TWEEDY BROWNE FUND INC, N-30D, 1997-11-21

TWEEDY BROWNE FUND INC
N-30D, 1997-11-21

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TWEEDY, BROWNE
GLOBAL VALUE FUND

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SEMI-ANNUAL
SEPTEMBER 30, 1997
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TWEEDY, BROWNE
AMERICAN VALUE FUND
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TWEEDY, BROWNE FUND INC.

Investment Manager's Report .......................................... 1
Results of Shareholder Meeting ....................................... 2

Tweedy, Browne Global Value Fund:
Portfolio of Investments ............................................. 18
Schedule of Forward Exchange Contracts ............................... 27
Statement of Assets and Liabilities .................................. 33
Statement of Operations .............................................. 34
Statements of Changes in Net Assets .................................. 35
Financial Highlights ................................................. 36
Notes to Financial Statements ........................................ 37

Tweedy, Browne American Value Fund:
Portfolio of Investments ............................................. 45
Schedule of Forward Exchange Contracts ............................... 52
Statement of Assets and Liabilities .................................. 54
Statement of Operations .............................................. 55
Statements of Changes in Net Assets .................................. 56
Financial Highlights ................................................. 57
Notes to Financial Statements ........................................ 58

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This report is for the information of the shareholders of Tweedy, Browne
Fund Inc. Its use in connection with any offering of the Company's shares is
authorized only in a case of a concurrent or prior delivery of the Company's
current prospectus. Tweedy, Browne Company LLC is a member of the NASD and is
the Distributor of the Company.

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TWEEDY, BROWNE FUND INC.
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Investment Manager's Report

To Our Shareholders:

[Graphic Omitted]
Will Browne, John Spears and Chris Browne

We are pleased to present the semi-annual report for Tweedy, Browne Global
Value Fund and Tweedy, Browne American Value Fund. The performance of your Funds
for the six months and twelve months ended September 30, 1997 is presented in
the table below.

<TABLE>
<CAPTION>
TWEEDY, BROWNE TWEEDY, BROWNE EAFE EAFE
AMERICAN VALUE S&P 500 GLOBAL VALUE (U.S. DOLLAR) (HEDGED)
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<S> <C> <C> <C> <C> <C>
6 months 28.67% 26.26% 15.91% 12.18% 15.58%
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12 months 45.01 40.44 31.00 12.18 24.45
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Annualized since
Inception 22.98 23.54 17.36 9.57 12.37
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Note: The performance shown represents past performance and is not a guarantee of future results. The
Funds share price and investment return will vary with market conditions, and the principal value
of shares, when redeemed, may be more or less than original cost.
</TABLE>

It has clearly been a good time to be invested, and any time we can see our
net worth increase in a year by 45% or 31%, we are happy. We cannot and will not
claim that we could foresee this year's rise in the stock market, but we are
happy we were there to enjoy it. If forced to make a prediction a year ago about
what we thought the stock market might do for the next twelve months, we can
assure you that we would not have guessed that the Standard & Poor's 500 Stock
Index ("S&P 500") would have risen 40%. Fortunately for us and you, we do not
engage in such speculation. So long as we can find the kind of investment
opportunities we like, and we like what we own, we plan to stay fully invested.
This is a lesson we learned in the late 1980s. Ten years ago we were concerned
that the stock market was too high and we became cautious about putting money to
work. Although we have always professed to be strictly bottom-up stock pickers
who paid no attention to macro-economic issues, we were in fact, as one client
described us, "closet market timers." Without realizing it, our own fears that
after so many good years the stock market was bound to correct, led us to build
up significant cash positions in our managed portfolios. When we found a cheap
stock, such as American Broadcasting Company which was selling at 60% of its
intrinsic business value, we bought a 1% position rather than a full 3% position
which was our customary practice. We thought we would be able to buy more at an
even cheaper price after the stock market corrected.

We cannot even lay claim to predicting the "Crash of '87" because our
timidity began long before and persisted long after that event. We actually took
some perverse pleasure in the crash after we realized the world was not going to
unravel because we were able to finally put some money to work in stocks that
had suddenly become 20% or 30% cheaper for reasons about which we can only
speculate. Fortunately, our research into the behavior of stock markets led us
to conclude that we could not and never would be able to predict whether the
stock market would go up or down in some short-term foreseeable time period. We
also had a few smart clients who told us they hired us to buy stocks, not hold
cash. They would determine how much cash they thought they needed. They liked
the stocks we bought and wanted to own more of them. We further concluded that,
between 1926 and 1996, on average the stock market rises perhaps 70% of the time
on an annual basis. These are pretty good odds, but the major portion of the
stock market's advance comes in perhaps 5% of the time measured by days. Trying
to figure out which 5% of the days would produce most of our return was a futile
exercise. Moreover, trading in and out of the market with the expectation of
selling at a high and buying back at a lower price only seemed to benefit
brokers and the Internal Revenue Service ("IRS"). While we like the brokers we
use, we cannot make the same statement about the IRS.

Taking intellectual comfort from the empirical evidence, we decided to be
more fully invested with that portion of our assets we would not need in the
near future for the rent or college bills or a new car. We began this process in
the early 1990s, which took perhaps more courage (or stupidity), given the
horrible relative and absolute investment results experienced by "value
managers" in 1989 and 1990. In 1989, the U.S. economy was thought to be on the
brink of recession and investors flooded into "quality" growth stocks like
Coca-Cola and Merck while mundane stocks owned by the value set just languished.
Our own client composite rose only 13.2% in 1989, as compared to a gain of 31.7%
in the S&P 500. Then, to add insult to injury, in 1990 the cheap financial
stocks, such as banks and insurance companies that the value managers owned in
great abundance, had a disastrous year while the large cap growth stocks did not
do so badly. Our client composite sank 12.3% while the S&P 500 fell only 3.1%.
However, being gluttons for punishment and investors of limited scope, we moved
back into stocks and are glad to report we have never been happier. We consider
that decision one of but a few "defining moments" in our collective investment
careers.

As we have said in the past, (our ears are ringing with, "Here they go
again") we know we cannot predict where the stock market is going in the short
run. On average over long periods of time, stock markets have risen as economies
grow, and stocks have beaten bonds and cash. Stocks possessing investment
characteristics described in our booklet, What Has Worked in Investing, such as
low price/earnings ratio or low price-to-book value ratios, have beaten most
stocks and the stock market indices. We sometimes think the greatest benefit we
have provided our clients over time is the advice to stay invested in periods of
uncertainty. We recently received a letter from a client who wrote to tell us
that his wife of 47 years had passed away, which saddened us. This client, a
retired college professor, then went on to tell us that in the late 1960s he
gave a modest sum of money to Tweedy, Browne to manage because he knew one of
our now retired partners, Ed Anderson. (The term "modest" is the clients, not
ours. We happen to believe any sum of money one invests is important.) Through
the years, this investment put two children through college and graduate school,
and enabled our client and his wife to go around the world on the QE II and
spend a few months each winter for several years of their retirement in the
Virgin Islands. That "modest" investment made a significant difference in their
lives. To say his words make us feel good is an understatement. When we look
back on the past 30 years, we can remember more than a few times when stock
market pundits would have advised our client to get out of the stock market
because the bears were on a rampage. Whether due to dumb luck, misplaced trust
or long-term thinking, our client "stayed in" through the bear market of the
early 1970s, the gloomy days of recession and record-high interest rates of the
early 1980s, the Crash of 1987 and our own disappointing performance in 1989 and
1990. Stories such as this are helpful reminders of the long-term benefit of
investing in stocks especially when a chorus of bears is singing.

As we write this letter, today is the tenth anniversary of the Crash of '87.
So what? Well, it is a news event and an opportunity to write stories comparing
today's stock market with the stock market of ten years ago. It is an
opportunity for reporters and pundits alike to conjure up fears of eminent
financial disaster. Articles which give rise to feelings of fear or greed seem
to sell magazines and newspapers as well as articles about the lifestyles of
rock stars and movie stars. Both topics in our opinion are equally relevant, or
irrelevant as the case may be, to your financial health. But articles that
advise people to invest their money in stocks for thirty years and ignore any
shorter-term fluctuations do not sell newspapers. Instead we are fed a daily
diet of economic signals which could predict a continuation of the bull market
or the onset of the next crash. And the signals are different each day. If it
were so easy to read the tea leaves of the economy, someone would do it and we
would all know whether to cash in our chips today and wait until the market
bottoms out before going back in. At times it seems as if the whole future of
the world economy hinges on what Alan Greenspan thinks... "Greenspan has
Argument with Wife, Stocks Plummet." While we do not know Alan Greenspan, one of
us does know his wife, Andrea Mitchell, and we do not mean to imply that they
argue. We think Alan Greenspan has been a terrific head of the Federal Reserve
and that Andrea Mitchell is a lovely lady and great White House correspondent,
but we do not think daily ruminations about his views of the economy are
particularly relevant to our investments in the long run.

Some day in the future the Federal Reserve will raise interest rates and the
stock market will likely react negatively. They could also lower rates before
raising them and stocks could rise even higher than they are today. Some day the
stock market will go down; actually it goes down on a lot of days and we accept
the fact that there could be a real bear market for reasons we cannot not now
foresee. However, if the stock market went down 25% from where it is today, we
would only be giving up a portion of the gains we made in the past twelve
months, and we presume it would resume its longer term trend of going up.
Listening to the merchants of doom who seem to appear almost daily on financial
talk shows, one could conclude that the stock market is a zero sum game, that
stocks fall as much as they rise, and that over time the trend line for stocks
is flat. This is a disservice to the public, although no more of one than that
of promoters who would have us believe that stocks will always provide returns
of 20% or 30% each year. Over long periods, as measured by the S&P 500, which is
as good a proxy for the market as exists, stocks have compounded at about 10%
per year. There is no magic to this number; it is quite easy to understand. Over
long periods of time, corporate profits have grown 6% per year which is the sum
of 3% growth due to inflation and 3% growth attributable to growth in the Gross
Domestic Product. Monetary authorities, the guys who can wreak havoc on stock
prices by raising interest rates, have historically been happy with inflation at
3% and real growth at 3%. Economies do not seem to get out of hand at those
levels of growth. The balance of the stock market's return has come from
dividends which over long periods of time have been at a yield of 4%. If you are
willing to wait and are happy with compounding at 10%, you can probably get it
from an index fund before taxes.

Ten percent may not sound like a very big number, but consider this real
life story. We know an individual who was lucky enough to have inherited about
$15 million in the early 1960s. This was a princely sum, no doubt, although not
so great today considering the size of NBA contracts or Jim Carrey's fee for a
single movie. This inheritance was in trust and in one stock. Perhaps because of
a low cost basis and capital gains rates that have been historically higher than
today's 20% rate, the trustees never sold any shares. Luckily, this one stock
was one of the great, well-managed growth companies of our day. (We have chosen
not to mention the name of the company as it would then be rather easy to
determine who this individual is and we would be betraying a confidence.) Our
lucky fellow lived on his dividends, which we estimate have averaged 2% per
year. The stock has risen and fallen, but today is worth more than $500 million.
The rate of compounding of $15 million to $500 million over 34 years is 10.86%.
Adding back the dividend yield of 2%, Mr. Lucky had a total return before taxes
of about 12.86%. Not having realized any gains has so far saved this person
about $100 to $200 million depending on whether the shares were sold today or at
some time in the past. It does not take high-risk hedge fund returns to get to
be rich; you just have to live long enough. In terms of a 3% rate of inflation
over this period, the original $15 million would have to be nearly $41 million
to be worth the same amount. Instead, our friend is 12 times richer. Were he to
pass away tomorrow (which we sincerely hope he will not), he would leave enough
money even after paying inheritance taxes of 55% to give five children the same
inheritance he received, but in 1997 dollars. Each child would receive
approximately $45 million after all inheritance taxes had been paid. Had his
trustees sold his shares and invested his inheritance in bonds for safe, secure
income, he would still only have $15 million and would have enjoyed the
privilege of paying taxes on that income at rates ranging from a high of 90% in
the early 1960s to a now forgotten low of 28% in the Reagan years. Moreover, $15
million today is only worth 37% of what it was worth in 1963.

Inflation is a somewhat hidden but highly insidious form of taxation. While
few, if any of us, would shed tears for someone who inherits $15 million today,
pretend instead that the sum is $1 million and this is the amount of money that
has been set aside in your 401K for retirement. If the entire amount is invested
in bonds and the income is spent, your net worth is declining 3% every year,
assuming the historic rate of inflation. If you live for 30 years after
retirement, which is now quite possible, you will find yourself with the
equivalent of $370,000 which may be less than you consider comfortable.
Fortunately, stocks have a built-in antidote to inflation. On average, corporate
America raises prices to keep up with inflation and adds a premium to this
through gains in productivity and overall economic growth. Between 1925 and
1996, the pre-tax return on the S&P 500 has not been less than inflation in any
20-year period. The pre-tax returns from U.S. government bonds and treasury
bills beat inflation in 31% and 54% of the 20-year periods, respectively. This
is why we personally do not like bonds or treasury bills and why we are quite
comfortable owning stocks for the long term. If over the long term we can
improve our returns above the passive returns of an index fund, so much the
better. In our example above, the difference our friend earned at 12.86% versus
the 10% return for the index added $116 million to his net worth.

It appears obvious to us that one would want to own stocks if one wants
their net worth to stay up with or even grow faster than inflation. If only
there were no down turns in the stock market, one could invest their money
knowing it would always grow. Unfortunately, stock markets do go down from time
to time, and even though in the long run you are likely to profit if you stay
invested in stocks, the short run possibility of loss is greater than some can
tolerate. Behavioral psychologists have found that the disutility of loss is
twice as great as the utility of gain. Somehow we cannot help but be human.
Overcoming these human instincts is important for your financial well being. For
instance, let us say that you decided to finally take the plunge and invest your
nest egg the day before the crash of 1987. Unless you left that night for some
remote island where there was no communication with the outside world, you might
well be scared into selling everything and putting your money back in the bank
just like Aunt Harriet told you to do in the first place. However, if for some
reason you decided to stay in, you would have been amply rewarded ten years
later. The October 17, 1997, issue of THE WALL STREET JOURNAL carried a table
entitled The '87 Crash Anniversary, which presented certain statistics comparing
today to the market close the day before the crash. On that Friday, October 16,
1987, the Dow Jones Industrial Average ("DJIA") closed at 2246.74. The following
Monday, it sank 508 points for a one day loss of 22.46%. On Thursday, October
16, 1997, the DJIA was at 7938.88, 3.5 times higher for an annually compounded
rate of return of 13.45% before dividends, which we estimate contributed another
3%-plus to the annually compounded rate of return. Entering the market the day
before one of its most significant declines still produced rates of return ten
years later that exceeded the long-term rate of return of the S&P 500 by more
than 60%.

Statistics can be revealing and they can be misleading. In the
aforementioned chart in THE WALL STREET JOURNAL, there is an implication that
the stock market is once again at a level from which a crash could occur. We
agree that the popular stock market averages are fundamentally higher than their
historic norms, but do not conclude that it will take a crash to bring them back
to earth. While the DJIA has increased 250% before dividends over the ten-year
period, the underlying earnings of the companies in the average have also
increased 204% for a compounded growth rate of nearly 11.8%. This has been an
extraordinary ten years for corporate America. In 1987 the price/ earnings ratio
of the DJIA was 17.8 times its trailing twelve-month earnings. Today it is 20.67
times trailing earnings. The price/earnings ratio has increased 16%. However, in
1987 the 30-year treasury bond yield was 10.22% and had been rising all summer.
Today it is 6.41%. If the treasury bond yield were a price/earnings ratio, it
would have increased by 60% as compared to the 16% increase in the
price/earnings ratio of the DJIA. If the DJIA were to decline so that its
price/earnings ratio was at its historic ratio of 14.5 times earnings, the
averages would go down approximately 30%. This would be painful but not
terminal. Alternatively, the DJIA could stay where it is and if earnings grew at
the pace they have over the past ten years, the price/ earnings ratio would be
back to 14.5 in four years.

