<PAGE>
[Graphic Omitted]
TWEEDY, BROWNE
GLOBAL VALUE FUND
----------------------
SEMI-ANNUAL
----------------------
SEPTEMBER 30, 1999
----------------------
[Graphic Omitted]
TWEEDY, BROWNE
AMERICAN VALUE FUND
<PAGE>
TWEEDY, BROWNE FUND INC.
Investment Manager's Report ............................................... 1
Tweedy, Browne Global Value Fund:
Portfolio of Investments ................................................ 20
Schedule of Forward Exchange Contracts .................................. 29
Statement of Assets and Liabilities ..................................... 34
Statement of Operations ................................................. 35
Statements of Changes in Net Assets ..................................... 36
Financial Highlights .................................................... 37
Notes to Financial Statements ........................................... 38
Tweedy, Browne American Value Fund:
Portfolio of Investments ................................................ 45
Schedule of Forward Exchange Contracts .................................. 52
Statement of Assets and Liabilities ..................................... 54
Statement of Operations ................................................. 55
Statements of Changes in Net Assets ..................................... 56
Financial Highlights .................................................... 57
Notes to Financial Statements ........................................... 58
- --------------------------------------------------------------------------------
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. Investors should refer to the accompanying prospectus for
description of risk factors associated with investments in securities held by
both Funds. Additionally, investing in foreign securities involves economic
and political considerations not typically found in U.S. markets, including
currency fluctuations, political uncertainty and differences in financial
standards. Tweedy, Browne Company LLC is a member of the NASD and is the
Distributor of the Company.
- --------------------------------------------------------------------------------
<PAGE>
TWEEDY, BROWNE FUND INC.
- --------------------------------------------------------------------------------
Investment Manager's Report
- --------------------------------------------------------------------------------
[Graphic Omitted]
Chris Browne, John Spears and Will Browne (seated L to R)
Bob Wyckoff and Tom Shrager (back row L to R)
To Our Shareholders:
We are pleased to present the semi-annual report for Tweedy, Browne Global
Value Fund and Tweedy, Browne American Value Fund for the six months ended
September 30, 1999. Investment results for both the past six months and twelve
months present something of a mixed bag. Results of the Global Value Fund have
been good on an absolute basis and relative to the relevant stock market
indexes. Although the American Value Fund did better than the S&P 500 for the
six-month period, it trails the Index by a wide margin over the twelve-month
period. Our compounded annual return* for various periods ended September 30,
1999 and that of the indexes to which we compare ourselves is set forth in the
following charts:
- ------------
* 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.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
MORNINGSTAR MORNINGSTAR
WORLD FOREIGN
TWEEDY, BROWNE MSCI EAFE(1) STOCK FUNDS STOCK FUNDS
GLOBAL VALUE US $ HEDGED AVERAGE(2) AVERAGE(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6 Months 13.33% 7.04% 5.58% 7.15% 11.04%
- ---------------------------------------------------------------------------------------------------------------
1 Year 41.60 30.95 32.70 28.33 31.80
- ---------------------------------------------------------------------------------------------------------------
3 Years 20.65 10.43 15.29 12.41 11.25
- ---------------------------------------------------------------------------------------------------------------
5 Years 16.72 9.12 13.48 12.03 9.26
- ---------------------------------------------------------------------------------------------------------------
Since Inception(9) 16.85 9.57 11.95 12.70 10.79
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
MORNINGSTAR MORNINGSTAR
MID-CAP DOMESTIC
TWEEDY, BROWNE S&P S&P RUSSELL VALUE FUNDS STOCK FUNDS
AMERICAN VALUE 500(4) MID-CAP 400(5) 2000(6) AVERAGE(7) AVERAGE(8)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 Months 4.06% 0.36% 4.57% 8.25% 2.23% 4.19%
- -----------------------------------------------------------------------------------------------------------------------
1 Year 16.93 27.79 25.49 19.07 14.07 27.14
- -----------------------------------------------------------------------------------------------------------------------
3 Years 19.24 25.09 17.81 8.70 11.43 15.81
- -----------------------------------------------------------------------------------------------------------------------
5 Years 20.17 25.03 18.59 12.39 14.30 17.89
- -----------------------------------------------------------------------------------------------------------------------
Since Inception(9) 17.65 21.64 16.44 11.18 12.62 15.74
- -----------------------------------------------------------------------------------------------------------------------
See page 19 for footnotes 1 through 9, which describe the indexes and inception dates of the Funds.
