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European Equity Fund
Pacific Basin Equity Fund
International Equity Fund
PROSPECTUS
March 1, 1999
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PROSPECTUS
The 59 Wall Street European Equity Fund
The 59 Wall Street Pacific Basin Equity Fund
The 59 Wall Street International Equity Fund
21 Milk Street, Boston, Massachusetts 02109
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The European Equity Fund, the Pacific Basin Equity Fund and the
International Equity Fund are separate portfolios of The 59 Wall Street Fund,
Inc. Shares of each Fund are offered by this Prospectus. The European Equity
Fund and the Pacific Basin Equity Fund are each designed to enable investors to
participate in the opportunities available in foreign equity markets. The
International Equity Fund is designed to enable investors to participate in the
opportunities available in equity markets outside the United States and Canada.
The International Equity Fund invests all of its assets in the
International Equity Portfolio. Brown Brothers Harriman & Co. is the Investment
Adviser for the European Equity Fund, the Pacific Basin Equity Fund and the
International Equity Portfolio. Shares of each Fund are offered at net asset
value without a sales charge.
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Neither The Securities And Exchange Commission Nor Any State Securities
Commission Has Approved Or Disapproved Of These Securities Or Passed Upon
The Adequacy Or Accuracy Of This Prospectus. Any Representation To The
Contrary Is A Criminal Offense.
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The date of this Prospectus is March 1, 1999.
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TABLE OF CONTENTS
Page
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Investment Objective and Strategies 3
Principal Risk Factors ..................................................... 4
Fund Performance ........................................................... 6
Fees and Expenses of the Funds ............................................. 9
Investment Adviser ......................................................... 10
Shareholder Information .................................................... 10
Financial Highlights ....................................................... 13
Additional Information ..................................................... 16
2
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INVESTMENT OBJECTIVE AND STRATEGIES
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The investment objective of each Fund and the Portfolio is to provide
investors with long-term maximization of total return, primarily through capital
appreciation.
European Equity Fund
Under normal circumstances the Investment Adviser fully invests the assets
of the European Equity Fund in equity securities of companies based in the
European Economic Community (Belgium, Denmark, France, Germany, Greece, Ireland,
Italy, Luxembourg, Netherlands, Portugal, Spain, United Kingdom), as well as
Austria, Czech Republic, Finland, Hungary, Norway, Poland, Romania, Sweden,
Switzerland, Slovakia and Turkey.
Pacific Basin Equity Fund
Under normal circumstances the Investment Adviser fully invests the assets
of the Pacific Basin Equity Fund in equity securities of companies based in
Pacific Basin countries, including Australia, Bangladesh, China, Hong Kong,
India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines,
Singapore, Sri Lanka, South Korea, Taiwan and Thailand.
International Equity Fund
Under normal circumstances the Investment Adviser fully invests the assets
of the International Equity Portfolio in equity securities of companies based
outside the United States and Canada in the developed markets of the world.
These markets include Australia, Austria, Belgium, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand,
Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United Kingdom.
Each Fund
Although the Investment Adviser expects to invest the assets of each Fund
and the Portfolio primarily in common stocks, it may also purchase other
securities with equity characteristics, including securities convertible into
common stock, rights and warrants. The Investment Adviser may purchase these
equity securities directly or in the form of American Depositary Receipts,
Global Depositary Receipts or other similar securities representing securities
of foreign-based companies. Although the Investment Adviser invests primarily in
equity securities which are traded on foreign or domestic national securities
exchanges, the Investment Adviser may also purchase equity securities which are
traded in foreign or domestic over-the-counter markets. The Investment Adviser
may invest in securities of appropriate investment companies in order to obtain
participation in markets or market sectors which restrict foreign investment or
to obtain more favorable investment terms.
The Investment Adviser allocates the investments of each Fund and the
Portfolio among various countries based upon the economic environment, liquidity
conditions, valuation levels, expected earnings growth, government policies and
political stability. In response to changes or anticipated changes in these
criteria, the Investment Adviser increases, decreases or eliminates a particular
country's representation. As a result of applying these criteria the Investment
Adviser allocates assets among countries in a manner which does not always
reflect the relative size or valuation of a country's capital market or a
country's relative gross domestic product or population.
