon such Response.

(c) In the event that the Fund notifies the Bank of a Corporate Action requiring a Response and the Bank has received no other notice of such Corporate Action, the Response Deadline shall be 48 hours prior to the Response expiration time set by the depository processing such Corporate Action.

(d) Section 14.3(e) of this Agreement shall govern any Corporate Action involving Foreign Portfolio Securities held by an Eligible Foreign Custodian (as defined below).

(a) The Bank may keep Portfolio Securities in the Book-Entry System provided that such Portfolio Securities are represented in an account ("Account") of the Bank (or its agent) in such System which shall not include any assets of the Bank (or such agent) other than assets held as a fiduciary, custodian, or otherwise for customers;

(b) The records of the Bank (and any such agent) with respect to the Fund's participation in the Book-Entry System through the Bank (or any such agent) will identify by book entry the Portfolio Securities which are included with other securities deposited in the Account and shall at all times during the regular business hours of the Bank (or such agent) be open for inspection by duly authorized officers, employees or agents of the Fund. Where securities are transferred to the Fund's account, the Bank shall also, by book entry or otherwise, identify as belonging to the Fund a quantity of securities in a fungible bulk of securities (i) registered in the name of the Bank or its nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve Bank;

(c) The Bank (or its agent) shall pay for securities purchased for the account of the Fund or shall pay cash collateral against the return of Portfolio Securities loaned by the Fund upon (i) receipt of advice from the Book-Entry System that such Securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Bank (or its agent) to reflect such payment and transfer for the account of the Fund. The Bank (or its agent) shall transfer securities sold or loaned for the account of the Fund upon

(i) receipt of advice from the Book-Entry System that payment for securities sold or payment of the initial cash collateral against the delivery of securities loaned by the Fund has been transferred to the Account; and

(ii) the making of an entry on the records of the Bank (or its agent) to reflect such transfer and payment for the account of the Fund. Copies of all advices from the Book-Entry System of transfers of securities for the account of the Fund shall identify the Fund, be maintained for the Fund by the Bank and shall be provided to the Fund at its request. The Bank shall send the Fund a confirmation, as defined by Rule 17f-4 of the 1940 Act, of any transfers to or from the account of the Fund;

(d) The Bank will promptly provide the Fund with any report obtained by the Bank or its agent on the Book-Entry System's accounting system, internal accounting control and procedures for safeguarding securities deposited in the Book-Entry System;

(a) The Bank may use a Depository to hold, receive, exchange, release, lend, deliver and otherwise deal with Portfolio Securities including stock dividends, rights and other items of like nature, and to receive and remit to the Bank on behalf of the Fund all income and other payments thereon and to take all steps necessary and proper in connection with the collection thereof;

(b) Registration of Portfolio Securities may be made in the name of any nominee or nominees used by such Depository;

(c) Payment for securities purchased and sold may be made through the clearing medium employed by such Depository for transactions of participants acting through it. Upon any purchase of Portfolio Securities, payment will be made only upon delivery of the securities to or for the account of the Fund and the Fund shall pay cash collateral against the return of Portfolio Securities loaned by the Fund only upon delivery of the Securities to or for the account of the Fund; and upon any sale of Portfolio Securities, delivery of the Securities will be made only against payment therefor or, in the event Portfolio Securities are loaned, delivery of Securities will be made only against receipt of the initial cash collateral to or for the account of the Fund; and

(d) The Bank shall use its best efforts to provide that:

(i) The Depository obtains replacement of any certificated Portfolio Security deposited with it in the event such Security is lost, destroyed, wrongfully taken or otherwise not available to be returned to the Bank upon its request;

(ii) Proxy materials received by a Depository with respect to Portfolio Securities deposited with such Depository are forwarded immediately to the Bank for prompt transmittal to the Fund;

(iii) Such Depository promptly forwards to the Bank confirmation of any purchase or sale of Portfolio Securities and of the appropriate book entry made by such Depository to the Fund's account;

(iv) Such Depository prepares and delivers to the Bank such records with respect to the performance of the Bank's obligations and duties hereunder as may be necessary for the Fund to comply with the recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a) thereunder; and

(v) Such Depository delivers to the Bank all internal accounting control reports, whether or not audited by an independent public accountant, as well as such other reports as the Fund may reasonably request in order to verify the Portfolio Securities held by such Depository.

(a) The Bank will maintain all Book-Entry Paper held by the Fund in an account of the Bank that includes only assets held by it for customers;

(b) The records of the Bank with respect to the Fund's purchase of Book-Entry Paper through the Bank will identify, by book-entry, commercial paper belonging to the Fund which is included in the Book-Entry System and shall at all times during the regular business hours of the Bank be open for inspection by duly authorized officers, employees or agents of the Fund;

(c) The Bank shall pay for Book-Entry Paper purchased for the account of the Fund upon contemporaneous (i) receipt of advice from the Issuer that such sale of Book-Entry Paper has been effected, and (ii) the making of an entry on the records of the Bank to reflect such payment and transfer for the account of the Fund;

(d) The Bank shall cancel such Book-Entry Paper obligation upon the maturity thereof upon contemporaneous (i) receipt of advice that payment for such Book-Entry Paper has been transferred to the Fund, and (ii) the making of an entry on the records of the Bank to reflect such payment for the account of the Fund; and

(e) The Bank will send to the Fund such reports on its system of internal accounting control with respect to the Book-Entry Paper as the Fund may reasonably request from time to time.

(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or Over-the-Counter.

(i) The Bank shall take action as to put options ("puts") and call options ("calls") purchased or sold (written) by the Fund regarding escrow or other arrangements (i) in accordance with the provisions of any agreement entered into upon receipt of Proper Instructions among the Bank, any broker-dealer that is a member of the National Association of Securities Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to the compliance with the rules of the Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations.

(ii) Unless another agreement requires it to do so, the Bank shall be under no duty or obligation to see that the Fund has deposited or is maintaining adequate margin, if required, with any broker in connection with any option, nor shall the Bank be under duty or obligation to present such option to the broker for exercise unless it receives Proper Instructions from the Fund. The Bank shall have no responsibility for the legality of any put or call purchased or sold on behalf of the Fund, the propriety of any such purchase or sale, or the adequacy of any collateral delivered to a broker in connection with an option or deposited to or withdrawn from a Segregated Account (as defined in subsection 6.8 below). The Bank specifically, but not by way of limitation, shall not be under any duty or obligation to: (i) periodically check or notify the Fund that the amount of such collateral held by a broker or held in a Segregated Account is

sufficient to protect such broker or the Fund against any loss; (ii) cause the return of any collateral delivered to a broker; or (iii) advise the Fund that any option it holds, has or is about to expire. Such duties or obligations shall be the sole responsibility of the Fund.

(b) Puts, Calls and Futures Traded on Commodities Exchanges

(i) The Bank shall take action as to puts, calls and futures contracts ("Futures") purchased or sold by the Fund in accordance with the provisions of any agreement entered into upon the receipt of Proper Instructions among the Fund, the Bank and a Futures Commission Merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any Contract Market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Fund.

(ii) The responsibilities of the Bank as to futures, puts and calls traded on commodities exchanges, any Futures Commission Merchant account and the Segregated Account shall be limited as set forth in subparagraph (a)(ii) of this Section 6.7 as if such subparagraph referred to Futures Commission Merchants rather than brokers, and Futures and puts and calls thereon instead of options.

(a) Cash and/or Portfolio Securities may be transferred into a Segregated Account upon receipt of Proper Instructions in the following circumstances:

(i) in accordance with the provisions of any agreement among the Fund, the Bank and a broker-dealer registered under the Exchange Act and a member of the NASD or any Futures Commission Merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Options Clearing Corporation and of any registered national securities exchange or the Commodity Futures Trading Commission or any registered Contract Market, or of any similar organizations regarding escrow or other arrangements in connection with transactions by the Fund;

(ii) for the purpose of segregating cash or securities in connection with options purchased or written by the Fund or commodity futures purchased or written by the Fund;

(iii) for the deposit of liquid assets, such as cash, U.S. Government securities or other high grade debt obligations, having a market value (marked to market on a daily basis) at all times equal to not less than the aggregate purchase price due on the settlement dates of all the Fund's then outstanding forward commitment or "when-issued" agreements relating to the purchase of Portfolio Securities and all the Fund's then outstanding commitments under reverse repurchase agreements entered into with broker-dealer firms;

(iv) for the purposes of compliance by the Fund with the procedures required by Investment Company Act Release No. 10666, or any subsequent release or releases of the Securities and Exchange Commission relating to the maintenance of Segregated Accounts by registered investment companies;

(v) for other proper corporate purposes, but only, in the case of this clause (v), upon receipt of, in addition to Proper Instructions, a certified copy of a resolution of the Board, or of the executive committee of the Board signed by an officer of the Fund and certified by the Secretary or an Assistant Secretary, setting forth the purpose or purposes of such Segregated Account and declaring such purposes to be proper corporate purposes.

(b) Cash and/or Portfolio Securities may be withdrawn from a Segregated Account pursuant to Proper Instructions in the following circumstances:

(i) with respect to assets deposited in accordance with the provisions of any agreements referenced in (a)(i) or (a)(ii) above, in accordance with the provisions of such agreements;

(ii) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet the Fund's obligations under outstanding forward commitment or when-issued agreements for the purchase of Portfolio Securities and under reverse repurchase agreements;

(iii) for exchange for other liquid assets of equal or greater value deposited in the Segregated Account;

(iv) to the extent that the Fund's outstanding forward commitment or when-issued agreements for the purchase of portfolio securities or reverse repurchase agreements are sold to other parties or the Fund's obligations thereunder are met from assets of the Fund other than those in the Segregated Account;

(v) for delivery upon settlement of a forward commitment or when-issued agreement for the sale of Portfolio Securities; or

(vi) with respect to assets deposited pursuant to (a)(v) above, in accordance with the purposes of such account as set forth in Proper Instructions.

the Bank therefore shall be the same as and no greater than the Bank's responsibility in respect of other Portfolio Securities of the Fund.

(a) Upon sales of Portfolio Securities for the account of the Fund, against contemporaneous receipt by the Bank of payment therefor in full, or against payment to the Bank in accordance with generally accepted settlement practices and customs in the jurisdiction or market in which the transaction occurs, each such payment to be in the amount of the sale price shown in a broker's confirmation of sale received by the Bank before such payment is made, as confirmed in the Proper Instructions received by the Bank before such payment is made;

(b) In exchange for or upon conversion into other securities alone or other securities and cash pursuant to any plan of merger, consolidation, reorganization, share split-up, change in par value, recapitalization or readjustment or otherwise, upon exercise of subscription, purchase or sale or other similar rights represented by such Portfolio Securities, or for the purpose of tendering shares in the event of a tender offer therefor, provided, however, that in the event of an offer of exchange, tender offer, or other exercise of rights requiring the physical tender or delivery of Portfolio Securities, except to the extent caused by negligence, bad faith, willful misconduct or a material breach of this Agreement on the part of the Bank in connection with such offer of exchange, tender offer, or other exercise of rights, the Bank shall have no liability for failure to so tender in a timely manner unless such Proper Instructions are received by the Bank at least two business days prior to the date required for tender, and unless the Bank (or its agent or subcustodian hereunder) has actual possession of such Security at least two business days prior to the date of tender;

(c) Upon conversion of Portfolio Securities pursuant to their terms into other securities;

(d) For the purpose of redeeming in-kind Shares of the Fund upon authorization from the Fund or its authorized agent, as may be described from time to time in the Prospectus. It is understood and agreed that, in accordance with generally accepted settlement practices and customs in certain jurisdictions or markets in which Portfolio Securities may be held, the Bank may deliver Portfolio Securities prior to the receipt of Shares of the Index Series the redemption for which such Portfolio Securities were being delivered. Any loss resulting from such "free" delivery of Portfolio Securities will be for the account of the Fund and the Fund will hold the Bank harmless and indemnify the Bank for any such losses, except to the extent caused by negligence or a material breach of this Agreement on the part of the Bank;

(e) In the case of option contracts owned by the Fund, for presentation to the endorsing broker;

(f) When such Portfolio Securities are called, redeemed or retired or otherwise become payable;

(g) For the purpose of effectuating the pledge of Portfolio Securities held by the Bank in order to collateralize loans made to the Fund by any bank, including the Bank; provided, however, that such Portfolio Securities will be released only upon payment to the Bank for the account of the Fund of the moneys borrowed, provided further, however, that in cases where additional collateral is required to secure a borrowing already made, and such fact is made to appear in the Proper Instructions, Portfolio Securities may be released for that purpose without any such payment. In the event that any pledged Portfolio Securities are held by the Bank, they will be so held for the account of the lender, and after notice to the Fund from the lender in accordance with the normal procedures of the lender and any loan agreement between the fund and the lender that an event of deficiency or default on the loan has occurred, the Bank may deliver such pledged Portfolio Securities to or for the account of the lender;

(h) for the purpose of releasing certificates representing Portfolio Securities, against contemporaneous receipt by the Bank of the fair market value of such security, as set forth in the Proper Instructions received by the Bank before such payment is made;

(i) for the purpose of delivering securities lent by the Fund to a bank or broker dealer, but only against receipt in accordance with street delivery custom except as otherwise provided herein, of adequate collateral as agreed upon from time to time by the Fund and the Bank, and upon receipt of payment in connection with any repurchase agreement relating to such securities entered into by the Fund;

(j) for other authorized transactions of the Fund or for other proper corporate purposes; provided that before making such transfer, the Bank will also receive a certified copy of resolutions of the Board, signed by an authorized officer of the Fund (other than the officer certifying such resolution) and certified by its Secretary or Assistant Secretary, specifying the Portfolio Securities to be delivered, setting forth the transaction in or purpose for which such delivery is to be made, declaring such transaction to be an authorized transaction of the Fund or such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such securities shall be made; and

(k) upon termination of this Agreement as hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.

As to any deliveries made by the Bank pursuant to this Section 6.10, securities or cash receivable in exchange therefor shall be delivered to the Bank.

accordance with instructions of, the relevant Authorized Participant (as defined in the Prospectus). The Bank shall transfer the applicable Portfolio Securities to or on the order of the Authorized Participant through the Clearing Process (as defined in the Prospectus) or, at the election of the Authorized Participant, outside of the Clearing Process through the DTC system. Any cash redemption payment (less any applicable cash redemption transaction fees) due to the Authorized Participant on redemption shall be effected through the Clearing Process or through wire transfer in the case of redemptions effected outside the Clearing Process through DTC. All payments shall be made in accordance with the Declaration of Trust and By-laws of the Fund (the "Articles"), any applicable votes of the Board of Trustees of the Fund and the Prospectus, from assets available for said purpose.

9.1 Endorse for collection and collect on behalf of and in the name of the Fund all checks, drafts, or other negotiable or transferable instruments or other orders for the payment of money received by it for the account of the Fund and hold for the account of the Fund all income, dividends, interest and other payments or distributions of cash with respect to the Portfolio Securities held thereunder;

9.2 Present for payment all coupons and other income items held by it for the account of the Fund which call for payment upon presentation and hold the cash received by it upon such payment for the account of the Fund;

9.3 Receive and hold for the account of the Fund all securities received as a distribution on Portfolio Securities as a result of a stock dividend, share split-up, reorganization, recapitalization, merger, consolidation, readjustment, distribution of rights and similar securities issued with respect to any Portfolio Securities held by it hereunder.

9.4 Execute as agent on behalf of the Fund all necessary ownership and other certificates and affidavits required by the Internal Revenue Code or the regulations of the

Treasury Department issued thereunder, or by the laws of any state, now or hereafter in effect, inserting the Fund's name on such certificates as the owner of the securities covered thereby, to the extent it may lawfully do so and as may be required to obtain payment in respect thereof. The Bank will execute and deliver such certificates in connection with Portfolio Securities delivered to it or by it under this Agreement as may be required under the provisions of the Internal Revenue Code and any Regulations of the Treasury Department issued thereunder, or under the laws of any State;

9.5 Present for payment all Portfolio Securities which are called, redeemed, retired or otherwise become payable, and hold cash received by it upon payment for the account of the Fund; and

9.6 Exchange interim receipts or temporary securities for definitive securities.

The Bank shall perform the fund accounting services listed on Appendix C hereto and shall keep the books of account and render statements or copies from time to time as reasonably requested by the Treasurer or any executive officer of the Fund.

The Bank shall assist generally in the preparation of reports to shareholders and others, audits of accounts, and other ministerial matters of like nature.

share of capital stock of the Fund, such determination to be made in accordance with the provisions of the Articles and By-laws of the Fund and the Prospectus and Statement of Additional Information relating to the Fund, as they may from time to time be amended, and any applicable resolutions of the Board at the time in force and applicable; and promptly to notify the Fund, the proper exchange and the NASD or such other persons as the Fund may request of the results of such computation and determination. In computing the net asset value hereunder, the Bank may rely in good faith upon information furnished to it by any Authorized Person in respect of (i) the manner of accrual of the liabilities of the Fund and in respect of liabilities of the Fund not appearing on its books of account kept by the Bank, (ii) reserves, if any, authorized by the Board or that no such reserves have been authorized, (iii) the source of quotations or the quotations to be used in computing the net asset value, (iv) the value to be assigned to any security for which no price quotations are available, and (v) the method of computation of the public offering price on the basis of the net asset value of the shares.

(a) The Bank shall compute the Yield Calculation for the Fund for the stated periods of time as shall be mutually agreed upon, and communicate in a timely manner the result of such computation to the Fund.

(b) In performing the Yield Calculation, the Bank will derive the items of data necessary for the computation from the records it generates and maintains for the Fund pursuant Section 11 hereof. The Bank shall have no responsibility to review, confirm, or otherwise assume any duty or liability with respect to the accuracy or correctness of any such data supplied to it by the Fund, any of the Fund's designated agents or any of the Fund's designated third party providers.

