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European Equity Fund
Pacific Basin Equity Fund
SEMI-ANNUAL REPORT
April 30, 1998
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998
(unaudited)
Shares Value
- --------- ------------
COMMON STOCKS & RIGHTS (96.9%)
FINLAND (3.0%)
MULTI-INDUSTRY
78,700 Nokia AB.................... ....................... $ 5,274,024
------------
TOTAL FINLAND ...................................... 5,274,024
------------
FRANCE (15.4%)
BANKING
70,000 Banque National De Paris C.I. ...................... 5,904,176
34,300 Campagnie Financiere de Paribas..................... 3,651,971
26,000 Societe Generale SA................................. 5,415,405
------------
14,971,552
------------
CAPITAL EQUIPMENT
20,300 Alcatel Alsthom SA.................................. 3,765,513
------------
ENERGY
20,900 Elf Aquitaine SA.................................... 2,743,321
20,900 Total SA ........................................... 2,486,026
------------
5,229,347
------------
MEDIA
7,100 Canal Plus.......................................... 1,234,320
------------
SERVICES
7,500 Accor SA............................................ 2,045,001
------------
TOTAL FRANCE ....................................... 27,245,733
------------
GERMANY (7.1%)
BANKING
85,300 Commerzbank AG...................................... 3,289,270
41,890 Deutsche Pfandbrief-und Hypothekenbank AG*.......... 3,232,992
------------
6,522,262
------------
CAPITAL EQUIPMENT
49,100 Siemens AG.......................................... 2,872,865
------------
INSURANCE
294 Allianz AG (New)*................................... 89,615
10,000 Allianz AG Registered............................... 3,075,980
------------
3,165,595
------------
TOTAL GERMANY....................................... 12,560,722
------------
IRELAND (3.5%)
BANKING
160,000 Allied Irish Banks, Plc. ........................... 2,201,159
------------
CONSUMER NON-DURABLES
1,270,000 Waterford Wedgewood, Plc. .......................... 2,121,564
------------
PHARMACEUTICALS
31,500 Elan Corp., Plc. ADR*............................... 1,956,938
------------
TOTAL IRELAND....................................... 6,279,661
------------
ITALY (6.7%)
ENERGY
431,000 Ente Nazionale Idrocarbun SpA (ENI)................. 2,888,176
------------
TELECOMMUNICATIONS
584,000 Telecom Italia SpA.................................. 4,399,740
809,200 Telecom Italia Mobile SpA........................... 4,635,878
------------
9,035,618
------------
TOTAL ITALY ........................................ 11,923,794
------------
NETHERLANDS (7.5%)
CONSUMER GOODS
20,810 Heineken NV......................................... 4,827,269
------------
ENERGY
40,000 Royal Dutch Petroleum Co. .......................... 2,262,500
------------
FINANCE
46,000 Fortis Amev NV..................................... 2,691,550
------------
MATERIALS
17,205 Akzo Nobel NV....................................... 3,500,448
------------
TOTAL NETHERLANDS................................... 13,281,767
------------
POLAND (0.3%)
BANKING
26,000 Bank Handlowy W Warsza Wie SA GDR*.................. 482,261
------------
TOTAL POLAND........................................ 482,261
------------
ROMANIA (0.7%)
MULTI-INDUSTRY
242,918 Romanian Investment Fund, Ltd. (The)*............... 1,244,953
------------
TOTAL ROMANIA....................................... 1,249,953
------------
SPAIN (9.7%)
ENERGY
85,440 Repsol S.A. ........................................ 4,684,334
------------
FINANCE
77,100 Banco Bilbao Vizcaya, S.A. ......................... 4,075,214
76,000 Banco Santander S.A. ............................... 3,912,279
------------
7,987,493
------------
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (continued)
(unaudited)
Shares Value
- --------- ------------
SPAIN (continued)
UTILITIES
104,910 Telefonica de Espana S.A. .......................... $ 4,381,009
104,910 Telefonica de Espana S.A. (Rights)*................. 82,661
------------
4,463,670
------------
TOTAL SPAIN ........................................ 17,135,497
------------
SWEDEN (5.6%)
CAPITAL EQUIPMENT
75,000 Ericsson (LM) Telephone Co., Class 'B'.............. 3,952,467
------------
CONSUMER DURABLES
40,600 Electrolux AB (B free).............................. 3,775,769
------------
FINANCE
30,000 Skandia Foersaekrings AB............................ 2,088,608
------------
TOTAL SWEDEN ....................................... 9,816,844
------------
SWITZERLAND (10.3%)
BANKING
1,400 Credit Suisse Group AG Registered................... 307,897
3,120 Union Bank of Switzerland........................... 5,023,605
------------
5,331,502
------------
CONSUMER GOODS
370 Roche Holding AG DRC................................ 3,749,317
------------
CONSUMER NON-DURABLES
