THE 59 WALL STREET INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in BBH International Equity Portfolio (the "Portfolio"), at value .......... $115,046,373
Receivable for capital stock sold ...................................................... 845,000
Deferred organization expense .......................................................... 4,799
------------
Total Assets ...................................................................... 115,896,172
------------
LIABILITIES:
Payables for:
Capital stock redeemed .............................................................. 30,000
Shareholder servicing/eligible institution fees ..................................... 49,277
Administrative fee .................................................................. 24,639
Professional fees ................................................................... 21,000
Board of Directors' fee ............................................................. 3,000
Accounting fee ...................................................................... 1,900
Accrued expenses and other liabilities .............................................. 27,068
------------
Total Liabilities ................................................................. 156,884
------------
NET ASSETS ................................................................................... $115,739,288
============
Net Assets Consist of:
Paid-in capital ..................................................................... $109,562,614
Distributions in excess of net investment income .................................... (419,130)
Accumulated net realized gain ....................................................... 3,381,997
Net unrealized appreciation ......................................................... 3,213,807
------------
Net Assets ................................................................................... $115,739,288
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($115,739,288 / 8,708,338 shares) ...................................................... $13.29
======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
Net Investment Income Allocated from Portfolio:
Dividend ................................................................................. $ 1,112,043
Interest ................................................................................. 49,709
Expenses ................................................................................. (927,446)
-----------
Net Investment Income Allocated from Portfolio ......................................... 234,306
-----------
Fund Expenses:
Expense payment fee ...................................................................... 106,978
Administrative fee ....................................................................... 128,889
Shareholder servicing/eligible institution fee ........................................... 193,963
Board of Directors' fee .................................................................. 9,608
Accounting fee ........................................................................... 5,567
Other fees and expenses .................................................................. 34,422
Deferred organization expense ............................................................ 2,369
-----------
Total Expenses ......................................................................... 481,796
-----------
Net Investment Loss .................................................................... (247,490)
-----------
NET REALIZED AND UNREALIZED LOSS ALLOCATED FROM PORTFOLIO:
Net realized gain on investments and foreign exchange transactions .......................... 1,871,710
Net change in unrealized appreciation on investments and foreign currency translations ...... (3,532,427)
-----------
Net Realized and Unrealized Loss from Portfolio .......................................... (1,660,717)
-----------
Net Decrease in Net Assets Resulting from Operations ........................................ $(1,908,207)
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the years ended October 31,
--------------------------------
2000 1999
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss ........................................................... $ (247,490) $ (109,151)
Net realized gain on investments and foreign exchange
transactions ................................................................ 1,871,710 4,789,124
Net change in unrealized appreciation on investments and
foreign currency translations ............................................... (3,532,427) 6,066,361
------------ -----------
Net increase (decrease) in net assets resulting
from operations ........................................................... (1,908,207) 10,746,334
------------ -----------
Dividends declared:
From net investment income .................................................... (142,156) --
In excess of net investment income ............................................ (1,377,186) (75,518)
From net realized gains ....................................................... (1,534,297) --
------------ -----------
Total dividends and distributions declared .................................. (3,053,639) (75,518)
------------ -----------
Capital Transactions (Note 4):
Net proceeds from sales of capital stock ...................................... 82,466,361 29,321,914
Net asset value of capital stock issued to shareholders
in reinvestment of dividends and distributions .............................. 960,162 21,522