In constructing the portfolio of securities of each Fund and the
Portfolio, the Investment Adviser places emphasis on the equity securities of
larger globally competitive companies with strong longer term fundamentals such
as leading industry position, effective management, competitive products and
services, high or improving return on investment and a sound financial
structure. The Investment Adviser selects individual equities through a
disciplined process which systematically evaluates growth expectations relative
to price levels.
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Because the Investment Adviser buys and sells securities denominated in
currencies other than the U.S. dollar, and interest, dividends and sale proceeds
are received in currencies other than the U.S. dollar, the Investment Adviser
enters into foreign currency exchange transactions from time to time to convert
to and from different foreign currencies and to convert foreign currencies to
and from the U.S. dollar.
Solely as a hedge against changes in the market value of portfolio
securities or securities intended to be purchased, futures contracts on stock
indexes may be entered into for a Fund or the Portfolio. In order to protect the
dollar value of securities denominated in foreign currencies that are held or
intended to be purchased, forward foreign exchange contracts may be entered into
on behalf of each Fund or the Portfolio.
PRINCIPAL RISK FACTORS
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The principal risks of investing in the Funds and the Portfolio and the
circumstances reasonably likely to adversely affect an investment are described
below. As with any fund other than a money market mutual fund, the share price
of each Fund changes daily based on market conditions and other factors. A
shareholder may lose money by investing in the Funds.
The principal risks of investing in the Funds are:
o Market Risk:
This is the risk that the price of a security will fall due to changing
economic, political or market conditions, or due to a company's individual
situation.
o Foreign Investment Risk:
Investing in equity securities of foreign-based companies involves risks
not typically associated with investing in equity securities of companies
organized and operated in the United States.
Changes in political or social conditions, diplomatic relations, confiscatory
taxation, expropriation, nationalization, limitation on the removal of funds or
assets, or imposition of (or change in) exchange control or tax regulations may
adversely affect the value of such investments. Changes in government
administrations or economic or monetary policies in the United States or abroad
could result in appreciation or depreciation of portfolio securities and could
favorably or unfavorably affect the operations of the European Equity Fund, the
Pacific Basin Equity Fund or the International Equity Portfolio. The economies
of individual foreign nations differ from the U.S. economy, whether favorably or
unfavorably, in areas such as growth of gross domestic product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. It may be more difficult to obtain and enforce a judgment
against a foreign company. Dividends and interest paid by foreign issuers may be
subject to withholding and other foreign taxes which may decrease the net return
on foreign investments as compared to dividends and interest paid to other funds
by domestic companies.
In general, less information is publicly available with respect to
foreign-based companies than is available with respect to U.S. companies. Most
foreign-based companies are also not subject to the uniform accounting and
financial reporting requirements applicable to companies based in the United
States.
In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of the New York Stock Exchange. Accordingly, foreign investments are
less liquid and their prices are more volatile than comparable investments in
securities of U.S. companies. Moreover, the settlement periods for foreign
securities, which are often longer than those for securities of U.S. companies,
may affect portfolio liquidity. In buying and selling securities on foreign
exchanges, fixed commissions are normally paid that are generally higher than
the negotiated commissions charged in the United States. In addition, there is
generally less
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government supervision and regulation of securities exchanges, brokers and
companies in foreign countries than in the United States.
The foreign investments made by the Investment Adviser are in compliance
with the currency regulations and tax laws of the United States and foreign
governments. There may also be foreign government regulations and laws which
restrict the amounts and types of foreign investments.
Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the European Equity Fund, the Pacific Basin
Equity Fund and the International Equity Portfolio hold various foreign
currencies from time to time, the value of their respective net assets as
measured in U.S. dollars is affected favorably or unfavorably by changes in
exchange rates. The European Equity Fund, the Pacific Basin Equity Fund and the
International Equity Portfolio also incur costs in connection with conversion
between various currencies.
o Developing Countries:
The Investment Adviser may invest the assets of the European Equity Fund
and the International Equity Portfolio in securities of issuers based in
developing countries. The Investment Adviser may invest a substantial portion of
the assets of the Pacific Basin Equity Fund in the securities of issuers based
in developing countries. Investments in securities of issuers in developing
countries may involve a high degree of risk and many may be considered
speculative. These investments carry all of the risks of investing in securities
of foreign issuers outlined in this section to a heightened degree. These
heightened risks include (i) greater risks of expropriation, confiscatory
taxation, nationalization, and less social, political and economic stability;
(ii) the small current size of the markets for securities of issuers in
developing countries and the currently low or non-existent volume of trading,
resulting in lack of liquidity and in price volatility; (iii) certain national
policies which may restrict the Funds' investment opportunities including
restrictions on investing in issuers or industries deemed sensitive to relevant
national interests; and (iv) the absence of developed legal structures governing
private or foreign investment and private property.
o Diversification Risk
Each Fund and the Portfolio are classified as "non-diversified", which
means that each is limited with respect to the portion of its assets which may
be invested in securities of a single issuer only by certain requirements of
federal tax law. The possible assumption of large positions in the securities of
a small number of issuers may cause performance to fluctuate to a greater extent
than that of a diversified investment company as a result of changes in the
financial condition or in the market's assessment of the issuers.
Investments in the Funds are neither insured nor guaranteed by the U.S.
Government. Shares of the Funds are not deposits or obligations of, or
guaranteed by, Brown Brothers Harriman & Co. or any other bank, and the shares
are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other federal, state or other governmental agency.
5
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FUND PERFORMANCE
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The charts and tables below give an indication of the Funds' risks and
performance. The charts show changes in the Funds' performance from year to
year. The tables show how the Funds' average annual returns for the periods
indicated compare to those of a broad measure of market performance.
When you consider this information, please remember that a Fund's
performance in past years is not necessarily an indication of how that Fund will
do in the future.
EUROPEAN EQUITY FUND
Total Return (% per calendar year)
[The following information was depicted as a bar chart in the printed material]
1991 1992 1993 1994 1995 1996 1997 1998
- ---- ---- ---- ---- ---- ---- ---- ----
9.25 7.53 27.12 (3.93) 16.49 19.25 15.28 24.17
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Highest and Lowest Return
(Quarterly 1991-1998)
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Return Quarter Ending
Highest 20.88% 3/31/98
Lowest (15.55)% 9/30/98
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Average Annual Total Returns
(through December 31, 1998)
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1 Year 5 Years Life of Fund
(Since 10/31/90)
European Equity Fund 24.17% 13.82% 13.39%
MSCI-Europe 28.53% 19.11% 15.85%
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6
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PACIFIC BASIN EQUITY FUND
Total Return (% per calendar year)
[The following information was depicted as a bar chart in the printed material]
1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ----
13.64 6.15 74.90 (21.50) 3.49 (0.71) (20.13) 4.19
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Highest and Lowest Return
(Quarterly 1991-1998)
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Return Quarter Ending
Highest 36.69% 12/31/93
Lowest (16.42)% 3/31/94
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Average Annual Total Returns
(through December 31, 1998)
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1 Year 5 Years Life of Fund
(Since 10/31/90)
Pacific Basin Equity Fund 4.91% (7.53)% 3.89%
MSCI- Pacific 2.44% (4.15)% (0.96)%
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7
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INTERNATIONAL EQUITY FUND
Total Return (% per calendar year)
[The following information was depicted as a bar chart in the printed material]
1996 1997 1998
- ---- ---- ----
8.05 1.05 16.17
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Highest and Lowest Return
(Quarterly 1995-1998)
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Return Quarter Ending
Highest 13.97% 3/31/98
Lowest (13.77)% 9/30/98
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Average Annual Total Returns
(through December 31, 1998)
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1 Year Life of Portfolio
(Since 4/1/95)
International Equity Fund 16.17% 8.41%
MSCI-EAFE 20.00% 9.68%
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Historical performance information for the Fund for any period or portion
thereof prior to its commencement of operations (6/6/97), is that of the
Portfolio as adjusted to reflect all fees and expenses of the Fund.