2,380 Nestle AG Registered................................ 4,615,661
------------
PHARMACEUTICALS
2,780 Norvartis AG Bearer................................. 4,609,557
------------
TOTAL SWITZERLAND................................... 18,306,037
------------
UNITED KINGDOM (27.1%)
BANKING
128,000 Barclays, Plc. ..................................... 3,693,320
250,000 Lloyds TSB Group, Plc. ............................. 3,744,756
------------
7,438,076
------------
CONSUMER GOODS
225,000 Smithkline Beecham, Plc. ........................... 2,683,428
310,000 Unilever, Plc. ..................................... 3,303,080
------------
5,986,508
------------
ENERGY
280,000 Britsh Petroleum Co., Plc. ......................... 4,425,963
230,000 PowerGen, Plc. ..................................... 3,108,545
555,000 Shell Transport & Trading Co., Plc. ................ 4,131,149
------------
11,665,657
------------
FOOD & BEVERAGES
254,880 Diageo, Plc. ....................................... 3,035,524
------------
PHARMACEUTICALS
140,000 Glaxo Wellcome, Plc. ............................... 3,957,607
------------
REAL ESTATE
250,000 British Land Co., Plc. (The) ....................... 3,123,766
177,000 Land Securities, Plc. .............................. 3,162,004
------------
6,285,770
------------
SERVICES
315,000 BAA, Plc. .......................................... 3,206,188
180,000 Granada Group, Plc. ................................ 3,101,185
185,000 Railtrack Group, Plc. .............................. 3,380,735
------------
9,688,108
------------
TOTAL UNITED KINGDOM ............................... 48,057,250
------------
TOTAL INVESTMENTS (identified cost $122,229,980) (a)... 96.9% $171,608,543
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ........ 3.1 5,575,748
----- ------------
NET ASSETS ........................................... 100.0% $177,184,291
===== ============
- ----------
* non-income producing security
(a) The aggregate cost for federal income tax purposes is $122,229,980, the
aggregate gross unrealized appreciation is $50,868,621, and the aggregate
gross unrealized depreciation is $1,490,058, resulting in net unrealized
appreciation of $49,378,563.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
(unaudited)
ASSETS:
Investments in securities, at value (identified
cost $122,229,980) (Note 1) ............................... $ 171,608,543
Cash (including $876,728 in foreign currency) ............... 4,139,262
Receivables for:
Foreign tax reclaims ...................................... 277,826
Dividends ................................................. 584,933
Capital stock sold ........................................ 1,095,544
-------------
Total Assets .......................................... 177,706,108
-------------
LIABILITIES:
Payables for:
Capital stock redeemed .................................... 171,049
Investment advisory fee (Note 2) .......................... 93,225
Shareholder servicing/eligible institution
fees (Note 2) ........................................... 35,856
Administrative fee (Note 2) ............................... 21,514
Accrued expenses and other liabilities .................... 200,173
-------------
Total Liabilities ..................................... 521,817
-------------
NET ASSETS .................................................... $ 177,184,291
=============
Net Assets Consist of:
Paid-in capital ............................................. $ 116,238,059
Distributions in excess of net investment income ............ (435,605)
Accumulated net realized gain ............................... 12,001,046
Net unrealized appreciation ................................. 49,380,791
-------------
Net Assets .................................................... $ 177,184,291
=============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($177,184,291 / 4,201,886 shares) ........................... $42.17
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998
(unaudited)
INVESTMENT INCOME:
Income:
Dividends (net of foreign withholding taxes
of $151,941) .......................................... $ 1,144,679
------------
Expenses:
Investment advisory fee (Note 2) ........................ 502,382
Shareholder servicing/eligible institution
fees (Note 2) ......................................... 193,224
Administrative fee (Note 2) ............................. 115,934
Custodian fee (Note 3) .................................. 130,118
Directors' fees and expenses (Note 2) ................... 7,865
Miscellaneous expenses .................................. 14,785
------------
Total Expenses .......................................... 964,308
Fees paid indirectly (Note 3) ....................... (21,109)
------------
Net Expenses ........................................ 943,199
------------