Another statistic market forecasters like to watch is the dividend yield on
the averages. In 1987 the dividend yield of the DJIA was a healthy 3.07%. Today
it is only 1.68%. Historically, we are told, a dividend yield of less than 2% is
an indication of a toppy market. However, in 1987, the companies in the DJIA
were paying out 54.6% of their earnings in dividends, which is only slightly
less than the 58% of earnings they would be paying if the averages yielded their
historic 4% and sold at 14.5 times earnings. Today, the payout ratio of the DJIA
is only 34.7%. Corporate America is choosing to retain a greater portion of its
earnings rather than pay them out to shareholders in the form of dividends. This
has been a smart decision because the return on capital for the companies in the
averages may well be at an all-time high. Simply stated, corporations are making
more money keeping their earnings in the business than we as shareholders could
be making if they turned the earnings over to us. If the dividend payout ratio
today was 58%, the yield on the DJIA would be a more comfortable 2.8%. Although
shareholders like to see dividends because they view it as money they are
allowed to spend rather than as invading capital, which would be the case if one
sold some stock to get cash, it is not tax efficient. Dividends are taxed at the
highest rates in the tax tables. Capital gains are taxed at the lowest rates. As
shareholders, we would be better off with no dividends and be forced to sell
some shares when we needed money to buy a new car or house. In this way,
shareholders could decide when they wanted to pay their taxes on their pro-rata
share of the corporations' earnings rather than being forced to turn over a
significant portion of their earnings to the IRS. And so long as the corporation
is able to earn high returns on its reinvested capital, we are better off
leaving it in the company. If the company does not have a use for the earnings
that will produce satisfactory returns, they could always use the money to buy
back their shares. Share buy-backs increase the earnings of each remaining share
of stock that is outstanding because overall corporate earnings are divided
among a smaller number of shares. By buying back shares, the corporation is also
giving the shareholders the choice of taking out part of their earnings and
choosing to pay their share of taxes at the lower capital gains rate, or not as
the case may be. Warren Buffett learned this bit of math a long time ago, and
the fact that his company, Berkshire Hathaway, pays no dividend has not hurt its
share price or the wealth of its shareholders. We doubt that corporate America
is going to decide not to pay dividends any time soon, despite the fact it would
be in our best interests. Dividends are simply ingrained in our shareholder
culture.

Another sign that stock market pundits point to as an indication of imminent
financial collapse is the growth of assets invested in mutual funds. Again
referring to THE WALL STREET JOURNAL chart, the compounded rate of growth of
money invested in stock mutual funds over the past ten years has been 17.3%,
which is about 2% compounded greater than the rate of return of the DJIA after
including the reinvestment of dividends. This means there has been a shift in
the proportion of corporate America owned by individuals through mutual funds.
But is this bad? We do not think so. Ten years ago it was more common for
someone retiring to receive a pension rather than a lump sum distribution of the
money that would otherwise provide for that pension. If you lived to be 100, you
made out OK. If, on the other hand, you died a year later the corporation made
out because they were relieved of the obligation to pay you your pension. With a
lump sum distribution you have something to leave to your heirs if you are
unfortunate enough to suffer an early demise. Moreover, pensions were generally
a fixed amount so that the above-mentioned insidious inflation tax was eroding
your income. If you live long enough, your pension might not be sufficient to
maintain your lifestyle in your later years. With a lump sum, you at least have
the chance of seeing your retirement nest egg keep pace with inflation.
Investors are acting rationally by investing their retirement assets in stocks,
which over time have historically beaten bonds and cash. However, listening to
the market pundits, you could come away with the impression that individual
investors are gambling in some high stakes casino that has no reasonable chance
of turning a profit. So far, score one for the investors.

The pundits further caution that when the inevitable bear market or crash
occurs, these same investors will make a stampede for the door, further
exaggerating a stock market drop. It seems to us a bit arrogant on their part to
assume that all those people who have invested in mutual funds are so dumb that
they will sell everything at the first sign of trouble. In the crash of '87, the
opposite was true. Mutual funds did not report any such mad rush on the part of
shareholders to redeem while it was the supposedly rational professionals who
were doing all the selling. Some day the stock market will go down. It will
probably take some future government's misguided economic policy to do it or
some unpredictable world political problem. This does not mean it will not then
recover, as it has every time in the past, and continue to compound at its more
historic rate. It is a bit like going to the dentist: no one looks forward to
it, everyone tries to put it off as long as possible, but after it's over, it
was never as bad as the anticipation.

The average mutual fund investor is probably someone over the age of forty
who has experienced some ups and downs in the market. Unfortunately, the same
apparently cannot be said for the typical mutual fund manager. As more and more
funds have been created to cater to every segment of the market, more and more
fund managers are needed. The number of U.S. stock mutual funds has grown from
2,129 in 1987 to 6,685 today. In an article from the June 13, 1997, issue of THE
WALL STREET JOURNAL, it was reported that the average fund manager is 28 years
old. This means that they were not even around the market in the crash of '87.
The concern should not be how the shareholders will react but how the fund
managers will react. In the old days, mutual fund managers achieved star status
after years of beating the averages. Today, they are packaged by marketing
people and given aggressive personalities, as if mountain climbing or race car
driving provided the stamina needed to navigate through today's treacherous
markets. Like NBA teams, mutual fund companies bid for the best players. This
can create an environment where the managers start acting like heavy metal band
members. THE WALL STREET JOURNAL reported on September 11, 1997, what happened
at a mutual fund managers gathering, entitled What Next for Closed-End Bond
Funds, last December in Vail, Colorado. The hotel manager was told to put out
eight tons of M&M's but remove all the yellow ones. It seems yellow is a color
associated with bears. A few yellow M&M's slipped through the filtering process,
and some of the younger fund managers flew into a rage and trashed the hotel to
the tune of $220,000. It would be difficult if not impossible to imagine John
Templeton, John Neff or Peter Lynch engaging in similar behavior.

Mere youth is not a reason not to invest with someone, nor is it reason to
invest. Maturity is not a character trait found only in people of a certain age.
After all, when Chris Browne, Will Browne and John Spears took over the
principle task of managing money at Tweedy, Browne, their ages were, 30, 32, and
28, respectively. We did have what we believe is the advantage of having worked
for then partners Tom Knapp and Ed Anderson for whom we still manage money, and
for Howard Browne who passed away in 1994. Now that we are in our very early
50s, we like to think we have been around long enough to have weathered some
pretty ugly stock markets, but still have many productive years ahead. If we use
Walter Schloss as a role model, our best years are still to come. Today, Walter
is 81 and still beating most of the competition in the money management
business.

We began writing this letter on Monday, October 20, 1997. The previous
Thursday and Friday, the DJIA declined 210.95 points, or 2.6%. The following
Monday it rose 74.41 points, and on Tuesday it rose 139 points, for a two-day
gain of 2.7%. Whatever spooked the market the previous week was forgotten two
days later. On Thursday, October 23, the DJIA went down 187 points. We bought
stocks. We are at a loss to explain why it goes down so much one day and up so
much the next. However, we do not believe it is worth our time and energy to
speculate on the stock market's gyrations. We would rather just buy stocks when
others want to get rid of them. As far as we can tell, nothing so momentous has
occurred to account for such dramatic swings in investor sentiment.

All of this self-indulgent discussion is not without its purpose, which is
to tell our fellow shareholders not to worry about all the talk one hears of the
impending crash. If you look at stock prices rationally, the only time that
stock prices really matter is when you want to sell. Stock price fluctuations
are an advantage to the investor because they provide an opportunity to buy
partial interests in businesses, or shares, at low prices and sell at high
prices in relation to value. In between, you own interests in real businesses --
think of owning a local store -- which generate profits every day that are
largely reinvested in the business for your benefit, and partially paid out as
dividends and share buy-backs. If you anticipate having a need for cash from
your portfolio 20 years from now, what matters is your portfolio's value then,
when you will sell. All the fluctuation in between buying and selling may be
entertaining, but it isn't what counts. Remember why you invested, remember that
market timing is infrequently successful and probably the result of luck not
skill, and that you can get rich if you maintain a long-term perspective.

Your Funds Today

After gains over the past twelve months of 45% in the Tweedy, Browne
American Value Fund and 31% in Tweedy, Browne Global Value Fund, we cannot say
our portfolios are as cheap as they were a year ago. Portfolio characteristics
in terms of price/earnings ratios and price-to-book value ratios are statistics
we like to look at. As of September 30, 1997, 41% of the assets of Tweedy,
Browne Global Value Fund were invested in stocks based on a low price/ earnings
ratio. The weighted average price/earnings ratio of these stocks was 11.5 times
which is the cheapest 13% of stocks in the Worldscope database. An additional
29% of the portfolio was invested in stocks selected on the basis of a low
price-to-book value ratio. These stocks had a weighted average price- to-book
value ratio of 85.8% which is the cheapest 8% of the stocks in the Worldscope
database. In Tweedy, Browne American Value Fund, approximately 50% of the
portfolio was invested in stocks with an average price/earnings ratio of 12.8
times, which is the cheapest 8% of stocks in the Bloomberg database. A further
22.4% of the portfolio was invested in stocks with a weighted average
price-to-book value ratio of 98.5% which represents the cheapest 2% of all
stocks in the Bloomberg database.

We are often asked where are we finding value these days. The answer we have
is all over the place, though not in as great abundance as we did a year or two
ago. For example, we recently purchased shares of John H. Harland, the check
printing company at around $20 per share. The stock is down from a twelve-month
high of $33. The CEO has been buying shares this year to the tune of $1 million
and the company is going through a major restructuring and consolidation of
factories with the expectation that it could earn $3 per share down the road. We
have also been buying shares in Pharmacia & Upjohn Inc. Of all the major
pharmaceutical companies, this one sells at the lowest price to sales ratio and
again has been the object of significant insider buying. We are also beginning
to look more closely at companies in Southeast Asia, as we are sure the
significant declines in those markets have resulted in some babies being thrown
out with the bath water. For your information, prior to this debacle, the
Tweedy, Browne Global Value Fund had only 2.6% of its assets invested in Hong
Kong, Singapore and Thailand with the currency almost fully hedged. As our
portfolio turnover has been extremely low, we do not need a great number of
ideas to stay invested. And as we stated before, we have an aversion to creating
taxable gains.

We recently ran across an article by Gary Gentile in the May 1997 issue of
FINANCIAL PLANNING MAGAZINE entitled Performance Anxiety. This article examined
the turnover rates of growth stocks versus value stocks and found that growth
stocks have a significantly higher turnover rate than value stocks on both The
New York Stock Exchange and the NASDAQ stock market. The article further
presented evidence that low turnover stocks and value stocks had returns 3.86%
compounded higher than growth stocks over a 30-year period beginning January 1,
1967 and ending December 31, 1996. While we believe we are members in good
standing of the value club and spend little time observing our brethren in the
growth camp, we found this news quite amazing. We always thought the purpose of
buying growth stocks was to invest in companies that would grow faster and
longer than the overall market and therefore let investors hang on for the long
ride. One of the perceived drawbacks of value investing was that you bought
stocks that were temporarily depressed and realized gains when they hopefully
reverted back to some more reasonable level. The opposite seems to be the case.
Value investors can buy stocks that others may call growth stocks, we just do
not buy "growth stocks" that are more dream than reality like internet surfers
and coffee shop chains at sky high price/earnings ratios. We in fact own a
number of stocks we think have good growth prospects but are selling at
reasonable prices. Warren Buffett is the dean of value investors, but Berkshire
Hathaway's portfolio is comprised almost exclusively of stocks that could be
called growth stocks. Other of our value peers whom we hold in high esteem own
mostly better businesses in their portfolios such as Ruane, Cunniff's Sequoia
Fund, Southeastern Management's Long Leaf Partners and Pacific Financial
Research's Clipper Fund. A better business bought at a reasonable price is
perhaps the best investment of all. You can invest in a cheap stock that may
stay cheap while rising because the share price never catches up to the
intrinsic value. It is too bad there are not more of them. Some stocks that we
have held for years include Capital Cities/ABC until its sale to Disney, Popular
Inc., the largest bank in Puerto Rico, Nestle, TransAtlantic Holdings, and
Freddie Mac to name a few. When we can find them we buy them. Value investors do
not only own tired old rust belt America industrial companies as the growth
managers would have you believe. Warren Buffett has said, "Value and growth are
joined at the hip." It's only a function of price. What we do not own are stocks
selling at some nearly infinite multiple of a business plan that can crash if
earnings for the quarter come in one cent below estimates. That may account in
part for why we do not get upset on a day when the stock market goes down 50,
100 or 150 points. Just like flying, some times it is smooth and some times you
hit turbulence. But if the pilot keeps his cool, you ultimately arrive at your
destination.

----------------

We are pleased to report that the shareholders of Tweedy, Browne Fund Inc.
approved new investment advisory contracts with Tweedy, Browne Company LLC on
September 29, 1997. Following this approval, a majority interest in our company
was acquired by Affiliated Managers Group, Inc. We wish to thank our
shareholders for voting in favor of the new agreements and thereby expressing
confidence in our affiliation with AMG. We are pleased to report that the nice
folks at AMG have done exactly what they said they would, which is to leave us
alone to continue doing what we have been doing for our shareholders and clients
for many years. Nothing has changed at Tweedy, Browne, and, God willing, nothing
will change for many years to come.

----------------

We are extremely sorry to report that Daniel J. Loventhal, an independent
director of Tweedy, Browne Fund Inc., passed away on October 18, 1997. Dan was a
truly lovely and gentle human being and a friend of ours for more than twenty
years. He combined a delightful sense of humor with great business acumen. As an
independent director of our Funds, he represented the interests of our
shareholders with intelligence and integrity. Our sincerest sympathies are
extended to his wife, children and grandchildren. He will be sorely missed by
all who knew him.

----------------

Just as we were about to put this letter to bed, the "stock market
correction of '97" began, so we decided to delay your semi-annual report for a
day or two to permit us to express our opinion on this event. On Monday, October
27, 1997, the DJIA dropped 554 points, or 7.18%. The next day, the average
declined another 175 points or so in the morning and then turned around. As we
write, the average is up about 115 points. Where it will close is anybody's
guess. At the risk of this letter being "out of date" in the next few hours or
days, we will stick our necks out and offer our comments. As we watched the news
on Monday night, we were struck by the fact that the average individual investor
was non-plussed by the day's events. Reports from stockbrokers and mutual fund
companies indicated that the individual investor was not rushing for the door.
So who is doing all this selling? Presumably, it is the professional money
managers who were trying to dump all their stocks.

As investors in mutual funds, you pay your managers generous fees to do
something you must believe they can do better than you. You pay people like us
to manage your investments presumably because we devote all our working hours to
researching stocks and making investment decisions. And we believe you should
also expect us to "maintain our cool" when things get a bit bumpy. So why did
the stock market drop 554 points in a single day? The economy is doing just
fine. Interest rates are low and going lower. Inflation does not seem to be a
problem, and the people in charge of the Federal Reserve and the Department of
the Treasury are as capable as any we have seen. Three cheers for Alan Greenspan
and Robert Rubin!