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FEES AND EXPENSES OF THE FUNDS
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The tables below describe the fees and expenses(1) that an investor may
pay if that investor buys and holds shares of the Funds.
SHAREHOLDER FEES
(Fees paid directly from an investor's account)
European Pacific Basin International
Equity Fund Equity Fund Equity Fund
----------- ----------- ----------
Maximum Sales Charge (Load)
Imposed on Purchases ................. None None None
Maximum Deferred Sales Charge (Load) . None None None
Maximum Sales Charge (Load)
Imposed on Reinvested Dividends ...... None None None
Redemption Fee ....................... None None None
Exchange Fee ......................... None None None
ANNUAL FUND OPERATING EXPENSES
(Expenses that are deducted from Fund assets as
a percentage of average net assets)
<TABLE>
<CAPTION>
European Pacific Basin International
Equity Fund Equity Fund Equity Fund
----------- ------------ ------------
<S> <C> <C> <C>
Management Fees ............................ 0.65% 0.65% 0.65%
Distribution (12b-1) Fees .................. None None None
Other Expenses
Administration Fee ........................ 0.15% 0.15% 0.16%
Shareholder Servicing/Eligible
Institution Fee ......................... 0.25 0.25 0.25
Other Expenses ............................ 0.16 0.56 0.57 0.97 0.53 0.94
---- ---- ---- ---- ---- ----
Total Operating Expenses Paid by Fund ...... 1.21% 1.62% 1.59%
Expense Payment(2) ......................... n/a n/a (0.09)%
----
Net Expenses Paid by Fund .................. n/a n/a 1.50%
====
</TABLE>
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(1) The expenses shown for the International Equity Fund include the expenses
of the International Equity Portfolio.
(2) The expense payment arrangement is a contractual limitation on expenses
which will continue until October 31, 2000.
EXAMPLE
This example is intended to help an investor compare the cost of investing
in the Funds to the cost of investing in other mutual funds. The example assumes
that an investor invests $10,000 in a Fund for the time periods indicated and
then sells all of his shares at the end of those periods. The example also
assumes that an investment has a 5% return each year and that the Funds'
operating expenses remain the same as shown in the table above. Although actual
costs and the return on an investor's investment may be higher or lower, based
on these assumptions the investor's costs would be:
European Pacific Basin International
Equity Fund Equity Fund Equity Fund
---------- ----------- -----------
1 year ............ $ 123 $ 165 $ 153
3 years ........... $ 384 $ 511 $ 502
5 years ........... $ 665 $ 811 $ 866
10 years ........... $1,466 $1,922 $1,889
The example above reflects the expenses of both the International Equity
Fund and the International Equity Portfolio.
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INVESTMENT ADVISER
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The Investment Adviser to the European Equity Fund, the Pacific Basin
Equity Fund and the International Equity Portfolio is Brown Brothers Harriman &
Co., Private Bankers, a New York limited partnership established in 1818. The
firm is subject to examination and regulation by the Superintendent of Banks of
the State of New York and by the Department of Banking of the Commonwealth of
Pennsylvania. The firm is also subject to supervision and examination by the
Commissioner of Banks of the Commonwealth of Massachusetts. The Investment
Adviser is located at 59 Wall Street, New York, NY 10005.
The Investment Adviser provides investment advice and portfolio management
services to the European Equity Fund, the Pacific Basin Equity Fund and the
International Equity Portfolio. Subject to the general supervision of the
Directors of the 59 Wall Street Fund, Inc. (the "Corporation"), the Investment
Adviser makes the day-to-day investment decisions for each such Fund, places the
purchase and sale orders for the portfolio transactions of each such Fund, and
generally manages each such Fund's investments. Subject to the general
supervision of the Trustees of the Portfolio, the Investment Adviser makes the
day-to-day investment decisions for the Portfolio, places the purchase and sale
orders for the portfolio transactions of the Portfolio, and generally manages
the Portfolio's investments. The Investment Adviser provides a broad range of
investment management services for customers in the United States and abroad. At
December 31, 1998, it managed total assets of approximately $32 billion.
A team of individuals manages each Fund's portfolio on a day-to-day basis.