Net Investment Income ...................................... 201,480
------------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments and foreign
exchange transactions ................................... 12,001,833
Net change in unrealized appreciation on investments
and foreign exchange translations ....................... 27,209,385
------------
Net Realized and Unrealized Gain .................... 39,211,218
------------
Net Increase in Net Assets Resulting from Operations ....... $ 39,412,698
============
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the
six months ended For the
April 30, 1998 year ended
(unaudited) October 31, 1997
---------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................... $ 201,480 $ 1,587,020
Net realized gain on investments and
foreign exchange transactions ........ 12,001,833 18,918,927
Net change in unrealized appreciation
on investments and foreign
currency translations ................ 27,209,385 3,865,165
------------- -------------
Net increase in net assets
resulting from operations .......... 39,412,698 24,371,112
------------- -------------
Dividends and distributions declared
(Note 1):
From net investment income .............. (744,927) (1,711,429)
In excess of net investment income ...... (435,605) --
From net realized gains ................. (19,684,595) (9,446,042)
------------- -------------
Total dividends and distributions
declared .......................... (20,865,127) (11,157,471)
------------- -------------
Capital stock transactions (Note 4):
Net proceeds from sales of capital
stock ................................ 58,473,204 25,594,329
Net asset value of capital stock
issued to shareholders in
reinvestment of distributions ........ 1,850,819 706,526
Net cost of capital stock redeemed ...... (55,865,978) (31,685,844)
------------- -------------
Net increase (decrease) in net
assets resulting from capital
stock transactions ................ 4,458,045 (5,384,989)
------------- -------------
Total increase in net assets ...... 23,005,616 7,828,652
NET ASSETS:
Beginning of period ........................ 154,178,675 146,350,023
------------- -------------
End of period (including distribution
in excess of net investment
income and undistributed net
investment income of $435,605
and $543,447, respectively) ............. $ 177,184,291 $ 154,178,675
============= =============
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share
outstanding throughout each period
<TABLE>
<CAPTION>
For the six
months ended
April 30, For the years ended October 31,
1998 --------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $38.02 $35.02 $31.95 $31.82 $31.17 $27.15
Income from investment operations:
Net investment income....................... 0.07 0.39 0.38(1) 0.45 0.39 0.21
Net realized and unrealized gain............ 9.53 5.29 4.08 2.09 1.80 6.09
Less dividends and distributions (Note 1):
From net investment income.................. (0.20) (0.41) -- -- (0.25) (0.36)
In excess of net investment income.......... (0.11) -- -- -- -- --
From net realized gains..................... (5.14) (2.27) (1.39) (2.41) (1.29) (1.91)
In excess of net realized gains............. -- -- -- -- -- (0.01)
------ ------ ------ ------ ------ ------
Net asset value, end of period................ $42.17 $38.02 $35.02 $31.95 $31.82 $31.17
====== ====== ====== ====== ====== ======
Total return.................................. 28.88% 17.28% 14.63% 9.42% 7.35% 24.82%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted)... $177,184 $154,179 $146,350 $116,955 $110,632 $88,860
Expenses as a percentage of average
net assets:
Expenses paid by Fund..................... 1.25%(3) 1.32% 1.23% 1.24% 1.37% 1.50%
Expenses paid by commissions(2)........... -- 0.01% 0.01% 0.05% n/a n/a
Expense offset arrangement................ 0.03%(3) 0.03% 0.09% 0.14% n/a n/a
------ ------ ------ ------ ------ ------
Total expenses........................ 1.28%3 1.36% 1.33% 1.43% 1.37% 1.50%
Ratio of net investment income to
average net assets........................ 0.26%(3) 1.02% 1.16% 1.55% 1.30% 1.28%
Portfolio turnover rate..................... 24% 82% 42% 72% 124% 37%
Average commission rate paid per share(4)... $0.1550 $0.0062 $0.0212 $0.0216 -- --
</TABLE>
- ----------
(1) Calculated using average shares outstanding for the year.
(2) A portion of the Fund's securities transactions are directed to certain
unaffiliated brokers which in turn use a portion of the commissions they
receive from the Fund to pay other unaffiliated service providers on
behalf of the Fund for services provided for which the Fund would
otherwise be obligated to pay.
(3) Annualized.
(4) Most foreign securities markets do not charge commissions based on a rate
per share but as a percentage of the principal value of the transaction.
