<PAGE>
As filed with the Securities and Exchange Commission on February 10, 1995
Registration No. 33-85710
811-8734
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 2 [x]
Post-Effective Amendment No. [ ]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 2 [x]
(Check appropriate box or boxes)
The CountryBasketTM Index Fund, Inc.
(Exact name of registrant as specified in charter)
c/o Deutsche Bank Securities Corporation
(Investment Adviser)
31 West 52nd Street
New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 474-8000
Robert Lynch
c/o Deutsche Bank Securities Corporation (Investment Adviser)
31 West 52nd Street
New York, New York 10019
(Name and Address of Agent for Service)
Copies to:
Stephen K. West, Esq. Tuuli-Ann Ristkok, Esq.
Sullivan & Cromwell Donovan Leisure Newton & Irvine
125 Broad Street 30 Rockefeller Plaza
New York, New York 10004 New York, New York 10112
Approximate date of proposed public offering: As soon as
practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
-----------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine. <PAGE>
<PAGE>
Note
This Amendment to the Registration Statement of The
CountryBasketTM Index Fund, Inc. (the "Fund"), formerly Eurofund, Inc.,
contains two prospectuses and related SAIs.
The first prospectus and related SAI apply to an offering by the
Fund of its shares. In this "Fund-Only" structure, sales of shares of
each Fund series (a "Series") will only be made in aggregations of
shares constituting a "Creation Unit". For example, an investor seeking
to purchase shares of the Germany Index Series from the Fund must
purchase shares in aggregations of 100,000 Germany Series shares. Each
aggregation of 100,000 Germany Series shares thus constitutes a
Creation Unit for that Series. Likewise, redemptions of Series shares
may only be made in Creation Unit size aggregations (e.g., 100,000
shares in the case of the Germany Series). An investor may not redeem
shares of any Series in less than Creation Unit size aggregations. The
number of shares constituting a Creation Unit for each Fund Series
differs and is described in the Prospectus. Application will be made to
list the shares of each Fund Series (referred to as CB TM Shares) on
the New York Stock Exchange, Inc. (the "NYSE"). This "Fund-Only"
prospectus and SAI, first filed with the Securities and Exchange
Commission (the "Commission") as part of Amendment No. 1 to the Fund's
Registration Statement, have been amended as described in the
transmittal letter, dated February 10, 1995, from Stephen K. West and
Tuuli-Ann Ristkok to the Commission.
The second prospectus and related SAI apply to an offering by the
Fund in which shares of the Fund may be exchanged for redeemable units
("Redeemable CB TM Units") of a separate unit trust. The Redeemable CB TM
Units may be separated into identical fractional components (for
example, 100,000 fractional components in the case of the Germany
Redeemable CB TM Unit). Application will be made to list the fractional
components on the NYSE. The fractional components will not be
redeemable. This prospectus and related SAI are identical to those
filed with Amendment No. 1 to the Fund's Registration Statement on
December 2, 1994.
Only one of the two prospectuses and the related SAI will be used
upon the effectiveness of the Registration Statement. <PAGE>
<PAGE>
[FUND-ONLY VERSION]
THE COUNTRYBASKET(TM) INDEX FUND, INC.
CROSS-REFERENCE SHEET
<TABLE>
Part A
<CAPTION>
Form N-1A
Item Number Caption in Prospectus
<S> <C>
1. Cover Page . . . . . . . . . . . . . Outside Cover Page of Prospectus
2. Synopsis . . . . . . . . . . . . . . Prospectus Summary; Summary of
Fund Expenses
3. Condensed Financial
Information . . . . . . . . . . . . Not applicable
4. General Description of
Registrant. . . . . . . . . . . . .
The Fund--The Fund and its
Investment Objective;--Investment
Policies;--Investment Considera-
tions and Risks;--FT-Actuaries
World Indices;--The FT Index
Components;--Lending of
Securities;--Investment
Restrictions of the Fund
5. Management of the Fund . . . . . . . The Fund--Board of Directors;--
Investment Management; Fees;--
Administrator; --Custodian
and Transfer Agent
5A. Management's Discussion of
Fund Performance . . . . . . . . . Not applicable
6. Capital Stock and
Other Securities . . . . . . . . . The Fund--CB(TM) Shares;--Capital
Stock; Available Information;--
Dividends and Capital Gains
Distributions;--Tax Matters
7. Purchase of Securities
Being Offered . . . . . . . . . . . The Fund--Purchase of Fund Shares
in Creation Unit Aggregations;
--Distributor;--Fees; Back Cover
of Prospectus;
8. Redemption or Repurchase. . . . . . . The Fund--Redemption of Fund
Shares in Creation Unit
Aggregations
9. Pending Legal Proceedings . . . . . . Not applicable
<PAGE>
<PAGE> 2
Part B
Form N-1A Caption in Prospectus or
Item Number Statement of Additional
Information ("SAI")
10. Cover Page . . . . . . . . . . . . . Outside Front Cover Page of SAI
11. Table of Contents . . . . . . . . . . Table of Contents
12. General Information and
History . . . . . . . . . . . . . . General Description of The Fund
13. Investment Objectives and
Policies. . . . . . . . . . . . . . The Fund--The CountryBasket(TM)
Index Fund, Inc. and its Invest-
ment Objective (Prospectus); The
Fund--Investment Policies
(Prospectus); The Fund--Invest-
ment Restrictions of the Fund
(Prospectus); Investment Policies
and Restrictions (SAI); Brokerage
Transactions (SAI)
14. Management of the Fund. . . . . . . . The Fund--Board of Directors
(Prospectus); Management of the
Fund (SAI)
15. Control Persons and Principal
Holders of Securities . . . . . . . Capital Stock and Shareholder
Reports (SAI); Management of the
Fund (SAI)
16. Investment Advisory and
Other Services . . . . . . . . . . Investment Management
(Prospectus); The Fund--Fees
(Prospectus); Purchasing Fund
Shares in Creation Unit Aggrega-
tions (SAI); Administrator
(Prospectus); The Fund--Custodian
and Transfer Agent (Prospectus);
Investment Advisory, Management
and Administrative Services--
The Investment Adviser, --The
Administrator, Custodian And
Transfer Agent (SAI); Counsel and
Independent Accountants (SAI)
17. Brokerage Allocation and
Other Practices . . . . . . . . . . The Fund--Investment Management
(Prospectus); Brokerage Trans-
actions (SAI)
<PAGE>
<PAGE> 3
18. Capital Stock and Other
Securities . . . . . . . . . . . . The Fund--CB(TM) Shares
(Prospectus); The Fund--Capital
Stock (Prospectus); Capital Stock
and Shareholder Reports (SAI);
Taxes (SAI)
19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . . . . The Fund--Creation Units
(Prospectus); The Fund--Purchase
of Fund Shares in Creation Unit
Aggregations (Prospectus); The
Fund--Redemption of Fund Shares
in Creation Unit Aggregations
(Prospectus); Purchasing Fund
Shares in Creation Unit
Aggregations (SAI); Redemption of
Fund Shares in Creation Unit
Aggregations(SAI); Determining
Net Asset Value (SAI)
20. Tax Status . . . . . . . . . . . . . The Fund--Tax Matters
(Prospectus); Taxes (SAI)
21. Underwriters . . . . . . . . . . . . The Fund--Distributor
(Prospectus); Purchasing
Fund Shares in Creation Unit
Aggregations (SAI)
22. Calculation of Performance
Data . . . . . . . . . . . . . . . Not applicable
23. Financial Statements . . . . . . . . Statement of Assets and
Liabilities (SAI)
Part C
Information required to be included in Part C is set forth under the
appropriate item heading.<PAGE>
<PAGE> FRONT
SUBJECT TO COMPLETION DATED FEBRUARY 10, 1995
[FUND-ONLY] PROSPECTUS
THE COUNTRYBASKET TM INDEX FUND, INC.
The CountryBasket TM Index Fund, Inc. (the "Fund") is a management
investment company organized as a series fund, with each series of
shares (a "Series") representing a component of the FT-Actuaries World
Indices(TM) (the "FT Index") based on equity securities trading in the
markets of a particular country or equity securities representing a
particular geographical region or industry sector.
The initial nine Series offered by this Prospectus are the
Australia Index Series, the France Index Series, the Germany Index
Series, the Hong Kong Index Series, the Italy Index Series, the Japan
Index Series, the South Africa Index Series, the UK Index Series, and
the US Index Series. The Board of Directors may authorize additional
series.
The investment objective of each of the initial nine Series is to
provide investment results that substantially correspond to the price
and yield performance of its corresponding country component of the FT
Index.
The shares of common stock of each Series offered hereby are
sometimes referred to herein as "CB TM Shares". Application will be made
to list the CB TM Shares for trading on the New York Stock Exchange, Inc.
(the "NYSE"). Except in the Creation Unit size aggregations described
below, the CB TM Shares are not redeemable securities of the Fund. It is
expected that the non-redeemable CB TM Shares will trade on the NYSE
during the day at prices that differ to some degree from their net
asset value. See "The Fund Determination of Net Asset Value";
"Exchange Listing and Trading" and "Investment Considerations and
Risks".
The Fund will issue and redeem shares of each Series only in
aggregations of a specified number of shares for such Series (each, a
"Creation Unit") at their net asset value principally for an in-kind
portfolio of equity securities of the relevant FT Index component,
together with some cash. The number of CB TM Shares constituting a
Creation Unit will be either 100,000 or 75,000 CB TM Shares, depending on
the Series. See "The Fund Purchase and Issuance of Fund Shares in
Creation Unit Aggregations" and "Redemption of Fund Shares in Creation
Unit Aggregations".
Investors may not redeem CB TM Shares in less than Creation Unit
aggregations.
Deutsche Bank Securities Corporation, a subsidiary of Deutsche
Bank AG, will serve as investment adviser to each Series of the Fund,
providing investment advisory, management and certain administrative
services. SSC Distribution Services, Inc. is the distributor of the
Fund. See "The Fund Investment Management" and "--Distributor".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the
Fund that an investor should know before investing. It should be read
and retained for future reference. A Statement of Additional Information
dated , 1995, provides further discussion of certain topics
referred to in this Prospectus and other matters which may be of interest
to investors. The Statement of Additional Information has been filed with
the Securities and Exchange Commission and is incorporated herein by
reference. The Statement of Additional Information may be obtained without
charge by writing to the Fund or the Distributor (at its address set forth
on the back cover of this Prospectus). The Fund's address is c/o Deutsche
Bank Securities Corporation, 31 West 52nd Street, New York, New York 10019.
<PAGE>
<PAGE> 1
"FT-Actuaries World Indices", "FT-Actuaries World Index" and
"FTAWI" are trade and service marks of The Financial Times Limited and
used under license by DBSC. The Fund is an authorized sublicensee
thereof.
Distributor:
SSC Distribution Services, Inc.
Investor Information: 1-800-328-7408
Prospectus dated , 1995
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE> 2
THE FT-ACTUARIES WORLD INDICES ( THE "FT INDEX") (COPYRIGHT 1995)
ARE OWNED BY AND JOINTLY COMPILED BY THE FINANCIAL TIMES LIMITED,
GOLDMAN, SACHS & CO., AND NATWEST SECURITIES LIMITED (THE
"COMPILERS") IN CONJUNCTION WITH THE INSTITUTE OF ACTUARIES AND
THE FACULTY OF ACTUARIES (THE "ACTUARIES").
NONE OF THE COMPILERS OR THE ACTUARIES IS INTENDING BY THIS DOCU-
MENT TO OFFER OR SOLICIT TO BUY OR SELL ANY SECURITIES. EACH OF
THE COMPILERS, THE MEMBERS OF THE ACTUARIES AND THEIR RESPECTIVE
CLIENTS AND OFFICERS MAY HAVE A POSITION OR ENGAGE IN
TRANSACTIONS IN ANY OF THE SECURITIES MENTIONED HEREIN.
NONE OF THE COMPILERS OR THE ACTUARIES MAKES ANY WARRANTY
EXPRESSLY OR IMPLIEDLY AS TO THE MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE FT INDEX OR ANY PRODUCT OR SECURITIES
DESCRIBED IN THIS DOCUMENT (THE "PRODUCTS") OR IS RESPONSIBLE FOR
THE CONSTRUCTION OR OPERATION OF THE PRODUCTS OR FOR THE PERFOR-
MANCE OF OR FOR ANY ERROR IN THE FT INDEX OR THE PRODUCTS OR IS
UNDER ANY OBLIGATION TO ADVISE ANY PERSON OF ANY ERROR IN THE FT
INDEX OR THE PRODUCTS. NONE OF THEM GIVES ANY ASSURANCE REGARDING
THE CONTINUED CALCULATION OR PUBLICATION OF THE FT INDEX OR ANY
CHANGES IN THE CONSTITUENTS OR IN THE METHODOLOGY USED IN ITS
CALCULATION.
Unless otherwise specified, all references in this Prospectus to
"dollars", "US $" or "$" are to United States dollars, all references
to "A$" are to Australian dollars, all references to "FF" are to the
French francs, all references to "DM" are to the Deutsche mark, all
references to "HK $" are to Hong Kong dollars, all references to "LL"
are to Italian lira, all references to "Y" are to Japanese Yen, all
references to "CR" are to South African commercial rands and all
references to "L" are to pounds sterling. On __________, 1995, the noon
buying rates in New York City for cable transfers payable in the
applicable currency, as certified for customs purposes by the Federal
Reserve Bank of New York, were as follows for each US $1.00: A$
____________, FF ____________, DM ____________, HK$ ____________,
____________, Y ____________, CR ____________, and L ____________.
Some numbers in this Prospectus have been rounded. All US-dollar
equivalents provided in this Prospectus are calculated at the exchange
rate prevailing on the date to which the corresponding foreign currency
amount refers.
<PAGE>
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and in the Statement
of Additional Information.
The Fund and its
Investment Objective The CountryBasketTM Index Fund, Inc.,
a Maryland corporation (the "Fund"),
is a non-diversified management
investment company organized as a
series fund. Each series of shares (a
"Series") of the Fund seeks to provide
investment results that substantially
correspond to the price and yield
performance of its corresponding
country component of the FT-Actuaries
World Indices(TM) (the "FT Index").
The initial nine Series of the Fund
are the Australia Index Series, the
France Index Series, the Germany Index
Series, the Hong Kong Index Series,
the Italy Index Series, the Japan
Index Series, the South Africa Index
Series, the UK Index Series and the US
Index Series. Such Series represent
separate portfolios of equity
securities, each substantially
corresponding to the composition and
weighting of its respective country
component of the FT Index. There can
be no assurance that the investment
objective of any Series will be
achieved. See "The Fund--The Country
BasketTM Index Fund, Inc. and its
Investment Objective". The net asset
value of shares of each Series will
fluctuate. See "The Fund Determination
of Net Asset Value".
CB TM Shares The shares of common stock of each
Series are sometimes referred to
herein as the "CB TM Shares". Except in
the Creation Unit aggregations
referred to below, CB TM Shares are not
redeemable securities of the Fund.
Trading of CB TM Shares
on the New York Stock
Exchange Application will be made to list the
CB TM Shares of each Series for trading
on the New York Stock Exchange, Inc.
(the "NYSE"). The CB TM Shares of each
Series to be listed on the NYSE are
the "Australia CB TM Shares", "France
CB TM Shares", "Germany CB TM Shares",
"Hong Kong CB TM Shares", "Italy CB TM
Shares", "Japan CB TM Shares", "South
Africa CB TM Shares", "UK CB TM Shares",
and "US CB TM Shares". It is expected
that the non-redeemable CB TM Shares of
each Series will trade on the NYSE at
prices that differ to some degree from
their net asset value. See "The Fund--
Exchange Listing and Trading",
"Investment Considerations and Risks"
and "--Determination of Net Asset
Value".
<PAGE>
<PAGE> 4
Book Entry Ownership of
CB TM Shares The Depository Trust Company, a
limited purpose trust company organized
under the laws of the State of New York
(the "Depositary" or "DTC"), or its
nominee will be the record or registered
owner of all outstanding CB TM Shares.
Beneficial ownership of CB TM Shares will
be shown on the records of the Depositary
or its participants. Certificates will
not be issued for CB TM Shares. Beneficial
owners of CB TM Shares will exercise their
rights through DTC and such participants.
See "The Fund--Book-Entry Only System".
Purchases and Redemptions
of Creation Unit Aggregations
of CB TM Shares The Fund will issue and redeem CB TM
Shares of any Series only in aggregations
of a specified number of share (each a
"Creation Unit") at net asset value. A
Creation Unit of the Australia Index
Series, the Hong Kong Index Series, the
Italy Index Series and the South Africa
Index Series consists of 75,000 CB TM
Shares; a Creation Unit of each other
Series consists of 100,000 CB TM Shares.
The Fund will offer and sell Creation
Unit size aggregations of shares of each
Series continuously through the Distributor
(see below) at their net asset value next
determined after receipt of a purchase
order in good form. Creation Unit
aggregations of shares are sold for an
in-kind portfolio of equity securities
included in the relevant component of
the FT Index (the "Fund Basket") and
cash in an amount equal to the difference
between the value of a Fund Basket and
the net asset value of the Creation Unit
aggregation of shares (the "Cash
Component"), as described more fully
herein. See "The Fund--Purchase and
Issuance of Fund Shares in Creation Unit
Aggregations" and--Purchase and Issuance
of Fund Shares in Creation Unit
Aggregations" in the Statement of
Additional Information.
The Fund will redeem shares of each Series
only in Creation Unit size aggregations
at their net asset value principally
in-kind for a Fund Basket and a cash
payment equal to the difference between
the value of the Fund Basket and the net
asset value of the shares to be redeemed,
as described more fully herein. See "The
Fund--Redemption of Fund Shares in
Creation Unit Aggregations" in this
Prospectus and "--Redemption of Fund Shares
in Creation Unit Aggregations" in the
Statement of Additional Information.
Investment Management Deutsche Bank Securities Corporation
("DBSC" or the "Adviser") will act as
investment adviser and, in addition,
will provide management and certain
administrative services
<PAGE>
<PAGE> 5
to the Fund. DBSC is a wholly owned
indirect subsidiary of Deutsche Bank
AG, a major German banking institution.
Distributor SSC Distribution Services, Inc.
("SSCD") is the distributor of the
Fund shares (in such capacity, the
"Distributor"). Information about
purchases and redemptions of CB TM
Shares in Creation Unit aggregations
may be obtained from the Distributor.
Administrator State Street Bank and Trust Company
("State Street") will act as administrator
of the Fund (in such capacity, the
"Administrator").
Fees For its services as investment adviser
and manager to each Series, including
services in connection with lending
portfolio securities (see "The
Fund--Lending of Securities"), DBSC
will receive a monthly investment
management fee at an annual rate of
either .30% or .45% of the average
daily net assets of each Series,
depending on the Series, plus 40% of
the gross investment income excluding
less dividends on portfolio securities,
of each Series. See "Fees".
Each Series will pay the Distributor a
[monthly] distribution fee at an annual
rate of .02% of the average daily net
assets of the Series for its distribution
services and reimburse the Distributor
for payments made to dealers for share-
holder services in an additional amount
of up to .23% of the average daily net
assets of the Series.
The Administrator will receive monthly
administrative fees for each Series at
an annual rate of .08% of the average
daily net assets of each Series up to
$125 million, plus .06% of the average
daily net assets of such Series in
excess of $125 million up to $250
million and .04% of average daily net
assets of such Series in excess of
$250 million.
Investment Considerations
and Risks An investment in CB TM Shares of the
initial nine Series of the Fund
involves risks similar to those of
investing in a broadly based portfolio
of equity securities traded on
exchanges in the respective countries
represented by their corresponding FT
Index components. These risks include
market fluctuations caused by such
factors as economic and political
developments, changes in interest
rates and perceived trends in stock
prices.
The net asset value of shares of each
Series will fluctuate with changes in
the market value of its portfolio
securities
<PAGE>
<PAGE> 6
and, in the case of each Series except
the US Index Series, changes in the
market rate of exchange between the US
dollar and the national currency in
which the relevant component of the FT
Index is denominated. See "The
Fund--Investment Considerations and
Risks".
Prior to the date of this Prospectus,
there has been no market for CB TM
Shares and, consequently, there can be
no assurance that active trading
markets will develop. The market
prices of CB TM Shares will fluctuate
in accordance with supply and demand
on the NYSE. The Fund cannot predict
whether the CB TM Shares will trade
below, at or above their net asset
value. See "The Fund--Investment
Considerations and Risks."
The securities held by each Series,
except for the US Index Series, will
primarily be equity securities of non-
U.S. companies. Non-U.S. companies
generally do not provide all of the
disclosure required by U.S. law and
accounting practice. See "The
Fund--Investment Considerations and
Risks".
The Fund will engage in the lending of
its portfolio securities (see The
Fund Lending of Securities") and
engage in certain foreign currency
transactions designed to maintain the
value of each non-US Series' assets in
terms of the foreign currency value of
its respective FT Index component (see
"The Fund--Investment Policies" in this
Prospectus and "Investment Policies
and Restrictions" in the Statement of
Additional Information).
Dividends and Capital
Gains Distributions Dividends from net investment income
will be declared and paid at least
annually and capital gains, if any,
will be distributed at least annually.
Dividends and capital gains
distributions will be distributed in
US dollars and cannot be automatically
reinvested in additional shares of the
Fund. See "The Fund--Dividends and
Capital Gains Distributions".
Tax Matters The purchase, sale, and redemption of
CB TM Shares are taxable events and may
result in a capital gain or loss to
investors. Dividend distributions,
capital gain distributions and capital
gains or losses from redemptions of
CB TM Shares may be subject to federal,
state and local taxes.
<PAGE>
<PAGE> 7
SUMMARY OF FUND EXPENSES
The purpose of the following tables is to assist investors in under-
standing the various costs and expenses an investor will bear directly and
indirectly in respect of each Series of the Fund. The tables show all
expenses and fees the Fund is expected to incur and are based on estimates
estimates expressed as a percent of average net assets. "Other Expenses" are
estimated amounts for the current fiscal year. The examples set forth below
are presented for an investment of $1,000 1 as required by rules of the
Securities and Exchange Commission (the "SEC"). The examples in the tables
should not be considered a representation of past or future expenses or
performance. Actual expenses may be greater or less than those shown.
Fund Expense Table
</TABLE>
<TABLE>
<CAPTION>
The
The The The Hong The
Australia France Germany Kong Italy
Index Index Index Index Index
Series Series Series Series Series
<S> <C> <C> <C> <C> <C>
A. Shareholder Transaction
Expenses
Maximum Sales Load
Imposed on Purchases of
Creation Unit
aggregations of Shares
(as a percentage of
amount of investment) None None None None None
Estimated Cost to
Investor of Transferring
Securities in Fund Basket
to Fund (a) . . . . . . . $[ ] $[ ] $[ ] $[ ] $[ ]
Purchases--Cash Component
Transaction Fee (as a
percentage of cash amount
of investment)(b) . . . 1.3% 1.0% 1.0% 1.2% 1.0%
Deferred Sales Load . . None None None None None
Estimated Cost to
Redeemer of Transferring
Securities in Fund Basket
from Fund to Redeemer(a) $[ ] $[ ] $[ ] $[ ] $[ ]
Redemptions Transaction
Fee on Cash Portion (as a
percentage of cash
redemption proceeds) (c) 1.3% 1.0% 1.0% 1.2% 1.0%
B. Annual Series Operating
Expenses (as a percentage
of average net assets)
Management Fees (d) . . . .45% .30% .30% .45% .30%
Distribution Fees (12b-
1)(e) . . . . . . . . . .25% .25% .25% .25% .25%
Other Expenses . . . . . [ ] [ ] [ ] [ ] [ ]
Total Operating Expenses [ ] [ ] [ ] [ ] [ ]
</TABLE>
(footnotes to table on following page)
1 As of December 30, 1994, the minimum value of a portfolio of
index securities comprising a Fund Basket (assuming the inclusion
of all stocks in the relevant FT Index component in their exact
weightings) for an in-kind purchase or redemption of a Creation
Unit aggregation of shares of each Series would have been as
follows: the Australia Index Series, $3,215,625; the France
Index Series, $4,087,500; the Germany Index Series, $3,587,500;
the Hong Kong Index Series, $2,446,875; the Italy Index Series,
$2,821,875; the Japan Index Series, $3,925,000; the South Africa
Index Series, $2,521,875; the UK Index Series, $4,875,000; and
the US Index Series, $4,700,000.
<PAGE>
<PAGE> 8
<TABLE>
<CAPTION>
The South
The Japan Africa The UK The US
Index Index Index Index
Series Series Series Series
<S> <C> <C> <C> <C>
A. Shareholder Transaction
Expenses
Maximum Sales Load Imposed on
Purchases of Creation Unit
Aggregations of Shares (as a
percentage of amount of
investment) . . . . . . . . . . None None None None
Estimated Cost to Investor of
Transferring Securities in Fund
Basket to Fund(a) . . . . . . . $[ ] $[ ] $[ ] $[ ]
Purchases--Cash Component
Transaction Fee (as a percentage
of cash amount of investment) (b) 1.32% 2.0% 1.5% 1.0%
Deferred Sales Load . . . . . . None None None None
Estimated Cost to Redeemer of
Transferring Securities in Fund
Basket from Fund to Redeemer(a) $[ ] $[ ] $[ ] $[ ]
Redemptions--Transaction Fee on
Cash Portion (as a percentage of
cash redemption proceeds) (c) . . 1.32% 1.0% 1.0% 1.0%
B. Annual Series Operating Expenses
(as a percentage of average net
assets)
Management Fees (d) . . . . . . . .30% .45% .30% .30%
Distribution Fees (12b-1) (e) . . .25% .25% .25% .25%
Other Expenses . . . . . . . . . [ ] [ ] [ ] [ ]
Total Operating Expenses . . . . [ ] [ ] [ ] [ ]
____________________
<FN>
(a) Estimated based on a delivery to or from the Fund of one Fund Basket
of securities. An investor purchasing shares in Creation Unit aggregations
will bear the costs of transferring the securities in the Fund Basket to
the Fund and an investor redeeming Creation Unit aggregations of shares
will bear the costs of transferring securities in the Fund Basket
constituting a portion of the redemption proceeds from the Fund to the
investor. In each case, such costs will include settlement and custody
custody charges, registration costs, transfer taxes and similar charges.
(b) Paid to the Fund and applicable only to the amount of a purchase
represented by the Cash Component to offset the Fund's brokerage and other
transaction costs of investing cash in portfolio securities of the
applicable Series. The cash purchase transaction fee is not a sales
charge. The Cash Component is estimated to be 1% of the total purchase
price. See "Purchase and Issuance of Fund Shares in Creation Unit
Aggregations".
(c) Paid to the Fund and applicable only to the amount of a redemption
proceeds represented by the cash portion to offset the Fund's brokerage
and other transaction costs of selling portfolio securities of the
applicable Series to pay a portion of redemption proceeds. The cash
portion is estimated to be 1% of the total redemption proceeds of a
Creation Unit aggregation of shares. See Redemption of Fund Shares in
Creation Unit Aggregations".
(d) Management fees are .30% or .45% of the average net assets of each
Series, depending on the Series (see "The Fund--Fees"). In addition, each
Series will pay to the Adviser 40% of the gross investment income,
excluding less dividends on portfolio securities, of the Series. Invest-
ment income is received primarily from interest earned on the collateral
for securities loaned. See "The Fund--Lending of Securities".
(e) The Distributor will be paid distribution fees at an annual rate of
.02% of the average daily net assets of each Series and reimbursed for
payments made to dealers for shareholder services in an additional amount
of up to .23% of the average daily net assets of each Series.
</TABLE> <PAGE>
<PAGE> 9
C. Examples of Expenses
(a) An investor would pay the following expenses on a $1,000
investment (payment with a Fund Basket and a Cash Component of
$10 (1% of the total purchase price)), assuming (1) a 5% annual
return and (2) redemption (delivery of a Fund Basket and a cash
redemption payment of $10 (1% of the total redemption
proceeds)) at the end of each indicated time period:
1 year 3 years 5 years 10 years
Australia Index
Series
France Index
Series
Germany Index
Series
Hong Kong Index
Series
Italy Index
Series
Japan Index
Series
South Africa
Index Series
UK Index Series
US Index Series
(b) An investor would pay the following expenses on the same
investment, assuming no redemptions:
1 year 3 years 5 years 10 years
[S]
Australia Index
Series
France Index
Series
Germany Index
Series
Hong Kong Index
Series
Italy Index
Series
Japan Index
Series
South Africa
Index Series
UK Index Series
US Index Series
<PAGE>
<PAGE> 10
Explanation of Table
A. Shareholder Transaction Expenses are charges that investors pay
to buy or sell Creation Unit aggregations of shares of the Fund. See
"The Fund--Purchase and Issuance of Fund Shares in Creation Unit
Aggregations" and "--Redemption of Fund Shares in Creation Unit
Aggregations" in this Prospectus and "Purchase and Issuance of Fund
Shares in Creation Unit Aggregations" and "Redemption of Fund Shares
in Creation Unit Aggregations" in the Statement of Additional
Information for an explanation of how these charges apply.
B. Annual Series Operating Expenses are based on estimated
expenses. Management Fees are paid to DBSC to provide each Series with
investment advisory, management and certain administrative services and
services in connection with the lending of portfolio securities. See
"The Fund--Lending of Securities". Administration fees estimated at
.077% of the average daily net assets of each Series, based on net
assets of US $250,000,000, are included in "Other Expenses" and are
paid to State Street, as Administrator, to provide the Fund with
administrative services. Distribution fees are paid to SSCD, as
Distributor, to provide distribution services to the Fund. The
Distributor is also reimbursed for payments made to dealers providing
shareholder services. See "The Fund--Investment Management",
"--Distributor", "--Administrator" and "--Fees" for additional
information.
C. Examples of Expenses. The hypothetical examples illustrate the
estimated expenses associated with a $1,000 investment in a Creation
Unit aggregation of Fund shares over periods of 1, 3, 5 and 10 years,
based on the expenses in the table and an assumed annual rate of return
of 5%. The return of 5% and estimated expenses are for illustration
purposes only and should not be considered indications of expected
Series expenses or performance, both of which may vary. The expenses
associated with a hypothetical $1,000 investment in CB TM Shares include
a pro rata portion of shareholder transaction expenses associated with
the purchase or sale of a Creation Unit aggregation of shares, which
would have been valued as of December 30, 1994 at between $2,000,000
and $5,000,000, depending on the Series, assuming for this purpose that
the net asset value of a Creation Unit aggregation of shares were the
same as the value of the Fund Basket as of such date. See footnote 1 to
the Summary of Fund Expenses. Based on the 1994 annual rates of return
of the FT Index components represented by each Series, the annual rate
of return of each Series, without reinvestment of dividends, after
estimated expenses applicable to the respective Series, would have been
____% for the Australia Index Series, ____% for the France Index
Series, ____% for the Germany Index Series, ____% for the Hong Kong
Index Series, ____% for the Italy Index Series, ____% for the Japan
Index Series, ____% for the South Africa Index Series, ____% for the UK
Index Series and ___% for the US Index Series. These rates of return
do not include interest earned on collateral from securities loaned,
which would have been increased to the extent of any net interest
income so earned.
<PAGE>
<PAGE> 11
THE FUND
The CountryBasket TM
Index Fund, Inc. and
its Investment
Objective The Fund is a non-diversified, open-end
management investment company registered under
the Investment Company Act of 1940 (the "1940
Act"), organized as a series fund. Each Series
of the Fund seeks to provide investment results
that substantially correspond to the price and
yield performance of its respective country,
geographic region or industry sector component
of the FT Index.
The Initial Series. Initially, nine Series of
the Fund will issue shares: the Australia
Index Series, the France Index Series, the
Germany Index Series, the Hong Kong Index
Series, the Italy Index Series, the Japan Index
Series, the South Africa Index Series, the UK
Index Series, and the US Index Series. The
Board of Directors may authorize additional
Series. Each such Series seeks to provide
investment results that substantially
correspond to the price and yield performance
of its respective country component of the FT
Index (e.g., the Germany Index Series seeks to
provide investment results that substantially
correspond to the price and yield performance
of the Germany component of the FT Index). The
investment objective of each Series is a
fundamental policy and cannot be changed
without the approval of the holders of a
majority of the respective Series' voting
securities (as defined in the 1940 Act). See
"Investment Policies and Restrictions--Investment
Restrictions" in the Statement of Additional
Information. There can be no assurance that the
investment objective of any Series will be achieved.
Each country component of the FT Index is a
capitalization-weighted index of equity securities
traded on the principal securities exchange(s) and,
in some cases, the over-the-counter market, of
that country. The portfolio of equity
securities held by each Series will
substantially correspond in composition and
weighting to the securities comprising the FT
Index component which such Series represents.
See "The FT Index Components".
Correlation with the FT Index. The correlation
between the performance of each Series and its
respective FT Index component is expected to be
at least 0.95 for the foreseeable future. The
ability to correlate the performance of a
Series with that of the corresponding component
of the FT Index will be affected by, among
other things, changes in securities markets,
the manner in which the FT Index is calculated
by the Consortium (as defined below under "FT-
Actuaries World Indices"), the expenses
incurred by such Series, the asset size of such
Series, and the timing and size of purchases
and redemptions of shares. Investment changes
to accommodate purchases and redemptions of
shares in Creation Unit size aggregations will
be made at the direction of the Adviser to
maintain to the extent practicable the
correlation of each Series' portfolio to its
corresponding component of the FT Index.
<PAGE>
<PAGE> 12
Investment Policies Each Series will seek to implement its fundamental
investment objective by a policy of remaining fully
invested in a portfolio of equity securities that
will provide investment results that substantially
correspond to the price and yield performance of its
respective country component of the FT Index. Each
Series will invest the largest proportion of its net
assets as is practicable, in any event at least 95%
of its net assets, in the securities of its
respective component of the FT Index and the
weighting of the portfolio securities of each Series
will substantially correspond to their proportional
representation in the relevant component of the FT
Index. These investment policies are not fundamental
and so may be changed by the Board of Directors of
the Fund without shareholder approval.
Each Series may invest in high quality short-term
fixed income securities as cash reserves, including
securities denominated in US dollars and in the
principal foreign currency or currencies of the
portfolio securities of such Series (the "Series
Currency"). To a limited extent each Series may
also purchase stock index futures contracts and
options thereon traded on recognized exchanges in
the markets relevant to such Series, and purchase
call options, and write (sell) put options, on
securities and indices in such markets. A Series
will invest in such instruments (or combinations
thereof) only for the purpose of exposing cash
reserves and short-term money market investments
to the equity risk and return of the corresponding
component of the FT Index in order to achieve a
higher correlation to such component. Stock index
futures, options and options on futures in which a
Series may invest will be those which the Adviser
believes would, alone or in combination with other
options, replicate the performance of the relevant
FT Index component better than the uninvested cash.
For example, if market conditions make it
impracticable to purchase a security in the relevant
FT Index component, a Series may purchase or write
an option or combination of options on such security
(or a security expected to perform similarly to the
missing index security) to expose the uninvested
assets to the equity risk and return of such security
and thereby improve the correlation of the Series
with the relevant FT Index component. A Series will
not invest in options and futures contracts and
options thereon for speculative purposes. See
"Investment Policies and Restrictions--Other Fund
Investments" in the Statement of Additional
Information.
Investments other than the equity securities
included in each FT Index Component are not
expected to exceed 5% of each Series' net
assets. Such investments include cash and cash
equivalents, call options and stock index
futures contracts and options thereon, and
equity securities not included in the relevant
component of the FT Index that may be an
appropriate substitution for an index equity
security if market conditions make it impracticable
to purchase the index security in the relevant FT
Index component. See "The Fund--Investment Policies
and Restrictions--Other Fund Investments" in the
Statement of Additional Information. The activities
of the Fund are subject to certain restrictions
that may not be changed without shareholder
approval. See "Investment
<PAGE>
<PAGE> 13
Restrictions of the Fund" in this Prospectus and
"Investment Policies and Restrictions--Investment
Restrictions" in the Statement of Additional
Information.
Each Series may lend its portfolio securities in an
amount up to 33 1/3% of the value of its total
assets in order to earn additional income and thereby
reduce the effect that expenses have on the Series'
ability to provide investment results that substan-
tially correspond to the correspond to the price and
yield performance of the relevant FT Index component.
See "Lending of Securities". Each Series will also
engage in certain foreign currency transactions that
are designed to maintain the correspondence between
the value of the Series' assets and the foreign
currency-denominated values of the respective
indices. The Fund will not hold illiquid assets in
excess of 15% of its net assets. For purposes of
this restriction, "illiquid" securities shall mean
securities which may not be sold or disposed of
mean securities which may not be sold or disposed
of in the ordinary course of business within seven
days at approximately the value at which the Series
has valued the securities. In the case of each
non-US Index Series, portfolio securities will not
be deemed illiquid securities if they are traded
on an exchange and are not legally restricted from
sale by the Series. See "Investment Policies and
Restrictions" in the Statement of Additional
Information.
Portfolio Turnover. Each Series of the Fund is
permitted to sell securities irrespective of how
long they have been held. Given that the investment
management of each Series is fundamentally
"passive" in that it seeks to provide investment
results corresponding to that of an index, the
portfolio turnover rate for each Series is expected
to be under 50%. Ordinarily, securities will be
purchased or sold by a Series only to reflect changes
in the composition of the corresponding component of
the FT Index or to accommodate cash flows required
by, among other things, purchases and redemptions of
Creation Unit aggregations of shares.
FT-Actuaries World
Indices The FT-Actuaries World Indices (TM)/(SM) are jointly
compiled by the Financial Times Limited, Goldman,
Sachs & Co. and NatWest Securities Limited in
conjunction with the Institute of Actuaries and the
Faculty of Actuaries, the English and Scottish
bodies, respectively, that represent the actuarial
profession in the United Kingdom (together, the
"Consortium"). The aim of the Consortium is to
create and maintain a series of equity indices for
use by the global investment community.
Selection Criteria. The World Index Policy
Committee ("WIPC") makes all policy decisions
concerning the FT Index, including: objectives,
selection criteria, liquidity requirements,
calculation methodologies, and the timing and
disclosure of additions and deletions of
constituent securities. The WIPC makes these
decisions in a manner that is consistent with
the stated aims and objectives of the Consortium
described above. With respect to each country,
regional or sector component of the FT Index, the
WIPC has generally sought a minimum of 70% coverage
of the aggregate value of all exchange-traded
stocks in such country, region or sector. The
Consortium selects securities for inclusion in the
<PAGE>
<PAGE> 14
FT Index on the basis of several additional
criteria, which include: (1) selecting at a
minimum the securities of companies representing
the top 5% of the market capitalization of
exchange-listed companies in markets open to
institutional investors; (2) the exclusion of
companies with an aggregate market value (all
classes of common equity) of less than $100
million at the end of 1985; (3) the addition of
shares of stock on a selected basis down to either
the minimum size constraint (see (2), above), or
70% of the market capitalization, or 20% of the
number of stocks in the market (subject to an
overall limit of 600 stocks in any one market);
and (4) the exclusion of markets, companies and
securities for which direct holdings of capital
by foreign nationals are prohibited. The universe
of "investible" equities (the "investible
universe") for a particular component of the FT
Index is determined after application of five
exclusionary "screens" to the entirety of exchange-
traded equities in the relevant market. A fuller
description of the FT Index is included in the
Statement of Additional Information.
Market Capitalization Weighting. The proportional
representation of equity securities in the FT Index
is based on each security's total market
capitalization (that is, its market price times the
number of shares outstanding) relative to other
securities in the same market. The percentage of a
Series' assets to be invested in each equity
security will not deviate significantly from such
security's corresponding proportional representation
in the relevant component of the FT Index. The FT
Index treats dividends and distributions as being
prorated and reinvested on each business day, and
calculates the investment performance of the FT
Index on that basis. Each Series will reinvest
dividends and distributions it receives as soon as
practicable.
The FT Index
Components The Australia Component. The Australia component of
the FT Index consists of stocks that are traded on
the Australian Stock Exchange Limited. As of
December 30, 1994, stocks of 68 issuers were
included. The three largest stocks and the
approximate percentages of the Australia component
represented thereby were Broken Hill Proprietaries
(17.6%), National Australia Bank (7.5%) and CRA
(5.7%), for a total of 30.8% of the Australia
component. The ten largest equity issues in the
Australia component represented approximately
54% of the Australia component. As of December 30,
1994, equities of the mining, metals and minerals,
commercial and other banking and diversified
industries represented approximately 33.4%, 16.8%
and 8.2%, respectively, or a total of 58.4%, of the
Australia component. Equities comprising the
Australia component of the FT Index accounted for
approximately 83.9% of the aggregate investible
Australian market capitalization.
The France Component. The France component of
the FT Index consists of stocks traded on the
seven French stock exchanges. As of December
30, 1994, stocks of 102 issuers were included.
The three largest stocks and the approximate
percentages of the France component of the FT
Index represented thereby were Elf Aquitaine
(5.3%), Total Petroleum
<PAGE>
<PAGE> 15
(4.1%), LVMH-Moet Vuitton (4.1%) for a total of
13.5% of the France component. The ten largest
equity issues in the France component
represented approximately 36% of the France
component. Equities of the commercial and other
banks, oil and retail industries represented
approximately 9.9%, 9.5% and 7.9%,
respectively, or a total of 27.3%, of the
France component. As of December 30, 1994,
equities comprising the France component of the
FT Index accounted for approximately 88.2% of
the aggregate investible French market
capitalization.
The Germany Component. The Germany component of
the FT Index consists of stocks that are traded
on the Frankfurt Stock Exchange. As of December
30, 1994, stocks of 58 issuers were included.
The three largest stocks and the approximate
percentages of the Germany component of the
FT Index represented thereby were Allianz AG
(9.8%), Daimler Benz AG (7.4%) and Siemens AG
(6.8%), for a total of 24.0% of the Germany
component. The ten largest equity issues in the
Germany component represented approximately 55%
of the Germany component. Equities of the
banking, insurance and chemicals industries
represented approximately 16.5%, 16.3% and
14.0%, respectively, or a total of 46.8%, of
the Germany component. As of December 30, 1994,
equities comprising the Germany component of
the FT Index accounted for approximately 89% of
the aggregate investible universe of the
official market.
The Hong Kong Component. The Hong Kong
component of the FT Index consists primarily of
stocks traded on the Stock Exchange of Hong
Kong Limited (the "HKX"). As of December 30,
1994, stocks of 56 issuers (including two
issuers listed on the Singapore Stock Exchange
but not on the HKX) were included. The three
largest stocks and the approximate percentages
of the Hong Kong component represented thereby
were Hutchison Whampoa (8.8%), Sun Hung Kai
Properties (8.4%), and Hang Seng Bank (8.4%),
for a total of 25.6% of the Hong Kong
component. The ten largest equity issues in the
Hong Kong component represented approximately
55% of the Hong Kong component. Equities of the
real estate, utilities, and diversified holding
companies represented approximately 37.4%,
13.3% and 12.0%, respectively, or a total of
62.7%, of the Hong Kong component. As of
December 30, 1994, equities comprising the Hong
Kong component of the FT Index accounted for
approximately 81% of the aggregate investible
market capitalization of the Stock Exchange of
Hong Kong Limited.
The Italy Component. The Italy component of the
FT Index consists of stocks that are traded on
the Milan Stock Exchange. As of December 30,
1994, stocks of 59 issuers were included. The
three largest stocks and the approximate
percentages of the Italy component represented
thereby were Generali (14.2%), Telecom Italia
(12.8%) and Stet (8.5%), for a total of 35.5%
of the Italy component. The ten largest equity
issues in the Italy component represented
approximately 63% of the Italy component.
Equities of the insurance, utilities and
automobile industries represented approximately
27.6%, 25.8% and 10.4%, respectively, or
<PAGE>
<PAGE> 16
a total of 63.8%, of the Italy component. As of
December 30, 1994, equities comprising the
Italy component of the FT Index accounted for
approximately 89.7% of the aggregate investible
Italian market capitalization.
The Japan Component. The Japan component of the
FT Index consists of stocks traded on the Tokyo
and Osaka Stock Exchanges. As of December 30,
1994, stocks of 468 issuers were included. The
three largest stocks and the approximate
percentages of the Japan component represented
thereby were Toyota Motor [Company] (2.9%),
Mitsubishi Bank (2.6%) and Industrial Bank of
Japan (2.5%), for a total of 8.0% of the Japan
component. The ten largest equity issues in the
Japan component represented approximately 21%
of the Japan component. Equities of the
commercial and other banks, financial
institutions and services, and electronics and
instrumentation industries represented
approximately 22.9%, 6.0% and 6.0%,
respectively, or a total of 34.9%, of the Japan
component. As of December 30, 1994, equities
comprising the Japan component of the FT Index
accounted for approximately 83.1% of the
aggregate investible market capitalization of
the Tokyo Stock Exchange.
The South Africa Component. The South Africa
component of the FT Index consists of stocks
that are traded on the Johannesburg Stock
Exchange. As of December 30, 1994, stocks of 59
issuers were included. The three largest stocks
and the approximate percentages of the South
Africa component represented thereby were Anglo
American Corp. (10.4%), De Beers/Centenary
(6.8%) and South African Breweries (5.1%), for
a total of 22.3% of the South Africa component.
The ten largest equity issues in the South
Africa component represented approximately 46%
of the South Africa component. Equities of the
precious metals and minerals, life and
agents/brokers insurance, and diversified
holding companies industries represented
approximately 45.5%, 8.0% and 7.9%,
respectively, or a total of 61.4%, of the South
Africa component. As of December 30, 1994,
equities comprising the South Africa component
of the FT Index accounted for approximately
[82.2]% of the aggregate investible market
capitalization of the Johannesburg Stock
Exchange.
The UK Component. The UK component of the FT
Index consists of stocks that are traded on the
London Stock Exchange. As of December 30, 1994,
stocks of 204 issuers were included. The three
largest stocks and the approximate percentages
of the UK component represented thereby were
Shell Transport & Trading (4.1%), British
Telecom (4.1%) and British Petroleum (4.0%),
for a total of 12.2% of the UK component. The
ten largest equity issues in the UK component
represented approximately 28% of the UK
component. Equities of the utilities,
commercial and other banks, and health and
personal care industries represented
approximately 13.5%, 10.7% and 8.8% of the UK
component, respectively, or a total of 33.0%,
of the UK component. As of December 30, 1994,
equities comprising the UK component of the FT
<PAGE>
<PAGE> 17
Index accounted for approximately 88.4% of the
aggregate investible universe of the London
Stock Exchange.
The US Component. The US component of the FT
Index consists of stocks traded on the NYSE,
the American Stock Exchange and the National
Association of Securities Dealers Automated
Quotation (NASDAQ) system. As of December 30,
1994, stocks of 513 issuers were included. The
three largest stocks and the approximate
percentages of the US component represented
thereby were AT&T (2.7%), General Electric
(2.4%) and Exxon Corp. (2.3%), for a total of
7.4% of the US component. The ten largest
equity issues in the US component represented
approximately 18% of the US component. Equities
of the utilities, health and personal care and
oil industries represented approximately 14.6%,
9.8% and 7.6%, respectively, or a total of 32%,
of the US component. As of December 30, 1994,
equities comprising the US component of the FT
Index accounted for approximately 86.8% of the
aggregate investible United States market
capitalization.
Investment Management DBSC will act as investment adviser to the Fund
and, subject to the supervision of the Board of
Directors of the Fund, will be responsible for
management of each Series' affairs, including
providing certain administrative services and
services in connection with the lending of
portfolio securities, pursuant to an Investment
Management Agreement entered into with the Fund
with respect to each Series. The Adviser
receives a fee from the Fund for its services.
See "Fees" in this Prospectus and "Investment
Advisory, Management and Administrative
Services--The Investment Adviser" in the
Statement of Additional Information. DBSC is
organized under Delaware law and is registered
as an investment adviser under the Investment
Advisers Act of 1940 and as a broker-dealer
under the Securities Exchange Act of 1934 (the
"Exchange Act"). DBSC is a wholly owned
indirect subsidiary of Deutsche Bank AG, a
major German banking institution ("Deutsche
Bank").
DBSC is engaged in the securities underwriting
and securities brokerage businesses. The
principal business address of DBSC is 31 West
52nd Street, New York, New York 10019. Subject
to best price together with efficient
execution, the Fund may place orders for the
purchase and sale of securities for the Fund's
portfolio with both DBSC and Deutsche Bank,
among other brokers and dealers, and incur
brokerage commissions for such transactions.
All portfolio transactions with DBSC, Deutsche
Bank and their affiliates will be done on an
agency basis. No portfolio transaction on a
principal basis will be done with DBSC,
Deutsche Bank or their affiliates in
securities, foreign currency or other assets.
Distributor SSC Distribution Services, Inc. is the
Distributor of CB TM Shares (see "CB TM Shares"
below). Its address is 2048 Washington Street,
Hanover, MA 02339, and investor information can
be obtained by calling 1-800-328-7408. CB TM
shares will be sold by the Fund and distributed
only in
<PAGE>
<PAGE> 18
Creation Unit size aggregations, as described
below under "Purchase and Issuance of Fund
Shares in Creation Unit Aggregations". CB TM
Shares in less than Creation Unit size
aggregations will not be distributed by the
Distributor. The Distributor is a registered
broker-dealer under the Exchange Act and is a
wholly owned subsidiary of SuperShare Services
Corporation ("SSC"). The Distributor was
incorporated in December 1989 under Delaware
law. The Distributor has entered into a
Distribution Agreement with the Fund pursuant
to which it will distribute Fund shares. The
Distributor receives a fee from the Fund for
its services. See "Fees" below and "Purchase
and Issuance of Fund Shares in Creation Unit
Aggregations--The Distributor" in the Statement
of Additional Information.
Administrator State Street will act as Administrator of the
Fund pursuant to an Administration Agreement
with the Fund and will be responsible for
certain clerical, recordkeeping and bookkeeping
services, except those to be performed by the
Adviser or by State Street in its capacity as
Custodian. See "Investment Advisory, Management
and Administrative Services--The Administrator,
Custodian and Transfer Agent" in the Statement
of Additional Information.
Custodian and Transfer
Agent State Street serves as the Custodian for the
cash and portfolio securities of each Series of
the Fund pursuant to a Custodian Agreement
between State Street and the Fund. State Street
also provides transfer agency and fund
accounting services (in such capacity, the
"Transfer Agent") pursuant to an agreement with
the Fund. State Street, as Custodian and
Transfer Agent, has no role in determining the
investment policies of the Fund or which
securities are to be purchased or sold by the
Fund. The principal business address of State
Street is 225 Franklin Street, Boston,
Massachusetts 02110.
Fees For its investment advisory and management
services to the Fund, DBSC will be paid a fee,
computed daily and paid monthly, at an annual
rate of either .30% or .45%, depending on the
Series, of the average daily net assets of each
Series, plus 40% of the gross investment income
excluding dividends on securities held in the
portfolio, of each Series. See "Summary of Fund
Expenses" for the fee for each Series.
Each Series will pay the Distributor a
[monthly] distribution fee at an annual rate of
.02% of the average daily net assets of such
Series for its distribution services pursuant
to a plan (the "12b-1 Plan") adopted by the
Board of Directors under Rule 12b-1 under the
1940 Act. The 12b-1 Plan, which is subject to
approval annually by the Board of Directors,
provides for the payment to SSCD of the
distribution fees described above for
activities facilitating the distribution of
such shares. In addition, each Series will
reimburse the Distributor up to a maximum of an
additional .23% of the average daily net assets
of the Series for payments made to dealers for
providing shareholder services. See "Purchase
and Issuance of Fund Shares in Creation Unit
<PAGE>
<PAGE> 19
Aggregations--The Distributor" in the Statement
of Additional Information.
The Administrator will receive monthly
administrative fees from the Fund at an annual
rate of .08% of the average daily net assets of
each Series up to $125 million, plus .06% of
the average daily net assets of each Series in
excess of $125 million up to $250 million and
.04% of the average daily net assets of each
Series in excess of $250 million. In addition,
the Administrator will be reimbursed for its
own out-of-pocket costs incurred in providing
administration services.
In addition to the fees described above, the
Fund will be responsible for the payment of
expenses that will include, among other things,
organizational expenses, compensation of the
Directors of the Fund, reimbursement of out-of-
pocket expenses incurred by the Administrator,
exchange listing fees, brokerage costs and
litigation and extraordinary expenses.
CB TM Shares The shares of common stock, par value $.001 per
share, of each Series are referred to herein as
the "CB TM Shares". The CB TM Shares of the
initial nine series of the Fund are the
"Australian CB TM Shares", the "France CB TM
Shares", the "Germany CB TM Shares", the "Hong
Kong CB TM Shares", the "Italy CB TM Shares", the
"Japan CB TM Shares", the "South Africa CB TM
Shares", the "UK CB TM Shares", and the "US CB TM
Shares". Except in the Creation Unit size
aggregations described under "Creation Units"
below, CB TM Shares are not redeemable securities
of the Fund.
Exchange Listing
and Trading Application will be made to list the CB TM Shares
of each Series for trading on the NYSE. The
CB TM Shares are expected to trade on the NYSE at
prices that will differ to some degree from
their net asset value. See "Investment
Considerations and Risks" and "Determination of
Net Asset Value". There can be no assurance
that the requirements of the NYSE necessary to
maintain the listing of CB TM Shares of any
Series will continue to be met or will remain
unchanged. The NYSE may remove the CB TM Shares
of a Series from listing [if the Series
terminates; the Series has 60 days remaining
until termination and there are fewer than 50
record or beneficial holders of the CB TM Shares
for 30 or more consecutive trading days; the
value of the relevant FT Index component is no
longer calculated or available; or such other
event occurs or condition exists that, in the
opinion of the NYSE, makes further dealings on
the NYSE inadvisable]. In addition, the NYSE
will remove the shares from listing and trading
upon termination of the Fund.
Creation Units The Fund will issue and redeem CB TM Shares of
each Series only in aggregations of a specific
number of shares applicable to a Series. See
"Purchase and Issuance of Fund Shares in
Creation Unit Aggregations" and "Redemption of
Fund Shares in Creation Unit Aggregations". A
Creation Unit of the Australia Index Series,
the Italy Index Series, the Hong Kong Index
Series or the South Africa Index Series
consists of <PAGE>
<PAGE> 20
75,000 shares; a Creation Unit of all other
Series consists of 100,000 shares. The Board
of Directors of the Fund reserves the right to
declare a split in the number of CB TM Shares
outstanding of any Series, and to make a
corresponding change in the number of CB TM
Shares constituting a Creation Unit, in the
event that the per CB TM Share price in the
secondary market rises to an amount that
exceeds the desirable retail range.
Investment
Considerations and
Risks An investment in CB TM Shares of each Series
involves risks similar to those of investing in
a broadly-based portfolio of equity securities
traded on exchanges in the countries represented
by the relevant FT Index component, such as market
fluctuations caused by such factors as economic
and political developments, changes in interest
rates and perceived trends in stock prices.
Investing in Fund Series whose portfolios contain
non-U.S. issuers involves certain risks and
considerations not typically associated with
investing in the securities of U.S. issuers. These
risks include generally greater price volatility;
reduced liquidity and the significantly smaller
market capitalization of most non-U.S. securities
markets; more substantial government involvement
in the economy; higher rates of inflation; greater
social, economic, and political uncertainty and
the risk of nationalization or expropriation of
assets and risk of war.
Each Series of the Fund is classified as "non-
diversified" for purposes of the 1940 Act,
which means the Series is not limited by the
1940 Act with regard to the portion of its
assets that may be invested in the securities
of a single issuer. However, each Series
intends to maintain the required level of
diversification and otherwise conduct its
operations so as to qualify as a "regulated
investment company" for purposes of the
Internal Revenue Code of 1986 (the "Code"),
which will relieve the Series of any liability
for Federal income tax to the extent that its
earnings are distributed to shareholders. See
"Dividends and Capital Gains Distributions" in
this Prospectus and "Taxes" in the Statement of
Additional Information.
To a limited extent, each Series may purchase
stock index futures contracts and options thereon
traded on recognized exchanges in the markets
relevant to such Series. Each Series may also
purchase call options and write (sell) covered
put options on securities and indices in such
markets. The purpose of purchasing stock index
futures and options thereon, purchasing call
options and writing put options is to expose cash
reserves and short-term money market investments
to the equity risk and return of the corresponding
component of the FT Index in order to achieve a
higher correlation to such component. It is not
expected for the foreseeable future that the value
of futures contracts and options thereon, plus the
segregated assets in respect of such contracts
and written put options, any equity securities
in which the Fund invests as temporary substitutes
for FT Index securities that are unavailable and
any other temporary cash and short-term investments,
will exceed 5% of the Series' net assets. See
"Investment Policies and Restrictions--Other Fund
<PAGE>
<PAGE> 21
Investments" and "Special Considerations and
Risks--Options and Futures" in the Statement of
Additional Information.
The Fund is a newly organized investment
company with no previous operating history. As
indicated above, application will be made to
list CB TM Shares on the NYSE. There can be no
assurance that active trading markets for the
CB TM Shares will develop. The Distributor will
not maintain a secondary market in CB TM Shares.
Trading in CB TM Shares on the NYSE may be halted
due to market conditions or, in light of NYSE
rules and procedures, for reasons that, in the
view of the NYSE, make trading in CB TM Shares
inadvisable. In addition, trading in CB TM Shares
on the NYSE will be subject to trading halts
caused by extraordinary market volatility
pursuant to NYSE "circuit breaker" rules that
require trading in securities on the NYSE to be
halted in the event of a specified market
decline. There can be no assurance that the
requirements of the NYSE necessary to maintain
the listing of CB TM Shares of any Series will
continue to be met or will remain unchanged.
See "Exchange Listing and Trading".
The net asset value of the CB TM Shares of each
Series will fluctuate with changes in the
market value of the portfolio securities of the
Series and, in each case other than the US
Index Series, changes in the market rate of
exchange between the US dollar and the Series
Currency. The market prices of CB TM Shares will
fluctuate in accordance with supply and demand
on the NYSE. The Fund cannot predict whether
the CB TM Shares will trade below, at or above
their net asset value. Price differences may
be due, in large part, to the fact that supply
and demand forces at work in the secondary
trading market for CB TM Shares will be closely
related to, but not identical to, the same
forces influencing the prices of the stocks of
the relevant FT Index component trading
individually or in the aggregate at any point
in time.
Because each Series' assets, except those of
the US Index Series, will generally be invested
in non-U.S. securities, and because a
substantial portion of the revenues and income
of each Series except for the US Index Series
are received in foreign currencies, while
Series dividends and other distributions are
paid in dollars, the US dollar equivalent of a
Series' net assets would be adversely affected
by reductions in the value of such foreign
currencies relative to the dollar and would be
positively affected by increases in the value
of such foreign currencies relative to the
dollar. The Fund does not expect to engage in
currency transactions for the purpose of
hedging against the decline in value of any
Series Currency. Each Series may, however,
purchase forward contracts, currency futures
contracts and options on such contracts and
currency call options in the Series Currency
(other than the US Dollar) up to the aggregate
amount of any US dollar-denominated assets to
maintain exposure to the Series Currency. See
"Investment Policies and Restrictions--Currency
Transactions" in the Statement of Additional
Information.
<PAGE>
<PAGE> 22
CB TM Shares may be more susceptible to any
single economic, political or regulatory
occurrence than the portfolio securities of an
investment company that is more broadly
invested in the equity securities of the
relevant market than the Fund Series. In
addition, the securities held by each Series
other than the US Index Series will primarily
be equity securities of non-U.S. companies,
which do not provide all of the disclosure
required by U.S. law and accounting practice.
Dividends and Capital
Gains Distributions Dividends from net investment income, including
net foreign currency gains, if any, will be
declared and paid at least annually and capital
gains, if any, will be distributed at least
annually. Dividends and capital gains
distributions will be distributed in US dollars
and cannot be automatically reinvested in
additional CB TM Shares. The Fund will inform
shareholders of the amount and nature of all
distributions made to them.
Tax Matters Each Series intends to qualify for and to elect
treatment as a "regulated investment company"
under Subchapter M of the Code. As a regulated
investment company, a Series will not be subject
to U.S. federal income tax on its income and
gains that it distributes to shareholders,
provided that it distributes annually at least
90% of its net investment income. Net investment
income includes income from dividends and interest
and gains and losses from currency transactions net
of operating expenses plus the Series' net short-
term capital gains in excess of its net long-term
capital losses. Each Series intends to distribute
at least annually to its shareholders all of its net
investment income and any net long-term capital
gains. See "Taxes--Tax Treatment of the Fund" in
the Statement of Additional Information.
Dividends paid out of a Series' net investment
income and distributions of net realized short-
term capital gains in excess of long-term
capital losses are taxable to a U.S. investor
as ordinary income.
Distributions of net long-term capital gains,
if any, in excess of net short-term capital
losses are taxable to a U.S. investor as long-
term capital gains, regardless of how long the
investor has held the CB TM Shares.
Dividends and distributions paid by a Series
other than the US Index Series generally will
not qualify for the deduction for dividends
received by corporations. Distributions in
excess of a Series' current and accumulated
earnings and profits will be treated as a tax-
free return of capital to each of the Series'
investors to the extent of the investor's basis
in its CB TM Shares of the Series, and as capital
gain thereafter.