</TABLE>
The results of the Global Value Fund were helped in large measure by our
investments in Japan and to a lesser extent in Hong Kong and Singapore. A year
ago it was hard to find someone on the international investment scene who had
anything nice to say about either Japan or Hong Kong. The economic
uncertainties facing both were enough to scare off most investors. However,
given our rather myopic approach to investing, whereby we focus on the values
offered in individual stocks and not the macro-economic situation, we made
fairly significant investments in all of these markets. And although we found
many compelling values, this did not prevent many of these stocks from
becoming even more undervalued. For example, in March of 1998, we found Shinki
Company, a small business and consumer loan company selling at about 10x
estimated earnings for its 1999 fiscal year end. On a stock split adjusted
basis, the shares were selling for 1,025 Yen, down from a three-year high of
1,750 Yen. Six months later, the stock was at 650 Yen. During the Asian
financial crisis of last year, the stock got as low as 280 Yen. Fluctuations
of this sort would scare off almost any rational investor. However, nothing
fundamental had happened to the business. Actual earnings per share for
Shinki's fiscal year ended March 31, 1999 came in higher than expected at 127
Yen. Next year's earnings estimates are for 150 Yen per share. As of September
30, 1999, the market price was 4,640 Yen per share. We had a similar
experience with Takefuji Corp., another consumer lender, which was selling for
5,330 Yen when we found it in late 1997 and went as low as 4,600 Yen. At
September 30, 1999, the shares closed at 17,730 Yen. (When we found it, the
market capitalization of Takefuji was $6 billion, while Shinki was only $370
million. We are not constrained by market cap.) Another example is Mandom
Corp., a $260 million market cap company that makes men's hair care products.
When we found this company two years ago, the shares were trading at 1,300 Yen
with 406 Yen per share of excess cash and rising earnings. Adjusting the
price/earnings ratio for the excess cash, the shares were selling for 11x
earnings. Again, during the Asian financial crisis, the stock got as low as
730 Yen. As of September 30, 1999, the shares closed at 3,900 Yen.
The speed with which stock prices rise or fall can be startling. Stock
market sentiment is highly fickle and prone to rapid change. Although we
suffered unrealized losses on our investments in Japan almost from the time we
started buying Japanese stocks up through the end of 1998, we have been amply
rewarded this year. If we had not accumulated our positions over a relatively
long period of time, we probably would not have managed to "get in" as
significantly as we did had we begun the process just after the Japanese stock
market started to recover. This is especially true given the number of small
and medium cap companies we bought where the values were the most compelling.
In late 1997, we discovered Wing Hang Bank, a small Hong Kong bank with a
market cap of $680 million at its price then of HK$17.90. In the ensuing year,
the stock went as low as HK$6.65 and we bought a reasonably large position at
an average cost of HK$12.93. By September 30, 1999 the stock was selling for
HK$20.60, less than 10x next year's earnings. In June of 1998, we found
Singapore Press Holdings, a monopoly newspaper company with holdings in cable
television and cellular phones, selling for a reasonable earnings multiple of
15x at a price of SP$12.90. Again, in the Asian financial crisis of 1998, the
shares sank like a lead balloon. We eventually acquired a fairly significant
position at an average cost of SP$13.58. As of September 30, 1999, the stock
closed at SP$26.80.