Amazingly to us, the people who should remain cool are the very ones causing
the turmoil. The "small investor" apparently sat on the sidelines and took the
day's decline in stride, while the professional money managers, or at least
enough of them to cause a 500-point drop, ran around like chickens with their
heads cut off. Maybe people have a better long-term perspective when it comes to
their own money than do the managers who are working with other people's money.
One would have thought that the increasing institutionalization of investments
with the increased professional management of money would lead to more rational
behavior. We guess not. Maybe we are not professional money managers because we
did what the average man in the street reportedly did, which was very little. We
took advantage of this "irrational exuberance" in reverse to buy some stocks
which we wanted to buy for a while. Although we do not see why markets should
have such dramatic fluctuations, we guess we are glad they do. If we cannot
change the behavior of money managers, we can at least take advantage of it.
Hopefully, this will prove to be beneficial to us and the investors who have
entrusted their money to us.

Sincerely,

Christopher H. Browne
William H. Browne
John D. Spears

Managing Directors
TWEEDY, BROWNE COMPANY LLC
Investment Adviser to the Fund
October 23, 1997
<PAGE>

TWEEDY, BROWNE FUND INC.
- --------------------------------------------------------------------------------
Results of Shareholder Meeting
- --------------------------------------------------------------------------------

The special shareholder meeting held September 29, 1997 resulted in approval
of all items proposed.

For the Tweedy, Browne Global Value Fund a total of 53,517,057.051 votes
were cast in favor of the proposal to approve a new investment advisory
agreement, 931,019.618 were cast against the proposal and 1,154,809.336
abstained. For the Tweedy, Browne American Value Fund, a total of 17,234,771.028
voted for the proposal, 243,848.213 voted against the proposal and 277,352.265
votes abstained.

Additionally, at the meeting, shareholders re-elected the Directors of
Tweedy, Browne Fund Inc. The votes were cast as follows:

IN FAVOR WITHHELD
-------- --------
Bruce A. Beal 72,302,907.440 1,056,471.071
Christopher H. Browne 72,317,305.642 1,042,072.869
William H. Browne 72,316,960.267 1,042,418.244
Arthur Lazar 72,239,762.640 1,119,615.871
Daniel J. Loventhal 72,252,310.610 1,107,067.901
Richard Salomon 72,319,995.833 1,039,382.678

Also at the meeting, shareholders ratified the selection of Ernst & Young
LLP as independent auditors for each Fund for the fiscal year ending March 31,
1998. A total of 71,848,893.856 votes were cast for the proposal and 551,169.680
votes were cast against the proposal and 959,314.975 votes abstained.
<PAGE>

TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------

September 30, 1997 (Unaudited)

[Graphic Omitted]
MARKET
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCKS--86.4%
AUSTRALIA--0.0%++
96,353 Carillon Development Ltd. ................... $ 146,89
-------------
BELGIUM--0.5%
526 Fabrique de Fer de Charleroi ................ 2,596,106
1,440 Glaces de Charleroi ......................... 3,593,090
3,940 Ibel ........................................ 192,301
2,458 Spadel SA ................................... 2,692,544
3,252 Uco Textiles SA ............................. 374,511
-------------
9,448,552
-------------
CANADA--2.2%
196,891 BRL Enterprises Inc.+ ....................... 712,212
60,000 Canadian Western Bank ....................... 824,742
166,500 Corby Distilleries Ltd., Class A ............ 7,709,170
104,600 Corby Distilleries Ltd., Class B ............ 4,457,182
1,728,361 Kaufel Group NV, Class B .................... 5,001,587
260,700 Melcor Developments Ltd. .................... 3,064,840
1,391,000 National Bank of Canada, Toronto ............ 19,472,491
247,800 Shirmax Fashions ............................ 806,728
785,883 Westfield Minerals Ltd.+ .................... 938,113
-------------
42,987,065
-------------
DENMARK--0.2%
11,390 Nordvestbank ................................ 1,252,597
30,271 Spar Nord Holding A/S ....................... 1,722,985
-------------
2,975,582
-------------
FINLAND--3.3%
8,000 Atria OY .................................... 75,625
507,027 Huhtamaki Group, Class I .................... 19,938,860
794,900 Kesko Ord ................................... 11,196,304
257,555 Kone Corporation, Class B ................... 33,355,424
-------------
64,566,213
-------------
FRANCE--5.1%
32,222 Bongrain SA ................................. 12,057,485
24,763 Centenaire-Blanzy SA ........................ 1,891,666
5,229 Christian Dior, SA .......................... 705,996
79,419 Compagnie Financiere de Paribas ............. 5,890,177
57,700 Compagnie Lebon SA .......................... 2,305,024
188,692 Dollfus Mieg & Cie .......................... 3,011,998
1,150 Fiat France SA .............................. 25,200
14,896 Fin Marc de Lacharriere SA .................. 1,275,512
60,931 Fonciere Financiere Et de Participation+ .... 2,608,695
42,900 Groupe Danone ............................... 6,761,144
2,022 Idianova SA+ ................................ 23,858
52,218 Klepierre ................................... 6,909,413
33,293 La Concorde+ ................................ 6,936,217
5,229 LVMH Moet Hennessey ......................... 1,111,437
137,188 Lyonnaise des Eaux - Dumez+ ................. 15,308,244
21,145 Mecelec SA .................................. 210,821
2,509 Nordon Et Cie ............................... 161,553
36,372 NSC Groupe .................................. 5,125,364
38,018 Paluel Marmont SA ........................... 1,954,521
9,073 Paris Orleans ............................... 412,920
97,700 Peugeot SA .................................. 12,878,124
9,164 Precia ...................................... 216,254
11,136 Rallye+ ..................................... 628,818
13,082 Sediver ..................................... 358,326
8,590 Signaux Girod ............................... 153,479
49,723 Siparex ..................................... 1,001,559
63,700 Societe Generale ............................ 9,223,248
-------------
99,147,053
-------------
GERMANY--1.3%
15,018 Axel Springer Verlag, Class A ............... 12,836,987
61,660 Kaufring AG ................................. 3,106,473
41,360 Linder Holding .............................. 760,918
33,968 Sinn AG ..................................... 7,691,376
3,755 Tiag Tabbert-Industrie AG ................... 265,702
-------------
24,661,456
-------------
HONG KONG--2.0%
4,081,000 Jardine Strategic Holdings Ltd.+ ............ 15,997,520
2,067,953 Semi-Tech (Global) Ltd. ..................... 3,006,523
8,891,000 Sing Tao Holdings ........................... 4,136,418
973,000 Swire Pacific Ltd., Class A ................. 7,450,278
5,150,000 Swire Pacific Ltd., Class B ................. 7,620,509
-------------
38,211,248
-------------
IRELAND--0.4%
1,873,618 Crean (James) PLC ........................... 4,216,766
1,105,000 Unidare PLC ................................. 3,529,813
-------------
7,746,579
-------------
ITALY--5.5%
3,099,291 Arnoldo Mondadori Editore SPA ............... 22,659,127
150,000 Banca Popolare di Novara+ ................... 877,676
2,750,400 Banca Toscana+ .............................. 5,927,346
741,850 Banco di Sardegna Risp+ ..................... 6,468,060
472,500 Bassetti SPA ................................ 3,038,409
2,061,730 Cartiere Burgo Ord .......................... 13,377,387
447,000 Cementerie di Augusta+ ...................... 748,388
323,000 Cementerie di Barletta Ord .................. 1,075,949
1,156,450 Cristalleria Artistica ...................... 4,140,348
380,100 Ericsson Italia ............................. 10,899,951
529,750 IMI SPA ..................................... 5,683,730
620,862 Industrie Zignago ........................... 5,071,491
1,234,000 Maffei SPA .................................. 1,537,004
237,000 Marangoni SPA ............................... 617,162
2,233,300 Merloni ..................................... 8,409,727
7,910,735 Montefibre SPA .............................. 6,553,516
2,371,500 Tecnost SPA ................................. 5,399,296
1,825,000 Vianini Industria SPA ....................... 1,057,266
493,000 Zucchi ...................................... 3,113,113
-------------
106,654,946
-------------
JAPAN--16.9%
218,000 Agro-Kanesho Company Ltd. .................. 1,741,543
735,000 Aichi Electric Manufacturing ................ 1,748,115
627,000 Amada Sonoike Company Ltd. .................. 1,974,476
484,000 Bunka Shutter Company Ltd. .................. 1,736,737
196,600 Chiyoda Company ............................. 2,069,131
763,240 Chofu Seisakusho Company .................... 10,815,782
178,000 Daido Metal Company ......................... 708,047
763,000 Daiichi Cement Company Ltd. ................. 1,606,049
798,000 Danto Corporation ........................... 6,117,096
426,000 Denkyosha ................................... 2,524,157
1,765,000 Dowa Fire & Marine Insurance Company ........ 7,020,801
12,600 Exedy Corporation ........................... 113,815
770,000 Fuji Coca-Cola Bottling Company ............. 7,274,385
618,000 Fuji Photo Film Ltd. ........................ 25,504,599
299,000 Fujicco Company Ltd. ........................ 2,725,615
1,996,000 Fujisawa Pharmaceutical Company ............. 17,037,209
40,000 Fujitec Company Ltd. ........................ 417,668
539,000 Fukuda Denshi ............................... 8,040,110
947,000 Gakken Company Ltd. ......................... 3,099,901
1,784,000 Hitachi Koki ................................ 10,201,044
306,000 Hitachi Medical Corporation ................. 3,271,236
29,000 Katsuragawa Electric Company ................ 122,566
218,000 Kawagishi Bridge Works ...................... 650,369
3,000 Kinki Coca-Cola Bottling Company ............ 36,546
141,000 Kita Kyushu Coca-Cola Bottling .............. 3,131,516
680,000 Koa Fire & Marine Insurance Company ......... 3,657,247
493,000 Koito Manufacturing ......................... 3,166,280
313,000 Kokura Enterprises Company .................. 2,827,298
264,000 Koyosha Inc.+ ............................... 1,465,816
567,000 Mandom Corporation .......................... 4,792,741
1,941,000 Matsushita Electric Industrial Company ...... 35,065,716
22,000 Matsumoto Yushi-Seiyaku Company ............. 417,502
200,000 Meito Sangyo Company ........................ 1,988,895
2,911,000 Mitsubishi Electric Corporation ............. 11,458,730
423,000 Morito ...................................... 2,769,288
342,000 Nankai Plywood Company Ltd. ................. 2,324,024
663,000 Nippon Cable System ......................... 5,604,210
751,000 Nippon Konpo Unyu Soko ...................... 4,972,644
1,016,400 Nissan Fire & Marine Insurance Company ...... 4,169,371
674,000 Nisshinbo Industries ........................ 4,462,799
409,000 Nittetsu Mining ............................. 2,270,904
482,000 Nitto FC Co. ................................ 3,554,985
516,000 Oak ......................................... 1,710,450
669,000 Osaka Securities Finance .................... 1,918,240
81,500 Osaka Steel Company Ltd. .................... 594,348
580,000 Riken Vitamin ............................... 4,950,692
452,000 Sangetsu Company Ltd. ....................... 7,304,218
147,000 Sanko Sangyo ................................ 1,193,834
388,000 Sankyo Company Ltd. ......................... 13,440,292
317,760 Sanyo Shinpan Finance Company, Ltd. ......... 15,431,123
659,100 Shikoku Coca-Cola Bottling .................. 6,991,365
1,470,000 Shin Nikkei Company Ltd. .................... 2,619,127
452,000 SK Kaken Co., Ltd. .......................... 7,866,081
434,000 Sonton Food Industry ........................ 4,279,937
261,000 Sotoh Company Ltd. .......................... 1,687,081
507,000 Suzuki Motor Corporation .................... 4,873,788
183,000 Taisei Fire & Marine Insurance Company ...... 591,448
546,000 Takeda Chemical Industries .................. 16,379,548
377,000 Takigami Steel Construction ................. 1,234,068
166,000 Teikoku Hormone Manufacturing Company ....... 1,341,261
246,000 Tomita Electric Company Ltd. ................ 1,661,473
379,000 Torii Company Ltd. .......................... 2,512,638
772,000 Torishima Pump Manufacturing ................ 5,949,780
114,000 Toso Company, Ltd. .......................... 529,046
11,000 Totech Corporation .......................... 61,076
675,000 Toyo Technical Company Ltd. ................. 4,754,703
591,000 U-Shin ...................................... 3,110,011
257,000 Zojirushi ................................... 2,172,371
-------------
329,814,962
-------------
NETHERLANDS--4.8%
193,400 Akzo NV Ord ................................. 33,054,596
68,158 European Vinyls Corporation ................. 1,609,843
39,310 Heineken Holdings NV, Class A ............... 6,035,080
309,124 Holdingmaatschappij De Telegraaf NV ......... 6,524,553
207,100 Unilever NV CVA ............................. 44,211,307
133,750 Wegener NV .................................. 2,688,577
-------------
94,123,956
-------------
NEW ZEALAND--1.0%
3,388,000 Independent Newspaper ....................... $ 19,534,696
164,600 Radio Pacific Limited ....................... 369,078
-------------