(c) At the request of the Bank, the Fund shall provide, and the Bank shall be entitled to rely on, written standards and guidelines to be followed by the Bank in interpreting and applying the computation methods set forth in the Releases or any Subsequent Staff Positions as they specifically apply to the Fund. In the event that the computation methods in the Releases or the Subsequent Staff Positions or the application to the Fund of a standard or guideline is not free from doubt or in the event there is any question of interpretation as to the characterization of a particular security or any aspect of a security or a payment with respect thereto (e.g., original issue discount, participating debt security, income or return of capital, etc.) or otherwise or as to any other element of the computation which is pertinent to the Fund, the Fund or its designated agent shall have the full responsibility for making the determination of how the security or payment is to be treated for purposes of the computation and how the computation is to be made and shall inform the Bank thereof on a timely basis. The Bank shall have no responsibility to make independent determinations with respect to any item which is

covered by this Section, and shall not be responsible for its computations made in accordance with such determinations so long as such computations are mathematically correct.

(d) The Fund shall keep the Bank informed of all publicly available information and of any non-public advice, or information obtained by the Fund from its independent auditors or by its personnel or the personnel of its investment adviser, or Subsequent Staff Positions related to the computations to be undertaken by the Bank pursuant to this Agreement and the Bank shall not be deemed to have knowledge of such information (except as contained in the Releases) unless it has been furnished to the Bank in writing.

The Bank will be under no duty or obligation to inquire into and will not be liable for:

(a) the validity of the issue of any Portfolio Securities purchased by or for the Fund, the legality of the purchases thereof or the propriety of the price incurred therefor;

(b) the legality of any sale of any Portfolio Securities by or for the Fund or the propriety of the amount for which the same are sold;

(c) the legality of an issue or sale of any common shares of the Fund or the sufficiency of the amount to be received therefor;

(d) the legality of the repurchase of any common shares of the Fund or the propriety of the amount to be paid therefor;

(e) the legality of the declaration of any dividend by the Fund or the legality of the distribution of any Portfolio Securities as payment in kind of such dividend; and

(f) any property or moneys of the Fund unless and until received by it, and any such property or moneys delivered or paid by it pursuant to the terms hereof.

Moreover, the Bank will not be under any duty or obligation to ascertain whether any Portfolio Securities at any time delivered to or held by it for the account of the Fund are such as may properly be held by the Fund under the provisions of its Articles, By-laws, any federal or state statutes or any rule or regulation of any governmental agency.

Upon receipt of Proper Instructions, the Bank may employ subcustodians selected by or at the direction of the Fund, provided that any such subcustodian meets at least the minimum qualifications required by Section 17(f)(1) of the 1940 Act to act as a custodian of the Fund's assets with respect to property of the Fund held in the United States. The Bank shall have no liability to the Fund or any other person by reason of any act or omission of any subcustodian (including any act or omission in connection with corporate actions) selected by or at the direction of the Fund and the Fund shall indemnify the Bank and hold it harmless from and against any and all actions, suits and claims, arising directly or indirectly out of the performance of any subcustodian, except to the extent caused by the negligence, bad faith, willful misconduct or material breach of this Agreement on the part of the Bank. Upon request of the Bank, the Fund shall assume the entire defense of any action, suit, or claim subject to the foregoing indemnity. The Fund shall pay all fees and expenses of any subcustodian selected by or at the direction of the Fund.

(i) If the Fund has appointed the Bank Foreign Custody Manager (as that term is defined in Rule 17f-5 under the 1940 Act), the Bank's duties and obligations with respect to the Fund's Portfolio Securities and other assets maintained outside the United States shall be, to the extent not set forth herein, as set forth in the Delegation Agreement between the Fund and the Bank (the "Delegation Agreement").

(ii) If the Fund has appointed any other person or entity Foreign Custody Manager, the Bank shall act only upon Proper Instructions from the Fund with regard to any of the Fund's Portfolio Securities or other assets held or to be held outside of the United States, and the Bank shall be without liability for any Claim (as that term is defined in Section 15 hereof) arising out of maintenance of the Fund's Portfolio Securities or other assets outside of the United States. The Fund also agrees that it shall enter into a written agreement with such Foreign Custody Manager that shall obligate such Foreign Custody Manager to provide to the Bank in a timely manner all information required by the Bank in order to complete its obligations hereunder. The Bank shall not be liable for any Claim arising out of the failure of such Foreign Custody Manager to provide such information to the Bank.

Notwithstanding any provision of this Agreement to the contrary, settlement and payment for Foreign Portfolio Securities received for the account of the Fund and delivery of Foreign Portfolio Securities maintained for the account of the Fund may be effected in accordance with the customary established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivering securities to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) against a receipt with the expectation of receiving later payment for such securities from such purchaser or dealer.

In connection with any action to be taken with respect to the Foreign Portfolio Securities held hereunder, including, without limitation, the exercise of any voting rights, subscription rights, redemption rights, exchange rights, conversion rights or tender rights, or any other action in connection with any other right, interest or privilege with respect to such Securities (collectively, the "Rights"), the Bank shall promptly transmit to the Fund such information in connection therewith as is made available to the Bank by the Eligible Foreign Custodian, and shall promptly forward to the applicable Eligible Foreign Custodian any instructions, forms or certifications with respect to such Rights, and any instructions relating to the actions to be taken in connection therewith, as the Bank shall receive from the Fund pursuant to Proper Instructions. Notwithstanding the foregoing, the Bank shall have no further duty or obligation with respect to such Rights, including, without limitation, the determination of whether the Fund is entitled to participate in such Rights under applicable U.S. and foreign laws, or the determination of whether any action proposed to be taken with respect to such Rights by the Fund or by the applicable Eligible Foreign Custodian will comply with all applicable terms and conditions of any such Rights or any applicable laws or regulations, or market practices within the market in which such action is to be taken or omitted.

(a) The Bank shall, during the period that this Agreement remains in effect, (i) maintain an Errors & Omissions policy of at least $50 million, which policy will insure against all claims sustained by any party (including the Fund) as a result of any actual or alleged wrongful act by the Bank, or error or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in the Bank's agreements with its clients, and (ii) maintain a separate Errors & Omissions policy of at least $25 million, which policy will insure against claims sustained solely by the Fund as a result of any actual or alleged wrongful act, error

or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in this Agreement.

(b) Upon the Fund's written request, the policy referred to in clause
(a)(ii) above will be expanded to $50 million when the Fund's total assets reach $25 billion. The Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the cost of the policy referred to in clause (a)(ii) above. When the policy is expanded to $50 million, the Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the total cost of such expanded policy.

15.1 Notwithstanding anything in this Agreement to the contrary, in no event shall the Bank or any of its officers, directors, employees or agents (collectively, the "Indemnified Parties") be liable to the Fund or any third party, and the Fund shall indemnify and hold the Bank and the Indemnified Parties harmless from and against any and all loss, damage, liability, actions, suits, claims, costs and expenses, including reasonable legal fees, (a "Claim") arising as a result of any act or omission of the Bank or any Indemnified Party under this

Agreement, except for any Claim to the extent such Claim results from the material breach of this Agreement by or negligence, willful misfeasance or bad faith of the Bank or any Indemnified Party.

15.2 The Bank shall indemnify and hold the Fund, its Board of Trustees, officers and employees and its agents harmless from and against any and all Claims to the extent any such Claim arises out of the negligent acts or omissions, bad faith, willful misconduct or material breach of this Agreement by the Bank, its officers, directors or employees or any of its agents or subcustodians in connection with the activities undertaken pursuant to this Agreement, provided that the Bank's indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to the Bank.

15.3 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for lost profits or lost revenues or any special, consequential, punitive or incidental damages of any kind whatsoever in connection with this Agreement or any activities hereunder.

15.4 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, or insurrection, and (ii) other happenings or events beyond the reasonable control or anticipation of the party effected, provided that (A) the effected party has in place appropriate business resumption procedures, systems and facilities and (B) the effected party uses its best efforts to avoid or remove the cause of such losses.

15.5 In performing its duties hereunder, the Bank will be entitled to receive and act upon the advice of independent counsel of its own selection, which may be counsel for the Fund.

15.6 The Bank may rely upon any Proper Instruction which it reasonably believes to be genuine and to be signed or presented by any Authorized Person. The Bank shall not be held to have notice of any change of authority of any Authorized Person until receipt of appropriate written notice thereof has been received by the Bank from the Fund.

15.7 In order that the indemnification provisions contained in this Article 14 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking the indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party seeking indemnification shall give the indemnifying party full and complete authority, information and assistance to defend such claim or proceeding, and the indemnifying party shall have, at its option, sole control of the defense of such claim or proceeding and all negotiations for its compromise or settlement. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written

consent, which consent shall not be unreasonably withheld.

16.1 The term of this Agreement shall be three years commencing upon the date hereof (the "Initial Term"), unless earlier terminated as provided herein.

(a) Either party hereto may terminate this Agreement prior to the expiration of the Initial Term in the event the other party breaches any material provision of this Agreement, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice.

(b) The Fund may terminate this Agreement prior to the expiration of the Initial Term upon ninety days' prior written notice in the event that:

(i) the Bank's parent, Investors Financial Services Corp. ("IFSC"), fails to maintain a minimum capital level as follows: (i) total stockholders' equity, as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $100 million, and (ii) the sum of (x) total stockholders' equity and (y) the outstanding amount of company-obligated, manditorily redeemable, preferred securities, each as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $125 million; or

(ii) the Board of the Fund votes to liquidate the Fund and terminate its registration with the Securities and Exchange Commission other than in connection with a merger or acquisition of the Fund or the Fund's investment adviser.

16.2 In the event of the termination of this Agreement, the Bank will immediately upon receipt or transmittal, as the case may be, of notice of termination, commence and prosecute diligently to completion the transfer of all cash and the delivery of all Portfolio Securities duly endorsed and all records maintained under Section 11 to the successor custodian when appointed by the Fund ("Transfer"). The obligation of the Bank to deliver and transfer over the assets of the Fund held by it directly to such successor custodian will commence as soon as such successor is appointed and will continue until completed as aforesaid. If the Fund does not select a successor custodian within ninety (90) days from the date of delivery of notice of termination the Bank may, subject to the provisions of subsection 16.3, deliver the Portfolio Securities and cash of the Fund held by the Bank to a bank or trust company of the Bank's own selection which meets the requirements of Section 17(f)(1) of the 1940 Act and has a reported capital, surplus and undivided profits aggregating not less than $2,000,000, to be held as the property of the Fund under terms similar to those on which they were held by the Bank, whereupon such bank or

trust company so selected by the Bank will become the successor custodian of such assets of the Fund with the same effect as though selected by the Board. Thereafter, the Bank shall be released from any and all obligations under this Agreement. Notwithstanding anything to the contrary in this Agreement, each party's obligations under Section 15 hereof shall continue and remain in full force and effect after the termination of this Agreement.

16.3 Prior to the expiration of ninety (90) days after notice of termination has been given, the Fund may furnish the Bank with an order of the Fund advising that a successor custodian cannot be found willing and able to act upon reasonable and customary terms and that there has been submitted to the shareholders of the Fund the question of whether the Fund will be liquidated or will function without a custodian for the assets of the Fund held by the Bank. In that event the Bank will deliver the Portfolio Securities and cash of the Fund held by it, subject as aforesaid, in accordance with one of such alternatives which may be approved by the requisite vote of shareholders, upon receipt by the Bank of a copy of the minutes of the meeting of shareholders at which action was taken, certified by the Fund's Secretary and an opinion of counsel to the Fund in form and content satisfactory to the Bank. Thereafter, the Bank shall be released from any and all obligations under this Agreement.

16.4 If this Agreement is terminated by the Bank under 16.1(a) or the Fund under 16.1(b), the Fund shall reimburse the Bank for any reasonable expenses incurred by the Bank in connection with the Transfer.

16.5 At any time after the termination of this Agreement, the Fund may, upon written request, have reasonable access to the records of the Bank relating to its performance of its duties as custodian.

(a) In the case of notices sent to the Fund to:

iShares Trust
c/o Fund Administration Barclays Global Fund Advisers 45 Fremont Street
San Francisco, California 94105 With a copy to: Legal Department

(b) In the case of notices sent to the Bank to:

Investors Bank & Trust Company 200 Clarendon Street, P.O. Box 9130 Boston, Massachusetts 02117-9130 Attention: Steven Gallant, Director - Client Management With a copy to: John E. Henry, General Counsel

or at such other place as such party may from time to time designate in writing.

of any such obligation from the officers, agents, employees, trustees, or shareholders of the Fund.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first written above.

iShares TRUST

By: /s/ Nathan Most
    -------------------------------
    Name: Nathan Most
    Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Kevin Sheehan
    -------------------------------
    Name: Kevin Sheehan
    Title: President

Appendix A................................   Index Series

Appendix B................................   Fee Schedule

Appendix C................................   Additional Services (N/A)

iShares S&P 500            iShares Dow Jones U.S. Total Market             iShares Russell 3000
Index Fund                 Index Fund                                      Index Fund

iShares S&P 500/BARRA      iShares Dow Jones U.S. Basic Materials          iShares Russell 3000 Growth
Growth Index Fund          Sector Index Fund                               Index Fund

iShares S&P 500/BARRA      iShares Dow Jones U.S. Consumer Cyclical        iShares Russell 3000 Value
Value Index Fund           Sector Index Fund                               Index Fund

iShares S&P MidCap 400     iShares Dow Jones U.S. Consumer                 iShares Russell 2000
Index Fund                 Non-Cyclical Sector Index Fund                  Index Fund

iShares S&P MidCap         iShares Dow Jones U.S. Energy                   iShares Russell 2000 Growth
400/BARRA Growth Index     Sector Index Fund                               Index Fund
Fund

iShares S&P MidCap         iShares Dow Jones U.S. Financial                iShares Russell 2000 Value
400/BARRA Value Index      Sector Index Fund                               Index Fund
Fund

iShares S&P SmallCap 600   iShares Dow Jones U.S. Healthcare               iShares Russell 1000
Index Fund                 Sector Index Fund                               Index Fund

iShares S&P SmallCap       iShares Dow Jones U.S. Industrial               iShares Russell 1000 Growth
600/BARRA Growth Index     Sector Index Fund                               Index Fund
Fund

iShares S&P SmallCap       iShares Dow Jones U.S. Technology               iShares Russell 1000 Value
600/BARRA Value Index      Sector Index Fund                               Index Fund
Fund

iShares S&P Europe 350     iShares Dow Jones U.S.
Index Fund                 Telecommunications Sector Index Fund

iShares S&P/TSE 60         iShares Dow Jones U.S. Utilities
Index Fund                 Sector Index Fund

                           iShares Dow Jones U.S. Chemicals
                           Index Fund

                           iShares Dow Jones U.S. Financial
                           Services Composite Index Fund

                           iShares Dow Jones U.S. Internet
                           Index Fund

iShares Dow Jones U.S. Real Estate Index Fund

Schedule B

Fee Schedule*

Exchange Traded Funds
March 8, 2000

Assumptions used in developing the fee schedule:

-The launch of the 36 new funds will begin around May 1, 2000. -BGI will use IBT for securities lending for a minimum of 2.5 years from the date that at least 14 funds are serviced by Investors Bank. -BGI will use IBT for foreign exchange.
-BGI will use IBT for custody, fund accounting, administration and transfer agency services.
-IBT will provide accounting information to BGI for the PCF file.

. DTC/Fed Book Entry $ 3***
. Physical Securities 35
. Options and Futures 18
. GNMA Securities 30
. Principal Paydown 5
. Foreign Currency 18****
. Outgoing Wires 7
. Incoming Wires 5

** These fees assume that trade information is sent to Investors Bank electronically utilizing the same format as we are using today or electronically from NSCC. For non-automated DTC/Fed Book trades the per trade fee will be $10.00.
***There are no transaction charges for the use of Investors Bank Repo product. ****There are no transaction charges for F/X contracts executed by Investors Bank.

. Incremental basis point and transaction fees will be charged for all foreign assets for which we are custodian. The asset based fees and transaction fees vary by country, based upon the global custody fees below. Local duties, script fees, reclaims, registration, exchange fees, and other market charges are out-of-pocket.

. Investors Bank will require the fund to hold all international assets at the subcustodian of our choice.

                    Basis Point           Per
Country                  Charge         Trade
-------                  ------
                                       Charge
                                       ------
Australia                   2.5           $40
Austria                     3.5           $35
Belgium                     3.5           $40
Canada                      2.5           $20
Euroclear                   2.5           $20
France                      2.5           $43
Germany                     2.5           $23
Hong Kong                   3.0           $60
Italy                       2.5           $30
Japan                       2.0           $20
Malaysia                      8           $60
Mexico                        6           $24
Netherlands                 3.5           $30
Singapore                     7           $60
Spain                         4           $43
Sweden                      2.5           $35
Switzerland                   4           $45
UK                          3.0           $30
Brazil                       22           $60
Korea                         8           $50
South Africa                  5           $30
Taiwan                       11           $50
Thailand                    7.5           $50

Denmark                     2.5           $43
Finland                     3.5           $50
Ireland                       4           $56
Norway                      2.5           $35
Portugal                     14           $90

                                        Annual Fee
                                        -----------------
First $4 billion in assets              4.5  Basis Points
Next $8 billion in assets               4.0  Basis Points
Next $8 billion in assets               3.0  Basis Points
Assets in excess of $20 billion         1.5  Basis Points

. There will be an incremental .5 basis point fee on each global portfolio.

. There will be a yearly complex minimum of $3,600,000 which includes 36 funds. For each new fund beyond 36 the complex minimum will increase by $100,000 (This fee does not include transactions or global custody). The $3.6 million complex minimum will be billed monthly beginning on May 1, 2000. Any additional basis point fees owed to Investors Bank will be calculated at the end of the first 12 month period (April 31, 2001) based on the above fee schedule and the end of month assets for each of the previous 12 months (May 1, 2000 to April 31, 2001). After the initial 12 months, the complex minimum or basis points, whichever is larger, will be billed on a monthly basis.

. The monthly minimum fee of $300,000 will be billed starting on May 1, 2000. Also, Barclays Global Investors agrees to pay Investors Bank $2.4 million in calendar year 2000.

-Third Party Review ($250/fd/yr)  -InvestView
-Legal Expenses                   -Customized Reporting
-Printing, Delivery & Postage     -Non-Standard Transmissions/Extracts
-Extraordinary Travel Expenses    -Blue Sky ($100/permit)
-Forms and Supplies               -Microfiche

-Pricing (per security/fund/day $.035 equities, $.40 bonds, $.45 int'l)
-Telecommunications (Per month/fund dom $61.25, int'l $77.06) -International Verification ($.50/security/fund/month) -Printing of shareholder reports -Copy fitting -Financial statement report modification (after initially agreed upon parameters) as to style, layout or format.

