TWEEDY BROWNE FUND INC, N-30D, 1997-06-04

TWEEDY BROWNE FUND INC
N-30D, 1997-06-04

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TWEEDY, BROWNE
GLOBAL VALUE FUND

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ANNUAL
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MARCH 31, 1997
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TWEEDY, BROWNE
AMERICAN VALUE FUND

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TWEEDY, BROWNE FUND INC.

Investment Manager's Report ........................................ 1

Tweedy, Browne Global Value Fund:
Portfolio Highlights ............................................. 15
Portfolio of Investments ......................................... 16
Schedule of Forward Exchange Contracts ........................... 25
Statement of Assets and Liabilities .............................. 31
Statement of Operations .......................................... 32
Statements of Changes in Net Assets .............................. 33
Financial Highlights ............................................. 34
Notes to Financial Statements .................................... 35
Report of Ernst & Young LLP, Independent Auditors ................ 43
Tax Information .................................................. 44

Tweedy, Browne American Value Fund:
Portfolio Highlights ............................................. 45
Portfolio of Investments ......................................... 46
Schedule of Forward Exchange Contracts ........................... 53
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
Report of Ernst & Young LLP, Independent Auditors ................ 66
Tax Information .................................................. 67

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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 L.P. 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
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To Our Shareholders:

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

We are pleased to present the Annual Report for Tweedy, Browne Global Value
Fund and Tweedy, Browne American Value Fund for the fiscal year ended March 31,
1997. In our Semi-Annual Report as of September 30, 1996, we experimented with
combining the reports of our two Funds and asked our shareholders for their
opinion on this combined format. We are happy to report that the new format was
met with approval by all who re-
sponded, so we will continue to report in this manner. Unanimity of opinion is
rare in the investment world, so we are particularly gratified that our
experiment was greeted with approval. It makes our task of reporting somewhat
easier and permits all of our shareholders to hear our complete views,
irrespective of whether they apply to stocks in the U.S. or outside the U.S.
Additionally, as some of you pointed out, there is a savings in printing costs
by combining the reports. We have also followed the suggestion of one
shareholder and separated the discussions that are specific to one or the other
Fund, and combined the discussion that is more general and relevant to both
Funds.

For the year ended March 31, 1997, the net asset value of the shares of the
Global Value Fund increased 16.66%* to $15.46 per share. This performance
includes the reinvestment of a dividend of $1.1225 per share paid in December
1996. For the same period, the Morgan Stanley Capital International ("MSCI")
Europe, Australasia and Far East Index ("EAFE") gained 1.45%. The EAFE Index is
measured in U.S. dollars so any rise in the value of the dollar vis-a-vis other
currencies would reduce the reported results of the Index. This was the case in
the past twelve months. EAFE in local currencies rose 10.23%. However, the most
relevant comparison to our performance is EAFE hedged back into the dollar, by
which we mean the Index is calculated as if the investment positions in each of
the countries in the Index were dollar hedged. The EAFE Index hedged showed a
gain of 12.53%. One of the questions we were asked following our discussion of
currency hedging in a previous letter was whether we know what our performance
would have been if we had not hedged our currency exposure. We have not made
this particular calculation and we do not think it would be easy to do. The
comparison of the EAFE Index in dollars, in local currency, and hedged gives
some indication of the impact of currencies and hedging. Clearly, hedging was
the course to have followed in the past year. If we subtract the results of the
EAFE Index, as measured in dollars, 1.45%, from the local currency version of
the EAFE Index, 10.23%, we see that the rise in the dollar reduced the increase
in the local markets by 8.78%.

Furthermore, if we subtract the increase in the local currency version,
10.23%, from the hedged EAFE Index, 12.53%, we see that hedging actually added
2.30% to the EAFE Index's performance. The reason for this is the difference in
the one-year interest rate between the U.S. and the countries that comprise the
EAFE Index. Put another way, the weighted average interest rate in the countries
in the Index was 2.29% lower than the one-year U.S. interest rate. While hedging
was a good thing to do last year, we do not wish to take any credit for doing
so. As we hope our shareholders all know, it is our policy to maintain a fully
hedged position at all times. Just as we do not pretend to be able to predict
where individual stock markets are headed, we certainly do not have a clue as to
where eighteen different currencies are going in relation to the dollar.

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*Past performance is not a guarantee of future results and total return and
principal value of investments will fluctuate with market changes. Shares, when
redeemed, may be worth more or less than their original cost.
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The composition of the portfolio of the Global Value Fund, in geographic
terms, has not changed appreciably over the past year. The table below shows our
investment positions by geographic area:

1996 1997
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Europe 55.8% 49.0%
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Australasia 17.8 21.6
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North America 16.1 17.2
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We are currently invested in 21 countries. The five largest areas of
investment by country at fiscal year-end 1997 as compared to fiscal year-end
1996 is as follows:

1996 1997
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Switzerland 16.0% Japan 18.7%
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Japan 14.9 USA 15.1
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USA 14.6 Switzerland 12.7
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France 9.0 U.K. 6.5
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Netherlands 8.9 France 6.3
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We still do not, and probably never will, pay any attention to country
weightings of the popular indices when investing the assets of your/our Fund.
Our relatively small position in Japan as compared to EAFE probably helped last
year as the Japanese Index declined 25.7%. Again, this should be chalked up to
luck rather than genius. We simply have not found enough opportunities in Japan
to warrant investing an amount equal to the 29% weighting Japan has in the EAFE
Index. In some future year, the Japanese market could well roar ahead, and if we
are less invested than the Index, in all likelihood we will underperform.

Our focus is on finding cheap stocks on a global basis. In this regard, we
are more concerned with what we call the portfolio characteristics of the Global
Value Fund. We focus on how much of our money is invested in stocks that have a
cheap market price in relation to book value, and how much of our money is
invested in stocks that are selling at low price/earnings ratios. As of March
31, 1997, 32% of our assets were invested in 139 issues selling at a weighted
average price of 74% of book value. In the Worldscope global database of 8,272
stocks with a market capitalization of $100 million or more, only 445 issues, or
5% of the total, were selling at a price-to-book value ratio of 74% or less. In
other words, 95% were more expensive than our holdings on this basis. From a
price/earnings standpoint, 51% of the Global Value Fund's assets were invested
in 79 issues selling at a weighted average of 10.7 times actual or estimated
earnings. Again, in the Worldscope global database, only 994 companies, or 12%
of the total, were selling at 10.7 times earnings or less, which means that 88%
of the companies were more expensive.

The performance of the American Value Fund was better on an absolute basis,
although not as good on a relative basis. For the year ended March 31, 1997, the
net asset value of the American Value Fund increased 17.75%*, to $16.22 per
share after adding back a dividend of $0.5865 per share paid in December 1996.
During the same period, the Standard & Poor's 500 Stock Index ("S&P 500") gained
19.82%, including the reinvestment of dividends. It is always nice to think one
can beat the S&P 500 year in and year out, but our experience tells us this is
not possible. Since we do not invest your/our Fund to look like the S&P 500, we
assume that the S&P 500 will outperform us about 33% of the time as it has over
the last 22 years. The results of the S&P 500 this past year were primarily
caused by a handful of big capitalization stocks. Broader indices, which include
smaller and medium size stocks, did not fair as well. For example, the Wilshire
5000 Index gained 15.51% and the Russell 3000 Index rose 16.42%. Because we
invest across the full spectrum of all market caps (approximately 40% of the
American Value Fund is invested in stocks with market caps of less than $1
billion), it is difficult for us to outperform the S&P 500 at a time when large
cap stocks are beating the overall market. On a calendar year basis, our
performance in 1996 just about matched that of the S&P 500, 22.45% for the
American Value Fund versus 23% for the S&P 500. Our long-term goal is to
compound our net worth at something north of 15% per year as compared to the S&P
500's long-term result of 10.5%. While past performance is no guarantee of
future performance, we have achieved our goal in the past and hope we will
continue to do so in the future.

The portfolio characteristics of the American Value Fund also diverge
significantly from that of the S&P 500. While there is some concern voiced in
the investment community about the current level of the S&P 500 in terms of
price/earnings ratios and price-to-book value ratios as compared to historic
levels, we believe our portfolio holds greater value than the S&P 500. As of
March 31, 1997, 20% of the American Value Fund's assets were invested in 73
stocks selling at a weighted average price-to-book value ratio of 76% as
compared to a price-to-tangible book value ratio of 443% for the S&P 500.
Moreover, in the Bloomberg database of 3,809 stocks with a market capitalization
of $100 million or more, only 75 stocks, or 2% of the total, were selling at 76%
of book value or less. A further 53% of the American Value Fund's portfolio was
invested in 58 stocks selling at a weighted average price-to-actual or estimated
earnings of 10 times as compared to a price/ earnings ratio of 20 times for the
S&P 500. Again, in the Bloomberg database, only 261 stocks out of 3,809 stocks
with a market capitalization of $100 million or more, 7% of the total, were
selling at 10 times earnings or less. We like to keep both of our Funds invested
in the lower value tiers of all stocks, as our experience and that of numerous
academic studies tells us that this is where we can expect satisfactory
long-term results.

The fact that we discuss our results in relation to an index, whether it be
EAFE or the S&P 500, may seem inconsistent with our previously espoused views
that too much short-term attention is focused on comparisons to an index
benchmark. We are required to present our results in relation to some relevant
index. Although we do not think it is important on a short-term basis, over the
long term, these comparisons provide a measure of how successful a particular
investment philosophy is. Over the short term, the indices also provide fodder
for the stock market pundits. The last two years have been exceptionally good in
the stock market. This much prosperity usually begets fears that things cannot
continue to be so good. This is probably true. We do not think the stock market
can continue to compound at 20% to 30% as it has in the past two years unless
all rational measurements of fundamental values are thrown out the window. Stock
market pundits are increasingly talking of a "correction" in stock prices. The
month of March, which is supposed to come in like a lion and go out like a lamb,
did the opposite this year, at least as measured by the market. A correction
could certainly happen if for no other reason than corrections do happen, and it
has been so long since we have had one. Moreover, the S&P 500 is selling at
somewhere between 17 and 19 times estimated 1997 earnings, depending upon
whether one assumes earnings will increase 7% or 10% this year as compared to an
historic multiple of 14.5 times earnings. Last year the earnings of the S&P 500
came in better than analysts' predictions, which helped to propel the market's
rise in 1996. This is not usually the case. Traditionally, analysts' estimates
start high in the beginning of the year and are revised downward as the year
unfolds. We do not pay much attention to these estimates as we are generally
skeptical about predictions of the future other than the inevitability of death
and taxes. However, the question keeps coming up, particularly now, given the
market's performance so far in April. As "professionals", we are presumed to
have some opinion on these matters or some special knowledge which will guide
our investment decisions. We do not like to disappoint our investors, but we
must admit that we do not know what the stock market will do this quarter, this
year or next year. Long term, we know that the stock market has risen, as
corporate profits, dividends and intrinsic values have grown, and that stocks
have beaten bonds and cash. We see no reason why this should not continue in the
future, especially for stocks that are cheap in relation to assets or earnings.
We also know that from time to time the market declines. The S&P 500 has
declined in 20 of the past 71 years, or 28% of the time. If Mr. Stock Market
were a major league baseball player and got a hit 72% of the times at bat, he
would be in both the Baseball Hall of Fame AND "Ripley's Believe It or Not".

It would be nice to be able to "call the market" with some degree of
accuracy, but we cannot. If we could, we would presumably sell everything the
day before the onset of the correction or the bear market, sit on the sidelines,
and then plunge back in when the market started to rise again. This presumes we
would not only know when the decline would begin but also when it would end.
When we start to claim such divine knowledge, our investors should start to
worry. We recently saw some data that showed the results an investor would have
experienced if he/she had invested in the S&P 500 at the beginning of 1985 and
had cashed out before the 1987 crash, just after the crash, or ignored the whole
thing and stayed invested through 1993. The respective performance numbers are:
204%, 117% and 278%. Bear markets do occur. Fortunately, they generally do not
last more than six to twelve months, and the average time it takes a market to
recover to its previous high is another six to twelve months. The bear market of
1973-1974 and the Great Depression are obvious exceptions, but so were the
economic circumstances. This is not to say that some unforeseen economic or
political event could not send the stock market into a tailspin. The future is
nothing more than the past repeating itself. If Iran decided to lob a few
missiles across the Persian Gulf towards Saudi Arabia, the stock market would
probably decline significantly. These things happen. One friend of ours calls
this the caribou factor. When a hunter looks into the woods, he cannot see the
caribou until it moves. After it moves, it seems obvious where the beast had
been standing all the time. Similarly, no one knows what will make the stock
market decline. After it happens, many will wonder why they could not foresee
these events. If investors knew what was going to make the market decline in the
future, it would have already declined. Stock markets are very efficient at
processing important economic events and incorporating them into the overall
price level. In the same way, everyone in Los Angeles probably knows there will
someday be another earthquake, and yet they have not all moved away. Few assume
these courageous souls believe that they can predict when this event will happen
and plan to leave the day before. Instead, we assume that most Angelinos know
there will be another earthquake, and that they will survive it and go on
enjoying their warm, sunny climate.

We have the same attitude towards the stock market. We assume there will be
"corrections" and bear markets in the future; it comes with the territory. We
also assume that the market will recover and that we will go on compounding our
wealth by owning cheap stocks. If the stock market drops 20% tomorrow, we are
sure some soothsayer will say that we are the ostriches of the investment world
with our heads stuck in the sand. Another market pundit who happens to be the
one to predict the decline closest to its occurrence, will be interviewed by
every television station as the new market guru and will enter the hall of fame
of market pundits. Perhaps, as Warren Buffett would say, our "circle of
competence" is a bit too limited. We have no way of knowing if the next stock
market decline will be a more common 10% drop or a more significant drop of 20%
or more. Nor do we know if our net worth will increase by 30% or more before the
decline occurs. We do know that nothing is accomplished by selling out AFTER the
market has gone down. In the meantime, our advice is to not invest money that
you know you will need to spend in the near future. If a correction occurs at
about the time you are planning to take this money out of the stock market, you
will be forced to lock in those losses. If you know you want to take some money
out of your investments in August to buy a new car, take it out now. Who knows
if August will be a good time to sell stocks?