Since more than 50% of the value of the total
assets of each Series other than the US Index
Series will consist of stock or securities of
foreign corporations at the close of its
taxable year, each such Series will be eligible
to file an election with the Internal Revenue
Service to "pass through" to its investors the
amount of foreign income taxes (including
<PAGE>
<PAGE> 23
withholding taxes) paid by such Series. The
foreign income taxes passed through may qualify
as a deduction against income or as a foreign
tax credit against U.S. federal income taxes.
Each investor will be notified within 60 days
after the close of the Series' taxable year of
the investor's portion of the foreign income
taxes paid to each country and the portion of
dividends that represents income derived from
sources within each country.
The Fund may be required to withhold for U.S.
federal income tax purposes 31% of the dividends
and distributions payable to investors who fail
to provide the Fund with their correct taxpayer
identification number or to make required
certifications, or who have been notified by the
U.S. Internal Revenue Service that they are
subject to backup withholding. Backup withholding
is not an additional tax; amounts withheld may be
credited against the investor's U.S. federal
income tax liability.
For further information on taxes see "Taxes" in
the Statement of Additional Information.
Lending of Securities The Fund may lend securities from the portfolio
of each Series to brokers, dealers and other
financial institutions needing to borrow
securities to complete transactions and for
other purposes. Because the cash, government
securities or other assets that are pledged as
collateral to the Fund earn interest, securities
lending enables each Series to earn additional
income, which may partially offset the expenses
of the Series, and thereby reduces the effect
that expenses have on the Series' ability to
provide investment results that substantially
correspond to the price and yield performance
of the relevant component of the FT Index.
These loans may not exceed 33 1/3% of a Series'
total assets. In connection with these loans,
the Series will receive collateral equal to at
least 100% of the current market value of the
loaned securities, as marked to market each
day [that the net asset value of the Series is
determined], consisting of cash, government
securities or other assets permitted by
applicable regulations. Each Series will pay
reasonable administrative and custodial fees in
connection with the loan of securities. The
interest income the Series receives from the
loan collateral is included in the Series'
gross investment income on which a portion of
the management fee paid to DBSC is based. See
"Fees". The Fund will not pay any finders fees
in connection with the lending of portfolio
securities. The Fund will comply with the
conditions for lending established by the SEC.
See "Lending Portfolio Securities" in the
Statement of Additional Information for further
details of the lending transactions.
Investment Restrictions
of the Fund Each Series intends to observe certain
limitations on its investment practices.
Specifically, a Series may not:
(i) lend any funds or other assets except
through the purchase of all or a portion of
an issue of securities or obligations of the
type in which it is permitted to invest and
except that a Series may lend its
<PAGE>
<PAGE> 24
portfolio securities in an amount not to
exceed 33 1/3% of the value of its total
assets;
(ii) issue senior securities or borrow
money, except borrowings from banks (which
may be from an affiliate of the Adviser) for
temporary or emergency purposes in an amount
up to 33 1/3% of the value of the Series'
total assets (including the amount
borrowed), valued at the lesser of cost or
market, less liabilities (not including the
amount borrowed) valued at the time the
borrowing is made, and the Series will not
purchase securities while borrowings in
excess of 5% of the Series' total assets are
outstanding, provided, that for purposes of
this restriction, short-term credits
necessary for the clearance of transactions
are not considered borrowings;
(iii) pledge, hypothecate, mortgage or
otherwise encumber its assets, except in an
amount up to 33 1/3% of the value of its
total assets, to secure permitted
borrowings. (The deposit of underlying
securities and other assets in escrow and
collateral arrangements with respect to
initial or variation margin for currency
transactions, options, futures contracts and
options on futures will not be deemed to be
pledges of the Series' assets);
(iv) purchase a security (other than
obligations of the United States Government,
its agencies or instrumentalities) if as a
result 25% or more of its total assets would
be invested in a particular industry, except
that a Series will invest 25% or more of its
total assets in a single industry in the
event that the relevant component of the FT
Index becomes so concentrated. See "The FT
Index" in the Statement of Additional
Information for a description of the ten
most highly represented industry sectors for
each Series component.
Except with regard to a Series' borrowing
policy, all percentage limitations apply
immediately after a purchase or initial
investment, and any subsequent change in any
applicable percentage resulting from market
fluctuations or other changes in total or net
assets does not require elimination of any
security from the Series' portfolio. With
respect to the fundamental restriction set
forth in (iv) above, the Adviser has advised
the Fund that as of December 30, 1994, the
following FT Index components were concentrated
(in excess of 25% of such component) in the
stocks of the indicated industry groups (as
defined by the Consortium):
Australia Mining, Metals and Minerals
Hong Kong Real Estate
Italy Insurance Multi/Property/Casualty
Utilities
South Africa Precious Metals and Minerals
The investment limitations described here, and
certain additional limitations described under
"Investment Policies and
<PAGE>
<PAGE> 25
Restrictions--Investment Restrictions" in the
Statement of Additional Information, may be
changed with respect to a Series only with the
approval of the holders of a majority of the
outstanding voting securities (as defined in
the 1940 Act) of such Series.
For a description of additional investment
restrictions of the Fund, see the Statement of
Additional Information.
Determination of Net
Asset Value Net asset value per share for each Series of
the Fund is computed by dividing the value of
the net assets of such Series (i.e., the value
of its total assets less total liabilities) by
the total number of CB TM Shares outstanding,
rounded to the nearest cent. Expenses and fees,
including the management, administration and
distribution fees, are accrued daily and taken
into account for purposes of determining net
asset value.
The net asset value per CB TM Share of each
Series is determined as of the close of the
regular trading session on the NYSE (currently
4:00 p.m., New York time) on each day that the
NYSE is open. See "Business Day".
In computing a Series' net asset value, the
Series' portfolio securities are valued based
on their last quoted current sales price on the
primary exchange or market upon which they
trade, but when the market quotations are not
readily available, portfolio securities are
valued based on fair value as determined in
good faith by the Adviser in accordance with
procedures adopted by the Board of Directors of
the Fund. The values of portfolio securities
denominated in currencies other than the US
dollar are converted into US dollars at the
relevant foreign exchange rate for each Series
in effect at [12:00] noon, New York time, on
the day that the foreign-currency values of the
securities are determined.
Board of Directors The Board of Directors of the Fund has
responsibility for the overall management of
the Fund, including general supervision of the
duties performed by the Adviser and other
service providers. Additional information about
the Board of Directors and the officers of the
Fund appears in the Statement of Additional
Information under the heading "Management of
the Fund--Directors and Officers of the Fund".
Capital Stock The Fund, a Maryland corporation incorporated
on August 8, 1994, is currently comprised of
nine series of shares of common stock, par
value $.001 per share, referred to herein as
"CB TM Shares": the Australia Index Series, the
France Index Series, the Germany Index Series,
the Hong Kong Index Series, the Italy Index
Series, the Japan Index Series, the South
Africa Index Series, the UK Index Series, and
the US Index Series. The Board of Directors of
the Fund may designate additional series of
common stock and classify shares of a
particular series into one or more classes of
that series.
Each CB TM Share issued by the Fund will have a
pro rata interest in the assets of the corres-
ponding Series. The Fund is authorized to issue
<PAGE>
<PAGE> 26
_________ shares of common stock, including
______ Australia CB TM Shares, ________ France
CB TM Shares, ______ Germany CB TM Shares, _____
Hong Kong CB TM Shares, ______ Italy CB TM Shares,
_______ Japan CB TM Shares, _______ South Africa
CB TM Shares, _______ UK CB TM Shares and ______
US CB TM Shares. Fractional shares will not be
issued. Each CB TM Share has one vote with
respect to matters upon which a stockholder
vote is required; stockholders have no
cumulative voting rights with respect to their
shares. Shares of all series vote together as a
single class except that if the matter being
voted on affects only a particular Series it
will be voted on only by that Series and if a
matter affects a particular Series differently
from other Series, that Series will vote
separately on such matter. Under Maryland law,
the Fund is not required to hold an annual
meeting of stockholders unless required to do
so under the 1940 Act. The policy of the Fund
is not to hold an annual meeting of stockholders
unless required to do so under the 1940 Act. All
shares of the Fund (regardless of Series) have
noncumulative voting rights for the election of
Directors. Under Maryland law, Directors of the
Fund may be removed by vote of the stockholders.
The Fund has provisions in its Articles of
Incorporation and By-laws that could have the
effect of limiting the ability of other
entities or persons to acquire control of the
Fund. The Board of Directors currently consists
of [seven] Directors. The Board is divided into
three classes each having a term of three
years. Each year, the term of one class expires
and the successor or successors elected to such
class will serve for a three-year term. This
provision could delay for up to two years the
replacement of a majority of the Board of
Directors by the stockholders of the Fund.
The Fund expects that, immediately prior to the
commencement of trading of the CB TM Shares,
each of the Australia Index Series, the Hong
Kong Index Series, the Italy Index Series and
the South Africa Index Series will have [four]
stockholders and each other Series will have
[three] stockholders, each of whom will hold
more than 5% of the outstanding shares of such
Series in Creation Unit size aggregations. The
Fund cannot predict the length of time that
such persons will remain control persons of
each Series.
Book-Entry Only System DTC will act as securities depositary for the
CB TM Shares. CB TM Shares will be represented by
global securities, which will be registered in
the name of DTC or its nominee and deposited
with, or on behalf of, DTC. Except as provided
below, certificates will not be issued for CB TM
Shares.
DTC has advised the Fund as follows: it is a
limited-purpose trust company organized under
the laws of the State of New York, a member of
the Federal Reserve System, a "clearing
corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was
created to hold securities of its participants
(the "DTC Participants") and to facilitate the
clearance and settlement of <PAGE>
<PAGE> 27
securities transactions among the DTC Participants
in such securities through electronic book-entry
changes in accounts of the DTC Participants, thereby
eliminating the need for physical movement of
securities certificates. DTC Participants include
securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other
organizations, some of whom (and/or their represen-
tatives) own DTC. More specifically, DTC is owned
by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system
is also available to others such as banks, brokers,
dealers and trust companies that clear through or
maintain a custodial relationship with a DTC
Participant, either directly or indirectly (the
"Indirect Participants"). DTC agrees with and
represents to its Participants that it will
administer its book-entry system in accordance
with its rules and by-laws and requirements of law.
Beneficial ownership of CB TM Shares will be
limited to DTC Participants, Indirect Participants
and persons holding interests through DTC
Participants and Indirect Participants. Ownership
of beneficial interests in CB TM Shares (owners
of such beneficial interests are referred to
herein as "Beneficial Owners") will be shown on,
and the transfer of ownership will be effected only
through, records maintained by DTC (with respect to
DTC Participants) and on the records of DTC
Participants (with respect to Indirect Participants
and Beneficial Owners that are not DTC
Participants). Beneficial Owners are expected to
receive from or through the DTC Participant a
written confirmation relating to their purchase of
CB TM Shares. The laws of some jurisdictions may
require that certain purchasers of securities take
physical delivery of such securities in definitive
form. Such laws may impair the ability of certain
investors to acquire beneficial interests in
CB TM Shares.
So long as Cede & Co., as nominee of DTC, is the
registered owner of CB TM Shares, the registered
or record owners of CB TM shall not be the
Beneficial Owners of CB TM Shares. Beneficial
Owners of CB TM Shares will not be entitled to
have CB TM Shares registered in their names, will
not receive or be entitled to receive physical
delivery of certificates in definitive form and
will not be considered the record or registered
holder thereof. Accordingly, each Beneficial
Owner must rely on the procedures of DTC, the
DTC Participant and any Indirect Participant
through which such Beneficial Owner holds its
interests, to exercise any rights of a holder
of CB TM Shares. The Fund understands that under
existing industry practice, in the event the
Fund requests any action of holders of CB TM
Shares, or a Beneficial Owner desires to take
any action that DTC, as the record owner of all
outstanding CB TM Shares, is entitled to take,
DTC would authorize the DTC Participants to
take such action and that the DTC Participants
would authorize the Indirect Participants and
Beneficial Owners acting through such DTC
Participants to take such action and would
otherwise act upon the instructions of
Beneficial Owners owning through them. <PAGE>
<PAGE> 28
As described above, the Fund recognizes DTC or
its nominee as the owner of all CB TM Shares for
all purposes. Conveyance of all notices, statements
and other communications to Beneficial Owners is
effected as follows. Pursuant to the Depositary
Agreement between the Fund and DTC, DTC is required
to make available to the Fund upon request and for a
fee to be charged to the Fund a listing of the
CB TM Share holdings of each DTC Participant. The
Fund shall inquire of each such DTC Participant
as to the number of Beneficial Owners holding
CB TM Shares, directly or indirectly, through such
DTC Participant. The Fund shall provide each such
DTC Participant with copies of such notice,
statement or other communication, in such form,
number and at such place as such DTC Participant
may reasonably request, in order that such notice,
statement or communication may be transmitted by
such DTC Participant, directly or indirectly, to
such Beneficial Owners. In addition, the Fund
shall pay to each such DTC Participant a fair and
reasonable amount as reimbursement for the expenses
attendant to such transmittal, all subject to
applicable statutory and regulatory requirements.
CB TM Share distributions shall be made to DTC or
its nominee, Cede & Co., as the registered
owner of all CB TM Shares. The Fund expects that
DTC or its nominee, upon receipt of any such
distributions, shall credit immediately DTC
Participants' accounts with payments in amounts
proportionate to their respective beneficial
interests in CB TM Shares as shown on the records
of DTC or its nominee. The Fund also expects
that payments by DTC Participants to Indirect
Participants and Beneficial Owners of CB TM
Shares held through such DTC Participants will
be governed by standing instructions and
customary practices, as is now the case with
securities held for the accounts of customers
in bearer form or registered in a "street
name," and will be the responsibility of such
DTC Participants. The Fund will have no
responsibility or liability for any aspects of
the records relating to or notices to
Beneficial Owners, or payments made on account
of beneficial ownership interests in such CB TM
Shares, or for maintaining, supervising or
reviewing any records relating to such
beneficial ownership interests or for any other
aspect of the relationship between DTC and the
DTC Participants or the relationship between
such DTC Participants and the Indirect
Participants and Beneficial Owners owning
through such DTC Participants.
DTC may determine to discontinue providing its
service with respect to CB TM Shares at any time
by giving reasonable notice to the Fund and
discharging its responsibilities with respect
thereto under applicable law. Under such
circumstances, the Fund shall take action
either to find a replacement for DTC to perform
its functions at a comparable cost or, if such
a replacement is unavailable, to issue and
deliver printed certificates representing
ownership of CB TM Shares, unless the Fund makes
other arrangements with respect thereto
satisfactory to the NYSE (or such other
exchange on which the CB TM Shares may be
listed).
Business Day A "Business Day" with respect to each Series
other than the US Index <PAGE>
<PAGE> 29
Series is any day on which (i) the NYSE and (ii) the
stock exchange(s) and Fund subcustodian(s) relevant
to such Series are open for business and, with
respect to the US Index Series, is any day on which
the NYSE is open. As of the date of this Prospectus,
the NYSE observes the following holidays: New Year's
Day, President's Day (Washington's Birthday), Good
Friday, Memorial Day (observed), Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The
local holidays specific to each current Series of the
Fund (other than the US Index Series) are set forth
in Appendix A to this Prospectus. The Fund will issue
and sell shares of a Series only on Business Days for
such Series on which financial institutions in
Massachusetts are also open. See "Purchase and
Issuance of Fund Shares in Creation Unit
Aggregations".
Purchase and Issuance The Fund will issue and sell shares of each Series
of Fund Shares in only in Creation Unit size aggregations on a
Creation Unit continuous basis through the Distributor at their
Aggregations net asset value next determined after receipt of
an order in good form, without a sales charge, on
any Business Day on which financial institutions
in Massachusetts are open. See "Business Day".
Massachusetts financial institutions, such as
the Fund's Custodian, are open on all days when
the NYSE is open except Columbus Day, Veterans Day
and Martin Luther King Day (observed) for such
Series. The consideration for purchase of a
Creation Unit size aggregation of shares of a
Series will be the in-kind deposit of a designated
portfolio of equity securities substantially
corresponding in composition and weighing to the
corresponding FT Index component (the "Fund Basket")
and an amount of cash computed as described below
(the "Cash Component"). Together, the Fund Basket
and the Cash Component constitute the "Fund Deposit"
which represents the minimum initial and subsequent
investment amount for shares of any Series from the
Fund. The names and number of shares of each
security constituting the Fund Basket as determined
by the Adviser at the close of business on the
previous Business Day will be made available by the
Distributor on each Business Day for a Series
immediately prior to the opening of business on the
NYSE (currently 9:30 a.m., New York time) for
delivery on a subsequent Business Day designated
for such Series on which shares are to be purchased
and issued (the "Issue Day"). The Cash Component
will equal the difference between the value of the
Fund Basket and the net asset value of a Creation
Unit aggregation of shares as determined on the
Issue Day. The net asset value per share of each
Series will be computed as described above under
"Determination of Net Asset Value" at the close
of business on the NYSE (currently 4:00 p.m.,
New York time). Tendered Securities in the
Fund Basket will be valued in the same manner
as the relevant Series values its portfolio
securities.
The Fund Basket for each Series will generally
change with changes in the corresponding FT
Index component; in addition, the Adviser
reserves the right to permit or require the
substitution of an amount of cash to be added
to the Cash Component to replace any security
in the relevant FT Index component which may
not be available in sufficient quantity for
delivery or for other similar reasons. The Fund
Basket must be delivered <PAGE>
<PAGE> 30
for receipt on the Issue Day in an account
maintained at the Custodian, in the case of the
US Index Series, or the applicable local
subcustodian, in the case of each other Series.
Orders for Creation Unit size aggregations of
shares may be placed with the Distributor only
by an "Authorized DTC Participant", i.e., a DTC
Participant who has entered into an account
agreement (the "Account Agreement") with the
Distributor and the Fund. The Fund does not
expect to enter into an Account Agreement with
more than a few DTC Participants. Investors who
are not Authorized DTC Participants must make
appropriate arrangements with an Authorized DTC
Participant in order to purchase Creation Unit
size aggregations of shares from the Fund. A
list of the Authorized DTC Participants may be
obtained from the Distributor. These arrangements
include making available in advance of each
purchase of shares an amount of cash sufficient
to pay the Cash Component, once the net asset
value of a Creation Unit is next determined after
receipt of the purchase order in good form,
together with the cash transaction fee described
below.
For a purchase order submitted by an Authorized
DTC Participant (on its own or on another
investor's behalf) to be in "good form" means
delivery of a duly completed purchase order to
the Distributor not later than 4:00 p.m., New
York time, on the intended Issue Date with
confirmation from the Custodian that the
applicable Fund Basket has been delivered and
that same day funds sufficient to pay the
estimated amount of the Cash Component are
available to the Fund (any excess cash will be
refunded). The Authorized DTC Participant will
be required to provide for the payment of the
Cash Component, as next determined upon
computation of the net asset value of shares of
the Series at 4:00 p.m., to the Custodian in a
timely manner so as to be effective on the same
Business Day in order for shares to be issued.
Investors are advised that the Custodian must
be able to confirm delivery of the Fund Basket
by [3:00 p.m.], New York time, in the case of
the US Index Series and by [1:00 p.m.], New
York time, in the case of the other Series, for
a purchase order to be accepted and shares to
be issued at the net asset value computed at
4:00 p.m. on such Business Day. The Fund
reserves the right to reject any order until
acceptance.
A cash transaction fee payable to the Fund is
imposed only on the amount of the Cash
Component to compensate the Fund for the
brokerage and other costs of investing the cash
in portfolio securities of the applicable
Series. Investors are also responsible for
payment of the costs of transferring the Fund
Basket securities to the Fund. See "Summary of
Fund Expenses".
See "Distributor" and "Fees", above, and
"Purchase and Issuance of Fund Shares in
Creation Unit Aggregations--The Distributor" in
the Statement of Additional Information, for
additional information concerning the
distribution arrangements for Fund shares. See
"Purchase and Issuance of Fund Shares in
Creation Unit Aggregations" in the <PAGE>
<PAGE> 31
Statement of Additional Information for
additional details concerning the purchase of
CB TM Shares from the Fund in Creation Unit
aggregations.
Redemption of Fund CB TM Shares in less than Creation Unit size
Shares in Creation aggregations are not redeemable. CB TM Shares of
Unit Aggregations a Series may be redeemed only in Creation Unit
size aggregations on any Business Day at their
net asset value next determined after receipt
of a redemption request in proper form by the
Distributor. "Proper form" for a redemption
request means receipt of a duly completed
redemption request form by the Distributor from
an Authorized DTC Participant by 4:00 p.m., New
York time, on any Business Day, and delivery of
the shares being redeemed to the Fund through
the facilities of DTC by the 4:00 p.m. close of
trading on the NYSE on such Business Day. Investors
should be aware that the deadline for such
transfers of shares through the DTC system may be
significantly earlier than the close of business
on the NYSE [and is currently 1:00 p.m., New York
time]. Investors other than Authorized DTC
Participants must make arrangements through an
Authorized DTC Participant in order to redeem
their shares. Such investors should allow for the
additional time that may be required to effect
redemptions through their banks, brokers or other
financial intermediaries if such intermediaries are
not Authorized DTC Participants. Investors who use
the services of a broker or other such intermediary
may be charged a fee for their services. The
Distributor will furnish a list of the Authorized
DTC Participants on request.
The Fund generally will redeem a Creation Unit
aggregation of shares of a Series principally
on an in-kind basis for a Fund Basket as announced
by the Distributor on the Business Day of the
the request for redemption, plus cash in an amount
equal to the difference between the net asset
value of the shares being redeemed, as next
determined after a receipt of a request in proper
form, and the value of the Fund Basket, less the
redemption cash transaction fee described below.
[Subject to applicable regulations and the order
of the SEC, the in-kind redemption proceeds will
generally be delivered within five Business Days
of the day on which the redemption request is
received in good form. The cash redemption proceeds
will be paid to the Authorized DTC Participant
redeeming shares on behalf of the redeeming
investor as soon as practicable after the date
of redemption (but an any event within seven
calendar days thereafter).
Investors may purchase CB TM Shares in the
secondary market and aggregate such purchases
into a Creation Unit for redemption. There can
be no assurance, however, that there always
will be sufficient liquidity in the public
trading market to permit assembly of a Creation
Unit size aggregation of CB TM Shares. Investors
should expect to incur brokerage and other
costs in connection with assembling a sufficient
number of CB TM Shares to constitute a redeemable
Creation Unit. The approximate cost of a
Creation Unit of each Series, based on FT Index
values at December 30, 1994, is indicated in
Note 1 to the Fund Expense Table under "Summary
of Fund Expenses".
<PAGE>
<PAGE> 32
For additional details concerning the
redemption of Fund shares in Creation Unit
aggregations, see "Redemption of Fund Shares in
Creation Unit Aggregations" in the Statement of
Additional Information.
A redemption cash transaction fee payable to
the Fund is imposed only on the cash portion of
the redemption proceeds to offset brokerage and
other transaction costs that may be incurred by
the Series. Investors will also bear the costs
of transferring the Fund Basket from the Fund
to their account or on their order. See
"Summary of Fund Expenses".
Because the portfolio securities of a Series
may trade on the relevant exchange(s) on days
that the NYSE is closed or are otherwise not
Business Days for such Series, stockholders may
not be able to redeem their shares of such
Series, or to purchase or sell CB TM Shares on
the NYSE, on days when the net asset value of
such Series could be significantly affected by
events in the relevant foreign markets.
Similarly, when a foreign exchange is open but
the NYSE is closed, stockholders will not have
the ability to purchase or sell their CB TM
Shares on the NYSE when price movements on the
foreign market could significantly affect their
prices.
Available Information This Prospectus does not contain all the
information included in the Registration
Statement filed with the SEC under the
Securities Act of 1933 with respect to the
securities offered hereby, certain portions of
which have been omitted pursuant to the rules
and regulations of the SEC. The Registration
Statement, including the exhibits filed
therewith and the Statement of Additional
Information, may be examined at the office of
the SEC, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington D.C. 20549. Such
documents and other information concerning the
Fund may also be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York
10005.
Statements contained in this Prospectus as to
the contents of any agreement or other document
referred to are not necessarily complete, and,
in each instance, reference is made to the copy
of such agreement or other document filed as an
exhibit to the Registration Statement of which
this Prospectus forms a part, each such
statement being qualified in all respects by
such reference.
Stockholder inquiries may be directed to the
Fund in writing, to 31 West 52nd Street, New
York, New York 10019, and by telephone, to
(212) 474-8000.
<PAGE>
<PAGE> A-1
Appendix A
The CountryBasketTM Index Fund, Inc.
Local Holidays*
Series Local Holidays
The Australia Index New Year's Day (Observed) (1/2/95), Australia Day
Series (1/26/95), Good Friday (4/14/95), Easter Monday
(4/17/95), ANZAC Day (4/25/95), Queen's Birthday
(6/12/95), Bank Holiday (8/7/95), Labour Day
(10/2/95), Christmas Day (12/25/95) and Boxing Day
(12/26/95)
The France Index Series New Year's Day (Observed) (1/2/95), Good Friday
(4/14/95), Easter Monday (4/17/95), Labour Day
(5/1/95), Victory Day (5/8/95), Ascension Day
(5/25/95), Whit Monday (6/5/95), National Day
(7/14/95), Holiday (8/14/95), Assumption Day
(8/15/95), All Saints Day (11/1/95) and Christmas
Day (12/25/95)
The Germany Index New Year's Day (1/1/95), Epiphany Day (1/6/95),
Series Carnival (2/27/95), Good Friday (4/14/95), Easter
Monday (4/17/95), Labour Day (5/1/95), Ascension
Day (5/25/95), Corpus Christi Day (6/2/95), Whit
Monday (6/5/95), Assumption Day (8/15/95), German
Unity Day (10/3/95), All Saints Day (11/1/95),
Prayer & Repentance (11/22/95), Christmas Day
(12/25/95) and Christmas Holiday (12/26/95)
The Hong Kong Index New Year's Day (Observed) (1/2/95), Lunar New Year
Series (1/31/95), Day After LNY (2/1/95 and 2/2/95),
Ching Ming Festival (4/5/95), Good Friday
(4/14/95), Easter Saturday (4/15/95), Easter
Monday (4/17/95), Tueng Ng Festival (6/2/95),
Queen's Birthday (6/17/95), Monday After Queen's
Birthday (6/19/95), Liberation Day (8/28/95), Mid
Autumn Festival (9/9/95), Chung Yeung Festival
(11/1/95), Christmas Day (12/25/95) and Boxing Day
(12/26/95)
The Italy Index Series New Year's Day (1/1/95), Epiphany Day (1/6/95),
Easter Monday (4/17/95), Liberation Day (4/25/95),
Labour Day (5/1/95), Assumption Day (8/15/95), All
Saints Day (11/1/95), Immaculate Conception
(12/8/95), Christmas Day (12/25/95) and Christmas
Holiday (12/26/95)
* Days that are not Business Days for the indicated Series. The dates
on which such holidays fall during 1995 are indicated in
parentheses. In addition to the days listed in the table, days on
which the NYSE is closed for business are not Business Days for any
Series. See "Business Day".
<PAGE>
<PAGE> A-2
The Japan Index Series Bank Holiday (1/2/95 and 1/3/95), Coming of Age
Day (1/16/95), National Foundation Day (2/11/95),
Vernal Equinox (3/21/95), Greenery Day (4/29/95),
Constitutional Memorial Day (5/3/95), National
Holiday (5/4/95) and Children's Day (5/5/95),
Respect For Aged (9/15/95), Autumnal Equinox
(9/23/95), Health Sports Day (10/10/95), Culture
Day (11/3/95), Labor Thanksgiving Day (11/23/95),
Emperor's Birthday (12/23/95) and Bank Holiday
(12/31/95)
The South Africa Index New Year's (Observed) (1/2/95), Human Rights Day
Series (3/21/95), Good Friday (4/14/95), Family Day
(4/17/95), Constitution Day (4/27/95), Worker's
Day (5/1/95), Youth Day (6/16/95), Woman's Day
(8/9/95), Heritage Day (Observed) (9/25/95), Day
of Reconciliation (12/16/95), Christmas Day
(12/25/95) and Day of Goodwill (12/26/95)
The UK Index Series Bank Holiday (1/2/95), Good Friday (4/14/95),
Easter Monday (4/17/95), May Day (5/8/95), Spring
Bank Holiday (5/29/95), Summer Bank Holiday
(8/28/95), Christmas Day (12/25/95), Boxing Day
(12/26/95)
The US Index Series New Year's (Observed) (1/2/95), Martin Luther King
Day (1/16/95), President's Day (2/20/95), Good
Friday (4/14/95), Memorial Day (5/29/95),
Independence Day (7/4/95), Labor Day (9/4/95),
Columbus Day (10/9/95), Veteran's Day (11/11/95),
Thanksgiving Day (11/23/95) and Christmas Day
(12/25/95)
<PAGE>
<PAGE>
Page
Table of Contents of General Description of the Fund
Statement of Additional Investment Policies and Restrictions
Information Special Considerations and Risks
The FT Index
Management of the Fund
Investment Advisory, Management and
Administrative Services
Brokerage Transactions
Purchase and Issuance of Fund Shares in
Creation Unit Aggregations
Redemption of Fund Shares in Creation Unit
Aggregations
Determining Net Asset Value
Dividends and Distributions
Taxes
Capital Stock and Shareholder Reports
Counsel and Independent Accountants
Report of Independent Accountants
Statement of Assets and Liabilities
APPENDICES
A.FT-Actuaries Australia Index Constituency Summary
B.FT-Actuaries France Index Constituency Summary
C.FT-Actuaries Germany Index Constituency Summary
D.FT-Actuaries Hong Kong Index Constituency Summary
E.FT-Actuaries Italy Index Constituency Summary
F.FT-Actuaries Japan Index Constituency Summary
G.FT-Actuaries South Africa Index Constituency
Summary
H.FT-Actuaries UK Index Constituency Summary
I.FT-Actuaries US Index Constituency Summary
<PAGE>
<PAGE> BACK COVER
Investment Adviser
Deutsche Bank Securities Corporation
31 West 52nd Street
New York, New York 10019
Administrator THE COUNTRYBASKET(TM)
State Street Bank and Trust Company INDEX FUND, INC.
225 Franklin Street
Boston, Massachusetts 02110
Custodian and Transfer Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Distributor
SSC Distribution Services, Inc.
2048 Washington Street
Hanover, Massachusetts 02339
Investor Information:
1-800-328-7408 _____________
_________________
PROSPECTUS
TABLE OF CONTENTS _____________
Page
Prospectus Summary . . . . . . 3
Summary of Fund Expenses . . . 7
The Fund . . . . . . . . . . . 11
The CountryBasketTM Index
Fund, Inc. and its ______ __, 1995
Investment Objective. . . . 11
Investment Policies . . . . 12
FT-Actuaries World Indices . 13 No person has been
The FT Index Components . . 14 authorized to give any
Investment Management . . . 17 information or to make any
Distributor . . . . . . . . 17 representations other than
Administrator . . . . . . . 18 those contained in this
Custodian and Transfer Prospectus in connection
Agent. . . . . . . . . . . 18 with the offer of the Fund's
Fees . . . . . . . . . . . . 18 shares made by this Prospectus,
CB TM Shares . . . . . . . 19 and, if given or made, such
Exchange Listing and information or representations
Trading. . . . . . . . . . 19 must not be relied upon as
Creation Units . . . . . . . 19 having been authorized by the
Investment Considerations Fund. This Prospectus does not
and Risks . . . . . . . . 20 constitute an offer to sell,
Dividends and Capital Gains or a solicitation of an offer
Distributions . . . . . . 22 to buy, any shares in any
Tax Matters . . . . . . . . 22 jurisdiction in which such
Lending of Securities . . . 23 offer to sell or solicitation
Investment Restrictions of of an offer to buy may not
the Fund . . . . . . . . . 23 lawfully be made.
Determination of Net Asset
Value. . . . . . . . . . . 25 Dealers effecting trans-
Board of Directors . . . . . 25 actions in the shares, whether
Capital Stock . . . . . . . 25 or not participating in this
Book-Entry Only System . . . 26 distribution, are required
Business Day . . . . . . . . 28 to deliver a prospectus.
Purchase and Issuance of Fund This is in addition to any
Shares in Creation Unit obligation of dealers to
Aggregations . . . . . . . 29 deliver a prospectus when
Redemption of Fund Shares acting as underwriters.
in Creation Unit
Aggregations . . . . . . . 31
Available Information. . . . 32 SUBJECT TO COMPLETION
Appendix A . . . . . . . . . . 33 DATED _____________, 1995
Table of Contents of Statement
of Additional Information. . 34
<PAGE>
<PAGE>
[FUND-ONLY VERSION]
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 1995
THE COUNTRYBASKET(TM) INDEX FUND, INC.
Statement of Additional Information
, 1995
This Statement of Additional Information is not a Prospectus, and should be
read in conjunction with the Prospectus dated ________, 1995 (the
"Prospectus") for The CountryBasket(TM) Index Fund, Inc. (the "Fund"), as
it may be revised from time to time. A copy of the Prospectus for the Fund
may be obtained without charge from SSC Distribution Services, Inc. at the
address set forth herein.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
General Description of the Fund . . . . . . . . . . . . . . . 1
Investment Policies and Restrictions . . . . . . . . . . . . . 1
Special Considerations and Risks . . . . . . . . . . . . . . . 11
The FT Index . . . . . . . . . . . . . . . . . . . . . . . . . 13
Management of the Fund . . . . . . . . . . . . . . . . . . . . 24
Investment Advisory, Management and
Administrative Services . . . . . . . . . . . . . . . . . . 25
Brokerage Transactions . . . . . . . . . . . . . . . . . . . . 27
Purchase and Issuance of Fund Shares in
Creation Unit Aggregations . . . . . . . . . . . . . . . . . 27
Redemption of Fund Shares in Creation Unit Aggregations . . . 32
Determining Net Asset Value . . . . . . . . . . . . . . . . . 35
Dividends and Distributions . . . . . . . . . . . . . . . . . 35
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Capital Stock and Shareholder Reports . . . . . . . . . . . . 38
Counsel and Independent Accountants . . . . . . . . . . . . . 39
Report of Independent Accountants . . . . . . . . . . . . . . 40
Statement of Assets and Liabilities . . . . . . . . . . . . . 41
Notes to Financial Statements . . . . . . . . . . . . . . . . 42
APPENDICES
____________________
"CB(TM) Shares", "Australia CB(TM) Shares", "France CB(TM)
Shares", "Germany CB(TM) Shares", "Hong Kong CB(TM) Shares", "Italy CB(TM)
Shares", "Japan CB(TM) Shares", "South Africa CB(TM) Shares", "UK CB(TM)
Shares", and "US CB(TM) Shares" are trademarks of Deutsche Bank Securities
Corporation ("DBSC").
"FT-Actuaries World Indices", "FT-Actuaries World Index" and "FTAWI"
are trade and service marks of The Financial Times Limited, and used under
license by DBSC. The Fund is an authorized sublicensee thereof.
____________________
THE FT-ACTUARIES WORLD INDICES (THE "FT INDEX") (COPYRIGHT 1995) ARE
OWNED BY AND JOINTLY COMPILED BY THE FINANCIAL TIMES LIMITED,
GOLDMAN, SACHS & CO. AND NATWEST SECURITIES LIMITED (THE "COMPILERS")
IN CONJUNCTION WITH THE INSTITUTE OF ACTUARIES AND THE FACULTY OF
ACTUARIES (THE "ACTUARIES").
NONE OF THE COMPILERS OR THE ACTUARIES IS INTENDING BY THIS DOCUMENT
TO OFFER OR SOLICIT TO BUY OR SELL ANY SECURITIES. EACH OF THE
COMPILERS, THE MEMBERS OF THE ACTUARIES AND THEIR RESPECTIVE CLIENTS
AND OFFICERS MAY HAVE A POSITION OR ENGAGE IN TRANSACTIONS IN ANY OF
THE SECURITIES MENTIONED.
NONE OF THE COMPILERS OR THE ACTUARIES MAKES ANY WARRANTY EXPRESSLY
OR IMPLIEDLY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE FT INDEX OR ANY PRODUCT OR SECURITIES DESCRIBED IN
THIS DOCUMENT (THE "PRODUCTS") OR IS RESPONSIBLE FOR THE CONSTRUCTION
OR OPERATION OF THE PRODUCTS OR FOR THE PERFORMANCE OF OR FOR ANY
ERROR IN THE FT INDEX OR THE PRODUCTS OR IS UNDER ANY OBLIGATION TO
ADVISE ANY PERSON OF ANY ERROR IN THE FT INDEX OR THE PRODUCTS. NONE
OF THEM GIVES ANY ASSURANCE REGARDING THE CONTINUED CALCULATION OR
PUBLICATION OF THE FT INDEX OR ANY CHANGES IN THE CONSTITUENTS OR IN
THE METHODOLOGY USED IN ITS CALCULATION.
<PAGE>
<PAGE> ii
Unless otherwise specified, all references in this Statement of
Additional Information to "dollars", "US $" or "$" are to United States
dollars, all references to "A$" are to Australian dollars, all references
to "FF" are to French francs, all references to "DM" are to the Deutsche
mark, all references to "HK $" are to Hong Kong dollars, all references to
"LL" are to Italian lira, all references to "Y" are to Japanese Yen, all
references to "CR" are to South African commercial rands and all references
to "L" are to pounds sterling. On __________, 1995, the noon buying rates
in New York City for cable transfers payable in the applicable currency, as
certified for customs purposes by the Federal Reserve Bank of New York,
were as follows for each US $1.00: A$____________, FF____________,
DM____________, HK$____________, LL____________, Y____________,
CR____________ and L____________. Some numbers in this Statement of
Additional Information have been rounded. All US-dollar equivalents
provided in this Statement of Additional Information are calculated at the
exchange rate prevailing on the date to which the corresponding foreign
currency amount refers.
<PAGE>
<PAGE> 1
GENERAL DESCRIPTION OF THE FUND
The CountryBasket(TM) Index Fund, Inc. (the "Fund") is a non-
diversified, open-end management investment company. The Fund was
incorporated under the laws of the State of Maryland under the name
"Eurofund Inc." on August 8, 1994. The Fund filed Articles of Amendment
adopting its present name on February 6, 1995. The Fund is authorized to
issue shares of common stock, with a par value of $.001 per share, in one
or more series. The Fund's shares of common stock currently are issued in
nine series (each, a "Series"): the Australia Index Series, the France
Index Series, the Germany Index Series, the Hong Kong Index Series, the
Italy Index Series, the Japan Index Series, the South Africa Index Series,
the UK Index Series, and the US Index Series.
INVESTMENT POLICIES AND RESTRICTIONS
The following information supplements and should be read in
conjunction with the sections entitled "Investment Policies" and
"Investment Restrictions of the Fund" in the Prospectus.
Each of the initial nine Series will seek to remain fully invested in
a portfolio of common stocks and other equity securities which will provide
investment results that substantially correspond to the price and yield
performance of the corresponding country component of the FT Index. Brief
descriptions of the equity markets in which the Fund Series will be
invested are provided below. Unless otherwise indicated, numerical data
set forth below with respect to the equity markets represented by the
Series of the Fund were provided by the Compilers. Neither the Fund nor the
Adviser has independently verified such data.
The Australian Equity Markets
General Background. Publicly traded Australian equity securities are
listed on the Australian Stock Exchange Limited ("ASX"), which maintains
wholly-owned subsidiary exchanges in Sydney, Adelaide, Brisbane, Hobart,
Melbourne, and Perth. Only equity securities traded on the ASX are
currently eligible for inclusion in the Australia component of the FT
Index.
Reporting, Accounting, and Auditing. Australian reporting,
accounting, and auditing practices are regulated by the Australian
Securities Commission. These practices bear many similarities to American
standards, but differ significantly in some important respects. In
general, Australian corporations are not required to provide all of the
disclosure required by American law and accounting practice, and such
disclosure may be less timely and frequent than that required of U.S.
corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of the Australian equity markets was approximately
A$248.8 billion, or US $193.0 billion. The aggregate "investible" market
capitalization (as defined by the World Index Policy Committee ("WIPC") of
the FT Index, described below under "The FT Index--World Index Policy
Committee") of these stocks was approximately A$220.4 billion, or US $170.9
billion, as of December 30, 1994.
The French Equity Markets
General Background. Equity securities trade on France's seven stock
exchanges, of which the Paris Stock Exchange handled more than [95]% of the
transactions nationally in 1994. Trading in most of the stocks listed on
the Paris Stock Exchange (Le Marche National), which consolidates all
listed securities on the other French exchanges, takes place through the
Cotation Assistee en Continu (CAC)
<PAGE>
<PAGE> 2
computer order-driven trading system. Only equities traded on the Official
Market (Marche Official) are currently eligible for inclusion in the France
component of the FT Index.
Reporting, Accounting, and Auditing. Although French reporting,
accounting, and auditing practices are considered rigorous by European
standards, they are not identical to U.S. standards in some important
respects. In general, French corporations are not required to provide all
of the disclosure required by U.S. law and accounting practice, and such
disclosure may be less timely and frequent than that required of U.S.
corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of the French equity markets was approximately
FF2,442.7 billion, or US $457.7 billion. The aggregate investible market
capitalization (as defined by the WIPC) was FF1,999.6 billion, or US $374.7
billion, as of December 30, 1994.
The German Equity Markets
General Background. Equity securities trade on Germany's eight
independent local stock exchanges. The Frankfurt Stock Exchange, which
accounted for approximately [ ]% of the total trading volume on the
German stock exchanges in 1994, is the principal stock exchange in Germany.
Exchange securities are denominated in Deutsche Marks, the official
currency of Germany. German stock exchanges offer three different market
segments in which stocks are traded: the official market (Amtlicher Handel)
segment of the German stock exchanges comprises trading in shares which
have been formally admitted to official listing by the admissions committee
of the relevant stock exchange, based upon disclosure in the listing
application or "prospectus". Only equity securities traded on the official
market on the Frankfurt Stock Exchange are currently eligible for inclusion
in the Germany component of the FT Index.
Reporting, Accounting, and Auditing. German reporting, accounting,
and auditing standards differ from U.S. standards in important respects.
German corporations, other than subsidiaries of U.S. companies, normally do
not provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and less frequent than
required of public corporations in the United States.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Germany was approximately DM 718.7 billion, or
US $463.7 billion. The aggregate investible market capitalization (as
defined by the WIPC) was approximately DM 591.1 billion, or US $381.4
billion, as of December 30, 1994.
The Hong Kong Equity Markets
General Background. The publicly traded equity securities of Hong
Kong are listed on the Stock Exchange of Hong Kong Limited ("HKX"), Hong
Kong's sole stock exchange. Exchange securities are denominated in Hong
Kong dollars, the official currency of Hong Kong. Only equity securities
traded on the HKX and shares of certain Hong Kong issuers that are listed
on the Singapore Stock Exchange are currently eligible for inclusion in the
Hong Kong component of the FT Index.
Reporting, Accounting, and Auditing. While Hong Kong has
significantly upgraded reporting, accounting, and auditing practices during
the last decade, its standards remain significantly less rigorous
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<PAGE> 3
than U.S. standards. In general, Hong Kong corporations are not required
to provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and frequent than that
required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Hong Kong was approximately HK $1,774.2 billion,
or US $229.3 billion. The aggregate investible market capitalization (as
defined by the WIPC) of Hong Kong was approximately HK $1,574.8 billion, or
US $203.5 billion, as of December 30, 1994.
The Italian Equity Markets
General Background. Equity securities trade on Italy's ten stock
exchanges, of which the Milan Stock Exchange accounted for approximately
[90]% of the total volume in 1994. The Italian market is dominated by
financial companies and utilities and is not representative of that
country's overall economy. Only equity securities on the official list
(Listino della Borsa) and traded on the Milan Stock Exchange are currently
eligible for inclusion in the Italy component of the FT Index.
Reporting, Accounting, and Auditing. Italian reporting, accounting,
and auditing practices are regulated by Italy's National Control
Commission. These practices bear some similarities to American standards,
but differ significantly in many important respects. Generally, Italian
corporations are not required to provide all of the disclosure required by
U.S. law and accounting practice, and such disclosure may be less timely,
frequent, and consistent than required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the Italian markets was approximately LL304.3 trillion, or
US $187.6 billion. The aggregate investible market capitalization (as
defined by the WIPC) of Italy was approximately LL240.8 trillion, or US
$148.5 billion, as of December 30, 1994.
The Japanese Equity Markets
General Background. Equity securities trade on Japan's eight stock
exchanges, as well as in an over-the-counter market. Japan is second only
to the U.S. in aggregate stock market capitalization. Only equity
securities traded on the Tokyo and Osaka Stock Exchanges, which accounted
for approximately [ ]% of the total trading volume on the Japanese stock
exchanges in 1994, are currently eligible for inclusion in the Japan
component of the FT Index.
Reporting, Accounting, and Auditing. Although some Japanese
reporting, accounting, and auditing practices are substantially based on
U.S. principles, these standards are not identical to American ones in some
important respects, particularly with regard to unconsolidated subsidiaries
and related structures. Generally, Japanese corporations are not required
to provide all of the disclosure required by U.S. law and accounting
practice, and such disclosure may be less timely and frequent than that
required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of Japan was approximately Y366.4 trillion, or US
$3.7 trillion. The aggregate investible market capitalization (as defined
by the WIPC) of Japan was approximately Y329.8 trillion, or US $3.3
trillion, as of December 30, 1994.
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<PAGE> 4
The South African Equity Markets
General Background. South Africa's publicly traded equity securities
are listed on the Johannesburg Stock Exchange ("JSX"), South Africa's sole
stock exchange. The JSX, which has historically concentrated in mining
industries, is far less diversified than the overall South African economy.
South Africa has a two-currency system, consisting of the Commercial Rand
("CR") and the Financial Rand ("FR"). All commercial transactions and
dividends are denominated in CRs. However, either CRs or FRs may be used
to purchase securities. Securities purchased with CRs must be sold in that
denomination and the proceeds are repatriated at the CR rate. Similarly,
securities purchased with FRs, which normally trade at a 30% discount to
CRs, must be sold for FRs, with the initial capital and any gains
repatriated at the FR rate.
Reporting, Accounting, and Auditing. South Africa's reporting,
accounting, and auditing practices differ significantly from American
standards in many respects. In general, South African corporations are not
required to provide all of the disclosure required by U.S. law and
accounting practice, and such disclosure may be less timely and frequent
than that required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the total
market capitalization of South Africa was approximately CR796.9 billion, or
US $195.6 billion. The aggregate investible market capitalization (as
defined by the WIPC) of South Africa was approximately CR645.7 billion, or
US $158.4 billion, as of December 30, 1994.
The United Kingdom Equity Markets
General Background. The United Kingdom is Europe's largest equity
market in terms of aggregate market capitalization. Trading is fully
computerized under the Stock Exchange Automated Quotation System. The
London Stock Exchange has the largest volume of trading in international
equities in the world. Over 60% of cross-border trading in the world, and
approximately 93% of that in Europe, passes through London. Only stocks
traded on the London Stock Exchange are currently eligible for inclusion in
the UK component of the FT Index.
Reporting, Accounting, and Auditing. Although United Kingdom
reporting, accounting, and auditing standards are among the most stringent
outside the United States, such standards are not identical to U.S.
standards in some important respects. Some United Kingdom corporations are
not required to provide all of the disclosure required by U.S. law and
accounting practice, and such disclosure may, in certain cases, be less
timely and less frequent than that required of U.S. corporations.
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the United Kingdom markets was approximately L701.3
billion, or US $1,097.1 billion. The aggregate investible market
capitalization (as defined by the WIPC) of these stocks was approximately
L654.5 billion, or US $1,023.9 billion, as of December 30, 1994.
The United States Equity Markets
General Background. Equity securities trade on nine U.S. stock
exchanges. The New York Stock Exchange, Inc., the American Stock Exchange
and the National Association of Securities Dealers Automated Quotation
("NASDAQ") system, accounted for more than [ ]% of the total U.S. equity
<PAGE>
<PAGE> 5
trading volume in 1994. Only stocks traded on the New York Stock Exchange,
the American Stock Exchange and the NASDAQ are currently eligible for
inclusion in the US component of the FT Index.
Reporting, Accounting, and Auditing. U.S. reporting, accounting, and
auditing practices are generally regarded as the most stringent of all
major global markets.
Structure of Equity Markets. As of December 30, 1994, the aggregate
capitalization of the U.S. equity markets was approximately US $4.0
trillion. The aggregate investible market capitalization (as defined by
the WIPC) of these stocks was approximately US $3.8 trillion, as of
December 30, 1994.
Other Fund Investments
Because the investment objective of each Series is to provide
investment results that substantially correspond to the price and yield
performance of the equity securities in the applicable component of the FT
Index, each Series will invest the largest proportion of its assets as is
practicable, in any event at least 95% of its net assets, in the equity
securities of the relevant FT Index component.
The remainder of each Series' assets will consist of temporary cash
which may be used to purchase high quality, short-term fixed income
securities denominated in US dollars or foreign currency, stock index
futures contracts or options on such contracts and call options on
securities and indices in the relevant market. Each Series may also
purchase other equity securities that may be an appropriate substitution
for a security in the relevant FT Index component if market conditions make
it impracticable to purchase such index security. Such "substitute"
securities will be carefully selected for the high degree of positive
correlation between the values of such securities and the values of the FT
Index securities to which the Series seeks exposure.
Regulatory requirements designed to eliminate leverage accompanying
investments in futures contracts and options on futures contracts require
each Series to segregate in an account with the Fund's Custodian (see
"Investment Advisory, Management and Administrative Services -- The
Administrator, Custodian and Transfer Agent" below) an amount of its assets
equal to the obligation to purchase the assets underlying such contracts.
The assets segregated will be high-grade, short-term debt securities
denominated in the currency or currencies of the portfolio equity
securities of the particular Series (the "Series Currency").
The purpose of investing in futures contracts and options on futures
contracts and purchasing call options and the related activity of writing
put options (explained below) is to expose cash reserves and short term
money market investments to the equity risk and return of the corresponding
component of the FT Index in order to achieve a higher correlation with
such component.
It is not expected for the foreseeable future that the total value of
futures contracts and options thereon, plus the related segregated assets,
the "substitute" securities referred to above and any other temporary cash
and short-term investments, will exceed 5% of the net asset value of a
Series.
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<PAGE> 6
Options on Securities
Purchase of Call Options
Each Series may purchase call options on securities and indices
thereof. Call options are contracts which give the buyer the right, but
not the obligation, to buy a fixed amount of securities at a fixed price
for a fixed period of time or, in the case of options on indices, to make
or receive a cash settlement. A Series will only invest in call options,
in combination with other instruments, for the purpose of exposing the
Series' cash reserves and short-term investments to the equity risk and
return of the corresponding component of the FT Index in order to achieve a
higher correlation with such component. It will not purchase call options
for purposes of benefiting from anticipated market appreciation without the
risk of market decline.
Each Series may purchase both options that are traded on United
States and foreign exchanges and options traded over-the-counter with
broker-dealers who make markets in these options. Unlike exchange-traded
options in the United States that are issued by clearing organizations
affiliated with the exchange on which the option is listed, which, in
effect, gives its guarantee to every exchange-traded option transaction,
"over-the-counter" options are contracts between the Fund and its
counterparty with no clearing organization guarantee. Thus, when a Series
purchases an over-the-counter option, it relies on the dealer from which it
has purchased the over-the-counter option to make or take delivery of the
securities underlying the option or pay any cash settlement amount.
Failure by the dealer to do so would result in the loss of the premium paid
by the Series as well as the loss of the expected benefit of the
transaction. The Adviser will evaluate the creditworthiness of any dealer
from which a Series proposes to purchase options.
Although exchange-traded options generally have a continuous liquid
market, over-the-counter options may not. Consequently, a Series will
generally be able to realize the value of an over-the-counter option it has
purchased only by exercising it or reselling it to the dealer who issued
it. While the Fund will purchase over-the-counter call options only with
dealers which agree to, and which are expected to be capable of, entering
into closing transactions with the Series, there can be no assurance that
the Series will be able to liquidate an over-the-counter call option at a
favorable price at any time prior to expiration. In the event of
insolvency of the counterparty, the Series may be unable to liquidate an
over-the-counter call option.
Writing Put Options
When the Fund writes (sells) a put option, the purchaser has the
right, for a specified period of time, to sell the securities or index
subject to the option to the Fund at the specified exercise price. The Fund
receives a premium for writing the put option which it retains whether or
not the option is exercised.
A Series will write a covered put option only in connection with its
purchase of a related call option on the same security or index. This
technique will allow a Series to expose uninvested cash to the risk of both
market appreciation and market decline in the value of the relevant
security or index.
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<PAGE> 7
Futures Contracts
A Series will enter into futures contracts only for the purpose of
exposing the Series' cash reserves and short-term investments to the equity
risk and return of the corresponding component of the FT Index in order to
achieve a higher correlation with such component. A Series will not use
futures for speculative purposes. Each Series intends to invest only in
contracts on indices of securities which the Adviser believes will provide
appropriate proxies for the performance of the FT Index component relevant
to such Series. A Series may enter into such futures contracts on any
recognized futures exchange, if permitted by applicable U.S. law.
A futures contract on a stock index is an agreement between two
parties to buy and sell an index of securities at its closing value at a
specified future time. Stock index futures are settled by delivery by one
party of the net cash settlement price rather than the securities
underlying the contract. Each Series will only take "long" futures
positions, i.e., the Series will assume the obligation to acquire the index
of securities underlying the contract.
In order to open and maintain a position in futures contracts, the
Fund is required to make a good faith deposit, known as "initial margin",
in cash or government securities, which are held in the broker's name in an
account at the Fund's custodian. A Series expects to earn interest income
on its initial margin deposits. Minimal initial margin requirements are
established by the futures exchange and may be changed. Brokers may
establish initial margin requirements which are higher than the exchange
minimums. Initial margin requirements typically range upward from less
than 5% of the underlying value of the contract being traded. After a
futures contract position is opened, the value of the contract is marked to
market daily. The change in the futures contract's closing value is
settled each day by paying or receiving "variation margin", depending upon
the direction of change in the value of the futures contract. Variation
margin payments are made to and from the futures broker for as long as the
contract remains open.
A Series will invest in futures contracts and options thereon only to
the extent that the Fund, the Adviser or any related persons will not as a
result of such contracts be required to register as a "commodity pool
operator" with the Commodity Futures Trading Commission (the "CFTC").
Under CFTC regulations, each Series will be required to limit the amount of
initial margin and premiums on positions in futures or options on futures
entered into by the Series for non-hedging purposes to not more than 5% of
the net assets of such Series. A Series will limit its investments to those
which have been approved by the CFTC for investment by United States
investors.
Options on Futures Contracts
Each Series may also enter into options on futures contracts for the
same simulation purposes described above with respect to options and
futures contracts. The Fund may purchase only call options on futures
contracts. A call option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a long position in a
futures contract at a specified exercise price at any time during the
option exercise period.
Lending Portfolio Securities
To a limited extent the Fund may lend its portfolio securities to
brokers, dealers and other financial institutions, provided it receives
collateral in cash, U.S. Government securities or other assets
<PAGE>
<PAGE> 8
permitted by applicable regulations, the total value of which at all times
is maintained in an amount equal to at least 100% of the current market
value of the securities loaned. By lending its portfolio securities, each
Series can increase its income through securities lending fees and through
the investment of the collateral, and help offset the effect that the
expenses of the Series have on the ability of such Series to provide
investment results that correspond to that of its applicable component of
the FT Index. These loans may not exceed 331/3% of each Series' total
assets. Each Series will pay reasonable administrative and custodial fees
in connection with the loan of securities. The interest income the Series
receives from the loan collateral is included in the Series' gross
investment income on which a portion of the management fee paid to DBSC, in
its capacity as investment adviser to the Fund, is based. See "Investment
Advisory, Management and Administrative Services--The Adviser". The Fund
will pay no finders fees in connection with the lending of its securities.
The Securities and Exchange Commission currently requires that the
following conditions be met whenever portfolio securities are
loaned: (1) the Series must receive at least 100% collateral from the
borrower; (2) the borrower must increase such collateral whenever the
market value of the securities lent rises above the level of the
collateral; (3) the Series must be able to terminate the loan at any time;
(4) the Series must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions on the loaned securities, and
any increase in market value; (5) the Series may pay only reasonable
custodian fees in connection with the loan and will pay no finders fees;
and (6) while voting rights on the loaned securities may pass to the
borrower, the Fund's Board of Directors (the "Board" or the "Directors")
must terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. Each Series will
comply with the foregoing conditions. DBSC will provide securities lending
services to the Fund under its investment advisory and management agreement
with the Fund. See "Investment Advisory, Management and Administrative
Services--The Adviser".
Currency Transactions
The investment policy of each Series is to remain as fully invested
as practicable in the equity securities of the relevant FT Index component.
Hence, no Series of the Fund expects to engage in currency transactions for
the purpose of hedging against declines in the value of the Series
Currency.
Each Series will engage in currency conversion transactions for the
purpose of meeting the U.S. dollar cash requirements of redemptions of
Series shares in Creation Unit size aggregations (see "Purchase and
Issuance of Fund Shares in Creation Unit Aggregations--Generally") and
Series expenses and distributions. In addition, to the extent a Series
holds US dollar-denominated cash balances or short term money market-type
investments, it may purchase a forward currency contract or other
instruments which would enable it to purchase the applicable Series
Currency at a fixed price in the future and eliminate the risk that the US
dollar-denominated assets of the Series would widen any deviation between
the performance of the applicable FT Index component and the Series in the
event that the value of the Series Currency rose in relation to the US
dollar. Since it is not expected for the foreseeable future that US
dollar-denominated assets would exceed 5% of a Series' net assets (and
would under normal conditions be significantly less than 5%), the value of
forward currency contracts, currency futures contracts and options on such
contracts and currency options should not exceed 5% of a Series' net assets
and net forward currency contracts and other currency instruments should
not exceed the value of US dollar-denominated assets.
<PAGE>
<PAGE> 9
A forward currency contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price
set at the time of the contract. Currency options give the buyer the
right, but not the obligation, to buy or sell a fixed amount of a specific
currency at a fixed price for a fixed period of time. A currency futures
contract is a contract involving an obligation to deliver or acquire the
specified amount of currency at a specified price at a specified future
time. Futures contracts may be settled on a net cash payment basis rather
than by the sale and delivery of the underlying currency. Certain risks of
transactions in foreign currency and related derivatives are described
below under "Special Considerations and Risks--Currency Transactions".
Investment Restrictions
The Fund has adopted the following investment restrictions as
fundamental policies with respect to each Series. These restrictions
cannot be changed with respect to a Series without the approval of the
holders of a majority of such Series' outstanding voting securities. For
purposes of the Investment Company Act of 1940, as amended (the "1940
Act"), a majority of the outstanding voting securities of a Series means
the vote, at an annual or a special meeting of the security holders of the
Fund, of the lesser of (1) 67% or more of the voting securities of the
Series present at such meeting, if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by
proxy, or (2) more than 50% of the outstanding voting securities of the
Series. A Series may not:
1. Change its investment objective, which is to provide investment
results that substantially correspond to the price and yield performance of
its corresponding country component of the FT Index;
2. Lend any funds or other assets except through the purchase of all
or a portion of an issue of securities or obligations of the type in which
it is permitted to invest; however, a Series may lend its portfolio
securities in an amount not to exceed 33 1/3% of the value of its total
assets.
3. Issue senior securities or borrow money, except borrowings from
banks for temporary or emergency purposes in an amount up to 33 1/3% of the
value of the Series' total assets (including the amount borrowed), valued
at the lesser of cost or market, less liabilities (not including the amount
borrowed) valued at the time the borrowing is made, and the Series will not
purchase securities while borrowings in excess of 5% of the Series' total
assets are outstanding, provided, that for purposes of this restriction,
short-term credits necessary for the clearance of transactions are not
considered borrowings;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 33 1/3% of the value of its total assets to
secure permitted borrowings. (The deposit of underlying securities and
other assets in escrow and collateral arrangements with respect to initial
or variation margin for currency transactions, options, futures contracts
and options on futures will not be deemed to be pledges of the Series'
assets);
5. Purchase a security (other than obligations of the United States
Government, its agencies or instrumentalities) if as a result 25% or more
of its total assets would be invested in a particular industry, except that
a Series will invest 25% or more of its total assets in a single industry
in the event that the relevant component of the FT Index is or becomes
similarly concentrated;
6. Purchase, hold or deal in real estate, or oil, gas or mineral
interests or leases, but a Series may purchase and sell securities that are
issued by companies that invest or deal in such assets;
<PAGE>
<PAGE> 10
7. Act as an underwriter of securities of other issuers, except to
the extent the Series may be deemed an underwriter in connection with the
sale of securities in its portfolio;
8. Purchase securities on margin, except for such short-term credits
as are necessary for the clearance of transactions, except that a Series
may make margin deposits in connection with transactions in currencies,
options, futures and options on futures.
9. Sell securities short, but reserves the right to sell securities
short if it owns the security;
10. Invest in commodities or commodity contracts, except that the
Series may buy and sell currencies and forward contracts with respect
thereto, futures contracts on securities, stock indices and currencies and
options on such futures contracts and make margin deposits in connection
with such contracts; or
11. Write put or call options or combinations thereof, except that a
Series may write put options.
