CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 1713
Boston, Massachusetts 02105
SUB-CUSTODIAN
Chase Manhattan Corporation
1 Chaseside
Bournemouth, Dorset BH7 7DB
England
WORLDWIDE VALUE FUND, INC.
P.O. BOX 1476
7 EAST REDWOOD STREET, 10TH FLOOR
BALTIMORE, MD 21203-1476
[WORLDWIDE VALUE FUND LOGO]
REPORT TO SHAREHOLDERS
FOR THE SIX MONTHS ENDED
JUNE 30, 1997
LOMBARD ODIER INTERNATIONAL
PORTFOLIO MANAGEMENT LIMITED
Investment Adviser
LEGG MASON FUND ADVISER, INC.
Investment Consultant
and Administrator
<PAGE>
TO OUR SHAREHOLDERS,
At the April 30, 1997 annual meeting of shareholders, the proposal
recommending that Worldwide Value Fund open-end by merging with the newly
created Bartlett Europe Fund passed. Voting results are listed on the next page
and our financial report follows. Prior to the merger, the Fund paid a $1.50 per
share long-term capital gain distribution. Many shareholders reinvested the
distribution in additional shares of the Fund.
As this letter is written, we have just completed our first month as the
Bartlett Europe Fund. The merger and conversion went very smoothly. There were a
few "bumps" and we received several shareholder questions, but overall we were
pleased with the transition.
We are excited about our reorganization as the Bartlett Europe Fund. Our
current portfolio managers are the same managers whose Worldwide Value Fund
performance over the last five years was exceptional. As Bartlett Europe, the
Fund's focus will continue to be on European investments, an area which Lombard
Odier International Portfolio Management, the Fund's Sub-Adviser, believes holds
great promise as companies restructure and work to improve shareholders' value.
As a result of our reorganization, several officer and director changes
have occurred. Charles J. Swindells, who served admirably as the Worldwide Value
Fund's Chairman since its inception in 1986, has stepped down.Lorrence T.
Kellar, a trustee of the Bartlett Capital Trust (of which Bartlett Europe Fund
is a series), serves as Chairman of the Board and I serve as the Trust's
President. I am a Senior Portfolio Manager and a Managing Director of Bartlett &
Co., the Adviser to the Bartlett Capital Trust.
We hope you are as excited about the Fund's potential as we are; we will
work hard to achieve the Fund's objectives. We appreciate your support of the
Fund through this transition and we welcome your comments. If you don't have a
current copy of our prospectus or want one to pass on to another investor,
please call our distributor at 1-800-800-3609.
Sincerely,
/s/ Dale H. Rabiner
------------------------
Dale H. Rabiner, CFA
President,
Bartlett Capital Trust
August 18, 1997
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS
VOTING RESULTS
The Fund's annual meeting of shareholders was held on April 30, 1997. Of
the 3,222,252 shares outstanding, the following shares (in thousands) were voted
at the meeting:
<TABLE>
<CAPTION>
For Against Abstain
----- ------- -------
<S><C>
Election of seven directors:
A. John W. Campbell 2,806 -- 60
Edmund J. Cashman, Jr. 2,813 -- 53
Henri Deegenaar 2,813 -- 53
Ian F. H. Grant 2,812 -- 54
Charles J. Swindells 2,809 -- 57
Robert H. C. van Maasdijk 2,809 -- 57
Wolfgang E. Furst zu Ysenburg 2,813 -- 53
Ratification of selection of Coopers
& Lybrand L.L.P. as the Fund's independent
accountants for the year ending December 31, 1997 2,819 18 29
Proposal recommending that the shareholders
consider an Agreement and Plan of Conversion and
Liquidation under which Bartlett Europe Fund would
acquire the assets and liabilities of the Fund. 1,675 80 58
</TABLE>
2
<PAGE>
INVESTMENT ADVISERS' COMMENTS
2ND QUARTER 1997
MSCI European Index +8.9%
Worldwide Value Fund +6.7%
MARKET REVIEW
The two main themes of the second quarter were the firm Dollar and the
strong US equity markets, both of which provided the impetus for the European
bourses. All the major European markets performed well during the second
quarter, taking their cue from events in the US, where the market's inexorable
rise continued.
The quarter began somewhat nervously. After a strong start to the year,
some sort of correction appeared inevitable, but this was very short-lived.