This team includes Mr. John A. Nielsen, Mr. Jeffrey A. Schoenfeld, Ms. Camille
M. Kelleher, Mr. A. Edward Allinson, Mr. G. Scott Clemons, Mr. Paul J. Fraker
and Mr. Ben Kottler. Mr. Nielsen holds a B.A. from Bucknell University, a M.B.A.
from Columbia University and is a Chartered Financial Analyst. He joined Brown
Brothers Harriman & Co. in 1968. Mr. Schoenfeld holds a B.S. from the University
of California, Berkeley and a M.B.A. from the University of Pennsylvania. He
joined Brown Brothers Harriman & Co in 1984. Ms. Kelleher holds a B.A. from
Barnard College and a M.B.A. from Columbia University. She joined Brown Brothers
Harriman & Co. in 1984. Mr. Allinson holds a B.A. and a M.B.A. from the
University of Pennsylvania and is a Chartered Financial Analyst. He joined Brown
Brothers Harriman & Co. in 1991. Mr. Clemons holds a A.B. from Princeton
University and is a Chartered Financial Analyst. He joined Brown Brothers
Harriman & Co. in 1990. Mr Fraker holds a B.A. from Carleton College and a M.A.
from Johns Hopkins University. He joined Brown Brothers Harriman & Co. in 1996.
Prior to joining Brown Brothers Harriman & Co., he worked for Clay Finlay. Mr.
Kottler holds a B.A. from Durham University and is a Chartered Financial
Analyst. He joined Brown Brothers Harriman & Co. in 1996. Prior to joining Brown
Brothers Harriman & Co., he worked for NatWest Investment Management Ltd.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by the Investment Adviser under the
Investment Advisory Agreements, the European Equity Fund, the Pacific Basin
Equity Fund and the International Equity Portfolio each pays the Investment
Adviser an annual fee, computed daily and payable monthly, equal to 0.65% of its
average daily net assets.
SHAREHOLDER INFORMATION
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NET ASSET VALUE
The Corporation determines each Fund's net asset value per share once
daily at 4:00 P.M., New York time on each day the New York Stock Exchange is
open for regular trading.
The Corporation values the assets in each Fund's portfolio and the
Portfolio values its assets on the basis of their market quotations and
valuations provided by independent pricing services. If quotations are not
readily available, the assets are
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valued at fair value in accordance with procedures established by the Directors
of the Corporation or the Trustees of the Portfolio, as the case may be.
PURCHASE OF SHARES
The Corporation offers shares of each Fund on a continuous basis at their
net asset value without a sales charge. The Corporation reserves the right to
determine the purchase orders for Fund shares that it will accept. Investors may
purchase shares on any day the net asset value is calculated if the Corporation
receives the purchase order and acceptable payment for such order prior to such
calculation. The Corporation then executes purchases of Fund shares at the net
asset value per share next determined on that same day. Shares are entitled to
dividends declared, if any, starting as of the first business day following the
day the Corporation executes the purchase order on the books of the Corporation.
An investor who has an account with an Eligible Institution or a Financial
Intermediary may place purchase orders for Fund shares through that Eligible
Institution or Financial Intermediary which holds such shares in its name on
behalf of that customer pursuant to arrangements made between that customer and
that Eligible Institution or Financial Intermediary. Each Eligible Institution
and each Financial Intermediary may establish and amend from time to time a
minimum initial and a minimum subsequent purchase requirement for its customers.
Currently, such minimum purchase requirements range from $500 to $5,000. Each
Eligible Institution or Financial Intermediary arranges payment for Fund shares
on behalf of its customers. An Eligible Institution or a Financial Intermediary
may charge a transaction fee on the purchase of Fund shares.