With respect to the fundamental restriction set forth in (5), above,
the Adviser has advised the Fund that as of December 30, 1994, the
following FT Index components were concentrated (in excess of 25% of such
component) in stocks of the indicated industry groups, as defined by the
Consortium of the FT Index (see "The FT Index" below):
Australia Mining, Metals and Minerals
Hong Kong Real Estate
Italy Insurance Multi/Property/Casualty Utilities
South Africa Precious Metals and Minerals
The securities portfolios of the Australia Index Series, the Hong Kong
Index Series, the Italy Index Series and the South Africa Index Series will
be concentrated in the indicated industries for so long as the
corresponding FT Index components are so concentrated.
In addition to the investment restrictions adopted as fundamental
policies as set forth above, each Series will observe the following
restrictions, which may be changed by the Board without a shareholder vote.
A Series will not:
1. Invest in the securities of a company for the purpose of
exercising management or control, or in any event purchase and hold more
than 10% of the securities of a single issuer. The Fund may vote the
investment securities owned by each Series in accordance with its views; or
2. Hold illiquid assets in excess of 15% of its net assets. An
illiquid asset is any asset which may not be sold or disposed of in the
ordinary course of business within seven days at approximately the value at
which the Series has valued the investment.
For purposes of the percentage limitation on each Series' investments
in illiquid securities, with respect to each Series other than the US Index
Series, foreign equity securities, though not registered under the
Securities Act of 1933 (the "Securities Act"), will not be deemed illiquid
if they are otherwise readily marketable. Such securities will be
considered "readily marketable" if they are traded on an exchange and are
not legally restricted from sale by the Series. The Consortium, i.e., the
compilers of
<PAGE>
<PAGE> 11
the FT Index and their associates (see "The FT Index--In General"),
automatically excludes a security from the FT Index if it fails to trade
for more than fifteen working days within each of two successive calendar
quarters. The Adviser will monitor the liquidity of restricted securities
in each Series' portfolio under the supervision of the Fund's Board of
Directors. In reaching liquidity decisions, the Adviser will consider,
inter alia, the following factors:
(1) the frequency of trades and quotes for the security;
(2) the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers;
(3) dealer undertakings to make a market in the security; and
(4) the nature of the security and the nature of the
marketplace in which it trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of
transfer).
If a percentage limitation is adhered to at the time of investment or
contract, a later increase or decrease in percentage resulting from any
change in value or total or net assets will not result in a violation of
such restriction, except that the percentage limitations with respect to
the borrowing of money and illiquid securities will be observed
continuously.
SPECIAL CONSIDERATIONS AND RISKS
A discussion of the risks associated with an investment in the Fund
is contained in the Prospectus under the heading "The Fund--Investment
Considerations and Risks". The discussion below supplements, and should be
read in conjunction with, such section of the Prospectus.
Non-U.S. Equity Portfolios
Investing in securities issued by companies domiciled in countries
other than the domicile of the investor and denominated in currencies other
than an investor's local currency entails certain considerations and risks
not typically encountered by the investor in making investments in its home
country and in that country's currency. These considerations include
favorable or unfavorable changes in interest rates, currency exchange rates
and exchange control regulations, and the costs that may be incurred in
connection with conversions between various currencies. In addition,
investments in countries other than the United States could be affected by
other factors generally not thought to be present in the United States,
including less liquid and less efficient securities markets, greater price
volatility, less publicly available information about issuers, the
imposition of withholding or other taxes, restrictions on the expatriation
of funds or other assets of a Series, higher transaction and custody costs,
delays attendant in settlement procedures and difficulties in enforcing
contractual obligations.
Currency Transactions
Foreign exchange transactions involve a significant degree of risk
and the markets in which foreign exchange transactions are effected are
highly volatile, highly specialized and highly technical. Significant
changes, including changes in liquidity and prices, can occur in such
markets within very short
<PAGE>
<PAGE> 12
periods of time, often within minutes. Foreign exchange trading risks
include, but are not limited to, exchange rate risk, maturity gaps,
interest rate risk and potential interference by foreign governments
through regulation of local exchange markets, foreign investment, or
particular transactions in foreign currency. The risks associated with
foreign currency options and futures contracts generally include those
discussed under "Other Fund Investments--Options on Securities" and
"--Futures Contracts", with respect to stock index futures, options on
securities and indices and options on futures, and below under "Options and
Futures". If the Adviser applies a currency hedging strategy at an
inappropriate time or judges market conditions, trends or correlations
incorrectly, foreign currency derivatives strategies may not serve their
intended purpose of improving the correlation of a Series' return with the
performance of the corresponding FT Index component and may lower the
Series' return. The Series could experience losses if the values of its
currency forwards, options and futures positions were poorly correlated
with its other investments or if it could not close out its positions
because of an illiquid market. In addition, each Series will incur
transaction costs, including trading commissions, in connection with its
foreign currency transactions.
Options and Futures
A Series' ability to establish and close out positions in options,
futures contracts and options on futures contracts will be subject to the
existence of a liquid market. Although a Series generally will purchase or
sell only those options, futures contracts and options thereon for which
there appears to be a liquid market and, in the case of futures contracts,
which are traded on regulated futures exchanges, there can be no assurance
that a liquid market will exist for any particular option or futures
contract or option thereon in which the Series maintains a position. Thus,
it may not be possible to effect a closing transaction in any contract or
to do so at a satisfactory price and the Series would have to either make
or take delivery under the contract or, in the case of a written option,
wait to sell the underlying securities until the option expires or is
exercised or, in the case of a purchased option, exercise the option. In
the case of a futures contract which the Series has purchased and which the
Fund is unable to close, the Series may be required to maintain margin
deposits on the futures contract and to make variation margin payments
until the contract is closed. In such situations, if a Series has
insufficient cash, it may have to sell portfolio securities to meet
applicable daily margin requirements.
Because the futures strategies of each Series are engaged in only for
the purpose of seeking a higher correlation with the corresponding
component of the FT Index and its use of futures will be unleveraged, the
Fund does not believe that the Series are subject to the risks of loss
frequently associated with futures transactions. A Series would presumably
have sustained comparable losses if, instead of the futures contract, it
had invested in the underlying security or index of securities and sold it
after the decline.
Successful use of futures contracts and options thereon by any Series
is subject to the ability of the Adviser to predict correctly correlations
between the movements in the values of such contracts (or the underlying
securities or indices) with the direction of the relevant FT Index
component or securities to which the Series seeks exposure. If the
Adviser's expectations are not met, the Series would be in a worse position
than if the futures exposure had not been effected. If a Series buys
futures contracts on stock indices which historically have had a high
degree of positive correlation to the value of the FT Index, and such
historical experience were not to obtain in the future, the value of the
relevant FT Index Component might rise or decline more rapidly than the
value of such an imperfectly correlated futures contract. In that case,
the futures strategy will be less effective than if the correlation had
been greater. In a similar but more extreme situation, the value of the
futures position might in fact decline while the
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<PAGE> 13
value of the relevant FT Index component holds steady or rises. This would
result in a loss that would not have occurred but for the futures position.
THE FT INDEX
In General
The FT Index is jointly compiled by The Financial Times Limited,
NatWest Securities Limited, and Goldman, Sachs & Co. (together, the
"Compilers"), in conjunction with the Institute of Actuaries and the
Faculty of Actuaries (together with the Compilers, the "Consortium"). The
Compilers are responsible for calculating the FT Index on a day-to-day
basis.
The following summary of the compilation and operation of the FT
Index is based on information provided by Goldman, Sachs & Co.
The FT Index offers measures of stock price performance for the major
world stock markets as well as for regional areas, broad economic sectors,
and industry groups. The components of the FT Index represent separately
each of 24 countries, 12 regions grouped by geographic areas, 36 groups
classified according to industry sectors, as well as 7 broad economic
sectors. In total over 1,000 indices are calculated daily across
countries, regions, industry groups, and economic sectors.
The World Index Policy Committee
Daily and quarterly review of and policy decisions made concerning
the FT Index are the responsibility of the WIPC. The WIPC consists of one
representative from each of the Compilers, two members appointed by the
President of the Fellows of the Institute of Actuaries and Faculty of
Actuaries, and three members from separate and independent international
investment management and advisory firms appointed by the three principals,
[currently County Investment Management Ltd., Rowe Price Fleming
International Inc., and The WM Company]. To the best of the Adviser's
knowledge, WIPC includes no employees of DBSC or Deutsche Bank AG as of
December 30, 1994.
Specifically, the WIPC determines the overall policy and objectives
of the FT Index; establishes selection criteria, liquidity requirements,
calculation methodologies, rules and representation for inclusion of index
components and the timing and disclosure of additions and deletions of FT
Index constituents; determines what data on distributions to shareholders
and other capital changes are included; and scrutinizes and ensures that
the FT Index is theoretically and operationally correct and accurate. The
_____________________
* "FT-Actuaries World Indices" is a trade and service mark of The
Financial Times Limited, and used under license by DBSC. The Fund is
an authorized sublicensee thereof.
** See The FT-Actuaries World Indices(TM)--An Introduction (The
Financial Times Limited, Goldman, Sachs & Co. and Wood MacKenzie &
Co., Ltd., 1987); FT-Actuaries World Indices(TM)--Construction and
Maintenance Rules (The Financial Times Limited, Goldman, Sachs & Co.
and County NatWest Securities Limited, 1991); FT-Actuaries World
Indices(TM)-- Construction and Maintenance Rules Amendments (Goldman,
Sachs & Co. and NatWest Securities Limited, April 1993).
<PAGE>
<PAGE> 14
WIPC may at any time change the stock exchange or exchanges from which the
constituents of a particular FT Index component may be selected.
Delivery and Availability
The FT Index's values and related performance figures for various
periods of time are calculated after the close of the New York Stock
Exchange, Inc. ("NYSE") for publication the following day in the various
editions of the Financial Times. The FT Index components are reported in
local currency, US dollars, and UK pounds sterling to allow an explicit
valuation of the impact of the currency component on various user groups.
On Mondays, the Financial Times publishes a list of constituent changes
implemented during the previous week, if any. The FT Index components are
calculated on weekdays when one or more of the constituent markets are
open; the indices are syndicated and published in the financial sections of
several newspapers worldwide. FT Index data also may be purchased
electronically through Goldman, Sachs & Co.
Selection
Country Selection Criteria. In order for a country to be included in
the FT Index, the following criteria must be satisfied: (1) direct equity
investment by non-nationals must be permitted; (2) accurate and timely data
must be available; (3) no significant exchange controls exist which would
prevent the timely repatriation of capital or dividends; (4) significant
international investor interest in the local equity market must have been
demonstrated; and (5) adequate liquidity must exist.
Allocation of Stocks to Countries. In most instances stocks are
included in the index component of that country where the company is
legally registered and is recognized for taxation purposes, including
regulation of its financial affairs. However, exceptions are made where
the international investor's recognition of the area of the company's
business or its market listings clearly suggests a different allocation.
Classes Included. Companies whose business is that of holding equity
and other investments (e.g., United Kingdom investment trusts) are eligible
for inclusion. Split capital investment trusts are excluded. Those whose
price is a direct derivation of underlying holdings (e.g., mutual funds)
are also excluded.
Investibility Screens. All securities are subjected to the five
investibility screens described below.
1. A "Size Screen". All securities comprising the bottom 5% of
any market's capitalization are excluded from the FT Index.
2. A "Total Restriction Screen". A security is totally excluded
from the FT Index if foreign investors are barred from
ownership.
3. A "Partial Restriction Screen". An 'investibility weight' is
attached to those securities for which there are partial
restrictions on foreign ownership. The capitalization
included, therefore, for any such security generally is
restricted to that portion available to foreign investors.
<PAGE>
<PAGE> 15
4. A "'Free Float' Screen". The full capitalization of a security
is eligible for inclusion in the FT Index if 25% or more of the
outstanding securities is publicly available for investment and
not in the hands of a single party or parties "acting in
concert". A government's shareholdings are included in this
total if these holdings have a stock exchange listing and could
be offered to the public. Two or more identifiable holders of
more than 75% of a single security may be deemed to be acting
in concert unless evidence is available to the contrary.
Securities will also be considered for inclusion, however, if
the existing 'free float' is less than 25% but more than 10%
and if the free float capitalization is more than one half of
the large-company cut-off size (described below) in that
particular market. Only that portion of capitalization deemed
to be 'free float' will be eligible for inclusion, this being
considered to be equivalent to the application of the "partial
restriction screen". The free float will be automatically
included if its size is greater than the large-company cut-off
size. The free float may be considered for inclusion if it is
more than one half of but less than the large company cut-off
size.
5. A "Liquidity Screen". A security is deemed to be illiquid, and
therefore ineligible for inclusion, if it fails to trade for
more than 15 working days within each of two successive
quarters.
Stock Selection Criteria. The "investible universe" consists of the
aggregate capitalization of all equity securities listed on the exchanges
monitored within a market after the application of the investibility
screens described above. An objective of the FT Index in selecting
constituent stocks is to capture 85% of the investible universe. In
practice, representation is maintained within a band of 82%-88% of the
investible universe. For the purposes of the implementation of the current
FT Index rules, a band of 82%-90% is used in order to restrict turnover to
5%-7% for the larger markets. Consideration is also given in assembling
the equities comprising any market to the economic sector distribution of
the sample chosen. The objective is that this distribution reflect the
overall economic sector distribution of the investible universe.
The FT Index determines for each market a "Large Company Cut Off,"
which is the average market capitalization of the companies constituting
the investible universe of such market after application of the Size
Screen. Companies greater in size than the "Large Company Cut-Off" qualify
for inclusion in an FT Index component automatically should they remain
eligible after application of all other investibility screens. Stocks in
the investible universe below the Large Company Cut-Off are selected and
added to the existing sample using the methods described below.
Stocks are added in descending order of size within economic sectors
such that the sector weighing of any market corresponds generally to the
sectoral make-up of the large company sample. The selection process
continues until the aggregate capitalization of the sample represents as
closely as possible 85% of the capitalization of the investible universe.
The representation of each market is reviewed as a rolling process and at
any time that there is evidence that representation of the investible
universe has fallen without the normal band of 82%-88%.
<PAGE>
<PAGE> 16
Constituent Changes
Additions may be made to existing FT Index Components for a number of
reasons: (1) the addition would make the economic sector make-up and
market capitalization distribution of the FT Index component more
representative of its investible universe; (2) a non-constituent has gained
in importance and replaces an existing constituent under the rules of
review established by the WIPC; (3) the FT Index component represents less
than its targeted percentage of the capitalization of its investible
universe (usually in cases where the investible universe has grown faster
than the corresponding FT Index component); (4) a new, eligible security
becomes available whose total capitalization is 1% or more of the current
capitalization of the relevant FT Index component; (5) an existing
constituent "spins off" a part of its business and issues new equity to the
existing shareholders; (6) changes in investibility factors lead to a stock
being eligible for inclusion and that stock now qualifies on other grounds.
Deletions from the FT Index may be made for any of the following
reasons: (1) the FT Index component comprises too high a percentage of its
representative universe; (2) a review by the WIPC shows that a constituent
has declined in importance and should be replaced by a non-constituent;
(3) the deletion of a security that has declined in importance would make
the FT Index component more representative of the economic sector make-up
of its investible universe; (4) circumstances regarding investibility and
free float change, causing the constituent to fail the FT Index screening
criteria; (5) an existing constituent is acquired by another entity;
(6) the stock has been suspended from trading for a period of more than ten
working days. Generally, but not in all cases, changes resulting from
review by the WIPC occur at the end of a calendar quarter.
Certain adjustments may be made to the constituents of an FT Index
component immediately. For example, if an existing constituent is acquired
for eligible shares by a quoted non-constituent in the same market, then
the acquiring company is added to the FT Index immediately if eligible on
all other counts. The existing constituent is deleted immediately.
Calculation Methodologies
The FT Index values are calculated through widely accepted
mathematical formulae, with the effect that the components are weighted
arithmetic averages of the price relatives of the constituents -- as
produced solely by changes in the marketplace -- adjusted for intervening
capital changes. The FT Index component values are base-weighted
aggregates of the initial market capitalization, the price of each issue
being weighted by the number of shares outstanding. The FT Index
components are modified to maintain continuity when subsequent capital
changes occur. Values are derived to illustrate the longer-term changes
associated with the value of the component over time, although still
reflecting day-to-day movements. The arithmetic average is the sum of the
values divided by the total shares in a component. The arithmetic average
is suitable so long as the series of data is not widely dispersed.
Dividends
The FT Index treats dividends as being reinvested in accordance with
a smoothing algorithm. For each constituent, the implied annual dividend
is divided by 260 (an accepted approximation for the number of business
days in a calendar year). This dividend is then reinvested daily according
to standard actuarial calculations. Distributions effect adjustments to
the base capital and/or the price per share in accordance with prescribed
FT Index standards.
<PAGE>
<PAGE> 17
The Australia Component
On December 30, 1994, the Australia component of the FT Index
consisted of 68 stocks with an aggregate market capitalization of
approximately A$184.9 billion, or US $143.4 billion. In percentage terms,
the Australia component represented approximately 83.9% of the aggregate
investible Australian market capitalization. The ten largest constituents
of the Australia component and the respective approximate percentages of
the Australia component represented by such constituents were, in order:
Broken Hill Proprietaries (17.6%), National Australia Bank (7.5%), CRA
(5.7%), Western Mining (4.5%), Westpac (4.3%), BTR-Nylex (3.5%), ANZ Bank
(3.1%), Coles Myer (3.1%), Amcor (3.0%) and CSR (2.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 40% of the market capitalization of the Australia component;
the largest ten holdings comprised approximately 54% of the market
capitalization of the Australia component; and the largest 20 holdings
comprised approximately 73% of the market capitalization of the Australia
component.
The ten most highly represented industry sectors in the Australia
component of the FT Index, and the approximate percentages of the Australia
component represented thereby, as of December 30, 1994, were:
1) Mining, Metals & Minerals 33.4%
2) Banks: Commercial & Other 16.8%
3) Diversified Industrials 8.2%
4) Construction & Building Materials 6.3%
5) Real Estate 4.9%
6) Retail Trade 4.6%
7) Oil 3.7%
8) Transportation 3.2%
9) Forestry & Paper Products 3.0%
10) Diversified Consumer Goods 2.6%
Appendix A hereto contains a complete list of the securities in the
Australia component as of December 30, 1994.
The France Component
On December 30, 1994, the France component of the FT Index consisted
of 102 stocks with an aggregate market capitalization of approximately
FF1,762.7 billion, or US $330.5 billion. In percentage terms, the France
component represented approximately 88.2% of the aggregate investible
French market capitalization. The ten largest constituents of the France
component and the respective approximate percentages of the France
component represented by such constituents were, in order: Elf Aquitaine
(5.3%), Total Petroleum (4.1%), LVMH-Moet Vuitton (4.1%), L'Oreal (3.9%),
Alcatel Alsthom (3.6%), Eaux (3.2%), Carrefour (3.1%), Danone (3.0%), nt
Gobain (2.9%) and Societe Generale (2.8%).
As of December 30, 1994, the largest five holdings together comprised
approximately 21% of the market capitalization of the France component; the
largest ten holdings comprised approximately 36% of the market
capitalization of the France component; and the largest 20 holdings
comprised approximately 59% of the market capitalization of the France
component.
<PAGE>
<PAGE> 18
The ten most highly represented industry sectors in the France
component of the FT Index, and the approximate percentages of the France
component represented thereby, as of December 30, 1994, were:
1) Banks: Commercial & Other 9.9%
2) Oil 9.5%
3) Retail Trade 7.9%
4) Health & Personal Care 7.9%
5) Construction & Building Materials 6.0%
6) Beverages & Tobacco 5.3%
7) Food & Grocery Products 5.3%
8) Chemicals 5.2%
9) Insurance Multi/Property/Casualty 5.0%
10) Utilities 4.8%
Appendix B hereto contains a complete list of the securities in the France
component as of December 30, 1994.
The Germany Component
On December 30, 1994, the Germany component of the FT Index consisted
of 58 stocks with an aggregate market capitalization of approximately DM
526.1 billion or US $339.4 billion. In percentage terms, the Germany
component represented approximately 89% of the aggregate investible market
capitalization of the official market. The ten largest constituents of the
Germany component and the respective approximate percentages of the Germany
component represented by such constituents were, in order: Allianz (9.8%),
Daimler Benz (7.4%), Siemens (6.8%), Deutsche Bank (6.5%), Veba (5.0%),
Bayer (4.6%), Munich Re (4.0%), Hoechst (3.8%), BASF (3.6%), and Dresdner
Bank (3.5%).
As of December 30, 1994, together, the largest five holdings
comprised approximately 36% of the market capitalization of the Germany
component; the largest ten holdings comprised approximately 55% of the
market capitalization of the German component; and the largest 20 holdings
comprised approximately 77% of the market capitalization of the Germany
component.
The ten most highly represented industry sectors in the Germany
component of the FT Index and the approximate percentages of the Germany
component represented thereby as of December 30, 1994, were:
1) Banks: Commercial & Other 16.5%
2) Insurance Multi/Property/Casualty 16.3%
3) Chemicals 14.0%
4) Automobiles 12.9%
5) Electrical Equipment 7.5%
6) Utilities 5.6%
7) Machinery & Engineering Services 5.5%
8) Mining, Metals & Minerals 5.3%
9) Diversified Holding Companies 5.0%
10) Construction & Building Materials 3.3%
<PAGE>
<PAGE> 19
Appendix C hereto contains a complete list of the component securities of
the Germany component as of December 30, 1994.
The Hong Kong Component
On December 30, 1994, the Hong Kong component of the FT Index
consisted of 56 stocks with an aggregate market capitalization of
approximately HK $1,275.6 billion, or US $164.8 billion. In percentage
terms, the Hong Kong component represented approximately 81% of the
aggregate investible market capitalization of the HKX. The ten largest
constituents of the Hong Kong component and the respective approximate
percentages of the Hong Kong component represented by such constituents
were, in order: Hutchison Whampoa (8.8%), Sun Kung Kai Properties (8.4%),
Hang Seng Bank (8.4%), Cheung Kong (5.4%), China Light & Power (5.2%),
Henderson Land (4.6%), Wharf Holdings (4.4%), Swire Pacific (3.7%), Hong
Kong Electric (3.4%) and Hong Kong Land Holdings (3.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 36% of the market capitalization of the Hong Kong component;
the largest ten holdings comprised approximately 55% of the market
capitalization of the Hong Kong component; and the largest 20 holdings
comprised approximately 68% of the market capitalization of the Hong Kong
component.
The ten most highly represented industry sectors in the Hong Kong
component of the FT Index, and the approximate percentages of the Hong Kong
component represented thereby, as of December 30, 1994, were:
1) Real Estate 37.4%
2) Utilities 13.3%
3) Diversified Holding Companies 12.0%
4) Diversified Consumer Goods 11.8%
5) Banks: Commercial & Other 10.4%
6) Transportation 4.0%
7) Retail Trade 3.8%
8) Entertainment/Leisure/Toys 2.7%
9) Media 1.6%
10) Financial Institutions & Services 1.2%
Appendix D hereto contains a complete list of the securities in the Hong
Kong component as of December 30, 1994.
The Italy Component
On December 30, 1994, the Italy component of the FT Index consisted
of 59 stocks with an aggregate market capitalization of approximately
LL224.2 trillion, or US $133.2 billion. In percentage terms, the Italy
component represented approximately 89.7% of the aggregate investible
market capitalization of Italy. The ten largest constituents of the Italy
component and the respective approximate percentages of the Italy component
represented by such constituents were, in order: Generali (14.2%), Telecom
Italia (12.8%), Stet (8.5%), Fiat (7.6%), Alleanza (4.2%), INA (4.0%), San
Paolo (3.2%), Mediobanca (2.9%), Montedison (2.9%) and IMI (2.8%).
<PAGE>
<PAGE> 20
As of December 30, 1994, the largest five holdings together comprised
approximately 47% of the market capitalization of the Italy component; the
largest ten holdings comprised approximately 63% of the market
capitalization of the Italy component; and the largest 20 holdings
comprised approximately 81% of the market capitalization of the Italy
component.
The ten most highly represented industry sectors in the Italy
component of the FT Index, and the approximate percentages of the Italy
component represented thereby, as of December 30, 1994, were:
1) Insurance Multi/Property/Casualty 27.6%
2) Utilities 25.8%
3) Automobiles 10.4%
4) Banks: Commercial & Other 8.7%
5) Financial Institutions & Services 7.2%
6) Diversified Holding Companies 4.5%
7) Insurance: Life & Agents/Brokers 4.0%
8) Computers/Office Equipment 2.5%
9) Food & Grocery Products 2.4%
10) Auto Components 2.1%
Appendix E hereto contains a complete list of the securities constituting
the Italy component as of December 30, 1994.
The Japan Component
On December 30, 1994, the Japan component of the FT Index consisted
of 468 stocks with an aggregate market capitalization of approximately
Y274.1 trillion, or US $2.7 trillion. In percentage terms, the Japan
component represented approximately 83.1% of the aggregate investible
market capitalization of the Tokyo Stock Exchange. The ten largest
constituents of the Japan component and the respective approximate
percentages of the Japan component represented by such constituents were,
in order: Toyota Motor (2.9%), Mitsubishi Bank (2.6%), Ind Bank of Japan
(2.5%), Fuji Bank (2.3%), Sumitomo Bank (2.2%), Dai-ichi Kangyo Bank
(2.1%), Sanwa Bank (2.1%), Sakura Bank (1.6%), Nomura Securities (1.5%) and
Tokyo Electric Power (1.4%).
As of December 30, 1994, the largest five holdings together comprised
approximately 12% of the market capitalization of the Japan component; the
largest ten holdings comprised approximately 21% of the market
capitalization of the Japan component; and the largest 20 holdings
comprised approximately 31% of the market capitalization of the Japan
component.
The ten most highly represented industry sectors in the Japan
component of the FT Index, and the approximate percentages of the Japan
component represented thereby, as of December 30, 1994, were:
1) Banks: Commercial & Other 22.9%
2) Financial Institutions & Services 6.0%
3) Electronics & Instrumentation 6.0%
4) Utilities 5.4%
5) Automobiles 5.2%
6) Transportation 4.3%
<PAGE>
<PAGE> 21
7) Construction & Building Materials 4.0%
8) Household Durables 4.0%
9) Retail Trade 4.0%
10) Chemicals 4.0%
Appendix F hereto contains a complete list of the securities constituting
the Japan component as of December 30, 1994.
The South Africa Component
On December 30, 1994, the South Africa component of the FT Index
consisted of 59 stocks with an aggregate market capitalization of
approximately CR530.7 billion, or US $130.2 billion. In percentage terms,
the South Africa component represented approximately [82.2]% of the
aggregate investible market capitalization of the JSX. The ten largest
constituents of the South Africa component and the respective approximate
percentages of the South Africa component represented by such constituents
were, in order: Anglo American Corp. (10.4%), De Beers/Centenary (6.8%),
South African Breweries (5.1%), Liberty Life Association (4.4%), Gencor
(4%), SASOL (3.7%), JCI (2.9%), Rembrandt Group (2.8%), Standard Bank Inv.
(2.7%) and Rustenburg Platinum (2.6%).
As of December 30, 1994, the largest five holdings together comprised
approximately 31% of the market capitalization of the South Africa
component; the largest ten holdings comprised approximately 46% of the
market capitalization of the South Africa component; and the largest 20
holdings comprised approximately 67% of the market capitalization of the
South Africa component.
The ten most highly represented industry sectors in the South Africa
component of the FT Index, and the approximate percentages of the South
Africa component represented thereby, as of December 30, 1994, were:
1) Precious Metals & Minerals 45.5%
2) Insurance: Life & Agents/Brokers 8.0%
3) Diversified Holding Companies 7.9%
4) Beverage & Tobacco 7.8%
5) Banks: Commercial & Other 6.4%
6) Food & Grocery Products 5.2%
7) Oil 3.7%
8) Metals, Mining & Minerals 3.5%
9) Forestry & Paper Products 3.5%
10) Construction & Bldg. Materials 2.2%
Appendix G hereto contains a complete list of the securities in the South
Africa component as of December 30, 1994.
The UK Component
On December 30, 1994, the UK component of the FT Index consisted of
204 stocks with an aggregate market capitalization of approximately L580.2
billion, or US $905.1 billion. In percentage terms, the UK component
represented approximately 88.4% of the aggregate investible market
capitalization of the London Stock Exchange. The ten largest constituents
of the UK Component and the
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<PAGE> 22
respective approximate percentages of the UK component represented by such
constituents were, in order: Shell Transport & Trading (4.1%), British
Telecom (4.1%), British Petroleum (4.0%), Glaxo Holdings (3.5%), British
Gas (2.4%), BAT Industries (2.3%), HSBC Holdings (2.1%), Hanson (2.0%),
Marks & Spencer (1.9%) and BTR (1.9%).
As of December 30, 1994, the largest five holdings together comprised
approximately 18% of the market capitalization of the UK component; the
largest ten holdings comprised approximately 28% of the market
capitalization of the UK component; and the largest 20 holdings comprised
approximately 43% of the market capitalization of the UK component.
The ten most highly represented industry sectors in the UK component
of the FT Index, and the approximate percentages of the UK component
represented thereby, as of December 30, 1994, were:
1) Utilities 13.5%
2) Commercial Banks 10.7%
3) Health & Personal Care 8.8%
4) Oil 8.7%
5) Beverage & Tobacco 8.6%
6) Retail Trade 8.6%
7) Food & Grocery Products 4.1%
8) Media 3.5%
9) Construction & Building Materials 3.5%
10) Diversified Industrials 2.9%
Appendix H hereto contains a complete list of the component securities of
the UK component as of December 30, 1994.
The US Component
On December 30, 1994, the US component of the FT Index consisted of
513 stocks with an aggregate market capitalization of approximately US $3.3
trillion. In percentage terms, the US component represented approximately
86.8% of the aggregate investible market capitalization of the U.S.
markets. The ten largest constituents of the US component and the
respective approximate percentages of the US component represented by such
constituents were, in order: AT&T (2.7%), General Electric (2.4%), Exxon
Corp. (2.3%), Coca-Cola (2.0%), Philip Morris (1.5%), Wal-Mart (1.5%),
Merck (1.5%), IBM (1.2%) Procter & Gamble (1.3%), and DuPont (1.2%).
As of December 30, 1994, the largest five holdings together comprised
approximately 11% of the market capitalization of the US component; the
largest ten holdings comprised approximately 18% of the market
capitalization of the US component; and the largest 20 holdings comprised
approximately 27% of the market capitalization of the US component.
The ten most highly represented industry sectors in the US component
of the FT Index, and the approximate percentages of the US component
represented thereby, as of December 30, 1994, were:
1) Utilities 14.6%
2) Health & Personal Care 9.8%
3) Oil 7.6%
<PAGE>
<PAGE> 23
4) Beverages & Tobacco 5.5%
5) Banks: Commercial & Other 5.4%
6) Retail Trade 5.2%
7) Chemicals 4.0%
8) Computer & Office Equipment 3.9%
9) Electrical Equipment 3.8%
10) Media 3.4%
Appendix I hereto contains a complete list of the securities in the US
component as of December 30, 1994.
<PAGE>
<PAGE> 24
MANAGEMENT OF THE FUND
Directors and Officers of the Fund
The Fund's Board consists of [seven] Directors. The Board of
Directors is divided into three classes each having a term of three years.
Each year, the term of one class expires and the successor or successors
elected to such class will serve for a three-year term. This provision
could delay for up to two years the replacement of a majority of the Board
of Directors by the stockholders of the Fund. The Board has the
responsibility for the overall management of the Fund, including general
supervision and review of its investment activities. The Board, in turn,
elects the officers of the Fund. The addresses, principal occupations, and
present positions, including any affiliations with the Adviser, State
Street Bank and Trust Company ("State Street" or the "Administrator") or
SSC Distribution Services, Inc., the principal underwriter of each Series
("SSCD" or the "Distributor"), of the Directors and the officers of the
Fund and their principal occupations for the past five years are listed
below. As of __________, 1995, the Directors and officers of the Fund
owned of record as a group less than 1% of the outstanding shares of the
Fund. Directors who are deemed to be interested persons of the Fund, as
defined in the 1940 Act, are indicated by an asterisk (*).
Position with Principal Occupations
Name and Address the Fund During Past Five Years
Certain Affiliated Relationships
[Disclose, as necessary, affiliations of officers/directors with
service providers.]
[Non-Resident Directors
[ ] of the directors of the Fund reside outside of the
United States and all or a significant portion of the assets of such
directors are located outside of the United States. The non-resident
directors of the Fund, all of whom reside in Germany, have no authorized
agents in the United States to receive service of process. As a result, it
may not be possible for investors to effect service of process within the
United States upon such persons or to enforce against them in United States
courts judgments predicated upon the civil liability provisions of United
States securities laws. The Fund has been advised by German counsel,
________________________, that a final and conclusive judgment based on
civil liability for a definite sum obtained in a United States court will
generally be held enforceable against directors
<PAGE>
<PAGE> 25
resident in Germany in the appropriate courts of Germany without re-
examination or re-litigation of the matter adjudicated, except that such
judgment will not be so enforceable if any of the reasons for excluding
enforceability set forth in Section 328(1) of the German Code of Civil
Procedure is present, in particular (i) under German law, such United
States court does not have jurisdiction, (ii) such director has not been
served with process in a proper and timely fashion and has not defended
himself against the claim in court, (iii) the judgment conflicts with a
prior judgment of a German court or a prior judgment of a foreign court
that is to be recognized in Germany or the litigation resulting in the
judgment to be enforced conflicts with litigation previously commenced in
Germany, (iv) recognition of the judgment would clearly be contrary to
basic principles of German law, in particular fundamental constitutional
rights or (v) reciprocity is not assured. The Fund has been advised further
by ___________________ that enforcement of liabilities predicated solely on
the United States securities laws in original actions in German courts is
uncertain, as it depends on the nature of the claim, applicable conflict of
laws rules and whether or not the liability under United States securities
laws would conflict with mandatory German law and public policy.]
INVESTMENT ADVISORY, MANAGEMENT
AND ADMINISTRATIVE SERVICES
The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Investment
Management" and "Administrator".
The Investment Adviser
DBSC, a corporation organized under the laws of the State of
Delaware, is a wholly owned direct subsidiary of DB U.S. Financial Markets
Holding Corporation and a wholly owned indirect subsidiary of Deutsche Bank
AG, a major German banking institution. DBSC is engaged in the securities
underwriting, investment advisory, and securities brokerage business. It
is a member of the NYSE and other principal U.S. stock exchanges.
DBSC serves as investment adviser to each Series pursuant to an
Investment Management Agreement (the "Management Agreement") between the
Fund and DBSC. Under the Management Agreement, the Adviser, subject to the
supervision of the Fund's Board of Directors and in conformity with the
stated investment policies of each Series, will manage the investment of
each Series' assets. The Adviser will be responsible for placing purchase
and sale orders and providing continuous supervision of the investment
portfolio of each Series. In addition, the Adviser will provide
administrative services to the Fund that will include negotiating and
overseeing the Fund's contractual arrangements with third-party service
providers. Each Series will pay DBSC an investment advisory and management
fee, computed daily and paid monthly, equal to an annual rate of (i) .30%
(in the case of the France Index Series, the Germany Index Series, the
Italy Index Series, the Japan Index Series, the UK Index Series and the US
Index Series) or .45% (in the case of the Australia Index Series, the Hong
Kong Index Series and the South Africa Index Series) of the average daily
net assets of such Series, plus (ii) in the case of each Series, as
remuneration for DBSC's services in connection with lending portfolio
securities of the Series, 40% of the Series' gross investment income,
excluding dividends on securities held in portfolio. In addition, DBSC
will be reimbursed by each Series for its out-of-pocket costs incurred in
providing certain administrative services. See "Investment Policies and
Restrictions--Lending Portfolio Securities". The Management Agreement will
continue in effect until ______, 1997, and thereafter will be subject to
annual approval by (1) the Fund's Board or (2) vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund,
provided that in either event the continuance also is approved by
<PAGE>
<PAGE> 26
a majority of the Fund's Board who are not interested persons (as defined
in the 1940 Act) of the Fund by vote cast in person at a meeting called for
the purpose of voting on such approval. The Management Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by
vote of the holders of a majority (as defined in the 1940 Act) of the
Fund's outstanding voting securities. The Management Agreement is also
terminable upon 60 days' notice by DBSC and will terminate automatically in
the event of its assignment (as defined in the 1940 Act).
The Management Agreement provides that DBSC will not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which the Management Agreement
relates, except for a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of DBSC in the performance of its obligations
and duties under the Management Agreement.
DBSC will reimburse, on a pro rata basis, each Series for annual
expenses of such Series which exceed the most stringent limits prescribed
by any state in which shares of the Series are offered for sale.
Currently, the only limitation which the Fund believes would be applicable
requires DBSC to reimburse a Series to the extent that aggregate operating
expenses of the Series (excluding interest, taxes, brokerage commissions,
distribution expenses, if any, and extraordinary expenses) exceed in any
year 2.5% of the first $30 million of average net assets of such Series,
2.0% of the next $70 million of average net assets of the Series and 1.5%
of average net assets of the Series in excess of $100 million.
The Administrator, Custodian and Transfer Agent
State Street, a Massachusetts trust company, provides certain
administrative services to the Fund, including clerical, bookkeeping and
recordkeeping services not otherwise performed by the Adviser or the
Custodian (as defined below), pursuant to an Administration Agreement (the
"Administration Agreement") between the Fund and State Street, which will
continue in effect until _____________, 199[ ]. Pursuant to the
Administration Agreement, State Street will provide administrative services
to the Fund which include, among other things, monitoring and authorizing
Fund expenses, preparing the Fund's financial statements and regulatory
filings and preparing the Fund's tax returns. The Administration Agreement
is terminable with respect to the Fund without penalty, on 60 days' notice,
by the Fund's Board. The Administration Agreement is also terminable upon
60 days' notice by State Street.
The Administration Agreement provides that State Street will not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which the Administration
Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of State Street in the
performance of its obligations and duties under the Administration
Agreement.
For its administrative services to the Fund, State Street is entitled
to a fee, computed daily and paid monthly, equal to an annual rate of .08%
of the average daily net assets of each Series up to $125 million, plus
..06% of the average daily net assets of such Series in excess of $125
million up to $250 million and .04% of the average daily net assets of such
Series in excess of $250 million. In addition, State Street will be
reimbursed by the Fund for its out-of-pocket costs incurred in providing
administrative services.
State Street will also act as Custodian and Transfer Agent for the
Fund. See "Custodian and Transfer Agent" in the Prospectus.
<PAGE>
<PAGE> 27
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio securities, the Adviser looks for prompt execution of the order
at a favorable price. Generally, the Adviser works with recognized dealers
in these securities, except when a better price and execution of the order
can be obtained elsewhere. The Fund will not deal with affiliates in
principal transactions unless permitted by exemptive order or applicable
rule or regulation. Since the investment objective of each Series is
investment performance that corresponds to that of an index, the Adviser
does not intend to select brokers and dealers for the purpose of receiving
research services in addition to a favorable price and prompt execution
either from that broker or an unaffiliated third party. Orders for agency
brokerage transactions may be placed with Deutsche Bank AG as well as DBSC.
The Fund's policy requires that commissions paid to Deutsche Bank AG and
DBSC be reasonable and fair compared with commissions received by other
brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a
comparable period of time.
Subject to allocating brokerage to receive a favorable price and
prompt execution, the Adviser may select brokers who are willing to provide
payments to third party service suppliers to a Series, to reduce expenses
of the Series.
The Adviser will assume general supervision over placing orders on
behalf of the Fund for the purchase or sale of portfolio securities. If
purchases or sales of portfolio securities of the Fund and one or more
other investment companies or clients supervised by the Adviser are
considered at or about the same time, transactions in such securities will
be allocated among the several investment companies and clients in a manner
deemed equitable to all by the Adviser, taking into account the sizes of
such other investment companies and clients and the amount of securities to
be purchased or sold. In some cases this procedure could have a
detrimental effect on the price or volume of the security so far as the
Fund is concerned. However, in other cases it is possible that the ability
to participate in volume transactions and to negotiate lower brokerage
commissions will be beneficial to the Fund. The primary consideration is
prompt execution of orders at the most favorable net price. Portfolio
turnover may vary from year to year, as well as within a year. High
turnover rates are likely to result in comparatively greater brokerage
expenses. The portfolio turnover rate for each Series is expected to be
under 50%. See "The Fund--Investment Policies--Portfolio Turnover" in the
Prospectus. The overall reasonableness of brokerage commissions is
evaluated by the Adviser based upon its knowledge of available information
as to the general level of commissions paid by other institutional
investors for comparable services.
PURCHASE AND ISSUANCE OF FUND SHARES IN CREATION UNIT AGGREGATIONS
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Purchase and
Issuance of Fund Shares in Creation Unit Aggregations".
Generally
The Fund will offer and sell shares of each Series on a continuous
basis through the Distributor only in aggregations of a specified number of
shares for such Series as set forth below (each a "Creation Unit"), without
a sales charge, at the net asset value of the shares next determined after
receipt of an order in good form (as described below under "Procedures for
Purchasing Creation Units"). The
<PAGE>
<PAGE> 28
consideration for a purchase of each Creation Unit aggregation of shares of
a Series is an in-kind deposit of a designated portfolio of equity
securities substantially corresponding in composition and weighting to the
relevant component of the FT Index (a "Fund Basket"), plus a specified
amount of cash (the "Cash Component"). Together, a single Fund Basket and
related Cash Component (the "Fund Deposit") represent the minimum initial
and subsequent investment amount required for the purchase of shares of a
Series, which may only be made in Creation Unit size aggregations. The
number of shares constituting a Creation Unit of each Series, subject to
any stock splits or reclassifications by the Board of Directors, is 100,000
for the France Index Series, the Germany Index Series, the Japan Index
Series, the UK Index Series and the US Index Series, and 75,000 for the
Australia Index Series, the Hong Kong Index Series, the Italy Index Series
and the South Africa Index Series. Orders for Creation Units must be
placed with SSCD, the Fund's Distributor. The address and telephone number
of the Distributor are 2048 Washington Street, Hanover, Massachusetts
02339, 1-800-328-7408; facsimiles should be sent to 617-982-8265. See
"Procedures for Purchasing Creation Units" below.
The Fund will issue and sell shares of a Series only on a Business
Day (as defined below) for such Series on which financial institutions in
Massachusetts are also open. Massachusetts financial institutions are open
on all days when the NYSE is open (see "Business Day" below) except
Columbus Day, Veterans Day and Martin Luther King Day (observed).
The Fund Basket
The Distributor will make available immediately prior to the opening
of business on the NYSE (currently 9:30 a.m. New York time) of each
Business Day (as defined below) for a Series the list of the names and
required number of shares of each of the portfolio securities constituting
the Fund Basket for such Series, based on the Adviser's determination at
the end of the prior Business Day. Such Fund Basket will be effective for
purchases of Creation Unit aggregations of shares of the Series on a
specified Business Day following the date of announcement of the Fund
Basket by the Distributor (an "Issue Day") on which financial institutions
in Massachusetts are open. The Issue Day for a Series will be as follows:
The Australia Index Series, the ___ Business Day; the France Index Series,
the ___ Business Day; the Germany Index Series, the ___ Business Day; the
Hong Kong Index Series, the ___ Business Day; the Italy Index Series, the
___ Business Day; the Japan Index Series, the ___ Business Day; the South
Africa Index Series, the ___ Business Day; the UK Index Series, the ___
Business Day; and the US Index Series, the ___ Business Day. The
composition of the Fund Basket will change with changes in the relevant FT
Index component. In addition, in the event that the Adviser determines, in
its discretion, that a security is likely to be unavailable or available in
insufficient quantities for delivery as part of a Fund Basket, the cash
equivalent value of such security may be required or permitted to be
delivered in lieu of the security in the Fund Basket. Such amount will be
added to the Cash Component (see "The Cash Component" below). When and if
the necessary arrangements are made by the Adviser and the Compilers at
some time after the date of this Prospectus, the announcement of a Fund
Basket for a Series on each Business Day may indicate, to the extent known
to the Adviser in advance, any adjustments in the Fund Basket that will be
in effect for purchases of Series shares on the Issue Day in order to
reflect stock splits, mergers, issuer replacements or other events. If the
securities tendered by an investor for a purchase of a Creation Unit
aggregation of shares will not constitute the complete Fund Basket for the
Issue Day, the Adviser in its discretion may waive any deficiency in the
Fund Basket delivered and require the cash equivalent value of any
undelivered securities to be included in the Cash Component of the Fund
Deposit.
<PAGE>
<PAGE> 29
No shares of any Series will be issued until the transfer of good
title to the Fund of the Fund Basket and the payment of the Cash Component
have been completed. All questions as to the number of shares of each
security in the Fund Basket and the validity, form, eligibility and
acceptance for deposit of any securities to be delivered shall be
determined by the Adviser, whose determination shall be final and binding.
Purchasers of Fund shares in Creation Unit size aggregations are
responsible for the costs of transferring the Fund Basket securities to the
account of the Fund. As of __________, 1995, the estimated costs of
transferring the securities in a Fund Basket to the Fund, which may
include, among others, settlement and custody charges, securities
registration costs, stock transfer taxes and similar costs, are as follows:
the Australia Index Series, $11,400; the France Index Series, $3,100; the
Germany Index Series, $1,500; the Hong Kong Index Series, $4,500; the Italy
Index Series, $1,200; the Japan Index Series, $22,100; the South Africa
Index Series, $14,100; the UK Index Series, $16,300; and the US Index
Series, $6,200. See "Summary of Fund Expenses" in the Prospectus.
The Cash Component
The Cash Component will be equal to the difference between the value
of the Fund Basket delivered on the Issue Day and the net asset value of
the Creation Unit aggregation of shares of the particular Series next
computed on such Business Day and will be determined at the close of the
NYSE (currently 4:00 p.m., New York time) on such Business Day when the net
asset value of Fund shares is determined. The tendered securities in the
Fund Basket will be valued on an Issue Day in the same manner as the
relevant Series values its portfolio securities for purposes of calculating
the Series' net asset value. See "Determining Net Asset Value". The
Distributor will also make available on the morning of each Business Day
information with respect to the Cash Component effective for purchases on
the previous Business Day.
A cash transaction fee will be imposed by the Fund on the Cash
Component of the Fund Deposit to offset the Fund's brokerage and other
transaction costs of investing such cash. The Cash Component transaction
fee for the purchase of shares of each Series, as a percentage of the Cash
Component, is as follows: the Australia Index Series, 1.3%; the France
Index Series, 1.0%; the Germany Index Series, 1.0%; the Hong Kong Index
Series, 1.2%; the Italy Index Series, 1.0%; the Japan Index Series, 1.32%;
the South Africa Index Series, 2.0%; the UK Index Series, 1.0%; and the US
Index Series, 1.0%. See "Summary of Fund Expenses" in the Prospectus. The
amount of the Cash Component and the cash purchase transaction fee must be
credited to the account of the Custodian on the date of purchase in order
for shares to be issued. See "Procedures for Purchasing Creation Units"
below.
Business Day
A Business Day with respect to a Series other than the US Index
Series is any day on which (i) the NYSE, (ii) the stock exchange(s) and
Fund subcustodian(s) relevant to such Series are open for business and, in
the case of the US Index Series, any day on which the NYSE is open. As of
the date of this Statement of Additional Information, the NYSE observes the
following holidays: New Year's Day, President's Day (Washington's
Birthday), Good Friday, Memorial Day (observed), Independence Day
(observed), Labor Day, Thanksgiving Day and Christmas Day. The stock
exchange and/or subcustodian holidays relevant to each Series are set forth
in Appendix A to the Prospectus.
<PAGE>
<PAGE> 30
Procedures for Purchasing Creation Units
Orders for Creation Unit size aggregations of shares of any Series
may be placed with the Distributor only by an "Authorized DTC Participant",
i.e., a participant in The Depository Trust Company ("DTC") who has entered
into an account agreement (the "Account Agreement") with the Distributor
and the Fund. Investors who are not Authorized DTC Participants must make
appropriate arrangements with an Authorized DTC Participant. Investors
should be aware that their particular broker may not be a DTC Participant
or may not have executed an Account Agreement, and that therefore orders to
purchase Creation Unit aggregations of Fund shares may have to be placed by
the investor's broker through an Authorized DTC Participant. As a result,
purchase orders placed through an Authorized DTC Participant may result in
additional charges to such investor. The Fund anticipates that it will
enter into Account Agreements with only a few DTC Participants. Investors
seeking to purchase Creation Unit size aggregations of Fund shares are
directed to contact the Distributor for a current list of Authorized DTC
Participants. All shares of the Fund will be entered on the records of DTC
in the name of Cede & Co. for the account of the Authorized DTC
Participant. For additional information, see "The Fund--Book-Entry Only
System" in the Prospectus. In placing an order, an Authorized DTC
Participant agrees that it will provide for payment of the Cash Component
and related Cash Component transaction fee on its own behalf or on behalf
of the investor for which it acts. Investors are responsible for making
their own arrangements with an Authorized DTC Participant for payment to it
of the Cash Component amount and related cash purchase transaction fee.
To place an order for shares to be issued on an Issue Day, the
Authorized DTC Participant must first give advance notice to the
Distributor of its intent to purchase one or more Creation Unit
aggregations of shares on the Issue Day and cause to be delivered or
arrange for the investor to deliver the securities constituting the Fund
Basket to the account maintained by the Custodian in the case of the US
Index Series or with the appropriate subcustodian in the jurisdiction where
the portfolio securities of the Series are traded in the case of each other
Series, by the intended Issue Day. The Custodian must be able to confirm
delivery of the Fund Basket on the Issue Day not later than 1:00 p.m., New
York time, in the case of each Series except the US Index Series, for which
confirmation of delivery of the Fund Basket must be available by [3:00
p.m.], New York time.
An order to purchase Creation Units on an Issue Day, in the form
required by the Fund (available from the Distributor), must be received by
the Distributor by the closing time of the regular trading session on the
NYSE (currently 4:00 p.m., New York time) on the date such order is placed
in order for the issuance of Creation Unit aggregations of shares to be
effected at the net asset value next determined at the close of trading on
the NYSE on such day. Those placing orders to purchase Creation Units
through an Authorized DTC Participant should afford sufficient time to
permit proper submission of the order to the Distributor in time for
issuance on the desired Issue Day. Orders must be transmitted by the
Authorized DTC Participant to SSCD by facsimile to 617-982-8265.
The Authorized DTC Participant shall have also made available,
whether through the cash transfer facilities of DTC or other means
satisfactory to the Fund (i.e., by credit to the Custodian for the account
of the Fund), immediately available funds estimated to be sufficient to pay
the Cash Component determined on the Issue Day (together with the Cash
Component transaction fee), in each case in a timely manner on the same
Business Day. Any excess funds will be returned. Those placing orders
should ascertain the applicable deadline for cash transfers by contacting
the operations department of the broker or depositary institution
effectuating the transfer of the Cash Component. This deadline is likely
to be
<PAGE>
<PAGE> 31
significantly earlier than the closing time of the regular trading session
on the NYSE. Cash transfers may currently be made through the cash transfer
facilities of DTC until 3:00 p.m., New York time.
A purchase order for shares of any Series will be considered in "good
form" if (i) delivery of the Fund Basket may be confirmed by the Custodian
by the time indicated above for the Series on the Issue Day, (ii) a
properly completed purchase order, in the form required by the Fund
(available through the Distributor), has been submitted on such date by the
Authorized DTC Participant, whether on its own or on a customer's behalf,
by the 4:00 p.m. close of trading on the NYSE, and (iii) arrangements
satisfactory to the Custodian have been made for the payment of any Cash
Component (together with the Cash Component transaction fee) which may be
due based on the determination of the net asset value of the shares at the
close of business on such Issue Day. If the Authorized DTC Participant's
purchase order is received in good form, the Fund will (subject to its
right to reject any order until acceptance) accept the order and upon
determination of the net asset value of the shares of such Series at the
close of business on the NYSE, issue the appropriate number of Creation
Unit aggregations of shares at the end of the Business Day. The Fund will
issue the shares to DTC on the same Business Day for credit to the account
of the Authorized DTC Participant by ___ on the following Business Day.
Once the Fund has accepted an order, the Distributor will transmit a
confirmation of acceptance to the Authorized DTC Participant that placed
the order.
The Fund reserves the absolute right to reject a purchase order
transmitted to it by the Distributor in respect of any Fund Basket or any
component thereof if (a) the purchaser or group of purchasers, upon
obtaining the shares ordered, would own 80% or more of the current
outstanding shares of any Series; (b) the Fund Basket is not as specified
by the Adviser, as described above; (c) acceptance of the Fund Basket would
have certain adverse tax consequences; (d) the acceptance of the Fund
Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance
of the Fund Deposit would otherwise, in the discretion of the Fund or the
Adviser, have an adverse effect on the Fund or the rights of beneficial
owners; or (f) in the event that circumstances outside the control of the
Fund, the Distributor and the Adviser make it for all practical purposes
impossible to process purchase orders. The Fund and the Distributor are
under no duty to give notification of any defects or irregularities in the
delivery of Fund Deposits or any component thereof nor shall either of them
incur any liability for the failure to give any such notification.
The Distributor
Creation Unit size aggregations of shares for each Series will be
continuously offered for sale through the Fund's principal underwriter and
Distributor, SSCD. The Distributor will serve as the Fund's principal
underwriter pursuant to an agreement which will continue until ________,
199_, and which is renewable annually thereafter (the "Distribution
Agreement"). The Distributor will act as agent for the Fund.
Pursuant to a plan adopted by the Board of Directors of the Fund for
each Series under Rule 12b-1 under the 1940 Act (each, a "12b-1 Plan"),
each Series will pay the Distributor distribution services fees, calculated
daily and payable monthly, on an annualized basis, of .02% of the average
daily
_____________________
* Orders for purchases of CB(TM) Shares placed with an Authorized DTC
Participant must be in the form required by the individual Authorized
DTC Participant, which form will not be the same as the form of
purchase order specified by the Fund, which the Authorized DTC
Participant must deliver to the Distributor.
<PAGE>
<PAGE> 32
net assets of the Series. Such monies may be used to pay for any
activities or expenses primarily intended to result in or required for the
sale of the Series' shares, including promotional and marketing activities
related to the sale of shares of the Series, expenses related to and
incurred with respect to the preparation, printing and distribution of
prospectuses and sales literature, communications to and with shareholders
and advertisements. In addition each Series will reimburse the Distributor
up to a maximum of an additional .23% of the average daily net assets of
such Series for payments made to broker-dealers or other persons for
providing shareholder services. The fees attributable to any particular
Series under the 12b-1 Plan will be borne solely by such Series and such
fees will not be used to pay the marketing or distribution expenses of any
other Series. The continuation of the 12b-1 Plan of each Series is subject
to the annual approval of the Fund's Board, including a majority of the
Directors who are not interested persons of the Fund and have no direct or
indirect financial interest in the operation of such 12b-1 Plan.
The Distribution Agreement will provide that it may be terminated at
any time, without the payment of any penalty, (i) by vote of a majority of
the Directors who are not interested persons of the Fund (as defined under
the 1940 Act) or (ii) by vote of a majority (as defined in the 1940 Act) of
the outstanding voting securities of the relevant Series, on at least 60
days' written notice to the Distributor. The Distribution Agreement is
also terminable upon 60 days' notice by the Distributor and will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, and is a wholly-owned subsidiary of
SuperShare Services Corporation, a Delaware corporation.
REDEMPTION OF FUND SHARES IN CREATION UNIT AGGREGATIONS
See "Redemption of Fund Shares in Creation Unit Aggregations" in the
Prospectus for information concerning redemptions of Fund shares. The
following information supplements and should be read in conjunction with
such section.
Generally
The Fund will redeem shares of a Series only in Creation Unit size
aggregations and only on a Business Day for such Series. The Fund will not
redeem Fund shares in less than Creation Unit size aggregations of Fund
shares. Generally, redemption proceeds for a Creation Unit aggregation of
shares will consist of a Fund Basket and a minimal amount of cash. See
"Redemption Procedures". All redemptions will be effected at the net asset
value next determined after receipt of a redemption request in proper form.
Shareholders may purchase CB(TM) Shares in the secondary market and
aggregate such purchases into Creation Units for redemption. There can be
no assurance, however, that there will be sufficient liquidity in the
public trading market at any time to permit assembly of a Creation Unit
size aggregation of CB(TM) Shares. See "Investment Considerations and
Risks" in the Prospectus. Investors will incur brokerage and other costs in
connection with such purchase in the secondary market. See "Summary of Fund
Expenses" in the Prospectus for information about the dollar value of
Creation Unit aggregations of shares.
Redemption Proceeds
With respect to each Series, the Distributor will make available
immediately prior to the opening of business on the NYSE (currently 9:30
a.m., New York time) on each Business Day the Fund Basket
<PAGE>
<PAGE> 33
that will be applicable to redemption requests received in proper form on
that Business Day. See "Purchase and Issuance of Fund Shares in Creation
Unit Aggregations--the Fund Basket". The redemption proceeds for a
Creation Unit aggregation of shares generally will consist of a Fund Basket
together with a cash redemption payment equal to the difference, if any,
between the net asset value of the Creation Unit aggregation of shares
being redeemed, next determined following receipt of a redemption request
in proper form, and the value of the Fund Basket. The cash redemption
transaction fee described below will be deducted from such proceeds. Net
asset value is determined at the close of the regular trading session on
the NYSE (currently 4:00 p.m., New York time). For this purpose the
securities in the Fund Basket will be valued in the same manner as the
relevant Series values its portfolio securities. See "Determination of Net
Asset Value" in the Prospectus and "Determining Net Asset Value" in this
Statement of Additional Information.
A cash redemption transaction fee payable to the Fund will be imposed
on the cash portion of the redemption proceeds of Fund shares in Creation
Unit size aggregations to offset brokerage and other transaction costs of
the portfolio transactions that may be required. The fee that will be
imposed ranges from 1% to 1.32% depending on the Series. See "Summary of
Fund Expenses" in the Prospectus. Investors redeeming shares of the Fund
will also bear the costs of transferring the Fund Basket, which may
include, without limitation, settlement and custody charges, registration
fees, stock transfer taxes and similar fees, from the Fund to their account
or on their order. Currently, the estimated redemption transfer costs for
each Series are as follows: the Australia Index Series, $ ; the France
Index Series, $ ; the Germany Index Series, $ ; the Hong Kong Index
Series, $ ; the Italy Index Series, $ ; the Japan Index Series,
$ ; the South Africa Index Series, $ ; the UK Index Series, $ ;
and the US Index Series, $ . Investors who use the services of a broker
or other such intermediary may be charged a fee for their services. The
Distributor will provide a list of Authorized DTC Participants on the
request of an investor.
Redemption Procedures
Redemption requests in respect of shares of any Series must be
submitted to the Distributor by or through an Authorized DTC Participant on
a Business Day for such Series. Investors other than Authorized DTC
Participants are responsible for making arrangements for a redemption
request to be made through an Authorized DTC Participant. The Distributor
(at 1-800-328-7408) can provide a list of current Authorized DTC
Participants. A Creation Unit aggregation of shares will be redeemed at
the net asset value determined at the close of the NYSE on the Business Day
that the redemption request is received in proper form, provided that such
request is received by the Distributor from the Authorized DTC Participant
by 4:00 p.m., New York time, on such day. Redemption requests received
after such time will be effected on the next Business Day and such
redeeming stockholder will receive the Fund Basket and related cash amount
for such next Business Day.
The Authorized DTC Participant must transmit the request for
redemption, in the form required by the Fund (available from the
Distributor), to the Distributor by facsimile in accordance with procedures
set forth in the Account Agreement. Investors should be aware that their
particular broker may not have executed an Account Agreement, and that,
therefore, requests to redeem Creation Unit size aggregations of shares may
have to be placed by the investor's broker through a DTC Participant who
has executed an Account Agreement. At any given time there may be only a
limited number of broker-dealers that have executed an Account Agreement.
Redemption requests transmitted to an Authorized DTC Participant acting on
behalf of an investor must be in the form required by such Authorized DTC
Participant, which form will not be the same as the form of redemption
request required by the Fund,
<PAGE>
<PAGE> 34
that the Authorized DTC Participant must deliver to the Distributor by
facsimile to 617-982-8265 for any redemption of Fund shares. Investors
making requests to redeem shares should afford sufficient time to permit
proper submission of the request by an Authorized DTC Participant. A
redemption request will be considered to be in proper form if (1) the
Authorized DTC Participant has transferred or caused to be transferred to
the Fund the Creation Unit aggregation of shares being redeemed through the
DTC book-entry system so as to be effective by 4:00 p.m., New York time, on
the same Business Day and (ii) a duly completed request form is received by
the Distributor. If the Fund does not receive the investor's Fund shares by
the closing time of the regular trading session on the NYSE, the redemption
request shall be rejected and may be resubmitted the following Business
Day. Those making redemption requests should ascertain the deadline
applicable to DTC [currently 1:00 p.m., New York time] by contacting the
operations department of the broker or depositary institution effectuating
such transfer of the CB(TM) Shares. This deadline is likely to be
significantly earlier than the closing time of the regular trading session
on the NYSE.
Upon receiving the redemption request, the Distributor shall notify
the Fund and the Fund's Transfer Agent of such redemption request. The
tender of an investor's Fund shares for redemption (as described above) and
the distribution of the cash redemption payment in respect of Creation
Units redeemed will be effected through DTC and the relevant Authorized DTC
Participant to the beneficial owner thereof as recorded on the book-entry
system of DTC or the DTC Participant through which such investor holds
shares, as the case may be. See "The Fund--Book-Entry Only System" in the
Prospectus. The Fund will transfer the Fund Basket in the case of the US
Index Series to or on the order of the relevant Authorized DTC Participant
through the DTC system and, in the case of each other Series, to the
account of the Authorized DTC Participant or beneficial owner in the
foreign jurisdiction where such securities are traded not later than the
fifth Business Day following the date on which the redemption request is
made. [Insert terms of any SEC exemptive order.] Cash redemption proceeds
will be paid to the account of the Authorized DTC Participant for the
beneficial owner through the DTC cash transfer facilities as soon as
practicable after the date of redemption but in any event within seven
calendar days thereof.