These stocks are representative of many investments we made in Asia, many
of which have provided excellent returns, and many of which have not yet done
so. However, rather than attempt to determine when an out of favor stock
market will return to favor, which we readily acknowledge we cannot do, we try
to find cheap stocks that we are comfortable owning even if they get cheaper,
or even if some financial crisis occurs such as the "Asian meltdown" of last
fall. Finally, the picture in Japan is showing signs of improvement. The Prime
Minister, Mr. Keizo Obuchi, seems to have embraced supply side economics by
pushing through tax cuts for businesses and individuals, and proposing
solutions to Japan's underfunded pension system. With the Nobel Prize in
Economics having been recently awarded to a supply side economist, Robert
Mundell of Columbia University, Mr. Obuchi may be able to strengthen the case
for his reforms.
Investments in countries along the Pacific Rim total 35.1% of net assets
of the Global Value Fund, with Japan accounting for 22.5%. Europe remains the
largest area of investment at 45.8% of net assets. European stock markets
present another mixed bag of results. Sweden is up substantially and France
and the UK are in positive territory. However, most are in negative territory.
There are positive structural changes taking place in Europe, which could have
a salutary effect on stock markets. The introduction of the Euro, which went
more smoothly than most expected, has given rise to a desire for companies to
merge across borders. Just as the U.S. economy was highly localized several
decades back, the lack of a common currency was an impediment to multi-
national expansion in Europe. The level of merger activity in Europe is up
substantially, and unfriendly acquisition bids are becoming commonplace on the
Continent, which would have been unthinkable a few years back. There is also a
movement to standardize securities laws, especially as they relate to
takeovers, which can only be positive for shareholders. Although the bad news
is that most of Europe is way behind the U.S. in terms of corporate
restructuring and consolidation, the good news is that it is beginning and,
once underway, it will be impossible to reverse.
The relative underperformance of the American Value Fund, as compared to
the S&P 500, over the past year is the result of having no investments in
technology stocks. Despite not owning technology stocks, we have been able to
compound the American Value Fund's net asset value at 20.17% annualized over
the past 5 years. (See page 2 for historical performance information.)
Technology stocks now account for 25% of the S&P 500 Index, up from 10% just
five years ago. This is the greatest concentration of the Index in any one
industry since the oil stocks accounted for a similar 25% in the early 1980s.
On a calendar year basis, through the nine months ended September 30, 1999,
the S&P 500 Index would have been down were it not for technology stocks.
Again, on a calendar year basis (this being the only time period for which we
have data) more than half of the stocks in the S&P 500 are down for the nine
months ended September 30, 1999 and more than 35% of them are down more than
10%.
Some of our stocks are down, too. For example, in April we first
considered buying shares of Quorum Health Group, Inc. when the stock was
selling for just under $11.00 per share. The company is the largest contract
manager of not-for-profit hospitals and owns and operates other hospitals
directly. We first noticed the company because of significant insider buying.
The chairman, who is highly respected in the hospital management industry,
spent tens of millions of dollars buying stock in the open market. Earnings in
the current year were expected to decline due to some operational problems at
several newly acquired hospitals, but the P/E was still a reasonable 11x after
the decline. We estimate the sell out value of the company at $16 to $17 per
share based on comparable acquisitions. The stock was also at a modest 1.3x
book value. All these facts did not prevent the stock price from declining to
a low of $5 5/16 in the ensuing months. We bought a small amount of stock at
$12.30 per share and bought more as the price declined. Our current position
of approximately 1.5 million shares was acquired at an average price of $9.03
per share. We still think there is significant value here, well in excess of
the current price, but unfortunately we have no control over what the stock
market thinks for now.
Some stock market pundits are saying we are in the early-to-middle stages
of a bear market, but because of technology stocks, it is not reflected in the
indexes. While we have no opinion about whether we are in a bear market or a
bull market, the fact that the average stock is lower provides some comfort
that stock valuations in general are not excessive. The rise of technology
shares is what the industry calls narrowness, and this market is particularly
narrow at this stage. According to Dr. Edward Yardeni, chief economist for
Deutsche Banc Alex. Brown, only seven stocks account for 15% of the S&P 500
Index. Dr. Yardeni calls these stocks "The Magnificent Seven." They are IBM,
Intel, Cisco, Microsoft, Lucent, Dell and America Online. The combined market
capitalization of these companies has increased 314% since the end of 1996
through September 30, 1999 while their combined earnings has increased 157%.