As a result, the above rate is not indicative of the commission
arrangements currently in effect.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998
(unaudited)
Shares Value
- ------- -----------
COMMON STOCKS & WARRANTS (83.4%)
AUSTRALIA (3.7%)
ENERGY
144,000 Woodside Petroleum, Ltd. ............................... $ 942,058
-----------
SERVICES
529,714 Pasminco, Ltd. ......................................... 559,720
-----------
TOTAL AUSTRALIA ........................................ 1,501,778
-----------
INDIA (6.0%)
CONSUMER DURABLES
11,700 Bajaj Auto, Ltd.*....................................... 175,507
-----------
CONSUMER GOODS
10,200 Ranbaxy Laboratories, Ltd. ............................. 170,407
-----------
FINANCE
361,050 Industrial Credit & Investment Corp. of India, Ltd.*.... 939,103
-----------
MATERIALS
18,000 Gransim Industries, Ltd. ............................... 184,500
239,000 Indo Gulf Fertilisers and Chemicals Corp., Ltd. GDR..... 274,850
55,000 Indo Gulf Fertilisers and Chemicals Corp., Ltd. GDR+.... 63,250
126,200 Reliance Industries, Ltd. .............................. 607,883
-----------
1,130,483
-----------
TOTAL INDIA............................................. 2,415,500
-----------
JAPAN (73.7%)
BANKING
392,000 Long-Term Credit Bank of Japan, Ltd. ................... 642,769
71,000 Sumitomo Trust and Banking Co., Ltd. ................... 371,256
-----------
1,014,025
-----------
CAPITAL EQUIPMENT
120,000 Fujikura, Ltd. ......................................... 618,407
1,050 Fujikura, Ltd. (Warrants)*.............................. 29,390
-----------
647,797
-----------
COMPUTER SOFTWARE
40,000 Meitec Corp. ........................................... 1,314,795
-----------
CONSUMER ELECTRONICS
40,000 Canon Inc. ............................................. 946,048
12,000 Sony Corp. ............................................. 998,338
-----------
1,944,386
-----------
CONSUMER GOODS
140,000 Kirin Brewery Co., Ltd. ................................ 1,221,853
100,000 Suzuki Motor Corp. ..................................... 859,906
-----------
2,081,759
-----------
CONSUMER NON-DURABLES
24,000 Fuji Photo Film Co. .................................... 854,164
15,000 Nintendo Co., Ltd. ..................................... 1,355,599
-----------
2,209,763
-----------
ELECTRIC COMPONENTS
12,000 Kyocera Corp. .......................................... 629,288
29,000 Matsushita Communications Industrial Co., Ltd. ......... 856,808
90,000 Minebea Co., Ltd. ...................................... 1,006,498
11,000 Rohm Co., Ltd. ......................................... 1,236,814
12,000 TDK Corp. .............................................. 948,466
-----------
4,677,874
-----------
FINANCE
19,000 Orix Corp. ............................................ 1,313,662
-----------
MATERIALS
48,000 Bridgestone Corp. ...................................... 1,095,360
95,000 Kurita Water Industries................................. 1,045,904
-----------
2,141,264
-----------
METAL PRODUCTS
62,000 Toyo Seikan Kaisha, Ltd. ............................... 798,776
-----------
MULTI-INDUSTRY
560,000 Prospect Japan Fund*.................................... 1,820,000
-----------
PHARMACEUTICALS
72,000 Eisai Co., Ltd. ........................................ 1,033,701
96,000 Santen Pharmaceutical Co., Ltd. ........................ 953,907
39,000 Yamanouchi Pharmaceutical Co., Ltd. .................... 922,397
-----------
2,910,005
-----------
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (continued)
(unaudited)
Shares Value
- ------- -----------
JAPAN (continued)
PRECISION INSTRUMENTS
36,000 Hoya Corp. ............................................. $ 1,191,476
-----------
RETAIL
21,000 Ito-Yokato Co., Ltd. ................................... 1,086,973
-----------
SERVICES
37,100 Benesse Corp. .......................................... 1,199,849
35,000 Credit Saison........................................... 759,030
100 Credit Saison (Warrants)*............................... 155,000
507,000 Kawasaki Kisen Kaisha, Ltd. ............................ 747,053
11,220 Nichiei Co., Ltd. ...................................... 873,251
-----------
3,734,183
-----------
TELECOMMUNICATIONS
76 Japan Telecom Co., Ltd. ................................ 775,276
-----------
TOTAL JAPAN............................................. 29,662,014
-----------
PAKISTAN (0.0%)
MATERIALS
65 Cresent Textile Mills, Ltd.*............................ 15
-----------
TOTAL PAKISTAN.......................................... 15
-----------