Net cost of capital stock redeemed ............................................ (22,686,501) (7,528,121)
------------ -----------
Net increase in net assets resulting from capital transactions .............. 60,740,022 21,815,315
------------ -----------
Total increase in net assets .................................................. 55,778,176 32,486,131
NET ASSETS:
Beginning of year ................................................................ 59,961,112 27,474,981
------------ -----------
End of year (including distributions in excess of net
investment income and undistributed net investment
income of $419,130 and $389,646, respectively) ................................ $115,739,288 $59,961,112
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding
throughout each period
<TABLE>
<CAPTION>
For the period
from June 6, 1997
For the years ended October 31, (commencement of
-------------------------------- operations) to
2000 1999 1998 October 31, 1997
-------- ------- ------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 13.04 $ 10.09 $ 9.42 $10.00
Income from investment operations:
Net investment loss ........................ (0.03)(6) (0.02) 0.00(1) 0.00(1)
Net realized and unrealized gain (loss) .... 0.93 3.00 0.75 (0.58)
Less dividends and distributions (Note 1):
In excess of net investment income ......... (0.32) (0.03) (0.03) --
From net realized gains .................... (0.33) -- (0.05) --
-------- ------- ------- ------
Net asset value, end of period ............. $ 13.29 $ 13.04 $ 10.09 $ 9.42
======== ======= ======= ======
Total Return .................................. 6.71% 29.57% 8.06% (5.80)%(2)
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $115,739 $59,961 $27,475 $7,040
Ratio of expenses to average net assets(4).. 1.37% 1.50% 1.50% 1.36%(3)
Ratio of net investment loss to average
net assets ............................... (0.24)% (0.25)% (0.15)% (0.06)%(3)
Portfolio turnover rate(5) ................. 37% 86% 89% na
</TABLE>
----------
(1) Less than $0.01.
(2) Not annualized.
(3) Annualized.
(4) Includes the Fund's share of expenses paid by the Portfolio and expense
offset arrangement.
(5) Portfolio turnover rate is that of the Portfolio in which the Fund
invests.
(6) Calculated using average shares outstanding for the year.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies. The 59 Wall Street
International Equity Fund (the "Fund") is a separate 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-end
management investment company organized under the laws of the State of Maryland
on July 16, 1990. The Fund commenced operations on June 6, 1997.
The Fund invests all of its investable assets in the BBH International
Equity Portfolio (the "Portfolio"), a diversified, open-end management
investment company having the same investment objectives as the Fund. The value
of such investment reflects the Fund's proportionate interest in the net assets
of the Portfolio (approximately 65% at October 31, 2000). The performance of the
Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in connection with the
Fund's financial statements.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America 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. The Fund records its investment in the
Portfolio at fair value. Valuation of investments held by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B. Investment Income and Expenses. The Fund records its share of
income, expenses, realized and unrealized gains and losses each day. In
addition, the Fund accrues its own expenses.
C. 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.
The Fund files a tax return annually using tax accounting methods required
under provisions of the Internal Revenue Code which may differ from
accounting principles generally accepted in the United States of America,
the basis on which these financial statements are prepared. Accordingly,
the amount of net investment income and net realized gain reported on
these financial statements may differ from that reported on the Fund's tax
return due to certain book-to-tax timing differences such as losses
deferred due to "wash sale" transactions and utilization of capital loss
carryforwards. These differences result in temporary over-distributions
for financial statement purposes and are classified as distributions in
excess of accumulated net realized gains net investment income. Permanent
differences are reclassified on the Statement of Assets & Liabilities
based upon their tax classification. These distributions do not constitute
a return of capital. 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.
D. Dividends and Distributions to Shareholders. Dividends and
distributions to shareholders are recorded on the ex-dividend date.
E. Deferred Organization Expenses. Expenses incurred by the Fund in
connection with its organization are being amortized by the Fund on a
straight-line basis over a five year period.
2. Transactions with Affiliates.
Administrative Fee. The Corporation has an administrative agreement with
Brown Brothers Harriman (the "Administrator") for which the Administrator
receives a fee from the Fund calculated daily and paid monthly at an annual rate
equivalent to 0.125% of the Fund's average daily net assets. The Administrator
has a subadministration
<PAGE>
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
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
year ended October 31, 2000, the Fund incurred $128,889 for administrative
services.