19,903,774
-------------
NORWAY--1.6%
20,000 Nycomed, ASA, ADR, Class B .................. 425,000
435,000 Nycomed, Class A ............................ 9,857,975
835,600 Nycomed, Class B ............................ 17,936,631
232,300 Schibsted ................................... 4,054,558
-------------
32,274,164
-------------
SINGAPORE--0.6%
2,527,500 Robinson and Company Ord .................... 12,145,881
-------------
SPAIN--1.8%
279,497 Argentaria .................................. 16,720,762
10,227 Banco Pastor SA ............................. 729,668
333,000 Corporacion Financiera Reunida .............. 1,885,074
151,997 Fabrica Auto Renault de Espana .............. 3,665,768
199,014 Grupo Anaya SA .............................. 4,219,731
31,598 Indo Internacional SA ....................... 1,369,592
51,846 Omsa ........................................ 258,761
80,898 Prim SA+ .................................... 411,888
31,783 Roberto Zubiri+ ............................. 74,523
250,996 Unipapel SA ................................. 6,112,216
-------------
35,447,983
-------------
SWEDEN--0.8%
124,085 BRIO AB, Class B ............................ 1,235,141
80,600 Invik & Company AB, Class A ................. 3,878,627
19,179 Kinnevik Investment AB, Class B ............. 428,594
236,033 Marieberg Tidnings AB, Class A .............. 6,534,948
19,179 Modern Times Group AB, Class A .............. 146,657
55,200 Nolato AB, Class B .......................... 1,681,130
69,200 VLT AB, Class B ............................. 1,122,177
-------------
15,027,274
-------------
SWITZERLAND--11.5%
20,010 Attisholz Holding AG+ ....................... 8,805,280
33 Bank of International Settlements America ... 225,763
16,428 Banque Cantonale Vaudoise ................... 4,224,472
2,415 Daetwyler Holding, Bearer ................... 4,151,196
46,540 Danzas Holding AG, Registered ............... 9,935,829
80,068 Edipresse SA, Bearer ........................ 23,176,999
8,225 Edipresse SA, Registered .................... 475,041
3,525 Forbo Holding AG ............................ 1,369,379
2,200 Golay Buchel Holding, Bearer ................ 1,966,447
4,984 Grand Magasin Jelmoli ....................... 801,881
12,150 Helvetia Patria Holding ..................... 7,435,025
300 Industrie Holding, Cham Registered .......... 241,130
6,248 Jelmoli, Bearer ............................. 5,026,238
21,015 Liechtenstein Global Trust .................. 11,414,913
29,327 Loeb Holding PC ............................. 4,436,152
1,815 Metallwaren Holding ......................... 1,347,772
52,089 Nestle SA, Registered ....................... 72,560,722
6,698 Novartis, AG, Bearer ........................ 10,315,952
10,329 Novartis, AG, Registered .................... 15,837,232
1,180 Sarna Kunsstoff Holding AG, Registered ...... 1,419,829
6,783 Sig Schweiz Industrie, Registered ........... 10,003,806
9,035 Swissair AG, Registered+ .................... 12,082,697
23,075 Swisslog Holding AG ......................... 1,761,087
200 UMS Schweizzerische Metalwerke .............. 16,089
3,355 Vetropack Holding AG PC ..................... 611,300
16,455 Zehnder Holding, Bearer ..................... 7,693,482
11,224 Zschokke Holding AG, Registered+ ............ 2,701,045
7,340 Zuercher Ziegeleien ......................... 5,652,365
-------------
225,689,123
-------------
THAILAND--0.0%++
132,300 S & J Enterprises ........................... 59,969
-------------
UNITED KINGDOM--8.9%
19,562,822 Aggregate Industries PLC .................... 17,029,056
1,029,500 Bernard Matthews PLC ........................ 1,742,533
455,000 British Mohair Holdings PLC ................. 744,462
2,115,000 British Steel Ord ........................... 6,077,224
7,144,000 BTR PLC ..................................... 28,963,080
758,000 Carclo Engineering Group PLC ................ 2,657,625
2,103,400 Concentric PLC .............................. 4,357,028
1,470,000 Courtaulos Textiles Ord ..................... 8,566,254
1,408,668 Dyson (J&J) PLC, Class A, Non-voting ........ 3,179,084
40,860 EIS Group PLC ............................... 184,426
803,000 Folkes Group PLC ............................ 860,800
554,000 Gibbs Mew PLC ............................... 2,250,482
427,800 Glaxo Wellcome PLC Units, ADR ............... 19,224,263
905,000 Glynwed International PLC ................... 4,004,573
887,000 Guinness PLC ................................ 8,357,443
2,191,698 Harrisons & Crosfield PLC ................... 4,345,614
515,000 Intercare Group PLC ......................... 601,881
350,000 Johnston Group PLC .......................... 1,833,651
4,545,154 McAlpine (Alfred) PLC ....................... 10,367,412
1,177,800 Molins PLC .................................. 8,496,301
584,000 Partridge Fine Art Ord ...................... 701,349
4,845,000 Pilkington PLC .............................. 12,261,928
3,493,490 Sherwood Group PLC .......................... 1,914,713
369,200 SmithKline Beecham, PLC Units, ADR .......... 18,044,650
779,500 Swan Hill Group PLC ......................... 1,118,334
175,000 Thistle Hotels PLC .......................... 394,940
600,000 Union PLC ................................... 677,040
1,495,000 Watmoughs Holdings PLC ...................... 4,675,287
-------------
173,631,433
-------------
UNITED STATES--18.0%
221,000 American Express Company .................... 18,094,375
75,700 American National Insurance Company ......... 7,579,463
257,400 Chase Manhattan Corporation ................. 30,373,200
81,500 Coca-Cola Bottling Company .................. 4,706,625
232,200 Comerica, Inc. .............................. 18,329,287
313,000 Darden Restaurants Inc. ..................... 3,619,063
230,400 Federal Home Loan Mortgage Corporation ...... 8,121,600
240,000 Fingerhut Companies, Inc. ................... 5,400,000
205,616 First Chicago Corporation ................... 15,472,604
35,000 GATX Corporation ............................ 2,364,688
31,590 Great Atlantic & Pacific Tea Company ........ 1,002,983
129,462 Hasbro Inc. ................................. 3,641,119
65,700 Household International Inc. ................ 7,436,419
125,000 Kmart Stores ................................ 1,750,000
505,400 Lehman Brothers Holdings Inc. ............... 27,102,075
363,800 McDonald's Corporation ...................... 17,325,975
48,750 Mercantile Bancorporation, Inc. ............. 3,711,094
150,000 NAC Re Corporation .......................... 7,706,250
1,527,000 Pharmacia & Upjohn Inc. ..................... 55,369,089
219,600 Philip Morris Companies Inc. ................ 9,127,125
298,000 Popular, Inc. ............................... 15,719,500
460,000 PNC Bank Corporation ........................ 22,453,750
169,000 Ryland Group Inc. ........................... 2,999,750
118,400 Standard Motor Products, Inc. ............... 2,767,600
185,000 Sun Healthcare Group Inc.+ .................. 3,804,063
160,000 Syms Corporation ............................ 2,360,000
294,600 Transatlantic Holdings Inc. ................. 21,100,725
20,000 Tremont Corporation ......................... 1,167,500
546,000 UST Inc. .................................... 16,687,125
52,500 Wells Fargo & Company ....................... 14,437,500
-------------
351,730,547
-------------
TOTAL COMMON STOCKS
(COST $1,358,564,061) ....................... 1,686,394,650
-------------
PREFERRED STOCK--1.0% (COST $14,666,725)
113,662 Villeroy & Boch AG .......................... 19,495,393
-------------

COMMON STOCK WARRANTS--0.0%++
105,920 Franco Tosi, Strike 20,000, Expires 11/30/97+ 13,745
9,073 Paris Orleans, Strike 330, Expires 4/30/98+ . 6,653
-------------
TOTAL COMMON STOCK WARRANTS
(COST $6,931) ............................... 20,398
-------------
FACE
VALUE
-----
CONVERTIBLE CORPORATE BONDS--0.0%++
ESP 29,870,000 Grupo Anaya SA, 7.000% due 3/18/98 .......... 201,358
JPY 9,000,000 Shikoku Coca-Cola Bottling, 2.400% due 3/29/02 78,686
-------------
TOTAL CONVERTIBLE CORPORATE BONDS
(COST $323,113) ............................. 280,044
-------------
COMMERCIAL PAPER--1.3%
$ 10,000,000 Ford Motor Company, 6.200% due 10/1/97 ...... 10,000,000
16,419,000 General Electric Capital Corporation, 6.450%
due 10/1/97.................................. 16,419,000
-------------
TOTAL COMMERCIAL PAPER
(COST $26,419,000) .......................... 26,419,000
-------------
U.S. TREASURY BILL--0.1% (COST $2,871,859)
3,000,000 5.576%** due 7/23/98 ........................ 2,871,859
-------------
REPURCHASE AGREEMENT--6.7%
(COST $130,000,000)
130,000,000 Agreement with UBS Securities, Inc., 6.030%
dated 9/ 30/97, to be repurchased at
$130,021,775 on 10/1/97, collateralized by
$50,000,000 U.S. Treasury Notes, 5.125% due
2/28/98, $50,000,000 U.S. Treasury Notes,
6.250% due 5/31/99 and $27,192,000 U.S.
Treasury Bonds, 7.500% due 11/15/16 (market
value $49,142,000, $50,367,000 and
$30,491,000, respectively) .................. 130,000,000
--------------
TOTAL INVESTMENTS (COST $1,532,851,689*) ............... 95.5% 1,865,481,344
OTHER ASSETS AND LIABILITIES (NET) ..................... 4.5 86,948,121
----- --------------
NET ASSETS ............................................. 100.0% $1,952,429,465
===== ==============
- ------------
* Aggregate cost for Federal tax purposes. Abbreviations:
** Rate represents annualized yield at ADR--American Depository Receipt
date of purchase. ESP--Spanish Peseta
+ Non-income producing security. JPY--Japanese Yen
++ Amount represents less than 0.1% of Ord--Ordinary Share
net assets.
<PAGE>

MARKET
PERCENTAGE OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (NOTE 1)
---------------------- ---------- --------
COMMON STOCKS:
Pharmaceuticals ............................ 10.0% $ 195,209,101
Food and Beverages ......................... 9.6 188,588,594
Banking .................................... 9.5 187,854,760
Financial Services ......................... 6.7 129,904,512
Printing and Publishing .................... 5.7 110,926,932
Manufacturing .............................. 4.5 88,365,522
Consumer Durables .......................... 3.6 70,327,814
Machinery .................................. 3.5 68,014,523
Retail ..................................... 3.4 65,533,176
Chemicals .................................. 2.8 54,798,066
Holdings ................................... 2.7 52,133,981
Insurance .................................. 2.6 51,055,272
Consumer Non-Durables ...................... 2.5 49,004,048
Engineering and Construction ............... 2.4 45,998,697
Electronics ................................ 2.2 42,070,231
Transportation ............................. 2.2 42,061,957
Textiles ................................... 1.8 35,411,444
Autos ...................................... 1.7 33,335,287
Forest Products ............................ 1.4 28,610,536
Restaurants ................................ 1.1 20,945,038
Mining and Metal Fabrication ............... 1.0 19,742,441
Tobacco .................................... 0.9 16,687,125
Real Estate ................................ 0.7 12,720,127
Telecommunications ......................... 0.6 10,899,951
Wholesale .................................. 0.5 10,073,506
Construction Materials ..................... 0.4 8,441,573
Building Materials ......................... 0.3 6,811,676
Other ...................................... 2.1 40,868,760
----- --------------
TOTAL COMMON STOCKS ........................ 86.4 1,686,394,650
----- --------------
PREFERRED STOCK ............................ 1.0 19,495,393
COMMON STOCK WARRANTS ...................... 0.0++ 20,398
CONVERTIBLE CORPORATE BONDS ................ 0.0++ 280,044
COMMERCIAL PAPER ........................... 1.3 26,419,000
U.S. TREASURY BILL ......................... 0.1 2,871,859
REPURCHASE AGREEMENT ....................... 6.7 130,000,000
OTHER ASSETS AND LIABILITIES (NET) ......... 4.5 86,948,121
----- --------------
NET ASSETS ................................. 100.0% $1,952,429,465
===== ==============
- ------------
++ Amount represents less than 0.1% of net assets.
<PAGE>

TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Schedule of Forward Exchange Contracts
- --------------------------------------------------------------------------------