TOTAL INVESTMENTS (identified cost $36,071,107) (a) ... 83.4% $33,579,307
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ........ 16.6 6,661,811
----- -----------
NET ASSETS ............................................ 100.0% $40,241,118
===== ===========
- ----------
* non-income producing security
+ Rule 144A security
(a) The aggregate cost for federal income tax purposes is $36,071,107, the
aggregate gross unrealized appreciation is $2,947,799, and the aggregate
gross unrealized depreciation is $5,439,599, resulting in net unrealized
depreciation of $2,491,800.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
(unaudited)
ASSETS:
Investments in securities, at value (identified
cost $36,071,107) (Note 1) ................................ $ 33,579,307
Cash (including $28,785 in foreign currency) ................. 4,635,594
Receivables for:
Investments sold .......................................... 721,587
Foreign exchange contracts sold (Note 5) .................. 692,430
Dividends ................................................. 180,564
Capital stock sold ........................................ 492,900
------------
Total Assets ........................................... 40,302,382
------------
LIABILITIES:
Payables for:
Investment advisory fee (Note 2) .......................... 21,433
Foreign withholding taxes ................................. 15,986
Shareholder servicing/eligible institution
fees (Note 2) ........................................... 8,244
Administrative fee (Note 2) ............................... 4,946
Accrued expenses and other liabilities .................... 10,655
------------
Total Liabilities ...................................... 61,264
------------
NET ASSETS ..................................................... $ 40,241,118
============
Net Assets Consist of:
Paid-in capital .............................................. $ 77,726,055
Distributions in excess of net investment income ............. (2,044,257)
Accumulated net realized loss ................................ (33,636,379)
Net unrealized depreciation .................................. (1,804,301)
------------
Net Assets ..................................................... $ 40,241,118
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($40,241,118 / 1,878,045 shares).............................. $21.43
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998
(unaudited)
INVESTMENT INCOME
Income:
Dividends (net of foreign withholding taxes
of $23,534) .......................................... $ 138,255
------------
Expenses:
Investment advisory fee (Note 2) ........................ 165,635
Shareholder servicing/eligible institution
fees (Note 2) ........................................ 63,706
Administrative fee (Note 2) ............................. 38,223
Custodian fee (Note 3) .................................. 83,354
Directors' fees and expenses (Note 2) ................... 6,625
Professional fees ....................................... 18,100
Miscellaneous expenses .................................. 13,326
------------
Total Expenses .......................................... 388,969
Fees paid indirectly (Note 3) ........................ (51,090)
------------
Net expenses ......................................... 337,879
------------
Net Investment Loss ........................................ (199,624)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Notes 1 and 3)
Net realized loss on investments and foreign
exchange transactions ................................... (19,275,477)
Net change in unrealized depreciation on investments
and foreign exchange translations ....................... 15,122,939
------------
Net Realized and Unrealized Loss .................... (4,152,538)
------------
Net Decrease in Net Assets Resulting from Operations ....... $ (4,352,162)
============
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the
six months ended For the
April 30, 1998 year ended
(unaudited) October 31, 1997
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss) .......... $ (199,624) $ 1,856
Net realized loss on investments and
foreign exchange transactions ....... (19,275,477) (9,573,901)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency translations ....... 15,122,939 (11,759,012)
------------- -------------
Net decrease in net assets
resulting from operations ......... (4,352,162) (21,331,057)
------------- -------------
Dividends and distributions declared
(Note 1):
From net investment income ............ (1,144,528) (1,856)
In excess of net investment income .... (2,044,257) (1,232,885)
From net realized gains ............... -- (1,393,227)