Shareholder Servicing/Eligible Institution Agreement. The Corporation has
a shareholder servicing agreement and an eligible institution agreement with
Brown Brothers Harriman for which Brown Brothers Harriman receives a fee from
the Fund calculated daily and paid monthly at an annual rate equivalent to 0.25%
of the Fund's average daily net assets. For the year ended October 31, 2000, the
Fund incurred $193,963 for such services.
Accounting Fee. The Corporation has an accounting agreement with Brown
Brothers Harriman (the "Accountant") for which the custodian receives a fee
calculated daily and paid monthly. For the year ended October 31, 2000, the Fund
incurred $6,400 for such services.
Expense Payment Fees. 59 Wall Street Administrators, Inc. pays certain
expenses of the Fund and receives a fee from the Fund, computed daily and paid
monthly, such that after such fee the aggregate expenses will not exceed 1.50%
of the Fund's average daily net assets. For the year ended October 31, 2000, 59
Wall Street Administrators, Inc. incurred approximately $83,259 in expenses,
including shareholder servicing/eligible institution fees of $63,815 and custody
fees of $3,200 on behalf of the Fund. The Fund's expense payment fee agreement
terminated on February 29, 2000.
3. Investment Transactions. Investment transactions of the portfolio are
discussed in Note 3 of the Portfolio's Notes to Financial Statements.
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 the Fund. Transactions in shares of capital
stock were as follows:
For the year ended
October 31,
------------------------
2000 1999
--------- --------
Capital stock sold ............................... 5,622,140 2,503,665
Capital Stock issued in connection with
reinvestment of dividends and distributions .... 69,076 2,030
Capital stock repurchased ........................ (1,580,788) (631,137)
---------- ---------
Net increase ..................................... 4,110,428 1,874,558
========== =========
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
The 59 Wall Street International Equity Fund (a series of The 59 Wall Street
Fund, Inc.):
We have audited the accompanying statement of assets and liabilities of
The 59 Wall Street International Equity Fund (a series of The 59 Wall Street
Fund, Inc.) as of October 31, 2000, the related statement of operations for the
year then ended, the statement of changes in net assets for the years ended
October 31, 2000 and 1999, and the financial highlights for the period from June
6, 1997 (commencement of operations) to October 31, 1997 and the years ended
October 31, 2000, 1999 and 1998. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of International Equity
Fund at October 31, 2000, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with accounting principles generally accepted in the United States of
America.
Deloitte & Touche LLP
Boston, Massachusetts
December 22, 2000
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The following investment management strategies and techniques have
materially affected the Fund's performance for the fiscal year ended October 31,
2000.
International Equity Fund
Returns generated in international equity markets diverged sharply by
region in the year ending October 31, 2000. In local currency terms, European
markets continued to advance, rising over 21% in the period, while Japanese and
other Asian markets declined 8% - 30%, in part due to economic uncertainties. As
measured in U.S. dollars, however, all markets declined. The MSCI-EAFE Index
recorded a loss of almost 3% as the strength in European equity markets was
almost entirely offset by weakness in the euro against the U.S. dollar.
The 59 WaIl Street International Equity Fund not only outperformed its
benchmark in this difficult period, but also produced a positive 6.7% return.
The outperformance is the direct result of strong stock selection and the
systematic trimming of technology and telecom positions. The Fund took advantage
of the strong run-up in prices of stocks in these sectors that occurred in the
early months of the fiscal year to realize profits. Proceeds were reinvested in
stocks in more defensive sectors of the economy perceived capable of producing
solid earnings growth in an environment of slowing global demand.
As we begin the new fiscal year, evidence suggests that economic growth
overseas will decelerate in tandem with the slowdown in the U.S. However, the
slowdown overseas will be modest and its impact on corporate profits moderate.
The prospect of reasonable demand growth, albeit slower than last year, stable
or lower interest rates, and a continuation of corporate restructuring programs
suggest that corporate profits in international markets will again experience
double-digit growth this year. Coupled with a more stable euro, this is a quite
positive scenario for international equity markets in the new year.