Concerns over the accelerating pace of economic activity in the US sent the Dow
plunging, dragging the European markets down with it. However, these concerns
were rapidly forgotten on the release of favourable CPI data and the weakest
monthly durable goods orders since 1991. As a result the Dow rose 280 points in
three days and the tone was set in Europe for the remainder of the quarter. All
the major European bourses reached record levels during Q2 with most ending the
period under review only just short of these levels.
Politics came to the fore in both France and the UK. President Chirac
called early elections in France and must rue his decision to do so. His aim was
to give the then incumbent (right-wing) government a renewed 5 year mandate,
during which time it would steer France into EMU and see him to the end of his
term of presidency. He clearly misjudged the mood of the electorate which
expressed its dissatisfaction with record unemployment levels and a crippling
tax regime by granting a surprise victory to the Socialists. Chirac must now
endure a period of cohabitation for the rest of his presidency, i.e. a
right-wing President in the Elysee with a left-wing government in the National
Assembly. The French market fell sharply on the initial outcome as doubts over
the future of the privatisation programme and the freedom of companies to
restructure their operations were raised. However, the market began to take a
more sanguine view of events and rebounded towards the end of Q2.
The outcome of the long-awaited General Election in the UK was more of a
foregone conclusion. "New Labour" under Tony Blair swept to a record Labour
majority and set about establishing a new government with considerable verve.
The Bank of England was granted full independence regarding monetary policy.
This sent the Gilt market soaring over 4 points in one day. Meanwhile the UK
economy remains buoyant, boosted by a significant improvement in the housing
market and over (pound)30bn in windfall shares handed out from the recently
privatised building societies. In order to rein back the economy, interest rates
were raised twice during Q2 to 6 1/2%. This provided more support for Sterling
which rose further and broke through the 2.90 level vs. the DEM and is thus of
some concern to the export sector.
The European debate over EMU and the form it will finally take became
increasingly heated. Many countries are struggling to reach the deficit targets
set down in the Maastricht treaty. As a consequence, various one-off measures
and "fudges" are being considered just to "make the cut." Clearly this is not
what was originally intended and has led to acrimonious exchanges among the
European heads of Finance. Germany, in particular, has been a vociferous
advocate of a strong Euro (by implication this excludes Italy and Spain at the
first stage of EMU). However, as it became clear that Germany might not make the
grade, a bitter public row broke out between Finance Minister Waigel, who wants
to re-value Germany's gold reserves thus
3
<PAGE>
bringing Germany within the 3% deficit/GDP target, and Bundesbank President
Tietmeyer who was adamantly against such action, arguing that it would undermine
Germany's credibility.
The surprise victory of the Socialists in France added another twist to the
EMU saga. The French Prime Minister Jospin and other socialist leaders appear
more concerned with the immediate issues of growth and unemployment rather than
strict financial targets and therefore, a broader-based EMU, including Italy and
Spain, seems more likely. The high-yielding bond markets of Sweden, Italy and
Spain all benefited from this expectation, with a considerable tightening of
yields towards German levels. This also spurred on the equity markets,
particularly in Spain, Europe's best performing market, rising 26% over the
period.
In terms of corporate news, Philips first released spectacular Q1 results,
well ahead of the most optimistic forecasts, then announced its intention to
merge its telecom activities with those of Lucent and gave further details of
the restructuring measures being implemented at its Sound &Vision division.
Consequently, Philips rose over 50% in Q2.
In contrast, Q1 results in Sweden were largely disappointing, highlighted
by profits warnings from the two pharmaceutical stocks, Astra and Pharmacia &
Upjohn. Ericsson and Nokia were the exceptions, both rising strongly, having
indicated that growth for their digital handsets exceeded 100% in Q1.
Swiss pharmaceutical giant Roche made its largest ever acquisition. Roche
paid $11.5bn for the private German diagnostics company Boehringer Mannheim. The
deal came as some surprise as it fell outside of Roche's mainstream
pharmaceutical business.
Grand Met and Guinness announced a (pound)24bn merger, although it is
currently unclear whether it will be allowed under competition rules. Also in
the UK, the recently de-mutualised building societies, the Alliance &Leicester,
the Halifax, as well as the Norwich Union, came to the market and were
well-received.