In excess of net realized gains ....... -- (2,266,428)
------------- -------------
Total dividends and distributions
declared .......................... (3,188,785) (4,894,396)
------------- -------------
Capital stock transactions (Note 4):
Net proceeds from sales of capital
stock ............................... 25,428,487 35,999,815
Net asset value of capital stock
issued to shareholders in
reinvestment of distributions ....... 147,083 43,114
Net cost of capital stock redeemed .... (80,099,996) (58,195,932)
------------- -------------
Net decrease in net assets
resulting from capital stock
transactions ...................... (54,524,426) (22,153,003)
------------- -------------
Total decrease in net assets ........ (62,065,373) (48,378,456)
NET ASSETS:
Beginning of period ...................... 102,306,491 150,684,947
------------- -------------
End of period (including distribution in
excess of net investment income
and undistributed net investment
income of $2,044,257 and
$1,344,152, respectively) ............. $ 40,241,118 $ 102,306,491
============= =============
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share
outstanding throughout each period
<TABLE>
<CAPTION>
For the six
months ended
April 30, For the years ended October 31,
1998 --------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993
----------- ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $24.52 $30.19 $29.88 $39.85 $39.87 $27.53
Income from investment operations:
Net investment income (loss)................ (0.10)(1) 0.00(1,3) 0.05(1) 0.11 0.14 0.14
Net realized and unrealized gain (loss)..... (1.37) (4.69) 1.62 (4.50) 1.26 13.18
Less dividends and distributions (Note 1):
From net investment income.................. (0.36) (0.00)(3) (0.86) (0.00)(3) (0.14) (0.02)
In excess of net investment income.......... (1.26) (0.25) (0.50) -- -- --
From net realized gains..................... -- (0.28) -- (5.58) (1.28) (0.96)
In excess of net realized gains............. -- (0.45) -- -- -- --
------ ------ ------ ------ ------ ------
Net asset value, end of period................ $21.43 $24.52 $30.19 $29.88 $39.85 $39.87
====== ====== ====== ====== ====== ======
Total return.................................. (5.77)% (16.03)% 5.65% (10.62)% 3.48% 50.02%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted)... $40,241 $102,306 $150,685 $114,932 $120,469 $92,863
Expenses as a percentage of average
net assets:
Expenses paid by Fund..................... 1.33%(2) 1.19% 1.13% 1.24% 1.29% 1.50%
Expenses paid by commissions(4) .......... -- 0.01% 0.01% 0.05% n/a n/a
Expense offset arrangement................ 0.20%(2) 0.06% 0.16% 0.14% n/a n/a
------ ------ ------ ------ ------ ------
Total expenses........................ 1.53%(2) 1.26% 1.30% 1.43% 1.29% 1.50%
Ratio of net investment income (loss) to
average net assets........................ (0.78)%(2) 0.00% 1.16% 0.53% 0.39% 0.62%
Portfolio turnover rate..................... 19% 83% 58% 82% 86% 79%
Average commission rate paid per share(5) .. $0.0540 $0.0195 $0.0149 $0.0092 -- --
</TABLE>
- ----------
(1) Calculated using average shares outstanding for the year.
(2) Annualized.
(3) Less than $0.01 per share.
(4) A portion of the Fund's securities transactions are directed to certain
unaffiliated brokers which in turn use a portion of the commissions they
receive from the Fund to pay other unaffiliated service providers on
behalf of the Fund for services provided for which the Fund would
otherwise be obligated to pay.
(5) Most foreign securities markets do not charge commissions based on a rate
per share but as a percentage of the principal value of the transaction.
As a result, the above rate is not indicative of the commission
arrangements currently in effect.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Organization and Significant Accounting Policies. The 59 Wall Street
European Equity Fund and The 59 Wall Street Pacific Basin Equity Fund
(individually the "Fund" or collectively the "Funds") are separate
non-diversified series of The 59 Wall Street Fund, Inc. (the "Corporation")
which is registered under the Investment Company Act of 1940, as amended. The
Corporation is an open-ended management investment company organized under the
laws of the State of Maryland on July 19, 1990. The Funds commenced operations
on November 1, 1990.
Each Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require management to make certain
estimates and assumptions at the date of the financial statements and are based,
in part, on the following accounting policies. Actual results could differ from
those estimates.
