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Barclays Global Investors Announces Launch of iShares(R) Lehman Mortgage-Backed Securities Exchange Traded Fund

First ETF to Cover Mortgage-Backed Securities

Barclays Global Investors (BGI) announced today that the iShares Lehman MBS Fixed-Rate Bond Fund (AMEX: MBB) began trading on the American Stock Exchange, extending the choices ETF investors have with fixed income asset classes. This expands the fixed income iShares family to a total of 15 funds. The new fund's annual expense ratio is 0.25%.

"Many investors have recognized that iShares fixed income funds help clear the opaqueness of fixed income investing that some investors experience. iShares has now brought this same level of transparency to the U.S. mortgage market," said Lee Kranefuss, CEO of BGI's Intermediary and Exchange Traded Funds Business. "For the first time investors are able to observe intra-day pricing of a basket of mortgage securities, and have the flexibility to implement their market views throughout the trading day. Investors can place limit and stop-loss orders on the iShares MBS Fund that allow them to better time entry and exit into the market, and the fund can be shorted on a downtick, making it a valuable risk management tool."

The underlying index is market capitalization weighted and measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of the Government National Mortgage Association ("GNMA"), Federal National Mortgage Association ("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"). The underlying index includes securities issued by GNMA, FHLMC, and FNMA that have 30-, 20-, 15-year and balloon securities that have a remaining maturity of at least one year and have more than $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed-rate and non-convertible. As of February 1, 2007, there were 387 issues included in the underlying index. The fund uses a representative sampling strategy in seeking to track the underlying index.

The iShares Funds are index funds that are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account.

Carefully consider the funds' investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the funds' prospectuses, which may be obtained by calling 1-800-iShares or by visiting www.ishares.com. Read the prospectus carefully before investing.

BGI is one of the world's largest asset managers(1) and a leading global provider of investment management products and services. It has over 2,900 institutional clients and over $1.8 trillion of assets under management as of 12/31/06. It transformed the investment industry by creating the first index strategy in 1971 and the first quantitative active strategy in 1979. BGI is the global product leader in exchange traded funds (iShares) with over 190 funds for institutions and individuals trading in fifteen markets. Globally, BGI and its affiliates have approximately $287 billion of iShares assets under management. BGI is a majority-owned subsidiary of Barclays Bank PLC.

There are risks involved with investing, including possible loss of principal. Bonds and bond funds will generally decrease in value as interest rates rise. Mortgage-backed securities are subject to prepayment and extension risk and therefore react differently to changes in interest rates than other bonds. Small movements in interest rates may quickly and significantly reduce the value of certain mortgage-backed securities. With short sales, you risk paying more for a security than you received from its sale.

The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an advisor to the Funds. Barclays Global Investors Services (BGIS) assists in the marketing of the Funds. BGFA and BGIS are subsidiaries of Barclays Global Investors, N.A., which is a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.

© 2007 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

(1) Source: "P&I/Watson Wyatt World 500," Pensions & Investments, September 4, 2006.