INVESTMENT STRATEGY
Our geographical asset allocation is derived from our stock selection. Our
two basic tenets of investment strategy centre on long-term growth and tangible
corporate change. To warrant inclusion in the portfolio, a stock must show
either of these characteristics. Much emphasis is also placed on management
quality and the prospects for the sector in which a stock operates.
We continue to maintain our overweight position in the Netherlands, as we
find many well-run growth companies here. German and Swedish weightings were cut
back however.
In terms of stocks, BASF was sold as we see little potential for further
outperformance from here and Dresdner Bank was added to the portfolio as it will
be a beneficiary of the restructuring of the German financial sector which we
believe is beginning to take place. Veba was also sold to make way for Fresenius
where the growth prospects are particularly attractive. Astra was sold because
of the deteriorating outlook for its major product, Losec. We also reduced Roche
in favour of Novartis. The main change in the UK was the increase in financial
weighting through the additions of the Halifax, the Norwich Union and HSBC, the
UK's largest stock, which is benefiting not only from the strong economic
environment in the UK but also from its exposure to the fast-growing Far East.
4
<PAGE>
OUTLOOK
We believe that the Fund remains well positioned in high quality stocks to
benefit from the current low growth, low inflationary environment. We believe
that good stock-picking is the key to outperformance in such an environment and
therefore we are hopeful that the Worldwide Value Fund will show solid
performance in the second-half of the year.
Ronnie Armist
Mark Lloyd-Price
August 11, 1997
5
<PAGE>
================================================================================
INDUSTRY DIVERSIFICATION
Worldwide Value Fund, Inc. / June 30, 1997
================================================================================
% of Net Market
Assets Value
-------- ------
(000)
Pharmaceuticals and Health Care 14.8% $12,152
Banking 11.8 9,661
Retail Sales 11.6 9,503
Telecommunications 10.5 8,631
Finance 7.4 6,101
Oil and Gas 5.7 4,663
Miscellaneous Services 5.5 4,555
Insurance 5.2 4,285
Aerospace/Defense 4.3 3,516
Automotive 4.1 3,352
Consumer Non-Durable Goods 3.8 3,117
Electrical Equipment 3.2 2,638
Publishing 3.1 2,557
Leisure 2.7 2,230
Utilities 2.3 1,883
Chemicals 1.9 1,595
Engineering 1.8 1,446
Consumer Durable Goods 1.6 1,290
Multi-Industry 1.6 1,278
Transportation 1.2 1,001
Metals 1.1 931
Human Resources 0.1 111
----- -------
Total Investment Portfolio 105.3 86,496
Other Assets Less Liabilities (5.3) (4,331)
----- -------
NET ASSETS 100.0% $82,165
===== =======
6
<PAGE>
================================================================================
STATEMENT OF NET ASSETS / Unaudited
Worldwide Value Fund, Inc. / June 30, 1997 / Amounts in Thousands
================================================================================
SHARES VALUE
------ -----
COMMON STOCKS AND
EQUITY INTERESTS--103.0%
AUSTRIA--2.9%
Voest-Alpine Stahl AG 21 $ 931
Voest-Alpine Technologie AG 8 1,446
-------
2,377
-------
FRANCE--16.2%
Alcatel Alsthom 15 1,915
AXA-UAP 28 1,743
Christian Dior SA 11 1,799
Compagnie Bancaire SA 9 1,123
Guilbert SA 9 1,332
Pinault-Printemps SA 3 1,629
Sodexho SA 4 1,812
Total SA 20 1,991
-------
13,344
-------
GERMANY--12.9%
Adidas AG 12 1,290
Daimler-Benz AG 24 1,931
Dresdner Bank AG 47 1,639
Fresenius AG 6 1,362
Gehe AG 18 1,255
Hoechst AG 38 1,595
Metro AG 14 1,567
-------
10,639
-------
GREECE--2.0%
Hellenic Telecommunication
Organization S.A. 20 459
Hellenic Telecommunication
Organization S.A. GDR 100 1,152