September 30, 1997 (Unaudited)
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- ---- --------
FORWARD EXCHANGE CONTRACTS TO BUY
10,356,200 Austrian Schilling .......... 10/31/97 $ 834,437
560,978 Belgian Franc ............... 10/1/97 15,382
30,268,000 Belgian Franc ............... 10/31/97 831,500
1,812 Canadian Dollar ............. 10/2/97 1,311
11,325 Canadian Dollar ............. 10/3/97 8,193
39,903,000 Danish Krona ................ 10/31/97 5,941,409
849,541 French Franc ................ 10/3/97 143,202
19,057 French Franc ................ 10/31/97 3,219
2,207,400 German Mark ................. 10/31/97 1,252,350
360,507 Great Britain Pound Sterling 10/7/97 581,165
1,147,558 Hong Kong Dollar ............ 10/6/97 148,284
1,500,000 Irish Punt .................. 4/30/98 2,178,580
105,342,574 Japanese Yen ................ 10/1/97 872,980
123,313,608 Japanese Yen ................ 10/2/97 1,021,929
51,170,858 Japanese Yen ................ 10/3/97 424,083
5,531,939 Netherlands Guilder ......... 10/3/97 2,780,090
1,648,500 Netherlands Guilder ......... 10/31/97 830,240
18,562,000 Netherlands Guilder ......... 3/6/98 9,419,222
2,816,550 Netherlands Guilder ......... 4/30/98 1,433,612
54,000,000 Swedish Krona ............... 2/5/98 7,152,015
374,211 Swiss Franc ................. 10/2/97 257,300
5,783,685 Swiss Franc ................. 10/3/97 3,976,886
-------------
TOTAL FORWARD EXCHANGE CONTRACTS TO BUY
(CONTRACT AMOUNT $39,843,282) ................ $ 40,107,389
=============
FORWARD EXCHANGE CONTRACTS TO SELL
10,356,200 Austrian Schilling .......... 10/31/97 $ (834,437)
236,289 Belgian Franc ............... 10/1/97 (6,478)
5,184,400 Belgian Franc ............... 10/2/97 (142,156)
10,902,195 Belgian Franc ............... 10/15/97 (299,194)
30,268,000 Belgian Franc ............... 10/31/97 (831,500)
30,820,000 Belgian Franc ............... 11/14/97 (847,313)
48,045,000 Belgian Franc ............... 1/20/98 (1,326,027)
32,990,000 Belgian Franc ............... 2/5/98 (911,343)
50,850,000 Belgian Franc ............... 2/17/98 (1,405,675)
34,130,000 Belgian Franc ............... 3/6/98 (944,376)
34,122,000 Belgian Franc ............... 4/6/98 (945,788)
27,656,000 Belgian Franc ............... 5/15/98 (768,227)
44,070,000 Belgian Franc ............... 6/15/98 (1,226,261)
34,675,000 Belgian Franc ............... 7/15/98 (966,394)
3,172,800 Canadian Dollar ............. 10/15/97 (2,297,569)
3,272,750 Canadian Dollar ............. 10/31/97 (2,372,388)
3,950,700 Canadian Dollar ............. 11/14/97 (2,865,950)
2,007,450 Canadian Dollar ............. 3/6/98 (1,464,272)
9,608,900 Canadian Dollar ............. 5/15/98 (7,026,736)
9,510,900 Canadian Dollar ............. 5/22/98 (6,956,765)
1,761,890 Canadian Dollar ............. 6/15/98 (1,289,760)
1,352,600 Canadian Dollar ............. 7/15/98 (991,114)
8,750,950 Canadian Dollar ............. 8/28/98 (6,420,977)
3,408,750 Canadian Dollar ............. 9/30/98 (2,503,643)
821,100 Canadian Dollar ............. 10/13/98 (603,405)
9,546,400 Canadian Dollar ............. 11/16/98 (7,025,373)
1,894,300 Danish Krona ................ 10/2/97 (281,519)
39,903,500 Danish Krona ................ 10/31/97 (5,941,409)
5,777,500 Danish Krona ................ 11/14/97 (860,898)
11,906,000 Danish Krona ................ 1/20/98 (1,780,593)
9,459,750 Danish Krona ................ 2/17/98 (1,416,652)
4,433,500 Finnish Markka .............. 10/15/97 (839,001)
18,018,000 Finnish Markka .............. 11/14/97 (3,416,548)
24,854,500 Finnish Markka .............. 11/28/97 (4,716,513)
9,274,000 Finnish Markka .............. 1/20/98 (1,765,427)
44,262,900 Finnish Markka .............. 3/13/98 (8,448,724)
4,940,300 Finnish Markka .............. 3/27/98 (943,617)
4,914,500 Finnish Markka .............. 4/14/98 (939,557)
22,459,500 Finnish Markka .............. 4/30/98 (4,297,322)
5,039,000 Finnish Markka .............. 5/15/98 (964,869)
22,344,750 Finnish Markka .............. 6/15/98 (4,285,055)
55,441,100 Finnish Markka .............. 7/15/98 (10,645,967)
25,543,500 Finnish Markka .............. 9/15/98 (4,916,433)
21,202,000 Finnish Markka .............. 9/30/98 (4,083,257)
38,137,400 Finnish Markka .............. 10/13/98 (7,349,698)
33,759,300 Finnish Markka .............. 11/16/98 (6,517,295)
15,039,900 French Franc ................ 10/15/97 (2,537,664)
22,494,600 French Franc ................ 10/31/97 (3,799,816)
10,173,000 French Franc ................ 11/14/97 (1,719,934)
86,596,950 French Franc ................ 1/20/98 (14,703,242)
13,936,250 French Franc ................ 3/6/98 (2,372,546)
18,419,610 French Franc ................ 4/6/98 (3,141,368)
5,544,500 French Franc ................ 4/14/98 (946,024)
8,431,500 French Franc ................ 4/30/98 (1,439,938)
36,130,250 French Franc ................ 5/29/98 (6,180,456)
45,410,400 French Franc ................ 7/15/98 (7,788,016)
39,662,000 French Franc ................ 8/14/98 (6,813,123)
8,729,250 French Franc ................ 9/15/98 (1,502,027)
30,139,000 French Franc ................ 9/30/98 (5,190,180)
45,982,500 French Franc ................ 10/13/98 (7,924,670)
186,307,800 French Franc ................ 11/16/98 (32,173,407)
2,215,650 German Mark ................. 10/15/97 (1,255,570)
2,207,400 German Mark ................. 10/31/97 (1,252,350)
2,243,700 German Mark ................. 11/14/97 (1,274,100)
1,552,250 German Mark ................. 1/20/98 (885,128)
4,003,750 German Mark ................. 2/5/98 (2,285,256)
5,749,240 German Mark ................. 2/17/98 (3,283,910)
8,266,000 German Mark ................. 3/27/98 (4,731,949)
2,463,000 German Mark ................. 4/14/98 (1,411,445)
9,189,675 German Mark ................. 4/30/98 (5,271,086)
3,353,400 German Mark ................. 5/15/98 (1,925,110)
9,547,380 German Mark ................. 5/29/98 (5,485,247)
4,927,800 German Mark ................. 6/15/98 (2,833,833)
8,600,000 German Mark ................. 9/15/98 (4,970,110)
3,570,600 German Mark ................. 9/30/98 (2,065,202)
5,451,000 German Mark ................. 10/13/98 (3,155,253)
5,155,500 German Mark ................. 11/16/98 (2,990,271)
2,187,637 Great Britain Pound Sterling 10/15/97 (3,527,309)
3,350,798 Great Britain Pound Sterling 11/28/97 (5,406,562)
1,208,971 Great Britain Pound Sterling 12/31/97 (1,951,719)
906,098 Great Britain Pound Sterling 1/20/98 (1,463,240)
1,244,400 Great Britain Pound Sterling 2/5/98 (2,010,070)
9,568,905 Great Britain Pound Sterling 2/17/98 (15,459,526)
6,179,324 Great Britain Pound Sterling 3/13/98 (9,987,157)
6,609,801 Great Britain Pound Sterling 3/27/98 (10,685,288)
1,554,533 Great Britain Pound Sterling 4/14/98 (2,513,734)
3,707,709 Great Britain Pound Sterling 4/30/98 (5,996,977)
4,028,509 Great Britain Pound Sterling 5/15/98 (6,517,358)
2,771,960 Great Britain Pound Sterling 5/29/98 (4,485,459)
4,014,576 Great Britain Pound Sterling 7/15/98 (6,500,790)
12,905,162 Great Britain Pound Sterling 9/15/98 (20,916,052)
8,561,430 Great Britain Pound Sterling 9/30/98 (13,878,981)
9,483,396 Great Britain Pound Sterling 10/13/98 (15,376,651)
8,191,244 Great Britain Pound Sterling 10/29/98 (13,284,793)
4,117,573 Great Britain Pound Sterling 11/16/98 (6,679,838)
7,746,300 Hong Kong Dollar ............ 1/20/98 (995,796)
7,763,500 Hong Kong Dollar ............ 4/30/98 (994,330)
69,795,000 Hong Kong Dollar ............ 5/29/98 (8,932,774)
23,290,500 Hong Kong Dollar ............ 6/15/98 (2,979,774)
97,411,250 Hong Kong Dollar ............ 7/31/98 (12,444,679)
68,819,100 Hong Kong Dollar ............ 10/29/98 (8,763,508)
13,407,900 Hong Kong Dollar ............ 11/16/98 (1,706,238)
4,178,183 Irish Punt .................. 4/30/98 (6,068,337)
2,307,489 Irish Punt .................. 6/15/98 (3,350,408)
891,111,000 Italian Lira ................ 10/1/97 (516,242)
18,472,800,000 Italian Lira ................ 10/15/97 (10,696,854)
4,608,750,000 Italian Lira ................ 10/31/97 (2,667,473)
9,171,420,000 Italian Lira ................ 11/14/97 (5,306,560)
16,382,835,000 Italian Lira ................ 1/20/98 (9,470,528)
7,321,950,000 Italian Lira ................ 2/5/98 (4,232,118)
2,548,875,000 Italian Lira ................ 3/6/98 (1,473,100)
15,423,300,000 Italian Lira ................ 3/27/98 (8,913,891)
1,709,300,000 Italian Lira ................ 4/14/98 (988,044)
14,500,150,000 Italian Lira ................ 4/30/98 (8,383,426)
6,894,040,000 Italian Lira ................ 5/15/98 (3,986,865)
5,050,500,000 Italian Lira ................ 5/29/98 (2,921,554)
13,527,200,000 Italian Lira ................ 6/15/98 (7,828,199)
2,561,400,000 Italian Lira ................ 7/15/98 (1,483,346)
5,184,000,000 Italian Lira ................ 9/15/98 (3,007,481)
10,800,000,000 Italian Lira ................ 9/30/98 (6,267,927)
33,352,500,000 Italian Lira ................ 10/29/98 (19,359,339)
4,881,800,000 Italian Lira ................ 11/16/98 (2,833,874)
1,197,405,000 Japanese Yen ................ 10/15/97 (9,945,010)
1,064,200,000 Japanese Yen ................ 10/31/97 (8,861,635)
1,620,300,000 Japanese Yen ................ 11/14/97 (13,518,462)
1,513,680,000 Japanese Yen ................ 11/28/97 (12,651,522)
920,405,500 Japanese Yen ................ 12/30/97 (7,733,781)
1,440,270,000 Japanese Yen ................ 1/20/98 (12,138,914)
635,855,000 Japanese Yen ................ 2/5/98 (5,371,379)
3,521,700,000 Japanese Yen ................ 2/27/98 (29,841,473)
3,487,500,000 Japanese Yen ................ 3/6/98 (29,580,317)
2,198,110,000 Japanese Yen ................ 4/6/98 (18,724,778)
2,902,375,000 Japanese Yen ................ 4/14/98 (24,753,544)
1,960,488,750 Japanese Yen ................ 4/30/98 (16,760,357)
2,154,780,000 Japanese Yen ................ 5/15/98 (18,462,668)
3,037,500,000 Japanese Yen ................ 5/22/98 (26,053,282)
1,749,760,000 Japanese Yen ................ 6/15/98 (15,096,171)
2,098,590,000 Japanese Yen ................ 7/31/98 (18,190,826)
3,742,550,000 Japanese Yen ................ 8/14/98 (32,509,902)
1,894,820,000 Japanese Yen ................ 9/30/98 (16,577,935)
1,313,820,000 Japanese Yen ................ 10/13/98 (11,517,589)
1,060,836,500 Japanese Yen ................ 10/29/98 (9,322,641)
314,020,000 Japanese Yen ................ 11/16/98 (2,767,253)
1,648,500 Netherlands Guilder ......... 10/31/97 (830,240)
8,386,000 Netherlands Guilder ......... 11/14/97 (4,227,168)
16,164,900 Netherlands Guilder ......... 2/5/98 (8,189,238)
5,898,240 Netherlands Guilder ......... 2/17/98 (2,990,158)
18,562,000 Netherlands Guilder ......... 3/6/98 (9,419,222)
5,578,200 Netherlands Guilder ......... 4/6/98 (2,835,510)
2,816,550 Netherlands Guilder ......... 4/30/98 (1,433,612)
12,241,400 Netherlands Guilder ......... 5/15/98 (6,235,898)
11,118,000 Netherlands Guilder ......... 5/29/98 (5,667,877)
7,399,600 Netherlands Guilder ......... 6/15/98 (3,775,649)
1,888,300 Netherlands Guilder ......... 7/15/98 (965,026)
28,109,700 Netherlands Guilder ......... 8/28/98 (14,398,314)
5,823,600 Netherlands Guilder ......... 10/29/98 (2,993,002)
4,345,307 New Zealand Dollar .......... 10/15/97 (2,789,851)
13,060,514 New Zealand Dollar .......... 11/28/97 (8,434,240)
1,457,938 New Zealand Dollar .......... 4/14/98 (955,083)
3,637,951 New Zealand Dollar .......... 5/29/98 (2,393,466)
3,021,604 New Zealand Dollar .......... 8/28/98 (2,004,530)
785,793 New Zealand Dollar .......... 9/30/98 (522,837)
1,617,599 New Zealand Dollar .......... 11/16/98 (1,081,437)
12,790,000 Norwegian Krone ............. 11/28/97 (1,806,275)
9,625,950 Norwegian Krone ............. 2/5/98 (1,364,375)
70,495,000 Norwegian Krone ............. 7/15/98 (10,066,979)
18,201,250 Norwegian Krone ............. 9/15/98 (2,606,358)
11,203,500 Norwegian Krone ............. 9/30/98 (1,605,390)
2,385,100 Singapore Dollar ............ 3/6/98 (1,567,391)
1,413,000 Singapore Dollar ............ 4/14/98 (929,711)
1,412,900 Singapore Dollar ............ 4/30/98 (930,225)
2,840,400 Singapore Dollar ............ 5/15/98 (1,871,182)
1,404,500 Singapore Dollar ............ 6/15/98 (926,435)
2,101,950 Singapore Dollar ............ 8/14/98 (1,387,791)
726,250 Singapore Dollar ............ 9/30/98 (479,597)
4,501,500 Singapore Dollar ............ 10/13/98 (2,973,741)
1,514,400 Singapore Dollar ............ 10/29/98 (1,000,870)
192,810,000 Spanish Peseta .............. 10/15/97 (1,291,861)
129,350,000 Spanish Peseta .............. 11/14/97 (867,024)
130,645,000 Spanish Peseta .............. 11/28/97 (875,914)
398,190,000 Spanish Peseta .............. 1/20/98 (2,672,855)
426,864,000 Spanish Peseta .............. 2/17/98 (2,867,188)
819,432,000 Spanish Peseta .............. 3/27/98 (5,509,411)
571,600,000 Spanish Peseta .............. 4/14/98 (3,845,146)
114,960,000 Spanish Peseta .............. 4/30/98 (773,718)
144,420,000 Spanish Peseta .............. 5/14/98 (972,433)
567,440,000 Spanish Peseta .............. 5/29/98 (3,822,716)
568,680,000 Spanish Peseta .............. 6/15/98 (3,833,364)
289,040,000 Spanish Peseta .............. 7/15/98 (1,950,497)
370,075,000 Spanish Peseta .............. 8/28/98 (2,501,625)
440,730,000 Spanish Peseta .............. 11/16/98 (2,987,152)
2,343,257 Swedish Krona ............... 10/1/97 (308,937)
13,449,000 Swedish Krona ............... 11/28/97 (1,777,012)
6,832,000 Swedish Krona ............... 1/20/98 (904,388)
60,983,250 Swedish Krona ............... 2/5/98 (8,076,909)
75,152,000 Swedish Krona ............... 4/14/98 (9,974,341)
23,018,400 Swedish Krona ............... 5/15/98 (3,057,796)
48,906,000 Swedish Krona ............... 5/29/98 (6,499,280)
18,871,250 Swedish Krona ............... 6/15/98 (2,509,025)
26,754,700 Swedish Krona ............... 8/28/98 (3,563,543)
39,267,500 Swedish Krona ............... 9/30/98 (5,234,084)
39,676,000 Swedish Krona ............... 10/13/98 (5,290,609)
22,499,700 Swedish Krona ............... 10/29/98 (3,001,680)
22,322 Swiss Franc ................. 10/1/97 (15,348)
9,704,000 Swiss Franc ................. 10/15/97 (6,684,282)
14,691,600 Swiss Franc ................. 10/31/97 (10,140,649)
5,008,400 Swiss Franc ................. 11/14/97 (3,462,551)
7,628,100 Swiss Franc ................. 11/28/97 (5,281,747)
42,586,500 Swiss Franc ................. 12/31/97 (29,606,731)
10,588,600 Swiss Franc ................. 1/20/98 (7,377,988)
13,715,000 Swiss Franc ................. 2/5/98 (9,573,336)
11,137,600 Swiss Franc ................. 2/27/98 (7,792,755)
38,460,960 Swiss Franc ................. 3/13/98 (26,950,185)
5,595,200 Swiss Franc ................. 4/6/98 (3,930,580)
7,682,400 Swiss Franc ................. 4/14/98 (5,401,521)
6,302,475 Swiss Franc ................. 4/30/98 (4,438,966)
14,063,000 Swiss Franc ................. 5/15/98 (9,920,820)
22,743,600 Swiss Franc ................. 5/22/98 (16,056,580)
24,949,100 Swiss Franc ................. 6/30/98 (17,686,206)
10,988,800 Swiss Franc ................. 7/31/98 (7,815,241)
9,586,500 Swiss Franc ................. 8/14/98 (6,827,846)
13,213,550 Swiss Franc ................. 8/28/98 (9,424,759)
14,477,000 Swiss Franc ................. 9/30/98 (10,361,311)
10,845,200 Swiss Franc ................. 10/29/98 (7,787,327)
---------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $1,354,519,975) ............. $(1,307,749,229)
===============
<PAGE>