-Board meeting attendance         -Data Transmissions
-Ad Hoc Reporting                 -Customized Statements

. We allow use of balance credit against fees (excluding out-of-pocket charges) for fund balances arising out of the custody relationship. The monthly earnings allowance is equal to 75% of the 90-day T-bill rate.

$0-$15 billion in assets         60%/40%.  60% going to the funds
Assets in excess of $15 billion  70%/30%.  70% going to the funds

. The details of any systems work will be determined after a thorough business analysis. Any systems work will be billed on a time and material basis. Investors Bank provides an allowance of 10 system hours for data extract set-up and reporting extract set-up.

. The above fees will be charged against the fund's custodian checking account on the last business day of the month. All fees will be billed monthly.

* This fee schedule assumes the execution of our standard contractual agreements for a term of 3 years and utilizing Investors Bank for custody, fund accounting, transfer agent, administration and ancillary

Exhibit (g.2)

SECURITIES LENDING AGENCY AGREEMENT

BETWEEN

INVESTORS BANK & TRUST COMPANY

AND

iShares TRUST

SECURITIES LENDING AGENCY AGREEMENT

AGREEMENT, dated as of April 25, 2000, between iShares Trust (the "Client"), a Delaware business trust, acting on behalf of the funds listed on Schedule A hereto (each fund, a "Lender"), and Investors Bank & Trust Company, a trust company organized and existing under the laws of the Commonwealth of Massachusetts (the "Bank"). Schedule A may be amended from time to time by written notice from the Client to the Bank.

WHEREAS, the Client is registered as an open-end investment company under the Investment Company Act of 1940, as amended (the "1940 Act");

WHEREAS, the Bank currently acts as custodian for securities held by it in the Account (as defined below) from time to time on behalf of the Lender;

WHEREAS, the Client desires to appoint the Bank as its agent for the purpose of lending securities in the Account as more fully set forth below; and

WHEREAS, the Bank has agreed to act as the Client's agent for such purpose pursuant to the terms hereof;

NOW, THEREFORE, for and in consideration of the mutual promises set forth herein, the parties hereto agree as follows:

Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meaning assigned to them in the applicable Securities Borrowing Agreement.

1.1 "Account" shall mean the custodial account or accounts established and maintained by the Bank on behalf of each Lender for the safekeeping of securities and monies received by the Bank from time to time.

1.2 "Approved Investment" shall mean any type of security, participation or interest in property in which Cash Collateral may be invested or reinvested, as set forth on Schedule I hereto (which may be amended from time to time to add additional Approved Investments with the written consent of the Bank and the Client, or to delete any Approved Investment at the written direction of the Client).

1.3 "Authorized Person" shall be any officer of the Client and any other person, whether or not any such person is an officer or employee of the Client, duly authorized by corporate resolutions of the Board of Directors or Trustees, as the case may be, of the Client to give Oral and/or Written Instructions on behalf of the Client, such persons to be designated in a Certificate which contains a specimen signature of such person.

1.4 "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering Government Securities (as defined herein), its successors and nominees.

1.5 "Borrower" shall mean any entity named on Schedule II hereto (as such Schedule may be amended from time to time to add additional Borrowers with the written consent of the Bank and the Client, or to delete any Borrower at the written direction of the Client). The Client will promptly notify the Bank if at any time any Borrower is or becomes or potential Borrower is an "affiliated person," as defined in the 1940 Act, of any Lender, or an affiliated person of such affiliated person.

If the Client provides such notice, the Bank shall take appropriate action to prevent the applicable Lenders from engaging in a Loan with any Borrower so identified by the Client. The Bank shall be entitled to rely upon such notices from the Client (and the absence of such notices) in its operation of the securities lending program.

1.6 "Cash Collateral" shall mean either fed funds or New York Clearing House funds, as applicable for a particular loan of Securities.

1.7 "Certificate" shall mean any notice, instruction, schedule or other instrument in writing, authorized or required by this Agreement to be given to the Bank, which is actually received by the Bank and signed on behalf of the Client by an Authorized Person or a person reasonably believed by the Bank to be an Authorized Person.

1.8 "Collateral" shall mean Cash Collateral unless the Bank and the Client have agreed in writing to additional collateral, including Government Securities and Letters of Credit.

1.9 "Collateral Account" shall mean a segregated account established and maintained by the Bank for the purpose of holding Collateral and Approved Investments, interest, dividends and other payments and distributions received with respect to Collateral and Approved Investments ("Distributions"), and any Securities Loan Fee paid by Borrowers in connection with Securities loans hereunder.

1.10 "Depository" shall mean the Depository Trust Company, Participant's Trust Company, Euroclear, and any other securities depository or clearing agency (and their respective successors and nominees) authorized under applicable law or regulation to act as a securities depository or clearing agency, including any foreign securities depository approved by the Client.

1.11 "Government Security" shall mean book-entry Treasury securities (as defined in Subpart 0 of Treasury Department Circular No. 300, 31 C.F.R. 306) and any other securities issued or fully guaranteed by the United States government or any agency or instrumentality of the United States government.

1.12 "Letter of Credit" shall mean a clean, unconditional and irrevocable letter of credit in favor of the Bank as agent for the Lender issued by a bank named on Schedule III hereto as

may be amended from time to time to add additional banks by the written consent of the parties hereto, or to delete any Bank at the written direction of the Client.

1.13 "Oral Instructions" shall mean verbal instructions actually received by the Bank from an Authorized Person or from a person reasonably believed by the Bank to be an Authorized Person.

1.14 "Rebate" shall mean the amount payable by the Lender to a Borrower (as set forth in a Receipt) in connection with Securities loans at any time collateralized by Cash Collateral.

1.15 "Receipt" shall mean an advice or confirmation setting forth the terms of a particular loan of Securities hereunder, including, without limitation, the Collateral with respect to such loan.

1.16 "Securities Borrowing Agreement" shall mean with, respect to any Borrower, the agreement pursuant to which the Bank lends securities on behalf of its customers (including the Lender) to such Borrower as may be amended from time to time.

1.17 "Securities Loan Fee" shall mean the amount payable by a Borrower to the Bank, as agent for the Lender, pursuant to the applicable Securities Borrowing Agreement in connection with Securities loans, if any, collateralized by Collateral other than Cash Collateral.

1.18 "Security" shall mean any Government Securities, non-U.S. securities, common stock and other equity securities, bonds, debentures, corporate debt securities, notes, mortgages or other obligations, and any certificates, warrants or other instruments representing rights to receive, purchase, or subscribe for the same, or evidencing or representing any other rights or interests therein, which are available for lending pursuant to Section 2.2 of this Agreement.

1.19 "Written Instructions" shall mean written communications actually received by the Bank from an Authorized Person or from a person reasonably believed by the Bank to be an Authorized Person by letter, memorandum, telegram, cable, telex, telecopy facsimile, computer, video (CRT) terminal or other on- line system, or any other method whereby the Bank is able to verify with a reasonable degree of certainty the identity of the sender of such communications or the sender is required to provide a password or other identification code.

(a) This Agreement has been approved by the Board of Trustees of the Client and the Approved Investments have been and will be annually determined to be in the best interests of shareholders of each Lender; this Agreement is, and each Securities loan and Approved Investment will be, legally and validly entered into by the Client on behalf of each Lender, does not, and will not, violate any statute, regulation, rule, order or, judgment binding on the Lender, or any provision of the Client's charter or by-laws, or any agreement binding on the Client or affecting its property, and is enforceable against the Client and each Lender in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally;

(b) The person executing this Agreement and all Authorized Persons acting on behalf of the Client or any Lender has and have been duly and properly authorized to do so;

(c) Each Lender is lending Securities as principal for its own account and it will not transfer, assign or encumber its interest in, or rights with respect to, any securities loans;

(d) All Securities subject to lending pursuant to Section 2.2 of this Agreement are free and clear of all liens, claims, security interests and encumbrances, no such Security subject to lending has been sold and the Client on behalf of each Lender has no present intention to sell any of the Securities subject to lending. The Client shall promptly delete from the list referenced in
Section 2.2 hereof any and all Securities which are no longer subject to the representations contained in this sub-paragraph (d).

(a) This Agreement is legally and validly entered into by the Bank, does not and will not, violate any statute, regulation, rule, order or, judgment binding on the Bank, or any provision of the Bank's charter or by-laws, or any agreement binding on the Bank or affecting its property, and is enforceable against the Bank in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally; and

(b) The person executing this Agreement on behalf of the Bank and all persons acting on the Bank's behalf pursuant to this Agreement have been duly and properly authorized to do so.

(c) It will comply with all laws, rules and regulations applicable to the securities lending transactions contemplated by this Agreement.

(a) For each loan hereunder the Bank shall (i) initially receive Cash Collateral equivalent to no less than 102% (105% in the case of loans of foreign securities denominated in non-U.S. dollars) of the market value of the securities lent and (ii) thereafter shall request on a

daily basis as necessary additional Collateral, which for Cash Collateral shall be an amount such that the value of the Cash Collateral in no event be equivalent to less than 100% of the market value of the Securities lent (as determined in accordance with the applicable Securities Borrowing Agreement), and the Bank is hereby authorized and directed, without obtaining any further approval from the Lender, to invest and reinvest all or substantially all of the Cash Collateral received in any Approved Investment. The Bank shall credit all Collateral, Approved Investments and Distributions received with respect to Collateral and Approved Investments to the Collateral Account and mark its books and records to identify the Lender's ownership thereof as appropriate.

(b) All Approved Investments shall be for the account and risk of the Lender. To the extent any loss arising out of Approved Investments results in a deficiency in the amount of Collateral available for return to a Borrower pursuant to the Securities Borrowing Agreement, the Lender agrees to pay the Bank on demand cash in an amount equal to such deficiency.

(c) Except as otherwise provided herein, all Collateral, Approved Investments and Distributions credited to the Collateral Account shall be controlled by, and subject only to the instructions of, the Bank, and the Bank shall not be required to comply with any instructions of the Lender with respect to the same.

(a) receipt by the Bank of a notice of termination pursuant to the Securities Borrowing Agreement;

(b) receipt by the Bank of Written Instructions instructing it to terminate a Securities loan; provided that the Client may require that each Security must be returned to the Lender by no later than the date which is the standard settlement date for trades of such Security entered into on the date of such Written Instruction;

(c) receipt by the Bank of Written Instructions deleting the Borrower to whom such loan was made from Schedule II hereto;

(d) upon the Bank's becoming aware of the occurrence of any default pursuant to the applicable Securities Borrowing Agreement requiring termination of such loan; or

(e) whenever the Bank, in its sole discretion, elects to terminate such loan.

(a) The Bank shall purchase a number of Securities of the same issuer and class as the loaned Securities equal to the number of such unreturned loaned Securities ("Replacement Securities"), to the extent that such Replacement Securities are available on the open market. Such Replacement Securities shall be purchased by applying the proceeds of the Collateral with respect to such loan to the purchase of such Replacement Securities. If and to the extent that such proceeds are insufficient or the Collateral is unavailable, the purchase of such Replacement Securities shall be made at the Bank's expense. The cost of the purchase of Replacement

Securities shall include all costs, fees and expenses (including, without limitation, attorneys' fees) incurred in connection with any purchase of Replacement Securities; and the value of proceeds of the Collateral shall be calculated less any costs, fees and expenses (including, without limitation, attorneys' fees) incurred in connection with selling or otherwise realizing on such Collateral.

(b) If and to the extent that it is impossible or commercially impracticable for the Bank to purchase Replacement Securities pursuant to Paragraph (a) hereof, the Bank shall credit to the Lender's account an amount equal to the Market Value of the unreturned loaned Securities for which Replacement Securities are not purchased, determined as of the close of trading on the business day that the Bank as agent of the Lender, in its sole discretion, either applies the proceeds of any Collateral with respect to such loan to the purchase of any Replacement Securities or elects to treat any loaned Securities as having been purchased by the Borrower, pursuant to the applicable Securities Borrowing Agreement.

(c) Any credits required under Paragraph (b) hereof shall be made by application of the proceeds of the Collateral (if any) that remains after the purchase of Replacement Securities pursuant to Paragraph (a). If and to the extent that the Collateral is unavailable or the value of the proceeds of the remaining Collateral is less than the value of the sum of the credits required to be made under Paragraph (b), such credits shall be made at the Bank's expense.

(d) The Bank shall be subrogated to all rights of Lender against Borrower in respect of any amounts paid by Bank pursuant to the provisions of this Section; provided, however, that until such time as all obligations of Borrower to Lender have been irrevocably paid in full, the Bank shall not be entitled to take action to enforce such rights and any amounts received by or distributable to the Bank on account of such rights shall be paid or distributed to Lender.

(a) It is expressly understood and agreed that in exercising its rights and performing its obligations hereunder, the Bank owes no fiduciary duty to the Lender. The Bank shall not be liable for any costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees) incurred by the Lender, except to the extent those costs, expenses, damages, liabilities or claims result from the Bank's material breach of this Agreement or the Bank's negligence, willful misconduct, bad faith, or reckless disregard of its obligations and duties hereunder.

Neither the Client nor the Bank shall have any obligation hereunder for costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees), which are sustained or incurred by reason of any action or inaction by the Book-Entry System or any Depository or their respective successors or nominees. In no event shall either party be be liable to the other for special, punitive or consequential damages, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages.

(b) The Client on behalf of each Lender agrees to indemnify the Bank and to hold it harmless from and against any and all costs, expenses, damages, liabilities or claims (including reasonable fees and expenses of counsel) which the Bank may sustain or incur or which may be asserted against the Bank by reason of or as a result of any action taken or omitted by the Bank in connection with or arising out of the Bank's operating under and in compliance with this Agreement, except those costs, expenses, damages, liabilities or claims arising out of the Bank's negligence, bad faith, willful misconduct, or reckless disregard of its obligations and duties hereunder. Actions taken or omitted in reasonable reliance upon Oral or Written Instructions, any Certificate, or upon any information, order, indenture, stock certificate, power of attorney, assignment, affidavit or other instrument reasonably believed by the Bank to be genuine or bearing the signature of a person or persons reasonably believed by the Bank to be genuine or bearing the signature of a person or persons reasonably believed to be authorized to sign, countersign or execute the same, shall be presumed to have been taken or omitted in good faith.

(c) The Bank shall indemnify and hold harmless the Lender, its Board of Trustees and its agents and Barclays Global Fund Advisors from any and all loss, liability, costs, damages, actions, and claims ("Loss") to the extent that any such Loss arises out of the material breach of this Agreement by or negligent acts or omissions or willful misconduct of the Bank, its officers, directors or employees or any of its agents or subcustodians in connection with the securities lending activities undertaken pursuant to this Agreement, provided that the Bank's indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to the Bank.

(a) The Bank may, in its sole discretion, (i) advance funds on behalf of the Lender in order to pay to Borrowers any Rebates with respect to fixed income securities loans, (ii) with the prior approval of the Client on behalf of a Lender, advance funds in order to pay to Borrowers any Rebates with respect to equity securities loans or to return to Borrowers Cash Collateral to which they are entitled pursuant to the Securities Borrowing Agreement (any such advance listed in clause (i) of (ii) an "Approved Advance"), or (iii) without prior approval of the Client on behalf of a Lender, advance funds in order to pay to Borrowers any Rebates with respect to equity securities loans or to return to Borrowers Cash Collateral to which they are entitled pursuant to

the Securities Borrowing Agreement (any such advance listed in this clause (iii) a "Bank Advance")(Approved Advances and Bank Advances hereinafter referred to collectively as "Advances"). The Bank may also, in its sole discretion, as a matter of bookkeeping convenience, credit the Account with interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefor, with the prior approval of the Client on behalf of a Lender (an "Approved Credit"), or without the prior approval of the Client on behalf of a Lender (a "Bank Credit") (Approved Credits and Bank Credits hereinafter referred to collectively as "Credits"). The Client of behalf of each Lender agrees that such Credits may also be reflected on its books, and otherwise, as "immediately available" or "same day" funds or by some similar characterization. Notwithstanding any such Credit or characterization, all Credits shall be conditional upon the Bank's actual receipt of final payment and may be reversed by the Bank to the extent that final payment is not received. If the Bank, in its sole discretion, permits a Lender to use funds credited to the Account prior to receipt by the Bank of final payment thereof, such Lender shall nonetheless, continue to bear the risk of, and liability for, the Bank's non- receipt of final payment in full.

(b) The Client agrees that each Lender shall repay the Bank on demand the amount of any Advance or Credit described in Section 3(a) above plus accrued interest at a rate per annum (based on a 360-day year for the actual number of days involved) as agreed to by the parties from time to time. In order to secure repayment of any Approved Advance or Approved Credit arising hereunder, the Client on behalf of each Lender hereby agrees that the Bank shall have a continuing lien and security interest against each Lender, to the extent of any such Approved Advance, Approved Credit or interest thereon owing, in and to all assets now or hereafter held in the Account and the Collateral Account of such Lender, which is then in the Bank's possession or control or in the possession or control of any third party acting on the Bank's behalf and, without limiting the foregoing, the Bank shall be entitled to all the rights and remedies of a pledgee under common law and a secured party under the New York Uniform Commercial Code and/or any other applicable laws and/or regulations as then in effect. The Bank shall be entitled to charge any Advance, Credit or interest thereon owing against any balance of account standing to the credit of a Lender on the Bank's books and against any cash in the Account of such Lender.

(c) The rights of the Bank and the obligations of the Lender under this Section are absolute and unconditional whether or not the Bank would be entitled to indemnification pursuant to Section 5.l(b) hereof.

(d) For all purposes of this Agreement, payment with respect to a transaction will not be "final" until the Bank shall have received immediately available funds which under applicable law or rule are irreversible, which are not subject to any security interest, levy or other encumbrance, and which are specifically applicable, or deemed by the Bank to be specifically applicable, to such transaction. A debit by the Bank to any other account of the Lender maintained by the Bank or to an account of any third party to whom or for whose account Securities have been delivered shall not constitute final payment to the extent that such debit creates an overdraft or does not otherwise result in the receipt by the Bank of immediately available, irreversible and unencumbered funds.