In order to accept delivery of the portfolio securities in the Fund
Basket, a redeeming investor or the Authorized DTC Participant on its
behalf must maintain appropriate securities broker-dealer, bank or other
custody arrangements in the jurisdiction in which the portfolio securities
of the Series are customarily traded, to which account such portfolio
securities will be delivered. In the event that neither the redeeming
investor nor the Authorized DTC Participant acting on its behalf has
appropriate arrangements in place to take delivery of the portfolio
securities in the applicable jurisdiction, and it is not possible to make
other comparable arrangements satisfactory to the Fund, or if it is not
possible to effect deliveries of the portfolio securities in such
jurisdiction, the Fund will exercise its option to redeem such shares in
cash and the redeeming beneficial owner will be required to receive the
redemption proceeds entirely in cash. In such a case the cash redemption
transaction fee will be charged by the Fund upon and be subtracted from the
entire redemption proceeds.
Suspension of Redemption
The right of redemption may be suspended or the date of payment
postponed with respect to any Series (1) during any period when the NYSE is
closed (other than customary weekend and holiday closings); (2) when
trading on the NYSE is suspended or restricted; or (3) when an emergency
exists as a result of which disposal of the Series' portfolio securities or
determination of its net asset value is
<PAGE>
<PAGE> 35
not reasonably practicable; or (3) for such other periods as may be
permitted by [the Order] or in such other circumstances as the Securities
and Exchange Commission may permit.
DETERMINING NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Determination of
Net Asset Value".
Each Series calculates its net asset value per share at the close of
the regular trading session on the NYSE (currently 4:00 p.m., New York
time), on each day when the NYSE is open for business. See "Purchase and
Issuance of Creation Unit Aggregations of Fund Shares -- Business Day".
Valuation of Portfolio Securities by the Fund
Portfolio securities held by a Series are valued, for purposes of
determining the net asset value per share of the Series, at the last quoted
sales price on the securities exchange or national securities market on
which such securities are primarily traded. The value of portfolio
securities delivered to the Fund as part of the in-kind deposit of
portfolio securities (i.e., the Fund Basket) required for a purchase of
Creation Units on any Business Day will be determined on the same basis.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average
of the most recent bid and asked prices, or if no asked price is available,
at the bid price. The values of portfolio securities denominated in
currencies other than the US dollar are converted into US dollars at the
average market spot exchange rate for the relevant Series Currency at 12:00
noon, New York time, as quoted by the Reuters on the day that the foreign-
currency values of the securities are determined, or at such other quoted
exchange rate as may be determined by the Adviser to be appropriate. Any
securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith in
accordance with procedures approved by the Fund's Board. Expenses and
fees, including the investment advisory, administration and distribution
fees of each Series, are accrued daily and taken into account for the
purpose of determining the net asset value of shares of that Series.
DIVIDENDS AND DISTRIBUTIONS
See "Dividends and Capital Gains Distributions" in the Prospectus for
information concerning the Fund's policy on dividends and distributions.
TAXES
The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Dividends and
Capital Gains Distributions" and "Tax Matters".
Tax Treatment of the Fund
Each Series is expected to be treated as a separate entity for tax
purposes. As such, each Series must calculate its income and losses, and
satisfy the requirements as to its status as a regulated investment
<PAGE>
<PAGE> 36
company, separately. It is intended that each Series will qualify for and
elect treatment as a regulated investment company (a "RIC") under the
Internal Revenue Code of 1986, as amended (the "Code"). Such treatment
generally will relieve a Series of federal income tax liability to the
extent it distributes its net investment income and net capital gain income
to stockholders.
To qualify for treatment as a RIC, a company must annually distribute
at least 90 percent of its net investment company taxable income (which
includes dividends, interest and net short-term capital gains) and meet
several other requirements. Among such other requirements are the
following: (1) at least 90 percent of the company's annual gross income
must be derived from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock or
securities or foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to its business
of investing in such stock, securities or currencies; (2) at the close of
each quarter of the company's taxable year, (a) at least 50 percent of the
market value of the company's total assets must be represented by cash and
cash items, U.S. government securities, securities of other RICS and other
securities, with such other securities limited for purposes of this
calculation in respect of any one issuer to an amount not greater than 5%
of the value of the company's assets and not greater than 10% of the
outstanding voting securities of such issuer, and (b) not more than 25
percent of the value of its total assets may be invested in the securities
of any one issuer or of two or more issuers that are controlled by the
company (within the meaning of Section 851(b)(4)(B) of the Code) that are
engaged in the same or similar trades or businesses or related trades or
businesses (other than U.S. government securities or the securities of
other RICs); and (3) the company may not derive 30 percent or more of its
annual gross income from the sale or other disposition of (i) stock or
securities, (ii) options, futures or forward contracts on stock or
securities (other than options, futures or forward contracts on foreign
currencies) or (iii) foreign currencies (including options, futures and
forward contracts on foreign currencies) not directly related to the
company's principal business of investing in stock, securities or foreign
currencies, in each case held for less than three months.
Any dividend declared by a Series in October, November or December of
any calendar year and payable to investors of record on a specified date in
such a month shall be deemed to have been received by each investor on
December 31 of such calendar year and to have been paid by the Series not
later than such December 31 so long as the dividend is actually paid by the
Series during January of the following calendar year.
Tax Treatment of Investors
A person other than a tax-exempt entity who exchanges securities for
Creation Units of Fund shares generally will recognize gain or loss equal
to the difference between the market value of the Creation Units and the
sum of his aggregate basis in the securities surrendered and the Cash
Component paid.
Generally, persons who are not subject to tax on their income will
not be taxed upon distributions from the Fund (unless the persons are
subject to the U.S. federal tax on unrelated business income and incur
indebtedness allocable to shares of the Fund). The Series' dividends and
distributions will not be a specified preference item for purposes of the
U.S. federal alternative minimum tax imposed on individuals and
corporations. Other investors will be taxed upon the distribution of
dividends from the Fund. Dividends paid from net investment income will
generally be taxable as ordinary income for federal income tax purposes.
Distributions in excess of a Series' current and accumulated earnings and
profits will, as to each of the Series' investors, be treated as a tax-free
return of capital, to the extent of
<PAGE>
<PAGE> 37
the investor's basis in his shares and as a capital gain thereafter.
Investors should consult their own tax advisers regarding the treatment of
distributions under applicable state law. Dividends of net investment
income from a Series other than the US Index Series generally will not
qualify for the dividends-received deduction permitted to corporate owners
under Section 243 of the Code. Regardless of the length of time a
stockholder has held his shares, distributions designated as being from a
Series' net long-term capital gains (i.e., the excess of net long-term
capital gains over net short-term capital losses) will be taxable as such.
A distribution by a Series will reduce its net asset value per share.
Such a distribution may be taxable to the investor as ordinary income or
capital gain as described above even though, from an investment standpoint,
it may constitute a return of capital.
Upon the sale or exchange of Fund shares, an investor will realize a
taxable gain or loss equal to the difference between the amount realized
and the investor's basis in the shares. Such gain or loss will be treated
as capital gain or loss, if the shares are capital assets in the investor's
hands, and will be long-term or short-term depending upon the investor's
holding period for the shares. Any loss realized on a sale or exchange
will be disallowed to the extent that the shares disposed of are replaced
within a 61-day period beginning 30 days before and ending 30 days after
the disposition of the shares. In such a case, the basis of the shares
acquired will be adjusted upward to reflect the disallowed loss. Any loss
realized by an investor on a disposition of the Fund's shares held by the
investor for six months or less will be treated as a long-term capital loss
for U.S. income tax purposes to the extent of any distributions of long-
term capital gains received by the investor (and any amounts retained by
the fund that were designated as undistributed capital gains), with respect
to such shares.
The Fund will make annual reports of the federal income tax status of
distributions to owners of shares. Such reports will set forth the dollar
amounts of dividends from net investment income and long-term capital
gains, the investor's portion of the foreign income taxes paid to each
country, the portion of dividends that represents income derived from
sources within each country and, in the case of the US Index Series,
dividends which may qualify for the dividends-received deduction described
above. Investors should consult their own tax advisers to determine the
consequences of holding shares in a Series under state, local or other tax
law.
The Fund may be required to withhold for U.S. federal income tax
purposes 31% of the dividends and distributions payable to investors who
fail to provide the Fund with their correct taxpayer identification number
or to make required certifications, or who have been notified by the U.S.
Internal Revenue Service that they are subject to backup withholding.
Corporate investors and other investors specified in the Code are or may be
exempt from such backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability.
The foregoing discussion is a summary only and is not intended as a
substitute for careful tax planning. Purchasers of shares of the Fund
should consult their own tax advisors as to the tax consequences of
investing in such shares, including under state, local and other tax laws.
Finally, the foregoing discussion is based on applicable provisions of the
Code, regulations, judicial authority and administrative interpretations in
effect on the date hereof. Changes in applicable authority could
materially affect the conclusions discussed above, and such changes often
occur.
<PAGE>
<PAGE> 38
CAPITAL STOCK AND SHAREHOLDER REPORTS
Each Fund share has one vote as to matters affecting the holder
thereof and, when issued and paid for in accordance with the terms of
purchase described under "Purchase and Issuance of Fund Shares in Creation
Unit Aggregations", will be fully paid and non-assessable. Shares have no
preemptive, exchange, subscription or conversion rights and are freely
transferable. The following number of shares is currently authorized for
each fund Series: the Australia Index Series, _______ shares; the France
Index Series, _______ shares; the Germany Index Series, _______ shares; the
Hong Kong Index Series, _______ shares; the Italy Index Series, _______
shares; the Japan Index Series, _______ shares; the South Africa Index
Series, _______ shares; the UK Index Series, _______ shares; and the US
Index Series, _______ shares.
Shares of all Series vote together as a single class except that if
the matter being voted on affects only a particular Series it will be voted
on only by that Series and if a matter affects a particular Series
differently from other Series, that series will vote separately on such
matter. Fractional shares of the Fund will not be issued. Each share is
entitled to participate equally in dividends and distributions declared by
the Board with respect to the relevant Series, and in the net distributable
assets of such Series on liquidation. Shareholders are entitled to require
the Fund to redeem Creation Unit size aggregations of their shares.
A registered investment company incorporated in Maryland, such as the
Fund, is not required to hold annual shareholder meetings if its charter or
bylaws provide that such meetings would not be held in any year such a
meeting is not required to be held for certain purposes specified in the
1940 Act. Accordingly, the Fund's bylaws provide that it is not required
to hold annual shareholder meetings for the purpose of electing Directors
as long as two-thirds of the Directors then in office have been elected by
the shareholders. Under Maryland law, Directors of the Fund may be removed
by the vote of the holders of a majority of the outstanding shares of the
Fund. The Fund does not intend to hold shareholder meetings unless
required to for certain purposes specified in the 1940 Act.
Control Persons. The Fund expects that, immediately prior to the
commencement of trading of the CB(TM) Shares, each of the Australian Index
Series, the Hong Kong Index Series, the Italy Index Series and the South
Africa Index Series will have [four] stockholders and each other Series
will have [three] stockholders, each of whom will hold more than 5% of the
outstanding shares of such Series in Creation Unit size aggregations. Those
stockholders are expected to be: _________________. The Fund cannot
predict the length of time that such persons will remain control persons of
each Series.
Reports. The Fund will issue to its stockholders semi-annual reports
containing unaudited financial statements and annual reports containing
financial statements audited by independent accountants approved by the
Fund's Directors and by the stockholders when meetings are held.
Stockholder Inquiries. Stockholder inquiries may be made by writing
to the Fund, c/o Deutsche Bank Securities Corporation, 31 West 52nd Street,
New York, New York 10019.
<PAGE>
<PAGE> 39
COUNSEL AND INDEPENDENT ACCOUNTANTS
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, is
counsel to the Fund and has passed upon the validity of the Fund shares.
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as the independent accountants of the Fund.
<PAGE>
<PAGE> 40
REPORT OF INDEPENDENT ACCOUNTANTS
<PAGE>
<PAGE> 41
STATEMENT OF ASSETS AND LIABILITIES
The CountryBasket(TM) Index Fund, Inc.
Statement of Assets and Liabilities
________ __, 1995
<TABLE>
<CAPTION>
Australia France Germany Hong Kong Italy Japan S. Africa UK US
Index Index Index Index Index Index Index Index Index
Series Series Series Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Cash $ $ $ $ $ $ $ $ $
Deferred organization
expenses
Total Assets
Liabilities
Organization expenses
payable
Total Liabilities $ $ $ $ $ $ $ $ $
Net Assets $ $ $ $ $ $ $ $ $
Shares outstanding
($.001 par value)
Net Asset Value
per share $ $ $ $ $ $ $ $ $
Composition of net assets
Capital stock
Paid-in capital $ $ $ $ $ $ $ $ $
Net Assets,
________ __, 1995 $ $ $ $ $ $ $ $ $
</TABLE>
See Notes to financial statements.
<PAGE>
<PAGE> 42
THE COUNTRYBASKET(TM) INDEX FUND, INC.
Notes to Financial Statements
___________[ ], 1995
________________________________________________________________________
1. General
The CountryBasket(TM) Index Fund, Inc. (the "Fund") was incorporated under
the laws of the State of Maryland on August 8, 1994. The Fund is
registered under the Investment Company Act of 1940 (the "Act") as an open-
end management investment company. The Fund currently has nine common
stock series: the Australia Index Series; the France Index Series; the
Germany Index Series; the Hong Kong Index Series; the Italy Index Series;
the Japan Index Series; the South Africa Index Series; the UK Index Series;
and the US Index Series (each, a "Series").
Deutsche Bank Securities Corporation ("DBSC"), a subsidiary of Deutsche
Bank AG, serves as investment adviser (the "Adviser") to the Fund. State
Street Bank and Trust Company ("State Street") serves as administrator and
custodian to the Fund, and SSC Distribution Services, Inc. ("SSCD"), a
wholly owned subsidiary of SuperShare Services Corporation ("SSC") serves
as distributor of the Fund.
The Series have had no operations other than the sale of the following Fund
Series shares to {TBA} for the noted amounts: Australia Index Series
(________ shares for proceeds of $________); France Index Series (________
shares for proceeds of $________); Germany Index Series (________ shares
for proceeds of $________); Hong Kong Index Series (________ shares for
proceeds of $________); Italy Index Series (________ shares for proceeds of
$________); Japan Index Series (________ shares for proceeds of $________);
South Africa Index Series (________ shares for proceeds of $________); UK
Index Series (________ shares for proceeds of $________); and US Index
Series (________ shares for proceeds of $________).
The costs of organizing the Fund and registering its shares will be paid
initially by {TBA} and reimbursed by the Fund. These costs in turn will be
equitably allocated to each Series as provided for by the Fund's Board.
Such organization costs have been deferred and will be amortized ratably
over a period of sixty months from the commencement of operations of the
Series. If any of the initial shares are redeemed before the end of the
amortization period, the proceeds of the redemption will be reduced by the
pro rata share of the unamortized organization costs.
2. Agreements and Transactions with Affiliates
The Fund has an Investment Management Agreement (the "Management
Agreement") with DBSC. As investment adviser, DBSC manages the investments
of each of the Series. For its services, DBSC is entitled to receive a fee
from each Series at an annual rate of .45% of the average daily net assets
in the case of the Australia Index Series, the Hong Kong Index Series and
the South African Index Series, and .30% of the average daily net assets of
each other Series, plus, in the case of each Series, 40% of the gross
investment income, less dividends on securities held in portfolio. The
Management Agreement also provides that DBSC will be reimbursed for out-of-
pocket expenses incurred in providing certain administrative services.
The Fund has an Administration Agreement with State Street. Under the
Administration Agreement, State Street assists in supervising the
operations of the Series. For its services, State Street is entitled to
receive a fee from each Series at an annual rate of .08% of the average
daily net assets of such Series
<PAGE>
<PAGE> 43
THE COUNTRYBASKET(TM) INDEX FUND, INC.
Notes to Financial Statements
___________[ ], 1995
________________________________________________________________________
up to $125 million, plus .06% of the average daily net assets of such
Series in excess of $125 million up to $250 million, and .04% of the
average daily net assets of such Series in excess of $250 million. The
Administration Agreement also provides that State Street will be reimbursed
for out-of-pocket expenses incurred in providing certain services.
The Fund has a Distribution Agreement with SSCD. Under the Distribution
Agreement, SSCD serves as Distributor of the shares of the Series. The
Fund also has established a 12b-1 Plan (the "Plan"), pursuant to which each
Series pays the Distributor for activities intended to result in the sale
of shares of the Series at an annual rate of .02% of the average daily net
assets of such Series. The Plan also calls for each Series to reimburse
the Distributor up to a maximum annual rate of .23% of the average daily
net assets of such Series for payments to parties providing shareholder
services.
3. Capital Shares
The Fund is authorized to issue _______ shares of common stock. Currently,
the Board has created nine Series of stock and allocated the following
number of shares to each Series: Australia Index Series (________ shares);
France Index Series (________ shares); Germany Index Series (________
shares); Hong Kong Index Series (________ shares); Italy Index Series
(________ shares); Japan Index Series (________ shares); South Africa Index
Series (________ shares); UK Index Series (________ shares); and US Index
Series (________ shares). Shares of each Series are offered at net asset
value without a sales charge, in exchange for an in-kind deposit of a
designated portfolio of securities specified by the Distributor each day,
plus a specified amount of cash. Redemptions of the shares of the Series
are made in portfolio securities. The Fund imposes a transaction fee to
the cash portion of each purchase of Series shares. The percentage fee
imposed upon the cash portion of such purchase, for each Series, is as
follows: Australia Index Series (.3%); France Index Series (1.0%); Germany
Index Series (1.0%); Hong Kong Index Series (1.2%); Italy Index Series
(1.0%); Japan Index Series (1.32%); South Africa Index Series (2.0%); UK
Index Series (1.0%); and US Index Series (1.0%).
<PAGE>
<PAGE> A-1
APPENDIX A
FT-Actuaries World Indices
Australia Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BROKEN HILL PROP Basic Industries 25,168.818 17.550
NATL AUSTRALIA BANK Financial, Insurance 10,736.394 7.486
CRA Basic Industries 8,218.603 5.731
WESTERN MINING Basic Industries 6,424.700 4.480
WESTPAC Financial, Insurance 6,128.195 4.273
BTR NYLEX Capital Goods 4,996.956 3.484
ANZ BANK Financial, Insurance 4,387.752 3.059
COLES MYER Consumer Goods / Ser 4,385.022 3.058
AMCOR Basic Industries 4,363.691 3.043
CSR Basic Industries 3,128.947 2.182
NEWS CORP Consumer Goods / Ser 2,916.665 2.034
BORAL Basic Industries 2,899.547 2.022
FOSTERS BREWING GR Capital Goods 2,837.967 1.979
PACIFIC DUNLOP Capital Goods 2,833.151 1.975
COMMONWLTH BK OF AUS Financial, Insurance 2,784.642 1.942
LEND LEASE CORP Financial, Insurance 2,646.538 1.845
MIM HOLDINGS Basic Industries 2,645.384 1.845
ICI AUSTRALIA Basic Industries 2,491.465 1.737
COCA-COLA AMATIL Consumer Goods / Ser 2,451.262 1.709
WOODSIDE PETROLEUM Energy 2,451.132 1.709
WOOLWORTHS LTD. Consumer Goods / Ser 2,226.916 1.553
PIONEER INTERNATIONAL Basic Industries 2,192.083 1.528
COMALCO Basic Industries 2,174.267 1.516
BRAMBLES INDUSTRIES Transportation and Ser 2,091.063 1.458
NORTH LTD Basic Industries 1,765.649 1.231
MAYNE NICKLESS Transportation and Ser 1,571.881 1.096
WESTFIELD TRUST Financial, Insurance 1,565.755 1.092
SANTOS Energy 1,425.891 0.994
WESFARMERS Consumer Goods / Ser 1,266.148 0.883
SOUTHCORP HOLDINGS Consumer Goods / Ser 1,256.546 0.876
GENERAL PROPERTY TST Financial, Insurance 1,076.262 0.750
GOODMAN FIELDER LTD Consumer Goods / Ser 1,036.043 0.722
NEWCREST MINING LTD. Basic Industries 1,029.807 0.718
BURNS PHILP Consumer Goods / Ser 1,024.228 0.714
T.N.T Transportation and Ser 972.911 0.678
ARNOTTS Consumer Goods / Ser 928.741 0.648
AUST GAS LIGHT Utilities 923.468 0.644
AMPOLEX LTD. Energy 779.679 0.544
QBE INSURANCE GP Financial, Insurance 773.744 0.540
TUBEMAKERS Capital Goods 773.084 0.539
SMITH (HOWARD) Energy 762.298 0.532
RENISON GOLD Basic Industries 762.115 0.531
EMAIL Consumer Goods / Ser 761.857 0.531
<PAGE>
<PAGE> A-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
AUST NATIONAL INDS Capital Goods 723.706 0.505
COAL & ALLIED INDS Energy 709.126 0.494
NORMANDY POSEIDON Basic Industries 708.265 0.494
HARDIE (JAMES) INDS Basic Industries 670.860 0.468
STOCKLAND TST Financial, Insurance 668.785 0.466
WESTFIELD HDGS Financial, Insurance 661.020 0.461
QCT RESOURCES Energy 636.786 0.444
CALTEX AUSTRALIA Energy 481.694 0.336
ASHTON MINING Basic Industries 466.610 0.325
ROTHMANS HDG Consumer Goods / Ser 453.852 0.316
METAL MANUFACTURERS Capital Goods 415.007 0.289
SCHRODERS PROP FUND Financial, Insurance 387.144 0.270
ENERGY RES AUSTRALIA Basic Industries 305.306 0.213
PANCONTL MGN Basic Industries 289.399 0.202
SONS OF GWALIA LTD Basic Industries 256.908 0.179
KIDSTON GOLD MINES Basic Industries 242.398 0.169
ABERFOYLE Basic Industries 238.554 0.166
BOUGAINVILLE COPPER Basic Industries 230.210 0.161
OPSM PROTECTOR LTD Consumer Goods / Ser 219.277 0.153
FAI INSURANCES Financial Insurance 180.655 0.126
NAT CONSOLIDATED Capital Goods 145.282 0.101
CLYDE INDUSTRIES Capital Goods 131.824 0.092
CRUSADER Energy 106.298 0.074
MCPHERSONS Basic Industries 26.745 0.019
JENNINGS GROUP Basic Industries 23.054 0.016
</TABLE>
<PAGE>
<PAGE> B-1
APPENDIX B
FT-Actuaries World Indices
France Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ELF AQUITAINE Energy 18,566.417 5.618
LVMH - MOET VUITTON Consumer Goods / Ser 13,729.394 4.155
TOTAL Energy 12,974.658 3.926
L'OREAL Consumer Goods / Ser 12,536.924 3.794
ALCATEL ALSTHOM Capital Goods 12,521.459 3.789
EAUX (GENERALE DES) Utilities 10,950.270 3.314
CARREFOUR Consumer Goods / Ser 10,623.137 3.215
DANONE Consumer Goods / Ser 9766.978 2.955
SAINT GOBAIN Basic Industries 9,337.476 2.826
SOCIETE GENERALE Financial, Insurance 8,755.166 2.649
BANQUE NATIONALE DE PARIS Financial, Insurance 8,742.372 2.645
AIR LIQUIDE Basic Industries 8,707.193 2.635
RENAULT Consumer Goods / Ser 7,873.584 2.383
PARIBAS Financial, Insurance 7,709.583 2.333
U.A.P Financial, Insurance 7,636.274 2.311
AXA Financial, Insurance 7,446.430 2.253
RHONE POULENC A ORD Basic Industries 7,291.563 2.206
SUEZ (FINANCIERE) Financial, Insurance 7,124.777 2.156
PEUGEOT S.A Consumer Goods / Ser 6,863.117 2.077
LAFARGE COPPEE Basic Industries 5,816.703 1.760
LYONNAISE DES EAUX-DUMEZ Utilities 4,981.236 1.507
ELF SANOFI Consumer Goods / Ser 4,209.086 1.274
SCHNEIDER (EX SPEP) Capital Goods 4,110.279 1.244
MICHELIN 'B' Capital Goods 3,885.943 1.176
PINAULT-PRINTEMPS/La REDOUTE Consumer Goods / Ser 3,880.249 1.174
HAVAS Consumer Goods / Ser 3,866.595 1.170
CANAL PLUS Consumer Goods / Ser 3,457.777 1.046
THOMSON-CSF Capital Goods 3,444.797 1.042
VALEO Capital Goods 3,416.043 1.034
ERIDANIA/BEGHIN-SAY Consumer Goods / Ser 3,372.541 1.021
PERNOD RICARD Consumer Goods / Ser 3,301.780 0.999
CHRISTIAN DIOR Consumer Goods / Ser 3,271.832 0.990
PROMODES Consumer Goods / Ser 3,257.990 0.986
ROUSSEL-UCLAF Consumer Goods / Ser 3,248.506 0.983
NAVIGATION MIXTE Financial, Insurance 2,788.206 0.844
CMB PACKAGING S.A Basic Industries 2,749.308 0.832
CREDIT. COMM. FRANCE Financial, Insurance 2,719.125 0.823
ACCOR Consumer Goods / Ser 2,713.210 0.821
LEGRAND Capital Goods 2,599.169 0.787
PECHINEY INTL. Basic Industries 2,575.016 0.779
CREDIT LOCAL DE FRANCE Financial, Insurance 2,562.939 0.776
BANCAIRE (CIE) Financial, Insurance 2,337.585 0.707
BOUYGUES Basic Industries 2,131.305 0.645
<PAGE>
<PAGE> B-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
SAINT - LOUIS Consumer Goods / Ser 2,061.160 0.624
EUROTUNNEL Transportation and Ser 1,994.094 0.603
LAGARDERE GROUP Capital Goods 1,992.671 0.603
SYNTHELABO Consumer Goods / Ser 1,954.451 0.591
BON MARCHE Consumer Goods / Ser 1,821.380 0.551
POLIET Basic Industries 1,752.265 0.530
CR FONCIER FRANCE Financial, Insurance 1,748.328 0.529
CASTORAMA DUBOIS Consumer Goods / Ser 1,740.989 0.527
BIC Consumer Goods / Ser 1,738.102 0.526
CAP GEMINI SOGETI Consumer Goods / Ser 1,690.125 0.511
CASINO Consumer Goods / Ser 1,678.576 0.508
EURO DISNEY Consumer Goods / Ser 1,598.371 0.484
GROUPE WORMS ET CIE Financial, Insurance 1,587.469 0.480
DOCKS DE FRANCE Consumer Goods / Ser 1,537.428 0.465
S.E.B Consumer Goods / Ser 1,528.297 0.462
CHARGEURS Financial, Insurance 1,517.583 0.459
C.G.I.P Financial, Insurance 1,377.657 0.417
SAGEM Capital Goods 1,355.320 0.410
AGF Financial, Insurance 1,351.015 0.409
IMETAL Basic Industries 1,295.705 0.392
COMPTOIRS MODERNES Consumer Goods / Ser 1,275.747 0.386
SIDEL Capital Goods 1,271.816 0.385
SIMCO Financial, Insurance 1,263.345 0.382
FROMAGERIES Consumer Goods / Ser 1,223.365 0.370
ECCO Consumer Goods / Ser 1,190.354 0.360
SEFIMEG Financial, Insurance 1,127.378 0.341
GROUP DE LA CITE Consumer Goods / Ser 1,115.506 0.338
OXYGENE D'ACETYL Basic Industries 1,031.673 0.312
ESSILOR INTL Consumer Goods / Ser 1,023.419 0.310
EURAFRANCE Financial, Insurance 1,017.029 0.308
BONGRAIN Consumer Goods / Ser 1,016.581 0.308
CLUB MEDITERRANEE Consumer Goods / Ser 917.969 0.278
CREDIT NATIONAL Financial, Insurance 891.982 0.270
GAZ ET EAUX Financial, Insurance 847.324 0.256
UNIBAIL Financial, Insurance 755.729 0.229
UIF Financial, Insurance 684.646 0.207
G.T.M. ENTREPOSE Basic Industries 678.362 0.205
SOMMER ALLIBERT Consumer Goods / Ser 677.703 0.205
DAMART S.A Consumer Goods / Ser 664.097 0.201
CPR (PARIS REESC.) Financial, Insurance 626.604 0.190
SALOMON Consumer Goods / Ser 617.683 0.187
FONCIERE LYONNAISE Financial, Insurance 590.878 0.179
EBF Capital Goods 557.613 0.169
EURO RSCG Consumer Goods / Ser 545.486 0.165
MOULINEX Consumer Goods / Ser 526.793 0.159
LABINAL Capital Goods 523.376 0.158
LEGRIS Capital Goods 510.509 0.154
IMMEUBLES DE FRANCE Financial, Insurance 496.992 0.150
<PAGE>
<PAGE> B-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
UFB LOCABAIL Financial, Insurance 447.413 0.135
S.I.L.I.C. Financial, Insurance 398.474 0.121
CASINO PREF. Consumer Goods / Ser 396.673 0.120
VALLOUREC Basic Industries 395.644 0.120
D.M.C. Consumer Goods / Ser 370.609 0.112
INTERBAIL Financial, Insurance 350.781 0.106
NORD - EST Financial, Insurance 331.246 0.100
TAITTINGER Consumer Goods / Ser 309.389 0.094
SPIE BATIGONOLLES Basic Industries 253.674 0.077
FINEXTEL Financial, Insurance 196.296 0.059
GEOPHYSIQUE Energy 174.081 0.053
</TABLE>
<PAGE>
<PAGE> C-1
APPENDIX C
FT-Actuaries World Indices
Germany Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ALLIANZ AG HLDG. Financial, Insurance 33,414.194 9.845
DAIMLER BENZ Consumer Goods / Ser 25,219.121 7.430
SIEMENS Capital Goods 23,058.520 6.794
DEUTSCHE BANK Financial, Insurance 22,034.081 6.492
VEBA Financial, Insurance 16,931.608 4.989
BAYER Basic Industries 15,708.510 4.628
MUNICH RE (PART PD. REG) Financial, Insurance 13,627.194 4.015
HOECHST Basic Industries 12,783.251 3.766
BASF Basic Industries 12,202.328 3.595
DRESDNER BANK Financial, Insurance 11,698.800 3.447
MANNESMANN Capital Goods 9,948.337 2.931
RWE Utilities 9,260.706 2.728
BMW (BR.) Consumer Goods / Ser 9,145.161 2.694
COMMERZBANK Financial, Insurance 7,777.359 2.291
VOLKSWAGEN REGD. Consumer Goods / Ser 7,420.645 2.186
BAY. HYP.-U. WECHSEL BANK. Financial, Insurance 6,699.004 1.974
VIAG Basic Industries 6,416.373 1.890
THYSSEN Basic Industries 5,967.194 1.758
BAYERISCHE VEREINSBANK Financial, Insurance 5,890.685 1.736
SCHERING Basic Industries 4,492.649 1.324
PREUSSAG Basic Industries 4,422.077 1.303
LUFTHANSA Transportation and S 4,381.210 1.291
HOCHTIEF Basic Industries 4,218.065 1.243
LINDE Capital Goods 4,030.613 1.188
RWE PREF Utilities 4,000.830 1.179
VEW Utilities 3,666.004 1.080
KARSTADT Consumer Goods / Ser 3,051.098 0.899
MAN Capital Goods 3,016.692 0.889
AACH. & MUNCH. BETEIL REGD. Financial, Insurance 2,879.303 0.848
BEIERSDORF Consumer Goods / Ser 2,750.323 0.810
HEIDELBERGER ZEMENT Basic Industries 2,720.737 0.802
DEGUSSA Basic Industries 2,595.717 0.765
RHEINELEKTRA Capital Goods 2,447.742 0.721
HOLZMANN (PHILIPP) Basic Industries 2,409.132 0.710
VICTORIA HLDG. REGD. Financial, Insurance 2,405.806 0.709
KAUFHOF Consumer Goods / Ser 2,305.414 0.679
HENKEL KGA PREF. Basic Industries 2,209.226 0.651
GEHE Consumer Goods / Ser 2,107.045 0.621
BER. KRAFT UND LICHT (BEWAG) Utilities 2,095.484 0.617
COLONIA KONZERN REGD. Financial, Insurance 1,966.452 0.579
<PAGE>
<PAGE> C-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BHF-BANK Financial, Insurance 1,966.098 0.579
ASKO DEUTSCHE KAUFHAUS Consumer Goods / Ser 1,960.403 0.578
BILFINGER & BERGER Basic Industries 1,834.839 0.541
ALTANA Consumer Goods / Ser 1,560.593 0.460
VOLKSWAGEN PREF Consumer Goods / Ser 1,408.681 0.415
SPRINGER (AXEL) VERLAG REG Consumer Goods / Ser 1,366.581 0.403
CONTINENTAL Capital Goods 1,364.726 0.402
METALLGESELLSCHAFT Basic Industries 1,302.074 0.384
AGIV Capital Goods 1,251.613 0.369
PWA Basic Industries 987.724 0.291
MAN PREF. Capital Goods 912.403 0.269
DOUGLAS HLDG. Consumer Goods / Ser 838.386 0.247
DEUTSCHE BABCOCK Capital Goods 779.032 0.230
AACH. & MUNCH. BET. BR. Financial, Insurance 596.129 0.176
LINOTYPE-HELL Capital Goods 540.387 0.159
MUNICH RE Financial, Insurance 470.323 0.139
KAUFHOF PREF Consumer Goods / Ser 462.647 0.136
BMW (PREF.) Consumer Goods / Ser 429.281 0.126
</TABLE>
<PAGE>
<PAGE> D-1
APPENDIX D
FT-Actuaries World Indices
Hong Kong Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
HUTCHISON WHAMPOA Consumer Goods / Ser 14,640.302 8.880
SUN HUNG KAI PROPS Financial, Insurance 13,880.543 8.419
HANG SENG BANK Financial, Insurance 13,855.284 8.404
CHEUNG KONG Financial, Insurance 8,947.011 5.427
CHINA LIGHT & POWER Utilities 8,490.584 5.150
HENDERSON LAND Financial, Insurance 7,611.740 4.617
WHARF HLDS Financial, Insurance 7,302.995 4.429
SWIRE PACIFIC `A' Financial, Insurance 6,048.548 3.669
HONG KONG ELECTRIC Utilities 5,522.823 3.350
HONG KONG LAND HLDGS Financial, Insurance 5,254.943 3.187
JARDINE MATHESON Consumer Goods / Ser 5,190.228 3.148
CITIC PACIFIC $HKO.40 Financial, Insurance 4,808.029 2.916
HONG KONG TELECOMM Utilities 4,571.316 2.773
NEW WORLD DEV Financial, Insurance 4,252.621 2.579
CATHAY PACIFIC A/WYS Transportation and S 4,165.149 2.526
HOPEWELL Financial, Insurance 3,571.787 2.166
WHEELOCK AND CO. Consumer Goods / Ser 3,404.788 2.065
HK & CHINA GAS Utilities 3,343.339 2.028
JARDINE STRATEGIC Financial, Insurance 3,101.652 1.881
SWIRE PACIFIC `B' Financial, Insurance 3,028.506 1.837
BANK OF EAST ASIA Financial, Insurance 2,930.393 1.777
AMOY PROPERTIES Financial, Insurance 2,045.306 1.241
HYSAN DEV Financial, Insurance 2,004.245 1.216
CHINESE ESTATES Financial, Insurance 1,925.020 1.168
DAIRY FARM INTL Consumer Goods / Ser 1,842.485 1.118
HANG LUNG DEV Financial, Insurance 1,745.153 1.058
GUOCO GROUP LIMITED Financial, Insurance 1,718.009 1.042
HENDERSON INVESTMENT Financial, Insurance 1,690.658 1.025
TELEVISION BROADCAST Consumer Goods / Ser 1,677.410 1.017
SINO LAND Financial, Insurance 1,674.193 1.015
HK & SHANGHAI HOTELS Consumer Goods / Ser 1,248.047 0.757
MIRAMAR HOTEL Consumer Goods / Ser 1,204.869 0.731
SHUN TAK HOLDINGS LTD Transportation and S 1,033.015 0.627
SOUTH CHINA MORNING POST $HKO.10 Consumer Goods / Ser 877.278 0.532
JOHNSON ELECTRIC Capital Goods 874.538 0.530
GREAT EAGLE HLDS Financial, Insurance 870.186 0.528
MANDARIN ORIENTAL Consumer Goods / Ser 806.735 0.489
KOWLOON MOTOR Transportation and S 719.946 0.437
HK REALTY `A' Financial, Insurance 642.727 0.390
HK AIRCRAFT Capital Goods 617.552 0.375
SHAW BROS Consumer Goods / Ser 612.750 0.372
<PAGE>
<PAGE> D-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
SEMI-TECH (GLOBAL) Consumer Goods / Ser 556.311 0.337
REALTY DEV 'A' Financial, Insurance 539.347 0.327
SIME DARBY Consumer Goods / Ser 518.184 0.314
JARDINE INTNL. MOTOR Consumer Goods / Ser 502.819 0.305
DICKSON CONCEPTS INT Consumer Goods / Ser 447.335 0.271
CROSS-HARBOUR TUNNEL Transportation and S 367.821 0.223
HARBOUR CENTRE DEV Consumer Goods / Ser 358.278 0.217
CHINA MOTOR BUS Transportation and S 351.333 0.213
WINSOR INDUSTRIAL Consumer Goods / Ser 320.762 0.195
WING ON CO INTL LTD Consumer Goods / Ser 315.733 0.192
SUN HUNG KAI Financial, Insurance 277.181 0.168
PLAYMATES TOYS HLDG Consumer Goods / Ser 196.251 0.119
LANE CRAWFORD INTL A Consumer Goods / Ser 137.624 0.083
PLAYMATES PROP HLDGS Financial, Insurance 127.989 0.078
LANE CRAWFORD INTL B Consumer Goods / Ser 102.358 0.062
</TABLE>
<PAGE>
<PAGE> E-1
APPENDIX E
FT-Actuaries World Indices
Italy Compenent as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENERALI (ASSICURAZIONI) Financial, Insurance 18,851.591 14.156
TELECOM ITALIA Utilities 17,086.039 12.831
STET Utilities 11,297.896 8.484
FIAT Consumer Goods / Ser 10,169.919 7.637
ALLEANZA (ASSICURAZIONI) Financial, Insurance 5,378.785 4.039
INA Financial, Insurance 5,313.608 3.990
SAN PAOLO Financial, Insurance 4,292.090 3.223
MEDIOBANCA Financial, Insurance 3,870.205 2.906
MONTEDISON Financial, Insurance 3,845.148 2.887
IMI Financial, Insurance 3,687.471 2.769
STET RISP Utilities 3,429.392 2.575
BANCA COMM. ITALIANA Financial, Insurance 3,353.635 2.518
TELECOM ITALIA SVGS Utilities 3,120.744 2.343
RAS Financial, Insurance 2,742.123 2.059
CREDITO ITALIANO Financial, Insurance 2,287.690 1.718
FIAT PTC PREF Consumer Goods / Ser 2,186.228 1.642
PIRELLI SPA Capital Goods 1,910.055 1.434
ITALGAS Utilities 1,821.170 1.368
OLIVETTI ORD Capital Goods 1,793.578 1.347
FONDIARIA Financial, Insurance 1,714.053 1.287
FIAT SVG N/CV Consumer Goods / Ser 1,426.760 1.071
SIRTI Capital Goods 1,423.948 1.069
SAI Financial, Insurance 1,378.082 1.035
IFIL Consumer Goods / Ser 1,362.588 1.023
BANCO AMBROVENETO Financial, Insurance 1,318.196 0.990
GEMINA Financial, Insurance 1,238.844 0.930
ITALCEMENTI Basic Industries 1,142.007 0.858
SME Consumer Goods / Ser 1,117.688 0.839
TORO ASSICURAZIONI Financial, Insurance 896.731 0.673
RINASCENTE ORD Consumer Goods / Ser 888.877 0.667
IFI PTC PREF Financial, Insurance 856.449 0.643
BURGO (CARTIERE) Basic Industries 835.291 0.627
FIDIS Financial, Insurance 817.152 0.614
SNIA BPD Basic Industries 772.699 0.580
RAS SVGS N/CV Financial, Insurance 740.738 0.556
ALLEANZA ASSIC N/CV Financial, Insurance 730.186 0.548
SAIPEM Energy 727.855 0.547
IFIL N/C SVGS. Consumer Goods / Ser 691.576 0.519
CIR-COMPAGNIE Financial, Insurance 656.014 0.493
MILANO ASSICURAZIONI Financial, Insurance 623.475 0.468
LLOYD ADRIATICO Financial, Insurance 600.401 0.451
<PAGE>
<PAGE> E-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GILARDINI Capital Goods 542.152 0.407
MONTEDISON SVG. N/CV. Financial, Insurance 461.704 0.347
SASIB Capital Goods 419.047 0.315
MARZOTTO Consumer Goods / Ser 388.097 0.291
MAGNETI MARELLI Capital Goods 363.144 0.273
ITALCEMENTI SVGS N/CV Basic Industries 351.115 0.264
BANCO AMBROVEN N/C SVGS Financial, Insurance 316.836 0.238
SAI SVGS N/CV Financial, Insurance 303.375 0.228
UNICEM Basic Industries 292.005 0.219
EDITOR L'ESPRESSO Consumer Goods / Ser 270.218 0.203
TORO ASSICURAZIONI SVG N/CV Financial, Insurance 223.561 0.168
SASIB SVG N/CV Capital Goods 197.950 0.149
CIR-COMPAGNIE SVG N/CV Financial, Insurance 195.852 0.147
TORO ASS. PTC PREF Financial, Insurance 158.690 0.119
TECNOST SPA Capital Goods 125.381 0.094
UNICEM SVG N/CV Basic Industries 104.354 0.078
BANCA COMM. ITALIANA SVGS N/CV Financial, Insurance 34.117 0.026
CREDITO ITALIANO SVG N/CV Financial, Insurance 22.145 0.017
</TABLE>
<PAGE>
<PAGE> F-1
APPENDIX F
FT-Actuaries World Indices
Japan Component as of 30DEC94
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TOYOTA MOTOR Consumer Goods / Ser 78,413.968 2.854
MITSUBISHI BANK Financial, Insurance 70,739.099 2.575
IND BANK OF JAPAN Financial, Insurance 69,528.044 2.531
FUJI BANK Financial, Insurance 63,885.138 2.325
SUMITOMO BANK Financial, Insurance 59,817.761 2.177
DAI-ICHI KANGYO BANK Financial, Insurance 58,804.471 2.140
SANWA BANK Financial, Insurance 57,567.838 2.095
SAKURA BANK LTD. Financial, Insurance 44,526.693 1.621
NOMURA SECURITIES Financial, Insurance 40,717.250 1.482
TOKYO ELEC POWER Utilities 37,323.180 1.359
MATSUSHITA ELECT IND Consumer Goods / Ser 34,473.990 1.255
HITACHI Capital Goods 32,584.831 1.186
BANK OF TOKYO Financial, Insurance 31,259.310 1.138
SEVEN-ELEVEN Consumer Goods / Ser 27,631.523 1.006
ASAHI BANK Financial, Insurance 26,995.283 0.983
LONG TERM CREDIT BK Financial, Insurance 26,142.784 0.952
NIPPON STEEL Basic Industries 25,896.698 0.943
MITSUBISHI HEAVY IND Capital Goods 25,656.747 0.934
TOKAI BANK Financial, Insurance 24,403.901 0.888
TOSHIBA Capital Goods 23,308.537 0.848
KANSAI ELEC POWER Utilities 23,308.383 0.848
ITO YOKADO Consumer Goods / Ser 22,143.223 0.806
SONY CORP Consumer Goods / Ser 21,174.338 0.771
NISSAN MOTOR Consumer Goods / Ser 20,725.817 0.754
MITSUBISHI CORP Consumer Goods / Ser 20,572.792 0.749
SHARP CORP Consumer Goods / Ser 20,039.607 0.729
MITSUBISHI TRUST BNK Financial, Insurance 19,449.037 0.708
DAIWA SECURITIES Financial, Insurance 19,399.912 0.706
TOKYO MARINE & FIRE Financial, Insurance 18,917.023 0.689
FUJITSU Capital Goods 18,389.909 0.669
CHUBU ELEC POWER Utilities 17,974.901 0.654
NIPPONDENSO Capital Goods 17,759.297 0.646
NEC CORP Capital Goods 17,601.596 0.641
SUMITOMO TRUST BANK Financial, Insurance 17,454.804 0.635
HONDA MOTOR Consumer Goods / Ser 17,282.695 0.629
NIKKO SECS Financial, Insurance 16,631.819 0.605
SEIBU RAILWAY Transportation and S 16,112.660 0.586
DAIWA BANK Financial, Insurance 15,292.300 0.557
MITSUBISHI ELECTRIC Capital Goods 15,211.267 0.554
ASAHI GLASS Capital Goods 14,455.851 0.526
MITSUBISHI ESTATE Financial, Insurance 13,933.327 0.507
<PAGE>
<PAGE> F-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
KYOCERA Capital Goods 13,820.782 0.503
CANON Capital Goods 13,635.253 0.496
KAWASAKI STEEL Basic Industries 13,590.234 0.495
MITSUI Consumer Goods / Ser 13,231.552 0.482
KINKI NIPPON RAILWAY Transportation and S 12,989.875 0.473
DAI-NIPPON PRINTING Consumer Goods and / Ser 12,773.198 0.465
TOHOKU ELEC POWER Utilities 12,626.000 0.460
MITSUI TRUST & BANKING Financial, Insurance 12,491.015 0.455
TOKYO GAS Utilities 12,167.122 0.443
BRIDGESTONE CORP Capital Goods 12,135.884 0.442
MITSUBISHI KASEI Basic Industries 12,027.422 0.438
FUJI PHOTO FILM Consumer Goods / Ser 11,915.259 0.434
KIRIN BREWERY Consumer Goods / Ser 11,709.480 0.426
FANUC Capital Goods 11,250.340 0.410
SANYO ELECTRIC Consumer Goods / Ser 11,133.792 0.405
KYUSHU ELEC POWER Utilities 11,058.403 0.403
ASAHI CHEMICAL INDS Basic Industries 11,044.931 0.402
SUMITOMO SHOJI Consumer Goods / Ser 10,881.994 0.396
NIPPON EXPRESS Transportation and S 10,765.088 0.392
DAIEI Consumer Goods / Ser 10,658.549 0.388
TAKEDA CHEMICAL Consumer Goods / Ser 10,620.616 0.387
NIPPON CREDIT BANK Financial, Insurance 10,418.942 0.379
TORAY INDS Basic Industries 10,184.164 0.371
SUMITOMO METAL Basic Industries 10,182.995 0.371
ITOCHU CORP Consumer Goods / Ser 10,143.314 0.369
OSAKA GAS Utilities 10,135.963 0.369
TONEN CORP Energy 10,109.369 0.368
SUMITOMO ELECTRIC Capital Goods 10,099.713 0.368
KUBOTA Capital Goods 10,085.779 0.367
SANKYO Consumer Goods / Ser 10,064.041 0.366
SHIZUOKA BANK Financial, Insurance 9,918.277 0.361
NKK Basic Industries 9,747.505 0.355
BANK OF YOKOHAMA Financial, Insurance 9,634.956 0.351
TOPPAN PRINTING Consumer Goods / Ser 9,435.494 0.343
SUMITOMO CHEMICAL Basic Industries 9,264.864 0.337
YAMAICHI SECURITIES Financial, Insurance 9,134.296 0.332
KOMATSU Capital Goods 9,056.124 0.330
MURATA MFG Capital Goods 9,008.020 0.328
KOBE STEEL Basic Industries 8,838.537 0.322
YASUDA TST AND BANK Financial, Insurance 8,779.632 0.320
MITSUI FUDOSAN Financial, Insurance 8,608.694 0.313
CHUGOKU ELEC POWER Utilities 8,459.136 0.308
MITSUBISHI MOTORS Consumer Goods / Ser 8,391.264 0.305
AJINOMOTO Consumer Goods / Ser 8,324.172 0.303
MARUBENI CORP Consumer Goods / Ser 8,232.183 0.300
KAJIMA Basic Industries 8,228.517 0.300
NIPPON OIL Energy 8,172.153 0.297
TOYO TST AND BANKING Financial, Insurance 8,113.968 0.295
<PAGE>
<PAGE> F-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
NEW OJI PAPER Basic Industries 7,857.086 0.286
SHIMIZU CORP Basic Industries 7,760.632 0.282
NIPPON YUSEN Transportation and S 7,602.214 0.277
NINTENDO Consumer Goods / Ser 7,596.764 0.277
MATSUSHITA ELEC WKS Capital Goods 7,513.548 0.273
SEKISUI HOUSE Basic Industries 7,365.325 0.268
TOKYU Transportation and S 7,262.360 0.264
CHIBA BANK Financial, Insurance 7,095.023 0.258
SECOM Consumer Goods / Ser 7,064.973 0.257
NIPPON PAPER CO. Basic Industries 6,958.795 0.253
JUSCO Consumer Goods / Ser 6,866.157 0.250
JOYO BANK Financial, Insurance 6,834.486 0.249
KAO Consumer Goods / Ser 6,792.418 0.247
HACHIJUNI BANK Financial, Insurance 6,771.731 0.246
DAIWA HOUSE INDUSTRY Basic Industries 6,763.890 0.246
MARUI Consumer Goods / Ser 6,719.063 0.245
TOYO SEIKAN Basic Industries 6,712.543 0.244
YAMANOUCHI PHARM Consumer Goods / Ser 6,639.604 0.242
SHIKOKU ELEC POWER Utilities 6,523.911 0.237
YASUDA FIRE & MARINE Financial, Insurance 6,498.254 0.237
TAISHO PHARM Consumer Goods / Ser 6,497.867 0.237
RICOH Capital Goods 6,464.738 0.235
SHIN-ETSU CHEMICAL Basic Industries 6,441.407 0.234
TOSTEM CORP Basic Industries 6,378.075 0.232
TDK Consumer Goods / Ser 6,365.993 0.232
TAISEI CORP Basic Industries 6,314.861 0.230
KAWASAKI HEAVY Capital Goods 6,069.377 0.221
MAZDA MOTOR Consumer Goods / Ser 6,030.047 0.219
MITSUBISHI MATERIALS Basic Industries 6,013.126 0.219
IHI Capital Goods 6,012.877 0.219
ONO PHARMACEUTICAL Consumer Goods / Ser 5,913.707 0.215
TOYODA AUTO LOOM Capital Goods 5,795.593 0.211
SEGA ENTERPRISES Consumer Goods / SEr 5,791.419 0.211
SUMITOMO MARINE & FIRE Financial, Insurance 5,753.409 0.209
GUNMA BANK Financial, Insurance 5,538.952 0.202
TOTO Basic Industries 5,518.468 0.201
MITSUI MARINE & FIRE Financial, Insurance 5,481.732 0.200
SEKISUI CHEMICAL Basic Industries 5,476.688 0.199
HITACHI ZOSEN Capital Goods 5,353.688 0.195
ALL NIPPON AIRWAYS Transportation and S 5,301.636 0.193
SUZUKI MOTOR Consumer Goods / Ser 5,261.296 0.192
ODAKYU ELEC RAILWAY Transportation and S 5,184.819 0.189
ISUZU MOTORS Consumer Goods / Ser 5,175.943 0.188
TEIJIN Basic Industries 5,127.735 0.187
NISSHIN STEEL Basic Industries 5,114.776 0.186
SUMITOMO METAL MNG Basic Industries 5,078.660 0.185
MITSUKOSHI Consumer Goods / Ser 5,063.724 0.184
BANK OF FUKUOKA Financial, Insurance 5,052.640 0.184
<PAGE>
<PAGE> F-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TOBU RAILWAY Transportation and S 5,008.995 0.182
HANKYU CORP Transportation and S 4,998.452 0.182
MATSUSHITA COMMS Capital Goods 4,958.875 0.180
HOKURIKU ELEC POWER Utilities 4,958.094 0.180
HOKKAIDO ELEC POWER Utilities 4,935.515 0.180
HOKURIKU BANK Financial, Insurance 4,889.371 0.178
EBARA Capital Goods 4,838.154 0.176
OHBAYASHI-GUMI Basic Industries 4,772.417 0.174
SHISEIDO Consumer Goods / Ser 4,733.425 0.172
TOKYO ELECTRON Capital Goods 4,650.602 0.169
ASAHI BREWERIES Consumer Goods / Ser 4,605.255 0.168
COSMO OIL Energy 4,451.484 0.162
NIPPON SEIKO Capital Goods 4,433.476 0.161
YAMAZAKI BAKING Consumer Goods / Ser 4,415.796 0.161
ASHIKAGA BANK Financial, Insurance 4,414.071 0.161
KYOWA HAKKO KOGYO Consumer Goods / Ser 4,406.619 0.160
JAPAN ENERGY CORP. Energy 4,320.024 0.157
OKI ELECTRIC Capital Goods 4,319.742 0.157
PIONEER ELECTRONIC Consumer Goods / Ser 4,319.663 0.157
KYUSHU MATSUSHITA Capital Goods 4,313.076 0.157
DAIICHI SEIYAKU Consumer Goods / Ser 4,279.389 0.156
OMRON TATEISI ELECT Capital Goods 4,261.974 0.155
FURUKAWA ELECTRIC Capital Goods 4,249.027 0.155
HITACHI METALS Basic Industries 4,240.374 0.154
EISAI Consumer Goods / Ser 4,202.259 0.153
JAPAN AIR LINES Transportation and S 4,177.850 0.152
MITSUI OSK LINES Transportation and S 4,155.959 0.151
SHOWA SHELL SEKIYU Energy 4,138.488 0.151
MATSUSHITA KOTOBUKI Consumer Goods / Ser 4,121.275 0.150
YAMATO TRANSPORT Transportation and S 4,081.743 0.149
NISSHO-IWAI Consumer Goods / Ser 4,046.217 0.147
NIPPON FIRE & MARINE Financial, Insurance 4,027.611 0.147
ISETAN Consumer Goods / Ser 3,975.229 0.145
FAMILYMART Consumer Goods / Ser 3,972.019 0.145
HOKKAIDO TAKUSHOKU Financial, Insurance 3,949.233 0.144
FUJI ELECTRIC Capital Goods 3,894.348 0.142
KEYENCE CORP Capital Goods 3,887.225 0.141
NAGOYA RAILROAD Transportation and S 3,878.851 0.141
DAINIPPON INK & CHEM Basic Industries 3,878.135 0.141
AISIN SEIKI Capital Goods 3,859.921 0.140
KEIO TEITO ELEC RAIL Transportation and S 3,760.811 0.137
GENERAL SEKIYU Energy 3,727.312 0.136
VICTOR CO OF JAPAN Consumer Goods / Ser 3,694.277 0.134
KURARAY Basic Industries 3,675.548 0.134
BANK OF HIROSHIMA Financial, Insurance 3,665.373 0.133
NGK INSULATORS Capital Goods 3,634.115 0.132
AMADA Capital Goods 3,632.019 0.132
SHOWA DENKO Basic Industries 3,631.097 0.132
<PAGE>
<PAGE> F-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
NIKON CORP Capital Goods 3,592.823 0.131
NIPPON LIGHT METAL Basic Industries 3,572.722 0.130
NICHII Consumer Goods / Ser 3,561.959 0.130
MITSUBISHI OIL Energy 3,539.259 0.129
KUMAGAI-GUMI Basic Industries 3,534.223 0.129
KINDEN Capital Goods 3,523.140 0.128
CANON SALES Consumer Goods / Ser 3,522.188 0.128
HINO MOTORS Consumer Goods / Ser 3,508.767 0.128
CASIO COMPUTER Capital Goods 3,484.697 0.127
NANKAI ELECTRIC RAIL Transportation and S 3,481.344 0.127
FUJISAWA PHARM Consumer Goods / Ser 3,475.418 0.127
NTN TOYO-BEARING Capital Goods 3,467.008 0.126
TOKYO STEEL Basic Industries 3,378.742 0.123
CHUO TST AND BANKING Financial, Insurance 3,350.507 0.122
TAKASHIMAYA Consumer Goods / Ser 3,321.518 0.121
ONODA CEMENT Basic Industries 3,285.033 0.120
MINEBEA Capital Goods 3,273.461 0.119
MITSUI TOATSU CHEM Basic Industries 3,258.286 0.119
UBE INDUSTRIES Basic Industries 3,233.178 0.118
SAPPORO BREWERIES Consumer Goods / Ser 3,208.276 0.117
KOKUYO Capital Goods 3,144.110 0.114
NISSIN FOOD Consumer Goods / Ser 3,142.509 0.114
SHIONOGI Consumer Goods / Ser 3,139.350 0.114
HITACHI CABLE Basic Industries 3,131.402 0.114
HOYA Capital Goods 3,096.030 0.113
KURITA WATER Capital Goods 3,033.863 0.110
KONICA Consumer Goods / Ser 3,010.489 0.110
NIPPON MEAT PACKERS Consumer Goods / Ser 2,990.867 0.109
DAI TOKYO FIRE & MARINE INSURANCE Financial, Insurance 2,962.565 0.108
TOKYO DOME CORP Consumer Goods / Ser 2,948.487 0.107
KEIHIN ELC EXP RAIL Transportation and S 2,935.785 0.106
SEIYU Consumer Goods / SEr 2,916.194 0.106
MAKITA ELECTRIC WKS Capital Goods 2,904.745 0.106
OLYMPUS OPTICAL Capital Goods 2,886.297 0.105
NIPPON ELECTR GLASS Capital Goods 2,882.487 0.105