A. Valuation of Investments. (1) The value of investments listed on
either a domestic or foreign securities exchange is based on the last
price on that exchange prior to the time when assets are valued, or in the
absence of recorded sales, at the average of readily available closing bid
and asked prices on such exchange; (2) unlisted securities are valued at
the average of the quoted bid and asked prices in the over-the-counter
market; (3) securities or other assets for which market quotations are not
readily available are valued at fair value in accordance with procedures
established by and under the general supervision and responsibility of the
Corporation's Board of Directors. Such procedures include the use of
independent pricing services, which use prices based upon yields or prices
of securities of comparable quality, coupon, maturity and type;
indications as to the value from dealers; and general market conditions;
(4) for purposes of calculating net asset value per share, all assets and
liabilities initially expressed in foreign currencies will be converted
into U.S. dollars at the prevailing rates of exchange available at the
time of valuation; and (5) trading in securities on most foreign exchanges
and over-the-counter markets is normally completed before the close of the
New York Stock Exchange and may also take place on days on which the New
York Stock Exchange is closed. If events materially affecting the value of
foreign securities occur between the time when the exchange on which they
are traded closes and the time when a Fund's net asset value is
calculated, such securities will be valued at fair value in accordance
with procedures established by and under the general supervision of the
Corporation's Board of Directors.
B. Foreign Currency Translations. The accounting records of the
Funds are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars at the current rate of exchange of such
currency against the U.S. dollar to determine the value of investments,
assets and liabilities. Purchases and sales of securities, and income and
expenses are translated at the prevailing rate of exchange on the
respective dates of such transactions. Upon the purchase or sale of a
security denominated in foreign currency, each Fund may enter into forward
foreign currency exchange contracts for the purchase or sale, for a fixed
amount of U.S. dollars, of the amount of foreign currency involved in the
underlying security transactions. The Funds do not isolate that portion of
realized gain or loss on investments resulting from changes in foreign
exchange rates on investments from the fluctuations arising from the
changes in market prices of such investments. Such fluctuations are
included with the net realized and unrealized gain or loss from
investments. Reported net realized and unrealized gains and losses arise
from the sales of portfolio securities, sales of foreign currencies,
currency gains or losses realized between the trade and settlement dates
on securities transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalents of the amounts actually
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
received or paid. Net unrealized appreciation or depreciation on foreign
currency translations arise from changes in the value of the assets and
liabilities, excluding investments in securities, at fiscal year end,
arising from changes in the exchange rate.
C. Forward Foreign Currency Exchange Contracts. The Funds may enter
into forward foreign currency exchange contracts ("contracts") in
connection with planned purchases or sales of securities, to hedge the
U.S. dollar value of portfolio securities denominated in a particular
currency, or to increase or shift its exposure to a currency other than
U.S. dollars. The Funds have no specific limitation on the percentage of
assets which may be committed to these types of contracts. The Funds could
be exposed to risks if the counterparties to the contracts are unable to
meet the terms of their contracts or if the value of the foreign currency
changes unfavorably. The U.S. dollar values of foreign currency underlying
all contractual commitments held by the Funds are determined using forward
currency exchange rates supplied by a quotation service.
D. Accounting for Investments. Security transactions are accounted
for on the trade date. Realized gains and losses on security transactions
are determined on the identified cost method. Dividend income and other
distributions from the portfolio securities are recorded on the
ex-dividend date. Dividend income is recorded net of foreign taxes
withheld where recovery of such taxes is not assured. Interest income is
accrued daily.
E. Federal Income Taxes. It is the Corporation's policy to comply
with the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
Each Fund files a tax return annually using tax accounting methods
required under provisions of the Internal Revenue Code which may differ
form generally accepted accounting principles, the basis on which these
financial statements are prepared. Accordingly, the amounts of net
investment income and net realized gain reported on these financial
statements may differ from that reported on each Fund's tax return due to
certain book-to-tax differences such as losses deferred due to "wash sale"
transactions, utilization of capital loss carryforwards and the
recognition of unrealized gains or losses on open forward foreign currency
exchange contracts and passive foreign investment companies at year-end.
These differences may result in temporary over-distributions for financial
statement purposes and are classified as distributions in excess of
accumulated net realized gains or net investment income. Permanent
differences are reclassified on the statement of assets and liabilities
based upon their tax classification. As such, the character of
distributions to shareholders reported in the Financial Highlights table
may differ from that reported to shareholders on Form 1099-DIV. These
distributions do not constitute a return of capital.
F. Dividends and Distributions to Shareholders. Dividends and
distributions to shareholders are recorded on the ex-dividend date.
2. Transactions with Affiliates.
Investment Advisory Agreement. The Corporation has an investment advisory
agreement with Brown Brothers Harriman & Co. (the "Adviser") for which the
Adviser receives a fee from each Fund calculated daily and paid monthly at an
annual rate equivalent to 0.65% of each Fund's average daily net assets. For the
six months ended April 30, 1998, the European Equity Fund and the Pacific Basin
Fund incurred $502,382 and $165,635, respectively, for advisory services.