(a) In connection with each Securities loan hereunder, the Lender shall pay to the Bank a fee as specified below:

(i) If the value of Securities maintained in the Accounts, in the aggregate, is less than or equal to $15 billion, Bank shall receive 40% of the fee basis (the "Fee Basis") formed by (i) the net realized income derived from the investment of Cash Collateral, plus (ii) any Securities Loan Fee paid by the Borrower, minus (iii) any Rebate paid to the Borrower, or

(ii) If the value of the Securities maintained in the Accounts, in the

           aggregate, exceeds $15 billion, the bank shall receive a fee
           equal to the product of the following fraction (the "Blended
           Rate") multiplied by the Fee Basis:

           [(1 / (Value of assets in Accounts / 15,000,000,000)] x .40}  +
           ({1 - [1 / (Value of assets in Accounts / 15,000,000,000)]} X
           .30)

(b)   The Bank is authorized on a monthly basis to charge the fee owed by

the Lender under this paragraph against the applicable Collateral Account. Such fee shall be charged and paid at the end of each month. The Blended Rate shall be calculated on the first business day of each month based on the value of the Securities maintained in the Accounts as of the last business day of the preceding month.

(c) Examples illustrating the calculation of fees to be paid by Lender to the Bank appear in Exhibit 1 hereto.

with the terms hereof, and Written or Oral Instruction actually received by the Bank and reasonably believed by the Bank to be duly authorized and delivered. The Client agrees to forward to the Bank Written Instructions confirming Oral Instructions in such manner so that such Written Instructions are received by the Bank by the close of business of the same day that such Oral Instructions are given to the Bank. The Client agrees that the fact that such confirming Written Instructions are not received on a timely basis or that contrary instructions are received by the Bank shall in no way affect the validity or enforceability of the transactions authorized by the Client. The Bank will use reasonable efforts to report any subsequently received contrary instructions. In this regard, the records of the Bank shall be presumed to reflect accurately any Oral Instructions given by an Authorized Person or a person reasonably believed by the Bank to be an Authorized Person.

(a) The Bank shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and in the applicable Securities Borrowing Agreement, and no covenant or obligation shall be implied against the Bank in connection with this Agreement.

(b) Neither the Client nor any Lender shall have any duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against the Client or any Lender in connection with this Agreement.

Agreement shall continue in full force and effect with respect to all loans of Securities outstanding on the date of termination.

(a) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Bank, shall be sufficiently given if addressed to the Bank and received by it at its offices at 200 Clarendon Street, P.O. Box 9130, Boston, Massachusetts 02117-9130, Attention: Securities Lending Department, , with a copy to: John E. Henry, General Counsel or at such other place as the Bank may from time to time designate in writing.

(b) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Client shall be sufficiently given if addressed to the Lender and mailed or delivered to iShares Trust, Fund Administration, c/o Barclays Global Fund Advisors, 45 Fremont Street, San Francisco, California 94105,with a copy to: Legal Department, Attn:
________________________, or at such other place as the Client may from time to time designate in writing.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers, thereunto duly authorized and their respective corporate seals to be hereunto affixed, as of the day and year first above written.

iShares TRUST

By: /s/ Nathan Most
   ________________________________
    Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Kevin Sheehan
   ________________________________
    Title: President

Schedule A Lenders

iShares Dow Jones U.S. Basic Materials Sector Index Fund iShares Dow Jones U.S. Chemicals Index Fund iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund iShares Dow Jones U.S. Energy Sector Index Fund iShares Dow Jones U.S. Financial Sector Index Fund iShares Dow Jones U.S. Financial Services Composite Index Fund iShares Dow Jones U.S. Healthcare Sector Index Fund iShares Dow Jones U.S. Industrial Sector Index Fund iShares Dow Jones U.S. Internet Index Fund iShares Dow Jones U.S. Real Estate Index Fund iShares Dow Jones U.S. Technology Sector Index Fund iShares Dow Jones U.S. Telecommunications Sector Index Fund iShares Dow Jones U.S. Total Market Index Fund iShares Dow Jones U.S. Utilities Sector Index Fund

iShares Russell 1000 Growth Index Fund
iShares Russell 1000 Index Fund
iShares Russell 1000 Value Index Fund
iShares Russell 2000 Growth Index Fund
iShares Russell 2000 Index Fund
iShares Russell 2000 Value Index Fund
iShares Russell 3000 Growth Index Fund
iShares Russell 3000 Index Fund
iShares Russell 3000 Value Index Fund

iShares S&P 100 Index Fund
iShares S&P 500 Index Fund
iShares S&P 500/BARRA Growth Index Fund
iShares S&P 500/BARRA Value Index Fund
iShares S&P Europe 350 Index Fund
iShares S&P MidCap 400 Index Fund
iShares S&P MidCap 400/BARRA Growth Index Fund iShares S&P MidCap 400/BARRA Value Index Fund iShares S&P SmallCap 600 Index Fund
iShares S&P SmallCap 600/BARRA Growth Index Fund iShares S&P SmallCap 600/BARRA Value Index Fund iShares S&P/TSE 60 Index Fund

Schedule I Approved Investments

A. US Government Securities (defined as follows):

B. Repurchase Agreements with the below-named counterparties, in amounts not to exceed the specified limit with respect to each such counterparty. Securities that are eligible as collateral under such Repurchase Agreements shall be limited to the US Government Securities listed under Section A of this Schedule above.

Repo Counterparties                          Credit Limits
-------------------------------------        --------------

Bear Stearns & Co., Inc.                     USD300mm.
------------------------
Credit Suisse First Boston Corp              USD200mm.
Goldman Sachs & Co.                          USD300mm.
-------------------
JP Morgan Securities Inc.                    USD200mm.
------------------------
Lehman Brothers Inc.                         USD200mm.
--------------------
Merrill Lynch Government Securities          USD300mm.
-----------------------------------
Morgan Stanley & Co., Inc.                   USD400mm.
--------------------------
PaineWebber, Inc.                            USD200mm.
-----------------
Salomon Smith Barney Inc.                    USD300mm.
-------------------------
Warburg Dillon Read LLC                      USD200mm.
-----------------------

C. Money Market Investments in the following funds:

Dreyfus Cash Management
Dreyfus Treasury Cash Management
Goldman Sachs Financial Square Money Market Fund Goldman Sachs Financial Square Prime Obligation Fund S-T Investments Co. Liquid Assets Portfolio S-T Investments Co. Prime Portfolio TempCash
TempFund

(continued next page)

Schedule I Approved Investments

(continued)

D. The maximum maturity for any security will be one year. No more than 5% of each iShare Fund's total assets will be invested in any one issuer, with the exception of US Government Securities. All investments shall be made in compliance with the Investment Company Act of 1940, as amended, including without limitation, Section 12(d)(1) thereof, and other applicable law.

Borrower                                               Borrowing Limit
--------------------------------------------------     ---------------

Bear Stearns & Co., Inc.                               USD200mm.
BT Alex Brown Inc.                                     USD100mm.
Credit Suisse First Boston Corp.                       USD100mm.
Deutsche Bank Securities Inc.                          USD100mm.
Donaldson, Luftkin & Jenrette Securities Corp.         USD100mm.
Goldman Sachs & Co.                                    USD200mm.
JP Morgan Securities Inc.                              USD100mm.
Lehman Brothers Inc.                                   USD200mm.
Merrill Lynch, Pierce, Fenner & Smith Incorporated     USD300mm.
Morgan Stanley & Co., Inc.                             USD200mm.
MS Securities Services, Inc.                           USD200mm.
PaineWebber, Inc.                                      USD200mm.
Salomon Smith Barney Inc.                              USD175mm.
Warburg Dillon Read LLC                                USD175mm.

Schedule III

Approved Issuing Banks for Letters of Credit

Bank of America
Chase Manhattan Bank
Mellon Bank
Morgan Guaranty Trust Company
Republic National Bank

Schedule IV

Securities Lending Guidelines

1. The Bank shall only lend securities to "Approved Borrowers" as designated by Barclays Global Fund Advisors (BGFA).

2. The Bank will make all loans versus acceptable collateral.

3. Collateral may include US Dollars (USD), Letters of Credit (with Banks approved by BGFA), or US Government Securities as set forth on the Approved Investment Schedule (Schedule I hereto).

4. The Bank will ensure that each loan will be initially collateralized at 102% for USD-denominated securities and 105% for securities not denominated in USD, and will request additional collateral on a daily basis in the event the collateral coverage falls below the applicable standard.

5. The Bank shall only invest the cash collateral in accordance with the "Approved Investment" schedule as designated by BGFA.

6. The Bank shall terminate securities loans upon the sale of securities, upon receipt of written instructions from the Lender, or as otherwise provided in the Agreement.

7. The Bank shall disburse rebates to the Borrowers in accordance with this Agreement.

8. The Bank shall collect all dividends, interest payments and other income on loaned securities.

9. The Bank shall provide periodic reporting to BGFA detailing the securities on loan, collateral, and cash reinvestment.

Exhibit 1

Fees

The following two examples illustrate the calculation of fees to be paid by Lender to the Bank:

Example A: Value of Securities in Account as of March 31 = $15,000,000,000 Value of Fee Basis for the month of April = $1,000,000 Fee to be paid to Bank on April = .40 x 1,000,000 = $400,000

Example B: Value of Securities in Account as of March 31 = $30,000,000,000 Value of Fee Basis for the month of April = $2,000,000 Blended Rate = {[1 / (30,000,000,000 / 15,000,000,000)] x .40} +
({1- (1 / (30,000,000,000 / 15,000,000,000)]} x .30) = .20 + .15 = .35 Fee to be paid to Bank on April 30 = $2,000,000 x .35 =

Exhibit (g.3)

DELEGATION AGREEMENT

AGREEMENT, dated as of April 25, 2000 by and between INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the "Delegate"), and iShares TRUST, a business trust established under the laws of the State of Delaware (the "Fund").

WHEREAS, pursuant to the provisions of Rule 17f-5(b) under the Investment Company Act of 1940, and subject to the terms and conditions set forth herein, the Board of Trustees of the Fund desires to delegate to the Delegate, and the Delegate hereby agrees to accept and assume, certain responsibilities described herein concerning Assets held outside of the United States, including those assigned to the Foreign Custody Manager as set forth in paragraphs (c)(1),
(c)(2) and (c)(3) of Rule 17f-5.

NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the parties hereto agree as follows:

Capitalized terms in this Agreement have the following meanings:

Assets means any of Fund's investments (including foreign currencies) for which the primary market is outside the United States, and such cash and cash equivalents as are reasonably necessary to effect Fund's transactions in such investments.

Authorized Representative means any one of the persons who are empowered, on behalf of the parties to this Agreement, to receive notices from the other party and to send notices to the other party.

Board means the Board of Trustees (or the body authorized to exercise authority similar to that of the board of directors of a corporation) of Fund.

Country Risk means all factors reasonably related to the systemic risk of holding assets in a particular country including, but not limited to, such country's financial infrastructure (including any Securities Depositories operating in such country);

prevailing custody and settlement practices; and laws applicable to the safekeeping and recovery of Assets held in custody.

Eligible Foreign Custodian has the meaning set forth in Rule 17f- 5(a)(1) and shall also include foreign branches of U.S. Banks (as the term "U.S. Bank" is defined in Rule 17f-5).

Foreign Custody Manager has the meaning set forth in Rule 17f-5(a)(2).

Monitor means to re-assess or re-evaluate, at reasonable intervals, a decision or determination previously made.

Securities Depository has the meaning set forth in Rule 17f-5(a)(6).

Delegate represents that it is a trust company chartered under the laws of the Commonwealth of Massachusetts and a U.S. Bank (as such term is defined in Rule 17f-5). Delegate further represents that the persons executing this Agreement and any amendment or appendix hereto on its behalf are duly authorized to so bind the Delegate with respect to the subject matter of this Agreement.

Fund represents that the Board has determined that it is reasonable to rely on Delegate to perform the responsibilities delegated by this Agreement. Fund further represents that the persons executing this Agreement and any amendment or appendix hereto on its behalf are duly authorized to so bind the Fund with respect to the subject matter of this Agreement.

Board may withdraw its delegation with respect to any jurisdiction upon written notice to Delegate. Delegate may withdraw its acceptance of delegated authority with respect to any jurisdiction upon written notice to Board. Ten days (or such longer period as to which the parties agree) after receipt of any such notice by the Authorized Representative of the party other than the party giving notice, Delegate shall have no further responsibility or authority under this Agreement with respect to the jurisdiction or jurisdictions is to which authority is withdrawn.

Subject to the provisions of this Agreement and the requirements of Rule 17f-5 (and any other applicable law), Delegate is authorized and directed to place and maintain Assets in the care of any Eligible Foreign Custodian or Custodians selected by Delegate in each jurisdiction to which this Agreement applies, except that Delegate does not accept such authorization and direction with regard to Securities Depositories.

Subject to the provisions of this Agreement and the requirements of Rule 17f-5 (and any other applicable law), Delegate is authorized and directed to enter into, on behalf of Fund, such written contracts governing Fund's foreign custody arrangements with such Eligible Foreign Custodians as Delegate deems appropriate.

In each case in which Delegate has exercised the authority delegated under this Agreement to place Assets with an Eligible Foreign Custodian, Delegate is authorized to, and shall, on behalf of Fund, establish and maintain a system to Monitor the appropriateness of maintaining Assets with such Eligible Foreign Custodian. In each case in which Delegate has exercised the authority delegated under this Agreement to enter into a written contract governing Fund's foreign custody arrangements, Delegate is

authorized to, and shall, on behalf of Fund, establish a system to Monitor the appropriateness of such contract.

In exercising its delegated authority under this Agreement, Delegate may assume, for all purposes, that the Board (or Fund's investment advisor, pursuant to authority delegated by the Board) has considered, and pursuant to its fiduciary duties to Fund and Fund's shareholders, determined to accept, such Country Risk as is incurred by placing and maintaining Assets in the jurisdictions to which this Agreement applies. In exercising its delegated authority under this Agreement, Delegate may also assume that Board (or Fund's investment advisor, pursuant to authority delegated by Board) has, and will continue to, Monitor such Country Risk to the extent Board deems necessary or appropriate.

Nothing in this Agreement shall require Delegate to make any selection or to engage in any Monitoring on behalf of Fund that would entail consideration of Country Risk.

In exercising the authority delegated under this Agreement to place Assets with an Eligible Foreign Custodian, Delegate shall determine that Assets will be subject to reasonable care, based on the standards applicable to custodians in the market in which the Assets will be held, after considering all factors relevant to the safekeeping of such assets, including, without limitation;

i. The Eligible Foreign Custodian's practices, procedures, and internal controls, including, but not limited to, the physical protections available for certificated securities (if applicable), the method of keeping custodial records, and the security and data protection practices;

ii. Whether the Eligible Foreign Custodian has the financial strength to provide reasonable care for Assets;

iii. The Eligible Foreign Custodian's general reputation and standing;

iv. Whether Fund will have jurisdiction over and be able to enforce judgments against the Eligible Foreign Custodian, such as by virtue of the existence of any offices of the Eligible Foreign Custodian in the United States or the Eligible Foreign Custodian's consent to service of process in the United States;

In exercising the authority delegated under this Agreement to enter into written contracts governing Fund's foreign custody arrangements with an Eligible Foreign Custodian, Delegate shall determine that such contracts provide reasonable care for Assets based on the standards applicable to Eligible Foreign Custodians in the relevant market. In making this determination, Delegate shall ensure that the terms of such contracts comply with the provisions of Rule 17f- 5(c)(2).

In exercising the authority delegated under this Agreement, Delegate agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of an investment company registered under the Investment Company Act of 1940 would exercise.

Delegate agrees to provide written reports notifying Board of the placement of Assets with a particular Eligible Foreign Custodian and of any material change in Fund's foreign custody arrangements. Such reports shall be provided to Board quarterly for consideration at the next regularly scheduled meeting of the Board or earlier if deemed necessary or advisable by the Delegate in its sole discretion.

10.1 Notwithstanding anything in this Agreement to the contrary, in no event shall the Bank or any of its officers, directors, employees or agents (collectively, the "Indemnified Parties") be liable to the Fund or any third party, and the Fund shall indemnify and hold the Bank and the Indemnified Parties harmless from and against any and all loss, damage, liability, actions, suits, claims, costs and expenses, including reasonable legal fees, (a "Claim") arising as a result of any act or omission of the Bank or any Indemnified Party under this Agreement, except for any Claim to the extent such Claim results from the material breach of this Agreement by or negligence, willful misfeasance or bad faith of the Bank or any Indemnified Party.

10.2 The Bank shall indemnify and hold the Fund, its Board of Trustees, officers and employees and its agents harmless from and against any and all Claims to the extent any such Claim arises out of the negligent acts or omissions, bad faith, willful misconduct or material breach of this Agreement by the Bank, its officers, directors or employees or any of its agents or subcustodians in connection with the activities undertaken pursuant to this Agreement, provided that the Bank's indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to the Bank.

10.3 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for lost profits or lost revenues or any special, consequential, punitive or incidental damages of any kind whatsoever in connection with this Agreement or any activities hereunder.

10.4 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, or insurrection, and (ii) other happenings or events beyond the reasonable control or anticipation of the party effected, provided that (A) the effected party has in place appropriate business resumption procedures, systems and facilities and (B) the effected party uses its best efforts to avoid or remove the cause of such losses.

10.5 In performing its duties hereunder, the Bank will be entitled to receive and act upon the advice of independent counsel of its own selection, which may be counsel for the Fund.

10.6 The Bank may rely upon any Proper Instruction which it reasonably believes to be genuine and to be signed or presented by any Authorized Person. The Bank shall not be held to have notice of any change of authority of any Authorized

Person until receipt of appropriate written notice thereof has been received by the Bank from the Fund.

10.7 In order that the indemnification provisions contained in this Article 14 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking the indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party seeking indemnification shall give the indemnifying party full and complete authority, information and assistance to defend such claim or proceeding, and the indemnifying party shall have, at its option, sole control of the defense of such claim or proceeding and all negotiations for its compromise or settlement. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent, which consent shall not be unreasonably withheld.

This Agreement shall be effective as of the later of the date of execution on behalf of Board or Delegate and shall remain in effect until terminated as provided herein. This Agreement may be terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective 90 days after receipt by the non-terminating party of such notice.