NISSHIN FLOUR Consumer Goods / Ser 2,880.001 0.105
NISHIMATSU CONSTRN Basic Industries 2,879.701 0.105
TODA CORP Basic Industries 2,867.973 0.104
KANDENKO Capital Goods 2,856.855 0.104
SUMITOMO FORESTRY Basic Industries 2,835.818 0.103
MITSUBISHI WAREHOUSE Transportation and S 2,795.042 0.102
SEINO TRANSPORT Transportation and S 2,777.855 0.101
TOYOBO Consumer Goods / Ser 2,749.595 0.100
MITSUI PETROCHEMICAL Basic Industries 2,749.019 0.100
TOHO Consumer Goods / Ser 2,732.016 0.099
NISSHINBO INDS Consumer Goods / Ser 2,725.318 0.099
JGC CORP Capital Goods 2,718.926 0.099
NGK SPARK PLUC CO Capital Goods 2,712.494 0.099
<PAGE>
<PAGE> F-6
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
YOKOGAWA ELECTRIC Capital Goods 2,702.994 0.098
BANYU PHARMACEUTICAL Consumer Goods / Ser 2,698.926 0.098
MITSUBISHI RAYON Basic Industries 2,685.271 0.098
SHIMANO IND Consumer Goods / SEr 2,678.689 0.098
FUJIKURA Basic Industries 2,678.571 0.097
FUJITA TOURIST Consumer Goods / Ser 2,667.353 0.097
TOMEN CORP Y50 Consumer Goods / Ser 2,651.410 0.097
CHIYODA CHEMICAL ENG Capital Goods 2,641.600 0.096
FUJITA CORP Basic Industries 2,621.418 0.095
KANEGAFUCHI CHEMICAL Basic Industries 2,613.229 0.095
FUJI HEAVY INDS Consumer Goods / Ser 2,599.063 0.095
CHUGAI PHARM Consumer Goods / SEr 2,593.753 0.094
NATIONAL HOUSE Basic Industries 2,585.059 0.094
MITSUI ENG & SHIPBLD Capital Goods 2,581.999 0.094
HASEKO Basic Industries 2,538.673 0.092
MEIJI SEIKA Consumer Goods / Ser 2,505.911 0.091
MITSUBISHI GAS CHEM Basic Industries 2,503.259 0.091
INAX Basic Industries 2,501.812 0.091
DAIDO STEEL Basic Industries 2,484.640 0.090
YAMAHA Consumer Goods / Ser 2,470.503 0.090
SNOW BRAND MILK Consumer Goods / Ser 2,459.104 0.090
MOCHIDA PHARM Consumer Goods / Ser 2,439.688 0.089
TOSOH CORP Basic Industries 2,420.241 0.088
MITSUBISHI PAPER Basic Industries 2,416.775 0.088
CITIZEN WATCH Capital Goods 2,416.476 0.088
SUMITOMO REALTY Financial, Insurance 2,405.716 0.088
TOKYU LAND Financial, Insurance 2,401.547 0.087
NITTO ELECTRIC IND Capital Goods 2,398.784 0.087
NIPPON SHINPAN Financial, Insurance 2,398.338 0.087
ORIX CORPORATION Financial, Insurance 2,392.697 0.087
NIHON CEMENT Basic Industries 2,373.271 0.086
NIPPON SHEET GLASS Capital Goods 2,360.943 0.086
ALPS ELECTRIC Capital Goods 2,352.081 0.086
HONSHU PAPER Basic Industries 2,348.458 0.085
KAWASAKI KISEN Transportation and S 2,347.407 0.085
DAIKIN INDUSTRIES Capital Goods 2,337.492 0.085
MORI SEIKI Capital Goods 2,328.956 0.085
ARABIAN OIL Energy 2,322.131 0.085
HIROSE ELECTRONICS Capital Goods 2,285.735 0.083
HOUSE FOOD INDS Consumer Goods / Ser 2,260.997 0.082
BANK OF KYOTO Financial, Insurance 2,226.880 0.081
MATSUZAKAYA Consumer Goods / SEr 2,226.268 0.081
SUMITOMO HEAVY INDS Capital Goods 2,218.607 0.081
CHIYODA FIRE & MAR Financial, Insurance 2,211.979 0.081
MEIJI MILK Consumer Goods / Ser 2,182.422 0.079
MITSUI MIN & SMELT Basic Industries 2,180.693 0.079
HITACHI CREDIT Financial, Insurance 2,142.662 0.078
DAIMARU Consumer Goods / Ser 2,130.919 0.078
<PAGE>
<PAGE> F-7
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
DAICEL CHEMICAL Basic Industries 2,106.457 0.077
CSK CORP Consumer Goods / Ser 2,082.693 0.076
ONWARD KASHIYAMA Consumer Goods / Ser 2,082.602 0.076
SANWA SHUTTER Basic Industries 2,078.716 0.076
SUMITOMO OSAKA CEMNT Basic Industries 2,073.607 0.075
NICHIREI Transportation and S 2,071.891 0.075
JAPAN RADIO Capital Goods 2,046.763 0.075
ORIENT FINANCE Financial, Insurance 2,042.287 0.074
IZUMIYA Consumer Goods / Ser 2,037.616 0.074
YOKOHAMA RUBBER Capital Goods 2,021.327 0.074
TANABE SEIYAKU Consumer Goods / Ser 2,005.277 0.073
DOWA FIRE & MARINE Financial, Insurance 1,976.854 0.072
KOYO SEIKO Capital Goods 1,962.209 0.071
GREEN CROSS Consumer Goods / Ser 1,944.630 0.071
TOKYU DEBT STORE Consumer Goods / Ser 1,929.416 0.070
NIPPON HODO Basic Industries 1,924.456 0.070
NIPPON SHOKUBAI Basic Industries 1,914.151 0.070
DAIFUKU Capital Goods 1,913.339 0.070
HITACHI MAXELL Consumer Goods / Ser 1,908.020 0.069
SKYLARK Consumer Goods / Ser 1,899.413 0.069
TOYO INK Basic Industries 1,878.715 0.068
TEIKOKU OIL Energy 1,865.028 0.068
AOKI CONSTRUCTION Basic Industries 1,852.038 0.067
OKUMURA CORP Basic Industries 1,851.487 0.067
MAEDA CORP Basic Industries 1,850.087 0.067
NIPPON PAINT Basic Industries 1,819.485 0.066
ITOHAM FOODS Consumer Goods/ Ser 1,802.081 0.066
KANEBO Consumer Goods / Ser 1,799.062 0.065
LION Consumer Goods / Ser 1,792.819 0.065
DAINIPPON PHARM Consumer Goods / Ser 1,786.776 0.065
BROTHER INDS Capital Goods 1,774.948 0.065
FUJI FIRE & MARINE Financial Insurance 1,747.723 0.064
MARUICHI STEEL TUBE Basic Industries 1,742.286 0.063
TOKYO STYLE Consumer Goods / Ser 1,732.366 0.063
PENTA OCEAN CONST Basic Industries 1,730.047 0.063
WACOAL Consumer Goods / Ser 1,714.639 0.062
ZEXEL CORPN Capital Goods 1,700.917 0.062
TAKARA SHUZO Consumer Goods / Ser 1,674.126 0.061
ANRITSU Capital Goods 1,660.555 0.060
AOYAMA TRADING Consumer Goods / Ser 1,655.298 0.060
JAPAN SYNTH RUBBER Capital Goods 1,638.450 0.060
NIPPON SANSO Basic Industries 1,620.182 0.059
KANSAI PAINT Basic Industries 1,608.682 0.059
NOK Capital Goods 1,604.807 0.058
SUMITOMO BAKELITE Basic Industries 1,602.510 0.058
ATSUGI NYLON Consumer Goods / Ser 1,590.660 0.058
UNITIKA Basic Industries 1,574.319 0.057
KIKKOMAN Consumer Goods / Ser 1,573.340 0.057
<PAGE>
<PAGE> F-8
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
MATSUSHITA REFRIGER Consumer Goods / Ser 1,559.291 0.057
DAISHOWA PAPER MFG Basic Industries 1,550.873 0.056
NIPPON SHARYO Capital Goods 1,544.407 0.056
HANWA Consumer Goods / Ser 1,538.859 0.056
MINOLTA CAMERA Capital Goods 1,527.761 0.055
TOKUYAMA CORP Basic Industries 1,507.802 0.055
KANEMATSU CORPN Consumer Goods / Ser 1,489.729 0.054
DOWA MINING Basic Industries 1,482.783 0.054
HANSHIN ELECT RAIL Transportation and S 1,463.268 0.053
TOSHOKU Consumer Goods / Ser 1,460.325 0.053
DAIKYO Basic Industries 1,458.071 0.053
NAGASE Consumer Goods / Ser 1,454.021 0.053
NIIGATA ENG Capital Goods 1,452.817 0.053
MIZUNO Consumer Goods / Ser 1,440.499 0.052
EZAKI GLICO Consumer Goods / Ser 1,438.335 0.052
NISSAN FIRE & MARINE Financial, Insurance 1,432.555 0.052
STANLEY ELECTRIC Capital Goods 1,424.853 0.052
IWATANI Consumer Goods / Ser 1,417.188 0.052
GUNZE Consumer Goods / Ser 1,416.772 0.052
AMANO CORP Capital Goods 1,411.699 0.051
NIPPON SUISAN Consumer Goods / Ser 1,393.179 0.051
KOKUSAI ELECTRIC Capital Goods 1,393.164 0.051
NAVIX LINE LTD Transportation and S 1,390.829 0.051
HAZAMA-GUMI Basic Industries 1,380.592 0.050
NIPPON KAYAKU Consumer Goods / Ser 1,366.397 0.050
MORINAGA MILK Consumer Goods / Ser 1,366.106 0.050
YAMATAKE HONEYWELL Capital Goods 1,338.679 0.049
YOSHIMTOMI PHARM Consumer Goods 1,338.119 0.049
NHK SPRING Capital Goods 1,320.995 0.048
NISSAN DIESEL MOTOR Consumer Goods / Ser 1,317.780 0.048
JAPAN STORAGE BATTRY Capital Goods 1,310.356 0.048
SANKYU Transportation and S 1,292.844 0.047
NORITAKE Consumer Goods / Ser 1,287.170 0.047
KOITO MFG Capital Goods 1,286.582 0.047
SANYO CHEMICAL Basic Industries 1,271.914 0.046
ISHIHARA SANGYO Basic Industries 1,268.255 0.046
NIPPON ZEON Basic Industries 1,260.538 0.046
OKUMA MACHINERY Capital Goods 1,255.648 0.046
TEKKEN CONSTRUCTION Basic Industries 1,250.644 0.046
YASKAWA ELECTRIC Capital Goods 1,248.583 0.045
RENOWN Consumer Goods / Ser 1,243.091 0.045
HITACHI KOKI Capital Goods 1,227.385 0.045
NITSUKO Capital Goods 1,214.066 0.044
NISSEI SANGYO Consumer Goods / Ser 1,210.294 0.044
TOA Basic Industries 1,208.088 0.044
SHOWA ELEC WIRE Basic Industries 1,203.203 0.044
KUREHA CHEMICAL Basic Industries 1,199.409 0.044
NISSHIN OIL MILLS Consumer Goods / Ser 1,194.733 0.043
<PAGE>
<PAGE> F-9
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
MITSUI-SOKO Transportation and S 1,193.349 0.043
TOEI Consumer Goods / Ser 1,190.158 0.043
MARUHA CORP Consumer Goods / Ser 1,178.711 0.043
TOKYU CONSTRUCTION Basic Industries 1,178.454 0.043
JAPAN STEEL WORKS Capital Goods 1,176.529 0.043
SANRIO Consumer Goods / Ser 1,173.024 0.043
YUASA CORP Capital Goods 1,172.114 0.043
KAKEN PHARMACEUTICAL Consumer Goods / Ser 1,168.535 0.043
KURABO INDS Consumer Goods / Ser 1,160.662 0.042
TOSHIBA MACHINERY Capital Goods 1,141.293 0.042
SUMITOMO LT METAL Basic Industries 1,138.375 0.041
JAPAN WOOL Consumer Goods / Ser 1,125.580 0.041
MISAWA HOMES Basic Industries 1,118.497 0.041
CALSONIC CORPORATION Capital Goods 1,093.265 0.040
HITACHI SALES Consumer Goods / Ser 1,068.835 0.039
TSUBAKIMOTO CHAIN Capital Goods 1,041.230 0.038
MERCIAN CORPN. Consumer Goods / Ser 1,041.077 0.038
MARUDAI FOOD Consumer Goods / Ser 1,040.303 0.038
HYOGO BANK Financial, Insurance 1,021.267 0.037
RYOBI Capital Goods 1,020.629 0.037
MITSUBISHI PLASTICS Basic Industries 1,015.066 0.037
DENNY'S JAPAN CO Consumer Goods / Ser 1,011.264 0.037
SANDEN Capital Goods 996.737 0.036
NIPPON YAKIN KOGYO Basic Industries 984.445 0.036
NACHI-FUJIKOSHI Capital Goods 983.738 0.036
TOYO TIRE Capital Goods 981.710 0.036
SHOWA ALUMINUM Basic Industries 981.585 0.036
TOBISHIMA Basic Industries 981.302 0.036
YAMATO KOGYO Basic Industries 975.755 0.036
ISEKI & CO Capital Goods 975.566 0.036
SUMITOMO WAREHOUSE Transportation and S 961.092 0.035
HEIWA REAL ESTATE Financial, Insurance 956.959 0.035
NIPPON FLOUR MILLS Consumer Goods / Ser 954.572 0.035
YAMAMURA GLASS Basic Industries 953.602 0.035
NIPPON ROAD Basic Industries 948.056 0.035
KAGOME Consumer Goods / Ser 939.364 0.034
CENTRAL GLASS Basic Industries 938.721 0.034
HATTORI SEIKO Capital Goods 935.656 0.034
NAGASAKIYA Consumer Goods / Ser 920.700 0.034
SEIYO FOOD SYSTEMS Consumer Goods / Ser 917.919 0.033
TOKAI CARBON Basic Industries 909.630 0.033
SHOWA SANGYO Consumer Goods / Ser 906.974 0.033
TOKYO ROPE Basic Industries 906.599 0.033
SHOCHIKU Consumer Goods / Ser 904.544 0.033
SETTSU Basic Industries 884.509 0.032
MAKINO MILLING MACHINE CO Capital Goods 848.049 0.031
ASICS CORP Consumer Goods / Ser 836.379 0.030
MIKUNI COCA COLA Consumer Goods / Ser 834.288 0.030
<PAGE>
<PAGE> F-10
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
YOMIURI LAND Consumer Goods / Ser 823.694 0.030
TOYO KANETSU Energy 819.764 0.030
TOYO CONSTRUCTION Basic Industries 814.081 0.030
TOKYU CAR Basic Industries 802.501 0.029
NISSIN ELECTRIC Capital Goods 801.961 0.029
NIPPON SHINYAKU Consumer Goods / Ser 786.280 0.029
GAKKEN Consumer Goods / Ser 773.378 0.028
NITTO BOSEKI Consumer Goods / Ser 739.781 0.027
CALPIS FOOD INDS Consumer Goods / Ser 738.010 0.027
MITSUBISHI STEEL Basic Industries 730.320 0.027
MITSUMI ELECTRIC Capital Goods 720.666 0.026
ROYAL CO Consumer Goods / Ser 713.919 0.926
JAPAN METALS & CHEM Basic Industries 708.830 0.026
TOSHIBA ENG & CONSTR Capital Goods 702.001 0.026
MITSUBOSHI BELTING Capital Goods 687.932 0.025
FUJIYA Consumer Goods / Ser 685.097 0.025
TOKICO Capital Goods 672.781 0.024
PRIMA MEAT PACKERS Consumer Goods / Ser 671.335 0.024
FUDO CONSTRUCTION Basic Industries 667.347 0.024
NICHIRO GYOGYO Consumer Goods / Ser 647.944 0.024
ASAHI OPTICAL Consumer Goods / Ser 633.980 0.023
NIPPON SIGNAL Capital Goods 618.899 0.023
NIPPON TV Consumer Goods / Ser 606.739 0.022
SHOKUSAN JUTAKU SOGO Basic Industries 599.385 0.022
TAKAOKA ELECTRIC Capital Goods 596.790 0.022
NIPPON SODA Basic Industries 595.864 0.022
NIHON NOSAN KOGYO Consumer Goods / Ser 590.976 0.022
TOKYO BROADCASTING Consumer Goods / Ser 578.339 0.021
IWATSU ELECTRIC Capital Goods 575.904 0.021
IKEGAMI TSUSHINKI Capital Goods 575.435 0.021
GUN-EI CHEMICAL Basic Industries 566.630 0.021
CENTRAL FINANCE Financial, Insurance 554.838 0.020
AKEBONO BRAKE Capital Goods 547.584 0.020
FUJI SPINNING Consumer Goods / Ser 540.162 0.020
DAI NIPPON TORYO Basic Industries 512.654 0.019
JEOL Capital Goods 487.120 0.018
ANDO CONSTRUCTION Basic Industries 471.268 0.017
NIHON PARKERIZING Basic Industries 458.540 0.017
JANOME SEW MACH Consumer Goods / Ser 456.906 0.017
NIPPON DENKO Basic Industries 448.590 0.016
KYODO SHIRYO Consumer Goods / Ser 406.518 0.015
KYOTARU Consumer Goods / Ser 363.665 0.013
GODO SHUSEI Consumer Goods / Ser 264.878 0.010
</TABLE>
<PAGE>
<PAGE> G-1
APPENDIX G
FT-Actuaries World Indices
South Africa Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ANGLO AMER CORP Basic Industries 13,492.250 10.359
DE BEERS/CENTENARY Basic Industries 8,817.034 6.770
SA BREWERIES Consumer Goods / Ser 6,581.445 5.053
LIBERTY LIFE ASSOC. Financial, Insurance 5,787.291 4.443
GENCOR Basic Industries 4,930.414 3.785
SASOL Energy 4,777.816 3.668
JCI Basic Industries 3,818.494 2.932
REMBRANDT GP Consumer Goods / Ser 3,586.748 2.754
STANDARD BK. INV. Financial, Insurance 3,488.934 2.679
RUSTENBURG PLATINUM Basic Industries 3,444.378 2.645
ANGLO AMERICAN IND Financial, Insurance 3,360.928 2.580
DRIEFONTEIN CONSOL Basic Industries 3,128.834 2.402
LIBERTY HLDGS. Financial, Insurance 3,056.702 2.347
GFSA Basic Industries 3,035.909 2.331
FIRST NATL. BANK Financial, Insurance 2,670.759 2.051
SAPPI Basic Industries 2,657.185 2.040
SAMANCOR Basic Industries 2,643.239 2.029
ANAMINT Basic Industries 2,625.767 2.016
AMGOLD Basic Industries 2,459.164 1.888
SMITH (CG) LTD. Consumer Goods / Ser 2,195.971 1.686
NEDCOR Financial, Insurance 2,116.880 1.625
KLOOF GOLD MINING Basic Industries 2,057.742 1.580
ANGLOVAAL INDS. Financial, Insurance 1,947.058 1.495
NAMPAK Basic Industries 1,848.876 1.420
TIGER OATS Consumer Goods / Ser 1,845.975 1.417
FREEGOLD Basic Industries 1,795.701 1.379
BARLOW LIMITED Financial, Insurance 1,776.375 1.364
SAFREN Transportation and S 1,768.354 1.358
EDGARS STORES Consumer Goods / Ser 1,767.705 1.357
VAAL REEFS EXP & MNG Basic Industries 1,735.563 1.333
MURRAY & ROBERTS Basic Industries 1,706.820 1.310
REMBRANDT CONTROLLING INV. Financial, Insurance 1,700.613 1.306
SOUTHERN LIFE ASSOC Financial, Insurance 1,630.504 1.252
AMCOAL Energy 1,607.326 1.234
IMPALA PLATINUM Basic Industries 1,526.380 1.172
ANGLOVAAL LTD. (N.) Financial, Insurance 1,404.264 1.078
PRETORIA PORTLND CEM Basic Industries 1,132.933 0.870
WESTERN DEEP LEVEL Basic Industries 1,122.123 0.862
AECI Basic Industries 1,110.185 0.852
TONGAAT-HULETT GP Consumer Goods / Ser 1,107.099 0.850
PREMIER GROUP HLDG Consumer Goods / Ser 1,065.473 0.818
<PAGE>
<PAGE> G-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENBEL Financial, Insurance 1,013.134 0.778
PLATE GLASS Capital Goods 917.117 0.704
HIGHVELD STEEL Basic Industries 903.234 0.693
MID WITS Basic Industries 887.968 0.682
SOUTHVAAL HDGS Basic Industries 749.693 0.576
RANDFONTEIN ESTATE Basic Industries 697.671 0.536
ELANDSRAND GM Basic Industries 672.353 0.516
BEATRIX MINES Basic Industries 588.221 0.452
PALABORA MINING Basic Industries 548.948 0.421
HARTEBEESTFONTEIN Basic Industries 508.466 0.390
ALLIED ELECTRONICS Capital Goods 471.755 0.362
ISCOR Basic Industries 439.647 0.338
PICK & PAY STORES Consumer Goods / Ser 376.428 0.289
IRVIN & JOHNSON Consumer Goods / Ser 332.299 0.255
ICS HOLDINGS Consumer Goods / Ser 252.541 0.194
ALLIED TECHNOLOGIE Capital Goods 235.040 0.180
DEELKRAAL COLD MNG Basic Industries 162.440 0.125
STELLENBOSCH Consumer Goods / Ser 154.601 0.119
</TABLE>
<PAGE>
<PAGE> H-1
APPENDIX H
FT-Actuaries World Indices
United Kingdom Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BRITISH TELECOM Utilities 36,797.514 4.065
BRITISH PETROLEUM Energy 36,632.439 4.047
SHELL TRANS & TRAD Energy 36,095.745 3.988
GLAXO HLDGS Consumer Goods / Ser 31,639.987 3.496
BRITISH GAS Utilities 21,274.949 2.350
BAT INDUSTRIES Consumer Goods / Ser 20,804.380 2.298
HSBC HOLDINGS (HK$ 10) Financial, Insurance 19,045.654 2.104
HANSON Financial, Insurance 18,680.861 2.064
MARKS & SPENCER Consumer Goods / Ser 17,361.230 1.918
BTR Capital Goods 16,703.696 1.845
BARCLAYS Financial, Insurance 15,615.907 1.725
UNILEVER Consumer Goods / Ser 14,716.239 1.626
GUINNESS Consumer Goods / Ser 14,197.280 1.569
RTZ (REG) Basic Industries 13,807.091 1.525
NATL WESTMINSTER BANK Financial, Insurance 13,793.104 1.524
GRAND METROPOLITAN Consumer Goods / Ser 13,280.748 1.467
ZENECA Consumer Goods / Ser 13,000.939 1.436
CABLE & WIRELESS Utilities 12,894.047 1.425
REUTERS HOLDINGS Consumer Goods / Ser 12,196.449 1.347
GENERAL ELECTRIC Capital Goods 11,795.645 1.303
SAINSBURY (J) Consumer Goods / Ser 11,598.944 1.281
LLOYDS BANK Financial, Insurance 11,212.071 1.239
VODAFONE GROUP Utilities 10,095.545 1.115
NATIONAL POWER Utilities 9,804.706 1.083
SMITHKLINE BEECHAM A Consumer Goods / Ser 9,771.943 1.080
WELLCOME Consumer Goods / Ser 9,529.104 1.053
HSBC HOLDINGS (ORD 75P) Financial, Insurance 9,412.073 1.040
PRUDENTIAL CORP Financial, Insurance 9,395.051 1.038
ABBEY NATIONAL Financial, Insurance 8,836.221 0.976
ALLIED DOMECQ Consumer Goods / Ser 8,698.571 0.961
SMITHKLINE BEECH/SMITH BECK UNITS Consumer Goods / Ser 8,648.641 0.956
GREAT UNIVERSAL STORES Consumer Goods / Ser 8,512.523 0.940
I.C.I. Basic Industries 8,475.312 0.936
TESCO Consumer Goods / Ser 8,006.882 0.885
BAA Transportation and S 7,571.998 0.837
BOOTS Consumer Goods / Ser 7,467.812 0.825
BASS Consumer Goods / Ser 7,024.964 0.776
REED INTL Consumer Goods / Ser 7,016.512 0.775
THORN-EMI Consumer Goods / Ser 6,911.377 0.764
POWERGEN Utilities 6,560.042 0.725
P.& O. DEFD STOCK Transportation and S 5,750.465 0.635
<PAGE>
<PAGE> H-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
CADBURY SCHWEPPES Consumer Goods / Ser 5,622.364 0.621
TSB GROUP Financial, Insurance 5,616.088 0.620
RANK ORGANISATION Consumer Goods / Ser 5,416.746 0.598
BOC GROUP Basic Industries 5,265.728 0.582
COMMERCIAL UNION Financial, Insurance 5,251.852 0.580
ROYAL BANK SCOTLAND Financial, Insurance 4,929.691 0.545
BRITISH STEEL Basic Industries 4,854.120 0.536
PEARSON Consumer Goods / Ser 4,799.265 0.530
LAND SECURITIES Financial, Insurance 4,755.270 0.525
ARGYLL GROUP Consumer Goods / Ser 4,729.664 0.523
GRANADA GROUP Consumer Goods / Ser 4,635.836 0.512
WHITBREAD (ORD.) Consumer Goods / Ser 4,623.933 0.511
KINGFISHER Consumer Goods / Ser 4,619.348 0.510
SCOTTISH POWER Utilities 4,461.535 0.493
SCOT & NEWCASTLE Consumer Goods / Ser 4,278.945 0.473
STANDARD CHARTERED Financial, Insurance 4,232.556 0.468
TOMKINS Basic Industries 4,063.586 0.449
ASSD BRITISH FOODS Consumer Goods / Ser 3,968.955 0.438
BANK OF SCOTLAND Financial, Insurance 3,866.592 0.427
SIEBE Capital Goods 3,735.187 0.413
REDLAND Basic Industries 3,728.165 0.412
SUN ALLIANCE GROUP Financial, Insurance 3,655.456 0.404
LLOYDS ABBEY LIFE Financial, Insurance 3,585.591 0.396
GENERAL ACCIDENT Financial, Insurance 3,575.794 0.395
FORTE Consumer Goods / Ser 3,537.222 0.391
INCHCAPE Consumer Goods / Ser 3,522.907 0.389
RENTOKIL GP Basic Industries 3,501.529 0.387
RECKITT & COLMAN Consumer Goods / Ser 3,449.092 0.381
SOUTHERN ELECTRIC Utilities 3,435.858 0.380
BOWATER Basic Industries 3,401.977 0.376
WOLSELEY Basic Industries 3,368.814 0.372
LEGAL & GENERAL GROUP Financial, Insurance 3,313.003 0.366
CARLTON COMMS Consumer Goods / Ser 3,223.321 0.356
BLUE CIRCLE INDS Basic Industries 3,207.904 0.354
GKN Capital Goods 3,186.142 0.352
NORTH WEST WATER Utilities 3,176.161 0.351
EASTERN GROUP Utilities 3,131.144 0.346
LADBROKE GROUP Consumer Goods / Ser 3,112.365 0.344
ASDA GROUP Consumer Goods / Ser 3,061.028 0.338
ARJO WIGGINS APPLETON Basic Industries 3,031.695 0.335
ENTERPRISE OIL Energy 3,019.144 0.334
THAMES WATER Utilities 3,005.100 0.332
SEVERN TRENT WATER Utilities 2,990.913 0.330
COURTAULDS Basic Industries 2,909.535 0.321
RMC GP Basic Industries 2,885.716 0.319
DE LA RUE Consumer Goods / Ser 2,845.012 0.314
ROYAL INSURANCE HDGS Financial, Insurance 2,841.199 0.314
WILLIAMS HLDGS. Capital Goods 2,835.029 0.313
<PAGE>
<PAGE> H-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
TI GROUP Capital Goods 2,795.238 0.309
VENDOME UNITS Consumer Goods / Ser 2,733.229 0.302
UNITED BISCUITS Consumer Goods / Ser 2,692.918 0.298
SEARS Consumer Goods / Ser 2,607.999 0.288
SMITH & NEPHEW Consumer Goods / Ser 2,605.909 0.288
LUCAS INDS Capital Goods 2,543.474 0.281
BURMAH CASTROL Energy 2,542.970 0.281
MEPC Financial, Insurance 2,429.107 0.268
TATE & LYLE Consumer Goods / Ser 2,381.197 0.263
WARBURG (SG) GROUP Financial, Insurance 2,376.018 0.263
ANGLIAN WATER Utilities 2,375.592 0.262
NEW ROTHMANS UNITS Consumer Goods / Ser 2,354.785 0.260
CARADON Basic Industries 2,335.384 0.258
SCHRODERS Financial, Insurance 2,314.847 0.256
BPB INDS Basic Industries 2,310.203 0.255
GUARDIAN ROYAL EXCHANGE Financial, Insurance 2,275.690 0.251
FOR & COL IT Financial, Insurance 2,236.272 0.247
LAPORTE Basic Industries 2,143.528 0.237
SMITH (W H) Consumer Goods / Ser 2,089.120 0.231
PILKINGTON Basic Industries 2,066.232 0.228
COATS VIYELLA Consumer Goods / Ser 2,060.403 0.228
SMITHS INDUSTRIES Capital Goods 2,049.542 0.226
COOKSON GROUP Basic Industries 2,020.375 0.223
BICC Capital Goods 1,981.296 0.219
EUROTUNNEL UNITS ORD Transportation and S 1,970.918 0.218
SCOT HYDRO-ELECTRIC Utilities 1,959.805 0.217
HILLSDOWN Consumer Goods / Ser 1,937.820 0.214
NORTHERN FOODS Consumer Goods / Ser 1,911.674 0.211
NFC Transportation and S 1,853.537 0.205
BRITISH LAND Financial, Insurance 1,839.879 0.203
LONRHO Financial, Insurance 1,837.998 0.203
UNITED NEWSPAPERS Consumer Goods / Ser 1,799.275 0.199
ENGLISH CHINA CLAYS Basic Industries 1,755.486 0.194
TARMAC Basic Industries 1,722.769 0.190
ARGOS Consumer Goods / Ser 1,647.510 0.182
JOHNSON MATTHEY Basic Industries 1,633.838 0.181
IMI Basic Industries 1,614.447 0.178
ASSD BRITISH PORTS Transportation and S 1,604.260 0.177
ELECTROCOMPONENTS Capital Goods 1,554.627 0.172
HAMMERSON PLC Financial, Insurance 1,534.859 0.170
HARRISONS & CROSFIELD Consumer Goods / Ser 1,530.051 0.169
DALGETY Consumer Goods / Ser 1,513.369 0.167
BURTON GROUP Consumer Goods / Ser 1,501.540 0.166
BET Financial, Insurance 1,484.581 0.164
SLOUGH ESTATES Financial, Insurance 1,431.771 0.158
GREENALLS GROUP Consumer Goods / Ser 1,406.330 0.155
STOREHOUSE Consumer Goods / Ser 1,402.684 0.155
BOOKER Consumer Goods / Ser 1,395.513 0.154
<PAGE>
<PAGE> H-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
EDINBURGH INV TRUST Financial, Insurance 1,390.402 0.154
WITAN INV Financial, Insurance 1,350.422 0.149
T&N Capital Goods 1,337.586 0.148
KWIK SAVE GROUP Consumer Goods / Ser 1,331.574 0.147
BRITISH AIRWAYS Transportation and S 1,331.068 0.147
SEDGWICK GP Financial, Insurance 1,281.576 0.142
BBA GROUP Capital Goods 1,279.271 0.141
TRAFALGAR HOUSE Financial, Insurance 1,275.107 0.141
UNIGATE Consumer Goods / Ser 1,226.289 0.135
RUGBY GROUP Basic Industries 1,217.890 0.135
HEPWORTH Basic Industries 1,187.148 0.131
FISONS Consumer Goods / Ser 1,183.919 0.131
DIXONS GROUP Consumer Goods / Ser 1,182.183 0.131
KLEINWORT BENSON GROUP Financial, Insurance 1,153.076 0.127
BUNZL Basic Industries 1,148.065 0.127
MAI Financial, Insurance 1,145.500 0.127
PROVIDENT FINANCIAL Financial, Insurance 1,145.096 0.127
M&G GROUP Financial, Insurance 1,137.374 0.126
MORGAN CRUCIBLE Capital Goods 1,090.364 0.120
GLYNWED INTL Capital Goods 1,087.970 0.120
FARNELL ELECTRONICS Capital Goods 1,084.030 0.120
ALLIED COLLOIDS Basic Industries 1,063.221 0.117
CHARTER Basic Industries 1,053.153 0.116
PORTALS Basic Industries 1,042.519 0.115
FKI Capital Goods 1,040.188 0.115
ROLLS-ROYCE Capital Goods 1,015.977 0.112
GREAT PORTLAND EST Financial, Insurance 926.313 0.102
WILLIS CORROON GROUP Financial, Insurance 897.905 0.099
VICKERS Capital Goods 892.098 0.099
HIGHLAND DISTILLERIES Consumer Goods / Ser 881.238 0.097
ELECTRA INV TRUST Financial, Insurance 866.551 0.096
BOWTHORPE Capital Goods 844.678 0.093
BRITISH AEROSPACE Capital Goods 838.237 0.093
TAYLOR WOODROW Basic Industries 775.467 0.086
COURTAULDS TEXTILES Consumer Goods / Ser 725.007 0.080
WIMPEY (G) Basic Industries 722.731 0.080
SCAPA GP Capital Goods 711.375 0.079
MEYER INTL Basic Industries 700.622 0.077
FIRST LEISURE CORP Consumer Goods / Ser 699.047 0.077
INVESCO Financial, Insurance 672.155 0.074
HALMA Capital Goods 669.905 0.074
HAMBROS Financial, Insurance 629.483 0.070
BRIXTON ESTATE Financial, Insurance 625.116 0.069
FLEMING MERCANTILE INV TRUST Financial, Insurance 620.545 0.069
MCKECHNIE Basic Industries 603.332 0.067
SCHRODERS NON/VTG Financial, Insurance 593.370 0.066
MARLEY Basic Industries 592.155 0.065
SPIRAX-SARCO ENG Capital Goods 547.375 0.060
<PAGE>
<PAGE> H-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BRYANT GROUP Basic Industries 537.269 0.059
ALBERT FISHER Consumer Goods / Ser 525.859 0.058
TR SMALLER COMPANIES INV. TST. Financial, Insurance 511.572 0.057
WILSON (CONNOLLY) Basic Industries 475.527 0.053
TR CITY OF LON (DFD) Financial, Insurance 471.369 0.052
VAUX GROUP Consumer Goods / Ser 470.810 0.052
BARRATT DEVELOPMENTS Basic Industries 470.478 0.052
CHRISTIES INTL Consumer Goods / Ser 446.413 0.049
BRADFORD PROPERTY TRUST Financial, Insurance 428.672 0.047
MERCHANTS TRUST Financial, Insurance 421.037 0.047
BAIRD (WILLIAM) Consumer Goods / Ser 377.311 0.042
DIPLOMA Capital Goods 369.698 0.041
DAWSON INTL Consumer Goods / Ser 348.487 0.039
BILTON Financial, Insurance 344.360 0.038
HEATH (C.E.) Financial, Insurance 253.052 0.028
AMSTRAD Capital Goods 243.741 0.027
APV Capital Goods 242.761 0.027
LAING (JOHN) Basic Industries 159.554 0.018
LAING (JOHN) `A Basic Industries 154.829 0.017
</TABLE>
<PAGE>
<PAGE> I-1
APPENDIX I
FT-Actuaries World Indices
US Component as of 30 December 1994
<TABLE>
<CAPTION>
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GENERAL ELECTRIC CO Capital Goods 87,192.660 2.645
AMER TEL & TEL Utilities 78,543.062 2.383
EXXON CORP Energy 75,415.962 2.288
COCA-COLA Consumer Goods / Ser 66,420.529 2.015
PHILIP MORRIS Consumer Goods / Ser 49,796.438 1.511
WAL-MART STORES Consumer Goods / Ser 48,837.281 1.482
MERCK & CO Consumer Goods / Ser 47,975.204 1.456
IBM Capital Goods 42,987.504 1.304
PROCTER & GAMBLE Consumer Goods / Ser 42,493.126 1.289
DU PONT E I DE NEMOURS Basic Industries 38,300.513 1.162
MICROSOFT CORP Consumer Goods / Ser 35,473.649 1.076
JOHNSON & JOHNSON Consumer Goods / Ser 35,218.759 1.069
MOBIL CORP Energy 33,483.646 1.016
MOTOROLA Capital Goods 32,320.699 0.981
GENERAL MOTORS Consumer Goods / Ser 31,838.121 0.966
AMER INTL GROUP Financial, Insurance 31,012.884 0.941
AMOCO Energy 29,371.526 0.891
BRISTOL MYERS SQUIBB CO Consumer Goods / Ser 29,212.869 0.886
GTE CORP Utilities 29,124.644 0.884
CHEVRON CORP Energy 29,081.354 0.882
PEPSICO Consumer Goods / Ser 28,710.979 0.871
FORD MOTOR Consumer Goods / Ser 28,251.804 0.857
BELLSOUTH CORP Utilities 26,858.016 0.815
INTEL Capital Goods 26,361.213 0.800
ABBOTT LABS Consumer Goods / Ser 26,305.113 0.798
HEWLETT-PACKARD Capital Goods 25,391.121 0.770
DISNEY (WALT) PRODS Consumer Goods / Ser 24,683.286 0.749
PFIZER Consumer Goods / Ser 24,316.601 0.738
SOUTHWESTERN BELL Utilities 24,211.071 0.735
BERKSHIRE HATHAWAY INC DEL Financial, Insurance 23,378.400 0.709
MINNESOTA MINING Consumer Goods / Ser 22,551.898 0.684
AMERITECH Utilities 22,177.422 0.673
BELL ATLANTIC Utilities 21,697.866 0.658
HOME DEPOT INC Consumer Goods / Ser 20,837.264 0.632
MCDONALD'S CORP Consumer Goods / Ser 20,549.324 0.623
FED NATL MORTGAGE Financial, Insurance 19,915.863 0.604
AMER HOME PRODUCTS Consumer Goods / Ser 19,180.604 0.582
LILLY (ELI) Consumer Goods / Ser 19,175.953 0.582
DOW CHEMICAL Basic Industries 18,635.177 0.565
CHRYSLER Consumer Goods / Ser 17,369.128 0.527
GILLETTE Consumer Goods / Ser 16,544.119 0.502
<PAGE>
<PAGE> I-2
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ATLANTIC RICHFIELD Energy 16,347.867 0.496
CITICORP Financial, Insurance 16,287.434 0.494
U S WEST INC. Utilities 16,242.257 0.493
EASTMAN KODAK Consumer Goods / Ser 16,219.959 0.492
SEARS ROEBUCK & CO Financial, Insurance 16,175.532 0.491
BOEING Capital Goods 15,927.585 0.483
TEXACO Energy 15,536.545 0.471
NYNEX CORP Utilities 15,455.102 0.469
BANKAMERICA Financial, Insurance 14,675.396 0.445
AMERICAN EXPRESS Financial, Insurance 14,600.258 0.443
AIRTOUCH COMMUNICATIONS Utilities 14,375.168 0.436
SCHERING-PLOUGH Consumer Goods / Ser 14,084.420 0.427
EMERSON ELECTRIC Capital Goods 14,000.125 0.425
ANHEUSER-BUSCH Consumer Goods / Ser 13,452.062 0.408
TIME WARNER INC Consumer Goods / Ser 13,319.365 0.404
COLUMBIA HEALTHCARE CORP Consumer Goods / Ser 13,216.322 0.401
CAP CITIES/ABC Consumer Goods / Ser 13,131.228 0.398
SOUTHERN CO Utilities 13,068.340 0.396
KELLOGG Consumer Goods / Ser 13,103.490 0.395
VIACOM CLASS B Consumer Goods / Ser 12,918.794 0.392
WASTE MANAGEMENT Capital Goods 12,699.698 0.385
ORACLE SYSTEMS CORP Consumer Goods / Ser 12,626.325 0.383
TELECOM CORP `A' Consumer Goods / Ser 12,566.650 0.381
NATIONSBANK CORP Financial, Insurance 12,479.003 0.379
SCHLUMBERGER Energy 12,261.426 0.372
PACIFIC TELESIS Utilities 12,085.853 0.367
SARA LEE Consumer Goods / Ser 12,080.358 0.367
CATERPILLAR TRACTOR Capital Goods 11,169.869 0.339
CAMPBELL SOUP Consumer Goods / Ser 10,974.505 0.333
MORGAN (J.P.) Financial Insurance 10,666.040 0.324
ARCHER-DANIELS Consumer Goods / Ser 10,631.332 0.323
THE TRAVELERS Financial, Insurance 10,543.033 0.320
PACIFIC GAS & ELECTRIC Utilities 10,536.654 0.320
XEROX CORP Capital Goods 10,479.447 0.318
PENNY (J.C.) Consumer Goods / Ser 10,416.055 0.316
WARNER-LAMBERT Consumer Goods / Ser 10,315.382 0.313
BANC ONE CORP Financial, Insurance 10,300.372 0.313
COMPAQ COMPUTER CORPORATION Capital Goods 10,206.800 0.310
GENERAL RE CORP Financial, Insurance 10,126.091 0.307
GENERAL MOTORS `E' Consumer Goods / Ser 10,066.441 0.305
MCI COMMS Utilities 9,916.547 0.301
SPRINT CORP Utilities 9,627.920 0.292
ALLIED SIGNAL Capital Goods 9,621.558 0.292
ITT CORP Capital Goods 9,456.288 0.287
INTERNATIONAL PAPER Basic Industries 9,406.348 0.285
UNION PACIFIC Transportation and S 9,357.094 0.284
DUN & BRADSTREET Consumer Goods / Ser 9,338.340 0.283
COLGATE-PALMOLIVE Consumer Goods / Ser 9,188.234 0.279
<PAGE>
<PAGE> I-3
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
HEINZ (H.J.) Consumer Goods / Ser 9,065.858 0.275
FEDERAL HOME LN MTG CORP Financial, Insurance 9,057.680 0.275
GENERAL MILLS Consumer Goods / Ser 8,990.040 0.273
CHEMICAL BANKING CORP. Financial, Insurance 8,769.034 0.266
RAYTHEON Capital Goods 8,619.101 0.261
PHILLIPS PETROLEUM Energy 8,566.188 0.260
TOYS (R) Consumer Goods / Ser 8,465.397 0.257
MAY DEPT STORES Consumer Goods / Ser 8,378.843 0.254
NORFOLK STHN CORP Transportation and S 8,345.213 0.253
MONSANTO Basic Industries 8,310.258 0.252
AUTO DATA PROCESS Consumer Goods / Ser 8,229.137 0.250
KIMBERLY-CLARK Basic Industries 8,087.373 0.245
UNITED TECHNOLOGIES Capital Goods 7,941.867 0.241
CPC INTL Consumer Goods / Ser 7,907.572 0.240
PPG INDUSTRIES Basic Industries 7,892.070 0.239
AMGEN INC Consumer Goods / Ser 7,871.544 0.239
BAXTER INTL INC Consumer Goods / Ser 7,829.459 0.238
DUKE POWER Utilities 7,810.249 0.237
COMPUTER ASSOC INTEL INC Consumer Goods / Ser 7,800.158 0.237
ROCKWELL INTL CORP Capital Goods 7,787.709 0.236
CONAGRA Consumer Goods / Ser 7,752.906 0.235
ENRON CORP Energy 7,715.341 0.234
WEYERHAEUSER Basic Industries 7,710.450 0.234
ALUMINUM CO AMER Basic Industries 7,706.507 0.234
AMP Capital Goods 7,626.746 0.231
AMERICAN BRANDS Consumer Goods / Ser 7,552.163 0.229
WELLS FARGO & CO DEL Financial, Insurance 7,548.120 0.229
NORWEST CORP Financial, Insurance 7,444.493 0.226
GANNETT Consumer Goods / Ser 7,412.374 0.225
ALBERTSONS Consumer Goods / Ser 7,359.736 0.223
CSX Transportation and S 7,292.801 0.221
TENNECO Capital Goods 7,283.480 0.221
TEXAS UTILITIES Utilities 7,226.912 0.219
MERRILL LYNCH Financial, Insurance 7,139.561 0.217
FIRST UNION Financial, Insurance 7,113.811 0.216
TEXAS INSTRUMENTS Capital Goods 6,935.671 0.210
LIN BROADCASTING Utilities 6,885.663 0.209
CHUBB Financial, Insurance 6,743.077 0.205
FPL GROUP Utilities 6,692.823 0.203
UNOCAL Energy 6,632.378 0.201
CORNING INC Basic Industries 6,600.344 0.200
SCECORP Utilities 6,549.060 0.199
PUBLIC SVC ENTERPRISE GROUP Utilities 6,484.497 0.197
LIMITED Consumer Goods / Ser 6,482.968 0.197
GEORGIA-PACIFIC Basic Industries 6,461.026 0.196
MEDTRONIC Consumer Goods / Ser 6,390.089 0.194
NOVELL INC Capital Goods 6,333.664 0.192
RJR NABISCO HOLDINGS CORP Consumer Goods / Ser 6,280.197 0.191
<PAGE>
<PAGE> I-4
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
CHASE MANHATTAN Financial, Insurance 6,231.844 0.189
DOMINION RESOURCES Utilities 6,088.475 0.185
AMER ELEC POWER Utilities 6,078.094 0.184
CON EDISON Utilities 6,048.315 0.184
OCCIDENTAL PETROL Energy 6,014.663 0.182
K MART CORP Consumer Goods / Ser 5,940.168 0.180
AMER GENERAL CORP Financial, Insurance 5,911.454 0.179
MARSH & MCLENNAN Financial, Insurance 5,818.773 0.177
DEAN WITTER DISCOVER & CO Financial, Insurance 5,778.228 0.175
DEERE & CO Capital Goods 5,723.801 0.174
SUNTRUST BANKS Financial, Insurance 5,702.639 0.173
ALLTEL CORP Utilities 5,651.420 0.171
UST INC Consumer Goods / Ser 5,630.531 0.171
MCDONNELL DOUGLAS Capital Goods 5,611.272 0.170
BROWNING-FERRIS Capital Goods 5,578.582 0.169
MARION MERRELL DOW INC. Consumer Goods / Ser 5,577.901 0.169
LOWE'S COS. Consumer Goods / Ser 5,530.775 0.168
WACHOVIA CORP Financial, Insurance 5,509.203 0.167
FIRST INTERSTATE BK Financial, Insurance 5,474.041 0.166
BANK OF NEW YORK Financial, Insurance 5,473.837 0.166
PECO ENERGY CO Utilities 5,428.245 0.165
WALGREEN Consumer Goods / Ser 5,384.356 0.163
UPJOHN Consumer Goods / Ser 5,322.456 0.161
AETNA LIFE & CAS Financial, Insurance 5,308.254 0.161
LOEW'S CORP Financial, Insurance 5,211.197 0.158
SCOTT PAPER CO Basic Industries 5,159.697 0.157
PACIFICORP Utilities 5,152.049 0.156
INTERNATIONAL FLAVORS & FRAGRA Consumer Goods / Ser 5,150.631 0.156
UNICOM CORP Utilities 5,130.024 0.156
GOODYEAR TIRE Capital Goods 5,087.328 0.154
DAYTON-HUDSON Consumer Goods / Ser 5,068.955 0.154
AIR PRODUCTS & CHEM Basic Industries 5,060.877 0.154
PITNEY BOWES Capital Goods 5,001.800 0.152
PNC BANK CORP Financial, Insurance 4,982.775 0.151
ILLINOIS TOOL Capital Goods 4,978.750 0.151
ENERGY CORP. Utilities 4,973.916 0.151
RHONE POULENC RORER INC Consumer Goods / Ser 4,938.195 0.150
SYSCO US$1 Consumer Goods / Ser 4,727.932 0.143
USC-MARATHON GROUP Energy 4,702.671 0.143
READERS DIGEST ASSN INC Consumer Goods / Ser 4,681.220 0.142
HOUSTON INDUSTRIES Utilities 4,677.456 0.142
APPLE COMPUTER Capital Goods 4,675.749 0.142
RUBBERMAID Consumer Goods / Ser 4,675.613 0.142
HERCULES Basic Industries 4,611.193 0.140
CIGNA CORP Financial, Insurance 4,596.079 0.139
DIGITAL EQUIPMENT Capital Goods 4,584.610 0.139
LOCKHEED CORP Capital Goods 4,565.062 0.139
DONNELLEY (RR) Consumer Goods / Ser 4,525.241 0.137
<PAGE>
<PAGE> I-5
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
BURLINGTON RES INC Utilities 4,516.190 0.137
MATTEL INC Consumer Goods / Ser 4,484.511 0.136
MORGAN STANLEY GROUP INC Financial, Insurance 4,481.109 0.136
RALSTON PURINA Consumer Goods / Ser 4,463.750 0.135
GENUINE PARTS CO Capital Goods 4,439.592 0.135
TEXTRON Capital Goods 4,435.821 0.135
GAP INC DEL Consumer Goods / Ser 4,424.696 0.134
FIRST CHICAGO Financial, Insurance 4,423.560 0.134
UNION CARBIDE Basic Industries 4,403.195 0.134
MELLON BK CORP Financial, Insurance 4,400.996 0.134
FLEET NORSTAR FINANCIAL GROUP Financial, Insurance 4,384.608 0.133
PHELPS DODGE CORP Basic Industries 4,373.078 0.133
BANKERS TRUST Financial, Insurance 4,372.687 0.133
WESTINGHOUSE ELEC Capital Goods 4,357.742 0.132
CENTRAL & SOUTH WEST Utilities 4,298.071 0.130
BURLINGTON NORTHERN Transportation and S 4,293.472 0.130
TRW Capital Goods 4,288.284 0.130
CAROLINA PWR & LIGHT Utilities 4,277.972 0.130
NBD BANKCORP INC Financial, Insurance 4,268.447 0.130
AMERADA HESS Energy 4,243.627 0.129
ARCO CHEM CO Basic Industries 4,227.608 0.128
MARTIN MARIETTA Capital Goods 4,218.110 0.128
MORTON INTL INC Basic Industries 4,206.173 0.128
AVON PRODUCTS Consumer Goods / Ser 4,203.293 0.128
EASTMAN CHEMICAL Basic Industries 4,175.996 0.127
QUAKER OATS Consumer Goods / Ser 4,105.371 0.125
HONEYWELL Capital Goods 4,071.470 0.124
GREAT LAKES CHEM CORP Basic Industries 4,066.665 0.123
AMR CORP Transportation and S 4,040.344 0.123
TIMES MIRROR CO Consumer Goods / Ser 4,035.264 0.122
DSC COMMUNICATIONS Capital Goods 4,022.197 0.122
CONRAIL Transportation and S 3,984.501 0.121
SALOMON Financial, Insurance 3,968.663 0.120
COOPER INDUSTRIES Capital Goods 3,939.117 0.120
NATIONAL CITY CORP Financial, Insurance 3,883.475 0.118
BLOCK (H&R) Consumer Goods / Ser 3,871.581 0.117
ROHM & HAAS CO Basic Industries 3,871.304 0.117
DETROIT EDISON Utilities 3,841.943 0.117
FIRST BANK SYSTEM Financial, Insurance 3,817.100 0.116
WINN-DIXIE STORES Consumer Goods / Ser 3,806.579 0.115
HALLIBURTON Energy 3,780.126 0.115
EATON CORP Capital Goods 3,776.850 0.115
ST PAUL COMPANIES Financial, Insurance 3,760.029 0.114
WHIRLPOOL CORP Consumer Goods / Ser 3,745.434 0.114
BARNETT BANKS INC Financial, Insurance 3,721.531 0.113
CORESTATES FINL Financial, Insurance 3,658.330 0.111
TRIBUNE Consumer Goods / Ser 3,651.825 0.111
HUMANA Consumer Goods / Ser 3,642.399 0.111
<PAGE>
<PAGE> I-6
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
GRACE (WR) Basic Industries 3,629.784 0.110
MASCO CORP Basic Industries 3,625.000 0.110
UNION ELEC CO Utilities 3,612.637 0.110
FIRST FIDELITY BANCORP Financial, Insurance 3,584.166 0.109
HOUSEHOLD INTL Financial, Insurance 3,576.771 0.109
FLUOR CORP Capital Goods 3,557.468 0.108
TRANSAMERICA CORP Financial, Insurance 3,502.798 0.106
MARRIOTT INTERNATIONAL Consumer Goods / Ser 3,489.750 0.106
DRESSER INDS Energy 3,467.281 0.105
NORDSTROM BEST Consumer Goods / Ser 3,452.064 0.105
GEICO CORP Financial, Insurance 3,436.615 0.104
ALCO STANDARD Basic Industries 3,425.021 0.104
BECTON DICKINSON Consumer Goods / Ser 3,406.608 0.103
CHAMPION INTL Basic Industries 3,394.829 0.103
CBS Consumer Goods / Ser 3,391.719 0.103
TYCO INTERNATIONAL Capital Goods 3,382.713 0.103
FEDERAL EXPRESS Transportation and S 3,369.543 0.102
CROWN CORK & SEAL Basic Industries 3,368.433 0.102
SUN MICROSYSTEMS Capital Goods 3,366.785 0.102
LINCOLN NAT CORP Financial, Insurance 3,323.985 0.101
INGERSOLL-RAND Capital Goods 3,322.557 0.101
MCGRAW-HILL Consumer Goods / Ser 3,321.013 0.101
CONS NATURAL GAS Utilities 3,302.033 0.100
UNION CAMP Basic Industries 3,296.064 0.100
SAFECO CORP Financial, Insurance 3,275.740 0.099
SANTA FE PAC CORP Transportation and S 3,264.170 0.099
BALTIMORE GAS & ELEC Utilities 3,262.154 0.099
MELVILLE CORP Consumer Goods / Ser 3,257.807 0.099
AON CORP Financial, Insurance 3,257.696 0.099
REEBOK INTERNATIONAL Consumer Goods / Ser 3,241.923 0.098
HILTON HOLTELS CORP Consumer Goods / Ser 3,233.462 0.098
AFLAC INC Financial, Insurance 3,188.992 0.097
PROMUS Consumer Goods / Ser 3,174.338 0.096
TANDY CORP Consumer Goods / Ser 3,170.908 0.096
LORAL CORP Capital Goods 3,170.781 0.096
VF CORP Consumer Goods / Ser 3,144.190 0.095
CLOROX Consumer Goods / Ser 3,142.277 0.095
NEWMONT MINING Basic Industries 3,097.584 0.094
DOW JONES Consumer Goods / Ser 3,092.033 0.094
SUN CO Energy 3,072.426 0.093
PROVIDIAN CORP Financial, Insurance 3,050.481 0.093
REYNOLDS METALS Basic Industries 3,038.588 0.092
PIONEER HI BRED Consumer Goods / Ser 3,026.444 0.092
GENERAL PUB UTILS CP Utilities 3,022.688 0.092
DILLARD DEPT STORE Consumer Goods / Ser 3,022.536 0.092
DOVER CORP Capital Goods 2,954.344 0.090
NTHN STATES POWER Utilities 2,943.864 0.089
GRAINGER (W.W.) Capital Goods 2,930.466 0.089
<PAGE>
<PAGE> I-7
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
PENNSYLVANIA PW< Utilities 2,924.138 0.089
MEAD Basic Industries 2,884.143 0.088
SHERWIN-WILLIAMS Basic Industries 2,834.771 0.086
OHIO EDISON Utilities 2,822.527 0.086
KROGER Consumer Goods / Ser 2,817.318 0.085
PRAXAIR INC Basic Industries 2,813.666 0.085
FLORIDA PROG CORP Utilities 2,813.280 0.085
WISCONSIN ENERGY CORP Utilities 2,800.555 0.085
UNUM CORP Financial, Insurance 2,788.895 0.085
BANK OF BOSTON Financial, Insurance 2,773.515 0.084
HARCOURT GENERAL INC Consumer Goods / Ser 2,744.953 0.083
GENERAL DYNAMICS Capital Goods 2,743.980 0.083
MOLEX INC Capital Goods 2,742.681 0.083
GENERAL MOTORS `H' Capital Goods 2,723.145 0.083
NORTH EAST UTILITIES Utilities 2,699.384 0.082
KNIGHT-RIDDER Consumer Goods / Ser 2,697.963 0.082
COASTAL CORP Energy 2,696.875 0.082
USX-US STEEL Basic Industries 2,691.965 0.082
WESTVACO CORP Basic Industries 2,637.365 0.080
WILLAMETTE Basic Industries 2,613.925 0.079
SERVICE CORP INTL Consumer Goods / Ser 2,604.948 0.079
CINCINNATI FINANCIAL Financial, Insurance 2,593.746 0.079
ALLEGHENY POWER Utilities 2,576.440 0.078
BAKER HUGHES INC. Energy 2,573.360 0.078
HASBRO Consumer Goods / Ser 2,566.571 0.078
DELTA AIR LINES Transportation and S 2,555.603 0.078
TEMPLE ISLAND Basic Industries 2,514.591 0.076
JEFFERSON-PILOT Financial, Insurance 2,513.344 0.076
PRICE/COSTCO INC Consumer Goods / Ser 2,508.372 0.076
TORCHMARK Financial, Insurance 2,495.516 0.076
STUDENT LOAN MARKETING ASSN Financial, Insurance 2,489.500 0.076
FREEPORT-MCMORAN Basic Industries 2,488.089 0.075
SONAT Utilities 2,440.676 0.074
INTERPUBLIC GROUP CO Consumer Goods / Ser 2,423.446 0.074
CYPRUS AMAX MINERALS Basic Industries 2,417.764 0.073
WASHINGTON POST Consumer Goods / Ser 2,415.058 0.073
NAT SEMICONDUCTOR Capital Goods 2,402.205 0.073
REPUBLIC N Y CORP Financial, Insurance 2,401.372 0.073
KERR-MCGEE Energy 2,376.544 0.072
NEW YORK TIMES Consumer Goods / Ser 2,361.092 0.072
HOMESTAKE MINING Basic Industries 2,358.763 0.072
NAT MED ENTERPRISES Consumer Goods / Ser 2,348.649 0.071
ADVANCED MICRO DEV Capital Goods 2,339.568 0.071
DANA CORP Capital Goods 2,308.866 0.070
MALLINCKRODT GROUP Consumer Goods / Ser 2,300.554 0.070
MALCO CHEMICAL Basic Industries 2,289.859 0.069
WILLIAMS COS INC DEL Utilities 2,276.451 0.069
SAN DIEGO GAS & ELEC Utilities 2,242.163 0.068
<PAGE>
<PAGE> I-8
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
UNITRIN INC Financial, Insurance 2,229.034 0.068
LUBRIZOL CORP Basic Industries 2,222.098 0.067
PARKER-HANNIFIN Capital Goods 2,219.718 0.067
ROADWAY SERVICES Transportation and S 2,215.066 0.067
DELUXE CORP Consumer Goods / Ser 2,188.556 0.066
POTOMAC ELECTRIC Utilities 2,170.951 0.066
PALL CORP Capital Goods 2,162.325 0.066
LSI LOGIC Capital Goods 2,142.459 0.065
GREAT WSTN FINANCIAL Financial, Insurance 2,140.656 0.065
ENGLEHARD CORP Basic Industries 2,132.485 0.065
GOLDEN WEST FIN Financial, Insurance 2,131.850 0.065
FMC CORP Capital Goods 2,105.681 0.064
ASHLAND OIL Energy 2,092.632 0.063
NEW ENGLAND ELECT Utilities 2,087.161 0.063
NORTHROP CORP Capital Goods 2,064.048 0.063
NIAGARA MOHAWK POWER Utilities 2,051.615 0.062
PENNZOIL Energy 2,030.986 0.062
AMERICAN GREETINGS A Consumer Goods / Ser 2,007.828 0.061
PREMIER INDUSTRIES Consumer Goods / Ser 2,004.274 0.061
BAUSCH & LOMB Consumer Goods / Ser 2,003.334 0.061
BLACK & DECKER MFG Consumer Goods / Ser 2,001.531 0.061
AVERY DENNISON CORP Basic Industries 1,996.378 0.061
JOHNSON CONTROLS Capital Goods 1,992.536 0.060
WOOLWORTH CORP Consumer Goods / Ser 1,979.295 0.060
RITE AID Consumer Goods / Ser 1,970.302 0.060
DIAL CORP ARIZ Financial, Insurance 1,966.730 0.060
TANDEM COMPUTERS Capital Goods 1,963.005 0.060
BETHLEHEM STEEL Basic Industries 1,962.864 0.060
WESTERN ATLAS INC Energy 1,953.189 0.059
CMS ENERGY CORP Utilities 1,948.881 0.059
SHAWMUT NATIONAL CORP. Financial, Insurance 1,930.334 0.059
SONOCO PRODUCTS Basic Industries 1,903.016 0.058
OMNICOM GROUP INC. Consumer Goods / Ser 1,891.928 0.057
AHMANSON (H.F.) Financial, Insurance 1,885.754 0.057
LOTUS DEV Consumer Goods / Ser 1,883.171 0.057
CUMMINS ENGINE Capital Goods 1,882.400 0.057
SERVICEMASTER LTD PARTNERSHIP Consumer Goods / Ser 1,871.269 0.057
AUTODESK Consumer Goods / Ser 1,864.792 0.057
VULCAN MATERIALS Basic Industries 1,849.483 0.056
LONG ISLAND LIGHTING Utilities 1,816.203 0.055
WHITMAN CORP Consumer Goods / Ser 1,814.148 0.055
BRUNSWICK CORP Consumer Goods / Ser 1,801.657 0.055
ECHLIN INC Capital Goods 1,772.520 0.054
BEAR STEARNS COMPANIES INC Financial, Insurance 1,768.755 0.054
SUPER VALU STORES Consumer Goods / Ser 1,751.481 0.053
ANALOG DEVICES Capital Goods 1,742.481 0.053
PACIFIC ENTERPRISES Utilities 1,742.011 0.053
RYDER SYSTEM Transportation and S 1,728.518 0.052
<PAGE>
<PAGE> I-9
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
PINNACLE WEST CAPITAL CORP. Utilities 1,726.328 0.052
PACCAR Capital Goods 1,719.467 0.052
MANOR CARE Consumer Goods / Ser 1,707.105 0.052
LITTON INDUSTRIES Capital Goods 1,700.816 0.052
SANTA FE PACIFIC GOLD Basic Industries 1,691.131 0.051
HARRIS CORP Capital Goods 1,675.180 0.051
JAMES RIVER CORP VA Basic Industries 1,653.899 0.050
ILLINOVA CORP Utilities 1,645.257 0.050
MAYTAG Consumer Goods / Ser 1,606.935 0.049
BANDAG INC Capital Goods 1,602.403 0.049
STANLEY WORKS Capital Goods 1,601.636 0.049
VARIETY CORP Capital Goods 1,594.239 0.048
SCIENTIFIC ATLANTA Capital Goods 1,592.682 0.048
INLAND STEEL Basic Industries 1,562.114 0.047
DQE Utilities 1,550.484 0.047
RAYCHEM Capital Goods 1,546.018 0.047
GENERAL SIGNAL CORP Capital Goods 1,507.146 0.046
AVNET Capital Goods 1,504.050 0.046
POLAROID Consumer Goods / Ser 1,503.255 0.046
SUNDSTRAND CORP Capital Goods 1,494.493 0.045
MARRIOTT CORP Consumer Goods / Ser 1,475.156 0.045
UNISYS CORP Capital Goods 1,473.323 0.045
WENDYS INTL Consumer Goods / Ser 1,459.652 0.044
MERC STORES Consumer Goods / Ser 1,455.338 0.044
ARMSTRONG WORLD IND Basic Industries 1,445.367 0.044
LEGGETT & PLATT Consumer Goods / Ser 1,430.030 0.043
SNAP-ON-TOOLS Capital Goods 1,424.696 0.043
ECOLAB Consumer Goods / Ser 1,419.789 0.043
TAMBRANDS Consumer Goods / Ser 1,425.838 0.043
E-SYSTEMS Capital Goods 1,414.542 0.043
OWENS-CORNING FIBER Basic Industries 1,397.184 0.042
DOLE FOOD INC Consumer Goods / Ser 1,367.994 0.042
LIZ CLAIBORNE Consumer Goods / Ser 1,330.543 0.040
MCKESSON CORP (NEW) Consumer Goods / Ser 1,327.674 0.040
MCDERMOTT INTL Capital Goods 1,327.565 0.040
CENTERIOR ENERGY COR Utilities 1,313.784 0.040
HARNISCHFEGER Capital Goods 1,292.400 0.039
PUGET SOUND Utilities 1,280.534 0.039
TRI-CONTINENTAL CP Financial, Insurance 1,275.816 0.039
KEMPER CORP Financial, Insurance 1,275.441 0.039
AMDAHL CORP Capital Goods 1,272.942 0.039
NAT SERVICE Consumer Goods / Ser 1,270.488 0.039
KING WORLD PRODUCTIONS Consumer Goods / Ser 1,268.255 0.038
TRINITY INDS Basic Industries 1,258.457 0.038
DIEBOLD Consumer Goods / Ser 1,255.341 0.038
RUSSELL CORP Consumer Goods / Ser 1,255.282 0.038
FOOD LION INC CLASS A Consumer Goods / Ser 1,251.218 0.038
LEUCADIA NATL Financial, Insurance 1,247.202 0.038
<PAGE>
<PAGE> I-10
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
AMER NATL INSURANCE Financial, Insurance 1,244.513 0.038
FOOD LION INC CLASS B Consumer Goods / Ser 1,227.801 0.037
BROWN-FORMAN `B' Consumer Goods / Ser 1,224.270 0.037
USF & G Financial, Insurance 1,219.860 0.037
LOUISIANA LAND & EXP Energy 1,214.016 0.037
CERIDAN CORP Capital Goods 1,197.147 0.036
BEVERLY ENTERPRISES DEL Consumer Goods / Ser 1,194.721 0.036
ASARCO Basic Industries 1,194.663 0.036
MILLIPORE CORP Basic Industries 1,190.025 0.036
COLUMBIA GAS SYSTEM Utilities 1,188.137 0.036
NICOR INC Utilities 1,183.387 0.036
ORYX ENERGY COMPANY Energy 1,151.234 0.035
ETHYL CORP COM Basic Industries 1,139.927 0.035
NAVISTAR INTL CORP Capital Goods 1,134.783 0.034
PAINE WEBBER Financial, Insurance 1,132.650 0.034
TJX COS INC Consumer Goods / Ser 1,131.391 0.034
PERKIN-ELMER Capital Goods 1,126.065 0.034
GOODRICH (BF) Basic Industries 1,119.292 0.034
TELEDYNE Capital Goods 1,115.911 0.034
PITTSTON SERVICES GROUP Transportation and S 1,105.024 0.034
UAL INC. Transportation and S 1,085.984 0.033
OLIN CORP Basic Industries 1,083.818 0.033
DELMARA POWER & LT Utilities 1,071.756 0.033
CABOT CORP Basic Industries 1,066.815 0.032
FOSTER WHEELER CORP. Capital Goods 1,065.139 0.032
WEIS MARKETS INC Consumer Goods / Ser 1,054.359 0.032
CONTINENTAL CORP Financial, Insurance 1,054.101 0.032
BROOKLYN UNION GAS Utilities 1,052.759 0.032
PETRIE STORES CORP Consumer Goods / Ser 1,046.591 0.032
TEKTRONIX Capital Goods 1,036.748 0.031
ALEX & BALDWIN Transportation and S 1,023.522 0.031
BOISE CASCADE CORP Basic Industries 1,017.945 0.030
BOWATER Basic Industries 974.582 0.030
BRIGGS & STRATON Capital Goods 947.392 0.029
CLARK EQUIPMENT Capital Goods 943.787 0.029
BALL CORP Basic Industries 939.078 0.028
STRATUS COMPUTER Capital Goods 922.868 0.028
ROUSE Financial, Insurance 915.684 0.028
PEOPLES ENERGY CORP Utilities 910.927 0.028
BATTLE MTN GOLD Basic Industries 889.757 0.027
ENSERCH CORP Utilities 877.997 0.027
CYPRESS SEMICONDUCTOR CORP. Capital Goods 872.414 0.026
US SHOE Consumer Goods / Ser 868.913 0.026
COMSAT CORP Utilities 868.204 0.026
FLEMING Consumer Goods / Ser 866.876 0.026
SAFETY-KLEEN Consumer Goods / Ser 851.886 0.026
TRINOVA CORP. Capital Goods 845.824 0.026
CONS FREIGHTWAYS Transportation and S 810.937 0.025
<PAGE>
<PAGE> I-11
Index Market
Industry Capitalization Weight in
Constituent Name Sector (Millions of US$) FT Index
<S> <S> <C> <C>
ALEX & ALEXANDER Financial, Insurance 810.282 0.025
PROV LIFE Financial, Insurance 797.594 0.024
CINCINNATI MILACRON Capital Goods 797.084 0.024
USLIFE CORP Financial, Insurance 796.161 0.024
EG & G Capital Goods 778.584 0.024
SHARED MED SYS Consumer Goods / Ser 749.549 0.023
BELO (AH) CORP Consumer Goods / Ser 744.444 0.023
MENTOR GRAPHICS Capital Goods 740.022 0.022
CHRIS-CRAFT INDS Consumer Goods / Ser 721.050 0.022
WASHINGTON GAS LT Utilities 709.463 0.022
ARMCO Basic Industries 693.585 0.021
GREAT ATLANTIC & PAC Consumer Goods / Ser 692.738 0.021
CHARMING SHOPPES Consumer Goods / Ser 681.216 0.021
TRANSCO ENERGY Utilities 680.428 0.021
YELLOW FREIGHT SYST Transportation and S 671.079 0.020
CHIQUITA BRANDS INTL INC Consumer Goods / Ser 668.892 0.020
NORAM ENERGY CORP Utilities 658.287 0.020
LONG DRUG STORES Consumer Goods / Ser 655.701 0.020
NL INDUSTRIES Basic Industries 644.380 0.020
COORS (ADOLPH) CO CLASS B Consumer Goods / Ser 641.961 0.019
HELMERICH & PAYNE Energy 633.424 0.019
FUND AMERICAN ENTRPS Financial, Insurance 604.588 0.018
COMCAST CORP. Consumer Goods / Ser 599.118 0.018
MACFRUGAL'S BARGAINS Consumer Goods / Ser 592.620 0.018
PHH GROUP Consumer Goods / Ser 592.279 0.018
AMETEK Capital Goods 592.026 0.018
THIOKOL CORP. Capital Goods 527.311 0.016
SHONEY'S INC Consumer Goods / Ser 525.032 0.016
COMM PSYCHIATRIC Consumer Goods / Ser 479.259 0.015
MAXUS ENERGY CORP Energy 454.278 0.014
CRAY RESEARCH INC Capital Goods 405.232 0.012
GENCORP Capital Goods 379.086 0.012
INTERGRAPH Capital Goods 362.733 0.011
CCH INC CLASS A Consumer Goods / Ser 296.106 0.009
FOXMEYER HEALTH CORP Consumer Goods / Ser 265.236 0.008
USAIR GROUP Transportation and S 262.719 0.008
SOUTHDOWN INC. Basic Industries 250.241 0.008
NETWORK SYSTEMS Capital Goods 208.544 0.006
OSHKOSH B'GOSH `A' Consumer Goods / Ser 192.710 0.006
SEQUA CORP CLASS A Capital Goods 160.706 0.005
</TABLE>
<PAGE>
<PAGE>
SUBJECT TO COMPLETION DATED DECEMBER 1, 1994
[FUND-TRUST] PROSPECTUS
EUROFUND, INC.