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
Administrative Fee. The Corporation has an administrative agreement with
Brown Brothers Harriman & Co. (the "Administrator") for which the Administrator
receives a fee from each Fund calculated daily and paid monthly at an annual
rate equivalent to 0.15% of each Fund's average daily net assets. The
Administrator has a sub administration services agreement with 59 Wall Street
Administrators, Inc. for which 59 Wall Street Administrators, Inc. receives such
compensation as is from time to time agreed upon, but not in excess of the
amount paid to the Administrator. For the six months ended April 30, 1998, the
European Equity Fund and the Pacific Basin Equity Fund incurred $115,934 and
$38,223, respectively, for administrative services.
Shareholder Servicing/Eligible Institution Agreement. The Corporation has
a shareholder servicing agreement and an eligible institution agreement with
Brown Brothers Harriman & Co. for which Brown Brothers Harriman & Co. receives a
fee from each Fund calculated daily and paid monthly at an annual rate
equivalent to 0.25% if each Fund's average daily net assets. For the six months
ended April 30, 1998, the European Equity Fund and the Pacific Basin Equity Fund
incurred $193,224 and $63,706, respectively, for such services.
Board of Directors' Fee. Each Director receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from each Fund. For the six
months ended April 30, 1998, the European Equity Fund and the Pacific Basin
Equity Fund incurred $7,865 and $6,625, respectively, for these fees.
3. Investment Transactions. For the six months ended April 30, 1998, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were as follows:
European Pacific Basin
Equity Fund Equity Fund
----------- -------------
Purchases........................... $ 2,239,011 $17,220,643
Sales............................... $57,401,810 $67,907,111
There were no purchases or sales of U.S. government obligations during the
year. Custody fees for the European Equity Fund and the Pacific Basin Equity
Fund were further reduced by $21,109 and $51,090, respectively, as a result of
an expense offset arrangement with the Fund's custodian.
4. Capital Stock. The Corporation is permitted to issue 2,500,000,000
shares of capital stock, par value $.001 per share, of which 25,000,000 shares
have been classified as shares of each of the Funds. Transactions in shares of
capital stock were as follows:
<TABLE>
<CAPTION>
European Equity Fund Pacific Basin Equity Fund
----------------------------- ------------------------------
For the six For the year For the six For the year
months ended ended October months ended ended October
April 30, 1998 31, 1997 April 30, 1998 31, 1997
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Capital stock sold............................. 1,528,390 727,395 1,160,933 1,257,815
Capital stock issued in connection with
reinvestment of dividends and
distributions............................... 55,002 21,179 7,078 1,499
Capital stock repurchased...................... (1,436,968) (872,257) (3,462,236) (2,077,900)
---------- -------- ---------- ----------
Net increase (decrease)........................ 146,424 (123,683) (2,294,225) (818,586)
========== ======== ========== ==========
</TABLE>
5. Financial Instruments with Off-Balance Sheet Risk. At April 30, 1998,
the Pacific Basin Equity Fund had outstanding forward foreign currency exchange
contracts as a hedge to protect against possible changes in the foreign currency
exchange rates that would adversely affect a portfolio position or an
anticipated portfolio
<PAGE>
THE 59 WALL STREET EUROPEAN EQUITY FUND
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
position. Forward contracts involve elements of market risk in excess of the
amount reflected in the Statements of Assets and Liabilities. The Funds bear
risk of an unfavorable change in the foreign exchange rate underlying the
forward contracts.
Forward foreign currency exchange contracts open at April 30, 1998:
Contracts In Exchange Deliver Unrealized
to deliver For Date Appreciation
---------- ----------- ------- ------------
Pacific Basin
Equity Fund:
JPY 5,800,000,000 $50,060,418 07/16/98 $692,430
--------
6. Federal Income Tax Status. At October 31, 1997, the Pacific Basin
Equity Fund, for federal income taxes purposes, had a capital loss carryforward
of $12,262,899 which may be applied against any net taxable realized gain of
each succeeding year until the earlier of it utilization or expiration on
October 31, 2005.
<PAGE>
The 59 Wall Street Fund, Inc.
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, Massachusetts 02109
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(800) 625-5759
This report is submitted for the general information of
shareholders and is not authorized for distribution to
prospective investors unless preceded or accompanied by
an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy
shares of the Funds. Such offering is made only by prospectus,
which includes details as to offering price and other material
information.