In our opinion, we like what is owned in our Funds. If all the stocks in our
Funds were interests in private businesses and someone offered to buy the entire
portfolio at the current market price, we would say thanks, but no thanks. The
problem with the stock market is that it assigns a value to your business every
day, more often than not for reasons unrelated to the true intrinsic value of
the business. If you owned a successful business, would you really care if the
stock market thought it was worth an eighth of a point more or a quarter of a
point less on any given day for reasons such as the latest labor statistics
report or the most recent ruminations of Alan Greenspan? We think not. In the
aggregate, in our opinion, the stocks we own are worth far more in a private
sale than their current stock market valuations, and they are far cheaper than
the stocks which comprise the popular market indices now or even historically.

For example, last year we accumulated shares of Price Enterprises. We came
across this company because it was selling at less than 65% of book value.
Within the Bloomberg database, only 1% of the companies sell for 65% of book
value or less. However, reported earnings were minimal and the price/earnings
ratio was close to 100 times. The company had been spun out of Price/Costco, a
discount retailer. Shareholders were given the opportunity to exchange their
shares in Price/Costco for shares of Price Enterprises. The company's assets
consisted primarily of real estate, mainly shopping centers. The Price family,
founders of Price/Costco, exchanged their shares of Price/Costco for shares of
Price Enterprises. We assumed that if the founders preferred to own the real
estate assets rather than the retailing side of the business, maybe they knew
something we did not. Unlike most real estate companies, the company had
virtually no debt. An appraisal of the assets provided by the company indicated
the assets were worth more than book value, which value was justified by the
cash flow they generated. The company was reporting only minimal earnings
because of a start-up retail operation, which was experiencing losses that
masked profits of the real estate holdings. In our analysis, if the company shut
down or sold the retail operations, the market would realize the value of the
real estate holdings, which could be almost twice the market price of the stock.

The analysis is very much the same with international stocks. Recently, we
purchased shares in a Japanese company, Kita Kyushu Coca-Cola, a regional
Coca-Cola bottler. This company turned up in the Nikkei database of Japanese
stocks because of relatively low price/book value and price/earnings ratios. We
purchased shares at a modest 18% premium to book value versus U.S. Coke
bottlers, which sell at multiples of book value as high as 8 times. Moreover,
the company had virtually no long-term debt, and cash and securities equaled
more than one-half of book value. U.S. bottlers have debt-to-equity ratios of
between 3 and 8 times. The price/earnings ratio of Kita is 14.5 times, but if
the company were to pay out its cash and securities as a dividend, the price/
earnings ratio would be less than 8 times. Again, the equivalent U.S. company
trades at price/earnings ratios in excess of 20 times earnings. Furthermore, a
Japanese company should have a higher, not lower, price/earnings ratio because
the long-term cost of capital in Japan, as measured by long-term government bond
yields, is only 2.2% as compared to 6.9% in the U.S. In addition, our purchase
price, net of the company's excess cash and securities, was 3 times EBITDA
(Earnings Before deducting Interest, Taxes, Depreciation and Amortization).
Coca-Cola bottlers in the U.S. have typically been valued at about 10 times
EBITDA in acquisitions.

Another international example is James Crean, a small Irish conglomerate
engaged in food, industrial parts distribution, printing and packaging
businesses. While the historic numbers on this company were not particularly
compelling from a value standpoint, the reporting of recent insider purchases of
stock provided a clue to value. Upon further analysis, we learned that the
company was in the process of selling several divisions that would result in a
balance sheet where cash exceeded debt and the stock price was approximately 65%
of book value.

Will our stocks go down if the market suddenly drops? The answer is yes.
When the tide goes out, all the ships go down. We want to avoid the ships that
get stuck in the mud and do not rise when the tide comes back, what we call the
"crash and burn" stocks. This is what happened in the bear market of 1973-1974
when, in many instances, the "nifty-fifty" group of growth stocks crashed far
more than the market. Despite the fact that the nifty-fifty comprised a list of
some of the best companies in America based on past performance, their stock
market valuations had been driven to unrealistic levels. Many were selling at
fifty and sixty times earnings. When, as Alan Greenspan would say, this
"irrational exuberance" had been wrung out of the market, investors were left
with huge losses that in some cases have not been recouped even twenty-three
years later. This is our definition of permanent capital loss. While we can
accept or tolerate temporary market losses, we want to own stocks we think will
return to their former, pre-bear market levels when the stock market recovers.

We think some of the high tech wonder stocks of today could experience a
similar fate. We have no way of knowing if Netscape will revolutionize the way
millions of people will surf the Internet and grow its earnings to a level that
will justify its current price or future gains. We do know that even after
declining more than 60% from its previous twelve-month high, it still sells for
more than 50 times estimated 1997 earnings. We also hear that Netscape has about
$250 million to spend on research and development, and that up in Redmond,
Washington, Bill Gates has $11 billion to spend on research and development. We
also hear that Bill Gates has indicated he does not intend to cede this market
to Netscape. This is akin to one of us going into the boxing ring against Mike
Tyson. Suicide, either financial or physical, is not high on our "To Do" list.

Many investors, both individual and professional, believe they have some
special knowledge that enables them to predict where the overall market or
individual stocks are going on an almost daily basis, despite personal
experience and empirical evidence to the contrary. It is part of the theory that
behavioral psychologists call an over-confidence factor. More often than not
this leads to costly, excessive trading as investors attempt to stay one step
ahead of the market. We are not aware of any other reason to explain the high
turnover rates that studies have shown occur in individual brokerage accounts
and also in many mutual fund portfolios. Our own experience shows that a small
number of investors in our Funds buy and redeem at a feverish pace. This can
only mean that they believe they can predict what our net asset value will be
tomorrow or the next day. Even we do not know this. Fortunately, this trading
does not affect the management of the Funds, as all this activity relates to a
small number of shares and seems to be a zero sum game, with as many going in as
out on any given day. We would like to discourage this behavior if only for the
reason that we do not think it is in the investors' best interests financially.
However, "irrational exuberance" and excessive pessimism provide many of our
investment opportunities.

We are pleased to be speaking for the third time at a conference on
behavioral psychology as it affects investment decisions that is being jointly
sponsored by the Kennedy School of Government and Harvard University Economics
Department. This conference explores why many investors react as they do to
short-term market events and seem incapable of maintaining a long-term focus. We
like to describe these conferences as contrarian "love-ins" because so much of
the psychology of contrarian, value investing runs counter to the herd instincts
of the stock market. We have been doing what we do for so long that it is
impossible for us to change. We also think that our own personal experience and
the long-term results we have achieved indicate that we are doing something
right.

There is a fashion today to portray successful fund managers as celebrities,
often based on rather short-term results. Descriptions such as "aggressive" and
"mean" are becoming synonymous with success in money management. Whereas The
Wall Street Journal reports that portfolio managers were once "geeks" wearing
green eyeshades, now they are shown spending their free time boxing, mountain
climbing or racing Formula One cars on the weekends. We call it the "Jean-Claude
Van Damme Syndrome". If the macho actor decided to become a fund manager, we
would have to say, "move over Mr. Buffett". We do not believe that being
aggressive or mean has anything to do with being successful money managers.
While we do not like to think of ourselves as "geeks," we lead pretty mundane
lives. Chris Browne resides in New York City and East Hampton with two dogs and
spends his weekends pursuing his interest in landscape architecture. Will Browne
lives in Connecticut, and most of his spare time is devoted to raising four
sons, ages 8 to 20. John Spears, who lives in New Jersey, is the father of three
daughters at or near college age, and swims outside, yes outside, almost every
day. (He does not admit to being a member of the Polar Bear Club!) All three of
us have a keen interest in education and Chris and Will serve on the boards of
trustees of their respective alma maters. On vacations, John and Chris like to
catch up on reading and prefer no greater risk than falling eighteen inches from
a beach chair onto two feet of sand. Because of his children, Will's vacations
are a bit more active. We do not come into the office on Monday morning raring
to roil the markets or turn over our Funds' portfolios for a point or two in a
stock. Our turnover rate is quite low: 20% for the Global Value Fund and 16% for
the American Value Fund this past year. In our minds, turnover is equated with
taxes, and we think of April 15th as a national day of mourning. We think the
tendency to report both before-tax and after-tax performance of mutual funds is
a good one. After all, you can only spend or reinvest the share of profits our
government leaves you.

We recognize that we are not the geniuses who will figure out if Netscape or
Yahoo will become the next Microsoft, nor are we able to predict next month's
same store sales for Walmart or the level of the Dow Jones Industrials come the
end of the year. We are not "masters of the universe" managers. We have a
process based on observation by us and numerous academics of the financial
characteristics of stock portfolios that over time have beaten the stock market:
stocks selected from the bottom tiers of all stocks ranked on the basis of
price-to-book value, earnings or cash flow.

Today's technology permits us to screen more than 20,000 companies in twenty
countries to come up with a short list of candidates for further, in-depth
research. In the early 1970s, when the three of us began our careers, screening
was a manual process which required turning the pages of Standard & Poor's
Directory of Corporations, and it was not possible to rank stocks. Today, we pop
a CD-ROM disk into our computer containing all the financial information
companies file with the Securities and Exchange Commission or their respective
national exchanges, run a feed of the previous night's closing prices over the
fundamental financial information and get a list of stocks ranked as we choose
with as much information as we want. The next step is to review the basic
financial information such as balance sheets, income statements, cash flow
statements, historical performance, etc., to determine which stocks should
continue in our financial beauty contest. In this process, we are further aided
by technology. Bloomberg Financial Services provides every bit of financial
information and every ratio one could ever need for all U.S. companies and for
many non-U.S. companies on one, simple-to-use terminal. In our investment
church, Michael Bloomberg would be canonized. We also have all Wall Street
research reports and insider trading information on-line.

The entire process is geared towards finding a reason to reject an
investment opportunity rather than becoming advocates for a particular company.
We try to keep our personal prejudices out of the process such as trying to
justify buying McDonald's just because we like Big Macs or think their
restaurants are cleaner than Burger King's. If a candidate is still in the
running, we or one of our analysts enter all relevant financial data including
46 financial data items onto a form we call a "rolodex". This rolodex form,
along with any reports, management interview notes, or notes of conversations
with competitors or experts, is then distributed to the partners for
consideration. We do not have a formal "investment committee" which must convene
to approve or reject an idea. When an idea is ready, we discuss its individual
merits and make a decision or ask for further information. In the near future,
we will be able to import the financial data from the database directly to the
rolodex form and e-mail the forms to each other no matter where we might be. We
want to do everything we can to speed the process of research and, thus, improve
our hit rate for investment ideas. Speed is also important because, on average,
stocks that are in the lower tier of value do not stay there. We want to
research and buy them while they are there, before they go up.

Our investment process is not merely putting round pegs into round holes and
square pegs into square holes by only buying stocks in the bottom 10% of stocks
ranked on price-to-book value or their price/earnings ratios. Sometimes we even
buy better businesses, the kinds of companies others call growth stocks to
justify owning them at higher price/earnings ratios. These candidates often
appear on our screens as having high returns on capital and above-average
earnings growth rates, yet are selling at relatively low price/ earnings ratios
or low price-to-book value ratios. We also use insider trading reports for
stocks in the U.S., Canada and the United Kingdom for indications of potential
value. Officers, directors and principal shareholders in public companies are
required to file reports of purchases and sales of shares in their companies. We
can now track patterns of buying by company officials over time rather than
merely seeing what buys or sells were reported the previous day. We can call up
a company on our system and get a printout of all insider transactions for
whatever time period we choose. Insider purchases are usually made because the
person sitting in the board room or at the management meetings thinks the
business is improving and the stock will go up. We call it a sort of company
specific leading economic indicator. Combining insider purchases with low
price/earnings or low price/book value criteria may provide even better
performance. We think it may be like finding a spouse who is good looking,
intelligent, personable, kind and rich all rolled into one.

All investment decisions are made by the three partners. We do not employ
portfolio managers. If our performance is lagging, you will not hear from us
that we have fired our mini-cap fund portfolio manager and hired a new star from
a competitor. We cannot fire ourselves; only our clients can do that by
redeeming their shares in our Funds. After working together for 20 to 25 years,
we do not often disagree on investment decisions. None of us ever seems to
propose an investment to which the other two respond, "What was he thinking?" We
work with four research analysts who do the same basic research that we do.
Although the partners make the final decision to buy or sell, our analysts
freely offer their opinions and never seem to come up with recommendations that
are out in left field. Left field is an appropriate location for baseball, not
investments. And after 20 to 25 years together, we like to think we are at the
midpoint in our careers. Our ages range from 48 to 52. Our good friend and role
model, Walter Schloss, has been camping out at Tweedy, Browne since 1955
managing a private investment partnership first alone, and then, with his son
Edwin for the past 23 years. Walter is now 80 and he shows no signs of slowing
down either physically or from a performance standpoint. We hope we can be as
lucky in life and as successful in investing as Walter.

Regarding our personal commitment to our investment approach, we have more
than $100 million of our own money, none of which was inherited or given to us,
invested alongside our clients. In our last report, several shareholders noted
that this statement does not square with our reported investment in the Funds.
Our investment in the two Funds is approximately $33 million, including our pro
rata share of our employees' profit sharing plan, which is also invested in the
Funds. The balance of the partners' capital is in other pooled accounts with
clients which were established before the Funds, and in individual portfolios.
To move these investments into the Funds would result in the realization of
significant capital gains. With the exception of our personal residences, more
than 95% of our investable assets are invested in the same stocks our clients
and shareholders own. A reporter recently asked us what the significance of
co-investing with our clients was. We responded that it was a bit like going to
a doctor who prescribed a course of action for you that was different from what
he or she would prescribe for themselves or their family. We want the same
medicine the doctor would take. We do not have any other prescription for your
money than we have for our own, and that will not change.