What this means is that while earnings growth has been substantial, the group
of seven stocks has been more than adequately rewarded with a doubling of its
price/earnings ratio. Based on trailing earnings, the price/earnings ratio of
the group is about 65x. Investment capital always flows disproportionately
into whichever group of stocks has performed best in the recent past until
valuations get so high that there is no room in their pricing for the
disappointments that inevitably occur.
We are not predicting that these companies' stocks must inevitably tumble
(tumble is a softer, less scary word than crash), but we are saying that, from
a value investor's perspective, there is not much appeal. A table from Dun's
Review, reprinted in Byron Wein's Strategy and Economics column for Morgan
Stanley, shows 23 "Glamour Stocks" of 1967-1968, which included seven
computer stocks, seven technology stocks, and nine conglomerates. At their
peak during that two-year period, the average price/earnings ratio was 103x.
By 1970, the average price decline from the peak for these stocks was 88% and
individual declines ranged from a low of 80% to a high of 96%. Obviously, in
the 1967-1968 period the stock market loved these stocks. They could do no
wrong and were expected to continue to grow and reward their shareholders.
Predicting the future beyond the inevitability of death and taxes is a risky
business.
Not all value stocks were without some favorable event surprises. We
experienced an increase in takeover activity in the stocks we own over the
past six months. In February 1999, we bought shares of Republic New York
Corp., a bank, for an average cost of $39.00 per share. On May 10, 1999 the
company announced it would be acquired by HSBC Corp. for $72.00 per share. Our
position in Pinkerton's Inc., with an average cost of $19.20 per share, was
acquired for $29.00 per share. Other companies in the portfolio that were
acquired or are pending completion of an acquisition are O'Sullivan Corp.,
O'Sullivan Industries, Pilgrim Capital, Standard Products and Fingerhut
Company among others.
In an ideal world, we would all love to own shares in companies that will
continue to grow forever, or maybe for 30 years or so. We are all envious of
those individuals who bought Microsoft or Walmart on the day they became
public companies. If you hung onto your shares, you have been richly rewarded.
However, are Microsoft and Walmart the exception, and will they continue to
grow at the rates they have in the past? We recently completed a study of how
companies with great ten year records as of December 31, 1990 did in the
subsequent seven years. We wanted to see if past performance was predictive of
future growth in earnings and intrinsic value. The study addresses whether or
not an excellent corporate track record, as measured by a high average return
on equity over the past ten years, predicts excellent corporate results in the
future. A high average return on equity over a long period of time, such as
ten years, conveys information about the nature of a business and suggests
that the business has some kind of competitive advantage such as lower costs,
uniqueness of products, etc., that has enabled the company to sustain high
returns.
In our study, we ranked all industrial and financial companies in the
Compustat database (utilities were excluded) with market capitalizations
greater than $100 million on December 31, 1990 on the basis of return on
equity over the previous ten years, and arranged them into ten equal groups,
or deciles. Of the companies in the top decile; i.e., those with the highest
historic return on equity, 54 were still independent companies in 1997. Over
the 1980-1990 period, these 54 companies had an average return on equity of
29.1%. The average return on equity in 1990 for these 54 companies was an
outstanding 41.9%. Over the ten year 1980-1990 period, these 54 highly
successful companies had enjoyed an average compounded earnings per share
growth rate of 18.5%. Over the next seven years through 1997, the performance
of these 54 companies presents a very mixed picture. One-third (18) of the 54
companies reported lower earnings per share in 1997 than in 1990. Another 14
companies, 26% of the group, had earnings per share growth rates of 7% or
less. Only 10 companies, 19% of the group, had earnings per share growth rates
of greater than 15%, which average was 21.2%. A similar pattern is evident
when growth is measured in terms of "intrinsic value," which we define as 10x
EBIT (earnings before interest and taxes) before adding back excess cash and
subtracting corporate debt.