September 30, 1997 (Unaudited)
<S> <C> <C>
ASSETS
Investments, at value (Cost $1,532,851,689) (Note 1)
See accompanying schedule ........................ $1,865,481,344
Cash and foreign currency (Cost $29,598,738) ......... 29,542,863
Net unrealized appreciation of forward exchange
contracts (Note 1) ................................. 47,034,853
Receivable for Fund shares sold ...................... 17,832,360
Dividends and interest receivable .................... 5,374,227
Receivable for investment securities sold ............ 3,068,377
Prepaid expenses ..................................... 26,629
Unamortized organization costs (Note 5) .............. 14,897
--------------
TOTAL ASSETS ..................................... 1,968,375,550
--------------
LIABILITIES
Payable for investment securities purchased .......... $12,500,674
Investment advisory fee payable (Note 2) ............. 1,939,694
Payable for Fund shares redeemed ..................... 676,366
Administration fee payable (Note 2) .................. 66,987
Custodian fees payable (Note 2) ...................... 62,819
Transfer agent fees payable (Note 2) ................. 30,982
Accrued Directors' fees and expenses (Note 2) ........ 3,423
Accrued expenses and other payables .................. 665,140
----------
TOTAL LIABILITIES ................................ 15,946,085
--------------
NET ASSETS ............................................... $1,952,429,465
==============
NET ASSETS CONSIST OF
Undistributed net investment income .................. $ 23,984,033
Accumulated net realized gain on securities, forward
exchange contracts and foreign currencies .......... 107,133,852
Net unrealized appreciation of securities, forward
exchange
contracts, foreign currencies and net other assets . 379,526,698
Par value ............................................ 10,894
Paid-in capital in excess of par value ............... 1,441,773,988
--------------
TOTAL NET ASSETS ................................. $1,952,429,465
==============
NET ASSET VALUE, offering and redemption price per share
($1,952,429,465 / 108,935,552 shares of common stock
outstanding) ......................................... $17.92
======
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -----------------------------------------------------------------------------------------------
Statement of Operations
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
For the six months ended September 30, 1997 (Unaudited)
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $2,610,926) .............. $ 20,584,424
Interest (net of foreign withholding taxes of $92) ...................... 3,811,108
------------
TOTAL INVESTMENT INCOME ............................................. 24,395,532
------------
EXPENSES
Investment advisory fee (Note 2) ...................... $10,809,805
Administration fee (Note 2) ........................... 388,086
Custodian fees (Note 2) ............................... 358,915
Transfer agent fees (Note 2) .......................... 78,651
Legal and audit fees .................................. 60,504
Directors' fees and expenses (Note 2) ................. 12,551
Amortization of organization costs (Note 5) ........... 11,174
Other ................................................. 734,364
Waiver of fees by administrator (Note 2) .............. (86,035)
-----------
TOTAL EXPENSES ...................................................... 12,368,015
------------
NET INVESTMENT INCOME ....................................................... 12,027,517
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3):
Net realized gain on:
Securities ............................................................ 33,059,276
Forward exchange contracts ............................................ 50,089,986
Foreign currencies and net other assets ............................... 339,591
------------
Net realized gain on investments during the period ...................... 83,488,853
------------
Net change in unrealized appreciation (depreciation) of:
Securities ............................................................ 168,047,722
Forward exchange contracts ............................................ (15,428,618)
Foreign currencies and net other assets ............................... 145,786
------------
Net unrealized appreciation on investments during the period ............ 152,764,890
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................. 236,253,743
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $248,281,260
============
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -----------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -----------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
9/30/97 ENDED
(UNAUDITED) 3/31/97
-------------- --------------
<S> <C> <C>
Net investment income ............................... $ 12,027,517 $ 8,308,612
Net realized gain on securities, forward exchange
contracts and currency transactions during the
period ............................................ 83,488,853 120,005,899
Net unrealized appreciation of securities,
forward exchange contracts, foreign currencies and
net other assets during the period ................ 152,764,890 54,898,049
-------------- --------------
Net increase in net assets resulting from operations 248,281,260 183,212,560
DISTRIBUTIONS:
Dividends to shareholders from net investment
income .......................................... -- (14,614,831)
Dividends in excess of net investment income ...... -- (28,673,453)
Distributions to shareholders from net realized
gain on
investments ..................................... -- (44,555,478)
Net increase in net assets from Fund share
transactions (Note 4) ............................. 262,937,713 394,930,728
-------------- --------------
Net increase in net assets .......................... 511,218,973 490,299,526
NET ASSETS
Beginning of period ................................. 1,441,210,492 950,910,966
-------------- --------------
End of period (including undistributed net investment
income of $23,984,033 and $11,956,516,
respectively) ..................................... $1,952,429,465 $1,441,210,492
============== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TWEEDY, BROWNE GLOBAL VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- ---------------------------------------------------------------------------------------------------------------------------
For a Fund share outstanding throughout each period.
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR
9/30/97 ENDED ENDED ENDED ENDED
(UNAUDITED) 3/31/97 3/31/96(a) 3/31/95 3/31/94(a)(b)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .............. $ 15.46 $ 14.28 $ 11.52 $ 12.26 $ 10.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income
(loss)(c) .............. 0.09 0.12 0.15 0.10 (0.00)(d)
Net realized and
unrealized gain (loss)
on investments ......... 2.37 2.18 2.81 (0.68) 2.26
-------- -------- -------- -------- --------
Total from investment
operations ......... 2.46 2.30 2.96 (0.58) 2.26
-------- -------- -------- -------- --------
DISTRIBUTIONS:
Dividends from net
investment income .... -- (0.19) -- -- --
Dividends in excess of
net investment income -- (0.36) -- -- --
Distributions from net
realized gains ....... -- (0.57) (0.05) (0.06) --
Distributions in excess
of net realized gains -- -- (0.15) (0.10) --
-------- -------- -------- -------- --------
Total distributions .. -- (1.12) (0.20) (0.16) --
-------- -------- -------- -------- --------
Net asset value, end of
period ................. $ 17.92 $ 15.46 $ 14.28 $ 11.52 $ 12.26
======== ======== ======== ======== ========
Total return(e) .......... 15.91% 16.66% 25.88% (4.74)% 22.60%
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of period
(in 000's) ............. $1,952,429 $1,441,210 $950,911 $655,035 $297,434
Ratio of operating
expenses to average net
assets(f) .............. 1.43%(g) 1.58% 1.60 % 1.65% 1.73%(g)
Ratio of net investment
income (loss) to average
net assets ............. 1.39%(g) 0.73% 1.15 % 1.08% (0.00)%(g)(h)
Portfolio turnover rate .. 8% 20% 17 % 16% 14%
Average commission rate
(per share of
security)(i) ........... $ 0.0195 $ 0.0249 $ 0.0206 N/A N/A
- ------------
(a) Per share amounts have been calculated using the monthly average share method, which more appropriately presents the
per share data for the period since the use of the undistributed income method does not accord with results of
operations.
(b) The Fund commenced operations on June 15, 1993.
(c) Net investment income for a Fund share outstanding, before the waiver of fees by the administrator and/or investment
adviser for the year ended March 31, 1997 and for the 7.5-month period ended March 31, 1994 was $0.11 and $(0.01) per
share, respectively.
(d) Amount represents less than $(0.01) per share.
(e) Total return represents aggregate total return for the periods indicated.
(f) Annualized expense ratio before the waiver of fees by the administrator and/or investment advisor for the six months
ended September 30, 1997, the year ended March 31, 1997 and for the 7.5-month period ended March 31, 1994 was 1.44%,
1.58% and 1.83%, respectively.
(g) Annualized.
(h) Amount represents less than (0.01)% per share.
(i) Average commission rate (per share of security) as required by amended disclosure requirements effective September 1, 1995.
</TABLE>
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Tweedy, Browne Global Value Fund (the "Fund") is a diversified series of
Tweedy, Browne Fund Inc. (the "Company"). The Company is an open-end management
investment company registered with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended. The Company was organized as a
Maryland corporation on January 28, 1993. The Fund commenced operations on June
15, 1993. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements.

PORTFOLIO VALUATION Generally, the Fund's investments are valued at market
value or, in the absence of market value by the Investment Adviser or at fair
value as determined by or under the direction of the Company's Board of
Directors. Portfolio securities or other assets, listed on a U.S. national
securities exchange or through any system providing for same day publication of
actual prices (and not subject to restrictions against sale by the Fund on such
exchange or system) are valued at the last quoted sale price prior to the close
of regular trading. Portfolio securities and other assets listed on a foreign
exchange or through any system providing for same day publication of actual
prices are valued at the last quoted sale price available before the time when
assets are valued. Portfolio securities and other assets for which there are no
reported sales on the valuation date are valued at the mean between the last
asked price and the last bid price prior to the close of regular trading. When
the Investment Adviser determines that the last sale price prior to valuation
does not reflect current market value, the Investment Adviser will determine the
market value of those securities or assets in accordance with industry practice
and other factors considered relevant by the Investment Adviser. All other
securities and assets for which current market quotations are not readily
available and those securities which are not readily marketable due to
significant legal or contractual restrictions will be valued by the Investment
Adviser or at fair value as determined by or under the direction of the Board of
Directors. Debt securities with a remaining maturity of 60 days or less are
valued at amortized cost or by reference to other factors (i.e., pricing
services or dealer quotations) by the Investment Adviser. Debt securities with a
remaining maturity of more than 60 days are valued according to certain pricing
services.

REPURCHASE AGREEMENTS The Fund engages in repurchase agreement transactions.
Under the terms of a typical repurchase agreement, the Fund takes possession of
an underlying debt obligation subject to an obligation of the seller to
repurchase, and the Fund to resell, the obligation at an agreed-upon price and
time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal at all times to the total amount of the repurchase obligations,
including interest. In the event of counterparty default, the Fund has the right
to use the collateral to offset losses incurred. There is potential loss to the
Fund in the event the Fund is delayed or prevented from exercising its rights to
dispose of the collateral securities, including the risk of a possible decline
in the value of the underlying securities during the period while the Fund seeks
to assert its rights. The Fund's investment adviser, acting under the
supervision of the Company's Board of Directors, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.

FOREIGN CURRENCY The books and records of the Fund are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of the
period, and purchases and sales of investment securities, income and expenses
are translated on the respective dates of such transactions. Unrealized gains
and losses which result from changes in foreign currency exchange rates have
been included in the unrealized appreciation (depreciation) of currencies and
net other assets. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amount actually received.
The portion of foreign currency gains and losses related to fluctuation in the
exchange rates between the initial purchase trade date and subsequent sale trade
date is included in realized gains and losses on investment securities sold.

FORWARD EXCHANGE CONTRACTS The Fund has entered into forward exchange
contracts for non-trading purposes in order to reduce its exposure to
fluctuations in foreign currency exchange on its portfolio holdings. Forward
exchange contracts are valued at the forward rate and are marked-to-market
daily. The change in market value is recorded by the Fund as an unrealized gain
or loss. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the value of the contract at the time that it
was opened and the value of the contract at the time that it was closed.

The use of forward exchange contracts does not eliminate fluctuations in the
underlying prices of the Fund's investment securities, but it does establish a
rate of exchange that can be achieved in the future. Although forward exchange
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of the currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Dividend income and interest income may
be subject to foreign withholding taxes. The Fund's custodian applies for
refunds where available. If the Fund meets the requirements of Section 853 of
the Internal Revenue Code of 1986, as amended, the Fund may elect to pass
through to its shareholders credits for foreign taxes paid.

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment
income, if any, and distributions from realized capital gains after utilization
of capital loss carryforwards, if any, will be declared and paid annually.
Additional distributions of net investment income and capital gains from the
Fund may be made at the discretion of the Board of Directors in order to avoid
the application of a 4% non-deductible Federal excise tax on certain
undistributed amounts of ordinary income and capital gains. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.

FEDERAL INCOME TAXES The Fund intends to qualify as a regulated investment
company, if such qualification is in the best interest of its shareholders, by
complying with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and by distributing
substantially all of its taxable income to its shareholders. Therefore, no
Federal income tax provision is required.

EXPENSES Expenses directly attributable to each Fund as a diversified series
of the Company are charged to that Fund. Other expenses of the Company are
allocated to each Fund based on the average net assets of each Fund.

2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
The Company, on behalf of the Fund, has entered into an investment advisory
agreement (the "Advisory Agreement") with Tweedy, Browne Company L.P. ("Tweedy,
Browne"). Under the Advisory Agreement, the Company pays Tweedy, Browne a fee at
the annual rate of 1.25% of the value of its average daily net assets. The fee
is payable monthly, provided the Fund will make such interim payments as may be
requested by the adviser not to exceed 75% of the amount of the fee then accrued
on the books of the Fund and unpaid.

The current and retired general partners and their families, as well as
employees of Tweedy, Browne, the investment adviser to the Fund, have
approximately $28.4 million of their own money invested in the Fund.

The Company, on behalf of the Fund, has entered into an administration
agreement (the "Administration Agreement") with First Data Investor Services
Group, Inc. ("the Administrator"), a wholly owned subsidiary of First Data
Corporation. Under the Administration Agreement, the Company pays the
Administrator an administrative fee and a fund accounting fee computed daily and
payable monthly at the following annual rates of the value of the average daily
net assets of the Fund:

FEES ON ASSETS
---------------------------------------
BETWEEN
UP TO $500 AND EXCEEDING
$500 MILLION $1 BILLION $1 BILLION
- ------------------------------------------------------------------------------
Administration Fees 0.06% 0.04% 0.02%
- ------------------------------------------------------------------------------

UP TO EXCEEDING
$100 MILLION $100 MILLION
- ------------------------------------------------------------------------------
Accounting Fees 0.03% 0.01%
- ------------------------------------------------------------------------------

For the period from April 1, 1997 to May 15, 1997, the Administrator
voluntarily waived administration and fund accounting fees of $86,035. For the
period from May 16, 1997 to September 30, 1997, the Administrator did not waive
any administration fees.

Under the terms of the Administration Agreement, the Company will pay for
fund administration services a minimum fee of $40,000 per annum, not to be
aggregated with fees for fund accounting services. The Company will pay a
minimum monthly fee of $4,000 for fund accounting services for the Fund, not to
be aggregated with fees for fund administration services.

No officer, director or employee of Tweedy, Browne, the Administrator or any
parent or subsidiary of those corporations receives any compensation from the
Company for serving as a director or officer of the Company. The Company pays
each director who is not an officer, director or employee of Tweedy, Browne, the
Administrator or any of their affiliates $2,000 per annum plus $500 per Regular
or Special Board Meeting attended in person or by telephone, plus out-of-pocket
expenses.

Boston Safe Deposit and Trust Company ("Boston Safe"), an indirect wholly
owned subsidiary of Mellon Bank, serves as the Fund's custodian pursuant to a
custody agreement (the "Custody Agreement"). On May 12, 1997, First Data
Investors Services Group, Inc. replaced Unified Advisors, Inc. as the Fund's
transfer agent. Tweedy, Browne also serves as the distributor to the Fund and
pays all distribution fees. No distribution fees are paid by the Fund.

For the six months ended September 30, 1997, the Fund incurred total
brokerage commissions of $1,239,060.

3. SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments for the six months ended September 30, 1997,
aggregated $360,510,702 and $121,382,504, respectively.

At September 30, 1997, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$430,569,520 and the aggregate gross unrealized depreciation for all securities,
in which there was an excess of tax cost over value, was $97,939,865.

4. CAPITAL STOCK

The Company is authorized to issue one billion shares of $0.0001 par value
capital stock, of which 600,000,000 of the unissued shares have been designated
as shares of the Fund. Changes in shares outstanding for the Fund were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED 9/30/97 YEAR ENDED 3/31/97
------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 25,447,993 $428,366,720 35,117,166 $522,414,402
Reinvested -- -- 5,409,129 78,324,194
Redeemed (9,750,119) (165,429,007) (13,856,018) (205,807,868)
- --------------------------------------------------------------------------------------------------------------
Net increase 15,697,874 $262,937,713 26,670,277 $394,930,728
- --------------------------------------------------------------------------------------------------------------
</TABLE>

5. ORGANIZATION COSTS

The Fund bears all costs in connection with its organization including the
fees and expenses of registering and qualifying its shares for distribution
under Federal and state securities regulations. All such costs have been
deferred and are being amortized over a five-year period using the straight-line
method from the commencement of operations of the Fund. In the event that any of
the initial shares of the Fund are redeemed during such amortization period, the
Fund will be reimbursed for any unamortized organization costs in the same
proportion as the number of shares redeemed bears to the number of initial
shares held at the time of redemption.

6. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments
involves economic and political risks and considerations not typically
associated with investing in U.S. companies and the U.S. Government. These
considerations include changes in exchange rates and exchange rate controls
(which may include suspension of the ability to transfer currency from a given
country), costs incurred in conversions between currencies, non-negotiable
brokerage commissions, less publicly available information, different accounting
standards, lower trading volume, delayed settlements and greater market
volatility, the difficulty of enforcing obligations in other countries, less
securities regulation, different tax provisions (including withholding on
dividends paid to the Fund), war, expropriation, political and social
instability and diplomatic developments.