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

General Partners
TWEEDY, BROWNE COMPANY L.P.
Investment Adviser to the Fund
April 17, 1997

<PAGE>

TWEEDY, BROWNE GLOBAL VALUE FUND

- --------------------------------------------------------------------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
March 31, 1997

HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
TWEEDY, BROWNE GLOBAL VALUE FUND VS. MORGAN STANLEY
CAPITAL INTERNATIONAL ("MSCI") EUROPE, AUSTRALASIA AND
FAR EAST ("EAFE") INDEX (IN U.S. DOLLARS & HEDGED)
6/15/93 THROUGH 3/31/97

Tweedy, Browne MSCI EAFE Index MSCI EAFE Index
Global Value Fund (In U.S. Dollars) (Hedged)
----------------- ----------------- ---------------
JUN 1993 9.98 9.84 9.96
SEP 1993 10.31 10.49 10.56
DEC 1993 11.54 10.59 11.03
MAR 1994 12.26 10.96 10.84
JUN 1994 12.20 11.52 10.95
SEP 1994 12.30 11.53 10.86
DEC 1994 12.04 11.41 10.85
MAR 1995 11.67 11.62 10.03
JUN 1995 12.30 11.71 10.22
SEP 1995 12.87 12.20 11.38
DEC 1995 13.33 12.69 12.17
MAR 1996 14.70 13.06 12.87
JUN 1996 15.34 13.26 13.36
SEP 1996 15.17 13.25 13.45
DEC 1996 16.02 13.46 13.82
MAR 1997 17.15 13.25 14.36

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

MSCI EAFE Index represents the change in market capitalizations of Europe,
Australasia and the Far East (EAFE), including dividends reinvested monthly,
net after foreign withholding taxes.

Index information is available at month end only; therefore, the closest month
end to inception date of the Fund, May 31, 1993, has been used.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN* AGGREGATE TOTAL RETURN*
- ----------------------------------------------------- -------------------------------------------------------
WITHOUT INCEPTION (6/15/93) U.S.
THE FUND ACTUAL WAIVERS** THROUGH 3/31/97 ACTUAL DOLLARS HEDGED
- -------- ------ --------- ------------------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Inception (6/15/93) The Fund 71.49% N/A N/A
through 3/31/97 15.29% 15.25% MSCI EAFE N/A 32.47% 44.84%
Year Ended 3/31/97 16.66% 16.65%
- --------------------------------------------------------------------------------------------------------

<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Portfolio of Investments
- -------------------------------------------------------------------------------

March 31, 1997

[Graphic Omitted]

MARKET
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCKS--86.8%
AUSTRALIA--0.0%++
96,353 Carillon Development Ltd. ......................... $ 147,295
--------------

BELGIUM--0.8%
788 Belvuco NV ........................................ 164,930
592 Fabrique de Fer de Charleroi ...................... 1,858,605
1,824 Glaces de Charleroi ............................... 4,719,070
636 Henex SA .......................................... 1,255,360
2,333 Spadel SA ......................................... 2,678,881
3,252 Uco Textiles SA ................................... 307,238
--------------

10,984,084
--------------
CANADA--2.1%
196,891 BRL Enterprises Inc.+ ............................. 647,176
166,500 Corby Distilleries Ltd., Class A .................. 5,743,453
104,600 Corby Distilleries Ltd., Class B .................. 3,324,833
1,635,200 Kaufel Group NV, Class B .......................... 3,337,143
260,700 Melcor Developments Ltd. .......................... 2,824,995
1,226,000 National Bank of Canada, Toronto .................. 13,063,753
243,300 Shirmax Fashions .................................. 386,679
785,883 Westfield Minerals Ltd.+ .......................... 936,758
--------------

30,264,790
--------------
DENMARK--0.6%
11,390 Nordvestbank ...................................... 1,102,102
186,571 Spar Nord Holding A/S ............................. 7,866,868
--------------

8,968,970
--------------
FINLAND--3.1%
6,000 Atria OY .......................................... 82,873
75,714 Huhtamaki Group, Class I .......................... 3,689,004
794,900 Kesko Ord ......................................... 11,615,762
241,035 Kone Corporation, Class B ......................... 29,287,422
--------------

44,675,061
--------------
FRANCE--6.3%
24,332 Bongrain SA ....................................... 9,681,661
24,763 Centenaire-Blanzy SA .............................. 2,022,676
5,229 Christian Dior, SA ................................ 800,951
72,419 Compagnie Financiere de Paribas ................... 5,052,368
229,987 Compagnie Financiere de Suez ...................... 11,916,149
57,700 Compagnie Lebon SA ................................ 2,291,762
176,692 Dollfus Mieg & Cie ................................ 4,626,186
6,636 Eurafrance SA ..................................... 3,129,776
1,150 Fiat France SA .................................... 26,627
14,896 Fin Marc de Lacharriere SA ........................ 1,483,100
60,931 Fonciere Financiere Et de Participation+ .......... 2,821,633
34,750 Groupe Danone ..................................... 5,520,883

<PAGE>
FRANCE--(CONTINUED)
2,022 Idianova SA+ ...................................... $ 24,814
52,218 Klepierre ......................................... 7,719,466
33,971 La Concorde+ ...................................... 5,693,599
5,229 LVMH Moet Hennessey ............................... 1,272,208
9,697 Marine-Wendel ..................................... 1,105,366
21,145 Mecelec SA ........................................ 263,630
3,347 Monneret Jouets+ .................................. 68,556
2,259 Nordon Et Cie ..................................... 183,070
36,372 NSC Groupe ........................................ 4,683,757
38,018 Paluel Marmont SA ................................. 2,024,648
9,073 Paris Orleans ..................................... 467,022
87,700 Peugeot SA ........................................ 10,012,593
2,232 Precia ............................................ 65,594
11,136 Rallye+ ........................................... 475,826
49,464 Salins du Midi, Series A .......................... 5,409,368
13,082 Sediver ........................................... 264,692
5,925 Signaux Girod ..................................... 125,582
61,500 Siparex ........................................... 1,347,315
--------------
90,580,878
--------------
GERMANY--1.6%
15,018 Axel Springer Verlag, Class A ..................... 11,169,483
61,660 Kaufring AG ....................................... 4,031,153
4,136 Linder Holding .................................... 855,852
33,968 Sinn AG ........................................... 6,010,232
3,755 Tiag Tabbert-Industrie AG ......................... 202,699
--------------
22,269,419
--------------
HONG KONG--1.1%
2,912,500 Jardine Strategic Holdings Ltd.+ .................. 10,077,250
2,067,953 Semi-Tech (Global) Ltd. ........................... 2,188,395
8,891,000 Sing Tao Holdings ................................. 3,929,908
--------------
16,195,553
--------------
IRELAND--0.5%
1,873,618 Crean (James) PLC ................................. 7,064,566
--------------
ITALY--6.3%
2,650,800 Arnoldo Mondadori Editore SPA ..................... 16,694,197
2,750,400 Banca Toscana+ .................................... 5,328,410
638,850 Banco di Sardegna Risp+ ........................... 5,824,273
494,500 Bassetti SPA ...................................... 1,732,122
2,061,730 Cartiere Burgo Ord ................................ 10,746,099
424,500 Cementerie di Augusta+ ............................ 636,527
323,000 Cementerie di Barletta Ord ........................ 973,504
218,450 Cristalleria Artistica ............................ 737,666
476,600 Ericsson Italia ................................... 6,760,588
642,920 Franco Tosi SPA ................................... 4,592,699
529,750 IMI SPA ........................................... 4,605,624
620,862 Industrie Zignago ................................. 4,245,210
1,234,000 Maffei SPA ........................................ 1,739,332
5,237,200 Magneti Marelli SPA ............................... 7,146,277
237,000 Marangoni SPA ..................................... 682,322
3,210,300 Merloni ........................................... 7,875,320
4,174,735 Montefibre SPA .................................... 2,391,286
2,371,500 Tecnost SPA ....................................... 5,348,232
1,825,000 Vianini Industria SPA ............................. 864,747
493,000 Zucchi ............................................ 2,143,799
--------------
91,068,234
--------------
JAPAN--18.7%
25,000 Agro-Kanesho Company Ltd. ......................... 321,420
735,000 Aichi Electric Manufacturing ...................... 3,239,064
627,000 Amada Sonoike Company Ltd. ........................ 2,458,923
730,740 Chofu Seisakusho Company .......................... 12,231,194
819,000 Daiichi Cement Company Ltd. ....................... 2,417,199
442,000 Danto Corporation ................................. 4,253,093
243,000 Denkyosha ......................................... 1,542,452
1,765,000 Dowa Fire & Marine Insurance Company .............. 7,250,101
632,000 Fuji Coca-Cola Bottling Company ................... 6,285,760
618,000 Fuji Photo Film Ltd. .............................. 20,338,481
296,000 Fujicco Company Ltd. .............................. 3,350,853
344,000 Fukuda Denshi ..................................... 6,675,831
947,000 Gakken Company Ltd. ............................... 4,357,104
867,000 Hitachi Koki ...................................... 5,194,849
195,000 Hitachi Medical Corporation ....................... 2,412,469
323,000 Kawagishi Bridge Works ............................ 1,802,135
3,000 Kinki Coca-Cola Bottling Company .................. 32,748
93,000 Kita Kyushu Coca-Cola Bottling .................... 1,699,523
680,000 Koa Fire & Marine Insurance Company ............... 3,161,640
144,000 Koito Manufacturing ............................... 923,361
315,000 Kokura Enterprises Company ........................ 3,158,405
264,000 Koyosha Inc.+ ..................................... 1,364,082
1,941,000 Matsushita Electric Industrial Company ............ 30,291,340
81,000 Meito Sangyo Company .............................. 792,512
1,397,000 Mitsubishi Electric Corporation ................... 7,850,853
98,000 Morito ............................................ 675,944
870,000 Nichimo Co. Ltd.+ ................................. 2,047,142
575,000 Nippon Cable System ............................... 5,114,417
152,000 Nippon Konpo Unyu Soko ............................ 860,354
1,016,400 Nissan Fire & Marine Insurance Company ............ 3,961,388
674,000 Nisshinbo Industries .............................. 4,452,640
409,000 Nittetsu Mining ................................... 2,414,248
477,000 Nitto FC Co. ...................................... 3,355,624
446,000 Oak ............................................... 1,911,377
401,000 Osaka Securities Finance .......................... 1,332,668
522,000 Riken Vitamin ..................................... 5,149,511
431,000 Sangetsu Company Ltd. ............................. 7,458,074
388,000 Sankyo Company Ltd. ............................... 10,698,472
311,960 Sanyo Shinpan Finance Company, Ltd. ............... 15,740,522
545,800 Shikoku Coca-Cola Bottling ........................ 5,958,034
771,000 Shin Nikkei Company Ltd. .......................... 2,337,875
452,000 SK Kaken Co., Ltd. ................................ 7,127,032
377,000 Sonton Food Industry .............................. 3,901,997
304,000 Sotoh Company Ltd. ................................ 2,286,084
1,330,000 Suzuki Motor Corporation .......................... 12,905,313
183,000 Taisei Fire & Marine Insurance Company ............ 606,695
646,000 Takeda Chemical Industries ........................ 13,529,069
377,000 Takigami Steel Construction ....................... 1,981,483
166,000 Teikoku Hormone Manufacturing Company ............. 1,785,235
188,000 Tomita Electric Company Limited ................... 1,641,789
308,000 Torii Company Ltd. ................................ 2,540,309
779,000 Torishima Pump Manufacturing ...................... 6,425,002
11,000 Totech Corporation ................................ 56,481
608,000 Toyo Technical Company Ltd. ....................... 4,867,147
338,000 U-Shin ............................................ 1,721,840
204,000 Zojirushi ......................................... 1,896,984
--------------
270,146,142
--------------
NETHERLANDS--4.9%
99,300 Akzo NV Ord ....................................... 14,264,000
4,050 European Vinyls Corporation ....................... 134,752
85,499 Heineken Holdings NV, Class A ..................... 12,901,553
207,100 Unilever NV CVA ................................... 40,460,391
28,750 Wegener NV ........................................ 2,881,975
--------------
70,642,671
--------------
NEW ZEALAND--1.1%
3,388,000 Independent Newspaper ............................. 15,581,124
164,600 Radio Pacific Limited ............................. 400,217
--------------
15,981,341
--------------
NORWAY--1.4%
20,000 Nycomed, ASA, Class B, ADR ........................ 300,000
435,000 Nycomed, Class A .................................. 6,896,382
580,800 Nycomed, Class B .................................. 8,679,178
232,300 Schibsted ......................................... 4,722,476
--------------
20,598,036
--------------
SINGAPORE--0.7%
2,505,500 Robinson and Company Ord .......................... 10,407,061
--------------
SPAIN--2.2%
269,497 Argentaria ........................................ 11,750,851
10,227 Banco Pastor SA ................................... 586,365
1,396,015 Corporacion Financiera Reunida .................... 4,693,733
151,997 Fabrica Auto Renault de Espana .................... 2,818,844
381,818 Fosforera ......................................... 905,390
199,014 Grupo Anaya SA .................................... 4,120,446
31,598 Indo Internacional SA ............................. 1,118,315
51,846 Omsa .............................................. 302,764
80,898 Prim SA+ .......................................... 286,314
45,068 Roberto Zubiri+ ................................... 206,399
250,996 Unipapel SA ....................................... 4,752,534
--------------
31,541,955
--------------
SWEDEN--1.1%
602,800 Atle AB ........................................... 8,678,560
124,085 BRIO AB, Class B .................................. 1,333,672
80,600 Invik & Company AB, Class A ....................... 3,743,241
19,179 Kinnevik Investment AB, Class B ................... 536,974
55,200 Nolato AB, Class B ................................ 908,250
7,200 VLT AB, Class B ................................... 116,557
--------------
15,317,254
--------------
SWITZERLAND--12.7%
20,010 Attisholz Holding AG+ ............................. 7,787,074
33 Bank of International Settlements America ......... 245,379
2,415 Daetwyler Holding, Bearer ......................... 4,271,143
6,235 Danzas Holding AG PC .............................. 1,230,535
8,061 Danzas Holding AG, Registered ..................... 7,904,149
80,068 Edipresse SA, Bearer .............................. 18,417,309
8,225 Edipresse SA, Registered .......................... 348,662
3,525 Forbo Holding AG .................................. 1,452,623
2,200 Golay Buchel Holding, Bearer ...................... 1,605,281
4,984 Grand Magasin Jelmoli ............................. 533,382
9,100 Helvetia Patria Holding ........................... 3,984,017
300 Industrie Holding, Cham Registered ................ 185,545
6,248 Jelmoli, Bearer ................................... 3,590,755
21,015 Liechtenstein Global Trust ........................ 11,829,152
29,327 Loeb Holding PC ................................... 4,402,107
26,045 Magazine Zum Globus PC ............................ 11,402,606
9,890 Magazine Zum Globus, Registered ................... 4,982,801
1,815 Metallwaren Holding ............................... 1,064,531
27,789 Nestle SA, Registered ............................. 32,539,587
6,698 Novartis, AG, Bearer .............................. 8,345,736
10,329 Novartis, AG, Registered .......................... 12,819,732
1,180 Sarna Kunsstoff Holding AG, Registered ............ 1,193,120
8,423 Sig Schweiz Industrie, Registered ................. 10,418,999
13,535 Swissair AG, Registered+ .......................... 12,077,095
20,130 Swisslog Holding AG ............................... 7,134,329
200 UMS Schweizzerische Metalwerke .................... 14,663
3,050 Vetropack Holding AG PC ........................... 741,835
16,455 Zehnder Holding, Bearer ........................... 6,918,190
11,224 Zschokke Holding AG, Registered+ .................. 2,347,758
5,500 Zuercher Ziegeleien ............................... 2,866,574
--------------
182,654,669
--------------
THAILAND--0.0%++
28,700 S & J Enterprises ................................. 45,060
--------------
UNITED KINGDOM--6.5%
19,562,822 Bardon Group ...................................... 13,034,822
201,000 British Mohair Holdings PLC ....................... 391,862
200,000 British Steel Ord ................................. 535,512
3,720,000 BTR Ord ........................................... 16,310,179
1,420,000 Courtaulos Textiles Ord ........................... 6,599,718
1,408,668 Dyson (J&J) PLC, Class A, Non-voting .............. 2,966,451
803,000 Folkes Group PLC .................................. 819,079
145,000 Gibbs Mew PLC ..................................... 564,180
427,800 Glaxo Wellcome PLC Units, ADR ..................... 15,133,425
887,000 Guinness PLC ...................................... 7,508,057
515,000 Intercare Group PLC ............................... 686,295
350,000 Johnston Group PLC ................................ 3,014,417
3,535,120 McAlpine (Alfred) PLC ............................. 9,421,884
584,000 Partridge Fine Art Ord ............................ 696,578
1,386,739 Proudfoot Alexander ............................... 262,368
1,221,500 Sherwood Group PLC ................................ 833,989
184,600 SmithKline Beecham, PLC Units, ADR ................ 12,922,000
779,500 Swan Hill Group PLC ............................... 1,160,602
600,000 Union PLC ......................................... 858,794
--------------
93,720,212
--------------
UNITED STATES--15.1%
221,000 American Express Company .......................... 13,232,375
75,700 American National Insurance Company ............... 5,923,525
298,000 BanPonce Corporation, New ......................... 10,579,000
257,400 Chase Manhattan Corporation ....................... 24,099,075
68,000 Coca-Cola Bottling Company ........................ 2,958,000
232,200 Comerica, Inc. .................................... 13,090,275
313,000 Darden Restaurants Inc. ........................... 2,464,875
140,000 Federal Home Loan Mortgage Corporation ............ 3,815,000
240,000 Fingerhut Companies, Inc. ......................... 3,360,000
205,616 First Chicago Corporation ......................... 11,128,966
35,000 GATX Corporation .................................. 1,710,625
31,590 Great Atlantic & Pacific Tea Company .............. 801,596
129,462 Hasbro Inc. ....................................... 3,544,021
65,700 Household International Inc. ...................... 5,641,988
125,000 Kmart Stores ...................................... 1,515,625
505,400 Lehman Brothers Holdings Inc. ..................... 14,719,775
100,000 McDonald's Corporation ............................ 4,725,000
48,750 Mercantile Bancorporation, Inc. ................... 2,583,750
584,700 Pharmacia & Upjohn Inc. ........................... 21,414,637
73,200 Philip Morris Companies Inc. ...................... 8,353,950
460,000 PNC Bank Corporation .............................. 18,400,000
169,000 Ryland Group Inc. ................................. 1,985,750
118,400 Standard Motor Products, Inc. ..................... 1,554,000
185,000 Sun Healthcare Group Inc.+ ........................ 2,659,375
160,000 Syms Corporation .................................. 1,460,000
196,400 Transatlantic Holdings Inc. ....................... 16,497,600
20,000 Tremont Corporation ............................... 697,500
546,000 UST Inc. .......................................... 15,219,750
12,500 Wells Fargo & Company ............................. 3,551,563
--------------
217,687,596
--------------
TOTAL COMMON STOCKS
(COST $1,087,043,013) ............................. 1,250,960,847
--------------
PREFERRED STOCK--1.0% (COST $13,969,243)
108,212 Villeroy & Boch AG ................................ 14,668,413
--------------
COMMON STOCK WARRANTS--0.0%++
105,920 Franco Tosi, Strike 20,000, Expires 11/30/97+ ..... 12,706
9,073 Paris Orleans, Strike 330, Expires 4/30/98+ ....... 18,745
--------------
TOTAL COMMON STOCK WARRANTS
(COST $37,986) .................................... 31,451
--------------