Eurofund, Inc. (the "Fund") is an open-end management investment
company organized as a series fund, with each series of shares (a "Series")
representing a component of the FT-Actuaries World Indices(TM) (the "FT
Index") based on equity securities trading in the markets of a particular
foreign country or equity securities representing a particular geographical
region or industry sector.
The Germany Index Series and UK Index Series. The initial two Series
offered by this Prospectus are the Germany Index Series and the UK Index
Series. The Board of Directors may authorize additional series.
The investment objective of each Series is to provide investment
results that substantially correspond to the price and yield performance of
publicly traded equity securities in the country, geographical region or
industry sector represented by its corresponding component of the FT Index.
Shares of each Series are sold at net asset value, without a sales
charge, for an in-kind deposit of a portfolio of equity securities substan-
tially corresponding to the securities comprising the applicable component
of the FT Index (a "Fund Basket"), plus an amount of cash (the "Cash
Component"), as described under "Purchase of Fund Shares". Together, the
Fund Basket and the Cash Component constitute a "Fund Deposit".
Fund shares of each Series may be exchanged on any Business Day (as
defined herein) for corresponding Redeemable CB(TM) Units ("Redeemable
CB(TM) Units") of The Germany EuroTrust Trust or The UK EuroTrust Trust,
each a trust of The EuroTrust Trust (the "Trust"), a unit investment trust
sponsored by SuperShare Services Corporation ("SSC"), at their respective
net asset values. On any Business Day, the net asset value of shares of a
Series which may be acquired for a Fund Deposit is designed to equal the
net asset value of one Redeemable CB Unit. Redeemable CB Units are
separable into identical exchange-tradeable fractional interests, referred
to as "CBs(TM)". The CBs are offered only pursuant to the prospectus of
the Trust, which contains information concerning the exchange of Fund
shares for Redeemable CB Units and may be obtained free of charge from the
Distributor. See "Exchange of Fund Shares for Redeemable CB Units" and
"Separation of Redeemable CB Units of the Trust into CBs".
All redemptions of Fund shares will be effected at the net asset
value next determined after receipt of a redemption request. The Fund will
redeem shares of a Series in amounts equivalent to one or more Redeemable
CB Units on a given Business Day principally on an in-kind basis.
Redemption proceeds will generally consist of the Fund Basket of securities
for such Series determined in accordance with the procedures herein
described, although a minimal amount of cash and other securities may be
included as part of the redemption proceeds. See "Redemption of Fund
Shares".
Deutsche Bank Securities Corporation ("DBSC" or the "Adviser"), a
subsidiary of Deutsche Bank AG, will serve as investment adviser to both
Series of the Fund, providing investment advisory, management and certain
administrative services. SSC Distribution Services, Inc. ("SSCD"), a wholly
owned subsidiary of SSC, is the Distributor of the Fund. See "Investment
Management".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund
that an investor should know before investing. It should be read and
retained for future reference. A Statement of Additional Information dated
<PAGE>
<PAGE>
________________ , 1994, provides further discussion of certain topics
referred to in this Prospectus and other matters which may be of interest
to investors. The Statement of Additional Information has been filed with
the Securities and Exchange Commission and is incorporated herein by
reference. The Statement of Additional Information may be obtained without
charge by writing to the Fund or the Distributor (at its address set forth
on the back cover of this Prospectus). The Fund's address is c/o Deutsche
Bank Securities Corporation, 31 West 52nd Street, New York, New York
10019.
<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
<PAGE>
<PAGE>
Distributor:
SSC Distribution Services, Inc.
Investor Information: 1-800-328-7408
Prospectus dated ___________, 1994
<PAGE>
<PAGE> 2
"FT-Actuaries World Indices", "FT-Actuaries World Index" and "FTAWI"
are trade and service marks of The Financial Times Limited and used under
license by DBSC. The Fund is an authorized sublicensee thereof.
THE FT-ACTUARIES WORLD INDICES ("THE FT INDEX") [COPYRIGHT 199_] ARE
OWNED BY AND JOINTLY COMPILED BY THE FINANCIAL TIMES LIMITED,
GOLDMAN, SACHS & CO., AND NATWEST SECURITIES LIMITED (THE
"COMPILERS") IN CONJUNCTION WITH THE INSTITUTE OF ACTUARIES AND THE
FACULTY OF ACTUARIES (THE "ACTUARIES").
NONE OF THE COMPILERS OR THE ACTUARIES IS INTENDING BY THIS DOCUMENT
TO OFFER OR SOLICIT TO BUY OR SELL ANY SECURITIES. EACH OF THE
COMPILERS, THE MEMBERS OF THE ACTUARIES AND THEIR RESPECTIVE CLIENTS
AND OFFICERS MAY HAVE A POSITION OR ENGAGE IN TRANSACTIONS IN ANY OF
THE SECURITIES MENTIONED.
NONE OF THE COMPILERS OR THE ACTUARIES MAKES ANY WARRANTY EXPRESSLY
OR IMPLIEDLY AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE FT INDEX OR ANY PRODUCT OR SECURITIES DESCRIBED IN
THIS DOCUMENT (THE "PRODUCTS") OR IS RESPONSIBLE FOR THE CONSTRUCTION
OR OPERATION OF THE PRODUCTS OR FOR THE PERFORMANCE OF OR FOR ANY
ERROR IN THE FT INDEX OR THE PRODUCTS OR IS UNDER ANY OBLIGATION TO
ADVISE ANY PERSON OF ANY ERROR IN THE FT INDEX OR THE PRODUCTS. NONE
OF THEM GIVES ANY ASSURANCE REGARDING THE CONTINUED CALCULATION OR
PUBLICATION OF THE FT INDEX OR ANY CHANGES IN THE CONSTITUENTS OR IN
THE METHODOLOGY USED IN ITS CALCULATION.
Unless otherwise specified, all references in this Prospectus to
"dollars", "US $" or "$" are to United States dollars, all references to
the "DM" are to the Deutsche mark and all references to "L" are to pounds
sterling. On __________, 1994, the noon buying rates in New York City for
cable transfers payable in DM and L, as certified for customs purposes by
the Federal Reserve Bank of New York, were DM _______ and L ______,
respectively, to US $1.00. See "Special Considerations and Risk Factors".
Some numbers in this Prospectus have been rounded.
<PAGE>
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and in the Statement of
Additional Information.
The Fund and its Eurofund, Inc., a Maryland corporation
Investment Objective. . . . . . (the "Fund"), is a non-diversified,
open-end management investment company
organized as a series fund. Each series
of shares (a "Series") of the Fund
seeks to provide investment results
that substantially correspond to the
price and yield performance of its
corresponding country, geographic
region or industry sector component of
the FT-Actuaries World Indices(TM) (the
"FT Index").
Series of the Fund represent separate
portfolios of equity securities
substantially corresponding to the
composition and weighting of their
respective country, geographic region
or industry sector component of the FT
Index. The initial Series of the Fund
are the Germany Index Series and the UK
Index Series. There can be no assurance
that the investment objective of either
Series will be achieved. See
"Investment Objective". The net asset
value of shares of each Series will
fluctuate.
Purchase of Fund Shares . . . . . Fund shares of a Series may be
purchased without a sales charge, at
the net asset value per share next
determined after receipt of a purchase
order by the Distributor for an in-kind
deposit of a designated portfolio of
equity securities (a "Fund Basket")
substantially corresponding in
composition and weighting to the
relevant component of the FT Index,
plus a specified amount of cash (the
"Cash Component"), as described herein.
Fractional shares may be issued.
Together, a single Fund Basket and
related Cash Component (the "Fund
Deposit") represent the minimum initial
and subsequent investment amount for
the purchase of shares of a Series. See
"Purchase of Fund Shares--Minimum
Purchase". The value of the Fund
Deposit for each of the Germany Index
Series and the UK Index Series, exclu-
sive of brokerage costs, would have
been approximately $2,100,000 and
1,900,000, respectively, at September 30,
1994. Orders for Fund shares may be placed
only by a participating institution in
The Depository Trust Company (a "DTC
Participant"). The DTC Participant
thereby assumes responsibility for timely
delivery of the Cash Component. Other
investors must make arrangements with a
DTC Participant to place their orders. All
orders must be placed with
<PAGE>
<PAGE> 4
SSC Distribution Services, Inc.
("SSCD"), the Distributor of the Fund
shares. The telephone number for SSCD
is (800) 328-7408.
A transaction fee will be imposed by
the Fund on the Cash Component of a
Fund Deposit to offset the Fund's
brokerage and other transaction costs
of investing cash in portfolio
securities. The Cash Component
transaction fee for purchases of shares
of the Germany Index Series and the UK
Index Series will be 1% and 1.5%,
respectively. See "Purchase of Fund
Shares--Cash Component Transaction
Fee".
Exchange of Fund Shares for Fund shares of the Germany Index Series
Redeemable CB Units . . . . . . and the UK Index Series may be
exchanged for the Redeemable CB(TM)
Units ("Redeemable CB Units") of the
corresponding trust of The EuroTrust
Trust (the "Trust"), at their
respective net asset values per share.
SSCD is the dealer-manager for the
exchange offer.
The net asset value of shares of a
Series purchased with a Fund Deposit on
any day is designed to equal the net
asset value of one corresponding
Redeemable CB Unit. The Fund Deposit
will therefore provide an efficient
means for investors to acquire the
appropriate number of shares to
exchange for a Redeemable CB Unit. At
September 30, 1994, the net asset value
of a Redeemable CB Unit of The Germany
EuroTrust Trust (a "Redeemable Germany
CB Unit") was approximately $2,100,000
and the net asset value of a Redeemable
CB Unit of The UK EuroTrust Trust (a
"Redeemable UK CB Unit") was
approximately $1,900,000. See "Exchange
of Fund Shares for Redeemable CB
Units".
Separation of Redeemable CB The Redeemable CB Units may, at the
Units into Tradeable CBs. . . . option of the owner, be separated into
exchange-tradeable fractional interests
("CBs"), each representing an identical
fractional component of a Redeemable CB
Unit. Thus, 150,000 non-redeemable
listed CBs will be issued for each
Redeemable Germany CB Unit and 100,000
non-redeemable CBs for each Redeemable
UK CB Unit. See "Exchange of Fund
Shares for Redeemable CB Units".
No offer to sell or solicitation of
offers to purchase CBs or Redeemable CB
Units in exchange for Fund shares is
being made pursuant to this Prospectus,
and any such offers to sell or
solicitation of offers to purchase
Redeemable CB Units in exchange for
Fund shares may be made only by means
of the Trust prospectus.
<PAGE>
<PAGE> 5
It is expected that the CBs will be
listed for trading on the New York
Stock Exchange, Inc. (the "NYSE").
Investment Management . . . . . . Deutsche Bank Securities Corporation
("DBSC" or the "Adviser") will act as
investment adviser and, in addition,
will provide management and certain
administrative services to the Fund.
DBSC is a wholly owned indirect
subsidiary of Deutsche Bank AG.
Distributor . . . . . . . . . . . SSCD is the distributor of the Fund
shares (in such capacity, the
"Distributor"). Information about
purchases of Fund shares, the identity
and weightings of the securities
constituting the Fund Basket and the
Cash Component of the Fund Deposit may
be obtained from the Distributor on any
Business Day (as defined herein).
Administrator . . . . . . . . . . State Street Bank and Trust Company
("State Street") will act as
administrator of the Fund (in such
capacity, the "Administrator").
Fees. . . . . . . . . . . . . . . DBSC will receive from the Fund a
monthly fee at an annual rate of .30%
of the average daily net assets of each
Series, plus [40]% of the gross
investment income, less dividends on
portfolio securities, of each Series.
The Administrator will receive monthly
administrative fees from the Fund at an
annual rate of .08% of the average
daily net assets of each Series up to
$125 million, plus .06% of the average
daily net assets of the Series in
excess of $125 million up to $250
million and .04% of average daily net
assets of the Series in excess of $250
million.
Each Series will pay the Distributor an
asset-based distribution fee of .02% of
the average daily net assets of the
Series for its distribution services
and reimburse the Distributor for
payments made to dealers for
shareholder services in an additional
amount of up to .23% of the average
daily net assets of the Series.
Redemption. . . . . . . . . . . . Shares of each Series may be redeemed on
any Business Day, at their net asset
value next determined after receipt of
a redemption request by the Distributor
in proper form, principally on an in-
kind basis. Redemption proceeds will
consist of a portfolio of securities
constituting one or more Fund Baskets
with a value not in excess of the net
asset value of the shares being
redeemed, together with a cash
component, if so required, and may
include a selection of portfolio
securities held by the Series. See
"Redemption of Fund Shares".
<PAGE>
<PAGE> 6
A cash redemption transaction fee will
be imposed by the Fund on the cash
portion of the redemption proceeds for
shares of either Series to offset
brokerage and other costs of the
portfolio transactions that may be
required. The cash redemption
transaction fee for shares of the
Germany Index Series and the UK Index
Series will each be 1% of the cash
portion of such redemptions.
Investment Considerations and An investment in shares of the Fund
Risks . . . . . . . . . . . . . involves risks similar to those of
investing in a broadly-based portfolio
of equity securities traded on
exchanges in Germany or the United
Kingdom, such as market fluctuations
caused by such factors as economic and
political developments, changes in
interest rates and perceived trends in
stock prices.
To a limited extent, each Series may
purchase and sell stock index futures
contracts and options thereon related
to the international equity markets and
purchase call options, and write
covered put options, on securities and
indices in the relevant markets. This
involves greater risks than those
customarily assumed by investment com-
panies that do not purchase and sell
stock index and security futures
contracts.
The net asset value of shares of each
Series will fluctuate with changes in
the market value of its portfolio
securities and changes in the market
rate of exchange between the U.S.
dollar and the currency in which the
relevant component of the FT Index is
denominated.
The securities held by the Fund will
primarily be equity securities of non-
U.S. companies, which may not provide
all of the disclosure required by U.S.
law and accounting practice. See
"Investment Considerations and Risks".
Dividends and Capital Gains Dividends from net investment income
Distributions . . . . . . . . . are declared and paid semi-annually;
capital gains, if any, will be
distributed at least annually.
Dividends and capital gains
distributions will be distributed in
U.S. dollars and cannot be
automatically reinvested in additional
shares of the Fund. See "Dividends and
Capital Gains Distributions".
Tax Matters . . . . . . . . . . . A sale of Fund shares is a taxable
event and may result in a capital gain
or loss. Dividend distributions,
capital gain distributions and capital
gains or losses from redemptions and
exchanges of Fund shares may be subject
to federal, state and local taxes.
<PAGE>
<PAGE> 7
Generally, investors other than tax-
exempt entities who purchase Fund
shares with a Fund Basket of securities
will recognize gain or loss equal to
the difference between the fair market
value of the Fund shares received in
the exchange and the sum of the
investors' aggregate basis in the
securities in the Fund Basket that are
surrendered and the Cash Component
paid. When an investor receives
portfolio securities upon redemption,
it will generally also be considered a
taxable event. See "Tax Matters" in
this Prospectus and "Taxes" in the
Statement of Additional Information.
Investors should consult the prospectus
of the Trust for a discussion of the
tax consequences of an exchange of Fund
shares for Redeemable CB Units and
separation into CBs.
<PAGE>
<PAGE> 8
SUMMARY OF FUND EXPENSES
The purpose of the following tables is to assist investors in
understanding the various costs and expenses an investor will bear directly
and indirectly in respect of each Series of the Fund. The tables show all
expenses and fees the Fund is expected to incur and are based on estimates
expressed as a percent of average net assets. "Other Expenses" are
estimated amounts for the current fiscal year. The examples in the tables
should not be considered a representation of past or future expense or
performance. Actual expenses may be greater or less than those shown.
Although the minimum investment in each Series of the Fund is initially
expected to be approximately $2,000,000, the examples are presented for an
investment of $1,000 as required by rules of the Securities and Exchange
Commission (the "SEC").
<TABLE>
Fund Expense Tables
<CAPTION>
The
The Germany UK
Index Index
Series Series
<S> <C> <C>
A. Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of amount of
investment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None None
Cash Component Transaction Fee (as a percentage
of amount of investment)(a) . . . . . . . . . . . . . . . . . . . . . . . .01% .015%
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . . . . . . None None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None None
Cash Redemption Transaction Fee (as a percentage
of total redemption proceeds)(b) . . . . . . . . . . . . . . . . . . . . . .01% .01%
B. Annual Series Operating Expenses (as a percentage of average net assets)
Management Fees(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32% .32%
Distribution Fees (12b-1)(d) . . . . . . . . . . . . . . . . . . . . . . . .25% .25%
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25% .28%
---- ----
Total Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .72% .85%
==== ====
</TABLE>
[FN]
____________
(a) Paid to the Fund and applicable only to the amount of a purchase
represented by the Cash Component to offset the Fund's brokerage and
other transaction costs of investing cash in portfolio securities of
the applicable Series. The cash purchase transaction fee is not a sales
charge. Estimated based on a Cash Component of 1% of the total purchase
price. In addition, an investor purchasing shares will bear the costs
of transferring the securities in his purchase portfolio to the Fund
(approximately $1,600 per purchase transaction for the Germany Index
Series and $4,100 per purchase transaction for the UK Index Series).
See "Purchase of Fund Shares".
(b) Paid to the Fund and applicable only to the amount of a redemption
represented by the Cash Component to offset the Fund's brokerage and
other transaction costs of selling portfolio securities of the
applicable Series to pay redemption proceeds. Estimated based on a
Cash Component of 1% of the total redemption proceeds. In addition,
investors redeeming shares will be required to bear the costs of
transferring the portfolio securities from the Fund (approximately
$1,600 per redemption transaction for the Germany Index Series and
$4,100 per redemption transaction for the UK Index Series).
(c) Management fees which for this purpose are estimated at $6,400
per annum per share (assuming a $2,000,000 net asset value per share)
for either Series, are .30% of the average net assets of the Series
plus 10%, with respect to the Germany Index Series, and 5%, with
respect to the UK Index Series, of the gross dividend and interest
income of each Series. Interest income is received primarily from the
collateral for securities loaned. See "Securities Lending".
<PAGE>
<PAGE> 9
(d) The Distributor will be paid distribution fees of .02% of the
average daily net assets of each Series and reimbursed for payments
made to dealers for shareholder services in an additional amount
of up to .23% of the average daily net assets of each Series.
<TABLE>
<CAPTION>
Germany UK
Index Series Index Series
Example 1 year 3 years 1 year 3 years
<S> <C> <C> <C> <C>
(a) An investor would pay the following expenses on a $1,000
investment in kind (payment with a Fund Basket and a cash
component of $____ of the total purchase price), assuming (1)
a ____ annual return and (2) redemption in kind (delivery of
a Fund Basket and a cash component of $____ of the total
redemption proceeds) at the end of each time period*
(b) An investor would pay the following expenses on the same
investment, assuming no redemptions:
</TABLE>
Explanation of Table
A. Shareholder Transaction Expenses are charges that investors pay
to buy or sell shares of the Fund. See "Purchase of Fund Shares" and
"Redemption of Fund Shares" for an explanation of how these charges apply.
B. Annual Fund Operating Expenses are based on estimated expenses.
Management Fees are paid to DBSC to provide the Fund with investment
advisory, management and certain administrative services. Administration
Fees are paid to State Street, as Administrator, to provide the Fund with
administrative services. Distribution fees are paid to SSCD, as
Distributor, to provide distribution services to the Fund. The Distributor
is also reimbursed for payments made to dealers for shareholder services.
See "Investment Management", "Distributor" and "Fees" for additional
information.
C. Examples of Expenses. The hypothetical examples illustrate the
estimated expenses associated with a $1,000 investment over periods of 1
and 3 years, based on the expenses in the table and an assumed annual rate
of return of 5%. The return of 5% and estimated expenses are for
illustration purposes only and should not be considered indications of
expected Series performance or expenses, both of which may vary. Based on
the annual rate of return of the Germany and UK components of the FT Index
in 1993, the annual rate of return of the Germany Index Series and the UK
Index Series, after estimated expenses applicable to the respective Series,
would have been ____% and ___%, respectively, not including interest earned
on collateral from securities loaned. This return would have been increased
to the extent of any net interest income earned on the collateral from
securities loaned.
* The minimum value of a portfolio of index securities
comprising a Fund Basket for an in-kind purchase of Fund
shares would have been approximately $2,100,000 for the
Germany Index Series and $1,900,000 for the UK Index Series at
September 30, 1994.
<PAGE>
<PAGE> 10
<TABLE>
<S> <C>
Eurofund, Inc. and The Fund, a Maryland corporation, is a non-diversified
its Investment open-end management investment company organized as a
Objective series fund. Each Series of the Fund seeks to provide
investment results that substantially correspond to
the price and yield performance of its corresponding
country, geographic region or industry sector
component of the FT Index.
The Initial Series. The Germany Index Series and the
UK Index Series are the only Series currently issuing
shares. The Board of Directors may authorize the
issuance of additional Series. The Germany Index
Series and the UK Index Series seek to provide
investment results that substantially correspond to
the price and yield performance of the Germany
component of the FT Index and the UK component of the
FT Index, respectively. The investment objective of
each Series is a fundamental policy and cannot be
changed without the approval of the holders of a
majority of the Series' shares. There can be no
assurance that the investment objective of either
Series will be achieved. The Germany component of the
FT Index is an index of stocks traded on the German
stock exchanges. The UK component is an index of
stocks traded on the London Stock Exchange. See "The
FT Index Components". The portfolio of equity
securities held by each Series will substantially
correspond in composition and weighting to the
securities comprising the FT Index component which
such Series represents.
Correlation with the FT Index. The correlation between
the performance of each Series and the respective FT
Index component that each Series seeks to replicate is
expected to be at least 0.95. The ability to correlate
the performance of a Series with that of the
corresponding component of the FT Index will be
affected by, among other things, changes in securities
markets, the manner in which the FT Index is
calculated by the Consortium (as defined below), the
expenses incurred by such Series, the asset size of
such Series, and the timing and size of purchases and
redemptions of shares. Investment changes to
accommodate purchases and redemptions of shares will
be made at the direction of the Adviser to maintain to
the extent practicable the correlation of each Series'
portfolio to its corresponding component of the FT
Index.
Investment Policies Each Series will seek to implement its fundamental
investment objective by a policy of remaining fully
invested in a portfolio of equity securities that will
provide investment results that substantially
correspond to the price and yield performance of its
corresponding component of the FT Index. Under normal
circumstances each Series will invest at least 95% of
its total assets in the securities of its respective
component of the FT Index and the weighting of the
portfolio securities of each Series will substantially
correspond to their proportional representation in the
relevant component of the FT Index. These investment
policies are not fundamental and so may be changed by
the Board of Directors of the Fund without shareholder
approval.
Each Series may invest in high quality short-term
fixed income securities as cash reserves, including
securities denominated in U.S. dollars and in the
principal foreign currency of the portfolio securities
of such Series (the "Series Currency"). Cash and cash
equivalents are normally expected to represent less
than 5% of each Series' assets. To a limited extent
each Series may also purchase stock index futures
<PAGE>
<PAGE>
contracts and options thereon traded on recognized
exchanges in the markets relevant to such Series, and
purchase call options, and write (sell) covered put
options, on securities and indices in such markets,
<PAGE>
<PAGE> 11
in order to invest any uncommitted cash balances in
instruments that achieve a higher correlation with its
corresponding component of the FT Index than the
uninvested cash. See "Investment Policies And
Restrictions--Other Fund Investments" in the Statement
of Additional Information. The activities of the Fund
are subject to certain restrictions that may not be
changed without shareholder approval. See "Investment
Restrictions" in this Prospectus and "Investment
Policies And Restrictions--Investment Restrictions" in
the Statement of Additional Information.
Portfolio Turnover. The Series of the Fund are
permitted to sell securities irrespective of how long
they have been held. Given that the investment
management of each Series is fundamentally "passive"
in that it seeks to provide investment results
corresponding to that of an index, the portfolio
turnover rate for each Series is expected to be under
50%. Ordinarily, securities will be purchased or sold
by a Series only to reflect changes in the composition
of the corresponding component of the FT Index or to
accommodate cash flows required by purchases and
redemptions.
FT-Actuaries World The FT-Actuaries World Indices(TM)/(SM) are jointly
Indices compiled by the Financial Times Limited, Goldman,
Sachs & Co. and NatWest Securities Limited in
conjunction with the Institute of Actuaries and the
Faculty of Actuaries (together, the "Consortium").
The aim of the Consortium is to create and maintain a
series of equity indices for use by the global
investment community.
Selection Criteria. The World Index Policy Committee
("WIPC") makes all policy decisions concerning the FT
Index, including: objectives, selection criteria,
liquidity requirements, calculation methodologies, and
the timing and disclosure of additions and deletions
of constituent securities. The WIPC makes these
decisions in a manner that is consistent with the
stated aims and objectives of the Consortium described
above. With respect to each country, regional or
sector component of the FT Index, the WIPC has
generally sought a minimum of 70% coverage of the
aggregate value of all exchange-traded stocks in such
country, region or sector. The Consortium selects
securities for inclusion in the FT Index on the basis
of several additional criteria, which include:
(1) selecting at a minimum the securities of companies
representing the top 5% of the market capitalization
of exchange-listed companies in markets open to
institutional investors; (2) the exclusion of
companies with an aggregate market value (all classes
of common equity) of less than $100 million at the end
of 1985; (3) the addition of shares of stock on a
selected basis down to either the minimum size
constraint (see (2), above), or 70% of the market
capitalization, or 20% of the number of stocks in the
market (subject to an overall limit of 600 stocks in
any one market); and (4) the exclusion of markets,
companies and securities for which direct holdings of
capital by foreign nationals is prohibited. The
universe of "investible" equities (the "investible
universe") for a particular component of the FT Index
is determined after application of five exclusionary
"screens" to the entirety of exchange-traded equities
in the relevant market. A fuller description of the FT
Index is included in the Statement of Additional
Information.
Market Capitalization Weighting. The proportional
representation of equity securities in the FT Index is
<PAGE>
<PAGE>
based on each security's total market capitalization
(that is, its market price times the number of shares
outstanding) relative to other securities in the same
market. The percentage of a Series' assets to be
invested in each equity security
<PAGE>
<PAGE> 12
will not deviate significantly from such security's
corresponding proportional representation in the
relevant component of the FT Index. The FT Index
treats dividends and distributions as being prorated
and reinvested on each business day, and calculates
the investment performance of the FT Index on that
basis. Each Series will reinvest dividends and
distributions it receives as soon as practical.
The FT Index The Germany Component. The Germany component of the FT
Components Index consists of stocks that are traded on the eight
local German stock exchanges. As of September 30,
1994, stocks of 58 issuers were included. The three
largest stocks and the approximate percentage of the
Germany component of the FT Index represented were
Allianz AG (9.2%), Daimler Benz AG (7.5%) and Siemens
AG (6.9%), for a total of 23.6% of the Germany
component. The ten largest equity issues in the
Germany component represented approximately 55% of the
Germany component. Equities of the banking, insurance,
and chemicals industries represented approximately
16.2%, 15.9% and 14.0%, respectively, or a total of
46.1% of the Germany component. Equities comprising
the Germany component of the FT Index accounted for
approximately 89% of the aggregate investible universe
of the official market.
The UK Component. The UK component of the FT Index
consists of stocks that are traded on the London Stock
Exchange. As of September 30, 1994, stocks of 204
issuers were included. The three largest stocks and
the approximate percentage of the UK component
represented were Shell Transport & Trading (4.1%),
British Telecom (4%) and British Petroleum (3.9%), for
a total of 12% of the UK component. The ten largest
equity issues in the UK component represented
approximately 28% of the UK component. Equities of
utilities, commercial and other banks, and retail
industries represented approximately 13.3%, 10.4% and
8.8% of the UK component, respectively, or a total of
32.5% of the UK component. Equities comprising the UK
component of the FT Index accounted for approximately
88.4% of the aggregate investible universe of the
London Stock Exchange.
Purchase of Fund Purchase Orders. Shares of the Fund will be offered
Shares for sale only through the Fund's Distributor.
Investors that are not DTC Participants must make
appropriate arrangements with a DTC Participant. As a
result, purchase orders made by a DTC Participant may
result in charges to such investor. DTC Participants
may purchase shares of the Fund only by entering into
an account agreement (the "Account Agreement") with
the Distributor and the Fund. Orders are accepted for
shares of a Series only on a Business Day for such
Series. A "Business Day" with respect to a Series is
the period from 9:00 a.m. to 5:00 p.m. (New York time)
on any day on which (i) the NYSE, (ii) the stock
exchange(s) and Fund subcustodian(s) relevant to such
Series and (iii) banking institutions in Massachusetts
are open. The Fund reserves the right to reject an
order to purchase shares of a Series at any time if
any purchaser, upon acceptance by the Fund of such
order, would own 80% or more of the outstanding shares
of such Series, or for any reason, until such order is
confirmed to the purchaser.
For the Distributor's address, see the back cover of
this Prospectus. The Distributor's telephone number is
1-800-328-7408.
<PAGE>
<PAGE>
The Fund Deposit. Fund shares of each Series may be
purchased without a sales charge, at the net asset
value per share next determined after acceptance by
the Distributor of a purchase order in proper form
<PAGE>
<PAGE> 13
(as defined below). Shares of either Series are
purchased by delivery of the "Fund Basket", together
with the "Cash Component". The Fund Basket is a
designated portfolio of equity securities substantially
corresponding in composition and weighting to the
component of the FT Index. The identity and weightings
of the securities comprising the Fund Basket are deter-
mined after the close of business in New York on each
Business Day by the Adviser and made available through
the Distributor on the following morning. Such Fund
Basket will be effective for purchases of shares of a
Series on the third Business Day following the
announcement of such Fund Basket. The Cash Component
will be determined for each Business Day by the Adviser.
It will be equal to the difference between the value
of the Fund Basket effective for the date of purchase
and the net asset value of the Fund shares being
purchased (which will equal the net asset value of the
corresponding Redeemable CB Unit) at the close of
business on such date of purchase. See "Determination
of Net Asset Value". In the event that the Adviser
determines, in its discretion, that a security is
likely to be unavailable or available in insufficient
quantity for delivery to the Fund as part of a Fund
Basket on the date of purchase, the cash equivalent
value of such security may be required or permitted
to be included as part of the Cash Component in lieu
of the security in the Fund Basket. The Fund Basket
and related Cash Component as determined with respect
to a Series for any purchase date are together called
the "Fund Deposit" for that date. The Adviser will make
available through the Distributor on each Business Day
a list of the names of the equity securities and the
required number of shares for each of the securities
included in the Fund Basket for each Series effective
for the third Business Day thereafter. The Distributor
also intends to make available information on each
Business Day with respect to the amount of the Cash
Component of the Fund Deposit as last determined. See
"Delivery of Fund Deposit".
Minimum Purchase. The minimum order for the purchase
of shares of a Series on any Business Day shall be
that number of full and/or fractional shares that can
be purchased for the Fund Deposit specified for such
Series on such Business Day. The value of a Fund
Deposit, exclusive of brokerage costs, would have been
approximately $2,100,000 for the Germany Index Series
and $1,900,000 for the UK Index Series at September
30, 1994. The Fund Deposit represents the minimum
initial and subsequent investment amount for the
purchase of shares of the Fund. The net asset value of
the full and/or fractional Fund shares issued for a
Fund Deposit will equal the net asset value of a
Redeemable CB Unit on a given Business Day. The Fund
Deposit will therefore provide an efficient means for
investors to acquire the appropriate number of shares
of the Fund to exchange for a Redeemable CB Unit, at
their respective net asset values next determined.
Pricing. The public offering price for Fund shares for
which a Fund Deposit has been received and accepted
prior to 4:00 p.m., New York time, on any Business Day
will be based on the net asset value per share
determined at 4:00 p.m., New York time, on that day.
Orders for shares for which a Fund Deposit has been
received and accepted after 4:00 p.m. on any Business
Day will be based on the net asset value next
determined on the following Business Day. See
"Determination of Net Asset Value".
Delivery of Fund Deposit. No shares of the Fund will
be sold and issued for a Fund Deposit until the
purchase order has been received
<PAGE>
<PAGE> 14
by the Distributor from a DTC Participant and is a
otherwise in proper form. "Proper form," as applied to
purchases of shares of either Series, on any Business
Day, means the deposit prior to 12:00 noon New York
time, on such Business Day, in [a specified trust]
account at State Street Bank and Trust Company ("State
Street"), the Fund's custodian (the "Custodian"), or
its subcustodian, of the Fund Basket announced for
such Series on the third prior Business Day; plus the
delivery, or guarantee to deliver by the next Business
Day, to the Fund's Custodian of immediately available
funds by the DTC Participant placing the order equal
to the specified Cash Component plus the cash purchase
transaction fee (as described below). To initiate an
order to purchase Fund shares, the DTC Participant
must advise the Distributor of its intent to submit a
purchase order for shares on a specified Business Day
(an "Issue Day"). If the securities included in the
designated Fund Basket for such Issue Day have been
delivered to the appropriate trust account at the
Fund's custodian or subcustodian, and a purchase order
otherwise in proper form has been received by the
Distributor, Fund shares will be issued on the Issue
Day upon payment of the Cash Component. Because the
net asset value of a Series (and the related
specification of the Cash Component) effective for any
Business Day will be determined at 4:00 p.m., New York
time, on such Business Day, the determination of
whether a Fund Deposit received by the Custodian (or
its subcustodian) during any Issue Day is in "proper
form" for the issue of Series shares on the Issue Day
will be made after 4:00 p.m. If the securities
delivered to the Custodian or its subcustodian by an
investor do not constitute the complete Fund Basket
for the Issue Day, whether due to a fail in the
transfer of securities or otherwise, the Adviser may
(1) waive any deficiency in the Fund Basket delivered
and require the cash equivalent value of any
undelivered securities to be included in the Cash
Component of the Fund Deposit or (2) require that
substitute securities be tendered for the undelivered
securities. In the case of (2), if the transfer of
good title to the substitute securities to the Fund
cannot be completed by the end of the same Business
Day, the purchase order will not be effected. In
placing an order, the DTC Participant becomes
responsible to the Fund for payment of the Cash
Component and related cash purchase transaction fee.
Other investors are responsible for making their own
arrangements with the DTC Participant for payment or
reimbursement to it of the Cash Component amount and
related cash purchase transaction fee the DTC
Participant is obligated to pay the Fund. No shares
will be issued until the transfer of good title to the
Fund of the Fund Basket has been completed. The
determination made by the Adviser as to whether
securities and cash tendered for Series shares meet
the requirements of a Fund Basket and Cash Component
on any Issue Day shall be conclusive. The Fund
reserves the right to reject any order. Tendered
securities will be valued on an Issue Day in the same
manner as the relevant Series values its portfolio
securities for calculation of the Series' net asset
value on such Issue Day.
Cash Component Transaction Fee. A fee will be imposed
by the Fund on the Cash Component of the Fund Deposit
to offset the Fund's brokerage and other transaction
costs of investing cash in portfolio securities. The
transaction fee for purchases of shares of the Germany
Index Series and the UK Index Series will be 1% and
1.5%, respectively, of the Cash Component.
<PAGE>
<PAGE>
The costs of transferring the Fund Basket securities
to the account of the Fund Custodian, presently
estimated at approximately $1,600 per purchase
transaction for shares of the Germany Index Series and
<PAGE>
<PAGE> 15
$4,100 per purchase transaction for shares of the UK
Index Series, will be borne by the investor.
Exchange of Fund Fund shares of either Series may be exchanged for
Shares for Redeemable Redeemable CB Units of the corresponding trust of the
CB Units Trust, at their respective net asset values. As
described above and in the prospectus of the Trust
(the "Trust Prospectus"), The Germany EuroTrust Trust
invests only in the shares of the Germany Index Series
of the Fund and The UK EuroTrust Trust invests only in
the shares of the UK Index Series of the Fund. Each
trust may also hold dividends and other distributions
with respect to such shares. The minimum tender for
exchange that the Trust accepts is full and/or
fractional shares of a Series having a net asset value
equal to the net asset value of the corresponding
Redeemable CB Unit next determined after receipt of an
order for exchange. Redeemable CB Units will be issued
only in whole units. No fractional units will be
issued. Investments in Redeemable CB Units and CBs (as
defined below) entail risks that are distinct from
those of an investment in shares of the Fund. The
Trust and the procedure for exchange of shares of the
Fund for Redeemable CB Units are described in the
Trust Prospectus, a copy of which may be obtained free
of charge from SSCD, the dealer-manager for the
exchange offer. The Trust Prospectus is included as
part of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act of
1933"), filed by SSC, as sponsor, with respect to the
Redeemable CB Units and CBs.
No offer to sell or solicitation of offers to purchase
Redeemable CB Units or any CBs is being made pursuant
to this Prospectus, and any such offers to sell or
solicitation of offers to purchase Redeemable CB Units
or CBs may only be made by means of the Trust
Prospectus.
Separation of Redeemable CB Units may, at the option of the owner,
Redeemable CB Units be separated into a specific number of exchange-
of the Trust into CBs tradeable "CBs(TM)," each representing an identical
fractional component of a Redeemable CB Unit. Thus,
150,000 non-redeemable Germany CBs will be issued for
each Redeemable Germany CB Unit and 100,000 non-
redeemable UK CBs for each Redeemable UK CB Unit. If
the net asset value of a Redeemable Germany CB Unit or
Redeemable UK CB Unit were $2,000,000, each Germany CB
would represent a fractional interest in such net
asset value equal to $13.33 and each UK CB would
represent a fractional interest in such net asset
value equal to $20. See the Trust Prospectus.
It is contemplated that the CBs will be listed for
trading on the NYSE. It is expected that a purchase
of Fund shares, and exchange into Redeemable CB Units,
and their separation into tradeable CBs can be
completed on the same Business Day.
Redemption of Fund Shares of a Series may be redeemed by the registered
Shares holder thereof on any Business Day at their net asset
value next determined after receipt of a redemption
request by the Distributor in proper form. "Proper
form," for a redemption request with respect to any
Business Day, means that the redemption request has
been received by the Distributor prior to [1:00] p.m.
on such Business Day from the DTC Participant in
question. Other investors must make arrangements
through the DTC Participant through which they hold
shares. [Redemption requests received after 1:00 p.m.
will be effected at the net asset value determined on
the following Business Day.] The Fund will redeem
shares of a Series principally on an in-kind basis.
Depending on the number of shares redeemed, redemption
proceeds
<PAGE>
<PAGE> 16
will generally consist of a portfolio of securities
constituting one or more Fund Baskets for such Series
(as determined on the date of the redemption request)
with a value not in excess of the shares being
redeemed on such Business Day, together with a Cash
Component equal to the difference, if any, between the
net asset value of shares being redeemed and the value
of the Fund Baskets included in the redemption
proceeds, less the cash redemption transaction fee (as
hereinafter described). Redemption proceeds may
include, in the discretion of the Adviser, a selection
of portfolio securities held by a Series. The
shareholder will receive the securities comprising the
redemption proceeds as soon as practicable in
accordance with, and subject to, settlement practice
in the primary market for the securities in question.
Any Cash Component will normally be wired to the DTC
Participant on the Business Day next following the day
the redemption is effected. In order to take delivery
of portfolio securities upon redemption of shares of a
Series, the shareholder must maintain appropriate
broker-dealer, bank, or other securities custody
arrangements in each jurisdiction in which any of such
portfolio securities are generally traded. If a
shareholder requesting redemption would, upon the
redemption, be a record holder of less than [half] of
a share, the Fund or the shareholder may elect to
redeem such fractional share, at net asset value, for
a combination of selected portfolio securities of the
relevant Series and cash, to be determined by the
Adviser. Holders of Redeemable CB Units are not Fund
shareholders and must contact the Trust regarding
redemption procedures.
Because the net asset value of each Series is deter-
mined, and redemptions of shares of each Series may
only be effected, on Business Days for such Series,
portfolio securities of each Series may trade, and the
net asset value of each Series may thereby be signif-
icantly affected, on days when shareholders have no
access to redemption of their shares.
A cash redemption transaction fee of 1% will be
imposed on the Cash Component of a redemption of
Shares of either Series to offset brokerage and other
costs of the portfolio transactions that may be
required. The cash redemption transaction fee is
retained by the Fund. Investors redeeming shares of
the Fund that receive portfolio securities will also
bear the costs of transferring portfolio securities
from the Fund to their account or on their order. Such
costs are currently estimated to be $1,600 per redemp-
tion transaction for shares of the Germany Index Series
and $4,100 per redemption transaction for shares of the
UK Index Series. Investors that are not DTC Participants
may also incur charges imposed by the relevant DTC
Participant in connection with redemptions.
Redemption by Telephone. Shareholders of either Series
that have elected to make redemptions by telephone in
their Account Agreements with the Fund may also redeem
shares by telephoning the Distributor at (800) 328-7408
between the hours of 9:00 a.m. and 5:00 p.m., New York
time, on any Business Day. Any shareholder wishing to
effect a telephone redemption that is unable to reach
the Distributor by telephone should make a written
redemption request, as described below. Redemption
requests received by the Distributor prior to [1:00]
p.m., New York time, on a Business Day and otherwise
in proper form will be effected at 4:00 p.m. on such
Business Day. Distribution of securities and cash, if
any, for redemptions will be made within seven days of
receipt by the Fund of the redemption request. Redemp-
tion requests received after such time
<PAGE>
<PAGE> 17
will be effected at the net asset value, and on the
basis of the Fund Basket, determined on the next
applicable Business Day.
Redemption by Mail. The holder of Fund shares may mail
a letter requesting redemption to the Distributor at
2048 Washington Street, Hanover, Massachusetts 02339,
along with the holder's Fund account number and the
number of shares to be redeemed. The request must be
signed exactly as the account is registered. If there
are two or more owners, all must sign. All signatures
must be guaranteed. For special situations involving
retirement or pension accounts or redemptions by
corporations, trustees, etc., additional documentation
may be required.
Investment Management Deutsche Bank Securities Corporation will act as
investment adviser and, subject to the supervision of
the Board of Directors of the Fund, will be respon-
sible for management of the Fund's business affairs,
including certain administrative services. See "Invest-
ment Advisory, Management and Administrative Services--
The Investment Adviser" in the Statement of Additional
Information. DBSC is organized under Delaware law and
is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act")
and as a broker-dealer under the Securities and Exchange
Act of 1934. DBSC is a wholly owned indirect subsidiary
of Deutsche Bank AG, a major German banking institution
("Deutsche Bank").
DBSC is engaged in the securities underwriting and
securities brokerage businesses and provides investment
advisory and administrative services for twelve invest-
ment companies whose shares are sold in Germany. DBSC
is the manager, pursuant to investment advisory and
management agreements, of The Germany Fund, Inc., The
New Germany Fund, Inc., and The Future Germany Fund,
Inc., each a closed-end management company registered
under the Investment Company Act of 1940 (the "1940
Act"). The principal business address of DBSC is 31
West 52nd Street, New York, New York 10019. Subject
to best price together with efficient execution, the
Fund may place orders for the purchase and sale of
securities for the Fund's portfolio with both Deutsche
Bank Securities and Deutsche Bank, among other brokers
and dealers, and incurs brokerage commissions for such
transactions.
Distributor SSCD is the Distributor of the Fund shares. The
Distributor is a registered broker-dealer under the
Securities Exchange Act of 1934, and is a wholly owned
subsidiary of SSC. The Distributor was formed in
December 1989 under Delaware law. The Distributor has
entered into an agreement with the Fund as of
_______________, 1994, (the "Distribution Agreement"),
pursuant to which it will distribute Fund shares. The
Distributor receives a fee from the Fund for its
services. See "Fees". The Distribution Agreement
contains certain provisions for indemnification of the
Distributor by the Fund from certain liabilities,
including liabilities under the Securities Act of
1933. The Distributor has also entered into a dealer
manager agreement with SSC, as sponsor of the Trust,
as of ________________, 1994, and pursuant thereto
acts as Dealer Manager of the Trust for the Exchange
Offer. See "Purchasing Fund Shares--The Distributor"
in the Statement of Additional Information.
Administrator State Street will act as Administrator of the Fund,
and will be responsible for certain clerical, record-
keeping and bookkeeping services, except those as to
which the Adviser will have supervisory functions. See
"Investment Advisory, Management and Administrative
Services--The Administrator" in the Statement of
Additional Information.
<PAGE>
<PAGE> 18
Custodian and Transfer State Street serves as the Custodian for the cash and
Agent portfolio securities of the Fund pursuant to the
Custodian Agreement between State Street and the Fund.
State Street also serves as transfer agent and
dividend disbursement agent (the "Transfer Agent") for
the Fund pursuant to an agreement with the Fund. The
Custodian and Transfer Agent has no part in determining
the investment policies of the Fund or which securities
are to be purchased or sold by the Fund. The principal
business address of State Street is 225 Franklin Street,
Boston, Massachusetts 02110.
Fees For its investment advisory and management services to
the Fund, DBSC will be paid a fee, computed daily and
paid monthly, equal to an annual rate of 0.30% of the
average daily net assets of each Series, plus [40]% of
the gross investment income, less dividends on
securities held in portfolio, of each Series.
The Administrator will receive monthly administrative
fees from the Fund at an annual rate of .08% of the
average daily net assets of each Series up to $125
million, plus .06% of the average daily net assets of
the Series in excess of $125 million up to $250
million and .04% of average daily net assets of the
Series in excess of $250 million. In addition, the
Administrator will be reimbursed for its own out-of-
pocket costs incurred in providing administration
services.
Each Series will pay the Distributor an asset-based
distribution fee at an annual rate of .02% of the
average daily net assets of the Fund for its
distribution services pursuant to a plan (the "12b-1
Plan") adopted by the Board of Directors under Rule
12b-1 under the 1940 Act. The 12b-1 Plan, which is
subject to approval annually by the Board of
Directors, provides for the payment to SSCD of the
distribution fees described above for activities
facilitating the distribution of Fund shares. In
addition, each Series will reimburse the Distributor
up to a maximum of an additional .23% of the average
daily net assets of the Series for payments made to
dealers for providing shareholder services. See
"Purchase of Fund Shares--The Distributor" in the
Statement of Additional Information.
In addition to the fees described above, the Fund will
be responsible for the payment of expenses that will
include, without limitation, organizational expenses,
compensation of the Directors of the Fund,
reimbursement of out-of-pocket expenses incurred by
the Administrator, brokerage costs and litigation and
extraordinary expenses.
Investment An investment in shares of the Fund involves risks
Considerations and similar to those of investing in a broadly-based port-
Risks folio of equity securities traded on exchanges in
Germany or the United Kingdom, such as market fluctu-
ations caused by such factors as economic and politi-
cal developments, changes in interest rates and
perceived trends in stock prices. Investing in the
securities of non-U.S. issuers involves certain risks
and considerations not typically associated with
investing in the securities of U.S. issuers, including
generally greater price volatility; reduced liquidity
and the significantly smaller market capitalization of
most non-U.S. securities markets; more substantial
government involvement in the economy; higher rates of
inflation; greater social, economic, and political
uncertainty and the risk of nationalization or
expropriation of assets and risk of war.
<PAGE>
The Fund is classified as "non-diversified" for
purposes of the 1940 Act, which means the Fund is not
limited by the 1940 Act in the
<PAGE>
<PAGE> 19
proportion of its assets that may be invested in the
securities of a single issuer. However, the Fund
intends to conduct its operations so as to qualify as
a "regulated investment company" for purposes of the
Internal Revenue Code of 1986 (the "Code"), which will
relieve the Fund of any liability for Federal income
tax to the extent that its earnings are distributed to
shareholders. See "Dividends, Distributions and Taxes"
in the Statement of Additional Information.
To a limited extent, the Fund may purchase stock index
futures contracts and options thereon related to the
relevant international equity markets. The Fund may
also purchase call options and write (sell) covered
put options on securities and stock indexes in such
markets. The purpose of purchasing stock index futures
and options thereon, purchasing call options and
writing put options is to expose cash balances and
short term money market investments to the equity risk
and return of the corresponding component of the FT
Index in order to achieve a higher correlation to such
component. It is not expected that the value of
futures contracts, options thereon and put options,
plus the value of the obligations they represent, will
exceed 5% of the Series' total assets. This involves
greater risks than those customarily assumed by
investment companies that do not purchase and sell
futures contracts or write put options.
The net asset value of each Series will fluctuate with
changes in the market value of its portfolio
securities and changes in the market rate of exchange
between the U.S. dollar and the Series Currency.
Because the Fund's assets will generally be invested
in non-U.S. securities, and because substantially all
revenues and income are received in foreign
currencies, whereas Fund distributions are made in
dollars, the dollar equivalent of the Fund's net
assets and distributions would be adversely affected
by reductions in the value of such foreign currencies
relative to the dollar and would be positively
affected by increases in the value of such foreign
currencies relative to the dollar. The Fund does not
expect to engage in currency transactions for the
purpose of hedging against the decline in value of any
Series Currency. Each Series may, however, purchase
forward contracts, currency futures contracts and
options on such contracts and currency call options in
the Series Currency up to the aggregate amount of any
U.S. dollar-denominated assets to maintain maximum
exposure to the Series Currency. See "Investment
Policies and Restrictions--Currency Transactions" in
the Statement of Additional Information.
The shares of the Fund may be more susceptible to any
single economic, political or regulatory occurrence
than the portfolio securities of an investment company
that is more broadly based in the equity securities of
the relevant foreign market than the Fund. In
addition, the securities held by the Fund will
primarily be equity securities of non-U.S. companies,
which do not provide all of the disclosure required by
U.S. law and accounting practice.
Dividends and Capital Dividends from net investment income will be declared
Gains Distributions and paid semi-annually; capital gains, if any, will be
distributed at least annually. Dividends and capital
gains distributions will be distributed in cash and
cannot be automatically reinvested in additional
shares of the Fund. The Fund will inform shareholders
of the amount and nature of all distributions made to
them.
<PAGE>
Each Series intends to qualify for and to elect
treatment as a "regulated investment company" under
Subchapter M of the Code. As a regulated investment
company, a Series will not be subject to U.S. federal
income tax on its income and gains that it distributes
to
<PAGE>
<PAGE> 20
shareholders, if it distributes at least 90% of its
net investment income. Net investment income includes
income from dividends and interest and gains and
losses from currency transaction net of operating
expenses plus the Series' net short-term capital gains
in excess of its net long-term capital losses. Each
Series intends to distribute semi-annually to its
shareholders all of its net investment income except
that any net short term capital gain will be
distributed annually. Each Series intends to
distribute at least annually all of its net capital
gains. Net capital gains consist of net long-term
capital gains in excess of net short-term capital
losses. See "Taxes--Tax Treatment of the Fund" in the
Statement of Additional Information.
Tax Matters Dividends paid out of a Series' net investment income
and distributions of net realized short-term capital
gains in excess of long-term capital losses are
taxable to a U.S. investor as ordinary income.
Distributions of net long-term capital gains, if any,
in excess of net short-term capital losses are taxable
as long-term capital gains, regardless of how long the
investor has held the Series shares.
Dividends and distributions paid by a Series generally
will not qualify for the deduction for dividends
received by corporations. Distributions in excess of
a Series' current and accumulated earnings and profits
will be treated as a tax-free return of capital to
each of a Series' investors to the extent of the
investor's basis in its shares of the Series, and as
capital gain thereafter.
Since more than 50% of the value of a Series' total
assets at the close of its taxable year will consist
of stock or securities of foreign corporations, each
Series will be eligible to file an election with the
Internal Revenue Service to "pass though" to its
investors the amount of foreign income taxes
(including withholding taxes) paid by such Series. The
foreign income taxes passed through may qualify for a
deduction as a foreign tax credit against federal
income taxes. Each investor will be notified within
60 days after the close of the Series' taxable year of
the investor's portion of the foreign income taxes
paid to each country and the portion of dividends that
represents income derived from sources within each
country.
Generally, investors other than tax-exempt entities
who purchase Fund shares with a Fund Basket of
securities will recognize gain or loss equal to the
difference between the fair market value of the Fund
shares received in the exchange and the sum of the
investors' aggregate basis in the securities in the
Fund Basket that are surrendered and the Cash
Component paid. When an investor receives portfolio
securities upon redemption, it will generally also be
considered a taxable event.
The Fund may be required to withhold for U.S. federal
income tax purposes 31% of the dividends and
distributions payable to investors who fail to provide
the Fund with their correct taxpayer identification
number or to make required certifications, or who have
been notified by the U.S. Internal Revenue Service
that they are subject to backup withholding. Backup
withholding is not an additional tax; amounts
withheld may be credited against the investor's U.S.
federal income tax liability.
<PAGE>
The federal income tax consequences relating to the
Trust and owners of Redeemable CB Units and CBs are
complex and are discussed in the Trust Prospectus,
which investors contemplating exchanging Fund shares
for Redeemable CB Units or separating Redeemable CB
Units
<PAGE>
<PAGE> 21
into CBs should read. Such investors should consult
with their own tax advisers regarding the tax
consequences to them of investing in Redeemable CB
Units and CBs.
For further information on taxes see "Taxes" in the
Statement of Additional Information.
Lending of Securities The Fund may lend securities from the portfolio of
each Series to brokers, dealers and other financial
institutions needing to borrow securities to complete
transactions. Because the government securities that
are pledged as collateral to the Fund earn interest,
securities lending enables each Series to earn
additional income, which may partially offset the
expenses of the Series, and thereby reduces the effect
that expenses have on the Series' ability to provide
investment results that substantially correspond to
the price and yield performance of the relevant
component of the FT Index. These loans may not exceed
33 1/3% of a Series' total assets. In connection with
these loans, the Series will receive collateral equal
to at least 100% of the current market value of the
loaned securities, as marked to market each Business
Day, consisting of government securities. Each Series
will pay reasonable administrative and custodial fees
in connection with the loan of securities. The
interest income the Series receives from the loan
collateral is included in the Series' gross investment
income on which a portion of the management fee paid
to DBSC is based. See "Fees". The Fund will pay no
finders fees in connection with lending of its
securities. The Fund will comply with the conditions
for lending established by the SEC. See the Statement
of Additional Information for further details of the
lending transactions.