7. LINE OF CREDIT

The Company and Mellon Bank, N.A. have entered into a Line of Credit
Agreement (the "Agreement") which provides the Fund with a $50 million line of
credit, primarily for temporary or emergency purposes, including the meeting of
redemption requests that might otherwise require the untimely disposition of
securities. The Fund may borrow up to the lesser of $50 million or one-third of
its net assets. Interest is payable at the bank's Money Market Rate plus 0.75%
on an annualized basis. Under the Agreement, the Fund is charged a facility fee
equal to 0.10% annually of the unutilized credit. The Agreement requires, among
other provisions, the Fund to maintain a ratio of net assets (not including
funds borrowed pursuant to the Agreement) to aggregated amount of indebtedness
pursuant to the Agreement of no less than three to one. For the six months ended
September 30, 1997, the Fund did not borrow under this Agreement.
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------

September 30, 1997 (Unaudited)

[Graphic Omitted]

MARKET
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCKS--DOMESTIC--87.9%
ADVERTISING--0.4%
6,680 Grey Advertising Inc. ............................ $ 2,324,640
------------
APPAREL/TEXTILES--0.1%
45,900 Chic by H.I.S. Inc.+ ............................. 324,169
9,400 Garan Inc. ....................................... 220,900
2,000 Thomaston Mills, Inc., Class A ................... 18,500
------------
563,569
------------
AUTOMOTIVE PARTS--0.8%
170,400 Standard Motor Products, Inc. .................... 3,983,100
23,300 Standard Products Company ........................ 613,081
5,200 Woodward Governor Company ........................ 184,275
------------
4,780,456
------------
BANKING--14.2%
56,700 BancFirst Corporation ............................ 1,885,275
10,200 Cape Cod Bank & Trust Company .................... 353,175
179,407 Chase Manhattan Corporation ...................... 21,170,026
75,100 Comerica, Inc. ................................... 5,928,206
4,500 Community Financial Group - Bank of Nashville .... 52,312
156,110 First Chicago NBD Corporation .................... 11,747,277
20,400 First Mortgage Corporation+ ...................... 77,775
33,900 Mercantile Bancorporation, Inc. .................. 2,580,638
40,855 Mid-America Bancorporation ....................... 1,348,215
18,000 Peoples Bank Corporation of Indianapolis ......... 600,750
246,700 PNC Bank Corporation ............................. 12,042,044
381,860 Popular, Inc. .................................... 20,143,115
36,000 Wells Fargo & Company ............................ 9,900,000
------------
87,828,808
------------
BASIC INDUSTRIES--3.4%
100,500 ACX Technologies Inc.+ ........................... 2,675,812
25,000 Blessings Corporation ............................ 381,250
121,700 Gorman-Rupp Company .............................. 2,418,787
61,400 Monarch Machine Tool Company ..................... 598,650
70,200 Sequa Corporation, Class A+ ...................... 4,047,469
78,000 Tremont Corporation+ ............................. 4,553,250
30,200 Unilever NV, ADR ................................. 6,421,275
------------
21,096,493
------------
BUSINESS AND COMMERCIAL SERVICES--0.6%
129,000 Harland (John H.) Company ........................ 2,975,062
1,300 IIC Industries Inc.+ ............................. 56,225
12,500 Paris Corporation+ ............................... 24,219
38,600 PriceSmart, Inc.+ ................................ 692,388
------------
3,747,894
------------
CHEMICALS--1.6%
202,400 Lilly Industries Inc., Class A ................... 4,250,400
222,900 Oil-Dri Corporation of America ................... 3,775,369
77,500 Stepan Company ................................... 2,068,281
------------
10,094,050
------------
CONSUMER NON-DURABLES--12.5%
142,400 Bairnco Corporation .............................. 1,441,800
130,400 Coca-Cola Bottling Company ....................... 7,530,600
209,200 EKCO Group Inc.+ ................................. 1,634,375
76,800 Fuji Photo Film Company Ltd., ADR ................ 3,163,200
334,535 Great Atlantic & Pacific Tea Company, Inc. ....... 10,621,486
19,000 Hyde Athletic Industries Inc., Class A+ .......... 89,062
25,000 Hyde Athletic Industries Inc., Class B+ .......... 121,875
184,000 Nestle, ADR ...................................... 12,815,732
49,800 OroAmerica Inc.+ ................................. 277,012
509,250 Philip Morris Companies, Inc. .................... 21,165,703
8,800 TCC Industries Inc.+ ............................. 39,050
567,000 UST Inc. ......................................... 17,328,938
57,200 Village Super Market Inc., Class A+ .............. 521,950
------------
76,750,783
------------
CONSUMER SERVICES--1.7%
460,400 Jones Intercable Inc., Class A+ .................. 5,783,775
193,350 Pinkerton's, Inc. ................................ 4,447,050
------------
10,230,825
------------
ELECTRONIC EQUIPMENT--0.0%++
8,000 Espey Manufacturing and Electronics Corporation .. 135,000
------------
ENGINEERING AND CONSTRUCTION--2.9%
12,700 Atkinson (Guy F.) Company California+ ............ 40,481
42,700 Devcon International Corporation+ ................ 213,500
107,300 Harding Lawson Associates Group+ ................. 1,026,056
150,500 Hovnanian Enterprises, Inc.+ ..................... 1,175,781
14,100 Liberty Homes, Inc. .............................. 132,188
61,300 M/I Schottenstein Homes Inc.+ .................... 946,319
4,080 Oilgear Company .................................. 77,520
42,000 Oriole Homes Corporation, Class A+ ............... 273,000
91,500 Oriole Homes Corporation, Class B+ ............... 571,875
459,700 Ryland Group, Inc. ............................... 8,159,675
489,300 Standard-Pacific Corporation ..................... 5,137,650
------------
17,754,045
------------
FINANCIAL SERVICES--12.8%
224,230 American Express Company ......................... 18,358,831
511,280 Federal Home Loan Mortgage Corporation ........... 18,022,620
126,800 Household International Inc. ..................... 14,352,175
18,600 HPSC Inc.+ ....................................... 123,225
20,800 Kent Financial Services Inc.+ .................... 119,600
345,550 Lehman Brothers Holdings Inc. .................... 18,530,119
10,000 Letchworth Independent Bancshares Corporation .... 455,000
391,000 Phoenix Duff & Phelps Corporation ................ 3,030,250
109,030 ReliaStar Financial Corporation .................. 4,340,757
29,800 Value Line Inc. .................................. 1,193,863
1,604 Whitney Holding Corporation ...................... 75,488
------------
78,601,928
------------
FOOD AND BEVERAGES--0.0%++
2,177 United Foods, Inc., Class A+ ..................... 5,987
3,269 United Foods, Inc., Class B+ ..................... 8,990
------------
14,977
------------
FURNITURE--0.9%
29,900 Flexsteel Industries Inc. ........................ 363,472
35,250 O'Sullivan Corporation ........................... 378,938
364,800 O'Sullivan Industries Holdings, Inc.+ ............ 4,560,000
------------
5,302,410
------------
HEALTH CARE--8.7%
163,670 Glaxo Wellcome PLC, Sponsored ADR ................ 7,354,921
33,412 Johnson & Johnson ................................ 1,925,367
10,666 Novartis AG, ADR ................................. 817,697
287,900 Nycomed ASA, ADR, Class B ........................ 6,117,875
23,700 Pharmacia & Upjohn, Inc. ......................... 865,050
385,600 Pharmacia & Upjohn, Inc., Depository Shares ...... 13,980,408
515,200 Regency Health Services, Inc.+ ................... 11,270,000
557,000 Sun Healthcare Group Inc.+ ....................... 11,453,313
7,500 Trans Leasing International, Inc. ................ 69,844
8,000 Wyant Corporation+ ............................... 49,000
------------
53,903,475
------------
INSURANCE--11.2%
15,200 Allstate Financial Corporation+ .................. 88,350
269,100 American Annuity Group Inc. ...................... 5,785,650
90,450 American General Corporation ..................... 4,692,094
77,400 American Indemnity Financial Corporation ......... 1,146,488
115,125 American National Insurance Company .............. 11,526,891
225,692 Integon Corporation .............................. 5,867,992
14,160 Kansas City Life Insurance Company ............... 1,200,060
21,600 Merchants Group Inc. ............................. 402,300
111,200 MMI Companies, Inc. .............................. 2,932,900
51,900 National Western Life Insurance Company+ ......... 5,313,263
239,200 NAC Re Corporation ............................... 12,288,900
13,200 RLI Corporation .................................. 594,000
240,800 Transatlantic Holdings, Inc. ..................... 17,247,300
------------
69,086,188
------------
LEISURE AND ENTERTAINMENT--1.1%
140,400 C-TEC Corporation+ ............................... 6,984,900
------------
METALS AND METAL PRODUCTS--0.0%++
14,000 American Metals Service, Inc.+ ................... 11,944
------------
OIL AND GAS--1.0%
80,000 Isramco, Inc.+ ................................... 76,250
5,600 Lufkin Industries, Inc. .......................... 173,250
41,460 Matrix Service Company+ .......................... 288,924
175,200 Penn Virginia Corporation ........................ 5,201,250
10,000 Wiser Oil Company ................................ 171,250
------------
5,910,924
------------
REAL ESTATE--1.9%
439,400 American Real Estate Partners Ltd. ............... 4,833,400
26,100 Arizona Land Income Corporation, Class A ......... 141,103
18,012 Atlantic Realty Trust Inc.+ ...................... 217,270
102,000 Koger Equity Inc. ................................ 2,078,250
13,200 Mays (J.W.), Inc.+ ............................... 114,675
154,400 Price Enterprises Inc. ........................... 2,967,375
3,623 Public Storage, Inc. ............................. 107,331
36,025 Ramco-Gershenson Properties ...................... 713,745
20,000 Reading Entertainment+ ........................... 249,375
------------
11,422,524
------------
RESTAURANT CHAINS--4.5%
766,500 Darden Restaurants Inc. .......................... 8,862,656
374,000 McDonald's Corporation ........................... 17,811,750
83,400 Vicorp Restaurants Inc.+ ......................... 1,316,156
------------
27,990,562
------------
RETAIL--5.0%
82,500 Burlington Coat Factory Warehouse ................ 1,742,812
1,000 Dart Group Corporation, Class A .................. 107,375
119,300 Discount Auto Parts Inc.+ ........................ 2,863,200
117,900 EZCORP Inc., Class A+ ............................ 1,223,212
407,100 Fingerhut Companies, Inc. ........................ 9,159,750
90,100 Government Technology Services, Inc. ............. 473,025
654,000 Jan Bell Marketing Inc.+ ......................... 1,757,625
164,000 Kmart Corporation+ ............................... 2,296,000
9,900 Mercantile Stores Company Inc. ................... 623,081
89,600 Penney (J.C.) Company, Inc. ...................... 5,219,200
52,100 Seaman Furniture Company+ ........................ 1,266,681
130,100 Swiss Army Brands, Inc.+ ......................... 1,374,181
158,700 Syms Corporation+ ................................ 2,340,825
138,000 United Retail Group, Inc.+ ....................... 414,000
------------
30,860,967
------------
TECHNOLOGY--0.0%++
44,600 Astrosystems Inc. ................................ 44,600
------------
TELECOMMUNICATIONS--0.0%++
15,300 TCI International Inc.+ .......................... 90,844
------------
TRANSPORTATION/TRANSPORTATION SERVICES--2.6%
225,200 GATX Corporation ................................. 15,215,075
53,100 KLLM Transport Services Inc.+ .................... 657,113
------------
15,872,188
------------
TOTAL COMMON STOCKS--DOMESTIC
(COST $367,839,941) .............................. 541,404,994
------------
COMMON STOCKS--FOREIGN--3.5%
FINLAND--0.4%
11,000 Huhtamaki Group, Class I ......................... 432,575
15,500 Kone Corporation, Class B+ ....................... 2,007,373
------------
2,439,948
------------
FRANCE--0.2%
900 Bongrain SA ...................................... 336,780
2,725 Klepierre ........................................ 360,568
3,512 Lyonnaise des Eaux--Dumez+ ....................... 391,890
2,300 Peugeot SA ....................................... 303,170
------------
1,392,408
------------
HONG KONG--0.1%
100,000 Jardine Strategic Holdings Ltd. .................. 392,000
250,000 Swire Pacific Ltd., Class B ...................... 369,928
------------
761,928
------------
ITALY--0.1%
72,100 Arnoldo Mondadori Editore SPA .................... 527,128
------------
JAPAN--1.0%
63,000 Aichi Electric Company Ltd. ...................... 149,838
49,000 Amada Sonoike Company Ltd. ....................... 154,305
62,000 Bunka Shutter Company Ltd. ....................... 222,475
15,200 Chofu Seisakusho Company ......................... 215,397
35,000 Danto Corporation ................................ 268,294
58,000 Dowa Fire & Marine Insurance Company ............. 230,712
17,000 Fuji Photo Film Ltd. ............................. 701,583
28,000 Fujisawa Pharmaceutical Company .................. 238,999
30,000 Gakken Company Ltd. .............................. 98,202
50,000 Hitachi Koki ..................................... 285,904
23,000 Hitachi Medical Corporation ...................... 245,877
6,000 Katsuragawa Electric Company ..................... 25,358
50,000 Koito Manufacturing .............................. 321,124
53,000 Koyosha Inc. ..................................... 294,274
19,000 Matsushita Electric Industrial Company ........... 343,250
54,000 Mitsubishi Electric Corporation .................. 212,563
32,000 Morito ........................................... 209,497
45,150 Nissan Fire & Marine Insurance Company ........... 185,210
36,000 Oak .............................................. 119,334
62,000 Osaka Securities Finance ......................... 177,774
19,000 Sangetsu Company Ltd. ............................ 307,036
15,000 Sankyo Company Ltd. .............................. 519,599
25,000 Shikoku Coca-Cola Bottling ....................... 265,186
99,000 Shin Nikkei Company Ltd. ......................... 176,390
32,000 Toyo Technical Company Ltd. ...................... 225,408
------------
6,193,589
------------
NETHERLANDS--0.3%
10,000 Heineken Holdings NV, Class A .................... 1,535,253
15,000 Holdingmaatschappij De Telegraaf NV .............. 316,599
------------
1,851,852
------------
SINGAPORE--0.1%
79,000 Robinson and Company Ord ......................... 379,634
------------
SPAIN--0.1%
7,600 Argentaria ....................................... 454,666
16,000 Unipapel SA ...................................... 389,629
------------
844,295
------------
SWITZERLAND--0.3%
2,000 Danzas Holding AG PC ............................. 426,980
2,000 Edipresse SA, Bearer ............................. 578,933
500 Swissair AG, Registered+ ......................... 668,660
------------
1,674,573
------------
UNITED KINGDOM--0.9%
177,800 BTR Ord .......................................... 720,834
50,000 Carclo Engineering Group PLC ..................... 175,305
172,000 Concentric PLC ................................... 356,284
100,000 Harrisons & Crosfield PLC ........................ 198,276
189,385 McAlpine (Alfred) PLC ............................ 431,984
65,000 SmithKline Beecham, PLC Units, ADR ............... 3,176,875
150,000 Thistle Hotels PLC ............................... 338,520
------------
5,398,078
------------
TOTAL COMMON STOCKS--FOREIGN
(COST $18,023,888) ............................... 21,463,433
------------
COMMON STOCK RIGHTS--0.0%++ (COST $1,143)
87,880 American Real Estate Partners Ltd.+ .............. 1,373
------------

FACE
VALUE
-----
COMMERCIAL PAPER--3.5%
$ 5,000,000 Ford Motor Company, 6.200% due 10/1/97 ........... 5,000,000
17,050,000 General Electric Capital Corporation, 6.450%
due 10/1/97 ...................................... 17,050,000
------------
TOTAL COMMERCIAL PAPER
(COST $22,050,000) ............................... 22,050,000
------------
U.S. TREASURY BILLS--0.1%
315,000 5.508%** due 10/16/97 ............................ 314,315
200,000 5.870%** due 4/30/98 ............................. 193,494
------------
TOTAL U.S. TREASURY BILLS
(COST $507,809) .................................. 507,809
------------
REPURCHASE AGREEMENT--4.9%
(COST $30,000,000)
30,000,000 Agreement with UBS Securities, Inc., 6.030%
dated 9/30/97, to be repurchased at $30,005,025 on
10/1/97, collateralized by $29,782,000 U.S.
Treasury Notes, 6.250% due 5/31/99 (market value
$30,000,000) 30,000,000
------------

TOTAL INVESTMENTS (COST $438,422,781*) .................. 99.9% 615,427,609
OTHER ASSETS AND LIABILITIES (NET) ...................... 0.1 758,952
---- ------------
NET ASSETS .............................................. 100.0% $616,186,561
===== ============
- ------------
* Aggregate cost for Federal tax purposes.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Amount represents less than 0.1% of net assets.