FACE
VALUE
CONVERTIBLE CORPORATE BONDS--0.0%++
ESP 29,870,000 Grupo Anaya SA, 7.000% due 3/18/98 ............ 215,660
JPY 9,000,000 Shikoku Coca-Cola Bottling, 2.400% due 3/29/02 78,160
--------------
TOTAL CONVERTIBLE CORPORATE BONDS
(COST $322,356) ............................... 293,820
--------------
COMMERCIAL PAPER--1.5% (COST $21,427,000)
$ 21,427,000 Ford Motor Company, 6.500% due 4/1/97 ......... 21,427,000
--------------

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>

March 31, 1997

MARKET
FACE VALUE
VALUE (NOTE 1)
----- --------

U.S. TREASURY BILLS--0.4%
$ 600,000 5.760%** due 5/29/97 .............................. $ 594,732
2,000,000 5.840%** due 7/24/97 .............................. 1,965,040
1,000,000 5.600%** due 8/21/97 .............................. 979,094
1,500,000 5.840%** due 9/18/97 .............................. 1,460,900
---------------
TOTAL U.S. TREASURY BILLS
(COST $4,999,766) ................................. 4,999,766
---------------
REPURCHASE AGREEMENT--6.9%
(COST $100,000,000)
100,000,000 Agreement with UBS Securities, Inc., 6.350%
dated 3/31/97, to be repurchased at
$100,017,639 on 4/1/97, collateralized by
$50,000,000 U.S. Treasury Notes, 6.375% due
9/30/01 and $44,657,000 U.S. Treasury
Bonds, 8.75% due 8/15/20 (market value
$49,281,250 and $52,220,779, respectively) ........ 100,000,000
---------------
TOTAL INVESTMENTS (COST $1,227,799,364*) .......... 96.6% 1,392,381,297
OTHER ASSETS AND LIABILITIES (NET) ................ 3.4 48,829,195
----- ---------------
NET ASSETS ........................................ 100.0% $1,441,210,492
===== ==============
- ------------
* Aggregate cost for Federal tax purposes is $1,237,720,743.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Amount represents less than 0.1% of net assets.

Abbreviations:
ADR--American Depositary Receipt
ESP--Spanish Peseta
JPY--Japanese Yen
Ord--Ordinary Share

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>

March 31, 1997

MARKET
PERCENTAGE OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (NOTE 1)
---------------------- ------------- --------

COMMON STOCKS:
Banking ................................. 10.1% $ 145,555,198
Food and Beverages ...................... 9.0 129,336,536
Pharmaceuticals ......................... 7.8 112,523,866
Financial Services ...................... 5.9 85,485,449
Printing and Publishing ................. 5.7 82,339,240
Retail .................................. 4.7 67,421,735
Consumer Durables ....................... 4.1 59,569,671
Machinery ............................... 3.9 56,578,594
Holdings ................................ 3.4 48,429,706
Manufacturing ........................... 3.4 48,329,655
Engineering and Construction ............ 2.8 40,717,750
Autos ................................... 2.8 40,677,503
Consumer Non-Durables ................... 2.8 40,460,391
Electronics ............................. 2.5 36,355,181
Chemicals ............................... 2.3 33,003,482
Textiles ................................ 2.1 29,935,480
Insurance ............................... 1.8 26,596,947
Forest Products ......................... 1.6 23,677,652
Transportation .......................... 1.5 22,072,133
Real Estate ............................. 1.1 16,057,273
Tobacco ................................. 1.1 15,219,750
Mining and Metal Fabrication ............ 0.9 13,059,172
Wholesale ............................... 0.7 8,134,018
Telecommunications ...................... 0.5 6,760,588
Construction Materials .................. 0.4 5,512,317
Leisure ................................. 0.3 4,946,249
Building Materials ...................... 0.3 4,891,977
Commercial Services ..................... 0.3 4,867,147
Other ................................... 3.0 42,446,187
----- --------------
TOTAL COMMON STOCKS ..................... 86.8 1,250,960,847
----- --------------
PREFERRED STOCK ......................... 1.0 14,668,413
COMMON STOCK WARRANTS ................... 0.0++ 31,451
CONVERTIBLE CORPORATE BONDS ............. 0.0++ 293,820
COMMERCIAL PAPER ........................ 1.5 21,427,000
U.S. TREASURY BILLS ..................... 0.4 4,999,766
REPURCHASE AGREEMENT .................... 6.9 100,000,000
OTHER ASSETS AND LIABILITIES (NET) ...... 3.4 48,829,195
----- --------------
NET ASSETS .............................. 100.0% $1,441,210,492
===== ==============
- ------------
++ Amount represents less than 0.1% of net assets.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Schedule of Forward Exchange Contracts
- -------------------------------------------------------------------------------