International Equity Fund Growth of $10,000
----------------------------------------------------
Total Return
----------------------------------------------------
One Year Five Years Inception
Ended Ended to 10/31/00
10/31/00 10/31/00 (Annualized)
----------------------------------------------------
6.71% 10.86% 10.20%
----------------------------------------------------
[The following table was depicted as a line chart in the printed material]
Date International Equity Portfolio* MSCI-EAFE
---- ------------------------------ ---------
04/01/95 $10,000 $10,000
(inception of Portfolio)
10/31/95 $10,274 $10,210
04/30/96 $11,808 $11,559
10/31/96 $11,326 $11,280
04/30/97 $11,103 $11,457
10/31/97 $11,243 $11,802
04/30/98 $13,553 $13,624
10/31/98 $12,444 $12,940
04/30/99 $14,738 $14,917
10/31/99 $16,123 $15,922
04/30/00 $19,171 $16,992
10/31/00 $17,204 $15,463
* net of fees and expenses
Past performance is not predictive of future performance.
<PAGE>
BBH INTERNATIONAL EQUITY Portfolio
Portfolio of Investments
October 31, 2000
Shares Value
-------- -----------
AUSTRALIA (1.5%)
BANKING
74,500 National Australia Bank, Ltd. ........................ $ 1,034,938
-----------
SERVICES
71,600 Lend Lease Corp. ..................................... 838,216
-----------
TELECOMMUNICATIONS
351,700 Cable and Wireless Optus*............................. 744,893
-----------
TOTAL AUSTRALIA ...................................... 2,618,047
-----------
FINLAND (2.7%)
MULTI-INDUSTRY
115,000 Nokia AB ............................................. 4,732,648
-----------
FRANCE (14.7%)
BANKING
41,000 BNP Paribas SA........................................ 3,535,345
-----------
CAPITAL EQUIPMENT
55,845 Alcatel SA............................................ 3,407,747
-----------
ELECTRONIC SEMI-CONDUCTOR
46,240 STMicroelectronics.................................... 2,401,590
-----------
ENERGY
37,705 Total Fina SA......................................... 5,395,239
-----------
PHARMACEUTICALS
63,740 Aventis SA............................................ 4,598,172
-----------
SERVICES
79,480 Accor SA.............................................. 3,217,588
24,705 Suez Lyonnaise Des Eaux............................... 3,769,891
-----------
6,987,479
-----------
TOTAL FRANCE ......................................... 26,325,572
-----------
GERMANY (4.8%)
BANKING
49,000 Bayerische Hypo-und
Vereinsbank AG...................................... 2,690,634
21,310 Deutsche Pfandbrief-und
Hypothekenbank AG................................... 1,569,847
-----------
4,260,481
-----------
INSURANCE
12,692 Allianz AG Registered................................. 4,314,066
-----------
TOTAL GERMANY ........................................ 8,574,547
-----------
HONG KONG (2.1%)
MULTI-INDUSTRY
103,400 Hutchinson Whampoa, Ltd. ............................. 1,286,037
479,200 Li & Fung, Ltd.*...................................... 890,935
-----------
2,176,972
-----------
TELECOMMUNICATIONS
254,000 China Mobile, Ltd.*................................... 1,628,414
-----------
TOTAL HONG KONG ...................................... 3,805,386
-----------
INDIA (0.0%)
FINANCE
550 Industrial Credit & Investment
Corp. of India, Ltd. ............................... 871
-----------
MATERIALS
16 Reliance Industries, Ltd. ............................ 104
-----------
TOTAL INDIA .......................................... 975
-----------
IRELAND (3.5%)
BANKING
390,350 Allied Irish Banks, Plc. ............................. 3,975,480
-----------
PHARMACEUTICALS
42,220 Elan Corp., Plc. ADR*................................. 2,192,801
-----------
TOTAL IRELAND ........................................ 6,168,281
-----------
ITALY (7.9%)
FINANCE
203,950 Banca Fideuram SpA.................................... 3,136,434
223,000 Mediolanum SpA........................................ 3,268,522