Investment Each Series intends to observe certain limitations on
Restrictions of the its investment practices. Specifically, a Series may
Fund not:
(i) issue senior securities or borrow money, except
borrowings from banks (which may be from an
affiliate of the Adviser) for temporary or
emergency purposes in an amount up to 33% of the
value of the Series' total assets (including the
amount borrowed), valued at the lesser of cost or
market, less liabilities (not including the amount
borrowed) valued at the time the borrowing is made,
and the Series will not purchase securities while
borrowings in excess of 5% of the Series' total
assets are outstanding, provided, that for purposes
of this restriction, short-term credits necessary
for the clearance of transactions are not
considered borrowings;
(ii) pledge, hypothecate, mortgage or otherwise
encumber its assets, except in an amount up to 33%
of the value of its total assets, to secure
borrowings for temporary or emergency purposes
(collateral arrangements with respect to initial or
variation margin for stock index futures contracts
will not be deemed to be pledges of the Series'
assets);
(iii) purchase a security (other than obligations
of the United States Government, its agencies or
instrumentalities) if as a result 25% or more of
its total assets would be invested in a particular
industry, except that a Series will invest 25% or
more of its total assets in a single industry in
the event that the relevant component of the FT
Index becomes so concentrated.
<PAGE>
Except with regard to a Series' borrowing policy, all
percentage limitations apply immediately after a
purchase or initial investment, and any subsequent
change in any applicable percentage resulting from
market fluctuations or other changes in total or net
assets does not
<PAGE>
<PAGE> 22
require elimination of any security from the Series'
portfolio. The investment limitations described here
may be changed with respect to a Series only with the
approval of the holders of a majority of the shares of
such Series.
For a description of additional investment
restrictions of the Fund, see the Statement of
Additional Information.
Determination of Net Net asset value per share for each Series of the Fund
Asset Value is computed by dividing the value of the net assets of
such Series (i.e., the value of its total assets less
total liabilities) by the total number of shares
outstanding, rounded to the nearest 1/10 of 1%.
Expenses and fees, including the management,
administration and distribution fees, are accrued
daily and taken into account for purposes of
determining net asset value.
The net asset value per share of each Series is
determined as of 4:00 p.m., New York time, on each
Business Day with respect to such Series.
The Fund's portfolio securities are valued based on
their last quoted current sales price on the primary
exchange or market upon which they trade on the
valuation date, but when the market quotations are not
readily available, portfolio securities are valued
based on fair value as determined in good faith by the
Adviser in accordance with procedures adopted by the
Board of Directors of the Fund.
Board of Directors The Board of Directors of the Fund has responsibility
for the overall management of the Fund, including
general supervision of the duties performed by the
Adviser and other service providers. Additional
information about the Board of Directors and the
officers of the Fund appears in the Statement of
Additional Information under the heading "Management
of the Fund--Directors and Officers of the Fund".
Capital Stock The Fund, a Maryland corporation incorporated on
August 8, 1994, is currently comprised of two series
of shares of common stock -- the Germany Index Series
and the UK Index Series. The Board of Directors of the
Fund may designate additional series of common stock
and classify shares of a particular series into one or
more classes of that series.
Each share of common stock issued by the Fund will
have a pro rata interest in the assets of the Fund.
The Fund is authorized to issue 100,000,000 shares of
common stock, par value $.001 per share, including
20,000 shares of common stock of the Germany Index
Series and 50,000 shares of the UK Index Series. Each
share has one vote with respect to matters upon which
a shareholder vote is required; shareholders have no
cumulative rights with respect to their shares.
Fractional shares of the Fund may be voted. Shares of
all classes and series vote together as a single class
except that if the matter being voted on affects only
a particular class or series it will be voted on only
by that class or series and if a matter affects a
particular class or series differently from other
classes or series, that class or series will vote
separately on such matter. Under the Fund's Articles
of Incorporation, the Board of Directors has the
authority to classify or reclassify shares of its
capital stock with such rights, preferences,
qualifications and limitations as the Board of
Directors, in its discretion, may determine.
For so as a Trust holds shares of a Series, such
Series may not liquidate, dissolve or change its
fundamental investment objective so
<PAGE>
<PAGE> 23
as to cease to invest in a portfolio of securities
designed to provide investment results that
substantially correspond to the performance of the
relevant component of the FT Index, except upon the
requisite vote of the shareholders of such Series
under the 1940 Act or pursuant to an order of the SEC
or a no-action position of the Division of Investment
Management. See the Statement of Additional
Information.
Available Information This Prospectus does not contain all the information
included in the Registration Statement filed with the
SEC under the Securities Act of 1933 with respect to
the securities offered hereby, certain portions of
which have been omitted pursuant to the rules and
regulations of the SEC. The Registration Statement,
including the exhibits filed therewith and the
Statement of Additional Information, may be examined
at the office of the SEC, Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington D.C. 20549.
Statements contained in this Prospectus as to the
contents of any agreement or other document referred
to are not necessarily complete, and, in each
instance, reference is made to the copy of such
agreement or other document filed as an exhibit to the
Registration Statement of which this Prospectus forms
a part, each such statement being qualified in all
respects by such reference.
Shareholders' inquiries may be directed to the Fund in
writing, to 31 West 52nd Street, New York, New York
10019, and by telephone, to (212) 474-8000.
/TABLE
<PAGE>
<PAGE> 24
<TABLE>
<S> <S> <C>
Page
Table of Contents General Description of the Fund
of Statement of Investment Policies and Restrictions
Additional In General
Information Non-U.S. Equity Portfolios
The German Equity Markets
The United Kingdom Equity Markets
Other Fund Investments
Lending Portfolio Securities
Investment Restrictions
The FT Index
In General
The World Index Policy Committee
Delivery and Availability
Selection
Management of the Fund
Directors and Officers of the Fund
Certain Affiliated Relationships
Investment Advisory, Management and
Administrative Services
The Investment Adviser
The Administrator, Custodian and Transfer Agent
Brokerage Transactions
Purchasing Fund Shares
Business Days for Share Purchases
The Distributor
Determining Net Asset Value
Valuation of Portfolio Securities by the Fund
Redemption of Fund Shares
Signatures
Suspension of Redemption
Dividends and Distributions
Taxes
Tax Treatment of the Fund
Tax Treatment of Investors
Capital Stock and Shareholder Reports
Counsel and Independent Accountants
Statement of Assets and Liabilities
APPENDICES
A. FT-Actuaries Germany Index Constituency Summary
B. FT-Actuaries UK Index Constituency Summary
/TABLE
<PAGE>
<PAGE> 25
EUROFUND, INC.
Investment Adviser
Deutsche Bank Securities Corporation
31 West 52nd Street
New York, New York 10019
Administrator
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110 _____________
Custodian and Transfer Agent PROSPECTUS
State Street Bank and Trust Company _____________
225 Franklin Street
Boston, Massachusetts 02110
______ __, 1994
Distributor
SSC Distribution Services, Inc.
P.O. Box 1078
Framingham, Massachusetts 01701-1078
Investor Information:
1-800-328-7408
No person has been authorized
to give any information or to make
any representations other than those
________________ contained in this Prospectus in
connection with the offer of the
Fund's shares made by this
TABLE OF CONTENTS Prospectus, and, if given or made,
such other information or
Page representations must not be relied
Prospectus Summary . . . . . . upon as having been authorized by
Eurofund, Inc. and its the Fund. This Prospectus does not
Investment Objective . . . . constitute an offer to sell, or a
Investment Policies . . . . . . solicitation of an offer to buy, by
FT-Actuaries World Indices . . the Fund in any jurisdiction in
The FT Index Components . . . . which such offer to sell or
Purchase of Fund Shares . . . . solicitation may not lawfully be
Exchange of Fund Shares for made.
Redeemable CB Units . . . . .
Separation of Redeemable
CB Units of the Trust
into CBs . . . . . . . . . .
Redemption of Fund Shares . . .
Investment Management . . . . .
Distributor . . . . . . . . . .
Administrator . . . . . . . . .
Custodian and Transfer Agent . SUBJECT TO COMPLETION
Fees . . . . . . . . . . . . . DATED ______________, 1994
Investment Considerations
and Risks . . . . . . . . . .
Dividends and Capital Gains
Distributions . . . . . . . .
Tax Matters . . . . . . . . . .
Lending of Securities . . . . .
Investment Restrictions of
the Fund . . . . . . . . . .
Determination of Net Asset Value
Board of Directors . . . . . .
Capital Stock . . . . . . . . .
Available Information . . . . .
Table of Contents of Statement
of Additional Information . .
<PAGE>
<PAGE>
[FUND-TRUST VERSION]
THE COUNTRYBASKET(TM) INDEX FUND, INC.
CROSS-REFERENCE SHEET
<TABLE>
<S> <S>
Part A
Form N-1A
Item Number Caption in Prospectus
1. Cover Page . . . . . . . . . . . . . Outside Cover Page of Prospectus
2. Synopsis . . . . . . . . . . . . . . Prospectus Summary; Summary of
Fund Expenses
3. Condensed Financial
Information . . . . . . . . . . . . Not applicable
4. General Description of
Registrant. . . . . . . . . . . . . Eurofund, Inc. and its Investment
Objective; Investment Conside-
rations and Risks; FT-Actuaries
World Indices; The FT Index
Components; Lending of Securities;
Investment Restrictions of the
Fund
5. Management of the Fund. . . . . . . . Board of Directors; Investment
Management; Fees; Administrator;
Custodian and Transfer Agent
5A. Management's Discussion of
Fund Performance . . . . . . . . . Not applicable
6. Capital Stock and
Other Securities . . . . . . . . . Capital Stock; Available Infor-
mation; Dividends and Capital
Gains Distributions; Tax Matters
7. Purchase of Securities
Being Offered . . . . . . . . . . . Purchase of Fund Shares;
Distributor; Back Cover of
Prospectus; Fees
8. Redemption or Repurchase . . . . . . Redemption of Fund Shares
9. Pending Legal Proceedings . . . . . . Not applicable
Part B
Form N-1A Caption in Prospectus or Statement
Item Number of Additional Information ("SAI")
10. Cover Page . . . . . . . . . . . . . Outside Front Cover Page of SAI
11. Table of Contents . . . . . . . . . . Table of Contents
12. General Information and
History . . . . . . . . . . . . . . Not applicable
<PAGE>
<PAGE> 2
13. Investment Objectives and
Policies. . . . . . . . . . . . . . Eurofund, Inc. and its Investment
Objective (Prospectus); Investment
Policies (Prospectus); Investment
Restrictions of the Fund
(Prospectus); Investment Policies
and Restrictions (SAI); Brokerage
Transactions (SAI)
14. Management of the Fund . . . . . . . Board of Directors (Prospectus);
Management of the Fund (SAI)
15. Control Persons and Principal
Holders of Securities . . . . . . . Capital Stock and Shareholder
Reports (SAI); Management of the
Fund (SAI)
16. Investment Advisory and
Other Services. . . . . . . . . . . Investment Management
(Prospectus); Fees (Prospectus);
Distributor (SAI); Administrator
(Prospectus); Custodian and
Transfer Agent (Prospectus);
Investment Advisory, Management
and Administrative Services--The
Investment Advisor, --The Admini-
strator, Custodian And Transfer
Agent (SAI); Purchasing Fund
Shares (SAI); Counsel and Inde-
pendent Accountants (SAI)
17. Brokerage Allocation and
Other Practices . . . . . . . . . . Investment Management
(Prospectus); Brokerage
Transactions (SAI)
18. Capital Stock and Other
Securities. . . . . . . . . . . . . Capital Stock (Prospectus);
Capital Stock and Shareholder
Reports (SAI); Taxes (SAI)
19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . . . . Purchase of Fund Shares
(Prospectus); Exchange of Fund
Shares for Redeemable CB Units
(Prospectus); Separation of
Redeemable CB Units of the Trust
into CBs (Prospectus); Purchasing
Fund Shares (SAI); Determining
Net Asset Value (SAI)
20. Tax Status . . . . . . . . . . . . . Tax Matters (Prospectus); Taxes
(SAI)
21. Underwriters. . . . . . . . . . . . . Distributor (Prospectus);
Purchasing Fund Shares (SAI)
<PAGE>
<PAGE> 3
22. Calculation of Performance
Data . . . . . . . . . . . . . . . Not applicable
23. Financial Statements. . . . . . . . . Statement of Assets and
Liabilities (SAI)
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item heading.
<PAGE>
<PAGE>
[FUND-TRUST VERSION]
SUBJECT TO COMPLETION, DATED DECEMBER 1, 1994
EUROFUND, INC.
Statement of Additional Information
_____________, 1994
This Statement of Additional Information is not a Prospectus, and should be
read in conjunction with the Prospectus dated _______, 1994 for Eurofund,
Inc. (the "Fund"), as it may be revised from time to time. A copy of the
Prospectus for the Fund may be obtained without charge from SSC Distribution
Services, Inc. at the address set forth herein. <PAGE>
<PAGE> 2
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
General Description of the Fund . . . . . . . . . . 1
Investment Policies and Restrictions . . . . . . . . 1
In General . . . . . . . . . . . . . . . . . . . . 1
Non-U.S. Equity Portfolios . . . . . . . . . . . 1
The German Equity Markets . . . . . . . . . . . . 1
The United Kingdom Equity Markets . . . . . . . . 2
Other Fund Investments . . . . . . . . . . . . . . 3
Lending Portfolio Securities . . . . . . . . . . . 3
Investment Restrictions . . . . . . . . . . . . . 4
The FT Index . . . . . . . . . . . . . . . . . . . . 6
In General . . . . . . . . . . . . . . . . . . . . 6
The World Index Policy Committee . . . . . . . . 7
Delivery and Availability . . . . . . . . . . . . 8
Selection . . . . . . . . . . . . . . . . . . . . 8
Management of the Fund . . . . . . . . . . . . . . . 13
Directors and Officers of the Fund . . . . . . . 13
Certain Affiliated Relationships . . . . . . . . 13
Investment Advisory, Management and
Administrative Services . . . . . . . . . . . . 14
The Investment Adviser . . . . . . . . . . . . . . 14
The Administrator, Custodian and
Transfer Agent . . . . . . . . . . . . . . . . . . . . 15
Brokerage Transactions . . . . . . . . . . . . . . . 16
Purchasing Fund Shares . . . . . . . . . . . . . . . 17
Business Days for Share Purchases . . . . . . . . 17
The Distributor . . . . . . . . . . . . . . . . . 17
Determining Net Asset Value . . . . . . . . . . . . 18
Valuation of Portfolio Securities by the Fund . . 18
Redemption of Fund Shares . . . . . . . . . . . . . 18
Signatures . . . . . . . . . . . . . . . . . . . 19
Suspension of Redemption . . . . . . . . . . . . 19
Dividends and Distributions . . . . . . . . . . . . 19
Taxes . . . . . . . . . . . . . . . . . . . . . . . 19
Tax Treatment of the Fund . . . . . . . . . . . . 19
Tax Treatment of Investors . . . . . . . . . . . . 20
Capital Stock and Shareholder Reports . . . . . . . 22
Counsel and Independent Accountants . . . . . . . . 23
Statement of Assets and Liabilities . . . . . . . . 24
APPENDICES
____________________
<PAGE>
<PAGE> ii
"CB", "Germany CB" and "UK CB" are trademarks of
Deutsche Bank Securities Corporation.
"FT-Actuaries World Indices", "FT-Actuaries World
Index" and "FTAWI" are trade and service marks of The Financial
Times Limited, and used under license by DBSC. The Fund is an
authorized sublicensee thereof.
____________________
THE FT-ACTUARIES WORLD INDICES (THE "FT INDEX") [COPYRIGHT
199_] ARE OWNED BY AND JOINTLY COMPILED BY THE FINANCIAL
TIMES LIMITED, GOLDMAN, SACHS & CO. AND NATWEST SECURITIES
LIMITED (THE "COMPILERS") IN CONJUNCTION WITH THE INSTITUTE
OF ACTUARIES AND THE FACULTY OF ACTUARIES (THE "ACTUARIES").
NONE OF THE COMPILERS OR THE ACTUARIES IS INTENDING BY THIS
DOCUMENT TO OFFER OR SOLICIT TO BUY OR SELL ANY SECURITIES.
EACH OF THE COMPILERS, THE MEMBERS OF THE ACTUARIES AND
THEIR RESPECTIVE CLIENTS AND OFFICERS MAY HAVE A POSITION OR
ENGAGE IN TRANSACTIONS IN ANY OF THE SECURITIES MENTIONED.
NONE OF THE COMPILERS OR THE ACTUARIES MAKES ANY WARRANTY
EXPRESSLY OR IMPLIEDLY AS TO THE MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE FT INDEX OR ANY PRODUCT OR
SECURITIES DESCRIBED IN THIS DOCUMENT (THE "PRODUCTS") OR IS
RESPONSIBLE FOR THE CONSTRUCTION OR OPERATION OF THE
PRODUCTS OR FOR THE PERFORMANCE OF OR FOR ANY ERROR IN THE
FT INDEX OR THE PRODUCTS OR IS UNDER ANY OBLIGATION TO
ADVISE ANY PERSON OF ANY ERROR IN THE FT INDEX OR THE
PRODUCTS. NONE OF THEM GIVES ANY ASSURANCE REGARDING THE
CONTINUED CALCULATION OR PUBLICATION OF THE FT INDEX OR ANY
CHANGES IN THE CONSTITUENTS OR IN THE METHODOLOGY USED IN
ITS CALCULATION.
Unless otherwise specified, all references in this Statement
of Additional Information to "dollars", "US$" or "$" are to
United States dollars, all references to the "DM" are to the
Deutsche mark and all references to "L" are to pounds sterling.
On __________, 1994, the noon buying rates in New York City for
cable transfers payable in DM and L, as certified for customs
purposes by the Federal Reserve Bank of New York, were DM _______
and L ______, respectively, to US$1.00. Some numbers in this
Statement of Additional Information have been rounded.
<PAGE>
<PAGE> 1
GENERAL DESCRIPTION OF THE FUND
Eurofund, Inc. (the "Fund") is an open-end management
investment company. It was incorporated under the laws of the
State of Maryland on August 8, 1994. The Fund is authorized to
issue shares of common stock, with a par value of $.001 per
share, in one or more series. The Fund's shares of common stock
currently are issued in only two series (each, a "Series"): the
Germany Index Series and the UK Index Series.
INVESTMENT POLICIES AND RESTRICTIONS
The following information supplements and should be
read in conjunction with the sections entitled "Investment
Policies" and "Investment Restrictions of the Fund" in the
Prospectus of the Fund dated __________, 1994 (the "Fund
Prospectus").
In General
Each Series will seek to remain fully invested in a
portfolio of common stocks and other equity securities which will
provide investment results that substantially correspond to the
price and yield performance of the corresponding component of the
FT Index.
Non-U.S. Equity Portfolios
Investing in securities issued by companies domiciled
in countries foreign to the investor, in currencies other than an
investor's local currency, entails certain considerations and
possible risks not typically encountered by the investor in
making investments in its country of residence and in that
country's currency. These considerations include favorable or
unfavorable changes in interest rates, currency exchange rates
and exchange control regulations, and the costs that may be
incurred in connection with conversions between various
currencies. In addition, investments in countries other than the
United States could be affected by other factors generally not
thought to be present in the United States, including less liquid
and less efficient securities markets, greater price volatility,
less publicly available information about issuers, the imposition
of withholding or other taxes, restrictions on the expatriation
of funds or other assets of a Series, higher transaction and
custody costs, delays attendant in settlement procedures and
difficulties in enforcing contractual obligations.
The German Equity Markets
General Background. Equity securities trade on
Germany's eight independent local stock exchanges, of which the
Frankfurt and Dusseldorf exchanges together account for
approximately 86% of the total volume as of ________, 1994. The
Frankfurt Stock Exchange is the principal stock exchange in
Germany. Exchange securities are denominated in German Marks,
the official currency of Germany. German stock exchanges offer
three different market segments in which stocks are traded: the
official market (Amtlicher Handel) <PAGE>
<PAGE> 2
comprises trading in shares which have been formally admitted to
official listing by the admissions committee of the relevant stock
exchange, based upon disclosure in the listing application or
"prospectus"; the unlisted market (Geregelter Markt) comprises of
trading in shares not in the official listing whose companies are
exempt from issuing a prospectus; and the unofficial, unregulated,
over-the-counter market (Freiverkehr). Only shares traded on the
official market are eligible for inclusion in the Germany
component of the FT Index.
Reporting, Accounting, and Auditing. German reporting,
accounting, and auditing standards differ from U.S. standards in
important respects. German corporations, other than subsidiaries
of U.S. companies, normally do not provide all of the disclosure
required by U.S. law and accounting practice, and such disclosure
may be less timely and less frequent than required of public
corporations in the United States.
Structure of Equity Markets. As of September 30, 1994,
the total market capitalization of Germany was approximately DM
687.9, or US$443.4. The aggregate investible market
capitalization, as defined by the World Index Policy Committee
("WIPC") (see "The FT Index--World Index Policy Committee"), as
of September 30, 1994, was approximately DM 565.8 billion, or
U.S.$364.7 billion.
The United Kingdom Equity Markets
General Background. The United Kingdom is Europe's
largest equity market in terms of aggregate market
capitalization. The market capitalization of all publicly held
companies in the United Kingdom is 95% of the Gross Domestic
Product, indicating that United Kingdom equity securities are
more representative of the country's economy than any other
European market. Trading is fully computerized under the Stock
Exchange Automated Quotation System. The London Stock Exchange
has the largest volume of trading in international equities in
the world. Over 60% of cross-border trading in the world, and
approximately 93% of that in Europe, passes through London.
Currently, six stock exchanges in The United Kingdom and Northern
Ireland comprise the Associated Stock Exchange. The network is
centered on representative offices in Glasgow, Belfast,
Manchester, Leeds, Birmingham and London.
Reporting, Accounting, and Auditing. Although United
Kingdom reporting, accounting, and auditing standards are among
the most stringent outside the United States, United Kingdom
reporting, accounting, and auditing standards are not identical
to U.S. standards in some important respects. Some United
Kingdom corporations are not required to provide all of the
disclosure required by U.S. law and accounting practice, and such
disclosure may, in certain cases, be less timely and less
frequent than that required of U.S. corporations.
Structure of Equity Markets. As of September 30, 1994,
the aggregate capitalization of the United Kingdom <PAGE>
<PAGE> 3
markets was approximately L703.4 billion or U.S.$1,091.5 billion.
The aggregate investible market capitalization (as defined by the
WIPC) of these stocks was approximately L656.5 billion, or
U.S.$1,018.3 billion.
Other Fund Investments
Because the investment objective of each Series is to
provide investment results that substantially correspond to the
price and yield performance of the equity securities in the
applicable component of the FT Index, under normal circumstances,
each Series will invest the largest proportion of its assets as
is practical, in the equity securities of the relevant FT Index
component. Under normal conditions this will exceed 95% of the
Series' total assets. The remainder of each Series' total assets
will consist of temporary cash which may be used to purchase
stock index future contracts or options on such contracts and
call options on securities and indices in the relevant market.
Each Series may also write (sell) covered put options on
securities and indices. Regulatory requirements designed to
eliminate leverage accompanying investments in futures contracts,
options on futures contracts and written put options require each
Series to segregate an amount of its assets equal to the
obligation to purchase the assets underlying such contracts. The
assets segregated will be in high grade, short term debt
securities denominated in the currency of the portfolio equity
securities of the particular Series (the "Series Currency"). It
is not expected that the total value of futures contracts,
options thereon and put options, plus the segregated assets and
any other temporary cash and short term investments will exceed
5% of the total net asset value of a Series.
Lending Portfolio Securities
To a limited extent the Fund may lend its portfolio
securities to brokers, dealers and other financial institutions,
provided it receives collateral in U.S. Government securities
which at all times is maintained in an amount equal to at least
100% of the current market value of the securities loaned. By
lending its portfolio securities, each Series can increase its
income through securities lending fees and through the investment
of the collateral, and help offset the effect that the expenses
of the Series have on the ability of such Series to provide
investment results that correspond to that of its corresponding
component of the FT Index. These loans may not exceed 33 1/3% of
each Series' total assets. Each Series will pay reasonable
administrative and custodial fees in connection with the loan of
securities. The interest income the Series receives from the
loan collateral is included in the Series' gross investment
income on which a portion of the management fee paid to Deutsche
Bank Securities Corporation ("DBSC" or the "Adviser") is based.
See "Investment Advisory, Management and Administrative Services
-- The Adviser". The Fund will pay no finders fees in connection
with the lending of its securities.
The Securities and Exchange Commission currently
requires that the following conditions be met whenever <PAGE>
<PAGE> 4
portfolio securities are loaned: (1) the Series must receive
at least 100% collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of the collateral; (3) the
Series must be able to terminate the loan at any time; (4) the
Series must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions on the loaned
securities, and any increase in market value; (5) the Series may
pay only reasonable custodian fees in connection with the loan
and will pay no finders fees; and (6) while voting rights on the
loaned securities may pass to the borrower, the Fund's Board of
Directors (the "Board" or the "Directors") must terminate the
loan and regain the right to vote the securities if a material
event adversely affecting the investment occurs. Each Series
will comply with the foregoing conditions. DBSC will provide
securities lending services to the Fund under its management
agreement with the Fund. See "Investment Advisory, Management
and Administrative Services -- The Adviser".
Currency Transactions. The investment policy of each
Series is to remain fully invested, to the extent practical, in
the securities market or markets relevant to such Series. Hence,
no Series of the Fund expects to engage on a regular basis in
currency transactions for the purpose of hedging against declines
in the value of the Series Currency.
Each Series will engage in currency conversion
transactions for the purpose of meeting the U.S. dollar cash
requirements of redemptions and Series expenses. In addition, to
the extent a Series holds dollar-denominated cash balances or
short term money market-type investments, it may purchase a
forward currency contract or other instruments which would enable
it to purchase the applicable Series Currency at a fixed price in
the future and eliminate the risk that the dollar-denominated
assets of the Series would widen any deviation between the
performance of the applicable FT Index component and the Series
in the event that the value of the Series Currency rose in
relation to the dollar. Since it is not expected under normal
circumstances that dollar-denominated assets would exceed 5% of a
Series' total assets (and would under normal conditions be
significantly less than 5%), forward currency contracts, currency
futures contracts and options on such contracts and currency
options should not exceed 5% of a Series' total assets and net
forward currency contracts and other currency instruments should
not exceed the value of dollar-denominated assets.
Investment Restrictions
The Fund has adopted the following investment
restrictions as fundamental policies with respect to each Series.
These restrictions cannot be changed with respect to a Series
without the approval of the holders of a majority of such Series'
outstanding voting securities. For purposes of the Investment
Company Act of 1940 (the "1940 Act"), a majority of the
outstanding voting securities of a Series means the vote, at an
annual or a special meeting of<PAGE>
<PAGE> 5
the security holders of the Fund, of the lesser of (1) 67% or more
of the voting securities of the Series present at such meeting, if
the holders of more than 50% of the outstanding voting securities
of such Series are present or represented by proxy, or (2) more
than 50% of the outstanding voting securities of the Series. A
Series may not:
1. Issue senior securities or borrow money, except
borrowings from banks (which may be from an affiliate of the
Adviser) for temporary or emergency purposes in an amount up to
33% of the value of the Series' total assets (including the
amount borrowed), valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) valued at the
time the borrowing is made, and the Series will not purchase
securities while borrowings in excess of 5% of the Series' total
assets are outstanding, provided, that for purposes of this
restriction, short-term credits necessary for the clearance of
transactions are not considered borrowings;
2. Pledge, hypothecate, mortgage or otherwise encumber
its assets, except in an amount up to 33% of the value of its
total assets to secure borrowings for temporary or emergency
purposes (collateral arrangements with respect to initial or
variation margin for stock index futures contracts will not be
deemed to be pledges of the Series' assets);
3. Purchase a security (other than obligations of the
United States Government, its agencies or instrumentalities) if
as a result 25% or more of its total assets would be invested in
a particular industry, except that a Series will invest 25% or
more of its total assets in a single industry in the event that
the relevant component of the FT Index is or becomes similarly
concentrated.
4. Purchase, hold or deal in real estate, or oil, gas
or mineral interests or leases, but the Fund may purchase and
sell securities that are issued by companies that invest or deal
in such assets.
5. Act as an underwriter of securities of other
issuers, except to the extent the Series may be deemed an
underwriter in connection with the sale of securities in its
portfolio.
In addition to the investment restrictions adopted as
fundamental policies as set forth above, each Series will observe
the following restrictions, which may be changed by the Board
without a shareholder vote. A Series will not:
1. Sell securities short, but reserves the right to
sell securities short if it owns the security.
2. Invest in commodities or commodity contracts,
except that the Series may buy and sell currencies and forward
contracts with respect thereto, and stock index and currency
futures contracts and options on such futures <PAGE>
<PAGE> 6
contracts as described under "Other Fund Investments" and
"Currency Transactions".
3. Invest in the securities of a company for the
purpose of exercising management or control, or in any event
purchase and hold more than 10% of the securities of a single
issuer. The Fund may vote the securities it owns in the
portfolio of either Series as a shareholder in accordance with
its views.
4. Purchase, sell or write put or call options or
combinations thereof, except as described above under "Other Fund
Investments".
5. Hold illiquid assets in excess of 15% of its net
assets. An illiquid asset is any asset which may not be sold or
disposed of in the ordinary course of business within seven days
at approximately the value at which the Series has valued the
investment.
For purposes of the percentage limitation on each
Series' investments in illiquid securities, foreign equity
securities, though not registered under the Securities Act, will
not be deemed illiquid if they are otherwise readily marketable.
The Consortium (as defined below under "The FT Index")
automatically excludes a security from the FT Index if it fails
to trade for more than fifteen working days within each of two
successive calendar quarters. Therefore, certain illiquid
securities will be excluded from the portfolio securities of each
Series based on its investment objective. The Adviser will
monitor the liquidity of restricted securities in each Series'
portfolio under the supervision of the Fund's Board of Directors.
In reaching liquidity decisions, the Adviser will consider, inter
alia, the following factors:
(1) the frequency of trades and quotes for the security;
(2) the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers;
(3) dealer undertakings to make a market in the security; and
(4) the nature of the security and the nature of the marketplace
in which it trades (e.g. the time needed to dispose of the
security, the method of soliciting offers and the mechanics of
transfer).
If a percentage limitation is adhered to at the time of
investment or contract, a later increase or decrease in
percentage resulting from any change in value or total or net
assets will not result in a violation of such restriction.
THE FT INDEX
In General
The FT Index is jointly compiled by The Financial Times
Limited, NatWest Securities Limited, and Goldman, Sachs & Co.
(together, the "Compilers"), in conjunction with the Institute of
Actuaries and the Faculty of Actuaries <PAGE>
<PAGE> 7
(together with the Compilers, the "Consortium").* The Compilers
are responsible for calculating the FT Index on a day-to-day
basis.
The following summary of the compilation and operation
of the FT Index is based on information provided by Goldman,
Sachs & Co.**
The FT Index offers measures of stock price performance
for the major world stock markets as well as for regional areas,
broad economic sectors, and industry groups. The components of
the FT Index represent separately each of 24 countries, 12
regions grouped by geographic areas, 36 groups classified
according to industry sectors, as well as 7 broad economic
sectors. In total over 1,000 indices are calculated daily across
countries, regions, industry groups, and economic sectors.
The World Index Policy Committee
Daily and quarterly review of and policy decisions made
concerning the FT Index are the responsibility of the WIPC. The
WIPC consists of one representative from each of the Compilers,
two members appointed by the President of the Fellows of the
Institute of Actuaries and Faculty of Actuaries, and three
members from separate and independent international investment
management and advisory firms appointed by the three principals,
[currently County Investment Management Ltd., Rowe Price Fleming
International Inc, and The WM Company]. To the best of the
Adviser's knowledge, WIPC contains no employees of DBSC or
Deutsche Bank AG as of September 30, 1994.
Specifically, the WIPC determines the overall policy
and objectives of the FT Index; establishes selection criteria,
liquidity requirements, calculation methodologies, rules and
representation for inclusion of index components and the timing
and disclosure of additions and deletions of FT Index
constituents; determines what data on distributions to share-
holders and other capital changes are included; and scrutinizes
and ensures that the FT Index is theoretically and operationally
correct and accurate.
[FN]
* "FT-Actuaries World Indices" is a trade and service mark of
The Financial Times Limited, and used under license by DBSC.
The Fund is an authorized sublicensee thereof.
** See The FT-Actuaries World Indices(TM)--An Introduction (The
Financial Times Limited, Goldman, Sachs & Co. and Wood
MacKenzie & Co., Ltd., 1987); FT-Actuaries World
Indices(TM)--Construction and Maintenance Rules (The
Financial Times Limited, Goldman, Sachs & Co. and County
NatWest Securities Limited, 1991); FT-Actuaries World
Indices(TM)-- Construction and Maintenance Rules Amendments
(Goldman, Sachs & Co. and NatWest Securities Limited, April
1993).
<PAGE>
<PAGE> 8
Delivery and Availability
The FT Index's values and related performance figures
for various periods of time are calculated after the close of the
New York Stock Exchange ("NYSE") for publication the following
day in the various editions of the Financial Times. The FT Index
components are reported in local currency, US dollars, and UK
pounds sterling to allow an explicit valuation of the impact of
the currency component on various user groups. On Mondays, the
Financial Times publishes a list of constituent changes
implemented during the previous week, if any. The FT Index
components are calculated on weekdays when one or more of the
constituent markets are open; the indices are syndicated and
published in the financial sections of several newspapers
worldwide. FT Index data also may be purchased electronically
through Goldman, Sachs & Co.
Selection
Country Selection Criteria. In order for a country to
be included in the FT Index, the following criteria must be
satisfied: (1) direct equity investment by non-nationals must be
permitted; (2) accurate and timely data must be available; (3) no
significant exchange controls exist which would prevent the
timely repatriation of capital or dividends; (4) significant
international investor interest in the local equity market must
have been demonstrated; and (5) adequate liquidity must exist.
Allocation of Stocks to Countries. In most instances
stocks are included in the index component of that country where
the company is legally registered and is recognized for taxation
purposes, including regulation of its financial affairs.
However, exceptions are made where the international investor's
recognition of the area of the company's business or its market
listings clearly suggests a different allocation.
Classes Included. Companies whose business is that of
holding equity and other investments (e.g., United Kingdom
investment trusts) are eligible for inclusion. Split capital
investment trusts are excluded. Those whose price is a direct
derivation of underlying holdings (e.g., mutual funds) are also
excluded.
Investibility Screens. All securities are subjected to
the five investibility screens described below.
1. A "Size Screen". All securities comprising the bottom 5% of
any market's capitalization are excluded from the FT Index.
2. A "Total Restriction Screen". A security is totally
excluded from the FT Index if foreign investors are barred
from ownership.
3. A "Partial Restriction Screen". An 'investibility weight'
is attached to those securities for which there are partial
restrictions on foreign ownership. The <PAGE>
<PAGE> 9
capitalization included, therefore, for any such security
generally is restricted to that portion available to
foreign investors.
4. A "'Free Float' Screen". The full capitalization of a
security is eligible for inclusion in the FT Index if 25% or
more of the outstanding securities is publicly available for
investment and not in the hands of a single party or parties
"acting in concert". A government's shareholdings are
included in this total if these holdings have a stock
exchange listing and could be offered to the public. Two or
more identifiable holders of more than 75% of a single
security may be deemed to be acting in concert unless
evidence is available to the contrary.
Securities will also be considered for inclusion, however,
if the existing 'free float' is less than 25% but more than
10% and if the free float capitalization is more than one
half of the large-company cut-off size (described below) in
that particular market. Only that portion of capitalization
deemed to be 'free float' will be eligible for inclusion,
this being considered to be equivalent to the application of
the "partial restriction screen". The free float will be
automatically included if its size is greater than the
large-company cut-off size. The free float may be
considered for inclusion if it is more than one half of but
less than the large company cut-off size.
5. A "Liquidity Screen". A security is deemed to be illiquid,
and therefore ineligible for inclusion, if it fails to trade
for more than 15 working days within each of two successive
quarters.
Stock Selection Criteria. The "investible universe"
consists of the aggregate capitalization of all equity securities
listed on the exchanges monitored within a market after the
application of the investibility screens described above. An
objective of the FT Index in selecting constituent stocks is to
capture 85% of the investible universe. In practice,
representation is maintained within a band of 82%-88% of the
investible universe. For the purposes of the implementation of
the current FT Index rules, a band of 82%-90% is used in order to
restrict turnover to 5%-7% for the larger markets. Consideration
is also given in assembling the equities comprising any market to
the economic sector distribution of the sample chosen. The
objective is that this distribution reflect the overall economic
sector distribution of the investible universe.
The FT Index determines for each market a "Large
Company Cut Off," which is the average market capitalization of
the companies constituting the investible universe of such market
after application of the Size Screen. Companies greater in size
than the "Large Company Cut-Off" qualify for inclusion in an FT
Index component automatically should they remain eligible after
application of all other investibility screens. Stocks in the
investible universe below the Large Company Cut-Off are selected
and added to the existing sample using the methods described
below.
<PAGE>
<PAGE> 10
Stocks are added in descending order of size within
economic sectors such that the sector weighting of any market
corresponds generally to the sectoral make-up of the large
company sample. The selection process continues until the
aggregate capitalization of the sample represents as closely as
possible 85% of the capitalization of the investible universe.
The representation of each market is reviewed as a rolling
process and at any time that there is evidence that
representation of the investible universe has fallen without the
normal band of 82%-88%.
Constituent Changes. Additions may be made to existing
FT Index Components for a number of reasons: (1) the addition
would make the economic sector make-up and market capitalization
distribution of the FT Index component more representative of its
investible universe; (2) a non-constituent has gained in
importance and replaces an existing constituent under the rules
of review established by the WIPC; (3) the FT Index component
represents less than its targeted percentage of the
capitalization of its investible universe (usually in cases where
the investible universe has grown faster than the corresponding
FT Index component); (4) a new, eligible security becomes
available whose total capitalization is 1% or more of the current
capitalization of the relevant FT Index component; (5) an
existing constituent "spins off" a part of its business and
issues new equity to the existing shareholders; (6) changes in
investibility factors lead to a stock being eligible for
inclusion and that stock now qualifies on other grounds.
Deletions from the FT Index may be made for any of the
following reasons: (1) the FT Index component now comprises too
high a percentage of its representative universe; (2) a review by
the WIPC shows that a constituent has declined in importance and
should be replaced by a non-constituent; (3) the deletion of a
security that has declined in importance would make the FT Index
component more representative of the economic sector make-up of
its investible universe; (4) circumstances regarding
investibility and free float change, causing the constituent to
fail the FT Index screening criteria; (5) an existing constituent
is acquired by another entity; (6) the stock has been suspended
from trading for a period of more than ten working days.
Generally, but not in all cases, changes resulting from review by
the WIPC occur at the end of a calendar quarter.
Certain adjustments may be made to the constituents of
an FT Index component immediately. For example, if an existing
constituent is acquired for eligible shares by a quoted non-
constituent in the same market, then the acquiring company is
added to the FT Index immediately if eligible on all other
counts. The existing constituent is deleted immediately.
Calculation Methodologies. The FT Index values are
calculated through widely accepted mathematical formulae, with
the effect that the components are weighted arithmetic averages
of the price relatives of the constituents -- as produced solely
by changes in the marketplace -- adjusted for intervening capital
changes.<PAGE>
<PAGE> 11
The FT Index component values are base-weighted aggregates of the
initial market capitalization, the price of each issue being
weighted by the number of shares outstanding. The FT Index
components are modified to maintain continuity when subsequent
capital changes occur. Values are derived to illustrate the
longer-term changes associated with the value of the component
over time, although still reflecting day-to-day movements. The
arithmetic average is the sum of the values divided by the total
shares in a component. The arithmetic average is suitable so long
as the series of data is not widely dispersed.
Dividends. The FT Index treats dividends as being
reinvested in accordance with a smoothing algorithm. For each
constituent, the implied annual dividend is divided by 260 (an
accepted approximation for the number of business days in a
calendar year). This dividend is then reinvested daily according
to standard actuarial calculations. Distributions effect
adjustments to the base capital and/or the price per share in
accordance with prescribed FT Index standards.
The Germany Component. On September 30, 1994, the
Germany component of the FT Index consisted of 58 stocks with an
aggregate market capitalization of DM 495.9 billion or U.S.$324.9
billion. In percentage terms, the Germany component represented
89% of the aggregate investible market capitalization of the
official market. The ten largest constituents of the Germany
component and the respective approximate percentages of the
Germany component represented by such constituents were, in
order: Allianz (9.2%), Daimler Benz (7.5%), Siemens (6.9%),
Deutsche Bank (6.3%), Veba (5.0%), Bayer (4.7%), Munich Re
(4.1%), Hoechst (3.9%), BASF (3.5%), and Dresdner Bank (3.4%).
As of September 30, 1994, together, the largest five
holdings comprised approximately 35% of the market capitalization
of the Germany component; the largest ten holdings comprised
approximately 55% of the market capitalization of the German
component; and the largest 20 holdings comprised approximately
76% of the market capitalization of the Germany component.
The ten most highly represented industry sectors in the
Germany component of the FT Index and the approximate percentages
of the Germany component represented thereby as of September 30,
1994 were:
<TABLE>
<S> <S> <C>
1) Banks: Commercial & Other 16.2%
2) Insurance Multi/Property/Casualty 15.9%
3) Chemicals 14.0%
4) Automobiles 13.1%
5) Electrical Equipment 7.7%
6) Utilities 5.8%
<PAGE>
<PAGE> 12
7) Mining, Metals, and Minerals 5.4%
8) Machinery and Engineering Services 5.1%
9) Diversified Holding Companies 5.0%
10) Construction & Building Materials 3.4%
</TABLE>
Appendix A hereto contains a complete list of the component
securities of the Germany component as of October 11, 1994.
The UK Component. On September 30, 1994, the UK
component of the FT Index consisted of 204 stocks with an
aggregate market capitalization of approximately L580.2 billion
or U.S.$900.1 billion. In percentage terms, the UK component
represented approximately 88.4% of the aggregate investible
market capitalization of the London Stock Exchange. The ten
largest constituents of the UK Component and the respective
approximate percentages of the UK component represented by such
constituents were, in order: Shell Transport & Trading (4.1%),
British Telecom (4.0%), British Petroleum (3.9%), Glaxo Holdings
(3.1%), BAT Industries (2.4%), British Gas (2.3%), HSBC Holdings
(2.2%), Hanson (2.1%), Marks & Spencer (2.0%) and BTR (1.9%).
As of September 30, 1994 together, the largest five
holdings comprised approximately 17% of the market capitalization
of the UK component; the largest ten holdings comprised
approximately 28% of the market capitalization of the UK
component; and the largest 20 holdings comprised approximately
43% of the market capitalization of the UK component.
The ten most highly represented industry sectors in the
UK component of the FT Index, and the approximate percentages of
the UK component represented thereby as of September 30, 1994
were:
<TABLE>
<C> <S> <C>
1) Utilities 13.3%
2) Commercial Banks 10.4%
3) Retail Trade 8.8%
4) Beverage & Tobacco 8.8%
5) Oil 8.5%
6) Health & Personal Care 8.2%
7) Food & Grocery Products 4.1%
8) Construction & Building Materials 3.6%
9) Media 3.6%
10) Diversified Industrials 3.1%
<PAGE>
<PAGE> 13
Appendix B hereto contains a complete list of the component
securities of the UK component as of October 11, 1994.
MANAGEMENT OF THE FUND
Directors and Officers of the Fund
The Fund's Board consists of _____ Directors. The Board
has the responsibility for the overall management of the Fund,
including general supervision and review of its investment
activities. The Board, in turn, elects the officers of the Fund.
The addresses, principal occupations, and present positions,
including any affiliations with the Adviser, State Street Bank
and Trust Company (the "Administrator") or SSC Distribution
Services, Inc. ("SSCD" or the "Distributor"), of the Directors
and the officers of the Fund and their principal occupations for
the past five years are listed below. As of __________, 1994,
the Directors and officers of the Fund owned of record as a group
less than 1% of the outstanding shares of the Fund. Directors
who are deemed to be interested persons of the Fund, as defined
in the 1940 Act, are indicated by an asterisk (*).
</TABLE>
<TABLE>
<S> <S> <S>
Position with Principal Occupations
Name and Address the Fund During Past Five Years
</TABLE>
Certain Affiliated Relationships
[Describe affiliations of officers/directors with service
providers.]
<PAGE>
<PAGE> 14
INVESTMENT ADVISORY, MANAGEMENT
AND ADMINISTRATIVE SERVICES
The following information supplements and should be read in
conjunction with the sections in the Fund Prospectus entitled
"Investment Management" and "Administrator".
The Investment Adviser
DBSC, a corporation organized under the laws of the State
of Delaware, is a wholly owned direct subsidiary of DB U.S.
Financial Markets Holding Corporation and a wholly owned indirect
subsidiary of Deutsche Bank AG. DBSC is engaged in the
securities underwriting, investment advisory, and securities
brokerage business. It is a member of the NYSE and other
principal U.S. stock exchanges.
DBSC serves as investment adviser to the Fund pursuant to
the Investment Advisory, Management and Administrative Services
Agreement (the "Advisory Agreement") between the Fund and DBSC.
Under the Advisory Agreement, the Adviser, subject to the
supervision of the Fund's Board of Directors and in conformity
with the stated investment policies of each Series, will manage
the investment of each Series' assets. The Adviser will be
responsible for placing purchase and sale orders and providing
continuous supervision of the investment portfolio of each
Series. In addition, the Adviser will provide administrative
services to the Fund that will include negotiating and overseeing
the Fund's contractual arrangements with third-party service
providers. Each Series will pay DBSC an investment advisory and
management fee, computed daily and paid monthly, equal to an
annual rate of .30% of the average daily net assets of such
Series, plus, in the case of each Series, 40% of the gross
investment income, less dividends on securities held in
portfolio. In addition, DBSC will be reimbursed by each Series
for its out-of-pocket costs incurred in providing certain
administrative services. The Advisor will perform securities
lending services for the Fund under the Advisory Agreement. See
"Investment Policies and Restrictions -- Lending Portfolio
Securities". The Advisory Agreement will continue in effect
until ______, 1996, and thereafter will be subject to annual
approval by (1) the Fund's Board or (2) vote of a majority (as
defined in the 1940 Act) of the outstanding voting securities of
the Fund, provided that in either event the continuance also is
approved by a majority of the Fund's Board who are not interested
persons (as defined in the 1940 Act) of the Fund by vote cast in
person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement is terminable without penalty,
on 60 days' notice, by the Fund's Board or by vote of the holders
of a majority (as defined in the 1940 Act) of the Fund's
outstanding voting securities. The Advisory Agreement is also
terminable upon 60 days' notice by DBSC and will terminate auto-
matically in the event of its assignment (as defined in the 1940
Act).
The Advisory Agreement provides that DBSC will not be
liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters <PAGE>
<PAGE> 15
to which the Advisory Agreement relates, except for a loss
resulting from willful misfeasance, bad faith or gross negligence
on the part of DBSC in the performance of its obligations and
duties under the Advisory Agreement.
DBSC will reimburse, on a pro rata basis, each Series for
annual expenses of DBSC which exceed the most stringent limits
prescribed by any state in which shares of the Series are offered
for sale. Currently, the only limitation which the Fund believes
would be applicable requires DBSC to reimburse a Series to the
extent that aggregate operating expenses of the Series (excluding
interest, taxes, brokerage commissions, distribution expenses, if
any, and extraordinary expenses) exceed in any year 2.5% of the
first $30 million of average net assets of such Series, 2.0% of
the next $70 million of average net assets of the Series and 1.5%
of average net assets of the Series in excess of $100 million.
The Administrator, Custodian and Transfer Agent
State Street, a ________ banking corporation, provides
certain administrative services to the Fund, including clerical,
bookkeeping and recordkeeping services not otherwise performed by
the Adviser or the Custodian, pursuant to an Administration
Agreement (the "Administration Agreement") between the Fund and
State Street, which will continue in effect until _____________,
199[ ]. The Administration Agreement is terminable with respect
to the Fund without penalty, on 60 days' notice, by the Fund's
Board. The Administration Agreement is also terminable upon 60
days' notice by State Street.
The Administration Agreement provides that State Street
will not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters
to which the Administration Agreement relates, except for a loss
resulting from willful misfeasance, bad faith or gross negligence
on the part of State Street in the performance of its obligations
and duties under the Administration Agreement.
For its administrative services to the Fund, State Street
is entitled to be paid a fee, computed daily and paid monthly,
equal to an annual rate of .08% of the average daily net assets
of each Series up to $125 million, plus .06% of the average daily
net assets of the Series in excess of $125 million up to $250
million and .04% of the average daily net assets of the Series in
excess of $250 million. In addition, State Street will be
reimbursed by the Fund for its out-of-pocket costs incurred in
providing administrative services.
State Street will also act as Custodian and Transfer Agent
for the Fund. See "Custodian and Transfer Agent" in the Fund
Prospectus.
<PAGE>
<PAGE> 16
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase
and sale of portfolio securities, the Adviser looks for prompt
execution of the order at a favorable price. Generally, the
Adviser works with recognized dealers in these securities, except
when a better price and execution of the order can be obtained
elsewhere. The Fund will not deal with affiliates in principal
transactions unless permitted by exemptive order or applicable
rule or regulation. Since the investment objective of each
Series is investment performance that corresponds to that of an
index, the Adviser does not intend to select brokers and dealers
for the purpose of receiving research services in addition to a
favorable price and prompt execution either from that broker or
an unaffiliated third party. Orders for brokerage transactions
may be placed with Deutsche Bank AG as well as DBSC. The Fund's
policy requires that commissions paid to Deutsche Bank AG and
DBSC be reasonable and fair compared with commissions received
by other brokers in connection with comparable transactions
involving similar securities being purchased or sold on a
securities exchange during a comparable period of time.
Subject to allocating brokerage to receive a favorable price
and prompt execution, the Adviser may select brokers who are
willing to provide payments to third party service suppliers to a
Series, such as the custodian or transfer agent, to reduce
expenses of the Series.
The Adviser will assume general supervision over placing
orders on behalf of the Fund for the purchase or sale of
portfolio securities. If purchases or sales of portfolio
securities of the Fund and one or more other investment companies
or clients supervised by the Adviser are considered at or about
the same time, transactions in such securities will be allocated
among the several investment companies and clients in a manner
deemed equitable to all by the Adviser, taking into account the
sizes of such other investment companies and clients and the
amount of securities to be purchased or sold. In some cases this
procedure could have a detrimental effect on the price or volume
of the security so far as the Fund is concerned. However, in
other cases it is possible that the ability to participate in
volume transactions and to negotiate lower brokerage commissions
will be beneficial to the Fund. The primary consideration is
prompt execution of orders at the most favorable net price.
Portfolio turnover may vary from year to year, as well as within
a year. High turnover rates are likely to result in
comparatively greater brokerage expenses. The overall
reasonableness of brokerage commissions is evaluated by the
Adviser based upon its knowledge of available information as to
the general level of commissions paid by other institutional
investors for comparable services.
<PAGE>
<PAGE> 17
PURCHASING FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund Prospectus entitled
"Purchase of Fund Shares".
Business Days for Share Purchases
Shares of a Series may be purchased only on a "Business
Day". A Business Day with respect to a Series is the period from
9:00 a.m. to 5:00 p.m. (New York time) on any day on which
(i) the NYSE, (ii) the stock exchange(s) and Fund subcustodian(s)
relevant to such Series and (iii) banking institutions in
Massachusetts are open for business. As of the date of this
Statement of Additional Information, the NYSE observes the
following holidays: New Year's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
Presidents' Day.
The Distributor
Shares of the Fund will be continuously offered for sale by
the Fund's principal underwriter and Distributor, SSCD. The
Distributor will serve as the Fund's principal underwriter
pursuant to an agreement which will continue until ________,
1996, and which is renewable annually thereafter (the
"Distribution Agreement"). The Distributor will act as agent for
the Fund.
Pursuant to a plan adopted by the Board of Directors of the
Fund for each Series under Rule 12b-1 under the 1940 Act (each, a
"12b-1 Plan"), each Series will pay the Distributor distribution
services fees, calculated daily and payable monthly, on an
annualized basis, of .02% of the average daily net assets of the
Series. Such monies may be used to pay for any activities or
expenses primarily intended to result in or required for the sale
of the Series' shares, including promotion and marketing
activities related to the sale of shares of the Series, expenses
related to and incurred with respect to the preparation, printing
and distribution of prospectuses and sales literature,
communications to and with shareholders and advertisements. In
addition each Series will reimburse the Distributor up to a
maximum of an additional .23% of the average daily net assets of
the Series for payments made to broker-dealers or other persons
for providing shareholder services. The fees under the Plan will
be borne solely by shares of the relevant Series; however, such
fees will not be used to pay the marketing or distribution
expenses of any other Series. The continuation of the 12b-1 Plan
of each Series is subject to the annual approval of the Fund's
Board, including a majority of the Directors who are not
interested persons of the Fund and have no direct or indirect
financial interest in the operation of such 12b-1 Plan.
Each Distribution Agreement will provide that it may be
terminated at any time, without the payment of any penalty, (i)
by vote of a majority of the Directors who are <PAGE>
<PAGE> 18
not interested persons of the Fund (as defined by the 1940 Act)
or (ii) by vote of a majority (as defined in the 1940 Act) of
the outstanding voting securities of the relevant Series, on at
least 60 days' written notice to the Distributor. Each
Distribution Agreement is also terminable upon 60 days' notice by
SSCD and will terminate automatically in the event of its
assignment (as defined in the 1940 Act).
The Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is a
wholly-owned subsidiary of SuperShare Services Corporation, a
Delaware corporation.
DETERMINING NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund Prospectus entitled
"Determination of Net Asset Value".
Each Series calculates net asset value per share as of
4:00 p.m., New York time, on each Business Day for such Series.
Valuation of Portfolio Securities by the Fund
Portfolio securities held by a Series are valued, for
purposes of determining the net asset value per share of the
Series, at the last quoted sales price on the securities exchange
or national securities market on which such securities are
primarily traded. The value of portfolio securities delivered to
the Fund as part of the in-kind deposit of portfolio securities
(the "Fund Basket") required for a purchase of Fund shares on any
Business Day will be determined on the same basis. Securities
not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the
average of the most recent bid and asked prices, or if no asked
price is available, at the bid price. Any securities or other
assets for which recent market quotations are not readily
available are valued at fair market value as determined in good
faith in accordance with procedures approved by the Fund's Board.
Expenses and fees, including the investment advisory,
administration and distribution fees of each Series, are accrued
daily and taken into account for the purpose of determining the
net asset value of shares of that Series.
REDEMPTION OF FUND SHARES
See "Redemption of Fund Shares" in the Fund Prospectus for
information concerning redemptions of Fund shares. The following
information supplements and should be read in conjunction with
such section.
<PAGE>
<PAGE> 19
Signatures
Written redemption requests must be signed by each
stockholder, including each holder of a joint account. Each
signature must be guaranteed by a commercial bank or trust
company or by a member firm of the NYSE. Guarantees must be
signed by an authorized signatory of the bank, trust company or
member firm and "Signature-Guaranteed" must appear with the
signature. The Distributor may request further documentation
from corporations, executors, administrators, trustees or
guardians. The Distributor will accept other suitable
verification arrangements from foreign investors.
Suspension of Redemption
The right of redemption may be suspended or the date of
payment postponed with respect to any Series (1) during any
period when the NYSE is closed (other than customary weekend and
holiday closings); (2) when trading in the markets the Series
normally utilizes is restricted, or when an emergency exists as
determined by the Securities and Exchange Commission so that
disposal of the Series' portfolio securities or determination of
its net asset value is not reasonably practicable; or (3) for
such other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's stockholders.
DIVIDENDS AND DISTRIBUTIONS
See "Dividends and Distributions" in the Fund Prospectus
for information concerning the Fund's policy on dividends and
distributions.
TAXES
The following information supplements and should be read in
conjunction with the section in the Fund Prospectus entitled
"Dividends, Distributions and Taxes".
Tax Treatment of the Fund
Each Series is expected to be treated as a separate entity
for tax purposes. As such, each Series must calculate its income
and losses, and satisfy the requirements as to its status as a
regulated investment company, separately. It is intended that
each Series will qualify for and elect treatment as a regulated
investment company (a "RIC") under the Internal Revenue Code of
1986, as amended (the "Code"). Such treatment generally will
relieve a Series of federal income tax liability to the extent it
distributes its net investment income and net capital gain income
to stockholders.
To qualify for treatment as a RIC, a company must annually
distribute at least 90 percent of its net investment company
taxable income (which includes dividends, interest and net
short-term capital gains) and meet several <PAGE>
<PAGE> 20
other requirements. Among such other requirements are the
following: (1) at least 90 percent of the company's annual gross
income must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other
disposition of stock or securities or foreign currencies, or
other income (including gains from options, futures or forward
contracts) derived with respect to its business of investing in
such stock, securities or currencies; (2) at the close of each
quarter of the company's taxable year, (a) at least 50 percent of
the market value of the company's total assets must be
represented by cash and cash items, U.S. government securities,
securities of other RICS and other securities, with such other
securities limited for purposes of this calculation in respect of
any one issuer to an amount not greater than 5% of the value of
the company's assets and not greater than 10% of the outstanding
voting securities of such issuer, and (b) not more than 25 percent of
the value of its total assets may be invested in the securities of any
one issuer or of two or more issuers that are controlled by the
company (within the meaning of Section 851(b)(4)(B) of the Code)
that are engaged in the same or similar trades or businesses or
related trades or businesses (other than U.S. government securities or
the securities of other RICs); and (3) the company may not derive
30 percent or more of its annual gross income from the sale or
other disposition of (i) stock or securities, (ii) options,
futures or forward contracts on (other than options, futures or
forward contracts on foreign currencies) stock or securities or
(iii) foreign currencies (including options, futures and forward
contracts on foreign currencies) not directly related to the
company's principal business of investing in stock, securities or
foreign currencies, in each case held for less than three months.
Any dividend declared by a Series in October, November or
December of any calendar year and payable to investors of record
on a specified date in such a month shall be deemed to have been
received by each investor on December 31 of such calendar year
and to have been paid by the Series not later than such
December 31 so long as the dividend is actually paid by the
Series during January of the following calendar year.
Tax Treatment of Investors
Although the matter is not free from doubt, the acquisition
of shares of the Fund for securities, followed immediately by an
exchange of such shares for redeemable units ("Redeemable CB
Units") of The EuroTrust Trust (the "Trust"), should be treated
for tax purposes as a direct acquisition of Redeemable CB Units
for securities. A person other than a tax-exempt entity who
exchanges securities for shares of the Fund and then immediately
exchanges such shares for Redeemable CB Units generally will
recognize gain or loss equal to the difference between the market
value of such Redeemable Units and the sum of his aggregate basis
in the securities surrendered and the Cash Component paid. The
federal income tax consequences relating to the Trust and owners
of the Redeemable CB Units and the exchange-traded non-redeemable
units into which the Redeemable Units are<PAGE>
<PAGE> 21
separable (the "CBs") are complex and are discussed under
"Certain Federal Income Tax Consequences" in the Trust Prospectus.
Investors contemplating exchanging Fund shares for Redeemable CB
Units or separating Redeemable CB Units into CBs are urged to read
that section and consult with their own tax advisers regarding the
tax consequences to them of investing in Redeemable CB Units and CBs.
Generally, persons who are not subject to tax on their
income will not be taxed upon distributions from the Fund (unless
the persons are subject to the U.S. federal tax on unrelated
business income and incur indebtedness allocable to shares of the
Fund). The Series' dividends and distributions will not be a
specified preference item for purposes of the U.S. federal
alternative minimum tax imposed on individuals and corporations.
Other investors will be taxed upon the distribution of dividends
from the Fund. Dividends paid from net investment income will
generally be taxable as ordinary income for federal income tax
purposes. Distributions in excess of a Series' current and
accumulated earnings and profits will, as to each of the Series'
investors, be treated as a tax-free return of capital, to the
extent of the investor's basis in his shares and as a capital
gain thereafter. Investors should consult their own tax advisers
regarding the treatment of distributions under applicable state
law. Dividends of net investment income from a Series generally
will not qualify for the dividends-received deduction permitted
to corporate owners under Section 243 of the Code. Regardless of
the length of time a stockholder has held his shares,
distributions designated as being from a Series' net long-term
capital gains (i.e., the excess of net long-term capital gains
over net short-term capital losses) will be taxable as such.
Dividends declared in October, November or December and paid
during January of the following calendar year are treated under
the Code as received in the year they are declared.
A distribution by a Series will reduce its net asset value
per share. Such a distribution may be taxable to the investor as
ordinary income or capital gain as described above even though,
from an investment and financial reporting standpoint, it may
constitute a return of capital.
Upon the sale or exchange of Fund shares, an investor will
realize a taxable gain or loss equal to the difference between
the amount realized and the investor's basis in the shares. Such
gain or loss will be treated as capital gain or loss, if the
shares are capital assets in the investor's hands, and will be
long-term or short-term depending upon the investor's holding
period for the shares. Any loss realized on a sale or exchange
will be disallowed to the extent that the shares disposed of are
replaced within a 61-day period beginning 30 days before and
ending 30 days after the disposition of the shares. In such a
case, the basis of the shares acquired will be adjusted to
reflect the disallowed loss. Any loss realized by an investor on
a disposition of the Fund's shares held by the investor for six
months or less will be treated as a long-term capital loss for
U.S. income tax purposes to the extent of any distributions of
long-term capital gains received by<PAGE>
<PAGE> 22
the investor (and any amounts retained by the fund that were
designated as undistributed capital gains), with respect to such
shares.
The Fund will make annual reports of the federal income tax
status of distributions to owners of shares. Such reports will
set forth the dollar amounts of dividends from net investment
income and capital gains dividends and the investor's portion of
the foreign income taxes paid to each country and the portion of
dividends that represents income derived from sources within each
country. Investors should consult their own tax advisers to
determine the consequences of holding shares in a Series under
state, local or other tax law.