Hellenic Telecommunication
Organization S.A. - Rights 20 2(A)
-------
1,613
-------
HUNGARY--2.2%
Richter Gedeon Rt 20 1,841
-------
ITALY--2.5%
ENI 355 2,012
-------
SHARES VALUE
------ -----
NETHERLANDS--18.2%
ABN Amro Holding N.V. 83 $ 1,551
Aegon N.V. 17 1,207
Gucci Group 20 1,318
Koninklijke Ahold NV 25 2,119
ING Groep N.V. 45 2,084
Philips Electronics N.V. 37 2,638
Vedior 4 111(A)
Vendex International N.V. 25 1,349
VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd
Bezit 65 1,427
Wolters Kluwer NV 9 1,130
-------
14,934
-------
SPAIN--4.5%
Banco Santander SA 65 2,003
Telefonica de Espana 59 1,700
-------
3,703
-------
SWEDEN--2.8%
Telefonaktiebolaget LM Ericsson 57 2,261
-------
SWITZERLAND--8.3%
Credit Suisse Group 9 1,120
Novartis 3 4,123
Roche Holding AG N.M. 1,556
-------
6,799
-------
UNITED KINGDOM--29.8%
BBA Group plc 275 1,624
Barclays PLC 104 2,064
British Aerospace PLC 85 1,892
British-Borneo Petroleum
Syndicate PLC 28 660
Carpetright plc 183 1,530
Granada Group plc 170 2,230
HSBC Holdings plc 43 1,324
Halifax plc 122 1,570(A)
Henlys Group plc 187 1,421
Lloyds TSB Group plc 125 1,284
Next Plc 116 1,310
Norwich Union plc 252 1,335(A)
Rentokil Initial PLC 402 1,410
Stagecoach Holdings plc 95 1,001
Vodafone Group plc 234 1,142
Wassall PLC 248 1,278
Zeneca Group plc 42 1,411(A)
-------
24,486
-------
7
<PAGE>
================================================================================
STATEMENT OF NET ASSETS / Continued
Worldwide Value Fund, Inc. / June 30, 1997 / Amounts in Thousands
================================================================================
SHARES VALUE
------ -----
UNITED STATES OF AMERICA--0.7%
Ultrafem, Inc. 44 $ 604(A)
-------
Total Common Stocks and Equity
Interests
(Identified Cost--$67,095) 84,613
-------
PREFERRED STOCK--2.3%
ITALY--2.3%
Telecom Italia S.p.A. - Savings Shares
(Identified Cost--$1,275) 1,053 1,883
-------
Total Investments--105.3%
(Identified Cost--$68,370) 86,496
Other Assets Less Liabilities--(5.3)% (4,331)
-------
NET ASSETS--100.0% $82,165
=======
NET ASSETS CONSISTING OF:
Common stock at par value
$.001 per share, authorized
50,000 shares, issued and
outstanding 3,222
shares $ 3
Accumulated paid-in capital 59,138
Overdistributions of net
investment income (35)
Undistributed net realized gain on
investments and foreign currency
transactions 4,955
Unrealized appreciation of
investments and foreign
currency transactions 18,104
-------
NET ASSETS--100.0% $82,165
=======
NET ASSET VALUE PER SHARE $25.50
======
- ----------
(A) Non-income producing
N.M. Not meaningful
See notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================
STATEMENT OF OPERATIONS / Unaudited
Worldwide Value Fund, Inc. / For the Six Months Ended June 30, 1997 / Amounts in Thousands
==========================================================================================
<S> <C>
INVESTMENT INCOME:
Dividends $1,029
Interest 29
Less foreign income tax expense (123)
------
Total investment income $ 935
EXPENSES:
Investment advisory fee 403
Administration fee 81
Custodian fees 105
Legal and audit fees 92
Reports to shareholders 33
Directors' fees and expenses 27
Transfer agent and shareholder servicing expense 13
Registration expense 8
Other expenses 25
------
Total expenses 787
------
NET INVESTMENT INCOME 148
NET REALIZED AND UNREALIZED GAIN (LOSS):
Realized gain on:
Investments 9,679
Foreign currency transactions 469
Unrealized gain (loss):
Investments (803)
Assets and liabilities denominated in foreign currencies 5
------
NET REALIZED AND UNREALIZED GAIN 9,350
------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $9,498
------
</TABLE>
- ----------
See notes to financial statements.