-----------
6,404,956
-----------
INSURANCE
94,300 Assicurazioni Generali................................ 3,101,256
-----------
TELECOMMUNICATIONS
258,100 Telecom Italia Mobile SpA............................. 2,194,876
213,700 Telecom Italia SpA.................................... 2,475,662
-----------
4,670,538
-----------
TOTAL ITALY .......................................... 14,176,750
-----------
JAPAN (22.6%)
BANKING
366,000 Asahi Bank, Ltd. ..................................... 1,442,067
208 Mizuho Holdings, Inc.*................................ 1,599,047
106,000 Sumitomo Trust and Banking
Co., Ltd. .......................................... 1,286,938
-----------
4,328,052
-----------
CAPITAL GOODS/DURABLES
36,000 Fujitsu, Ltd. ........................................ 641,261
74,000 Matsushita Electric Industrial
Co., Ltd. .......................................... 2,149,448
66,000 Matsushita Electric Works............................. 777,111
-----------
3,567,820
-----------
CHEMICALS
17,000 Shin-Etsu Chemical Co. ............................... 697,851
-----------
CONSUMER DISCRETIONARY
67,000 Toppan Printing Co. .................................. 591,817
-----------
<PAGE>
BBH INTERNATIONAL EQUITY Portfolio
Portfolio of Investments
October 31, 2000 (continued)
Shares Value
-------- -----------
CONSUMER ELECTRONICS
20,100 Sony Corp. ........................................... $ 1,606,011
-----------
CONSUMER GOODS
84,000 Kirin Brewery Co., Ltd. .............................. 875,906
188,000 Nissan Motor Co. ..................................... 1,290,255
-----------
2,166,161
-----------
CONSUMER NON-DURABLES
25,000 Kao Corp. ............................................ 749,072
7,900 Nintendo Co., Ltd. ................................... 1,306,593
-----------
2,055,665
-----------
ELECTRIC COMPONENTS
9,000 Matsushita Communications
Industrial Co., Ltd. ............................... 1,179,273
4,900 Rohm Co., Ltd. ....................................... 1,235,158
-----------
2,414,431
-----------
FINANCE
10,800 Acom Co., Ltd. ....................................... 873,817
62,000 Nomura Securities Co., Ltd. .......................... 1,315,160
13,200 Orix Corp. ........................................... 1,384,890
-----------
3,573,867
-----------
MACHINERY/EQUIPMENT
141,000 Mitsubishi Heavy Industries........................... 547,799
-----------
MATERIALS
113,000 Kinden Corp. ......................................... 741,357
230,000 Mitsubishi Materials Corp. ........................... 676,501
172,000 Sumitomo Chemical Co. ................................ 847,904
180,000 Sumitomo Metal & Mining Co. .......................... 928,575
-----------
3,194,337
-----------
MEDIA
78 Fuji Television Network............................... 857,653
-----------
MULTI-INDUSTRY
20 Prospect Japan Fund*.................................. 164
9,100 Softbank Corp. ....................................... 546,158
103,000 Sumitomo Corp. ....................................... 906,034
-----------
1,452,356
-----------
PHARMACEUTICALS
35,000 Kissei Pharmaceutical Co., Ltd. ...................... 641,087
41,000 Santen Pharmaceutical Co., Ltd. ...................... 809,594
21,000 Yamanouchi Pharmaceutical
Co., Ltd. .......................................... 950,566
-----------
2,401,247
-----------
PRECISION INSTRUMENTS
15,000 Hoya Corp. ........................................... 1,239,749
-----------
REAL ESTATE
13,600 Oriental Land Co., Ltd. .............................. 822,468
-----------
RETAIL
26,000 Ito-Yokado Co., Ltd. ................................. 1,174,509
-----------
SERVICES
38,700 Credit Saison Co., Ltd. .............................. 819,141
2,000 Daikin Industries, Ltd. .............................. 38,668
608,000 Kawasaki Kisen Kaisha, Ltd. .......................... 1,091,932