An investor who does not have an account with an Eligible Institution or a
Financial Intermediary must place purchase orders for Fund shares with the
Corporation through Brown Brothers Harriman & Co., the Funds' Shareholder
Servicing Agent. Such an investor has such shares held directly in the
investor's name on the books of the Corporation and is responsible for arranging
for the payment of the purchase price of Fund shares. The Corporation executes
all purchase orders for initial and subsequent purchases at the net asset value
per share next determined after the Corporation's custodian, State Street Bank
and Trust Company, has received payment in the form of a cashier's check drawn
on a U.S. bank, a check certified by a U.S. bank or a wire transfer. The
Shareholder Servicing Agent has established a minimum initial purchase
requirement for each Fund of $100,000 and a minimum subsequent purchase
requirement for each Fund of $25,000. The Shareholder Servicing Agent may amend
these minimum purchase requirements from time to time.
REDEMPTION OF SHARES
If the Corporation receives a redemption request prior to the net asset
value determination on that day, the Corporation will execute such a redemption
at the net asset value per share then determined. Shares continue to earn
dividends declared, if any, through the business day that the Corporation
executes the redemption request on the books of the Corporation.
Shareholders must redeem shares held by an Eligible Institution or a
Financial Intermediary on behalf of such shareholder pursuant to arrangements
made between that shareholder and that Eligible Institution or Financial
Intermediary. The Corporation pays proceeds of a redemption to that
shareholder's account at that Eligible Institution or Financial Intermediary on
a date established by the Eligible Institution or Financial Intermediary. An
Eligible Institution or a Financial Intermediary may charge a transaction fee on
the redemption of Fund shares.
Shareholders may redeem shares held directly in the name of a shareholder
on the books of the Corporation by submitting a redemption request in good order
to the Corporation through the Shareholder Servicing Agent. The Corporation pays
proceeds resulting from such redemption directly to the shareholder generally on
the next business day after the redemption request is executed, and in any event
within seven days.
Redemptions by the Corporation
The Shareholder Servicing Agent has established a minimum account size of
$25,000, which may be amended from time to time. If the value of a shareholder's
holdings in a Fund falls below that
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amount because of a redemption of shares, the Corporation may redeem the
shareholder's remaining shares. If such remaining shares are to be redeemed, the
Corporation notifies the shareholder and allows the shareholder 60 days to make
an additional investment to meet the minimum requirement before the redemption
is processed. Each Eligible Institution and each Financial Intermediary may
establish and amend from time to time for their respective customers a minimum
account size, each of which is currently lower than that established by the
Shareholder Servicing Agent.
Further Redemption Information
Redemptions of shares are taxable events on which a shareholder may
realize a gain or a loss.
The Corporation has reserved the right to pay the amount of a redemption
from a Fund, either totally or partially, by a distribution in kind of
securities (instead of cash) from that Fund.
The Corporation may suspend a shareholder's right to receive payment with
respect to any redemption or postpone the payment of the redemption proceeds for
up to seven days and for such other periods as applicable law may permit.
DIVIDENDS AND DISTRIBUTIONS
The Corporation declares and pays to shareholders substantially all of
each Fund's net income and realized net short-term capital gains at least
annually as a dividend, and substantially all of each Fund's realized net
long-term capital gains annually as a capital gains distribution. The
Corporation may make an additional dividend and/or capital gains distribution in
a given year to the extent necessary to avoid the imposition of federal excise
tax on a Fund. The Corporation pays dividends and capital gains distributions to
shareholders of record on the record date. The International Equity Fund's net
income and realized net capital gains include that Fund's pro rata share of the
Portfolio's net income and realized net capital gains.
Unless a shareholder whose shares are held directly in the shareholder's
name on the books of the Corporation elects to have dividends and capital gains
distributions paid in cash, the Corporation automatically reinvests dividends
and capital gains distributions in additional Fund shares without reference to
the minimum subsequent purchase requirement.
Each Eligible Institution and each Financial Intermediary may establish
its own policy with respect to the reinvestment of dividends and capital gains
distributions in additional Fund shares.
TAXES
Dividends are taxable to shareholders of a Fund as ordinary income,
whether such dividends are paid in cash or reinvested in additional shares.
Capital gains may be taxable at different rates depending on the length of time
a Fund or the Portfolio holds its assets. Capital gains distributions are
taxable to shareholders as long-term capital gains, whether paid in cash or
reinvested in additional shares and regardless of the length of time a
particular shareholder has held Fund shares.