This Agreement shall be constructed in accordance with the laws of the State of New York without regard to principles of choice of law.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

INVESTORS BANK & TRUST COMPANY

By:    /s/ Kevin Sheehan
   ___________________________________
Name:  Kevin Sheehan
Title: President

iShares TRUST

By:    /s/ Nathan Most
   ____________________________________
Name:  Nathan Most
Title: President

Argentina                       Kenya
Austria                         Korea
Australia                       Latvia
Bahrain                         Lebanon
Bangladesh                      Lithuania
Belgium                         Luxembourg
Bermuda                         Malaysia
Bolivia                         Mauritius
Botswana                        Mexico
Brazil                          Morocco
Bulgaria                        Namibia
Canada                          Netherlands
Chile                           New Zealand
China                           Norway
Clearstream (Cedel)             Oman
Colombia                        Pakistan
Costa Rica                      Panama
Croatia                         Papua New Guinea
Cyprus                          Peru
Czech Republic                  Philippines
Denmark                         Poland
Ecuador                         Portugal
Egypt                           Romania
Estonia                         Russia
Euroclear                       Singapore
Finland                         Slovak Republic
France                          Slovenia
Germany                         South Africa
Ghana                           Spain
Greece                          Sri Lanka
Hong Kong                       Swaziland
Hungary                         Sweden
Iceland                         Switzerland
India                           Taiwan
Indonesia                       Thailand
Ireland                         Turkey
Israel                          Ukraine
Italy                           United Kingdom
Ivory Coast                     Uruguay
Japan                           Venezuela
Jordan                          Zambia
Kazakhstan                      Zimbabwe

Pursuant to Article 3 of this Agreement, Delegate and Board agree that the following jurisdictions shall be added to Appendix A:

[insert additional countries]

INVESTORS BANK & TRUST COMPANY

By: ___________________________________

Name:

Title:

[FUND]

By:____________________________________

Name:

Title:

DATE: ______________________________

In addition to the factors set forth in Rule 17f-5(c)(1), in selecting Eligible Foreign Custodians that are banking institutions or trust companies, Delegate shall consider the following factors, if such information is available (check all that apply):

_________ None

_________ Other (list below):

In establishing systems for the Monitoring of foreign custody arrangements and contracts with Eligible Foreign Custodians, Delegate shall consider the following factors, if such information is available:

1. Operating performance
2. Established practices and procedures
3. Relationship with market regulators
4. Contingency planning

To aid the Board in its determinations regarding Country Risk, Delegate will furnish Board annually with respect to the jurisdictions specified in Article 3, the following information:

1. Copy of Addenda or Side Letters to Subcustodian Agreements

2. Legal Opinion, if available, with regard to:

a) Access to books and records by the Fund's accountants

b) Ability to recover assets in the event of bankruptcy of a custodian

c) Ability to recover assets in the event of a loss

d) Likelihood of expropriation or nationalization, if available

e) Ability to repatriate or convert cash or cash equivalents

3. Audit Report

4. Copy of Balance Sheet from Annual Report

5. Summary of Central Depository Information

6. Country Profile Matrix containing market practice for:

a) Delivery versus payment

b) Settlement method

c) Currency restrictions

d) Buy-in practice

e) Foreign ownership limits

f) Unique market arrangements

7. Information Regarding Securities Depositories

a) Whether use is voluntary or compulsory

b) Ownership

c) Operating History

d) Established rules, practices and procedures

e) Membership

f) Financial strength

g) Governing regulatory body

The names and addresses of each party's authorized representatives are set forth below:

A. Board

With a copy to:

B. Delegate

Investors Bank & Trust Company
200 Clarendon Street
P.O. Box 9130
Boston, MA 02117-9130
Attention: _______________, Director, Client Management Fax: (617) 330-6033

With a copy to:

Investors Bank & Trust Company
200 Clarendon Street
P.O. Box 9130
Boston, MA 02117-9130
Attention: John E. Henry, General Counsel

Exhibit (h.1)

ADMINISTRATION AGREEMENT

AGREEMENT made as of April 25, 2000 by and between iShares TRUST, a business trust established under the laws of the state of Delaware (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the "Bank").

WHEREAS, common shares of each Index Series will be listed on a registered securities exchange; and

WHEREAS, the Fund desires to retain the Bank to render certain administrative services to the Fund and the Bank is willing to render such services.

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, it is agreed between the parties hereto as follows:

(a) Resolutions of the Fund's Board of Directors authorizing the appointment of the Bank to provide certain administrative services to the Fund and approving this Agreement;

(b) The Fund's incorporating documents filed with the state of Delaware on [date] and all amendments thereto (the "Articles");

(c) The Fund's by-laws and all amendments thereto (the "By-Laws");

(d) The Fund's agreements with all service providers which include any investment advisory agreements, sub-investment advisory agreements, custody agreements, distribution agreements and transfer agency agreements (collectively, the "Agreements");

(e) The Fund's most recent Registration Statement on Form N-1A (the "Registration Statement") under the Securities Act of 1933 and under the 1940 Act and all amendments thereto; and

(f) The Fund's most recent prospectus and statement of additional information (the "Prospectus"); and

(g) Such other certificates, documents or opinions as may mutually be deemed necessary or appropriate for the Bank in the proper performance of its duties hereunder.

The Fund will promptly furnish the Bank with copies of all amendments of or supplements to the foregoing. Furthermore, the Fund will promptly notify the Bank of any matter which would materially affect the performance by the Bank of its services under this Agreement.

(b) In performing all services under this Agreement, the Bank shall act in conformity with the Fund's Articles and By-Laws and the 1940 Act, as the same may be amended from time to time, and the investment objectives, investment policies and other practices and policies set forth in the Fund's Registration Statement, as the same may be amended from time to time. Notwithstanding any item discussed herein, the Bank has no discretion over the Fund's assets or choice of investments and cannot be held liable for any losses resulting from the exercise of such discretion or investment choices.

(c) (i) The Bank shall, during the period that this Agreement remains in effect, (x) maintain an Errors & Omissions policy of at least $50 million, which policy will insure against all claims sustained by any party (including the Fund) as a result of any actual or alleged wrongful act, error or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in the Bank's agreements with its clients, and (y) maintain a separate Errors & Omissions policy of at least $25 million, which policy will insure against claims sustained solely by the Fund as a result of any actual or alleged wrongful act, error or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in this Agreement.

(ii) Upon the Fund's written request, the policy referred to in clause (c)(i)(y) above will be expanded to $50 million when the Fund's total assets reach $25 billion. The Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the cost of the policy referred to in clause
(c)(i)(y) above. When the policy is expanded to $50 million, the Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the total cost of such expanded policy.

discrepancy to the Fund. The Fund shall be responsible, at the Fund's expense, for taking any action, including any reprocessing, necessary to correct any such discrepancy or error, and to the extent such action requires the Bank to act, the Fund shall give the Bank specific Proper Instructions as to the action required. Proper Instructions shall include communication effected directly between electro-mechanical or electronic devices, including information transmitted by the Fund's Distributor. The Fund hereby authorizes such use of electro-mechanical or electronic communication and the Fund and the Bank will agree as to procedures which shall afford adequate safeguards for the Fund's assets.

(b) The Bank shall not be required to pay any expenses incurred by the Fund.

6.1 Notwithstanding anything in this Agreement to the contrary, in no event shall the Bank or any of its officers, directors, employees or agents (collectively, the "Indemnified Parties") be liable to the Fund or any third party, and the Fund shall indemnify and hold the Bank and the Indemnified Parties harmless from and against any and all loss, damage, liability, actions, suits, claims, costs and expenses, including reasonable legal fees, (a "Claim") arising as a result of any act or omission of the Bank or any Indemnified Party under this Agreement, except for any Claim to the extent such Claim results from the material breach of this Agreement by or negligence, willful misfeasance or bad faith of the Bank or any Indemnified Party.

6.2 The Bank shall indemnify and hold the Fund, its Board of Trustees, officers and employees and its agents harmless from and against any and all Claims to the extent any such Claim arises out of the negligent acts or omissions, bad faith, willful misconduct or material breach of this Agreement by the Bank, its officers, directors or employees or any of its agents or subcustodians in connection with the activities undertaken pursuant to this Agreement, provided that the Bank's indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to the Bank.

6.3 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for lost profits or lost revenues or any special, consequential, punitive or incidental damages of any kind whatsoever in connection with this Agreement or any activities hereunder.

6.4 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, or insurrection, and (ii) other happenings or

events beyond the reasonable control or anticipation of the party effected, provided that (A) the effected party has in place appropriate business resumption procedures, systems and facilities and (B) the effected party uses its best efforts to avoid or remove the cause of such losses.

6.5 In performing its duties hereunder, the Bank will be entitled to receive and act upon the advice of independent counsel of its own selection, which may be counsel for the Fund.

6.6 The Bank may rely upon any Proper Instruction which it reasonably believes to be genuine and to be signed or presented by any Authorized Person. The Bank shall not be held to have notice of any change of authority of any Authorized Person until receipt of appropriate written notice thereof has been received by the Bank from the Fund.

6.7 in order that the indemnification provisions contained in this Article 14 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking the indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party seeking indemnification shall give the indemnifying party full and complete authority, information and assistance to defend such claim or proceeding, and the indemnifying party shall have, at its option, sole control of the defense of such claim or proceeding and all negotiations for its compromise or settlement. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent, which consent shall not be unreasonably withheld.

7.1 The term of this Agreement shall be three years commencing upon the date hereof (the "Initial Term"), unless earlier terminated as provided herein.

(a) Either party hereto may terminate this Agreement prior to the expiration of the Initial Term in the event the other party breaches any material provision of this Agreement, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice.

(b) The Fund may terminate this Agreement prior to the expiration of the Initial Term upon ninety days' prior written notice in the event that:

(iii) the Bank's parent, Investors Financial Services Corp. ("IFSC"), fails to maintain a minimum capital level as follows: (i) total stockholders' equity, as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $100 million, and (ii) the sum of (x) total stockholders' equity and (y) the outstanding amount of company-obligated, manditorily redeemable, preferred securities, each as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $125 million; or

(iv) the Board of the Fund votes to liquidate the Fund and terminate its registration with the Securities and Exchange Commission other than in connection with a merger or acquisition of the Fund or the Fund's investment adviser.

7.2 At any time after the termination of this Agreement, the Fund may, upon written request, have reasonable access to the records of the Bank relating to its performance of its duties as Administrator.

(a) Any notice or other instrument authorized or required by this Agreement to be given in writing to the Fund or the Bank shall be sufficiently given if addressed to that party and received by it at its office set forth below or at such other place as it may from time to time designate in writing.

To the Fund:

iShares Trust
c/o Fund Administration
Barclays Global Fund Advisers 45 Fremont Street
San Francisco, California 94105 With a copy to: Legal Department

To the Bank:

Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, MA 02117-9130

Attention: Steven Gallant, Director, Client Management With a copy to: John E. Henry, General Counsel

(b) This Agreement shall extend to and shall be binding upon the parties hereto and their respective successors and assigns; provided, however, that this Agreement shall not be assignable without the written consent of the other party.

(c) This Agreement shall be construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.

(d) This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and which collectively shall be deemed to constitute only one instrument.

(e) The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed and delivered by their duly authorized officers as of the date first written above.

iShares TRUST

By: /s/ Nathan Most
    -----------------------
Name: Nathan Most
Title: President

INVESTORS BANK & TRUST COMPANY

By: /s/ Kevin Sheehan
    -----------------------
Name: Kevin Sheehan
Title: President

Appendix A....................................  Portfolios

Appendix B....................................  Services

Appendix C....................................  Fee Schedule

Review and Approval

The attached Summary of Administration Functions has been reviewed and represents the services currently being provided.

iShares S&P 500                        iShares Dow Jones U.S. Total Market               iShares Russell 3000
Index Fund                             Index Fund                                        Index Fund

iShares S&P 500/BARRA                  iShares Dow Jones U.S. Basic Materials            iShares Russell 3000 Growth
Growth Index Fund                      Sector Index Fund                                 Index Fund

iShares S&P 500/BARRA                  iShares Dow Jones U.S. Consumer                   iShares Russell 3000 Value
Value Index Fund                       Cyclical Sector Index Fund                        Index  Fund

iShares S&P MidCap 400                 iShares Dow Jones U.S. Consumer Non-Cyclical      iShares Russell 2000
Index Fund                             Sector Index Fund                                 Index Fund

iShares S&P MidCap                     iShares Dow Jones U.S. Energy                     iShares Russell 2000
400/BARRA Growth Index Fund            Sector Index Fund                                 Fund  Growth Index

iShares S&P MidCap                     iShares Dow Jones U.S. Financial                  iShares Russell 2000 Value
400/BARRA Value Index Fund             Sector Index Fund                                 Index Fund

iShares S&P SmallCap 600               iShares Dow Jones U.S. Healthcare                 iShares Russell 1000
Index Fund                             Sector Index Fund                                 Index Fund

iShares S&P SmallCap                   iShares Dow Jones U.S. Industrial                 iShares Russell 1000 Growth
600/BARRA Growth Index Fund            Sector Index Fund                                 Index Fund

iShares S&P SmallCap                   iShares Dow Jones U.S. Technology                 iShares Russell 1000 Value
600/BARRA Value Index Fund             Sector Index Fund                                 Index Fund

iShares S&P Europe 350                 iShares Dow Jones U.S. Telecommunications
Index Fund                             Sector Index Fund

iShares S&P/TSE 60                     iShares Dow Jones U.S. Utilities Sector
Index Fund                             Index Fund

                                       iShares Dow Jones U.S. Chemicals
                                       Index Fund

                                       iShares Dow Jones U.S. Financial Services
                                       Composite Index Fund

iShares Dow Jones U.S. Internet Index Fund

iShares Dow Jones U.S. Real Estate Index Fund

                                                                                                          Suggested Fund Auditor
Function                                 Investors Bank & Trust             Barclays Global Investors            or Counsel
--------------------------------     ---------------------------------    -----------------------------   -----------------------
  MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
--------------------------------
Monitor portfolio compliance in      Perform tests of certain specific    Continuously monitor            A/C - Provide
accordance with the current          portfolio activity designed from     portfolio activity and Fund     consultation as needed
Prospectus and SAI.                  provisions of the Fund's             operations in conjunction       on compliance issues.
                                     Prospectus and SAI.  Follow-up on    with 1940 Act, Prospectus,
                                     potential violations.                SAI and any other applicable
                                                                          laws and regulations.
                                                                          Monitor testing results and
Frequency:  Daily                                                         approve resolution of
                                                                          compliance issues.

Provide compliance summary package.  Provide a report of compliance       Review report.                  A/C - Provide
                                     testing results.                                                     consultation as needed.
Frequency:  Bi- weekly


Perform asset diversification        Perform asset diversification        Continuously monitor            A - Provide consultation
testing to establish qualification   tests at each tax quarter end.       portfolio activity in           as needed in establishing
as a RIC.                            Follow-up on issues.                 conjunction with IRS            positions to be taken in
                                                                          requirements.  Review test      tax treatment of
                                                                          results and take any            particular issues. Review
                                                                          necessary action.  Approve      quarter end tests on a
Frequency:  Quarterly                                                     tax positions taken.            current basis.

                                                                                                            Suggested Fund Auditor
Function                                      Investors Bank & Trust          Barclays Global Investors            or Counsel
------------------------------------    ---------------------------------   -----------------------------  ------------------------
  MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
------------------------------------
Perform qualifying income testing to    Perform qualifying income testing   Continuously monitor           A- Consult as needed on
establish qualification as a RIC.       (on book basis income, unless       portfolio activity in          tax accounting positions
                                        material differences are            conjunction with IRS           to be taken.  Review in
                                        anticipated) on quarterly basis     requirements.  Review test     conjunction with year-end
                                        and as may otherwise be             results and take any           audit.
Frequency:  Quarterly                   necessary.   Follow-up on issues.   necessary action.  Approve
                                                                            tax positions taken.

Prepare the Fund's annual expense       Prepare preliminary expense         Provide asset level
budget.  Establish daily accruals.      budget.  Notify fund accounting     projections and vendor fee
                                        of new accrual rates.               information.   Approve
Frequency:  Annually                                                        expense budget.

Monitor the Fund's expense budget.      Monitor actual expenses updating    Provide asset level            C/A - Provide
                                        budgets/ expense accruals.          projections quarterly.         consultation as
                                                                            Provide vendor information     requested.
                                                                            as necessary.  Review
                                                                            expense analysis and approve
                                                                            budget revisions.
Frequency:  Quarterly

                                                                                                             Suggested Fund Auditor
Function                                       Investors Bank & Trust          Barclays Global Investors          or Counsel
------------------------------------     ---------------------------------   -----------------------------   ----------------------
Receive and coordinate payment of        Propose allocations of invoice      Approve invoices and
fund expenses.                           among Funds and obtain authorized   allocations of payments.
                                         approval to process payment.        Send invoices to IBT in a
Frequency:  As often as necessary                                            timely manner.



------------------------------------
  MANAGEMENT REPORTING
& TREASURY ADMINISTRATION (CONT.)
------------------------------------
Calculate periodic dividend rates to     Calculate amounts available for     Establish and maintain          C - Review dividend
be declared in accordance with           distribution.  Coordinate review    dividend and distribution       resolutions in
management guidelines.                   by management and/or auditors.      policies.  Approve              conjunction with Board
                                         Notify custody and transfer agent   distribution rates per share    approval.
                                         of authorized dividend rates in     and aggregate amounts.
                                         accordance with Board approved      Obtain Board approval when      A - Review and concur
                                         policy.  Report dividends to        required.                       with proposed
Frequency:  Quarterly                    Board as required.                                                  distributions

Calculate total return information       Provide SEC total return            Review total return
on Funds as defined in the current       calculations.                       information.
Prospectus and SAI.


Frequency:  Monthly

                                                                                                             Suggested Fund Auditor
Function                                       Investors Bank & Trust          Barclays Global Investors          or Counsel
------------------------------------     ---------------------------------   -----------------------------   ----------------------
Prepare responses to major industry      Prepare, coordinate as necessary,   Identify the services to
questionnaires.                          and submit responses to the         which the Funds report.
                                         appropriate agency.                 Provide information as
Frequency:  As often as necessary                                            requested.