195,000 Tokyu Corp. .......................................... 1,007,743
-----------
2,957,484
-----------
TELECOMMUNICATIONS
153 Nippon Telegraph & Telephone.......................... 1,392,120
97 NTT Docomo, Inc. ..................................... 2,390,892
-----------
3,783,012
-----------
TRANSPORTATION
162,000 Nippon Express Co. ................................... 972,282
-----------
TOTAL JAPAN .......................................... 40,404,571
-----------
NETHERLANDS (3.2%)
CONSUMER GOODS
65,217 Heineken NV........................................... 3,542,379
-----------
ELECTRIC COMPONENTS
56,163 Philips Electronics*.................................. 2,207,391
-----------
TOTAL NETHERLANDS..................................... 5,749,770
-----------
SINGAPORE (2.2%)
BANKING
87,476 DBS Group Holdings, Ltd. ............................. 1,031,004
-----------
SERVICES
96,000 Singapore Airlines.................................... 962,022
-----------
TELECOMMUNICATIONS
117,000 Datacraft Asia, Ltd.*................................. 801,450
703,000 Singapore Telecom..................................... 1,164,795
-----------
1,966,245
-----------
TOTAL SINGAPORE ...................................... 3,959,271
-----------
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY Portfolio
Portfolio of Investments
October 31, 2000 (continued)
Shares Value
-------- -----------
SOUTH KOREA (1.1%)
ELECTRIC COMPONENTS
20,000 Samsung Electronics,
Ltd., GDR*+ .......................................... $ 1,475,000
-----------
TELECOMMUNICATIONS
18,150 SK Telecom, Ltd. ..................................... 454,884
-----------
TOTAL SOUTH KOREA .................................... 1,929,884
-----------
SPAIN (6.0%)
BANKING
370,562 Banco Santander SA.................................... 3,591,544
-----------
FINANCE
270,660 Banco Bilbao Vizcaya SA............................... 3,606,433
-----------
TELECOMMUNICATIONS
181,573 Telefonica de Espana SA............................... 3,462,649
-----------
TOTAL SPAIN .......................................... 10,660,626
-----------
SWEDEN (3.0%)
CAPITAL EQUIPMENT
359,200 Ericsson (LM) Telephone Co.
Class 'B'........................................... 4,780,563
-----------
CONSUMER DURABLES
44,413 Electrolux AB......................................... 559,979
-----------
TOTAL SWEDEN 5,340,542
-----------
SWITZERLAND (3.0%)
PHARMACEUTICALS
3,544 Novartis AG Registered................................ 5,376,927
-----------
UNITED KINGDOM (19.2%)
BANKING
353,000 Lloyds TSB Group, Plc. ............................... 3,595,417
-----------
ENERGY
592,800 BP Amoco, Plc. ....................................... 5,027,247
454,600 Shell Transport & Trading
Co., Plc. .......................................... 3,657,366
-----------
8,684,613
-----------
FOOD & BEVERAGES
360,000 Diageo, Plc........................................... 3,397,718
-----------
EISURE
199,014 Granada Compass, Plc.*................................ 1,715,171
-----------
MEDIA
137,600 Pearson, Plc. ........................................ 3,691,415
-----------
PHARMACEUTICALS
177,700 Glaxo Wellcome, Plc. ................................. 5,115,247
-----------
SERVICES
179,000 BAA, Plc. ............................................ 1,488,145
-----------
TELECOMMUNICATIONS
110,850 British Telecom, Plc. ................................ 1,299,525
1,279,400 Vodafone Airtouch, Plc. .............................. 5,322,887
-----------
6,622,412
-----------
TOTAL UNITED KINGDOM ................................. 34,310,138
-----------
TOTAL INVESTMENTS (identified cost $170,019,365)(a) . 97.5% $174,133,935
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ...... 2.5 4,574,562
----- ------------
NET ASSETS .......................................... 100.0% $178,708,497
===== ============
----------
* non-income producing security.