9
<PAGE>
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
Worldwide Value Fund, Inc. / Amounts in Thousands
================================================================================
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, 1997 Dec. 31, 1996
------------- -------------
(Unaudited)
<S> <C>
CHANGE IN NET ASSETS:
OPERATIONS:
Net investment income $ 148 $ 55
Net realized gain on investments and foreign currency transactions 10,148 9,795
Change in unrealized appreciation of investments
and foreign currency transactions (798) 8,729
------- -------
Increase in net assets resulting from operations 9,498 18,579
Distributions to shareholders from
net realized gain on investments (4,834) (9,518)
Change in net assets from Fund stock transactions 6,510 (319)
------- -------
Increase in net assets 11,174 8,742
NET ASSETS:
Beginning of period 70,991 62,249
------- -------
End of period (including overdistributions of net investment
income of $35 and $183, respectively) $82,165 $70,991
======= =======
</TABLE>
- ----------
See notes to financial statements.
10
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
Worldwide Value Fund, Inc.
================================================================================
Contained below is per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
and other supplemental data. This information has been derived from information
provided in the financial statements and market price data for the Fund's
shares.
<TABLE>
<CAPTION>
For the Six For the Years Ended December 31,
Months Ended -------------------------------------------------------
June 30, 1997 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
(Unaudited)
<S> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value beginning of period $24.24 $21.13 $17.68 $18.46 $14.29 $15.44
------ ------ ------ ------ ------ ------
Net investment income (loss) .05 .02 .01 (.03) .14 .08
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 2.71 6.34 3.50 (.75) 4.13 (1.19)
------ ------ ------ ------ ------ ------
Total from investment operations 2.76 6.36 3.51 (.78) 4.27 (1.11)
------ ------ ------ ------ ------ ------
Dividends and distributions paid:
Net investment income -- -- (.06) -- (.05) (.04)
Net realized gains (1.50) (3.25) -- -- -- --
In excess of net investment income -- -- -- -- (.05) --
------ ------ ------ ------ ------ ------
Total dividends and distributions (1.50) (3.25) (.06) -- (.10) (.04)
------ ------ ------ ------ ------ ------
Net asset value, end of period $25.50 $24.24 $21.13 $17.68 $18.46 $14.29
====== ====== ====== ====== ====== ======
Market value per share, end of period $24.375 $22.00 $16.88 $14.25 $16.625 $12.00
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN:
Based on market value per share 17.6%(B) 49.5% 18.8% (14.3%) 39.3% (3.7%)
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Expenses 2.0%(A) 2.0% 2.1% 2.1% 2.1% 2.2%
Net investment income 0.4%(A) 0.1% 0.1% -- 0.9% 0.5%
Portfolio turnover rate 141.6%(A) 109.0% 147.7% 75.0% 66.8% 148.4%
Average commission rate paid(C) .0427 .0313 -- -- -- --
Net assets at end of period (in thousands) $82,165 $70,991 $62,249 $53,135 $55,486 $42,930
</TABLE>
- ----------
(A) Annualized
(B) Not annualized
(C) Pursuant to SEC regulations adopted for fiscal years beginning after
September 1, 1995, this is the average commission rate paid on securities
purchased and sold by the Fund.
See notes to financial statements.
11
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS / Unaudited
Worldwide Value Fund, Inc. / Amounts in Thousands
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES:
- --------------------------------------------------------------------------------
Worldwide Value Fund, Inc. ("Fund") is registered under the Investment Company
Act of 1940, as amended, as a closed-end, diversified investment company. The
following accounting policies are in conformity with generally accepted
accounting principles for investment companies. Such policies are consistently
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION
All securities for which market quotations are readily available are valued at
the last sales price, or if no sales price is available at that time, at the
mean between the latest bid and asked prices. Securities that are traded
over-the-counter are valued at the mean between the latest bid and asked prices.
If market or bid and asked quotations are not available, securities will be
valued as determined in good faith by the Board of Directors.
CURRENCY TRANSLATION
The books and records of the Fund are maintained in US dollars. Foreign currency
amounts are translated into US dollars on the following basis:
(i) market value of investment securities, options, assets and
liabilities are translated at the closing daily rate of exchange, and
(ii) purchases and sales of investment securities, options, dividend and
interest income and expenses are translated at the rate of exchange
prevailing on the respective date of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains or losses is reflected as a component of such gains or losses.
SECURITY TRANSACTIONS AND
INVESTMENT INCOME
Security transactions are recorded on the trade date. Realized gains and losses
from security transactions are reported on an identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income and expenses are
recorded on the accrual basis.