March 31, 1997

<TABLE>
<CAPTION>
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- ------- --------
FORWARD EXCHANGE CONTRACTS TO BUY
<C> <S> <C> <C>
5,075,500 Austrian Schilling ....................... 8/14/97 $ 434,205
10,356,200 Austrian Schilling ....................... 10/31/97 891,258
2,688,311 French Franc ............................. 4/30/97 479,790
20,382 Great Britain Pound Sterling ............. 4/2/97 33,532
183,708 Great Britain Pound Sterling ............. 4/4/97 302,234
350,439 Great Britain Pound Sterling ............. 4/7/97 576,525
8,000,000 Hong Kong Dollar ......................... 6/16/97 1,032,209
4,154,667,300 Italian Lira ............................. 4/3/97 2,491,880
228,684,000 Italian Lira ............................. 4/4/97 137,157
4,450,504 Irish Pound .............................. 4/7/97 7,065,648
44,348,969 Japanese Yen ............................. 4/1/97 358,607
630,031 Japanese Yen ............................. 4/2/97 5,095
80,570,989 Japanese Yen ............................. 4/3/97 651,540
23,824,850 Swedish Krona ............................ 4/30/97 3,165,546
16,363,700 Swedish Krona ............................ 5/15/97 2,169,998
1,152,305 Swiss Franc .............................. 4/2/97 800,779
4,500,851 Swiss Franc .............................. 4/3/97 3,127,902
-------------
TOTAL FORWARD EXCHANGE CONTRACTS TO BUY
(CONTRACT AMOUNT $23,512,542) ..................................... $ 23,723,905
=============
FORWARD EXCHANGE CONTRACTS TO SELL
5,075,500 Austrian Schilling ....................... 8/14/97 $ (434,205)
10,356,200 Austrian Schilling ....................... 10/31/97 (891,258)
30,845,000 Belgian Franc ............................ 4/30/97 (898,420)
40,261,000 Belgian Franc ............................ 5/30/97 (1,175,161)
30,670,000 Belgian Franc ............................ 6/16/97 (896,092)
30,268,000 Belgian Franc ............................ 10/31/97 (893,383)
30,820,000 Belgian Franc ............................ 11/14/97 (910,656)
48,045,000 Belgian Franc ............................ 1/20/98 (1,427,150)
32,990,000 Belgian Franc ............................ 2/5/98 (981,223)
50,850,000 Belgian Franc ............................ 2/17/98 (1,513,922)
34,130,000 Belgian Franc ............................ 3/6/98 (1,017,558)
34,122,000 Belgian Franc ............................ 4/6/98 (1,019,875)
9,553,600 Canadian Dollar .......................... 4/30/97 (6,915,832)
4,077,600 Canadian Dollar .......................... 5/15/97 (2,954,780)
1,707,125 Canadian Dollar .......................... 5/30/97 (1,238,303)
2,032,650 Canadian Dollar .......................... 6/16/97 (1,476,002)
6,805,000 Canadian Dollar .......................... 7/15/97 (4,950,049)
1,351,300 Canadian Dollar .......................... 8/15/97 (984,694)
1,350,000 Canadian Dollar .......................... 9/15/97 (985,376)
3,986,400 Canadian Dollar .......................... 9/30/97 (2,911,983)
3,172,800 Canadian Dollar .......................... 10/15/97 (2,319,647)
3,272,750 Canadian Dollar .......................... 10/31/97 (2,394,884)
3,950,700 Canadian Dollar .......................... 11/14/97 (2,893,245)
2,007,450 Canadian Dollar .......................... 3/6/98 (1,477,966)
39,903,500 Danish Krona ............................. 10/31/97 (6,358,318)
5,777,500 Danish Krona ............................. 11/14/97 (921,399)
11,906,000 Danish Krona ............................. 1/20/98 (1,906,512)
9,459,750 Danish Krona ............................. 2/17/98 (1,517,217)
15,615,060 Finnish Markka ........................... 4/15/97 (3,129,551)
6,996,000 Finnish Markka ........................... 4/29/97 (1,403,579)
17,779,440 Finnish Markka ........................... 5/30/97 (3,575,518)
6,808,500 Finnish Markka ........................... 6/16/97 (1,370,961)
8,749,800 Finnish Markka ........................... 7/15/97 (1,765,697)
8,795,600 Finnish Markka ........................... 7/31/97 (1,777,090)
21,997,500 Finnish Markka ........................... 8/15/97 (4,449,481)
8,923,000 Finnish Markka ........................... 8/29/97 (1,806,781)
8,951,400 Finnish Markka ........................... 9/30/97 (1,816,916)
4,433,500 Finnish Markka ........................... 10/15/97 (900,944)
18,018,000 Finnish Markka ........................... 11/14/97 (3,670,110)
24,854,500 Finnish Markka ........................... 11/28/97 (5,068,236)
9,274,000 Finnish Markka ........................... 1/20/98 (1,898,814)
44,262,900 Finnish Markka ........................... 3/13/98 (9,097,007)
4,940,300 Finnish Markka ........................... 3/27/98 (1,016,371)
4,914,500 Finnish Markka ........................... 4/14/98 (1,012,464)
5,089,800 French Franc ............................. 4/15/97 (907,464)
17,695,146 French Franc ............................. 4/30/97 (3,158,099)
5,111,700 French Franc ............................. 5/15/97 (913,261)
5,137,000 French Franc ............................. 5/30/97 (918,773)
20,302,000 French Franc ............................. 6/16/97 (3,635,342)
44,524,500 French Franc ............................. 7/15/97 (7,989,017)
9,991,000 French Franc ............................. 7/31/97 (1,794,778)
22,421,250 French Franc ............................. 8/14/97 (4,031,910)
20,203,200 French Franc ............................. 8/29/97 (3,637,122)
151,680,000 French Franc ............................. 9/15/97 (27,341,622)
17,775,800 French Franc ............................. 9/30/97 (3,207,925)
15,039,900 French Franc ............................. 10/15/97 (2,717,362)
22,494,600 French Franc ............................. 10/31/97 (4,069,386)
10,173,000 French Franc ............................. 11/14/97 (1,842,404)
86,596,950 French Franc ............................. 1/20/98 (15,768,754)
13,936,250 French Franc ............................. 3/6/98 (2,547,034)
18,419,610 French Franc ............................. 4/6/98 (3,374,880)
5,544,500 French Franc ............................. 4/14/98 (1,016,504)
8,180,300 German Mark .............................. 4/15/97 (4,911,627)
1,342,800 German Mark .............................. 4/30/97 (807,071)
3,016,000 German Mark .............................. 5/15/97 (1,814,656)
2,112,040 German Mark .............................. 5/30/97 (1,272,145)
1,192,960 German Mark .............................. 6/16/97 (719,435)
5,778,000 German Mark .............................. 7/31/97 (3,496,195)
5,766,400 German Mark .............................. 8/15/97 (3,493,183)
1,468,500 German Mark .............................. 8/29/97 (890,556)
2,990,200 German Mark .............................. 9/30/97 (1,817,964)
2,215,650 German Mark .............................. 10/15/97 (1,348,679)
2,207,400 German Mark .............................. 10/31/97 (1,345,403)
2,243,700 German Mark .............................. 11/14/97 (1,369,101)
1,552,250 German Mark .............................. 1/20/98 (952,475)
4,003,750 German Mark .............................. 2/5/98 (2,459,998)
5,749,240 German Mark .............................. 2/17/98 (3,536,005)
8,266,000 German Mark .............................. 3/27/98 (5,100,199)
2,463,000 German Mark .............................. 4/14/98 (1,521,872)
5,470 Great Britain Pound Sterling ............. 4/3/97 (8,999)
1,647,757 Great Britain Pound Sterling ............. 4/15/97 (2,710,460)
1,993,620 Great Britain Pound Sterling ............. 4/30/97 (3,278,820)
1,330,495 Great Britain Pound Sterling ............. 5/15/97 (2,187,724)
648,004 Great Britain Pound Sterling ............. 6/16/97 (1,064,950)
6,137,160 Great Britain Pound Sterling ............. 7/31/97 (10,078,729)
641,643 Great Britain Pound Sterling ............. 8/15/97 (1,053,478)
642,880 Great Britain Pound Sterling ............. 9/15/97 (1,054,960)
955,171 Great Britain Pound Sterling ............. 9/30/97 (1,567,022)
2,187,637 Great Britain Pound Sterling ............. 10/15/97 (3,588,060)
3,350,798 Great Britain Pound Sterling ............. 11/28/97 (5,491,662)
1,208,971 Great Britain Pound Sterling ............. 12/31/97 (1,980,276)
906,098 Great Britain Pound Sterling ............. 1/20/98 (1,483,770)
1,244,400 Great Britain Pound Sterling ............. 2/5/98 (2,037,315)
9,568,905 Great Britain Pound Sterling ............. 2/17/98 (15,663,594)
6,179,324 Great Britain Pound Sterling ............. 3/13/98 (10,111,954)
6,609,801 Great Britain Pound Sterling ............. 3/27/98 (10,814,466)
1,554,533 Great Britain Pound Sterling ............. 4/14/98 (2,542,704)
100,687,600 Hong Kong Dollar ......................... 6/16/97 (12,991,326)
11,613,450 Hong Kong Dollar ......................... 8/29/97 (1,497,938)
11,619,750 Hong Kong Dollar ......................... 9/30/97 (1,498,525)
7,746,300 Hong Kong Dollar ......................... 1/20/98 (998,329)
4,432,320,000 Italian Lira ............................. 4/15/97 (2,656,647)
7,180,150,000 Italian Lira ............................. 4/30/97 (4,300,522)
7,966,500,000 Italian Lira ............................. 5/30/97 (4,765,366)
468,105,000 Italian Lira ............................. 6/16/97 (279,798)
4,658,600,000 Italian Lira ............................. 7/15/97 (2,781,249)
5,411,875,000 Italian Lira ............................. 8/14/97 (3,227,513)
18,651,600,000 Italian Lira ............................. 8/29/97 (11,117,871)
21,678,300,000 Italian Lira ............................. 9/30/97 (12,909,673)
18,472,800,000 Italian Lira ............................. 10/15/97 (10,996,753)
4,608,750,000 Italian Lira ............................. 10/31/97 (2,742,597)
9,171,420,000 Italian Lira ............................. 11/14/97 (5,456,263)
16,382,835,000 Italian Lira ............................. 1/20/98 (9,736,359)
7,321,950,000 Italian Lira ............................. 2/5/98 (4,350,551)
2,548,875,000 Italian Lira ............................. 3/6/98 (1,514,035)
15,423,300,000 Italian Lira ............................. 3/27/98 (9,159,840)
1,709,300,000 Italian Lira ............................. 4/14/98 (1,014,650)
31,057,436 Japanese Yen ............................. 4/3/97 (251,147)
1,595,877,500 Japanese Yen ............................. 4/15/97 (12,931,863)
555,747,500 Japanese Yen ............................. 4/30/97 (4,513,080)
1,654,040,000 Japanese Yen ............................. 5/15/97 (13,462,166)
725,200,000 Japanese Yen ............................. 5/30/97 (5,916,016)
313,020,000 Japanese Yen ............................. 6/16/97 (2,560,029)
2,625,250,000 Japanese Yen ............................. 6/30/97 (21,515,710)
411,680,000 Japanese Yen ............................. 7/15/97 (3,381,714)
823,640,000 Japanese Yen ............................. 7/31/97 (6,782,372)
1,031,700,000 Japanese Yen ............................. 8/15/97 (8,515,426)
837,440,000 Japanese Yen ............................. 8/29/97 (6,927,164)
421,120,000 Japanese Yen ............................. 9/15/97 (3,492,765)
532,100,000 Japanese Yen ............................. 9/30/97 (4,423,770)
1,197,405,000 Japanese Yen ............................. 10/15/97 (9,979,135)
1,064,200,000 Japanese Yen ............................. 10/31/97 (8,892,189)
1,620,300,000 Japanese Yen ............................. 11/14/97 (13,570,072)
1,513,680,000 Japanese Yen ............................. 11/28/97 (12,706,644)
920,405,500 Japanese Yen ............................. 12/30/97 (7,767,584)
1,440,270,000 Japanese Yen ............................. 1/20/98 (12,193,512)
635,855,000 Japanese Yen ............................. 2/5/98 (5,396,205)
3,521,700,000 Japanese Yen ............................. 2/27/98 (29,985,660)
3,487,500,000 Japanese Yen ............................. 3/6/98 (29,725,501)
2,198,110,000 Japanese Yen ............................. 4/6/98 (18,824,200)
2,902,375,000 Japanese Yen ............................. 4/14/98 (24,887,102)
6,669,800 Netherlands Guilder ...................... 4/15/97 (3,560,080)
6,685,600 Netherlands Guilder ...................... 4/29/97 (3,572,074)
4,180,000 Netherlands Guilder ...................... 5/15/97 (2,235,978)
6,722,400 Netherlands Guilder ...................... 5/30/97 (3,600,064)
1,625,800 Netherlands Guilder ...................... 7/31/97 (874,656)
1,648,500 Netherlands Guilder ...................... 10/31/97 (893,368)
8,386,000 Netherlands Guilder ...................... 11/14/97 (4,549,847)
16,164,900 Netherlands Guilder ...................... 2/5/98 (8,829,750)
5,898,240 Netherlands Guilder ...................... 2/17/98 (3,224,848)
18,562,000 Netherlands Guilder ...................... 3/6/98 (10,162,372)
5,578,200 Netherlands Guilder ...................... 4/6/98 (3,061,468)
2,005,554 New Zealand Dollar ....................... 5/15/97 (1,390,167)
1,136,364 New Zealand Dollar ....................... 6/16/97 (786,481)
1,487,874 New Zealand Dollar ....................... 7/31/97 (1,027,668)
4,345,307 New Zealand Dollar ....................... 10/15/97 (2,990,772)
13,060,514 New Zealand Dollar ....................... 11/28/97 (8,971,026)
1,457,938 New Zealand Dollar ....................... 4/14/98 (995,946)
64,785,000 Norwegian Krone .......................... 6/16/97 (9,881,329)
12,790,000 Norwegian Krone .......................... 11/28/97 (1,972,753)
9,625,950 Norwegian Krone .......................... 2/5/98 (1,491,782)
1,652,520 Singapore Dollar ......................... 4/30/97 (1,145,318)
1,102,000 Singapore Dollar ......................... 5/30/97 (765,012)
1,381,300 Singapore Dollar ......................... 6/16/97 (960,613)
1,390,200 Singapore Dollar ......................... 7/31/97 (969,794)
4,848,900 Singapore Dollar ......................... 8/15/97 (3,384,345)
834,420 Singapore Dollar ......................... 9/30/97 (583,099)
2,385,100 Singapore Dollar ......................... 3/6/98 (1,681,744)
1,413,000 Singapore Dollar ......................... 4/14/98 (997,829)
16,807,547 Spanish Peseta ........................... 4/3/97 (118,970)
127,840,000 Spanish Peseta ........................... 4/15/97 (904,828)
130,050,000 Spanish Peseta ........................... 4/30/97 (920,395)
130,550,000 Spanish Peseta ........................... 5/15/97 (923,873)
524,800,000 Spanish Peseta ........................... 5/30/97 (3,713,689)
194,355,000 Spanish Peseta ........................... 6/16/97 (1,375,316)
127,490,000 Spanish Peseta ........................... 7/15/97 (902,207)
126,410,000 Spanish Peseta ........................... 8/15/97 (894,709)
259,040,000 Spanish Peseta ........................... 9/15/97 (1,833,930)
194,685,000 Spanish Peseta ........................... 9/30/97 (1,378,547)
192,810,000 Spanish Peseta ............................ 10/15/97 (1,365,543)
129,350,000 Spanish Peseta ........................... 11/14/97 (916,537)
130,645,000 Spanish Peseta ........................... 11/28/97 (925,952)
398,190,000 Spanish Peseta ........................... 1/20/98 (2,825,185)
426,864,000 Spanish Peseta ........................... 2/17/98 (3,030,427)
819,432,000 Spanish Peseta ........................... 3/27/98 (5,822,580)
571,600,000 Spanish Peseta ........................... 4/14/98 (4,062,357)
23,824,850 Swedish Krona ............................ 4/30/97 (3,165,546)
16,363,700 Swedish Krona ............................ 5/15/97 (2,170,000)
6,577,300 Swedish Krona ............................ 8/15/97 (878,171)
6,653,000 Swedish Krona ............................ 8/29/97 (888,888)
22,934,100 Swedish Krona ............................ 9/30/97 (3,069,069)
13,449,000 Swedish Krona ............................ 11/28/97 (1,805,033)
6,832,000 Swedish Krona ............................ 1/20/98 (919,361)
60,983,250 Swedish Krona ............................ 2/5/98 (8,212,707)
75,152,000 Swedish Krona ............................ 4/14/98 (10,154,347)
8,370,000 Swiss Franc .............................. 4/15/97 (5,825,596)
8,344,350 Swiss Franc .............................. 4/30/97 (5,817,129)
10,440,500 Swiss Franc .............................. 5/15/97 (7,290,365)
12,315,000 Swiss Franc .............................. 5/30/97 (8,613,695)
1,828,950 Swiss Franc .............................. 6/16/97 (1,281,660)
5,817,000 Swiss Franc .............................. 7/31/97 (4,097,234)
8,650,500 Swiss Franc .............................. 8/15/97 (6,103,700)
7,726,550 Swiss Franc .............................. 8/29/97 (5,460,784)
4,832,400 Swiss Franc .............................. 9/30/97 (3,428,496)
9,704,000 Swiss Franc .............................. 10/15/97 (6,897,606)
14,691,600 Swiss Franc .............................. 10/31/97 (10,463,782)
5,008,400 Swiss Franc .............................. 11/14/97 (3,573,482)
7,628,100 Swiss Franc .............................. 11/28/97 (5,452,448)
42,586,500 Swiss Franc .............................. 12/31/97 (30,570,383)
10,588,600 Swiss Franc .............................. 1/20/98 (7,619,233)
13,715,000 Swiss Franc .............................. 2/5/98 (9,887,927)
11,137,600 Swiss Franc .............................. 2/27/98 (8,051,087)
38,460,960 Swiss Franc .............................. 3/13/98 (27,849,596)
5,595,200 Swiss Franc .............................. 4/6/98 (4,063,291)
7,682,400 Swiss Franc .............................. 4/14/98 (5,584,459)
-------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $1,050,991,191) .................................. $(988,738,908)
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>

TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities
- -------------------------------------------------------------------------------
March 31, 1997

<TABLE>
<S> <C> <C>
ASSETS
Investments, at value (Cost $1,227,799,364) (Note 1)
See accompanying schedule ........................ $1,392,381,297
Cash and foreign currency (Cost $1,075,991) .......... 1,084,452
Net unrealized appreciation of forward exchange
contracts
(Note 1) ........................................... 62,463,646
Receivable for Fund shares sold ...................... 6,165,754
Dividends and interest receivable .................... 4,052,021
Receivable for investment securities sold ............ 796,618
Unamortized organization costs (Note 5) .............. 26,071
Prepaid expenses ..................................... 6,650
--------------
TOTAL ASSETS ..................................... 1,466,976,509
--------------

LIABILITIES
Payable for investment securities purchased .......... $21,573,132
Payable for Fund shares redeemed ..................... 2,002,529
Investment advisory fee payable (Note 2) ............. 1,520,549
Transfer agent fees payable (Note 2) ................. 60,000
Custodian fees payable (Note 2) ...................... 55,000
Accrued expenses and other payables .................. 554,807
-----------
TOTAL LIABILITIES ................................ 25,766,017
--------------
NET ASSETS ............................................... $1,441,210,492
==============
NET ASSETS CONSIST OF
Undistributed net investment income .................. $ 11,956,516
Accumulated net realized gain on securities, forward
exchange contracts and foreign currencies .......... 23,644,999
Net unrealized appreciation of securities, forward
exchange
contracts, foreign currencies and net other assets . 226,761,808
Par value ............................................ 9,324
Paid-in capital in excess of par value ............... 1,178,837,845
--------------
TOTAL NET ASSETS ................................. $1,441,210,492
==============
NET ASSET VALUE, offering and redemption price per share
($1,441,210,492 / 93,237,678 shares of common stock
outstanding) ......................................... $15.46
======

</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Statement of Operations
- -------------------------------------------------------------------------------

For the Year Ended March 31, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $2,667,110) .............. $ 21,537,601
Interest (net of foreign withholding taxes of $192) ..................... 4,832,359
-------------
TOTAL INVESTMENT INCOME ............................................. 26,369,960
-------------
EXPENSES
Investment advisory fee (Note 2) ...................... $14,318,034
Administration fee (Note 2) ........................... 1,398,274
Custodian fees (Note 2) ............................... 894,791
Transfer agent fees (Note 2) .......................... 545,246
Legal and audit fees .................................. 107,479
Amortization of organization costs (Note 5) ........... 22,285
Directors' fees and expenses (Note 2) ................. 15,300
Other ................................................. 844,873
Waiver of fees by administrator (Note 2) .............. (84,934)
-----------
TOTAL EXPENSES ...................................................... 18,061,348
-------------
NET INVESTMENT INCOME ....................................................... 8,308,612
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3)
Net realized gain (loss) on:
Securities ............................................................ 54,568,300
Forward exchange contracts ............................................ 66,112,135
Foreign currencies .................................................... (674,536)
-------------
Net realized gain on investments during the year ........................ 120,005,899
-------------

Net change in unrealized appreciation (depreciation) of:
Securities ............................................................ 19,433,370
Forward exchange contracts ............................................ 35,713,408
Foreign currencies and net other assets ............................... (248,729)
-------------
Net unrealized appreciation on investments during the year .............. 54,898,049
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................. 174,903,948
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 183,212,560
=============

</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
3/31/97 3/31/96
------------------- -----------------
<S> <C> <C>
Net investment income ................................. $ 8,308,612 $ 9,045,946
Net realized gain (loss) on securities, forward
exchange
contracts and currency transactions during the year . 120,005,899 (10,403,439)
Net unrealized appreciation of securities,
forward exchange contracts, foreign currencies and
net other assets during the year .................... 54,898,049 185,687,996
-------------- ------------
Net increase in net assets resulting from operations .. 183,212,560 184,330,503
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) (3,341,225)
Distributions to shareholders in excess of net
realized gain
on investments .................................... -- (9,099,176)
Net increase in net assets from Fund share transactions
(Note 4) ............................................ 394,930,728 123,986,313
-------------- ------------
Net increase in net assets ............................ 490,299,526 295,876,415
NET ASSETS
Beginning of year ..................................... 950,910,966 655,034,551
-------------- ------------

End of year (including undistributed net investment
income of $11,956,516 and $14,504,033, respectively) $1,441,210,492 $950,910,966
============== ============

</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Financial Highlights
- -------------------------------------------------------------------------------

For a Fund share outstanding throughout each year.

<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
3/31/97 3/31/96(a) 3/31/95 3/31/94(a)(b)
---------- ---------- ------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
year.......................... $ 14.28 $ 11.52 $ 12.26 $ 10.00
---------- -------- -------- --------
Income from investment operations:
Net investment income (loss)(c) 0.12 0.15 0.10 (0.00)(d)
Net realized and unrealized gain
(loss) on investments ........ 2.18 2.81 (0.68) 2.26
---------- -------- -------- --------
Total from investment
operations ............... 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 year ... $ 15.46 $ 14.28 $ 11.52 $ 12.26
========== ======== ======== ========
Total return(e) ................ 16.66% 25.88% (4.74)% 22.60%
========== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of year (in 000's) $1,441,210 $950,911 $655,035 $297,434
Ratio of operating expenses
to average net assets(f) ..... 1.58% 1.60% 1.65% 1.73%(g)
Ratio of net investment income
(loss) to average net assets . 0.73% 1.15% 1.08% (0.00)%(g)(h)
Portfolio turnover rate ........ 20% 17% 16% 14%
Average commission rate
(per share of security)(i) ... $ 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 adviser for the year ended
March 31, 1997 and for the 7.5-month period ended March 31, 1994 was 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>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -------------------------------------------------------------------------------
Notes to Financial Statements
- -------------------------------------------------------------------------------

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 with respect to any portfolio
securities, at fair value as determined by or under the direction of the
Company's Board of Directors. Portfolio securities, for which the primary market
is a national securities exchange or other market where there exists a reliable
daily publication of actual transaction prices, are valued at the last sale
price prior to the close of regular trading or, if there were no sales during
the day, at the mean between the last ask price and the last bid price prior to
the close of regular trading. Over-the-counter securities and securities listed
or traded on certain foreign exchanges whose operations are similar to the
United States ("U.S.") over-the-counter market are valued at the mean between
the bid and ask prices. Portfolio securities that are traded primarily on
foreign exchanges generally are valued at the preceding closing values of such
securities on their respective exchanges, except that when an occurrence
subsequent to the time that a value was so established is likely to have changed
such value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Company's Board
of Directors. Short-term investments that mature in 60 days or less are valued
at amortized cost.

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 credit-worthiness 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 investments 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 $24.4 million of their own money invested in the Fund.

The Company on behalf of the Fund has entered into an administration
agreement, as amended on February 15, 1997 (the "Administration Agreement") with
First Data Investor Services Group, Inc. ("FDISG"), a wholly owned subsidiary of
First Data Corporation. Under the Administration Agreement, the Company pays
FDISG 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 February 15, 1997 through March 31, 1997, FDISG
voluntarily waived administration and fund accounting fees of $84,934.

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.

Prior to February 15, 1997, the Company paid FDISG an administrative fee and
a fund accounting fee computed daily and paid monthly at the annual rates of the
value of the average daily net assets of the Fund as follows:

FEES ON ASSETS
----------------------------------------
BETWEEN
UP TO $200 AND EXCEEDING
$200 MILLION $500 MILLION $500 MILLION
- ------------------------------------------------------------------------------
Administration Fees 0.12% 0.10% 0.08%
- ------------------------------------------------------------------------------

BETWEEN
UP TO $50 AND EXCEEDING
$50 MILLION $100 MILLION $100 MILLION
- ------------------------------------------------------------------------------
Accounting Fees 0.08% 0.06% 0.04%
- ------------------------------------------------------------------------------

For the period April 1, 1996 through February 14, 1997, the Company paid for
Fund Administration Services a minimum fee of $40,000 per Fund per annum, not to
be aggregated with fees for Fund Accounting Services and a minimum fee of
$20,000 per Fund per annum, not to be aggregated with fees for Fund
Administration Services.

No officer, director or employee of Tweedy, Browne, FDISG 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, FDISG 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"). Unified Advisers, Inc., serves as
the Fund's transfer agent. Effective May 12, 1997, FDISG will replace Unified
Advisers, 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 year ended March 31, 1997, the Fund incurred total brokerage
commissions of $2,167,248.

3. SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments for the year ended March 31, 1997, aggregated
$537,030,192 and $202,319,185, respectively.

At March 31, 1997, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$232,016,098 and the aggregate gross unrealized depreciation for all securities,
in which there was an excess of tax cost over value, was $77,355,544.

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>
YEAR ENDED 3/31/97 YEAR ENDED 3/31/96
------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 35,117,166 $522,414,402 29,891,616 $381,433,296
Reinvested 5,409,129 78,324,194 854,225 11,062,218
Redeemed (13,856,018) (205,807,868) (21,057,222) (268,509,201)
- --------------------------------------------------------------------------------------------------------------
Net increase 26,670,277 $394,930,728 9,688,619 $123,986,313
- --------------------------------------------------------------------------------------------------------------
</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 lessor 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
year ended March 31, 1997, the Fund did not borrow under this Agreement.

<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- ------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- ------------------------------------------------------------------------------

To the Shareholders and Board of Directors of
Tweedy, Browne Fund Inc.:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments and the schedule of forward exchange
contracts, of Tweedy, Browne Global Value Fund (the "Fund") (one of a series
of Tweedy, Browne Fund Inc.) as of March 31, 1997, the related statement of
operations for the year then ended, and the related statement of changes in
net assets for each of the two years in the period then ended and financial
highlights for each of the three years in the period then ended and for the
period from June 15, 1993 (commencement of operations) to March 31, 1994.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 1997, by correspondence with
the custodian and brokers and other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and signficant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Tweedy, Browne Global Value Fund, a series of Tweedy, Browne Fund Inc., at
March 31, 1997, the results of its operations for the year then ended, and the
changes in its net assets for each of the two years in the period then ended
and financial highlights for each of the three years in the period then ended
and for the period from June 15, 1993 to March 31, 1994, in conformity with
generally accepted accounting principles.

Boston, Massachusetts ERNST & YOUNG LLP
May 2, 1997

<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- ------------------------------------------------------------------------------
Tax Information (unadited)
- ------------------------------------------------------------------------------

YEAR ENDED MARCH 31, 1997

For the fiscal year ended March 31, 1997, the amount of long-term capital
gain distributed to shareholders by the Fund was $32,491,565.

Of the ordinary income (including short-term capital gain) distributions
made by the Fund during the fiscal year ended March 31, 1997, 5.56% qualify
for the dividend received deduction available to corporate shareholders.

<PAGE>

TWEEDY, BROWNE AMERICAN VALUE FUND

HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
TWEEDY, BROWNE AMERICAN VALUE FUND VS.
STANDARD & POOR'S 500 STOCK INDEX 12/8/93 THROUGH 3/31/97

INDEX: STANDARD & POOR'S
TWEEDY, BROWNE 500 STOCK INDEX
AMERICAN VALUE FUND* (THE "S&P 500")
-------------------- ------------------------
DEC 1993 10.00 10.12
MAR 1994 9.71 9.74
JUN 1994 9.82 9.78
SEP 1994 10.26 10.26
DEC 1994 9.88 10.25
MAR 1995 10.78 11.25
JUN 1995 11.98 12.32
SEP 1995 13.06 13.30
DEC 1995 13.46 14.10
MAR 1996 14.52 14.86
JUN 1996 14.99 15.53
SEP 1996 15.17 16.01
DEC 1996 16.48 17.34
MAR 1997 17.09 17.80

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

The S&P 500 is an index composed of 500 widely held common stocks listed on
the New York Stock Exchange, American Stock Exchange and over-the-counter
market and includes the reinvestment of dividends.