+ 144A security.
(a) The aggregate cost for federal income tax purposes is $170,387,946, the
aggregate gross unrealized appreciation is $12,390,065 and the aggregate
gross unrealized depreciation is $8,644,076, resulting in net unrealized
appreciation of $3,745,989.
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments in securities, at value
(identified cost $170,019,365) .................... $174,133,935
Cash ................................................ 88,292
Receivables for:
Investments sold ................................. 10,631,383
Contributions .................................... 911,599
Dividends and other receivables .................. 187,197
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Total Assets ................................... 185,952,406
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LIABILITIES:
Payables for:
Investments purchased ............................ 6,860,060
Withdrawals ...................................... 80,964
Expense payment fee .............................. 264,543
Administration fee ............................... 10,011
Foreign withholding taxes ........................ 28,331
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Total Liabilities .............................. 7,243,909
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NET ASSETS ................................................ $178,708,497
============
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
NET INVESTMENT INCOME:
Income:
Dividends (net of foreign withholding tax of $292,890) . $ 1,351,677
Interest ............................................... 61,799
-----------
Total Income ......................................... 1,413,476
-----------
Expenses:
Expense reimbursement fee .............................. 1,112,178
Administrative fee ..................................... 45,098
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Total Expenses ....................................... 1,157,276
-----------
Net Investment Income .................................. 256,200
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NET REALIZED AND UNREALIZED LOSS:
Net realized gain on investments and
foreign exchange transactions ........................... 1,647,086
Net change in unrealized appreciation on investments and
foreign currency translations ........................... (7,090,328)
-----------
Net Realized and Unrealized Loss .......................... (5,443,242)
-----------
Net Decrease in Net Assets Resulting from Operations ...... $(5,187,042)
===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the years ended October 31,
---------------------------------
2000 1999
------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income ................................................ $ 256,200 $ 190,492
Net realized gain on investments and foreign exchange
transactions ....................................................... 1,647,086 10,563,181
Net change in unrealized appreciation on investments and
foreign currency translations ...................................... (7,090,328) 6,673,316
------------ ------------
Net increase (decrease) in net assets resulting from operations ...... (5,187,042) 17,426,989
------------ ------------
Capital Transactions:
Proceeds from contributions .......................................... 137,448,947 31,843,108
Fair value of withdrawals ............................................ (25,004,096) (44,451,990)
------------ ------------
Net increase (decrease) in net assets resulting from capital
transactions ....................................................... 112,444,851 (12,608,882)
------------ ------------
Total increase in net assets ......................................... 107,257,809 4,818,107
NET ASSETS:
Beginning of year .................................................... 71,450,688 66,632,581
------------ ------------
End of year .......................................................... $178,708,497 $ 71,450,688
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the years ended October 31,
---------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Return 7.31% 30.44% 9.44% 2.90% 10.75%
Ratios/Supplemental Data:
Net assets, end of year (000's omitted) .......... $178,708 $71,451 $66,633 $46,038 $39,484
Expenses as a percentage of average
net assets ..................................... 0.90% 0.87% 0.76% 0.90% 0.90%
Ratio of net investment income to average
net assets ..................................... 0.20% 0.29% 0.56% 0.63% 0.68%
Portfolio turnover rate .......................... 37% 86% 89% 85% 56%
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies. BBH International
Equity Portfolio (the "Portfolio") is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company which was
organized as a trust under the laws of the State of New York on August 15, 1994.
The Portfolio commenced operations on April 1, 1995. The Declaration of Trust
permits the Trustees to create an unlimited number of beneficial interests in
the Portfolio.