Prepare disinterested trustee Form       Summarize amounts paid to           Provide social security
1099-Misc.                               directors/trustees during the       numbers and current mailing
                                         calendar year.  Prepare and mail    address for trustees.
                                         Form 1099-Misc.                     Review and approve
Frequency:  Annually                                                         information provided for
                                                                             Form 1099-Misc.

-------------------------------------
         FINANCIAL REPORTING
-------------------------------------
Prepare financial information for        Prepare selected portfolio and      Review financial information.
presentation to Fund Management and      financial information for
Board of Directors.                      inclusion in board material.

Frequency: Quarterly

                                                                                                             Suggested Fund Auditor
Function                                      Investors Bank & Trust           Barclays Global Investors         or Counsel
------------------------------------    ---------------------------------    -----------------------------  ----------------------
Coordinate the annual audit and         Coordinate the creation of           Provide past financial         A - Perform audit and
semi-annual preparation and             templates reflecting                 statements and other           issue opinion on annual
printing of financial statements        client-selected standardized         information required to        financial statements.
and notes with management, fund         appearance and text of financial     create templates, including
accounting and the fund auditors.       statements and footnotes.  Draft     report style and graphics.     A/C - Review reports.
                                        and manage production cycle.         Approve format and text as
                                        Coordinate with IBT fund             standard.  Approve
                                        accounting the electronic receipt    production cycle and assist
                                        of portfolio and general ledger      in managing to the cycle.
                                        information.  Assist in              Coordinate review and
                                        resolution of accounting issues.     approval by portfolio
                                        Using templates, draft financial     managers of portfolio
                                        statements, coordinate auditor       listings to be included in
                                        and management review, and clear     financial statements.
                                        comments. Coordinate printing of     Prepare appropriate
                                        reports and EDGAR conversion with    management letter and
                                        outside printer and filing with      coordinate production of
                                        the SEC via EDGAR.                   Management Discussion and
Frequency: Annually/semi-annually                                            Analysis.  Review and
                                                                             approve entire report.  Make
                                                                             appropriate representations
                                                                             in conjunction with audit.


------------------------------------
               LEGAL
------------------------------------

                                                                                                         Suggested Fund Auditor
Function                                     Investors Bank & Trust         Barclays Global Investors          or Counsel
------------------------------------   ---------------------------------  -----------------------------  ----------------------
Prepare agenda and board materials     Maintain annual calendar of        Review and approve board       C - Review agenda,
for quarterly board meetings.          required quarterly and annual      materials and board and        resolutions, board
                                       approvals. Prepare agenda,         committee meeting minutes.     material and board and
                                       resolutions and other board                                       committee meeting
                                       materials for quarterly board                                     minutes.  Ensure BOD
                                       meetings.  Prepare supporting                                     material contains all
                                       information and materials when                                    required information
                                       necessary.  Assemble, check and                                   that the BOD must review
                                       distribute books in advance of                                    and/or approve to
                                       meeting.  Attend board and                                        perform their duties as
                                       committee meetings and prepare                                    directors.
Frequency: Quarterly                   minutes.

Prepare and file Form N-SAR.           Prepare form for filing. Obtain    Provide appropriate            C - Review initial filing.
                                       any necessary supporting           responses.  Review and         A - Provide annual audit
                                       documents.  File with SEC via      authorize filing.              internal control letter
                                       EDGAR.                                                            to accompany the annual
                                                                                                         filing.
Frequency: Semi-annually

Prepare amendments to Registration     Prepare and coordinate the filing  Review and approve.            C - Review and approve
Statement.                             of post-effective amendments.                                     filings.
                                       Coordinate with outside printers                                  A/C - Provide consents as
Frequency: Annual update (includes     the Edgar conversion, filing with                                 appropriate.
updating financial highlights,         the SEC and printing of
expense tables, ratios) plus one       prospectus.
additional filing per fiscal year

                                                                                                          Suggested Fund Auditor
Function                                     Investors Bank & Trust          Barclays Global Investors         or Counsel
------------------------------------   ---------------------------------   -----------------------------  ----------------------
------------------------------------
          LEGAL (CONT.)
------------------------------------
Prepare Prospectus/SAI supplements.    Prepare Prospectus and SAI          Review and approve.            C - Review and approve
                                       supplements.  File with the SEC                                    filings.
                                       via Edgar.  Coordinate printing                                    A/C - Provide consents
                                       of supplements.                                                    as appropriate.

Frequency:  As often as required

Preparation and filing of 24f-2        Accumulate capital stock            Review and approve filing.     C - Approve 24f-2 Notice.
Notice.                                information and draft Form 24f-2.
                                       Notice.  File approved Form with                                   A - Review informally
                                       SEC via Edgar.                                                     when requested

Frequency:  Annually

Proxy Material/Shareholder Meetings    Prepare drafts of proxy material    Review and approve proxy.      C - Review and approve
                                       for review, file materials or                                       proxy.
                                       coordinate filing with SEC and
                                       coordinate printing.  Assist
                                       proxy solicitation firm and
                                       prepare scripts.  Attend meeting
                                       and prepare minutes.
Frequency: As needed

                                                                                                          Suggested Fund Auditor
Function                                     Investors Bank & Trust          Barclays Global Investors         or Counsel
------------------------------------   ---------------------------------   -----------------------------  ----------------------
Assist in updating of fidelity bond    Make annual filing of fidelity      Obtain required fidelity
insurance coverage.                    bond insurance material with the    bond insurance coverage.
                                       SEC.                                Monitor level of fidelity
                                                                           bond insurance maintained
Frequency:  Annually                                                       in accordance with required
                                                                           coverage.


------------------------------------
           LEGAL (CONT.)
------------------------------------
Respond to regulatory audits.          Compile and provide documentation   Coordinate with regulatory     C - Provide consultation
                                       pursuant to audit requests.         auditors to provide            as needed.
Frequency:  As needed (at least        Assist client in resolution of      requested documentation and
annually)                              audit inquiries.                    resolutions to inquiries.

                                                                                                          Suggested Fund Auditor
Function                                     Investors Bank & Trust          Barclays Global Investors         or Counsel
------------------------------------   ---------------------------------   -----------------------------  ----------------------
------------------------------------
                  TAX
------------------------------------
Prepare income tax provisions.         Calculate investment company        Provide transaction            A - Provide consultation
                                       taxable income, net tax exempt      information as requested.      as needed in establishing
                                       interest, net capital gain and      Identify Passive Foreign       positions to be taken in
                                       spillback dividend requirements.    Investment Companies           tax treatment of
                                       Identify book-tax accounting        (PFICs).  Approve tax          particular issues.
                                       differences.  Track required        accounting positions to be     Perform review in
                                       information relating to             taken.  Approve provisions.    conjunction with the
Frequency:  Annually                   accounting differences.                                            year-end audit.

                                                                                                           Suggested Fund Auditor
Function                                  Investors Bank & Trust            Barclays Global Investors           or Counsel
----------------------------------   ---------------------------------     ---------------------------   -------------------------
Calculate excise tax distributions   Calculate required distributions      Provide transaction           A - Provide consultation
                                     to avoid imposition of excise tax.    information as requested.     as needed in establishing
                                        - Calculate capital gain net       Identify Passive Foreign      positions to be taken in
                                            income and foreign currency    Investment Companies          tax treatment of
                                          gain/loss through October 31.    (PFICs).  Approve tax         particular issues.
                                        - Calculate ordinary income and    accounting positions to be    Review and concur with
                                          distributions through a          taken.  Review and approve    proposed distributions
                                          specified cut off date.          all income and distribution   per share.
                                        - Project ordinary income from     calculations, including
                                          cut off date to December 31.     projected income and
                                        - Ascertain dividend shares.       dividend shares.  Approve
                                     Identify book-tax accounting          distribution rates per share
                                     differences.  Track required          and aggregate amounts.
                                     information relating to               Obtain Board approval when
                                     accounting differences.               required.
                                     Coordinate review by management
                                     and fund auditors.  Notify
                                     custody and transfer agent of
                                     authorized dividend rates in
                                     accordance with Board approved
Frequency: Annually                  policy.  Report dividends to
                                     Board as required.


            TAX (CONT.)
----------------------------------

                                                                                                            Suggested Fund Auditor
Function                                      Investors Bank & Trust           Barclays Global Investors          or Counsel
----------------------------------       ---------------------------------    ---------------------------  ------------------------
Prepare tax returns                      Prepare excise and RIC tax           Review and sign tax return.  A - Review and sign tax
                                         returns.                                                          return as preparer.
Frequency:  Annually

Prepare Form 1099                        Obtain yearly distribution           Review and approve
                                         information.  Calculate 1099         information provided for
                                         reclasses and coordinate with        Form 1099.
Frequency: Annually                      transfer agent.

Prepare other year-end tax-related       Obtain yearly income distribution    Review and approve
disclosures                              information.  Calculate              information provided.
                                         disclosures
                                         (i.e., dividend received
                                         deductions, foreign tax credits,
Frequency: Annually                      tax-exempt income, income by
                                         jurisdiction) and coordinate with
                                         transfer agent.

Schedule C

Fee Schedule*

Exchange Traded Funds
March 8, 2000

Assumptions used in developing the fee schedule:

-The launch of the 36 new funds will begin around May 1, 2000. -BGI will use IBT for securities lending for a minimum of 2.5 years from the date that at least 14 funds are serviced by Investors Bank. -BGI will use IBT for foreign exchange.
-BGI will use IBT for custody, fund accounting, administration and transfer agency services.
-IBT will provide accounting information to BGI for the PCF file.

. DTC/Fed Book Entry $ 3***
. Physical Securities 35
. Options and Futures 18
. GNMA Securities 30
. Principal Paydown 5
. Foreign Currency 18****
. Outgoing Wires 7
. Incoming Wires 5

** These fees assume that trade information is sent to Investors Bank electronically utilizing the same format as we are using today or electronically from NSCC. For non-automated DTC/Fed Book trades the per trade fee will be $10.00.
***There are no transaction charges for the use of Investors Bank Repo product. ****There are no transaction charges for F/X contracts executed by Investors Bank.

. Incremental basis point and transaction fees will be charged for all foreign assets for which we are custodian. The asset based fees and transaction fees vary by country, based upon the global custody fees below. Local duties, script fees, reclaims, registration, exchange fees, and other market charges are out-of-pocket.

. Investors Bank will require the fund to hold all international assets at the subcustodian of our choice.

                                            Per
                   Basis Point            Trade
Country                 Charge           Charge
-------                 ------           ------
Australia                  2.5              $40
Austria                    3.5              $35
Belgium                    3.5              $40
Canada                     2.5              $20
Euroclear                  2.5              $20
France                     2.5              $43
Germany                    2.5              $23
Hong Kong                  3.0              $60
Italy                      2.5              $30
Japan                      2.0              $20
Malaysia                     8              $60
Mexico                       6              $24
Netherlands                3.5              $30
Singapore                    7              $60
Spain                        4              $43
Sweden                     2.5              $35
Switzerland                  4              $45
UK                         3.0              $30
Brazil                      22              $60
Korea                        8              $50
South Africa                 5              $30
Taiwan                      11              $50
Thailand                   7.5              $50

Denmark                    2.5              $43
Finland                    3.5              $50
Ireland                      4              $56
Norway                     2.5              $35
Portugal                    14              $90

                                               Annual Fee
                                            -----------------
First $4 billion in assets                  4.5  Basis Points
Next $8 billion in assets                   4.0  Basis Points
Next $8 billion in assets                   3.0  Basis Points
Assets in excess of $20 billion             1.5  Basis Points

. There will be an incremental .5 basis point fee on each global portfolio.

. There will be a yearly complex minimum of $3,600,000 which includes 36 funds. For each new fund beyond 36 the complex minimum will increase by $100,000 (This fee does not include transactions or global custody). The $3.6 million complex minimum will be billed monthly beginning on May 1, 2000. Any additional basis point fees owed to Investors Bank will be calculated at the end of the first 12 month period (April 31, 2001) based on the above fee schedule and the end of month assets for each of the previous 12 months (May 1, 2000 to April 31, 2001). After the initial 12 months, the complex minimum or basis points, whichever is larger, will be billed on a monthly basis.

. The monthly minimum fee of $300,000 will be billed starting on May 1, 2000. Also, Barclays Global Investors agrees to pay Investors Bank $2.4 million in calendar year 2000.

-Third Party Review ($250/fd/yr)  -InvestView
-Legal Expenses                   -Customized Reporting
-Printing, Delivery & Postage     -Non-Standard Transmissions/Extracts
-Extraordinary Travel Expenses    -Blue Sky ($100/permit)
-Forms and Supplies               -Microfiche

-Pricing (per security/fund/day $.035 equities, $.40 bonds, $.45 int'l)
-Telecommunications (Per month/fund dom $61.25, int'l $77.06) -International Verification ($.50/security/fund/month) -Printing of shareholder reports -Copy fitting -Financial statement report modification (after initially agreed upon parameters) as to style, layout or format.

-Board meeting attendance         -Data Transmissions
-Ad Hoc Reporting                 -Customized Statements

. We allow use of balance credit against fees (excluding out-of-pocket charges) for fund balances arising out of the custody relationship. The monthly earnings allowance is equal to 75% of the 90-day T-bill rate.

      $0-$15 billion in assets             60%/40%.  60% going to the funds
      Assets in excess of $15 billion      70%/30%.  70% going to the funds


D.  Systems
    -------

. The details of any systems work will be determined after a thorough business analysis. Any systems work will be billed on a time and material basis. Investors Bank provides an allowance of 10 system hours for data extract set-up and reporting extract set-up.

. The above fees will be charged against the fund's custodian checking account on the last business day of the month. All fees will be billed monthly.

* This fee schedule assumes the execution of our standard contractual agreements for a term of 3 years and utilizing Investors Bank for custody, fund accounting, transfer agent, administration and ancillary services mentioned above.

Exhibit (h.2)

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the 25th day of April, 2000 by and between iShares TRUST, a business trust established under the laws of the State of Delaware (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company (the "Bank").

WHEREAS, the Bank is duly registered as a transfer agent as provided in
Section 17A(c) of the Securities Exchange Act of 1934, as amended, (the "1934 Act");

WHEREAS, the Fund will issue and redeem shares of each Index Series only in aggregations of shares known as "Creation Units" principally in-kind for portfolio securities of the respective Index Series, as more fully described in the then current prospectus and statement of additional information of the Fund (together, the "Prospectus") included in its registration statement on Form N-1A (the "Registration Statement") Registration Nos. 333-92935 and 811-09729; and

WHEREAS, the shares of each of the Index Series have been approved for listing on the American Stock Exchange LLC ("Amex"), subject to notice of issuance; and

WHEREAS, the Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York ("DTC"), or its nominee, will be the record or registered owner (the "Shareholder") of all shares of each Index Series;

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the Fund and the Bank agree as follows:

1.1 Subject to the terms and conditions set forth in this Agreement, the Fund on behalf of the Index Series hereby employs and appoints the Bank to act, and the Bank agrees to act, as transfer agent for each of the Index Series' authorized and issued shares of beneficial interest ("Shares"), and dividend disbursing agent of the Fund.

1.2 The Bank agrees that it will perform the following services:

(a) In connection with procedures established from time to time by agreement between the Fund and the Bank, the Bank shall:

(i) Receive from the Fund's distributor (the "Distributor") purchase orders from the Authorized Participants (as defined in the Prospectus) for Creation Units received and accepted by or on behalf of the Fund by the Distributor, transmit appropriate trade instructions to the National Securities Clearing Corporation, if applicable, and pursuant to such orders issue the appropriate number of shares of the applicable Index Series in Creation Units and hold such shares in the account of the Shareholder for each of the respective Index Series. It is understood and agreed that the Bank will not be responsible for determining whether any order, if accepted, will result in the depositor of the Fund Deposit (as defined in the Prospectus) owning or appearing to own eighty percent (80%) of the outstanding shares of such Index Series;

(ii) Receive from the Distributor redemption requests; deliver the appropriate documentation thereof to the duly appointed custodian of the Fund (the "Custodian"); generate and transmit, or cause to be generated and transmitted, confirmation of receipt of such redemption requests to the Distributor; transmit appropriate trade instructions to the National Securities Clearing Corporation, if applicable; and pursuant to such orders redeem the appropriate number of shares of the applicable Index Series in Creation Units from the account of the Shareholder for each of the respective Index Series;

(iii) At the appropriate time, cause to be paid over in the appropriate manner monies to the redeeming party;

(iv) Prepare and transmit payments for dividends and distributions declared by the Fund on behalf of an Index Series;

(v) Create and maintain all necessary records including those specified in Article 10 hereof, in accordance with all applicable laws, rules and regulations, including but not limited to records required by Section 31(a) of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules promulgated thereunder and those records pertaining to the various functions performed by it hereunder. All records shall be available for inspection and use by the Fund. Where applicable, such records shall be maintained by the Bank for the periods and in the places required by Rule 31a-2 under the 1940 Act;

(vi) Make available during regular business hours all records and other data created and maintained pursuant to this Agreement for reasonable audit and inspection by the Fund, or any person retained by the Fund. Upon reasonable notice by the Fund, the Bank shall make available during regular business hours its facilities and premises employed in

connection with its performance of this Agreement for reasonable visitation by the Fund, or any person retained by the Fund; and

(vii) Record the issuance of Shares of each Index Series and maintain, pursuant to Rule 17Ad-10(e) under the 1934 Act, a record of the total number of Shares of the Fund which are authorized, based upon data provided to it by the Fund, and issued and outstanding. The Bank shall also provide the Fund on a regular basis with the total number of Shares which are authorized and issued and outstanding but shall not be responsible for, when recording the issuance of Shares, monitoring the issuance of such Shares or compliance with any laws relating to the validity of the issuance or the legality of the sale of such Shares.

(b) In addition to and not in lieu of the services set forth in the above paragraph (a) or in any Schedule hereto, the Bank shall: perform all of the customary services of a transfer agent and dividend disbursing agent for exchange traded funds, including but not limited to: maintaining all Shareholder accounts, preparing Shareholder meeting lists, coordinating the mailing and soliciting of proxies, receiving and tabulating proxies, withholding taxes on all accounts, including nonresident alien accounts, preparing and transmitting statements of account to the Shareholder for all purchases and redemptions of Shares, preparing and mailing activity statements for Shareholders (including dividend and distribution notices and tax information), and providing Shareholder account information. The Fund hereby informs the Bank that as of the date hereof the Shares are exempt from Blue Sky reporting for each State.