Index information is available at month end only; therefore, the closest month
end to inception date of the Fund, November 30, 1993, has been used.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN* AGGREGATE TOTAL RETURN*
- --------------------------------------------------------------------------------------------------------

YEAR INCEPTION
WITHOUT ENDED 12/8/93 -
THE FUND ACTUAL WAIVERS** 3/31/97 3/31/97
- ---------- ---------- ----------------------------------------------- -----------
<S> <C> <C> <C> <C> <C>
Inception (12/8/93) The Fund 17.75% 70.97%
through 3/31/97 17.58% 17.28% S&P 500 19.82% 78.04%
Year Ended 3/31/97 17.75% 17.61%
- --------------------------------------------------------------------------------------------------------

Note: The performance shown represents past performance and is not a guarantee of future
results. The Fund's 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.
*Assumes the reinvestment of all dividends and distributions.
**See Note 2 to Financial Statements.
</TABLE>
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------

March 31, 1997

[Graphic Omitted]

<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 1)
------ -------
COMMON STOCKS--DOMESTIC--86.5%
ADVERTISING--0.5%
<C> <S> <C>
6,680 Grey Advertising Inc. .................................. $ 1,796,920
------------
APPAREL/TEXTILES--0.2%
45,900 Chic by H.I.S. Inc.+ ................................... 281,136
9,400 Garan Inc. .............................................. 169,200
2,000 Thomaston Mills, Inc., Class A ......................... 22,000
------------
472,336
------------
AUTOMOTIVE PARTS--0.8%
144,500 Standard Motor Products, Inc. ........................... 1,896,562
23,300 Standard Products Company .............................. 541,725
5,200 Woodward Governor Company .............................. 141,700
------------
2,579,987
------------
BANKING--14.0%
56,700 BancFirst Corporation .................................. 1,658,475
316,160 BanPonce Corporation ................................... 11,223,680
10,200 Cape Cod Bank & Trust Company .......................... 275,400
89,207 Chase Manhattan Corporation ............................ 8,352,005
75,100 Comerica, Inc. .......................................... 4,233,762
4,500 Community Financial Group--Bank of Nashville ........... 54,000
114,910 First Chicago NBD Corporation .......................... 6,219,505
20,400 First Mortgage Corporation+ ............................. 94,350
33,900 Mercantile Bancorporation, Inc. ......................... 1,796,700
40,855 Mid-America Bancorporation ............................. 817,100
9,000 Peoples Bank Corporation of Indianapolis ............... 391,500
230,700 PNC Bank Corporation ................................... 9,228,000
4,300 Suffolk Bancorp ........................................ 180,600
18,425 Transworld Bancorp+ .................................... 331,650
11,000 Wells Fargo & Company .................................. 3,125,375
------------
47,982,102
------------
BASIC INDUSTRIES--4.6%
100,500 ACX Technologies Inc.+ ................................. 1,934,625
25,000 Blessings Corporation .................................. 246,874
103,300 Gorman-Rupp Company .................................... 1,652,800
61,400 Monarch Machine Tool Company ........................... 452,825
70,200 Sequa Corporation, Class A+ ............................. 3,132,675
78,000 Tremont Corporation+ ................................... 2,720,250
30,200 Unilever NV, ADR ....................................... 5,624,750
------------
15,764,799
------------
BUSINESS AND COMMERCIAL SERVICES--0.0%++
1,300 IIC Industries Inc.+ ................................... 54,275
12,500 Paris Corporation+ ..................................... 25,781
------------
80,056
------------
CHEMICALS--1.4%
177,700 Lilly Industries Inc., Class A ......................... $ 3,265,238
103,100 Oil-Dri Corporation of America ......................... 1,688,263
------------
4,953,501
------------
CONSUMER NON-DURABLES--11.6%
142,400 Bairnco Corporation .................................... 996,800
76,700 Coca-Cola Bottling Company ............................. 3,336,450
209,200 EKCO Group Inc. ......................................... 1,046,000
76,800 Fuji Photo Film Company Ltd., ADR ...................... 2,515,200
43,535 Great Atlantic & Pacific Tea Company, Inc. .............. 1,104,701
19,000 Hyde Athletic Industries Inc., Class A+ ................ 87,875
25,000 Hyde Athletic Industries Inc., Class B+ ................ 124,220
121,735 Nestle, ADR ............................................ 7,037,805
49,800 OroAmerica Inc.+ ....................................... 249,000
106,750 Philip Morris Companies Inc. ............................ 12,182,844
10,800 TCC Industries Inc.+ ................................... 16,200
366,200 UST Inc. ................................................ 10,207,825
57,200 Village Super Market Inc., Class A+ .................... 514,800
------------
39,419,720
------------
CONSUMER SERVICES--1.8%
301,800 Jones Intercable Inc., Class A+ ........................ 2,867,100
128,900 Pinkerton's, Inc. ....................................... 3,319,175
------------
6,186,275
------------
ELECTRONIC EQUIPMENT--0.1%
8,000 Espey Manufacturing and Electronics Corporation ........ 143,000
------------
ENGINEERING AND CONSTRUCTION--3.1%
12,700 Atkinson (Guy F.) Company California+ .................. 104,775
22,700 Devcon International Corporation+ ...................... 116,337
107,300 Harding Lawson Associates Group ......................... 737,688
150,500 Hovnanian Enterprises, Inc.+ ........................... 978,250
58,800 M/I Schottenstein Homes Inc.+ .......................... 602,700
4,080 Oilgear Company ........................................ 66,300
42,000 Oriole Homes Corporation, Class A+ ..................... 330,750
91,500 Oriole Homes Corporation, Class B+ ..................... 714,843
329,700 Ryland Group, Inc. ...................................... 3,873,975
489,300 Standard-Pacific Corporation ............................ 3,058,125
------------
10,583,743
------------
FINANCIAL SERVICES--11.5%
191,230 American Express Company ................................ 11,449,895
418,280 Federal Home Loan Mortgage Corporation .................. 11,398,130
48,300 Household International Inc ............................. 4,147,762
18,600 HPSC Inc.+ ............................................. 111,600
20,800 Kent Financial Services Inc.+ .......................... 158,600
345,550 Lehman Brothers Holdings Inc ............................ 10,064,145
10,000 Letchworth Independent Bancshares Corporation .......... 355,000
1,500 Norex American Inc.+ ................................... 68,625
88,200 Phoenix Duff & Phelps Corporation ....................... 672,525
29,800 Value Line Inc. ......................................... 983,400
1,604 Whitney Holding Corporation ............................. 62,456
------------
39,472,138
------------
FOOD AND BEVERAGES--0.0%++
40,600 United Foods, Inc., Class A+ ........................... 73,588
25,400 United Foods, Inc., Class B+ ........................... 46,037
------------
119,625
------------
FURNITURE--0.1%
29,900 Flexsteel Industries Inc ................................ 358,800
------------
HEALTH CARE--8.5%
163,670 Glaxo Wellcome PLC, Sponsored ADR ...................... 5,789,826
33,412 Johnson & Johnson ...................................... 1,766,660
10,666 Novartis AG, ADR ....................................... 650,182
222,300 Nycomed ASA, ADR, Class B .............................. 3,334,500
167,000 Pharmacia & Upjohn, Inc. ................................ 6,116,375
401,800 Regency Health Services, Inc. ........................... 4,269,125
497,600 Sun Healthcare Group Inc.+ ............................. 7,153,000
7,500 Trans Leasing International, Inc. ....................... 42,186
8,000 Wyant Corporation ....................................... 40,000
------------
29,161,854
------------
INSURANCE--11.1%
15,200 Allstate Financial Corporation+ ........................ 92,150
221,000 American Annuity Group Inc. ............................. 3,453,125
77,400 American Indemnity Financial Corporation ............... 1,020,713
112,125 American National Insurance Company .................... 8,773,781
600 Amwest Insurance Group Inc. ............................. 7,275
122,600 Integon Corporation .................................... 1,808,350
23,300 Kansas City Life Insurance Company ..................... 1,578,575
21,600 Merchants Group Inc. .................................... 410,400
50,900 National Western Life Insurance Company+ ............... 4,199,250
13,200 RLI Corporation ........................................ 420,750
74,000 Security-Connecticut Corporation ....................... 3,339,250
109,500 Transatlantic Holdings, Inc. ............................ 9,198,000
81,715 USLIFE Corporation ..................................... 3,820,176
------------
38,121,795
------------
LEISURE AND ENTERTAINMENT--1.2%
165,000 Alliance Entertainment Corporation+ ..................... 226,875
140,400 C-TEC Corporation+ ..................................... 3,966,300
------------
4,193,175
------------
METALS AND METAL PRODUCTS--0.0%++
14,000 American Metals Service, Inc.+ ......................... 13,125
------------
OIL AND GAS--1.4%
80,000 Isramco, Inc.+ ......................................... 50,000
1,900 Lufkin Industries, Inc. ................................. 41,919
90,400 Matrix Service Company+ ................................ 689,300
87,600 Penn Virginia Corporation ............................... 3,876,300
10,000 Wiser Oil Company ....................................... 176,250
------------
4,833,769
------------
REAL ESTATE--2.3%
347,800 American Real Estate Partners Ltd. ..................... 3,738,850
26,100 Arizona Land Income Corporation, Class A ............... 127,237
18,012 Atlantic Realty Trust Inc.+ ............................ 194,755
13,200 Mays (J.W.), Inc.+ ..................................... 125,400
154,400 Price Enterprises Inc.+ ................................ 2,837,100
3,623 Public Storage, Inc. .................................... 105,067
36,025 Ramco-Gershenson Properties ............................. 630,437
20,000 Reading Company, Class A+ ............................... 217,500
------------
7,976,346
------------
RESTAURANT CHAINS--5.0%
719,100 Darden Restaurants Inc. ................................. 5,662,911
219,000 McDonald's Corporation ................................. 10,347,750
83,400 Vicorp Restaurants Inc.+ ............................... 1,063,350
------------
17,074,011
------------
RETAIL--5.4%
82,500 Burlington Coat Factory Warehouse+ ...................... 1,485,000
1,000 Dart Group Corporation, Class A ........................ 90,750
25,000 Discount Auto Parts Inc.+ .............................. 400,000
117,900 EZCORP Inc., Class A+ .................................. 928,462
280,500 Fingerhut Companies, Inc ................................ 3,927,000
90,100 Government Technology Services, Inc. .................... 456,130
479,000 Jan Bell Marketing Inc.+ ................................ 1,017,875
164,000 Kmart Corporation ...................................... 1,988,500
32,800 Luria (L) and Sons Inc.+ ............................... 69,700
9,900 Mercantile Stores Company Inc. .......................... 459,113
67,200 Penney (J.C.) Company, Inc. ............................. 3,200,400
32,100 Seaman Furniture Company+ .............................. 625,950
130,100 Swiss Army Brands, Inc. ................................. 1,626,250
158,700 Syms Corporation+ ...................................... 1,448,137
138,000 United Retail Group, Inc. ............................... 621,000
------------
18,344,267
------------
TECHNOLOGY--0.1%
44,600 Astrosystems Inc.+ ..................................... 245,300
------------
TELECOMMUNICATIONS--0.0%++
15,300 TCI International Inc.+ ................................ 108,056
------------
TRANSPORTATION/TRANSPORTATION SERVICES--1.8%
114,000 GATX Corporation ........................................ 5,571,750
53,100 KLLM Transport Services Inc.+ .......................... 577,463
------------
6,149,213
------------
TOTAL COMMON STOCKS--DOMESTIC
(COST $234,985,659) ..................................... 296,133,913
------------
COMMON STOCKS--FOREIGN--4.8%
FINLAND--0.5%
15,500 Kone Corporation, Class B .............................. 1,883,357
------------
FRANCE--0.3%
7,200 Compagnie Financiere de Suez ........................... 373,048
2,725 Klepierre .............................................. 402,841
2,300 Peugeot SA ............................................. 262,588
------------
1,038,477
------------
ITALY--0.2%
72,100 Arnoldo Mondadori Editore SPA .......................... 454,072
15,000 Franco Tosi SPA ........................................ 107,153
------------
561,225
------------
JAPAN--1.4%
63,000 Aichi Electric Company Ltd. ............................ 277,634
49,000 Amada Sonoike Company Ltd. ............................. 192,165
15,200 Chofu Seisakusho Company ............................... 254,420
58,000 Dowa Fire & Marine Insurance Company ................... 238,247
17,000 Fuji Photo Film Ltd. ................................... 559,473
30,000 Gakken Company Ltd. .................................... 138,030
53,000 Koyosha Inc.+ .......................................... 273,850
19,000 Matsushita Electric Industrial Company ................. 296,515
54,000 Mitsubishi Electric Corporation ........................ 303,470
32,000 Morito ................................................. 220,716
45,150 Nissan Fire & Marine Insurance Company ................. 175,971
36,000 Oak .................................................... 154,282
62,000 Osaka Securities Finance ............................... 206,048
19,000 Sangetsu Company Ltd. .................................. 328,778
15,000 Sankyo Company Ltd. .................................... 413,601
5,000 Shikoku Coca-Cola Bottling ............................. 54,581
99,000 Shin Nikkei Company Ltd. ............................... 300,195
33,000 Suzuki Motor Corporation ............................... 320,207
19,000 Toyo Technical Company Ltd. ............................ 152,098
------------
4,860,281
------------
NETHERLANDS--0.5%
10,900 Heineken Holdings NV, Class A .......................... 1,644,779
------------
SINGAPORE--0.1%
79,000 Robinson and Company Ord ............................... 328,141
------------
SPAIN--0.2%
7,600 Argentaria ............................................. 331,382
16,000 Unipapel SA ............................................ 302,955
------------
634,337
------------
SWITZERLAND--0.6%
2,000 Danzas Holding AG PC ................................... 394,719
2,000 Edipresse SA, Bearer ................................... 460,042
1,500 Magazine Zum Globus PC ................................. 656,706
500 Swissair AG, Registered+ ............................... 446,143
------------
1,957,610
------------
UNITED KINGDOM--1.0%
177,800 BTR Ord ................................................ 779,556
147,300 McAlpine (Alfred) PLC .................................. 392,587
32,500 SmithKline Beecham, PLC Units, ADR ..................... 2,275,000
------------
3,447,143
------------
TOTAL COMMON STOCKS--FOREIGN
(COST $14,616,162) ...................................... 16,355,350
------------
FACE
VALUE
-----
COMMERCIAL PAPER--3.8% (COST $13,000,000)
$13,000,000 General Electric Capital Corporation, 6.500% due 4/1/97 13,000,000
------------

U.S. TREASURY BILLS--0.2%
$200,000 5.630%** due 5/1/97 .................................... $ 199,112
350,000 5.600%** due 8/21/97 ................................... 342,683
315,000 5.508%** due 10/16/97 ................................... 305,956
------------

TOTAL U.S. TREASURY BILLS
(COST $847,751) ......................................... 847,751
------------
REPURCHASE AGREEMENT--5.4%
(COST $18,665,000)
18,665,000 Agreement with UBS Securities, Inc., 6.350% dated 3/31/97,
to be repurchased at $18,668,292 on 4/1/97, collateralized
by $19,329,000 U.S. Treasury Notes, 6.375% due 9/30/01
(market value $19,051,146) .............................. 18,665,000
------------

TOTAL INVESTMENTS (COST $282,114,572*) ................................ 100.7% 345,002,014
OTHER ASSETS AND LIABILITIES (NET) .................................. (0.7) (2,534,635
---- ------------
NET ASSETS ............................................................ 100.0% $342,467,379
===== ============
- ------------
* Aggregate cost for Federal tax purposes is $282,090,648.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Amount represents less than 0.1% of net assets.