Whatever the competitive advantage was that enabled these companies to
produce superior returns on equity and superior earnings per share growth
rates in the 1980-1990 period, it was not sustained, on average, over the next
seven years. Past financial results were not able to predict future financial
results. Others have made similar studies with similar results. On average,
the performance of the "best companies" tends to revert to the mean.
Moreover, companies that were in the lowest category of ten-year, 1980-1990
average return on equity, had a similar distribution of good to poor
subsequent seven-year earnings per share growth rates in the 1990-1997 period
as the companies with the best ten year, 1980-1990, average returns on equity.
Many companies with poor return on equity track records perked up and produced
significant earnings increases, and many companies with excellent return on
equity track records stumbled and experienced a large decline in earnings.
You may say these are just statistics without the benefit of analysts'
research. A good analyst should be able to predict future earnings and guide
the investor into a portfolio of the companies that will continue to
outperform. Another study, Returns to Contrarian Investment Strategies: Tests
of Naive Expectations Hypotheses by Patricia M. Dechow and Richard G. Sloan in
the January 1, 1997 issue of Journal of Financial Economics tests the
forecasting abilities of security analysts. More than 23,000 five-year
forecasts of earnings per share growth rates by analysts were ranked into
deciles by rate of growth and compared to what actually happened. In every
decile the analysts predictions were overly optimistic, with the degree of
over optimism rising in a linear relationship from worst to best performing.
For the companies predicted to perform best, the analysts' prediction was for
a growth rate in earnings per share of 36.2%. The actual rate of EPS growth
came in at 13.4%, meaning the analysts missed the mark by 22.8 percentage
points. The only other group whose predictions are this far off the mark and
remain employed are weathermen.
The difficulty for us in owning technology stocks is the extremely high
valuations that are put on them. We do not see any "margin of safety" as Ben
Graham would say. And these high valuations are based on analysts' predictions
of high future earnings growth, about which we are at best skeptical. The
evidence suggests that, on average, high returns on equity and high growth
rates are not sustainable. Technology has the additional risk of obsolescence.
Of the fourteen computer and technology stocks that were the glamour issues of
1967-1968, presented by Byron Wein and referred to above, only one is in
existence today. Recently, a smart friend of ours attended a technology
conference sponsored by Montgomery Securities, a leading brokerage and
investment banking firm in this field. He was quite excited about the changes
coming down the road from technology and the growth of the Internet. "I don't
know who is going to own the wire connecting me to the world, but it sure is
exciting," he said. When we asked how one would turn that into an investment
strategy, his response was that he did not have a clue. Which company or
companies will be the winners in this new wired world may be too difficult to
predict. Getting it right may be more a matter of luck than skill or
intelligence. If companies whose stocks sell for 50 to 100 times earnings, or
an infinite multiple because they have not yet entered the earnings phase of
their business model, fail to meet these predictions, the financial
consequences to stockholders can be devastating. We are afraid we have to
pass.
The run up in technology stocks has been a fairly recent phenomenon. This
is called "skewing," which means that portfolio or even stock index returns
can come from a small percentage of issues. The group or groups of stocks that
outperform the overall market is constantly changing, which is why certain
investment styles may underperform at certain times. We recently read the June
30, 1999 shareholder report of Sequoia Fund, which is run by a group of folks
for whom we have the highest respect. We would describe their investment style
as value with a bias toward better businesses whose intrinsic values are
likely to grow over time. Like us, they own no technology stocks. As of June
30, 1999 Sequoia Fund was down 3.8%, as compared to a gain of 12.4% for the
S&P 500. According to the Sequoia Fund, over its 29-year history, it has
returned over 12,500% as compared to a gain of 4,900% for the S&P 500. By
producing an average compounded annual return of 18.1% over the 29-year
period, which was 3.7 percentage points higher than the S&P 500's 14.4%
average annual return, Sequoia generated 7,600% more wealth for its
shareholders than the wealth that was generated by the S&P 500. A $1 million
initial investment in the Sequoia Fund 29 years ago would have grown to $126
million. The same initial investment in the S&P 500 would have grown to $50
million over the 29-year period. Congratulations! However, the Sequoia Fund
underperformed the S&P 500 Index in 12 of those 29 years, or 41% of the time.