Abbreviations:
ADR--American Depository Receipt
Ord--Ordinary Share
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Schedule of Forward Exchange Contracts
- --------------------------------------------------------------------------------

September 30, 1997 (Unaudited)
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- ---- --------
FORWARD EXCHANGE CONTRACTS TO BUY
11,172,218 Japanese Yen ................... 10/1/97 $ 92,585
29,165,781 Japanese Yen ................... 10/2/97 241,704
8,284,122 Japanese Yen ................... 10/3/97 68,655
------------
TOTAL FORWARD EXCHANGE CONTRACTS TO BUY
(CONTRACT AMOUNT $402,168) ................ $ 402,944
============
FORWARD EXCHANGE CONTRACTS TO SELL
1,721,335 Finnish Markka ................. 3/13/98 $ (328,561)
2,994,600 Finnish Markka ................. 4/30/98 (572,976)
5,298,500 Finnish Markka ................. 10/29/98 (1,021,943)
1,002,660 French Franc ................... 10/15/97 (169,178)
4,739,600 French Franc ................... 10/29/98 (817,604)
125,008 Great Britain Pound Sterling ... 10/15/97 (201,560)
1,813,456 Great Britain Pound Sterling ... 12/31/97 (2,927,578)
466,650 Great Britain Pound Sterling ... 2/5/98 (753,776)
617,932 Great Britain Pound Sterling ... 3/13/98 (998,716)
945,239 Great Britain Pound Sterling ... 9/30/98 (1,532,332)
629,683 Great Britain Pound Sterling ... 10/29/98 (1,021,238)
423,335,000 Italian Lira ................... 10/15/97 (245,136)
190,496,250 Japanese Yen ................... 10/15/97 (1,582,161)
75,798,100 Japanese Yen ................... 12/30/97 (636,900)
29,050,000 Japanese Yen ................... 3/13/98 (246,634)
116,095,000 Japanese Yen ................... 4/14/98 (990,142)
83,172,250 Japanese Yen ................... 4/30/98 (711,045)
107,930,000 Japanese Yen ................... 7/15/98 (933,286)
114,850,000 Japanese Yen ................... 9/30/98 (1,004,832)
248,355 Netherlands Guilder ............ 10/15/97 (124,935)
3,407,800 Netherlands Guilder ............ 12/31/97 (1,722,713)
1,857,800 Netherlands Guilder ............ 3/13/98 (943,103)
3,968,000 Netherlands Guilder ............ 10/29/98 (2,039,328)
4,812,975 Norwegian Krone ................ 2/5/98 (682,188)
418,260 Singapore Dollar ............... 10/15/97 (273,646)
38,562,000 Spanish Peseta ................. 10/15/97 (258,372)
6,767,000 Swedish Krona .................. 12/30/97 (895,148)
34,537,500 Swedish Krona .................. 7/15/98 (4,595,452)
10,091,900 Swedish Krona .................. 10/29/98 (1,346,358)
242,600 Swiss Franc .................... 10/15/97 (167,107)
3,871,500 Swiss Franc .................... 12/31/97 (2,691,521)
1,371,500 Swiss Franc .................... 2/5/98 (957,333)
1,068,360 Swiss Franc .................... 3/13/98 (748,616)
2,064,000 Swiss Franc .................... 7/15/98 (1,465,465)
2,794,900 Swiss Franc .................... 9/30/98 (2,000,334)
2,425,900 Swiss Franc .................... 10/29/98 (1,741,902)
------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $40,525,000) ........................... $(39,349,119)
============
<PAGE>

<TABLE>
<CAPTION>
TWEEDY, BROWNE AMERICAN VALUE FUND
- -------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
- -------------------------------------------------------------------------------------------------
September 30, 1997 (Unaudited)
<S> <C> <C>
ASSETS
Investments, at value (Cost $438,422,781) (Note 1)
See accompanying schedule ............................ $615,427,609
Cash and foreign currency (Cost $7,489,794) .............. 7,481,986
Receivable for Fund shares sold .......................... 1,423,059
Net unrealized appreciation of forward exchange contracts
(Note 1) ............................................... 1,176,657
Dividends and interest receivable ........................ 824,422
Unamortized organization costs (Note 5) .................. 22,688
Prepaid expenses ......................................... 7,297
------------
TOTAL ASSETS ......................................... 626,363,718
------------
LIABILITIES
Payable for investment securities purchased .............. $9,348,191
Investment advisory fee payable (Note 2) ................. 594,094
Payable for Fund shares redeemed ......................... 53,834
Administration fee payable (Note 2) ...................... 22,043
Transfer agent fees payable (Note 2) ..................... 12,483
Custodian fees payable (Note 2) .......................... 5,812
Accrued Directors' fees and expenses (Note 2) ............ 1,327
Accrued expenses and other payables ...................... 139,373
---------
TOTAL LIABILITIES .................................... 10,177,157
------------
NET ASSETS ................................................... $616,186,561
============
NET ASSETS CONSIST OF
Undistributed net investment income ...................... $ 3,021,750
Accumulated net realized gain on securities, forward
exchange
contracts and foreign currencies ....................... 6,885,340
Net unrealized appreciation on securities, forward
exchange
contracts, foreign currencies and net other assets ..... 178,178,345
Par value ................................................ 2,952
Paid-in capital in excess of par value ................... 428,098,174
------------
TOTAL NET ASSETS ..................................... $616,186,561
============
NET ASSET VALUE, offering and redemption price per share
($616,186,561 / 29,519,221 shares of common stock
outstanding) $20.87
======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ----------------------------------------------------------------------------------------------------
Statement of Operations
- ----------------------------------------------------------------------------------------------------

For the six months ended September 30, 1997 (Unaudited)

<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $66,587) ................. $ 4,208,864
Interest ................................................................ 1,072,482
------------
TOTAL INVESTMENT INCOME ............................................. 5,281,346
------------
EXPENSES
Investment advisory fee (Note 2) ........................ $2,972,409
Administration fee (Note 2) ............................. 113,566
Transfer agent fees (Note 2) ............................ 102,712
Custodian fees (Note 2) ................................. 28,489
Legal and audit fees .................................... 15,812
Amortization of organization costs (Note 5) ............. 9,761
Directors' fees and expenses (Note 2) ................... 3,766
Other ................................................... 180,930
Waiver of fees by investment adviser and administrator
(Note 2) (128,268)
----------
TOTAL EXPENSES ...................................................... 3,299,177
------------
NET INVESTMENT INCOME ....................................................... 1,982,169
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3)
Net realized gain (loss):
Securities ............................................................ 423,462
Forward exchange contracts ............................................ 1,079,981
Foreign currencies and net other assets ............................... (33,493)
------------
Net realized gain on investments during the period ...................... 1,469,950
------------
Net change in unrealized appreciation (depreciation) of:
Securities ............................................................ 114,117,386
Forward exchange contracts ............................................ (303,875)
Currencies and net other assets ....................................... 27,743
------------
Net unrealized appreciation of investments during the period ............ 113,841,254
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................. 115,311,204
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $117,293,373
============
</TABLE>
<PAGE>

TWEEDY, BROWNE AMERICAN VALUE FUND
- -------------------------------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------------------------------

For a Fund share outstanding throughout each period.

SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
9/30/97 ENDED ENDED ENDED ENDED
(UNAUDITED) 3/31/97 3/31/96(a) 3/31/95(a) 3/31/94(b)
----------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.22 $ 14.29 $ 10.71 $ 9.71 $ 10.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income(c) ........... 0.05 0.13 0.15 0.13 0.01
Net realize d and unrealized gain
(loss) on investments ............ 4.60 2.39 3.56 0.93 (0.30)
-------- -------- -------- -------- --------
Total from investment operations . 4.65 2.52 3.71 1.06 (0.29)
-------- -------- -------- -------- --------
DISTRIBUTIONS:
Dividends from net investment income -- (0.17) (0.11) (0.06) --
Distributions from net realized
gains ............................ -- (0.42) (0.02) -- --
-------- -------- -------- -------- --------
Total distributions ................ -- (0.59) (0.13) (0.06) --
-------- -------- -------- -------- --------
Net asset value, end of period ..... $ 20.87 $ 16.22 $ 14.29 $ 10.71 $ 9.71
======== ======== ======== ======== ========
Total return(d) .................... 28.67% 17.75% 34.70% 11.02% (2.90)%
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of period (in 000's) $616,187 $342,467 $201,599 $ 58,856 $ 16,133
Ratio of operating expenses to
average net assets}(e) ........... 1.39%(f) 1.39% 1.39% 1.74% 2.26%(f)
Ratio of net investment income to
average net assets ............... 0.83%(f) 0.92% 1.13% 1.25% 0.64%(f)
Portfolio turnover rate ............ 1% 16% 9% 4% 0%(g)
Average commission rate (per share
of security)(h) .................. $ 0.0272 $ 0.0302 $ 0.0341 N/A N/A

- ------------
(a) Per share amounts have been calculated using the monthly average share method, which more
appropriately presents the per share data for the period since the use of the undistributed income
method does not accord with results of operations.
(b) The Fund commenced operations on December 8, 1993.
(c) Net investment income (loss) for a Fund share outstanding, before the waiver of fees by the investment
adviser and/or administrator and/or custodian for the years ended March 31, 1997, 1996 and 1995 and
the 3.75-month period ended March 31, 1994 was $0.11, $0.12, $0.11 and $(0.01), respectively.
(d) Total return represents aggregate total return for the periods indicated.
(e) Annualized expense ratios before the waiver of fees by the investment adviser and/or administrator
and/or custodian for the six months ended September 30, 1997, the years ended March 31, 1997, 1996,
and 1995 and the 3.75-month period ended March 31, 1994 were 1.44%, 1.52%, 1.61%, 1.94% and 3.51%,
respectively.
(f) Annualized.
(g) Amount rounds to less than 1.0%.
(h) Average commission rate (per share of security) as required by amended disclosure requirements
effective September 1, 1995.
</TABLE>
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- -------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- -------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Tweedy, Browne American Value Fund (the "Fund") is a diversified series of
Tweedy, Browne Fund Inc. (the "Company"). The Company is an open-end management
investment company registered with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended. The Company was organized as a
Maryland corporation on January 28, 1993. The Fund commenced operations on
December 8, 1993. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.

2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS

The Company, on behalf of the Fund, has entered into an investment advisory
agreement (the "Advisory Agreement") with Tweedy, Browne Company L.P. ("Tweedy,
Browne"). Under the Advisory Agreement, the Company pays Tweedy, Browne a fee at
the annual rate of 1.25% of the value of its average daily net assets. The fee
is payable monthly, provided the Fund will make such interim payments as may be
requested by the adviser not to exceed 75% of the amount of the fee then accrued
on the books of the Fund and unpaid. From time to time, Tweedy, Browne may
voluntarily waive a portion of its fee otherwise payable to it. For the six
months ended September 30, 1997, Tweedy, Browne voluntarily waived fees of
$105,729.

The current and retired general partners and their families, as well as
employees of Tweedy, Browne, the investment adviser to the Fund, have
approximately $29.5 million of their own money invested in the Fund.

FEES ON ASSETS
------------------------------------------------------
BETWEEN
UP TO $500 AND EXCEEDING
$500 MILLION $1 BILLION $1 BILLION
- --------------------------------------------------------------------------------
Administration Fees 0.06% 0.04% 0.02%
- --------------------------------------------------------------------------------

UP TO EXCEEDING
$100 MILLION $100 MILLION
- --------------------------------------------------------------------------------
Accounting Fees 0.03% 0.01%
- --------------------------------------------------------------------------------

For the period from April 1, 1997 to May 15, 1997, the Administrator
voluntarily waived administration fees of $22,539. For the period from May 16,
1997 to September 30, 1997, the Administrator did not waive any administration
fees.

Under the terms of the Administration Agreement, the Company will pay for
fund administration services a minimum fee of $40,000 per annum, not to be
aggregated with fees for fund accounting services. The Company will pay for a
minimum monthly fee of $3,000 for fund accounting services for the Fund, not to
be aggregated with fees for fund administration services.

Boston Safe Deposit and Trust Company ("Boston Safe"), an indirect wholly
owned subsidiary of Mellon Bank, serves as the Fund's custodian pursuant to a
custody agreement (the "Custody Agreement"). From time to time, Boston Safe may
voluntarily waive a portion of its fee otherwise payable to it. For the six
months ended September 30, 1997, Boston Safe did not waive any custody fees. On
May 12, 1997, First Data Investors Services Group, Inc. replaced Unified
Advisors, Inc. as the Fund's transfer agent. Tweedy, Browne also serves as the
distributor to the Fund and pays all distribution fees. No distribution fees are
paid by the Fund.

For the six months ended September 30, 1997, the Fund incurred total
brokerage commissions of $155,206.

3. SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments for the six months ended September 30, 1997,
aggregated $139,819,150 and $3,979,460, respectively.

At September 30, 1997, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$179,619,727 and the aggregate gross unrealized depreciation for all securities,
in which there was an excess of tax cost over value, was $2,614,899.

4. CAPITAL STOCK

The Company is authorized to issue one billion shares of $0.0001 par value
capital stock, of which 400,000,000 of the unissued shares have been designated
as shares of the Fund. Changes in shares outstanding for the Fund were as
follows:

SIX MONTHS ENDED 9/30/97 YEAR ENDED 3/31/97
-----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------
Sold 10,744,899 $200,600,716 9,381,470 $146,286,093
Reinvested -- -- 599,957 9,419,276
Redeemed (2,344,768) (44,174,907) (2,966,055) (45,473,803)
- -------------------------------------------------------------------------------
Net Increase 8,400,131 $156,425,809 7,015,372 $110,231,566
- -------------------------------------------------------------------------------

5. ORGANIZATION COSTS

6. LINE OF CREDIT

Effective October 1, 1996, the Company and Mellon Bank, N.A. have entered
into a Line of Credit Agreement (the "Agreement") which provides the Fund with a
$50 million line of credit, primarily for temporary or emergency purposes,
including the meeting of redemption requests that might otherwise require the
untimely disposition of securities. The Fund may borrow up to the lesser of $50
million or one-third of its net assets. Interest is payable at the bank's Money
Market Rate plus 0.75% on an annualized basis. Under the Agreement, the Company
is charged a facility fee equal to 0.10% annually of the unutilized credit. The
Agreement requires, among other provisions, the Fund to maintain a ratio of net
assets (not including funds borrowed pursuant to the Agreement) to aggregated
amount of indebtedness pursuant to the Agreement of no less than three to one.
For the six months ended September 30, 1997, the Fund did not borrow under this
Agreement.

TWEEDY, BROWNE FUND INC.
52 Vanderbilt Avenue, Ny, Ny 10017
800-432-4789