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

March 31, 1997

<CAPTION>
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- -------- --------

FORWARD EXCHANGE CONTRACTS TO SELL
<C> <S> <C> <C>
2,147,265 Finnish Markka ................................ 4/15/97 $ (430,352)
4,464,000 Finnish Markka ................................ 8/29/97 (903,897)
1,721,335 Finnish Markka ................................ 3/13/98 (353,773)
3,029,280 French Franc .................................. 8/29/97 (545,352)
1,002,660 French Franc .................................. 10/15/97 (181,158)
125,008 Great Britain Pound Sterling .................. 10/15/97 (205,032)
1,813,456 Great Britain Pound Sterling .................. 12/31/97 (2,970,414)
466,650 Great Britain Pound Sterling .................. 2/5/98 (763,993)
617,932 Great Britain Pound Sterling .................. 3/13/98 (1,011,195)
544,148,500 Italian Lira .................................. 8/29/97 (324,357)
423,335,000 Italian Lira .................................. 10/15/97 (252,009)
55,814,250 Japanese Yen .................................. 4/15/97 (452,279)
67,990,000 Japanese Yen .................................. 8/29/97 (562,402)
190,496,250 Japanese Yen .................................. 10/15/97 (1,587,590)
75,798,100 Japanese Yen .................................. 12/31/97 (639,683)
29,050,000 Japanese Yen .................................. 3/13/98 (247,864)
116,095,000 Japanese Yen .................................. 4/14/98 (995,484)
750,353 Netherlands Guilder ........................... 4/15/97 (400,509)
1,972,080 Netherlands Guilder ........................... 8/29/97 (1,063,340)
248,355 Netherlands Guilder ........................... 10/15/97 (134,415)
3,407,800 Netherlands Guilder ........................... 12/31/97 (1,856,172)
1,857,800 Netherlands Guilder ........................... 3/13/98 (1,017,677)
6,478,500 Norwegian Krone ............................... 6/16/97 (988,133)
4,812,975 Norwegian Krone ............................... 2/5/98 (745,891)
418,260 Singapore Dollar .............................. 10/15/97 (292,590)
38,562,000 Spanish Peseta ................................ 10/15/97 (273,108)
6,767,00 Swedish Krona ................................. 12/31/97 (909,688)
951,040 Swiss Franc ................................... 8/29/97 (672,153)
242,600 Swiss Franc ................................... 10/15/97 (172,440)
3,871,500 Swiss Franc ................................... 12/31/97 (2,779,126)
1,371,500 Swiss Franc ................................... 2/5/98 (988,793)
1,068,360 Swiss Franc ................................... 3/13/98 (773,600)
------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $26,975,000) .................................... $(25,494,469)
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
- ------------------------------------------------------------------------------------------------

March 31, 1997

ASSETS
<S> <C> <C>
Investments, at value (Cost $282,114,572) (Note 1)
See accompanying schedule ............................ $345,002,014
Cash and foreign currency (Cost $39,445) ................. 8,740
Receivable for Fund shares sold .......................... 3,071,641
Net unrealized appreciation of forward exchange contracts
(Note 1) ............................................... 1,480,531
Receivable for investment securities sold ................ 1,168,695
Dividends and interest receivable ........................ 529,305
Unamortized organization costs (Note 5) .................. 32,449
Prepaid expenses ......................................... 1,381
------------
TOTAL ASSETS ......................................... 351,294,756
------------
LIABILITIES
Payable for investment securities purchased .............. $7,535,139
Payable for Fund shares redeemed ......................... 796,746
Investment advisory fee payable (Note 2) ................. 362,902
Transfer agent fees payable (Note 2) ..................... 12,300
Custodian fees payable (Note 2) .......................... 7,395
Accrued expenses and other payables ...................... 112,895
---------
TOTAL LIABILITIES .................................... 8,827,377
-----------
NET ASSETS ................................................... $342,467,379
============
NET ASSETS CONSIST OF
Undistributed net investment income ...................... $ 1,039,581
Accumulated net realized gain on securities, forward
exchange
contracts and foreign currencies ....................... 5,415,390
Net unrealized appreciation of securities, forward
exchange
contracts, foreign currencies and net other assets ..... 64,337,091
Par value ................................................ 2,112
Paid-in capital in excess of par value ................... 271,673,205
-----------
TOTAL NET ASSETS ..................................... $342,467,379
============
NET ASSET VALUE, offering and redemption price per share
($342,467,379 / 21,119,090 shares of common stock
outstanding) $16.22
======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ----------------------------------------------------------------------------------------------------
Statement of Operations
- ----------------------------------------------------------------------------------------------------

For the Year Ended March 31, 1997

INVESTMENT INCOME
<S> <C>
Dividends (net of foreign withholding taxes of $83,262) .................. $ 4,842,528
Interest ................................................................. 1,015,320
-----------
TOTAL INVESTMENT INCOME .............................................. 5,857,848
-----------
EXPENSES
Investment advisory fee (Note 2) ......................... $3,176,537
Administration fee (Note 2) .............................. 329,781
Transfer agent fees (Note 2) ............................. 98,552
Custodian fees (Note 2) .................................. 56,005
Legal and audit fees ..................................... 32,659
Amortization of organization costs (Note 5) .............. 19,469
Directors' fees and expenses (Note 2) .................... 3,820
Other .................................................... 151,863
Waiver of fees by investment adviser, administrator and
custodian (Note 2) ..................................... (343,759)
----------
TOTAL EXPENSES ....................................................... 3,524,927
-----------
NET INVESTMENT INCOME ........................................................ 2,332,921
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3)
Net realized gain on:
Securities ............................................................. 10,230,036
Forward exchange contracts ............................................. 1,264,232
Foreign currencies ..................................................... 16,177
-----------
Net realized gain on investments during the year ......................... 11,510,445
-----------

Net change in unrealized appreciation (depreciation) of:
Securities ............................................................. 25,939,299
Forward exchange contracts ............................................. 906,418
Foreign currencies and net other assets ................................ (30,702)
-----------
Net unrealized appreciation of investments during the year ............... 26,815,015
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .............................. 38,325,460
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $40,658,381
===========
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ----------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- ----------------------------------------------------------------------------------------------
<CAPTION>
YEAR YEAR
ENDED ENDED
3/31/97 3/31/96
------------ ---------
<S> <C> <C>
Net investment income ................................... $ 2,332,921 $ 1,550,882
Net realized gain on securities, forward exchange
contracts and currency transactions during the year ... 11,510,445 2,569,270
Net unrealized appreciation of securities, forward
exchange contracts, foreign currencies and net other
assets during the year 26,815,015 34,254,651
------------ ------------
Net increase in net assets resulting from operations .... 40,658,381 38,374,803

DISTRIBUTIONS:
Dividends to shareholders from net investment income .. (2,924,069) (1,344,358)
Distributions to shareholders from net realized gain on
investments ......................................... (7,097,006) (253,652)
Net increase in net assets from Fund share transactions
(Note 4) 110,231,566 105,965,682
------------ ------------
Net increase in net assets .............................. 140,868,872 142,742,475

NET ASSETS
Beginning of year ....................................... 201,598,507 58,856,032
------------ ------------
End of year (including undistributed net investment
income of $1,039,581 and $371,199, respectively) ...... $342,467,379 $201,598,507
------------ ------------
</TABLE>
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------

For a Fund share outstanding throughout each year.

<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
3/31/97 3/31/96(a) 3/31/95(a) 3/31/94(b)
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year .. $ 14.29 $ 10.71 $ 9.71 $ 10.00
-------- -------- -------- --------
Income from investment operations:
Net investment income(c) ............ 0.13 0.15 0.13 0.01
Net realized and unrealized gain
(loss) on investments ............. 2.39 3.56 0.93 (0.30)
-------- -------- -------- --------
Total from investment operations 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 year ........ $ 16.22 $ 14.29 $ 10.71 $ 9.71
======== ======== ======== ========
Total return(d) ..................... 17.75% 34.70% 11.02% (2.90)%
======== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of year (in 000's) .. $342,467 $201,599 $ 58,856 $ 16,133
Ratio of operating expenses
to average net assets(e) .......... 1.39% 1.39% 1.74% 2.26%(f)
Ratio of net investment income
to average net assets ............. 0.92% 1.13% 1.25% 0.64%(f)
Portfolio turnover rate ............. 16% 9% 4% 0%(g)
Average commission rate
(per share of security)(h) ........ $ 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 years ended March 31, 1997, 1996 and 1995 and the
3.75-month period ended March 31, 1994 were 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
- --------------------------------------------------------------------------------

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.

PORTFOLIO VALUATION Generally, the Fund's investments are valued at
market value or, in the absence of market value with respect to any portfolio
securities, at fair value as determined by or under the direction of the
Company's Board of Directors. Portfolio securities, for which the primary
market is a national securities exchange or other market where there exists a
reliable daily publication of actual transaction prices, are valued at the
last sale price prior to the close of regular trading or, if there were no
sales during the day, at the mean between the last ask price and the last bid
price prior to the close of regular trading. Over-the-counter securities and
securities listed or traded on certain foreign exchanges whose operations are
similar to the United States ("U.S.") over-the-counter market are valued at
the mean between the bid and ask prices. Portfolio securities that are traded
primarily on foreign exchanges generally are valued at the preceding closing
values of such securities on their respective exchanges, except that when an
occurrence subsequent to the time that a value was so established is likely to
have changed such value, then the fair value of those securities will be
determined by consideration of other factors by or under the direction of the
Company's Board of Directors. Short-term investments that mature in 60 days or
less are valued at amortized cost.

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 of 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. From time to time,
Tweedy, Browne may voluntarily waive a portion of its fee otherwise payable to
it. For the year ended March 31, 1997, Tweedy, Browne voluntarily waived fees
of $284,262.

The current and retired general partners and their families, as well as
employees of Tweedy, Browne, the investment adviser to the Fund, have
approximately $22.8 million of their own money invested in the Fund.

The Company on behalf of the Fund has entered into an administration
agreement, as amended on February 15, 1997 (the "Administration Agreement")
with First Data Investor Services Group, Inc. ("FDISG"), a wholly owned
subsidiary of First Data Corporation. Under the Administration Agreement, the
Company pays FDISG 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, 1996 through February 14, 1997, FDISG
voluntarily waived administration fees of $32,914. For the period from
February 15, 1997 through March 31, 1997, FDISG voluntarily waved
administration and fund accounting fees of $21,979.

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 $3,000 for Fund Accounting Services for the Fund, not
to be aggregated with fees for Fund Administration Services.

Prior to February 15, 1997, the Company paid FDISG an administrative fee
and a fund accounting fee computed daily and paid monthly at the annual rates
of the value of the average daily net assets of the Fund as follows:

FEES ON ASSETS
------------------------------------------------------
BETWEEN
UP TO $200 AND EXCEEDING
$200 MILLION $500 MILLION $500 MILLION
- --------------------------------------------------------------------------------
Administration Fees 0.10% 0.08% 0.06%
- --------------------------------------------------------------------------------

UP TO EXCEEDING
$100 MILLION $100 MILLION
- --------------------------------------------------------------------------------
Accounting Fees 0.06% 0.04%
- --------------------------------------------------------------------------------

For the period April 1, 1996 through February 14, 1997, the Company paid
for Fund Administration Services a minimum fee of $40,000 per Fund per annum,
not to be aggregated with fees for Fund Accounting Services and a minimum fee
of $40,000 per Fund per annum, not to be aggregated with fees for Fund
Administration Services.

No officer, director or employee of Tweedy, Browne, FDISG 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, FDISG
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"). From time to time, Boston Safe
may voluntarily waive a portion of its fee otherwise payable to it. For the
year ended March 31, 1997, Boston Safe voluntarily waived fees of $4,604.
Unified Advisers, Inc., serves as the Fund's transfer agent. Effective May 12,
1997, FDISG will replace Unified Advisers, 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 year ended March 31, 1997, the Fund incurred total brokerage
commissions of $223,652.

3. SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments for the year ended March 31, 1997, aggregated
$131,396,987 and $36,926,371, respectively.

At March 31, 1997, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$63,617,578 and the aggregate gross unrealized depreciation for all
securities, in which there was an excess of tax cost over value, was $706,212.

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:

YEAR ENDED 3/31/97 YEAR ENDED 3/31/96
----------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------
Sold 9,381,470 $146,286,093 12,329,516 $153,231,522
Reinvested 599,957 9,419,276 112,691 1,493,159
Redeemed (2,966,055) (45,473,803) (3,834,573) (48,758,999)
- --------------------------------------------------------------------------------
Net Increase 7,015,372 $110,231,566 8,607,634 $105,965,682
- --------------------------------------------------------------------------------

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. 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 lessor 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 year ended March 31, 1997, the Fund did not borrow under
this Agreement.
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------

To the Shareholders and Board of Directors of
Tweedy, Browne Fund Inc.:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments and schedule of forward exchange
contracts, of Tweedy, Browne American Value Fund (the "Fund") (one of a series
of Tweedy, Browne Fund Inc.) as of March 31, 1997, the related statement of
operations for the year then ended, and the related statement of changes in
net assets for each of the two years in the period then ended and financial
highlights for each of the three years in the period then ended and for the
period from December 8, 1993 (commencement of operations) to March 31, 1994.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Tweedy, Browne American Value Fund, a series of Tweedy, Browne Fund Inc., at
March 31, 1997, the results of its operations for the year then ended, and the
changes in its net assets for each of the two years in the period then ended
and financial highlights for each of the three years in the period then ended
and for the period from December 8, 1993 to March 31, 1994, in conformity with
generally accepted accounting principles.

/s/ Ernst & Young LLP

Boston, Massachusetts
May 2, 1997
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Tax Information (unaudited)
- --------------------------------------------------------------------------------

YEAR ENDED MARCH 31, 1997

For the fiscal year ended March 31, 1997, the amount of long-term capital
gain distributed to shareholders by the Fund was $4,309,940.

Of the ordinary income (including short-term capital gain) distributions
made by the Fund during the fiscal year ended March 31, 1997, 62.17% qualify
for the dividend received deduction available to corporate shareholders.
<PAGE>

TWEEDY, BROWNE FUND, INC.
52 Vanderbilt Avenue, NY, NY 10017
800-432-4789 or 800-873-8242