Foreign Investors
Each Fund is designed for investors who are either citizens of the United
States or aliens subject to United States income tax. Prospective investors who
are not citizens of the United States and who are not aliens subject to United
States income tax are subject to United States withholding tax on the entire
amount of all dividends. Therefore, such investors should not invest in a Fund
since alternative investments are available which would not be subject to United
States withholding tax.
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FINANCIAL HIGHLIGHTS
================================================================================
The financial highlights table is intended to help an investor understand
the Funds' financial performance for the past five years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in each Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP,
whose report, along with the Funds' financial statements, are included in the
annual report, which is available upon request.
<TABLE>
<CAPTION>
European Equity Fund
For the years ended October 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $ 38.02 $ 35.02 $ 31.95 $ 31.82 $ 31.17
Income from investment operations:
Net investment income.................... 0.42 0.39 0.38(1) 0.45 0.39
Net gains or losses on securities
(both realized and unrealized)......... 6.06 5.29 4.08 2.09 1.80
------- ------- ------- ------- -------
Total from investment operations............ 6.48 5.68 4.46 2.54 2.19
------- ------- ------- ------- -------
Dividends and Distributions:
Dividends (from net investment income)... (0.31) (0.41) -- -- (0.25)
Distributions (from capital gains)....... (5.14) (2.27) (1.39) (2.41) (1.29)
------- ------- ------- ------- -------
Total Dividends and Distributions........... (5.45) (2.68) (1.39) (2.41) (1.54)
------- ------- ------- ------- -------
Net asset value, end of period.............. $ 39.05 $ 38.02 $ 35.02 $ 31.95 $ 31.82
======= ======= ======= ======= =======
Total return................................ 19.34% 17.28% 14.63% 9.42% 7.35%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted).. $155,557 $154,179 $146,350 $116,955 $110,632
Ratio of expenses to average net
assets................................. 1.21% 1.36%(2) 1.33%(2) 1.43%(2) 1.37%
Ratio of net income to average net
assets................................. 0.60% 1.02% 1.16% 1.55% 1.30%
Portfolio turnover rate ................... 56% 82% 42% 72% 124%
</TABLE>
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(1) Calculated using average shares outstanding for the year.
(2) Ratio reflects fees paid with brokerage commission (years ended October 31,
1995, 1996 and 1997) and fees reduced in connection with certain offset
arrangements (years ended October 31, 1996, 1997 and 1998).
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<TABLE>
<CAPTION>
Pacific Basin Equity Fund
For the years ended October 31
--------------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $24.52 $30.19 $29.88 $39.85 $39.87
Income from investment operations:
Net investment income.................... (0.20) 0.00(1,2) 0.05(1) 0.11 0.14
Net gains or losses on securities
(both realized and unrealized)......... (2.39) (4.69) 1.62 (4.50) 1.26
------ ------ ------ ------ ------
Total from investment operations............ (2.59) (4.69) 1.67 (4.39) 1.40
------ ------ ------ ------ ------
Dividends and Distributions:
Dividends (from net investment income)... (0.52) (0.00)(2) (0.86) (0.00)(2) (0.14)
Distributions (from capital gains)....... -- (0.28) -- (5.58) (1.28)
Dividendes (in excess of net
investment income)..................... (1.10) (0.25) (0.50) -- --
Distributions (in excess of net
realized gains)........................ -- (0.45) -- -- --
------ ------ ------ ------ ------
Total Dividends and Distributions........... (1.62) (0.98) (1.36) (5.58) 1.42
------ ------ ------ ------ ------
Net asset value, end of period.............. $20.31 $24.52 $30.19 $29.88 $39.85
====== ====== ====== ====== ======
Total return................................ (10.78)% (16.03)% 5.65% (10.62)% 3.48%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted).. $32,630 $102,306 $150,685 $114,932 $120,469
Ratio of expenses to average net
assets3 ............................... 1.62% 1.26% 1.30% 1.43% 1.29%
Ratio of net income to average net
assets ................................ (0.73%) 0.00%2 0.16% 0.53% 0.39%
Portfolio turnover rate ................. 91% 63% 58% 82% 86%
</TABLE>
- ----------
(1) Calculated using average shares outstanding for the year.