(c) Additionally, the Bank shall utilize a system to identify all Share transactions which involve purchase and redemption orders that are processed at a time other than the time of the computation of net asset value per share next computed after receipt of such orders, and shall compute the net effect upon the Index Series of such transactions so identified on a daily and cumulative basis.

1.3 Instructions shall be deemed to be proper instructions hereunder if such instructions are (i) instructions given by an Authorized Person (which shall include the Fund's Distributor), such instructions to be given in such form and manner as the Bank and the Fund shall agree upon from time to time. Oral instructions will be considered proper instructions if the Bank reasonably believes them to have been given by an Authorized Person. The Fund shall cause all oral instructions to be promptly confirmed in writing. The Bank shall act upon and comply with any subsequent proper instruction which modifies a prior instruction and the sole obligation of the Bank with respect to any follow-up or confirmatory instruction shall be to make reasonable efforts to detect any discrepancy between the original instruction and such confirmation and to report such discrepancy to the Fund. The Fund shall be responsible, at the Fund's expense, for taking any action, including any reprocessing, necessary to correct any such discrepancy or error, and to the extent such action requires the Bank to act, the Fund shall give the Bank specific proper instructions as to the action required. Instructions shall include communication effected directly between electro-mechanical or electronic devices, including information transmitted by the Fund's Distributor. The Fund hereby authorizes such use of electro-mechanical or electronic communication and the Fund and the Bank will agree as to procedures which shall afford adequate safeguards for the Fund's assets.

1.4 Authorized Person will mean any of the persons duly authorized to give proper instructions or otherwise act on behalf of the Fund by appropriate resolution of its Board, and set forth in a certificate provided to the Bank.

2.1 Whenever the Fund shall sell or cause to be sold any Shares of an Index Series, the Fund shall deliver or cause to be delivered to the Bank a document duly specifying: (i) the name of the Index Series whose Shares were sold; (ii) the number of Shares sold, trade date, and price; (iii) the amount of money and/or securities to be delivered to the Custodian for the sale of such Shares and specifically allocated to such Index Series; and (iv) in the case of a new account, a new account application or sufficient information to establish an account.

2.2 The Bank will, upon receipt by it of a check or other payment identified by it as an investment in Shares of one of the Index Series and drawn or endorsed to the Bank as agent for, or identified as being for the account of, one of the Index Series, promptly deposit such check or other payment to the appropriate account postings necessary to reflect the investment in the appropriate Index Series. The Bank will notify the Fund (or its designated agent) and the Custodian of all purchases and related account adjustments.

2.3 Under procedures as established by mutual agreement between the Fund and the Bank, the Bank shall issue to the purchaser or its authorized agent such Shares in Creation Units, as he is entitled to receive determined in accordance with the prospectus and any applicable federal law or regulation. In issuing Shares to a purchaser or its authorized agent, the Bank shall be entitled to rely upon the latest proper instructions, if any, previously received by the Bank from the Fund, the purchaser or their authorized agents concerning the delivery of such Shares.

2.4 The Bank shall not issue any Shares of the Fund where it has received a written instruction from the Fund or written notification from any appropriate federal or state authority that the sale of the Shares of the Index Series in question has been suspended or discontinued, and the Bank shall be entitled to rely upon such written instructions or written notification.

2.5 Upon the issuance of any Shares of any Index Series in accordance with foregoing provisions of this Section, the Bank shall not be responsible for the payment of any original issue or other taxes, if any, required to be paid by the Fund in connection with such issuance.

2.6 The Bank may establish such additional rules and regulations governing the transfer or registration of Shares as it may deem advisable and consistent with such rules and regulations generally adopted by transfer agents, or with the written consent of the Fund, any other rules and regulations.

5. [RESERVED]

7.1 The Fund will promptly notify the Bank of the declaration of any dividend or distribution. The Fund shall furnish to the Bank a resolution of the Board of Trustees of the Fund certified by the Secretary (a "Certificate"): (i) authorizing the declaration of dividends on a specified periodic basis and authorizing the Bank to rely on oral instructions or a Certificate specifying the date of the declaration of such dividend or distribution, the date of payment thereof, the record date as of which Shareholders entitled to payment shall be determined and the amount payable per share to Shareholders of record as of such record date and the total amount payable to the Bank on the payment date; or (ii) setting forth the date of the declaration of any dividend or distribution by a Index Series, the date of payment thereof, the record date as of which Shareholders entitled to payment shall be determined, and the amount payable per share to the Shareholders of record as of that date and the total amount payable to the Bank on the payment date.

7.2 The Bank, on behalf of the Fund, shall instruct the Custodian to place in a dividend disbursing account funds equal to the cash amount of any dividend or distribution to be paid out. The Bank will calculate, prepare and mail checks to (at the address as it appears on the records of the Bank), or (where appropriate) credit such dividend or distribution to the account of, Index Series Shareholders, and maintain and safeguard all underlying records.

7.3 The Bank will replace lost checks at its discretion and in conformity with regular business practices.

7.4 The Bank shall not be liable for any improper payments made in accordance with a resolution of the Board of Trustees of the Fund.

7.5 If the Bank does not receive from the Custodian sufficient cash to make payment to all Shareholders of the Fund as of the record date, the Bank shall, upon notifying the Fund, withhold payment to all Shareholders of record as of the record date until such sufficient cash is provided to the Bank and shall not be liable for any claim arising out of such withholding.

10.1 The Bank shall maintain confidential records showing for each Shareholder account in each Index Series, the following: (i) name, address and tax identification number; (ii) number and class, if any, of Shares held; (iii) historical information regarding shareholder accounts, including dividends and distributions and the date and price for each transaction in a shareholder's account; (iv) any stop or restraining order placed against Shareholder's account; (v) information with respect to withholdings; (vi) any dividend address and correspondence relating to the current maintenance of a Shareholder's account; (vii) any information required in order for the Bank to perform the calculations contemplated or required by this Agreement; and (viii) such other information and data as may be required by applicable law.

10.2 Any records required to be maintained by Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act. Such records may be inspected by the Fund during regular business hours upon reasonable notice. The Bank may, at its option at any time, and shall forthwith upon the Fund's demand, turn over to the Fund and cease to retain in the Bank's files, records and documents created and maintained by the Bank in performance of its service or for its protection. At the end of the retention period required by the 1940 Act, such documents will either be turned over to the Fund, or destroyed in accordance with the Fund's authorization.

10.3 Procedures applicable to the services to be performed hereunder may be established from time to time by agreement between the Fund and the Bank. The Bank shall have the right to utilize any shareholder accounting and recordkeeping systems which, in its opinion, qualifies to perform any services to be performed hereunder. The Bank shall keep records relating to the services performed hereunder, in the form and manner as it may deem advisable.

11.2 In addition to the fee paid under Section 11.1 above, the Fund agrees to reimburse the Bank for out-of-pocket expenses or advances incurred by the Bank for the items set out in Appendix B hereto. In addition, any other expenses incurred by the Bank at the request or with the consent of the Fund including, without limitation, any equipment or supplies which the Bank orders or purchases specifically for the Fund, with the approval of the Fund, or which the Fund specifically orders or requires the Bank to purchase, will be reimbursed by the Fund.

11.3 The Fund agrees to pay all fees and reimbursable expenses on the last day of each month in which such services are performed. Postage for mailing of dividends, proxies, reports and other mailings to all shareholder accounts shall be advanced to the Bank by the Fund at least three (3) days prior to the mailing date of such materials. Any waiver or extension by the Bank of time periods shall not constitute a dismissal of any monies due under this Agreement nor shall such waiver or extension apply to any future monies due to the Bank hereunder.

The Bank represents and warrants to the Fund that:

12.1 It is a trust company duly organized and existing and in good standing under the laws of the Commonwealth of Massachusetts.

12.2 It is empowered under applicable laws and by its charter and by-laws to enter into and perform this Agreement.

12.3 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

12.4 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

12.5 It is in full compliance with all applicable federal state and local laws with respect to its duties under this Agreement.

The Fund represents and warrants to the Bank that:

13.1 It is a corporation duly organized and existing and in good standing under the laws of the State of its incorporation as set forth in the preamble hereto.

13.2 It is empowered under applicable laws and by its charter documents and by-laws to enter into and perform this Agreement.

13.3 All proceedings required by said charter documents and by-laws have been taken to authorize it to enter into and perform this Agreement.

13.4 It is a open-end investment company registered under the 1940 Act.

13.5 A registration statement on Form N-1A (including a prospectus and statement of additional information) under the Securities Act of 1933 and the 1940 Act will be effective as of the date the Bank begins to provide services hereunder and will remain effective, and any appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of the Fund being offered for sale.

13.6 When Shares are hereafter issued in accordance with the terms of the Prospectus, such Shares shall be validly issued, fully paid and nonassessable by the Fund.

14.1 Notwithstanding anything in this Agreement to the contrary, in no event shall the Bank or any of its officers, directors, employees or agents (collectively, the "Indemnified Parties") be liable to the Fund or any third party, and the Fund shall indemnify and hold the Bank and the Indemnified Parties harmless from and against any and all loss, damage, liability, actions, suits, claims, costs and expenses, including reasonable legal fees, (a "Claim") arising as a result of any act or omission of the Bank or any Indemnified Party under this Agreement, except for any Claim to the extent such Claim results from the material breach of this Agreement by, or negligence, willful misfeasance or bad faith of, the Bank or any Indemnified Party.

14.2 The Bank shall indemnify and hold the Fund, its Board of Trustees, officers and employees and its agents harmless from and against any and all Claims to the extent any such Claim arises out of the negligent acts or omissions, bad faith, willful misconduct or material breach of this Agreement by the Bank, its officers, directors or employees or any of its agents or subcustodians in connection with the activities undertaken pursuant to this Agreement, provided that the Bank's indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to the Bank.

14.3 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for lost profits or lost revenues or any special, consequential, punitive or incidental damages of any kind whatsoever in connection with this Agreement or any activities hereunder.

14.4 Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, or insurrection, and (iii) other happenings or events beyond the reasonable control or anticipation of the party effected, provided that (A) the effected party has in place appropriate business resumption procedures, systems and facilities and (B) the effected party uses its best efforts to avoid or remove the cause of such losses.

14.5 In performing its duties hereunder, the Bank will be entitled to receive and act upon the advice of independent counsel of its own selection, which may be counsel for the Fund.

14.6 The Bank may rely upon any Proper Instruction which it reasonably believes to be genuine and to be signed or presented by any Authorized Person. The Bank shall not be held to have notice of any change of authority of any Authorized Person until receipt of appropriate written notice thereof has been received by the Bank from the Fund.

14.7 in order that the indemnification provisions contained in this Article 14 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking the indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party seeking indemnification shall give the indemnifying party full and complete authority, information and assistance to defend such claim or proceeding, and the indemnifying party shall have, at its option, sole control of the defense of such claim or proceeding and all negotiations for its compromise or settlement. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent, which consent shall not be unreasonably withheld.

15.1 The Fund shall promptly furnish to the Bank the following:

(a) A certified copy of the resolution of the Trustees of the Fund authorizing the appointment of the Bank hereunder and the execution and delivery of this Agreement.

(b) A copy of the charter documents and by-laws of the Fund and all amendments thereto.

(c) Copies of each vote of the Trustees designating authorized persons to give instructions to the Bank, and a Certificate providing specimen signatures for such authorized persons.

(d) Certificates as to any change in any officer or Trustee of the Fund.

(e) All account application forms and other documents relating to shareholder accounts or relating to any plan, program or service offered by the Fund.

(f) A list of all Shareholders of each Index Series with the name, address and tax identification number of each Shareholder, and the number of Shares of the Index Series held by each, certificate numbers and denominations ( if any certificates have been issued), lists of any account against which stops have been placed, together with the reasons for said stops, and the number of Shares redeemed by the Index Series.

(g) An opinion of counsel for the Fund with respect to the validity of the Shares and the status of such Shares under the Securities Act of 1933.

(h) Copies of the Fund registration statement on Form N-1A (if applicable)as amended and declared effective by the Securities and Exchange Commission and all post-effective amendments thereto.

(i) Such other certificates, documents or opinions as the Bank may reasonably deem necessary or appropriate for the Bank in the proper performance of its duties hereunder.

15.2 The Bank hereby agrees to establish and maintain facilities and procedures reasonably acceptable to the Fund for safekeeping of stock certificates, check forms and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices.

15.3 The Bank shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the 1940 Act and the Rules thereunder, the Bank agrees that all such records prepared or maintained by the Bank relating to the services to be performed by the Bank hereunder are the confidential property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered to the Fund on and in accordance with its request.

15.4 The Bank and the Fund agree that all books, records, information and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law.

15.5 In case of any requests or demands for the inspection of the Shareholder records of the Fund, the Bank will endeavor to notify the Fund and to secure instructions from an authorized officer of the Fund as to such request or demand. The Bank reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be subject to enforcement or other action by any court or regulatory body for the failure to exhibit the Shareholder records to such person.

15.6 (a) The Bank shall, during the period that this Agreement remains in effect, (i) maintain an Errors & Omissions policy of at least $50 million, which policy will insure against all claims sustained by any party (including the Fund) as a result of any actual or alleged wrongful act, error or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in the Bank's agreements with its clients, and (ii) maintain a separate Errors & Omissions policy of at least $25 million, which policy will insure against claims sustained solely by the Fund as a result of any actual or alleged wrongful act, error or omission in the Bank's rendering of or failure to render services in accordance with the terms set forth in this Agreement.

(b) Upon the Fund's written request, the policy referred to in clause (a)(ii) above will be expanded to $50 million when the Fund's total assets reach $25 billion. The Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the cost of the policy referred to in clause
(a)(ii) above. When the policy is expanded to $50 million, the Fund will reimburse (or cause its agent to reimburse) the Bank in advance for the total cost of such expanded policy.

16.1 The term of this Agreement shall be three years commencing upon the date hereof (the "Initial Term"), unless earlier terminated as provided herein.

(a) Either party hereto may terminate this Agreement prior to the expiration of the Initial Term in the event the other party breaches any material provision of this Agreement, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does not cure such violation within 90 days of receipt of such notice.

(b) The Fund may terminate this Agreement prior to the expiration of the Initial Term upon ninety days' prior written notice in the event that:

(i) the Bank's parent, Investors Financial Services Corp. ("IFSC"), fails to maintain a minimum capital level as follows: (i) total stockholders' equity, as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $100 million, and (ii) the sum of (x) total stockholders' equity and (y) the outstanding amount of company-obligated, manditorily redeemable, preferred securities, each as set forth in IFSC's most recent annual or quarterly financial statements, shall be equal to no less than $125 million; or

(ii) the Board of the Fund votes to liquidate the Fund and terminate its registration with the Securities and Exchange Commission other than in connection with a merger or acquisition of the Fund or the Fund's investment adviser.

16.2 Should the Fund exercise its right to terminate under 16.1(b)(ii), all out-of-pocket expenses associated with the movement of records and material will be borne by the Fund.

Additionally, the Bank reserves the right to recover from the Fund any other reasonable expenses associated with such termination.

18.1 Except as provided in Section 18.3 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party.

18.2 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.

18.3 The Bank, may without further consent on the part of the Fund, subcontract for the performance of any of the services to be provided hereunder to third parties, including any affiliate of the Bank.

21.1 This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject hereof whether oral or written.

21.2 In the event any provision of this Agreement shall be held unenforceable or invalid for any reason, the remainder of the Agreement shall remain in full force and effect.

21.3 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts shall together, constitute only one instrument.

For the Fund:

iShares Trust
c/o Fund Administration
Barclays Global Fund Advisers 45 Fremont Street
San Francisco, California 94105 With a copy to: Legal Department

For the Bank:

Investors Bank & Trust Company
200 Clarendon Street, P.O. Box 9130
Boston, Massachusetts 02117-9130

Attention: Steven Gallant, Director, Client Management With a copy to: John E. Henry, General Counsel

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf under their seals by and through their duly authorized officers, as of the day and the year first above written.

iShares TRUST

By:  /s/ Nathan Most
     __________________________
Name:    Nathan Most
Title:   President

INVESTORS BANK & TRUST COMPANY

By:  /s/ Kevin Sheehan
     __________________________
Name:    Kevin Sheehan
Title:   President

Appendix A.......................................... Series or Portfolios

Appendix B.......................................... Fee Schedule

iShares S&P 500                     iShares Dow Jones U.S. Total Market Index     iShares Russell 3000
Index Fund                          Fund                                          Index Fund

iShares S&P 500/BARRA Growth        iShares Dow Jones U.S. Basic Materials        iShares Russell 3000 Growth
Index Fund                          Sector Index Fund                             Index Fund

iShares S&P 500/BARRA Value Index   iShares Dow Jones U.S. Consumer Cyclical      iShares Russell 3000 Value
Fund                                Sector Index Fund                             Index Fund

iShares S&P MidCap 400              iShares Dow Jones U.S. Consumer               iShares Russell 2000
Index Fund                          Non-Cyclical Sector Index Fund                Index Fund

iShares S&P MidCap                  iShares Dow Jones U.S. Energy Sector Index    iShares Russell 2000 Growth
400/BARRA Growth Index Fund         Fund                                          Index Fund

iShares S&P MidCap                  iShares Dow Jones U.S. Financial Sector       iShares Russell 2000 Value
400/BARRA Value Index Fund          Index Fund                                    Index Fund

iShares S&P SmallCap 600 Index      iShares Dow Jones U.S. Healthcare Sector      iShares Russell 1000
 Fund                               Index Fund                                    Index Fund

iShares S&P SmallCap                iShares Dow Jones U.S. Industrial Sector      iShares Russell 1000 Growth
600/BARRA Growth Index Fund         Index Fund                                    Index Fund

iShares S&P SmallCap                iShares Dow Jones U.S. Technology Sector      iShares Russell 1000 Value
600/BARRA Value Index Fund          Index Fund                                    Index Fund

iShares S&P Europe 350              iShares Dow Jones U.S. Telecommunications
Index Fund                          Sector Index Fund

iShares S&P/TSE 60                  iShares Dow Jones U.S. Utilities Sector
Index Fund                          Index Fund

                                    iShares Dow Jones U.S. Chemicals
                                    Index Fund

                                    iShares Dow Jones U.S. Financial Services
                                    Composite Index Fund

iShares Dow Jones U.S. Internet
Index Fund

iShares Dow Jones U.S. Real Estate Index
Fund

Schedule B

Fee Schedule*

Exchange Traded Funds
March 8, 2000

Assumptions used in developing the fee schedule:

-The launch of the 36 new funds will begin around May 1, 2000. -BGI will use IBT for securities lending for a minimum of 2.5 years from the date that at least 14 funds are serviced by Investors Bank. -BGI will use IBT for foreign exchange.
-BGI will use IBT for custody, fund accounting, administration and transfer agency services.
-IBT will provide accounting information to BGI for the PCF file.