The Fund may be required to withhold for U.S. federal
income tax purposes 31% of the dividends and distributions
payable to investors who fail to provide the Fund with their
correct taxpayer identification number or to make required
certifications, or who have been notified by the U.S. Internal
Revenue Service that they are subject to backup withholding.
Corporate investors and other investors specified in the Code are
or may be exempt from such backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may
be credited against the shareholder's U.S. federal income tax
liability.
The foregoing discussion is a summary only and is not
intended as a substitute for careful tax planning. Purchasers of
shares of the Fund should consult their own tax advisors as to
the tax consequences of investing in such shares, including under
state, local and other tax laws. Finally, the foregoing
discussion is based on applicable provisions of the Code,
regulations, judicial authority and administrative
interpretations in effect on the date hereof. Changes in
applicable authority could materially affect the conclusions
discussed above, and such changes often occur.
CAPITAL STOCK AND SHAREHOLDER REPORTS
Each Fund share has one vote as to matters affecting the
holder thereof and, when issued and paid for in accordance with
the terms of purchase described in the Fund Prospectus under
"Purchase of Fund Shares", will be fully paid and non-assessable.
Shares have no preemptive, subscription or conversion rights and
are freely transferable. The Fund is authorized to issue
100,000,000 shares of Common Stock, including 20,000 shares of
the Germany Index Series and 50,000 shares of the UK Index
Series.
Shares of all Series vote together as a single class except
that if the matter being voted on affects only a particular
Series it will be voted on only by that Series and if a matter
affects a particular Series differently from other Series, that
series will vote separately on such matter. Fractional Shares of
the Fund will be issued and may be voted. The Fund does not
expect to hold meetings of shareholders for the purpose of
electing directors as long <PAGE>
<PAGE> 23
as two-thirds of the Directors then in office have been elected
by the shareholders. Each share is entitled to participate equally
in dividends and distributions declared by the Board with respect
to the relevant Series, and in the net distributable assets of such
Series on liquidation. When issued, the shares will be fully paid
and nonassessable, and have no preemptive, conversion or exchange
rights. Shareholders are entitled to require the Fund to redeem
their shares.
A registered investment company incorporated in Maryland,
such as the Fund, is not required to hold annual shareholder
meetings if its charter or bylaws provide that such meetings
would not be held in any year such a meeting is not required to
be held for certain purposes specified in the 1940 Act.
Accordingly, the Fund's bylaws provide that it is not required to
hold annual shareholder meetings. Under the Fund's bylaws, any
director may be removed by the vote of the holders of a majority
of the shares represented at a shareholders' meeting, provided a
quorum is present at the meeting. The Fund does not intend to
hold shareholder meetings unless required to for certain purposes
specified in the 1940 Act.
Investors should note that it is expected that during the
term of The Eurofund Trust (the "Trust"), most of the Fund's
outstanding shares will be held and voted by the holders of the
redeemable units of the Trust (the "Redeemable CB Units") and the
fractional interests into which the Redeemable CB Units are
separable. The Fund will reimburse the Trust for reasonable
expenses incurred by the Trust in distributing proxy solicitation
materials and reports which are generally delivered to holders of
Fund shares.
Reports. The Fund will issue to its shareholders
semiannual reports containing unaudited financial statements and
annual reports containing financial statements audited by independent
accountants approved by the Fund's directors and by the
shareholders when meetings are held.
Shareholder Inquiries. Shareholder inquiries may be made
by writing to the Fund, c/o 31 West 52nd Street, New York, New York
10019.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Sullivan & Cromwell, 125 Broad Street, New York, New York
10004, is counsel to the Fund and has passed upon the validity of
the Fund shares. Price Waterhouse L.L.P., 1177 Avenue of the
Americas, New York, New York 10036, serves as the independent
accountants of the Fund.<PAGE>
<PAGE> 24
STATEMENT OF ASSETS AND LIABILITIES
Eurofund, Inc.
Statement of Assets and Liabilities
December __, 1994
U.K. Germany
Index Index
Series Series
Assets
Cash $ XX,XXX $ XX,XXX
Deferred organization
expenses XX,XXX XX,XXX
Total assets XXX,XXX XXX,XXX
Liabilities
Organization expenses
payable. XXX<XXX XXX<XXX
Net assets $ XX,XXX $ XX,XXX
Shares outstanding ($.001 par
value; 20,000 and 50,000
shares authorized) X,XXX X,XXX
Net asset value per share $ XX.XX $ XX.XX
Composition of net assets
Capital stock
Paid-in capital $ XX,XXX $ XX,XXX
Net assets, December __,
1994 $ XX,XXX $ XX,XXX
See Notes to financial statements.
<PAGE>
<PAGE> 25
EUROFUND, INC.
Notes to Financial Statements
December [ ], 1994
1. General
Eurofund, Inc. (the "Fund") was incorporated under the laws of
the State of Maryland on August 8, 1994. The Fund is registered
under the Investment Company Act of 1940 (the "Act") as an open-
end management investment company. The Fund currently has two
common stock series, the Germany Index Series and the UK Index
Series (the "Series").
Deutsche Bank Securities Corporation ("DBSC"), a subsidiary of
Deutsche Bank AG, serves as investment adviser to the Fund.
State Street Bank and Trust Company ("State Street") serves as
administrator and custodian to the Fund, and SSC Distribution
Services, Inc. ("SSCD"), a wholly owned subsidiary of SuperShare
Services Corporation ("SSC") serves as distributor of the Fund.
The Series have had no operations other than the sale to {TBA} of
{#} shares of the Germany Index Series for proceeds of {$} and
{#} shares of the UK Index Series for proceeds of {$}.
The costs of organizing the Fund and registering its shares will
be paid initially by {TBA} and reimbursed by the Fund. These
costs in turn will be equitably allocated to each Series as
provided for by the Fund's Board. Such organization costs have
been deferred and will be amortized ratably over a period of
sixty months from the commencement of operations of the Series.
If any of the initial shares are redeemed before the end of the
amortization period, the proceeds of the redemption will be
reduced by the pro rata share of the unamortized organization
costs.
2. Agreements and Transactions with Affiliates
The Fund has an Investment Advisory, Management, and
Administrative Services Agreement ("Advisory Agreement") with
DBSC. As investment adviser, DBSC manages the investments of
each of the Series. For its services, DBSC is entitled to
receive a fee from each Series at an annual rate of .30% of the
average daily net assets of such Series, plus, in the case of the
Germany Index Series, 10% of the gross investment income of such
Series, and in the case of the UK Index Series, 5% of the gross
investment income of such Series. The Advisory Agreement also
provides that DBSC will be reimbursed for out-of-pocket expenses
incurred in providing certain administrative services.
The Fund has an Administration Agreement with State Street.
Under the Administration Agreement, State Street assists in
supervising the operations of the Series. For its services,
State Street is entitled to receive a fee from each Series at an
annual rate of .08% of the average daily net assets of such
Series up to $125 million, .06% of the average daily net assets
of such Series in excess of $125 million up to $250 million, and
.04% of the average daily net assets of such Series in excess of
$250 million. The Administration Agreement also provides that
State Street will be reimbursed for out-of-pocket expenses
incurred in providing certain services. {Certain officers of the
Fund are "affiliated persons" (as defined in the Act) of State
Street.}
<PAGE>
<PAGE> 26
EUROFUND, INC.
Notes to Financial Statements
December [ ], 1994
The Fund has a Distribution Agreement with SSCD. Under the
Distribution Agreement, SSCD serves as Distributor of the shares
of the Series. The Fund also has established a 12b-1 Plan (the
"Plan"), pursuant to which each Series pays the Distributor for
activities intended to result in the sale of shares of the Series
at an annual rate of .02% of the average daily net assets of such
Series. The Plan also calls for each Series to reimburse the
Distributor up to a maximum annual rate of .23% of the average
daily net assets of such Series for payments to parties providing
shareholder services.
3. Capital Shares
Shares of the Germany Index Series and UK Index Series are
offered at net asset value without a sales charge, in exchange
for an in-kind deposit of a designated portfolio of securities
specified by the Distributor each day, plus a specified amount of
cash. Redemptions of the shares of the Series are made in
portfolio securities. A transaction fee applies to the cash
portion of a purchase in the amount of 1% and 1.5% of such cash
portion in the case of the Germany Index Series and the UK Index
Series, respectively. Shares of each Series may be exchanged for
Redeemable CB Units of the corresponding trust of The EuroTrust
Trust (the "Trust"), a unit investment trust sponsored by SSC, as
explained in the prospectus for the Trust. Such trusts invest
solely in the shares of the corresponding Series of the Fund.
Such Redeemable CB Units are separable into exchange-tradeable
fractional interests. The trusts each bear their own expenses,
which are separate from those of the Series.
<PAGE>
<PAGE> 27
APPENDIX A
<TABLE>
FT-Actuaries World Indices
Germany Component as of 11 October 1994
<CAPTION>
Weight
Index Market in FT
Industry Capitalization Index
Constituent Name Sector (Millions of US$) (%)
<S> <C> <C> <C>
ALLIANZ AG HLDG. Financial, Insurance 30,327.169 9.104
DAIMLER BENZ Consumer Goods/Ser 26,080.016 7.829
SIEMENS Capital Goods 22,895.567 6.873
DEUTSCHE BANK Financial, Insurance 21,899.384 6.574
VBBA Financial, Insurance 16,638.881 4.995
BAYER Basic Industries 15,244.296 4.576
MUNICH RE (PART PD. REG) Financial, Insurance 13,186.215 3.958
HOECHST Basic Industries 12,260.123 3.680
BASF Basic Industries 11,708.173 3.515
DRESDNER BANK Financial, Insurance 11,234.796 3.372
RNE Utilities 9,885.394 2.967
BMN (BR.) Consumer Goods/Ser 9,367.616 2.812
MANNESMANN Capital Goods 8,456.973 2.539
VOLKSWAGEN REGD. Consumer Goods/Ser 8,222.553 2.468
COMMERZBANK Financial, Insurance 7,533.852 2.261
VIAG Basic Industries 6,616.870 1.986
BAY. BYP.-U. WECHSEL
BANK Financial, Insurance 6,308.313 1.894
THYSSEN Basic Industries 5,925.669 1.779
BAYERISCHE VEREINSBANK Financial, Insurance 5,560.247 1.669
HOCHTIEF Basic Industries 4,526.057 1.359
PREUSSAG Basic Industries 4,451.472 1.336
NNE PREF Utilities 4,158.342 1.248
SCHERING Basic Industries 4,152.772 1.247
LUFTHANSA Transportation and S 4,109.377 1.234
LINDE Capital Goods 3,941.078 1.183
KARSTADT Consumer Goods/Ser 3,340.231 1.003
VEW Utilities 3,089.755 0.927
MAN Capital Goods 2,948.453 0.885
BEIERSDORF Consumer Goods/Ser 2,837.838 0.852
HEIDELBERGER ZENENT Basic Industries 2,815.392 0.845
AACH. & MUNCH. BETEIL
REGD. Financial, Insurance 2,653.752 0.797
DEGUSSA Basic Industries 2,634.704 0.791
RHEINELEKTRA Capital Goods 2,444.071 0.734
KAUFHOF Consumer Goods/Ser 2,403.854 0.722
HENKEL KGA PREF. Basic Industries 2,315.789 0.695
VICTORIA HLDG. REGD. Financial, Insurance 2,300.142 0.690
ASKO DEUTSCHE KAUFHAUS Consumer Goods/Ser 2,180.024 0.654
BER. KRAFT UND LICHT
(BEWAG) Utilities 2,071.124 0.622
BILFINGER & BERGER Basic Industries 2,025.087 0.608
BHF-BANK Financial, Insurance 1,978.218 0.594
HOLZMANN (PHILIPP) Basic Industries 1,875.484 0.563
COLONIA KONZERN REGD. Financial, Insurance 1,831.113 0.550
GEHE Consumer Goods/Ser 1,634.036 0.491
ALTANA Consumer Goods/Ser 1,629.506 0.489
VOLKSWAGEN PREF Consumer Goods/Ser 1,546.529 0.464
METALLGESELLSCHAFT Basic Industries 1,440.091 0.432
<PAGE>
<PAGE>
CONTINENTAL Capital Goods 1,439.494 0.432
SPRINGER (AXEL) VERLAG
REG Consumer Goods/Ser 1,384.973 0.416
AGIV Capital Goods 1,329.368 0.399
PWA Basic Industries 998.214 0.300
DOUGLAS HLDG. Consumer Goods/Ser 981.234 0.295
MAN PREF. Capital Goods 900.209 0.270
DEUTSCHE BABCOCK Capital Goods 862.537 0.259
AACH. & MUNCH. BET. BR. Financial, Insurance 630.299 0.189
LINOTYPE-HELL Capital Goods 515.195 0.155
KAUFHOF PREF Consumer Goods/Ser 500.911 0.150
MUNICH RB Financial, Insurance 459.718 0.138
BMW (PREF.) Consumer Goods/Ser 447.341 0.134
/TABLE
<PAGE>
<PAGE> 29
APPENDIX B
<TABLE>
FT-Actuaries World Indices
UK Component as of 11 October 1994
<CAPTION>
Weight
Index Market in FT
Industry Capitalization Index
Constituent Name Sector (Millions of US$) (%)
<S> <C> <C> <C>
BRITISH TELECOM Utilities 38,953.852 4.251
SHELL TRANS & TRAD Energy 37,721.691 4.117
BRITISH PETROLEUM Energy 36,509.949 3.984
GLAXO HLDGS Consumer Goods/Ser 28,252.560 3.083
BAT INDUSTRIES Consumer Goods/Ser 21,931.416 2.393
BRITISH GAS Utilities 20,715.720 2.261
HSBC HOLDINGS (BK$10) Financial, Insurance 20,161.439 2.200
HANSON Financial, Insurance 18,420.509 2.010
MARKS & SPENCER Consumer Goods/Ser 18,319.877 1.999
BTR Capital Goods 17,885.089 1.952
RTZ (BBG) Basic Industries 14,991.645 1.636
GUINNESS Consumer Goods/Ser 14,509.191 1.583
BARCLAYS Financial, Insurance 14,455.387 1.577
UNILEVER Consumer Goods/Ser 14,414.139 1.573
CABLE & WIRELESS Utilities 14,378.347 1.569
GRAND METROPOLITAN Consumer Goods/Ser 13,524.289 1.476
NATL WESTMINSTER BANK Financial, Insurance 13,252.471 1.446
GENERAL ELECTRIC Capital Goods 12,550.693 1.370
ZENECA Consumer Goods/Ser 12,041.862 1.314
REUTERS HOLDINGS Consumer Goods/Ser 11,982.491 1.308
LLOYDS BANK Financial, Insurance 11,440.981 1.249
SAINSBURY (J) Consumer Goods/Ser 11,439.111 1.248
NATIONAL POWER Utilities 9,930.608 1.084
VODAFONE GROUP Utilities 9,844.193 1.074
HSBC HOLDINGS (ORD 75P) Financial, Insurance 9,552.174 1.042
ALLIED DOMECQ Consumer Goods/Ser 9,379.595 1.024
SMITHKLINE BEECHAM A Consumer Goods/Ser 9,371.533 1.023
I.C.I. Basic Industries 9,334.204 1.019
PRUDENTIAL CORP Financial, Insurance 9,245.432 1.009
WELLCOME Consumer Goods/Ser 9,160.387 1.000
GREAT UNIVERSAL STORES Consumer Goods/Ser 8,899.686 0.971
ABBEY NATIONAL Financial, Insurance 8,475.587 0.925
BCOTS Consumer Goods/Ser 8,437.761 0.921
BAA Transportation and S 8,143.849 0.889
SMITHKLINE BEECH/SMITH
BECK UNITS Consumer Goods/Ser 8,048.965 0.878
TESCO Consumer Goods/Ser 7,763.815 0.847
BASS Consumer Goods/Ser 7,315.570 0.798
POWERGEN Utilities 7,078.605 0.772
REED INTL Consumer Goods/Ser 6,902.006 0.753
THORN-EMI Consumer Goods/Ser 6,733.149 0.735
CADBURY SCHWEPPES Consumer Goods/Ser 5,850.149 0.638
P. & O. DEFD STOCK Transportation and S 5,708.169 0.623
COMMERCIAL UNION Financial, Insurance 5,694.099 0.621
BRITISH STEEL Basic Industries 5,347.774 0.584
RANK ORGANISATION Consumer Goods/Ser 5,341.431 0.583
TSB GROUP Financial, Insurance 5,326.225 0.581
<PAGE>
<PAGE> 30
<S> <C> <C> <C>
PEARSON Consumer Goods/Ser 5,323.956 0.581
BOC GROUP Basic Industries 5,210.829 0.569
KINGFISHER Consumer Goods/Ser 5,193.283 0.567
ROYAL BANK SCOTLAND Financial, Insurance 5,153.423 0.562
LAND SECURITIES Financial, Insurance 4,931.591 0.538
ARGYLL GROUP Consumer Goods/Ser 4,685.338 0.511
GRANADA GROUP Consumer Goods/Ser 4,625.342 0.505
SCOTTISH POWER Utilities 4,514.692 0.493
WHITBREAD (ORD.) Consumer Goods/Ser 4,459.004 0.487
SUN ALLIANCE GROUP Financial, Insurance 4,239.643 0.463
GENERAL ACCIDENT Financial, Insurance 4,184.109 0.457
SCOT & NEWCASTLE Consumer Goods/Ser 4,122.162 0.450
STANDARD CHARTERED Financial, Insurance 4,087.616 0.446
REDLAND Basic Industries 3,862.148 0.421
LLOYDS ABBEY LIFE Financial, Insurance 3,820.693 0.417
BANK OF SCOTLAND Financial, Insurance 3,782.125 0.413
TOMKINS Basic Industries 3,765.984 0.411
BOWATER Basic Industries 3,691.810 0.403
INCHCAPE Consumer Goods/Ser 3,619.273 0.395
ASSD BRITISH FOODS Consumer Goods/Ser 3,592.903 0.392
LEGAL & GENERAL GROUP Financial, Insurance 3,528.407 0.385
SIEBE Capital Goods 3,498.254 0.382
RENTOKIL GP Basic Industries 3,461.446 0.378
ARJO HIGGINS APPLETON Basic Industries 3,383.023 0.369
GKN Capital Goods 3,287.454 0.359
NORTH WEST WATER Utilities 3,275.419 0.357
THAMES WATER Utilities 3,260.174 0.356
RECKITT & COLMAN Consumer Goods/Ser 3,248.673 0.355
FORTE Consumer Goods/Ser 3,202.665 0.350
BLUE CIRCLE INDS Basic Industries 3,175.853 0.347
WOLSELEY Basic Industries 3,171.437 0.346
SEVERN TRENT WATER Utilities 3,154.556 0.344
SOUTHERN ELECTRIC Utilities 3,067.467 0.335
WILLIAMS HLDGS. Capital Goods 3,053.356 0.333
CARLTON COMMS Consumer Goods/Ser 3,034.405 0.331
EASTERN GROUP Utilities 3,033.160 0.331
ENTERPRISE OIL Energy 3,028.733 0.331
ROYAL INSURANCE HDGS Financial, Insurance 3,023.569 0.330
RMC GP Basic Industries 2,941.472 0.321
DE LA RUE Consumer Goods/Ser 2,926.288 0.319
LADBROKE GROUP Consumer Goods/Ser 2,904.775 0.317
COURTAULDS Basic Industries 2,873.921 0.314
VENDOME UNITS Consumer Goods/Ser 2,837.658 0.310
ASDA GROUP Consumer Goods/Ser 2,807.910 0.306
MEPC Financial, Insurance 2,761.810 0.301
GUARDIAN ROYAL EXCHANGE Financial, Insurance 2,698.293 0.294
BURMAN CASTROL Energy 2,645.079 0.289
TI GROUP Capital Goods 2,621.737 0.286
CARADON Basic Industries 2,607.255 0.285
UNITED BISCUITS Consumer Goods/Ser 2,593.252 0.283
ANGLIAN WATER Utilities 2,534.967 0.277
<PAGE>
<PAGE> 31
<S> <C> <C> <C>
SEARS Consumer Goods/Ser 2,516.389 0.275
BPB INDS Basic Industries 2,465.823 0.269
SMITH & NEPHEW Consumer Goods/Ser 2,455.979 0.268
TATE & LYLE Consumer Goods/Ser 2,426.903 0.265
COATS VIYELLA Consumer Goods/Ser 2,352.384 0.257
LUCAS INDS Capital Goods 2,337.332 0.255
PILKINGTON Basic Industries 2,317.683 0.253
FOR & COL IT Financial, Insurance 2,293.920 0.250
WARBURG (SG) GROUP Financial, Insurance 2,198.391 0.240
SCHRODERS Financial, Insurance 2,176.380 0.238
COOKSON GROUP Basic Industries 2,134.118 0.233
LAPORTE Basic Industries 2,124.702 0.232
NEW ROTHMANS UNITS Consumer Goods/Ser 2,062.909 0.225
SCOT HYDRO-ELECTRIC Utilities 2,005.100 0.219
SMITHS INDUSTRIES Capital Goods 1,994.424 0.218
BICC Capital Goods 1,969.138 0.215
BRITISH LAND Financial, Insurance 1,959.380 0.214
SMITH (W R) Consumer Goods/Ser 1,921.285 0.210
NORTHERN FOODS Consumer Goods/Ser 1,913.855 0.209
TARMAC Basic Industries 1,890.790 0.206
NFC Transportation and S 1,884.721 0.206
UNITED NEWSPAPERS Consumer Goods/Ser 1,882.700 0.205
HILLSDOWN Consumer Goods/Ser 1,865.093 0.204
HARRISONS & CROSFIELD Consumer Goods/Ser 1,821.602 0.199
ENGLISH CHINA CLAYS Basic Industries 1,778.098 0.194
EUROTUNNEL UNITS ORD Transportation and S 1,774.648 0.194
T & N Capital Goods 1,753.930 0.191
LOHRKO Financial, Insurance 1,704.928 0.186
JOHNSON MATTHEY Basic Industries 1,632.739 0.178
ASSD BRITISH PORTS Transportation and S 1,616.430 0.176
IMI Basic Industries 1,587.526 0.173
DALGETY Consumer Goods/Ser 1,585.942 0.173
ELECTROCOMPONENTS Capital Goods 1,574.918 0.172
BET Financial, Insurance 1,574.119 0.172
ARGOS Consumer Goods/Ser 1,503.694 0.164
HAMMERSON PLC Financial, Insurance 1,465.966 0.160
SLOUGH ESTATES Financial, Insurance 1,444.213 0.158
BURTON GROUP Consumer Goods/Ser 1,424.774 0.155
BOOKER Consumer Goods/Ser 1,418.726 0.155
BRITISH AIRWAYS Transportation and S 1,403.252 0.153
EDINBURGH INV TRUST Financial, Insurance 1,398.605 0.153
TRAFALGAR HOUSE Financial, Insurance 1,390.709 0.152
GREENALLS GROUP Consumer Goods/Ser 1,378.113 0.150
KWIK SAVE GROUP Consumer Goods/Ser 1,352.223 0.148
WITAN INV Financial, Insurance 1,347.353 0.147
SEDGEWICK GP Financial, Insurance 1,347.030 0.147
STOREHOUSE Consumer Goods/Ser 1,325.156 0.145
UNIGATE Consumer Goods/Ser 1,227.641 0.134
MAI Financial, Insurance 1,214.662 0.133
FISONS Consumer Goods/Ser 1,396.839 0.131
DIXONS GROUP Consumer Goods/Ser 1,185.050 0.129
<PAGE>
<PAGE> 32
<S> <C> <C> <C>
FKI Capital Goods 1,178.972 0.129
RUGBY GROUP Basic Industries 1,170.871 0.128
BBA GROUP Capital Goods 1,169.264 0.128
HEPWORTH Basic Industries 1,165.120 0.127
FARNELL ELECTRONICS Capital Goods 1,128.727 0.123
BUNZL Basic Industries 1,124.709 0.123
MORGAN CRUCIBLE Capital Goods 1,110.022 0.121
M & G GROUP Financial, Insurance 1,090.948 0.119
ALLIED COLLOIDS Basic Industries 1,087.314 0.119
PROVIDENT FINANCIAL Financial, Insurance 1,085.054 0.118
GLYNNED INTL Capital Goods 1,075.721 0.117
WILLIS CORROON GROUP Financial, Insurance 1,062.972 0.116
ROLLS-ROYCE Capital Goods 1,032.587 0.113
CHARTER Basic Industries 1,026.743 0.112
GREAT PORTLAND EST Financial, Insurance 989.963 0.108
KLEINWORT BENSON GROUP Financial, Insurance 986.797 0.108
BOWTHORPE Capital Goods 894.790 0.098
VICKERS Capital Goods 888.717 0.097
ELECTRA INV TRUST Financial, Insurance 867.659 0.095
WIMPEY (G) Basic Industries 853.240 0.093
HIGHLAND DISTILLERIES Consumer Goods/Ser 852.972 0.093
TAYLOR WOODROW Basic Industries 827.141 0.090
BRITISH AEROSPACE Capital Goods 811.232 0.089
SCAPA GP Capital Goods 797.745 0.087
COURTAULDS TEXTILES Consumer Goods/Ser 753.782 0.082
PORTALS Basic Industries 752.001 0.082
MEYER INTL Basic Industries 751.934 0.082
FIRST LEISURE CORP Consumer Goods/Ser 679.546 0.074
BRIXTON ESTATE Financial, Insurance 677.572 0.074
HALMA Capital Goods 677.567 0.074
HAMBROS Financial, Insurance 674.829 0.074
FLEMING MERCANTILE INV
TRUST Financial, Insurance 655.883 0.072
INVESCO Financial, Insurance 646.242 0.071
MCKECHNIE Basic Industries 641.400 0.070
MARLEY Basic Industries 616.454 0.067
WILSON (CONNOLLY) Basic Industries 585.285 0.064
SCHRODERS NOW/VTG Financial, Insurance 577.554 0.063
BRYANT GROUP Basic Industries 558.111 0.061
TR SMALLER COMPANIES INV.
TST. Financial, Insurance 532.655 0.058
SPIRAX-SARCO ENG Capital Goods 524.959 0.057
BARRATT DEVELOPMENTS Basic Industries 524.747 0.057
VAUX GROUP Consumer Goods/Ser 515.702 0.056
ALBERT FISHER Consumer Goods/Ser 492.427 0.054
TR CITY OF LON (DFD) Financial, Insurance 461.976 0.050
BRADFORD PROPERTY TRUST Financial, Insurance 423.861 0.046
MERCHANTS TRUST Financial, Insurance 420.655 0.046
CHRISTIES INTL Consumer Goods/Ser 419.168 0.046
BAIRD (WILLIAM) Consumer Goods/Ser 405.485 0.044
DAWSON INTL Consumer Goods/Ser 401.718 0.044
DIPLOMA Capital Goods 401.563 0.044
APV Capital Goods 341.008 0.037
<PAGE>
<PAGE> 33
<S> <C> <C> <C>
BILTON Financial, Insurance 331.442 0.036
HEATH (C.E.) Financial, Insurance 257.413 0.028
AMSTRAD Capital Goods 232.150 0.025
LAING (JOHN) Basic Industries 159.047 0.017
LAING (JOHN) 'A' Basic Industries 154.178 0.017
</TABLE>
<PAGE>
<PAGE> 1
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part B - Eurofund, Inc. Financial Statements: Statement of Assets
and Liabilities, at [ ], 1995.
(b) Exhibits:
(1) --Articles of Incorporation of the Fund
*(2) --Bylaws of the Fund
(3) --Not applicable
**(4) (A) --Specimen global certificate evidencing shares of the
Common Stock, $.001 par value, of the Fund
**(4) (B) --Selected portions of the Fund's Articles of
Incorporation and Bylaws relating to the rights of
stockholders
**(5) --Investment Management Agreement between the Fund and
Deutsche Bank Securities Corporation
**(6) (A) --Distribution Agreement between the Fund and SSC
Distribution Services, Inc.
**(6) (B) --Form of Participant Account Agreement
**(6) (C) --Form of Purchase Order
(7) --Not applicable
**(8) --Custodian Agreement between the Fund and State Street
Bank and Trust Company
**(9) (A) --Administration Agreement Between the Fund and State
Street Bank and Trust Company
**(9) (B) --Transfer Agency and Service Agreement between the Fund
and State Street Bank and Trust Company
**(10) --Opinion and consent of Sullivan & Cromwell
**(11) --Opinion and consent of Price Waterhouse LLP
(12) --Not applicable
**(13) --Subscription Agreement(s) between the Fund and
_____________ with respect to the Fund's initial
capitalization
(14) --Not applicable
**(15) --12b-1 Plan
(16) --Not applicable
(17) --Not applicable
* Previously filed.
** To be filed by Amendment.
<PAGE>
<PAGE> 2
Item 25. Persons Controlled by or under Common Control with Registrant
Immediately prior to the contemplated public offering of the shares
of the Fund, the following persons may be deemed individually to control
each Series of the Fund:
[_______________________________________]. Given that [____]
is a wholly owned subsidiary of
[________________________________________], such company may
also be deemed to control the Fund. Moreover, the Fund and the
subsidiaries of [_________________________] may be deemed
currently to be under common control.
[_______________________________________]. Given that [____]
is a wholly owned subsidiary of
[________________________________________], such company may
also be deemed to control the Fund. Moreover, the Fund and the
subsidiaries of [_________________________] may be deemed
currently to be under common control.
[_______________________________________]. Given that [____]
is a wholly owned subsidiary of
[________________________________________], such company may
also be deemed to control the Fund. Moreover, the Fund and the
subsidiaries of [_________________________] may be deemed
currently to be under common control.
Item 26. Number of Holders of Securities
As of _______ __, 1995, the stockholders of Common Stock, par value
$.001 per share, of each of the initial nine Series of the Fund were:
Item 27. Indemnification
It is the Fund's policy to indemnify officers, directors, employees
and other agents to the maximum extent permitted by Section 2-418 of the
Maryland General Corporation Law, Article EIGHTH of the Fund's Articles of
Incorporation, and Article VI of the Fund's Bylaws (set forth below).
Section 2-418 of the Maryland General Corporation Law reads as follows:
"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
(a) In this section the following words have the meaning indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a corporation, is or
was serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger, consolidation, or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
(3) "Expenses" include attorney's fees.
<PAGE>
<PAGE> 3
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of director in
the corporation; and
(ii) When used with respect to a person other than a director as
contemplated in subsection (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
other enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or
investigative.
(b)(1) A Corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established
that:
(i) the act or omission of the director was material to the matter
giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding
in which the director shall have been adjudged to be liable to the
corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the director did
not meet that standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise,
in the defense of any proceeding referred to in subsection (B) of this
section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of
securing such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director has met the standards of conduct set forth in
subsection (b) of this section or has been adjudged liable under the
circumstances described in subsection (c) of this section, the court may
order such indemnification as the court shall deem proper. However,
indemnification with respect to any proceeding by or in the right of the
corporation or in which <PAGE>
<PAGE> 4
liability shall have been adjudged in the circumstances described in
subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific proceeding
after a determination has been made that indemnification of the director is
permissible in the circumstances because the director has met the standard
of conduct set forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding, or, if
such a quorum cannot be obtained, then by a majority vote of a committee of
the board consisting solely of two or more directors not, at the time,
parties to such proceeding and who were duly designated to act in the
matter by a majority vote of the full board in which the designated
directors who are parties may participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the
full board in which director [sic] who are parties may participate; or
(iii) By the shareholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the proceeding may
not be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the
final disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good
faith belief that the standard of conduct necessary for indemnification by
the corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to financial
ability to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws, or contract or as specified in subsection (e) of this
section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a director may be entitled under
the charter, the bylaws, a resolution of shareholders or directors, an
agreement or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance
as a witness in a proceeding at a time when the director has not been made
a named defendant or respondent in the proceeding.
(i) For purposes of this section:
<PAGE>
<PAGE> 5
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's
duties to the corporation also imposes duties on, or otherwise involves
services by, the director to the plan or participants or beneficiaries of
the plan;
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's duties for a
purpose reasonably believed by the director to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall
be entitled, to the same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may
indemnify directors under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to
an officer, employee, or agent who is not a director to such further
extent, consistent with law, as may be provided by its charter, bylaws,
general or specific action of its board of directors or contract.
(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against
and incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power to
indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the
right of the corporation, shall be reported in writing to the shareholders
with the notice of the next stockholders' meeting or prior to the meeting."
Article EIGHTH of the Fund's Articles of Incorporation and Article VI,
Section 1 of the Fund's Bylaws both provide:
"The Corporation shall indemnify to the fullest extent
permitted by law (including the Investment Company Act of 1940) any
person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that such person or such person's testator or
intestate is or was a director, officer or employee of the Corporation
or serves or served at the request of the Corporation any other enter-
prise as a director, officer or employee. To the fullest extent
permitted by law (including the Investment Company Act of 1940) expenses
incurred by any such person in defending any such action, suit or
proceeding shall be paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay such expenses if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation. The rights provided to any person by
Article EIGHTH [and Article VI of the Bylaws] shall be enforceable against
the Corporation by such person who shall be presumed to have relied upon
it in serving or continuing to serve as a director, officer or employee as
provided above. No amendment of <PAGE>
<PAGE> 6
Article EIGHTH [or Article VI of the Bylaws] shall impair the rights of
any person arising at any time with respect to events occurring prior to
such amendment. For purposes of Article EIGHTH [and Article VI of the
Bylaws], the term "Corporation" shall include any predecessor of the
Corporation any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger;
the term "other enterprise" shall include any corporation, partnership,
joint venture, trust or employee benefit plan; service "at the request
of the Corporation" shall include service as a director, officer or
employee of the Corporation which imposes duties on, or involves services
by, such director, officer or employee with respect to an employee
benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be
deemed to be indemnifiable expenses; and action by a person with respect
to any employee benefit plan which such person reasonably believes to be
in the interest of the participants and beneficiaries of such plan shall
be deemed to be action not opposed to the best interests of the
Corporation."
Article EIGHTH of the Fund's Articles of Incorporation further provides:
"Nothing in Article SEVENTH or in this Article EIGHTH protects
or purports to protect any director or officer against any liability
to the Corporation or its security holders to which he or she would
otherwise be subject by reason of willful malfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his or her office."
Item 28. Business and Other Connections of Investment Adviser
See "Management of the Fund" in the Statement of Additional
Information. Information as to the directors and officers of the Adviser
is included in its form ADV filed with the Commission and is incorporated
herein by reference thereto.
Item 29. Principal Underwriters
(a) SSC Distribution Services, Inc. ("SSCD") is the Fund's principal
underwriter. SSCD also acts as a principal underwriter, depositor, or
investment adviser to Capital Market Fund, Inc.
(b) Not applicable
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder will be maintained
at the offices of State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110 and the Fund, c/o Deutsche Bank Securities
Corporation, 31 West 52nd Street, New York, New York 10019. Documents
required by Rules 31a-1(b)(4), (5), (6), (9), (10), (11) and (12) and 31a-
1(f) will be kept at the Fund and the remaining accounts, books and other
documents required by such other pertinent provisions of Section 31(a) will
be kept at State Street Bank and Trust Company.
Item 31. Management Services
Not applicable
<PAGE>
<PAGE> 7
Item 32. Undertakings
The Fund undertakes that it will file:
(a) an amendment to the registration statement with certified
financial statements showing the initial capital received before accepting
subscriptions from any persons in excess of 25 if the Fund proposes to
raise its initial capital pursuant to Section 14(a)(3) of the 1940 Act [15
U.S.C. 80a-14(a)(3)]; and
(b) a post-effective amendment, using financial statements which need
not be certified, within four to six months from the effective date of the
Fund's registration statement under the Securities Act of 1933, as amended.
<PAGE>
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to be signed on its behalf by the undersigned, thereto duly
authorized, in the City and State of New York, on the ___ day of February,
1995.
EUROFUND, INC.
By: /s/ Stephen K. West
Stephen K. West
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment has been signed below by the following person in the capacities
and on the date indicated:
Name Title Date
/s/ Stephen K. West Director and President February __, 1995
Stephen K. West<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
(1) -- Articles of Incorporation of the Fund
*(2) -- Bylaws of the Fund
(3) -- Not applicable
*(4) (A) -- Specimen global certificate evidencing
shares of the Common Stock, $.001 par
value, of the Fund
**(4) (B) -- Selected portions of the Fund's Articles
of Incorporation and Bylaws relating to
the rights of stockholders
**(5) -- Investment Management Agreement between
the Fund and Deutsche Bank Securities
Corporation
**(6) (A) -- Distribution Agreement between the Fund
and SSC Distribution Services, Inc.
**(6) (B) -- Form of Participant Account Agreement
**(6) (C) -- Form of Purchase Order
(7) -- Not applicable
**(8) -- Custodian Agreement between the Fund and
State Street Bank and Trust Company
**(9) (A) -- Administration Agreement Between the Fund
and State Street Bank and Trust Company
**(9) (B) -- Transfer Agency and Service Agreement between
the Fund and State Street Bank and Trust
Company
**(10) -- Opinion and consent of Sullivan & Cromwell
**(11) -- Opinion and consent of Price Waterhouse LLP
(12) -- Not applicable
**(13) -- Subscription Agreement(s) between the Fund
and _____________ with respect to the Fund's
initial capitalization
(14) -- Not applicable
**(15) -- 12b-1 Plan
(16) -- Not applicable
(17) -- Not applicable
_______________
* Previously filed.
** To be filed by Amendment.
<PAGE>
EX. 3.1
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
EUROFUND, INC.
Pursuant to Section 2-603 of the General Corporation Law of the State of
Maryland, I, Stephen K. West, being the sole director of Eurofund, Inc., a
Maryland corporation (the "Corporation"), hereby certify that:
FIRST, no stock of the Corporation entitled to be voted on this
amendment to the Articles of Incorporation was outstanding or subscribed
for at the time of its approval by the Board of Directors;
SECOND, the following amendment to the Corporation's Articles of
Incorporation was unanimously approved by the Corporation's Board of
Directors and duly adopted in accordance with the provisions of Section 2-
603 of the General Corporation Law of the State of Maryland; and
THIRD, ARTICLE SECOND of the Articles of Incorporation is hereby
amended to read in full as follows:
"SECOND: Name. The name of the Corporation is The CountryBasket
Index Fund, Inc."
<PAGE>
<PAGE>
IN WITNESS THEREOF, I have signed these Articles of Amendment this 31st day
of January, 1995.
/s/ Stephen K. West
Stephen K. West
Director and President
Attest:
/s/ John O'Brien
John O'Brien
Secretary
I acknowledge this to be my act and state under penalty of
perjury that with respect to all matters and facts therein, to the best of
my knowledge, information, and belief, such matters and facts are true in
all material respects.
Date: January 31, 1994
By: /s/ Stephen K. West
Stephen K. West
<PAGE>
<PAGE>
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
EUROFUND, INC.
Pursuant to Section 2-603 of the General Corporation Law of the State of
Maryland, I, Stephen K. West, being the sole director of Eurofund, Inc., a
Maryland corporation (the "Corporation"), hereby certify that:
FIRST, no stock of the Corporation entitled to be voted on this
amendment to the Articles of Incorporation was outstanding or subscribed
for at the time of its approval by the Board of Directors;
SECOND, the following amendment to the Corporation's Articles of
Incorporation was unanimously approved by the Corporation's Board of
Directors and duly adopted in accordance with the provisions of Section 2-
603 of the General Corporation Law of the State of Maryland; and
THIRD, ARTICLE FIFTH, third paragraph, of the Articles of
Incorporation is hereby amended to delete in its entirety the last sentence
of such paragraph and replace it as follows:
"The names of such Series and the number of shares of Common Stock
initially classified and allocated to each Series is as follows:
Number of Shares of Common
Name of Series Initially Classified and Allocated
Germany Index Series ....................... 20,000
UK Index Series ........................... 50,000".
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IN WITNESS THEREOF, I have signed these Articles of Amendment this 26th day
of October, 1994.
/s/ Stephen K. West
Stephen K. West
Director and President
Attest:
/s/ John O'Brien
John O'Brien
Secretary
I acknowledge this to be my act and state under penalty of
perjury that with respect to all matters and facts therein, to the best of
my knowledge, information, and belief, such matters and facts are true in
all material respects.
Date: October 26, 1994 By: /s/ Stephen K. West
Stephen K. West
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ARTICLES OF INCORPORATION
OF
EUROFUND, INC.
FIRST: Incorporator. I, THE UNDERSIGNED, Stephen K. West,
whose post office address is 125 Broad Street, New York, New York 10004,
being at least twenty-one years of age, do under and by virtue of the
General Laws of the State of Maryland authorizing the formation of
corporations, associate myself as incorporator with the intention of
forming a corporation (hereinafter called the "Corporation").
SECOND: Name. The name of the Corporation is Eurofund, Inc.
THIRD: Purposes and Powers. The purpose for which the
Corporation is formed is to act as an open-end management investment
company under the Investment Company Act of 1940, as currently in effect or
as hereafter may be amended and the Rules and Regulations from time to time
promulgated and effective thereunder (referred to herein collectively as
the "Investment Company Act of 1940") and to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations
by the General Laws of the State of Maryland now or hereafter in force.
FOURTH: Principal Office. The post office address of the
principal office of the Corporation in this State is c/o The Corporation
Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. The name of
the Corporation's resident agent is The Corporation Trust Incorporated, and
its post office address is 32 South Street, Baltimore, Maryland 21202. Said
resident agent is a corporation of the State of Maryland.
FIFTH: Capital Stock. 1. The total number of shares of capital
stock of all series and classes that the Corporation initially shall have
authority to issue is 100,000,000 shares, with a par value of one-tenth of
one cent ($.001) per share, to be known and designated as Common Stock,
such shares of Common Stock having an aggregate par value of one hundred
thousand dollars ($100,000). The Board of Directors shall have power and
authority to increase or decrease, from time to time, the aggregate number
of shares of stock, or of any series or class of stock, that the
Corporation shall have the authority to issue.
2. Subject to the provisions of these Articles of
Incorporation, the Board of Directors shall have the power
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to issue shares of Common Stock of the Corporation from time to time, at
prices not less than the net asset value or par value thereof, whichever is
greater, for such consideration as may be fixed from time to time pursuant
to the direction of the Board of Directors. All stock shall be issued on a
non-assessable basis.
3. Pursuant to Section 2-105 of the Maryland General
Corporation Law, the Board of Directors of the Corporation shall have the
power to designate one or more series of shares of Common Stock, to fix the
number of shares in any such series and to classify or reclassify any
unissued shares with respect to such series. Any series of Common Stock
shall be referred to herein individually as a "Series" and collectively,
together with any further series from time to time established, as the
"Series". Any such Series (subject to any applicable rule, regulation or
order of the Securities and Exchange Commission or other applicable law or
regulation) shall have such preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms
and conditions of redemption and other characteristics as the Board of
Directors may determine in the absence of a contrary determination set
forth herein. The aforesaid power shall include the power to create, by
classifying or reclassifying unissued shares in the aforesaid manner, one
or more Series in addition to those initially designated as named below.
Subject to such aforesaid power, the Board of Directors has initially
designated one Series of shares of Common Stock of the Corporation. The
name of such Series and the number of shares of Common Stock initially
classified and allocated to this Series is as follows:
Number of Shares of Common
Initially Classified and
Name of Series Allocated
The Germany Index Series . . . . . . . . . . . . . . 5,000
4. The Board of Directors may, from time to time and without
stockholder action, classify shares of a particular Series into one or more
additional classes of that Series, the voting, dividend, liquidation and
other rights of which shall differ from the classes of common stock of that
Series to the extent provided in Articles Supplementary for such additional
class, such Articles Supplementary to be filed for record with the
appropriate authorities of the State of Maryland. Each class so created
shall consist, until further changed, of the lesser of (x) the number of
shares classified in Section 3 of this Article FIFTH or (y) the number of
shares that could be issued by issuing all of the shares of that Series
currently or hereafter classified less the total number of shares of all
classes of such Series then issued and outstanding. Any class of a Series
of Common Stock shall be referred to herein
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individually as a "Class" and collectively, together with any further class
or classes of such Series from time to time established, as the "Classes".
5. All Classes of a Particular Series of Common Stock of the
Corporation shall represent the same interest in the Corporation and have
identical voting, dividend, liquidation and other rights with any other
shares of Common Stock of that Series; provided, however, that
notwithstanding anything in the charter of the Corporation to the contrary:
(i) Any Class of shares may be subject to such sales loads,
contingent deferred sales charges, Rule 12b-1 fees, administrative
fees, service fees or other fees, however designated, in such amounts
as may be established by the Board of Directors from time to time in
accordance with the Investment Company Act of 1940.
(ii) Expenses related solely to a particular Class of a Series
(including, without limitation, distribution expenses under a Rule
12b-1 plan and administrative expenses under an administration or
service agreement, plan or other arrangement, however designated)
shall be borne by that Class and shall be appropriately reflected in
the manner determined by the Board of Directors) in the net asset
value, dividends, distributions and liquidation rights of the shares
of that Class.
(iii) As to any matter with respect to which a separate vote of
any Class of a Series is required by the Investment Company Act of
1940 or by the Maryland General Corporation Law (including, without
limitation, approval of any plan, agreement or other arrangement
referred to in subsection (ii) above), such requirement as to a
separate vote by that Class shall apply in lieu of Single Class
Voting, and if permitted by the Investment Company Act of 1940 or the
Maryland General Corporation Law, the Classes of more than one Series
shall vote together as a single Class on any such matter that shall
have the same effect on each such Class. As to any matter that does
not affect the interest of a particular Class of a Series, only the
holders of shares of the affected Classes of that Series shall be
entitled to vote.
6. Each share of a Series or Class shall have equal rights with
each other share of that Series or Class with respect to the assets of the
Corporation pertaining to that Series or Class. The dividends payable to
the holders of any Series or Class (subject to any applicable rule,
regulation or order of the Securities and Exchange Commission or any other
applicable law or regulation) shall be determined by the Board and need not
be individually declared, but may be declared and paid in accordance with a
formula adopted by the Board (whether or not the amount of dividend or
distribution so declared can be calculated at the time of such
declaration).
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7. The holder of each share of stock of the Corporation shall
be entitled to one vote for each full share, and a fractional vote for each
fractional share of stock, irrespective of the Series or Class, then
standing in his or her name in the books of the Corporation. On any matter
submitted to a vote of stockholders, all shares of the Corporation then
issued and outstanding and entitled to vote, irrespective of the Series or
Class, shall be voted in the aggregate and not by Series or Class except
(1) when otherwise expressly provided by the Maryland General Corporation
Law, or (2) when required by the Investment Company Act of 1940, shares
shall be voted by individual Series or Class; and (3) when the matter does
not affect any interest of a particular Series or Class, then only
stockholders of such other Series or Class or Series or Classes whose
interests may be affected shall be entitled to vote hereon. Holders of
shares of stock of the Corporation shall not be entitled to cumulative
voting in the election of Directors or on any other matter.
8. All consideration received by the Corporation for the
issuance or sale of stock of each Series or Class, together with all
income, earnings, profits, and proceeds thereof including any proceeds
derived from the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in whatever form
the same may be, shall belong to the Series or Class of shares of stock
with respect to which such assets, payments or funds were received by the
Corporation for all purposes, subject only to the rights of creditors, and
shall be so handled upon the books of account of the Corporation. Such
assets, income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof and any
assets derived from any reinvestment of such proceeds, in whatever form the
same may be, are herein referred to as "assets belonging to" such Series or
Class.
9. The Board of Directors may from time to time declare and
pay dividends or distributions in stock, property or in cash on any or all
Series or Class of stock and to the stockholders of record as of such date
as the Board of Directors may determine; provided that such dividends or
distributions on shares of any Series or Class of stock shall be paid only
out of earnings, surplus, or other lawfully available assets belonging to
such Series or Class. Subject to the foregoing proviso, the amount of any
dividends or distributions and the payment thereof shall be wholly in the
discretion of the Board of Directors.
10. In the event of the liquidation or dissolution of the
Corporation, stockholders of each Series and Class therein shall be
entitled to receive, as a Series or class, out of the assets of the
Corporation available for distribution to stockholders, but other than
general assets, the assets belonging to such Series or Class and the assets
so distributable to the stockholders of any Series or Class shall be
distributed among such stockholders in proportion to the number of shares
of such Series or Class held by them and recorded on the books of the
Corporation. In the event that
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there are any general assets not belonging to any particular Series or
Class of stock and available for distribution, such distribution shall be
made to the holders of stock of all Series and Classes in proportion to the
net asset value of the respective Series or Class determined as hereinafter
provided.
11. The assets belonging to any Series or Class of stock shall
be charged with the liabilities in respect to such Series or Class and
shall also be charged with such Series' or Classes' proportionate share of
the general liabilities of the Corporation, based upon the ratio of the net
asset value, determined as hereinafter provided, of the shares of such
Series or Class then outstanding to the net asset ratio of all shares of
Common Stock of the Corporation then outstanding. The determination of the
Board of Directors shall be conclusive with respect to the amount of
liabilities, including accrued expenses and reserves, the allocation of
such liabilities to a given Series or Class, and whether the same or
general assets of the Corporation are allocable to one or more Series or
Classes.
12. The Board of Directors may provide for a holder of any
Series or Class of stock of the Corporation, who surrenders his certificate
in good form for transfer to the Corporation or, if the shares in question
are not represented by certificates, who delivers to the Corporation a
written request in good order signed by the shareholder, to convert the
shares in question on such basis as the Board may provide, into shares of
stock of any other Series or Class of the Corporation.
13. Subject to subsection 14 below, the net asset value per
share of the Corporation's Common Stock shall be determined by adding the
value of all securities, cash and other assets of the Corporation
pertaining to that Series or Class, subtracting the liabilities applicable
to that Series or Class, proportionally allocating any general assets and
general liabilities to that Series or Class, and dividing the net result by
the number of shares of that Series or Class outstanding. Subject to
subsection 14 below, the value of the securities, cash and other assets,
and the amount and nature of liabilities, and the allocation thereof to any
particular Series or Class, shall be determined pursuant to the direction
of, or determined pursuant to procedures or methods prescribed by or
approved by the Board of Directors in its sole discretion and shall be so
determined at the time or times prescribed or approved by the Board of
Directors in its sole discretion.
14. The net asset value per share of a Series or Class of the
Corporation's Common Stock for the purpose of issuance, redemption or
repurchase of shares, shall be determined in accordance with the Investment
Company Act of 1940 and any other applicable Federal securities law or rule
or regulation.
15. All shares now or hereafter authorized shall be subject to
redemption and redeemable at the option of the stockholder, in the sense
used in the
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General Corporation Law of the State of Maryland. Each holder of a share,
upon request to the Corporation accompanied by surrender of the appropriate
stock certificate or certificates in proper form for transfer if
certificates have been issued to such holder, or accompanied by or in
accordance with such other procedures as may from time to time be in effect
if certificates have not been issued, shall be entitled to require the
Corporation to redeem all or any part of the shares standing in the name of
such holder on the books of the Corporation at a redemption price per share
equal to an amount determined by the Board of Directors in accordance with
any applicable laws and regulations; provided that (i) such amount shall
not exceed the net asset value per share determined in accordance with this
Article, and (ii) if so authorized by the Board of Directors, the
Corporation may, at any time from time to time, charge fees for effecting
such redemption or repurchase, at such rates as the Board of Directors may
establish, as and to the extent permitted under the Investment Company Act
of 1940.
16. Notwithstanding subsection 15 above (or any other
provision of these Articles of Incorporation), the Board of Directors of
the Corporation may suspend the right of the holders of shares to require
the Corporation to redeem such shares (or may suspend any voluntary
purchase of such shares pursuant to the provisions of these Articles of
Incorporation) during any national financial emergency.
For the purpose of these Articles of Incorporation, a "national
financial emergency" is defined as the whole or part of any period (i)
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, (ii) during which trading on the New York
Stock Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Corporation of securities owned by such
Series is not reasonably practicable or it is not reasonably practicable
for the Corporation fairly to determine the value of the net assets of such
Series, or (iv) during any other period when the Securities and Exchange
Commission (or any succeeding governmental authority) may for the
protection of security holders of the Corporation by order permit
suspension of the right of redemption or postponement of the date of
payment on redemption.
17. The Board of Directors may by resolution from time to time
authorize the repurchase by the Corporation, either directly or through an
agent, of shares upon such terms and conditions and for such consideration
as the Board of Directors shall deem advisable, out of funds legally
available therefor and at prices per share not in excess of the net asset
value per share determined in accordance with this Article and to take all
other steps deemed necessary or advisable in connection therewith.
18. Except as otherwise permitted by the Investment Company Act
of 1940, payment of the redemption or repurchase price of shares
surrendered to the
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Corporation for redemption pursuant to the provisions of subsection 15 or
20 of this Article or for repurchase by the Corporation pursuant to the
provisions of subsection 17 of this Article shall be made by the
Corporation within seven (7) days after surrender of such shares to the
Corporation for such purpose. Any such payment may be made in whole or in
part in portfolio securities or in cash, as the Board of Directors shall
deem advisable, and no stockholder shall have the right, other than as
determined by the Board of Directors, to have shares redeemed or
repurchased in portfolio securities.
19. In the absence of any specification of the purpose for
which the Corporation redeems or repurchase any shares of its Common Stock,
all redeemed or repurchased shares shall be deemed to be acquired for
retirement in the sense contemplated by the General Corporation Law of the
State of Maryland. Shares retired by redemption or repurchase shall
thereafter have the status of authorized but unissued shares.
20. All shares now or hereafter authorized shall be subject to
redemption and redeemable at the option of the Corporation. From time to
time the Board of Directors may by resolution, without the vote or consent
of stockholders, authorize the redemption of all or any part of any
outstanding shares (including through the establishment of uniform
standards with respect to the minimum net asset value of a stockholder
account) upon the sending of written notice thereof to each stockholder any
of whose shares are to be so redeemed and upon such terms and conditions as
the Board of Directors shall deem advisable, out of funds legally available
therefore, at net asset value per share determined in accordance with the
provisions of this Article and may take all other steps deemed necessary or
advisable in connection therewith. The Board of Directors may authorize the
closing and redemption of all shares of any accounts not meeting the
specified minimum standards of net asset value.
21. The holders of shares of Common Stock or other securities
of the Corporation shall have no preemptive rights to subscribe for new or
additional shares of its Common Stock or other securities.
SIXTH: Directors. The initial number of directors of the
Corporation shall be one (1), which shall be the minimum number of
directors for so long as there is only one or fewer shareholders. The name
of the director who shall act until the first annual meeting or until his
successor is duly chosen and qualified is Stephen K. West. Upon such time
as the Corporation has issued two or more shares of its capital stock, the
minimum number of directors shall be increased in accordance with the
provisions of Section 2-402 of the Maryland General Corporation Law. The
number of Directors may be changed from time to time in such lawful manner
as is provided
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in the Bylaws of the Corporation. Unless otherwise provided by the Bylaws
of the Corporation, directors of the Corporation need not be stockholders.
SEVENTH: Liabilities of Directors and Officers. A director or
officer of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director or officer, except to the extent such exemption from liability or
limitation thereof is not permitted by law (including the Investment
Company Act of 1940) as currently in effect or as the same may hereafter be
amended.
No amendment, modification or repeal of this Article SEVENTH
shall adversely affect any right or protection of a director or officer
that exists at the time of such amendment, modification or repeat
EIGHTH: Indemnification of Directors, Officers and Employees.
The Corporation shall indemnify to the fullest extent permitted by law
(including the Investment Company Act of 1940) any person made or
threatened to be made a party to any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact
that such person or such person's testator or intestate is or was a
director, officer or employee of the Corporation or serves or served at the
request of the Corporation any other enterprise as a director, officer or
employee. To the fullest extent permitted by law (including the Investment
Company Act of 1940), expenses incurred by any such person in defending any
such action, suit or proceeding shall be paid or reimbursed by the
Corporation promptly upon receipt by it of an undertaking of such person to
repay such expenses if it shall ultimately be determined that such person
is not entitled to be indemnified by the Corporation. The rights provided
to any person by this Article EIGHTH shall be enforceable against the
Corporation by such person who shall be presumed to have relied upon it in
serving or continuing to serve as a director, officer or employee as
provided above. No amendment of this Article EIGHTH shall impair the rights
of any person arising at any time with respect to events occurring prior to
such amendment. For purposes of this Article EIGHTH, the term "Corporation"
shall include any predecessor of the Corporation and any constituent
corporation (including any constituent of a constituent) absorbed by the
Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture, trust or employee
benefit plan; service "at the request of the Corporation" shall include
service as a director, officer or employee of the Corporation which imposes
duties on, or involves services by, such director, officer or employee with
respect to an employee benefit plan, its participants or beneficiaries; any
excise taxes assessed on a person with respect to an employee benefit plan
shall be deemed to be indemnifiable expenses; and action by a person with
respect to any employee benefit plan which such person reasonably believes
to be in the interest of the participants and beneficiaries of such plan
shall be deemed to be action not opposed to the best interests of the
Corporation.
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Nothing in Article SEVENTH or in this Article EIGHTH protects
or purports to protect any director or officer against any liability to the
Corporation or its security holders to which he or she would otherwise be
subject by reason of willful malfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her
office.
NINTH: Management of the Affairs of the Corporation. The Board
of Directors shall have the management and control of the property,
business and affairs of the Corporation and is hereby vested with all the
powers possessed by the Corporation itself so far as is not inconsistent
with law or these Articles of Incorporation. In furtherance and without
limitation of the foregoing provisions, it is expressly declared that,
subject to these Articles of Incorporation, the Board of Directors shall
have power:
(i) To make, alter, amend or repeal from time to time the
Bylaws of the Corporation except as such power may otherwise be
limited in the Bylaws.
(ii) To authorize the repurchase of shares in the open market
or otherwise, at prices not in excess of the net asset value of such
shares determined in accordance with Article FIFTH hereof, provided
that the Corporation has assets legally available for such purpose
and to pay for such shares in cash, securities or other assets then
held or owned by the Corporation.
(iii) To fix an offering price for the shares of any Series or
Class that shall yield to the Corporation not less than the par value
thereof, at which price the shares of the Common Stock of the
Corporation shall be offered for sale, and to determine from time to
time thereafter the offering price that will yield to the Corporation
not less than the par value thereof from sales of the shares of its
Common Stock.
(iv) From time to time to determine whether, to what extent, at
what times and places and under what conditions and regulations the
books and accounts of the Corporation, or any of them other than the
stock ledger, shall be open to the inspection of the stockholders,
and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by law or
authorized by resolution of the Board of Directors or of the
stockholders.
(v) In addition to the powers and authorities granted herein
and by statute expressly conferred upon it, the Board of Directors is
authorized to exercise all such powers and do all acts and things as
may be exercised or
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done by the Corporation, subject, nevertheless, to the provisions of
Maryland law, of these Articles of Incorporation and of the Bylaws of
the Corporation.
TENTH: Corporate Books. The books of the Corporation may be
kept (subject to any provisions contained in applicable statutes) outside
the State of Maryland at such place or places as may be designated from
time to time by the Board of Directors or in the Bylaws of the Corporation.
Election of directors need not be by ballot unless the Bylaws of the
Corporation shall so provide.
ELEVENTH: Amendments. The Corporation reserves the right from
time to time to amend, alter, or repeal any of the provisions of these
Articles of Incorporation (including any amendment that changes the terms
of any of the outstanding shares by classification, reclassification or
otherwise), and any contract rights, as expressly set forth in these
Articles of Incorporation, of any outstanding shares, and to add or insert
any other provisions that may, under the statutes of the State of Maryland
at the time in force, be lawfully contained in articles of incorporation,
and all rights at any time conferred upon the stockholders of the
Corporation by these Articles of Incorporation are subject to the
provisions of this Article ELEVENTH.
TWELFTH: Quorum; Majority Vote. 1. The presence in person or by
proxy of the holders of record of one-third of the shares issued and
outstanding and entitled to vote thereat shall constitute a quorum for the
transaction of any business at all meetings of the stockholders except as
otherwise provided by law or in these Articles of Incorporation.
2. On any given matter, the presence in any meeting, in person
or by proxy, of holders of record of less than one-third of the shares
issued and outstanding and entitled to vote thereat shall not prevent
action at such meeting upon any other matter or matters which may properly
come before the meeting, if there shall be present thereat, in person or by
proxy, holders of record of the number of shares required for action in
respect of such other matter or matters.
Notwithstanding any provision of Maryland law requiring more
than a majority vote of the Common Stock, or any Series or Class thereof,
in connection with any corporation action (including, but not limited to,
the amendment of these Articles of Incorporation), unless otherwise
provided in these Articles of Incorporation the Corporation may take or
authorize such action upon the favorable vote of the holders of a majority
of the outstanding shares of Common Stock entitled to vote thereon.
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THIRTEENTH: Acquisition Subject to Articles of Incorporation.
All persons who shall acquire shares in the Corporation shad acquire the
same subject to the provisions of these Articles of Incorporation.
FOURTEENTH: Duration. The duration of the Corporation shall be
perpetual.
I acknowledge this to be my act and state under penalty of
perjury that with respect to all matters and facts therein, to the best of
my knowledge, information and belief, such matters and facts are true in
all material respects.
Date: August 5, 1994 By: /s/ Stephen K. West
STEPHEN K. WEST