FEDERAL INCOME TAX
No provision for federal income or excise tax is required, since the Fund
intends to continue to qualify as a regulated investment company and distribute
all of its taxable income to its shareholders.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date. The Fund
expects to distribute annually to shareholders all of its net investment income
and net realized short-term and long-term capital gain.
2. INVESTMENT TRANSACTIONS:
- --------------------------------------------------------------------------------
Investment transactions for the six months ended June 30, 1997 (excluding
short-term securities) were as follows:
Purchases $56,500
Proceeds from sales 56,918
At June 30, 1997, the cost of securities for federal income tax purposes
was $68,370. Aggregate gross unrealized appreciation for all securities in which
there was an excess of value over tax cost was $19,150 and aggregate gross
unrealized depreciation for all securities in which there was an excess of tax
cost over value was $1,024.
3. TRANSACTIONS WITH AFFILIATES:
- --------------------------------------------------------------------------------
The Fund has an investment advisory agreement with Lombard Odier International
Portfolio Management Limited ("Adviser") for which the Adviser receives a
monthly fee at an annual rate of 1% of the Fund's net assets, based on the net
assets on the last business day of each month. This rate is reduced on net asset
values in excess of $100 million. The Adviser has managed the Fund's portfolio
since its inception in 1986.
The Fund has an administration contract with Legg Mason Fund Adviser, Inc.
("Administrator") for which the Administrator receives from the Fund a monthly
fee at an annual rate of .20% of the Fund's net assets, based on the net assets
on the last business day of each month. This rate is reduced on net asset values
in excess of $100 million.
12
<PAGE>
The Administrator also serves as Investment Consultant ("Consultant") to
the Adviser pursuant to an Investment Consultant Contract with the Adviser and
the Fund. Under the Investment Consultant Contract, the Consultant provides the
Adviser with investment advice, research and assistance, primarily regarding
United States securities. For its services, the Consultant receives from the
Adviser a monthly fee at the same rate and basis as in the Administration
Contract discussed in the preceding paragraph.
4. FINANCIAL INSTRUMENTS:
- --------------------------------------------------------------------------------
As part of the Fund's investment program, the Fund may utilize repurchase
agreements, forward currency contracts, options and futures. The nature and risk
of these financial instruments and the reason for using them are set forth more
fully in the Fund's Prospectus.
REPURCHASE AGREEMENTS
All repurchase agreements are fully collateralized by obligations issued by the
US government or its agencies and such collateral is in the possession of the
Fund's custodian. The value of such collateral includes accrued interest. Risks
arise from the possible delay in recovery or potential loss of rights in the
collateral should the issuer of the repurchase agreement fail financially.
FORWARD CURRENCY CONTRACTS
The Fund may enter into foreign forward currency contracts to hedge against
adverse changes in the relationship of the US dollar to foreign currencies.
Risks arise from the possible inability of counterparties to meet the terms of
their contracts and from movements in currency values. Forward currency
contracts are valued using the forward rate. As of June 30, 1997, the Fund had
no open forward currency contracts.
OPTION TRANSACTIONS
A call option written gives the option holder the right to purchase the
underlying security at a specified price until a specified date. A put option
written gives the option holder the right to sell the underlying security at a
specified price until a specified date. Risks arise from the possible
illiquidity of the options market and from movements in security values. No call
options were written by the Fund during the period.
5. REORGANIZATION OF WORLDWIDE VALUE FUND, INC.
- --------------------------------------------------------------------------------
On July 18, 1997, the Bartlett Europe Fund, a series of the Bartlett Capital
Trust, an open-end management investment company, acquired all the net assets of
Worldwide Value Fund, Inc. pursuant to a plan of reorganization approved by
Worldwide's shareholders on April 30, 1997. The acquisition was accomplished by
a tax-free exchange of 3,357 shares of Worldwide (valued at $88,660) outstanding
onJuly 18, 1997. The net assets of Worldwide ($88,660, including $18,092 of
unrealized appreciation and $12,991 of undistributed net capital gain) were
merged into the newly-created Bartlett Europe Fund. Prior to the reorganization,
Worldwide Value Fund, Inc. was a closed-end mutual fund whose shares traded on
the New York Stock Exchange.
13
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