A. Transactions**

. DTC/Fed Book Entry $ 3***
. Physical Securities 35
. Options and Futures 18
. GNMA Securities 30
. Principal Paydown 5
. Foreign Currency 18****
. Outgoing Wires 7
. Incoming Wires 5

** These fees assume that trade information is sent to Investors Bank electronically utilizing the same format as we are using today or electronically from NSCC. For non-automated DTC/Fed Book trades the per trade fee will be $10.00.

***There are no transaction charges for the use of Investors Bank Repo product. ****There are no transaction charges for F/X contracts executed by Investors Bank.

. Incremental basis point and transaction fees will be charged for all foreign assets for which we are custodian. The asset based fees and transaction fees vary by country, based upon the global custody fees below. Local duties, script fees, reclaims, registration, exchange fees, and other market charges are out-of-pocket.

. Investors Bank will require the fund to hold all international assets at the subcustodian of our choice.

                                                  Per
                          Basis Point           Trade
Country                        Charge          Charge
-------                        ------          ------
Australia                         2.5             $40
Austria                           3.5             $35
Belgium                           3.5             $40
Canada                            2.5             $20
Euroclear                         2.5             $20
France                            2.5             $43
Germany                           2.5             $23
Hong Kong                         3.0             $60
Italy                             2.5             $30
Japan                             2.0             $20
Malaysia                            8             $60
Mexico                              6             $24
Netherlands                       3.5             $30
Singapore                           7             $60
Spain                               4             $43
Sweden                            2.5             $35
Switzerland                         4             $45
UK                                3.0             $30
Brazil                             22             $60
Korea                               8             $50
South Africa                        5             $30
Taiwan                             11             $50
Thailand                          7.5             $50

Denmark                      2.5             $43
Finland                      3.5             $50
Ireland                        4             $56
Norway                       2.5             $35
Portugal                      14             $90

                                   Annual Fee
                                   ----------
First $4 billion in assets         4.5  Basis Points
Next $8 billion in assets          4.0  Basis Points
Next $8 billion in assets          3.0  Basis Points
Assets in excess of $20 billion    1.5  Basis Points

. There will be an incremental .5 basis point fee on each global portfolio.

. There will be a yearly complex minimum of $3,600,000 which includes 36 funds. For each new fund beyond 36 the complex minimum will increase by $100,000 (This fee does not include transactions or global custody). The $3.6 million complex minimum will be billed monthly beginning on May 1, 2000. Any additional basis point fees owed to Investors Bank will be calculated at the end of the first 12 month period (April 31, 2001) based on the above fee schedule and the end of month assets for each of the previous 12 months (May 1, 2000 to April 31, 2001). After the initial 12 months, the complex minimum or basis points, whichever is larger, will be billed on a monthly basis.

. The monthly minimum fee of $300,000 will be billed starting on May 1, 2000. Also, Barclays Global Investors agrees to pay Investors Bank $2.4 million in calendar year 2000.

-Third Party Review ($250/fd/yr)  -InvestView
-Legal Expenses                   -Customized Reporting
-Printing, Delivery & Postage     -Non-Standard Transmissions/
                                   Extracts
-Extraordinary Travel Expenses    -Blue Sky ($100/permit)
-Forms and Supplies               -Microfiche

-Pricing (per security/fund/day $.035 equities, $.40 bonds, $.45 int'l)
-Telecommunications (Per month/fund dom $61.25, int'l $77.06) -International Verification ($.50/security/fund/month) -Printing of shareholder reports -Copy fitting -Financial statement report modification (after initially agreed upon parameters) as to style, layout or format.

          -Board meeting attendance         -Data Transmissions
          -Ad Hoc Reporting                 -Customized Statements


B.   Domestic Balance Credit
     -----------------------

. We allow use of balance credit against fees (excluding out-of- pocket charges) for fund balances arising out of the custody relationship. The monthly earnings allowance is equal to 75% of the 90-day T-bill rate.

. The fee schedule is predicated on Investors Bank performing cash management, foreign exchange and securities lending for the portfolios. Securities lending revenue is split with the funds and Investors Bank as follows:

$0-$15 billion in assets 60%/40%. 60% going to the funds

Exhibit (h.3.i)

This Sublicense Agreement (the "Agreement") is made as of April 25, 2000, by and between Barclays Global Investors, N.A., a national banking association organized under the

laws of the United States ("BGI") and iShares Trust, a business trust established under the laws of the State of Delaware ("iShares").

RECITALS

WHEREAS, pursuant to that certain "License Agreement" dated April 27, 1999 (the "License Agreement") between The McGraw-Hill Companies, Inc., a New York corporation, acting through its unincorporated division Standard & Poor's ("S&P") and BGI, BGI obtained a license to use in connection with "BGI Funds" (as that term is defined in the License Agreement) certain stock indexes owned and managed by S&P (the "S&P Indexes"), along with associated marks (the "S&P Marks"); and

WHEREAS, BGI has the right pursuant to paragraph 3 of the License Agreement to sublicense its rights thereunder to any BGI Fund, of which iShares Trust is one; and

WHEREAS, iShares Trust wishes to use the S&P Indexes and the S&P Marks in connection with the establishment of a series of exchange traded funds (each, an "ETF"), each based on a S&P Index, and to use the S&P Marks in connection with the identification and marketing of the ETFS and in connection with making disclosures about the ETFS under applicable laws, rules and regulations; and

WHEREAS, BGI wishes to grant a sublicense to Ishares Trust for the use of the S&P Indexes and S&P Marks;

NOW THEREFORE, the parties agree as follows:

iShares Trust's right to use the S&P Indexes and the S&P Marks shall terminate immediately.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date first above written, with intent to be bound hereby.

BARCLAYS GLOBAL INVESTORS, N.A.             iSHARES TRUST
By:  /s/ Michael Latham                By:  /s/ Nathan Most

Its: Managing Director                 Its: President

Exhibit A to Sublicense Agreement dated April 25, 2000

iShares S&P 500 Index Fund

iShares S&P 500/BARRA Growth Index Fund

iShares S&P 500/BARRA Value Index Fund

Ishares S&P MidCap 400 Index Fund

iShares S&P MidCap400/BARRA Growth Index Fund

iShares S&P MidCap400/BARRA Value Index Fund

iShares S&P SmallCap 600 Index Fund

iShares S&P SmallCap 600/BARRA Growth Index Fund

iShares S&P SmallCap 600/BARRA Value Index Fund

iShares S&P Europe 350 Index Fund

Exhibit (h.3.ii)

This Sublicense Agreement (the "Agreement") is made as of April 25, 2000, by and between Barclays Global Investors, N.A., a national banking association organized under the laws of the United States ("BGI") and iShares Trust, a business trust established under the laws of the State of Delaware ("iShares").

RECITALS

WHEREAS, pursuant to that certain "License Agreement" dated December 9, 1999 (the "License Agreement") between Dow Jones & Company, Inc.(Dow Jones), a Delaware corporation, and BGI, BGI obtained a license to use in connection with "BGI Funds" (as that term is defined in the License Agreement) certain stock indexes owned and managed by Dow Jones (the "Dow Jones Indexes"), along with associated marks (the "Dow Jones Marks"); and

WHEREAS, BGI has the right pursuant to paragraph 3 of the License Agreement to sublicense its rights thereunder to any BGI Fund, of which iShares Trust is one; and

WHEREAS, iShares Trust wishes to use the Dow Jones Indexes and the Dow Jones Marks in connection with the establishment of a number of exchange traded funds (each, an "ETF"), each based on a Dow Jones Index, and to use the Dow Jones Marks in connection with the identification and marketing of the ETFS and in connection with making disclosures about the ETFS under applicable laws, rules and regulations; and

WHEREAS, BGI wishes to grant a sublicense to iShares Trust for the use of the Dow Jones Indexes and Dow Jones Marks;

NOW THEREFORE, the parties agree as follows:

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date first above written, with intent to be bound hereby.

BARCLAYS GLOBAL INVESTORS, N.A.                 iSHARES TRUST

By:  /s/ Michael Latham                 By:  Nathan Most

Its: Managing Director                  Its: President

Exhibit A to Sublicense Agreement dated April 25, 2000

iShares Dow Jones U.S. Total Market Index Fund

iShares Dow Jones U.S. Basic Materials Sector Index Fund

iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund

iShares Dow Jones U.S. Consumer Non-Cyclical Sector Index Fund

iShares Dow Jones U.S. Energy Sector Index Fund

iShares Dow Jones U.S. Financial Sector Index Fund

iShares Dow Jones U.S. Healthcare Sector Index Fund

iShares Dow Jones U.S. Industrial Sector Index Fund

iShares Dow Jones U.S. Technology Sector Index Fund

iShares Dow Jones U.S. Telecommunications Sector Index Fund

iShares Dow Jones U.S. Utilities Sector Index Fund

iShares Dow Jones U.S. Chemicals Index Fund

iShares Dow Jones U.S. Financial Services Composite Index Fund

iShares Dow Jones U.S. Internet Index Fund

Exhibit (h.3.iii)

This Sublicense Agreement (the "Agreement") is made as of April 25, 2000, by and between Barclays Global Investors, N.A., a national banking association organized under the laws of the United States ("BGI") and iShares Trust, a business trust established under the laws of the State of Delaware ("iShares").

RECITALS

WHEREAS, pursuant to that certain "License Agreement" dated December 17, 1999 (the "License Agreement") between Frank Russell Company ("FRC"), a Washington corporation, and BGI, BGI obtained a license to use in connection with "BGI Funds" (as that term is defined in the License Agreement) certain stock indexes owned and managed by FRC (the "FRC Indexes"), along with associated marks (the "FRC Marks"); and

WHEREAS, BGI has the right pursuant to paragraph 3 of the License Agreement to sublicense its rights thereunder to any BGI Fund, of which iShares Trust is one; and

WHEREAS, iShares Trust wishes to use the FRC Indexes and the FRC Marks in connection with the establishment of a number of exchange traded funds (each, an "ETF"), each based on a FRC Index, and to use the FRC Marks in connection with the identification and marketing of the ETFS and in connection with making disclosures about the ETFS under applicable laws, rules and regulations; and

WHEREAS, BGI wishes to grant a sublicense to iShares Trust for the use of the FRC Indexes and FRC Marks;

NOW THEREFORE, the parties agree as follows:

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date first above written, with intent to be bound hereby.

BARCLAYS GLOBAL INVESTORS, N.A. iSHARES TRUST

By:  /s/ Michael Latham                     By:  /s/ Nathan Most

Its:  Managing Director                     Its:  President

Exhibit A to Sublicense Agreement dated April 25, 2000

iShares Russell 3000 Index Fund

iShares Russell 3000 Growth Index Fund

iShares Russell 3000 Value Index Fund

iShares Russell 2000 Index Fund

iShares Russell 2000 Growth Index Fund

iShares Russell 2000 Value Index Fund

iShares Russell 1000 Index Fund

iShares Russell 1000 Growth Index Fund

Exhibit (i)

May 1, 2000

iShares Trust
c/o Barclays Global Fund Advisors
45 Fremont Street
San Francisco, CA 94105

Ladies and Gentlemen:

We are furnishing this opinion with respect to the proposed offer and sale from time to time of an indefinite number of units of beneficial interest, without par value (the "Shares"), of iShares Trust (the "Trust"), a Delaware business trust, in registration under the Securities Act of 1933 by a Registration Statement on Form N-1A (File No. 333-92935) as amended from time to time (the "Registration Statement").

We have acted as counsel to the Trust since its inception, and we are familiar with the actions taken by its Trustees to authorize the issuance of the Shares. We have reviewed the Declaration of Trust, the By-laws, and the minute books of the Trust, and such other certificates, documents and opinions of counsel as we deem necessary for the purpose of this opinion.

We have reviewed the Trust's Notification of Registration on Form N-8A under the Investment Company Act of 1940. We have also reviewed the Trust's Registration Statement, including all post-effective amendments thereto, filed or to be filed with the Securities and Exchange Commission.

In our review we have assumed the genuineness of all signatures, the authenticity and completeness of all documents purporting to be originals (whether reviewed by us in original or in copy form), and the conformity to the originals of all documents purporting to be copies.

iShares Trust
May 1, 2000

We have assumed the appropriate action will be taken to register or qualify the sale of the Shares under any applicable state and federal laws regulating sales and offerings of securities.

Based upon the foregoing, we are of the opinion that:

1. The Trust is a business trust validly existing under the laws of the State of Delaware. The Trust is authorized under its Declaration of Trust to issue an unlimited number of Shares in series representing interests in a number of separate investment portfolios and in such other series or classes as the Trustees may hereafter duly authorize.

2. Upon the issuance of any Shares of any of the series or classes of the Trust for payment therefor as described in, and in accordance with the Registration Statement and the Declaration of Trust and By-laws of the Trust, the Shares so issued will be validly issued, fully paid and non- assessable.

This opinion is intended only for your use in connection with the offering of Shares and may not be relied upon by any other person.

We hereby consent to the inclusion of this opinion as Exhibit (i) to the Trust's Post-Effective Amendment No. 2 to be filed with the Securities and Exchange Commission and to the reference to our firm under the caption "Counsel" in the Statement of Additional Information filed as part of such Amendment.

Very truly yours,

/s/ Morgan, Lewis & Bockius, LLP
--------------------------------

Morgan, Lewis & Bockius, LLP

/s/ PricewaterhouseCoopers
--------------------------
San Francisco, CA
May 12, 2000

/s/ Thomas E. Flanigan                       /s/ Richard K. Lyons
--------------------------                   ------------------------
Name: Thomas E. Flanigan                     Name: Richard K. Lyons



/s/ Nathan Most                              /s/ George G.C. Parker
--------------------------                   ------------------------
Name: Nathan Most                            Name: George G.C. Parker

By: /s/ James R. Foggo, Esq.

    ------------------------

By    /s/ Susan C. Mosher
----------------------------------------
        [Authorized Officer's Signature]

By:    /s/ Kevin Sheehan
----------------------------------------
        [Authorized Officer's Signature]

                                                                                                         xxxx
                                                             CUSIP                           Tax
Name                                                         Number         Ticker           ID#
----                                                         ------         ------           ---
iShares S&P MidCap 400 Index Fund                           464287507         IJH         94-3351279
iShares S&P 500 Index Fund                                  464287200         IVV         94-3361276
iShares S&P 500/BARRA Growth Index Fund                     464287309         IVW         94-3351277
iShares S&P 500/BARRA Value Index Fund                      464287408         IVE         94-3351278
iShares S&P SmallCap 600 Index Fund                         464287804         IJR         94-3351285
iShares Russell 1000 Index Fund                             464287622         IWB         94-3351327
iShares Russell 1000 Growth Index Fund                      464287614         IWF         94-3351328
iShares Russell 1000 Value Index Fund                       464287598         IWD         94-3351329
iShares Russell 2000 Index Fund                             464287655         IWM         94-3351322
iShares Russell 3000 Index Fund                             464287689         IWV         94-3351318
iShares Dow Jones U.S Financial Sector Index Fund           464287788         IYF         94-3351300
iShares Dow Jones U.S. Telecommunications Sector            464287713         IYZ         94-3351316
 Index Fund
iShares Dow Jones Internet Index Fund                       464287747         IYV         94-3351309
iShares Dow Jones U.S. Technology Sector Index Fund         464287721         IYW         94-3351314

iShares S&P Europe 350 Index Fund                           464287861         IEV         94-3351288
iShares S&P/TSE 60 Index Fund                               464287853         IKC         94-3351289
iShares Dow Jones U.S. Total Market Index Fund              464287846         IYY         94-3351291
iShares Dow Jones U.S. Basic Materials Sector Index         464287838         IYM         94-3351292
 Fund
iShares Dow Jones U.S. Consumer Cyclical Sector             464287580         IYC         94-3351294
 Index Fund
iShares Dow Jones U.S. Consumer Non-Cyclical Sector         464287812         IYK         94-3351295
 Index Fund
iShares Dow Jones U.S. Energy Sector Index Fund             464287796         IYE         94-3351296
iShares Dow Jones U.S. Healthcare Sector Index Fund         464287762         IYH         94-3351306
iShares Dow Jones U.S. Industrial Sector Index Fund         464287754         IYJ         94-3351307
iShares Dow Jones U.S. Utilities Sector Index Fund          464287697         IDU         94-3351317
iShares Dow Jones U.S. Chemicals Index Fund                 464287820         IYD         94-3351293

iShares Dow Jones U.S. Real Estate Index Fund               464287739         IYR         94-3351312
iShares Dow Jones U.S. Financial Services Index Fund        484287770         IYG         94-3351305

iShares S&P MidCap 400/BARRA Growth Index Fund              464287606         IJK         94-3351281
iShares S&P MidCap 400/BARRA Value Index Fund               464287705         IJJ         94-3351282
iShares S&P SmallCap 600/BARRA Growth Index Fund            464287887         IJT         94-3351286
iShares S&P SmallCap 600/BARRA Value Index Fund             464287879         IJS         94-3351287
iShares S&P 100 Index Fund                                  464287101         IXO         94-3351275
iShares Russell 2000 Growth Index Fund                      464287648         IWO         94-3351324
iShares Russell 2000 Value Index Fund                       464287630         IWN         94-3351325
iShares Russell 3000 Growth Index Fund                      464287671         IWZ         94-3351319
iShares Russell 3000 Value Index Fund                       464287663         IWW         94-3351321

     CUSIP Number               Share Total             Offering ($) Value
-----------------------   ------------------------  --------------------------

                                                                      SCHEDULE B
                                                                      ----------

Independent Trustees         Part A
--------------------
Interested Trustees          Part B
-------------------
Trust Officers               Part C
--------------
Natural Control Persons      Part D
        -------