(2) Less than $0.01 per share.
(3) Ratio reflects fees paid with brokerage commission (years ended October 31,
1995, 1996 and 1997) and fees reduced in connection with certain offset
arrangements (years ended October 31, 1996, 1997 and 1998).
14
<PAGE>
International Equity Fund
-------------------------------------
For the
period from
June 6, 1997
(commencement of
For the year ended operations) to
October 31, 1998 October 31, 1997
---------------- ----------------
Net asset value, beginning of year........ $ 9.42 $10.00
Income from investment operations:
Net investment income .................. 0.001 0.001
Net gains or losses on securities
(both realized and unrealized)......... 0.75 (0.58)
------ ------
Total from investment operations.......... 0.75 (0.58)
------ ------
Dividends and Distributions:
Dividends (from net investment income).. (0.03) --
Distributions (from capital gains)...... (0.05) --
------ ------
Total Dividends and Distributions ........ (0.08) --
------ ------
Net asset value, end of period............ $10.09 $ 9.42
====== ======
Total return.............................. 8.06%(5) (5.80)%(2)
Ratios/Supplemental Data:
Net assets, end of
year (000's omitted)................... $27,475 $7,040
Ratio of expenses to average net
assets4 ............................... 1.50%(5) 1.36%(3)
Ratio of net income to
average net assets .................... (0.15)% (0.06)%(3)
- ----------
(1) Less than $0.01.
(2) Not annualized.
(3) Annualized.
(4) Includes the Fund's share of the Portfolio's expenses.
(5) Had the expense payment agreement not been in place, the ratio of expenses
to average net assets and total return would have been 1.59% and 7.97%,
respectively.
15
<PAGE>
ADDITIONAL INFORMATION
================================================================================
Other mutual funds or institutional investors may invest in the
International Equity Portfolio on the same terms and conditions as the
International Equity Fund. However, these other investors may have different
operating expenses which may generate different aggregate performance results.
The Corporation may withdraw that Fund's investment in that Portfolio at any
time as a result of changes in that Portfolio's investment objective, policies
or restrictions or if the Board of Directors determines that it is otherwise in
the best interests of that Fund to do so.
Year 2000 issue. Information technology experts are concerned about
computer systems' ability to process data-related information on and after
January 1, 2000. This situation, commonly known as the "Year 2000" issue, could
have an adverse impact on each Fund. The cost of addressing the Year 2000 issue,
if substantial, could adversely affect companies and governments that issue
securities held by each Fund and the Portfolio. The Investment Adviser is
addressing the Year 2000 issue for its systems. Each Fund has been informed by
their other service providers that they are taking similar measures. Although
each Fund does not expect the Year 2000 issue to adversely affect it, each Fund
cannot guarantee that the efforts of each Fund, which are limited to requesting
and receiving reports from their service providers, or the efforts of their
service providers to correct the problem will be successful.
16
<PAGE>
The 59 Wall Street
European Equity Fund
SEC file number: 811-06139
The 59 Wall Street
Pacific Basin Equity Fund
SEC file number: 811-06139
The 59 Wall Street
International Equity Fund
SEC file number: 811-06139
More information on the Funds is available free upon request, including the
following:
o Annual/Semi-Annual Report
Describes the Funds' performance, lists portfolio holdings and contains a letter
from the Funds' Investment Adviser discussing recent market conditions, economic
trends and Fund strategies that significantly affected each Fund's performance
during their last fiscal year.
o Statement of Additional Information (SAI)
Provides more details about each Fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
To obtain information:
o By telephone
Call 1-800-625-5759
o By mail write to the Funds' Shareholder Servicing Agent:
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
o By E-mail send your request to:
[email protected]
o On the Internet:
Text-only versions of Fund documents can be viewed online or downloaded from:
Brown Brothers Harriman & Co.
http://www. bbhco.com
SEC
http://www.sec.gov
You can also review or obtain copies by visiting the SEC's Public Reference Room
in Washington, DC or by sending your request and a duplicating fee to the SEC's
Public Reference Section, Washington, DC 20549-6009. Information on the
operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