The Portfolio's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, 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 sale
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
Portfolio's Trustees. 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) 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 the Portfolio's
net assets are calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general
supervision of the Portfolio's Trustees.
B. Foreign Currency Translations. The accounting records of the
Portfolio 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, the Portfolio 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 transaction. The Portfolio isolates that
portion of realized gain or loss on investments resulting from changes in
foreign exchange rates on investments from the fluctuations arising from
changes in market prices of such 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 Portfolio's books and the U.S. dollar equivalent of the
amounts actually 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.
<PAGE>
BBH INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (continued)
C. Forward Foreign Currency Exchange Contracts. The Portfolio 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 Portfolio has no specific limitation on the percentage
of assets which may be committed to these types of contracts. The
Portfolio 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 Portfolio 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 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. The Portfolio will be treated as a
partnership for federal income tax purposes. As such, each investor in the
Portfolio will be subject to taxation on its share of the Portfolio's
ordinary income and capital gains. It is intended that the Portfolio's
assets will be managed in such a way that an investor in the Portfolio
will be able to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision
for federal income taxes is necessary.
2. Transactions with Affiliates.
Investment Advisory Fee. The Portfolio has an investment advisory
agreement with Brown Brothers Harriman (the "Adviser") for which it pays the
Adviser a fee calculated daily and paid monthly at an annual rate equivalent to
0.65% of the Portfolio's average daily net assets.
Administrative Fee. The Portfolio has an administrative agreement with
Brown Brothers Harriman Trust Company LLC (the "Administrator") for which it
pays the Administrator a fee calculated daily and paid monthly at an annual rate
equivalent to 0.035% of the Portfolio's average daily net assets. The
Administrator has a subadministration agreement with 59 Wall Street
Administraters, Inc. for which 59 Wall Street Administraters, Inc. receives such
compensation as is from time to time agreed upon. For the year ended October 31,
2000, the Portfolio incurred $45,098 for administrative services.
Custody Fee. The Portfolio has a custody agreement with Brown Brothers
Harriman (the "custodian") for which the custodian receives a fee calculated and
paid monthly.
Expense Reimbursement Fee. Brown Brothers Harriman Trust Company, LLC pays
certain expenses of the Portfolio and receives a fee from the Portfolio,
computed and paid monthly, such that after such fee the aggregate expenses will
not exceed 0.90% of the Portfolio's average daily net assets. For the year ended
October 31, 2000, Brown Brothers Harriman Trust Company, LLC incurred $1,094,591
including $837,536 in investment advisory fees, in expenses on behalf of the
Portfolio. The expense reimbursement agreement will terminate when the aggregate
amount of fees received by Brown Brothers Harriman Trust Company, LLC thereunder
equals the aggregate amount of expenses paid by Brown Brothers Harriman Trust
Company, LLC thereunder.
3.Investment Transactions. For the year ended October 31, 2000, the cost
of purchases and the proceeds of sales of investment securities other than
short-term investments were $155,989,778 and $46,228,538, respectively. There
were no purchases or sales of U.S. government obligations during the period.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Trustees and Investors
BBH International Equity Portfolio:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of BBH International Equity Portfolio as
of October 31, 2000, the related statement of operations for the years ended,
the statement of changes in net assets for the years ended October 31, 2000, and
1999, and the financial highlights for each of the years in the five-year period
ended October 31, 2000. These financial statements and financial highlights are
the responsibility of the Portfolio's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at October 31, 2000, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of BBH International
Equity Portfolio at October 31, 2000, the results of its operations, the changes
in its net assets, and its financial highlights for the respective stated
periods in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
December 22, 2000
<PAGE>
The 59 Wall Street Fund, Inc.
Investment Adviser and
Administrator
Brown Brothers Harriman
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
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.
International Equity Fund
ANNUAL REPORT
October 31, 2000