We, and the folks at Sequoia, reach a similar conclusion: if you are
consistent in your approach to investing, you do not have to outperform every
year in order to outperform in the long run.
Based on our research of long-run investment success, we accept that we
will not outperform in each and every period. That's not our goal, because
that goal is unrealistic. Our goal is to produce wealth in excess of that
produced by index funds by outperforming index returns, on average, over a
very long measurement period, such as 20 years. As the Sequoia Fund track
record shows, there can be a very large payoff from selecting an investment
manager and a strategy that provides value above the index return over the
long run. Seemingly small average annual return differences, compounded over a
long period of time, will result in significant differences in the amount of
money at the end of the period. Little advantages, little edges, really add up
over time.
FUTURE INVESTMENT RETURNS: WHAT TO EXPECT
What is the future pattern of investment returns likely to be for Tweedy,
Browne American Value Fund and Tweedy, Browne Global Value Fund? To gain
perspective and understanding on this question and the whole topic of
investment return expectations and measurement, we urge you to read our
report, Is Underperforming an Index 30% to 40% of the Time a Normal Part of
Long-Run Investment Success? What We Learned from an Examination of the Year-
by-Year Results for Nine Value-Oriented Investment Managers with Index Beating
Long-Term Records, which is part of the booklet entitled 10 WAYS TO BEAT AN
INDEX. You may have already received this booklet. (It is available in the
Investment Research and Reports Section of our website, www.tweedy.com, or
call us at (800) 432-4789 if you would like us to send a copy to you.) Our
conclusion, based on the research that is described in this report, is perhaps
a little hard to take, a little bit of a "cold shower." To gain the extra
wealth that can be provided by outperforming an index, on average, over a long
period of time, an investor should expect to have relatively crummy investment
results compared to an index in 30% to 40% of the years. Therefore, over a 20-
year period, we think you can expect 12 to 14 relatively good years and 6 to 8
crummy ones, relative to an index, and it is quite possible that several
crummy years will be lumped together, not evenly sprinkled over time. Our
research indicates that underperforming years, which have often caused
investors to abandon a perfectly sensible long run investment program, are
likely to be followed by good years. The investors who quit endured the pain,
but did not reap the gain. Many of the relatively poor years in comparison to
index returns could still be positive years where your wealth increases, but
just not by as much as the wealth increase provided by index returns. Beating
the index in 60% to 70% of the years means winning 1.5x to 2.33x as often as
the index. In other words, the index loses 60% to 70% of the time versus
investment strategies that have succeeded over the long run. This is about
what we think you can expect from an investment program that works well in the
future. Value investment managers who have generated significant wealth above
index returns have performed pretty well, winning 60% to 70% of the time, but
this is far from the near perfection that many consultants and other judges of
investment performance seem to expect. It brings to mind the saying, "The
perfect is the enemy of the good."
------------------ o ------------------
One topic we do spend a lot of time thinking about is risk. By this we do
not mean the short-term risk that stock markets can go down, which they
invariably do. However, they have always come back. If ever stock markets did
not "come back," it would probably mean a revolution has taken place and all
property has been confiscated by the government (as opposed to the partial
confiscation by way of taxes), or that thermo-nuclear war has returned mankind
to the stone age. We have always been optimists in the long run and it has
served us well. As we write this letter, the U.S. stock market is wavering
between a "correction" as they call it and maybe a bear market. And there are
bulls and bears on both sides of the argument. What is perfectly clear if you
listen to all this discussion, is that nothing is clear. If it were, the stock
market would immediately adjust to whatever level was appropriate for the
economic conditions. We think about risk on a stock-by-stock basis. At a given
price, is it probable (after all, anything is possible) that we will not
eventually get our money back if the overall market declines, or if specific
predictions about a company's future do not come to fruition? When there is an
overall decline in stock prices, the most overpriced stocks tend to fare the
worst. We have seen enough bubbles burst to not want to be around those
issues. The only emotion that gets stocks to crazy levels is excessive, blind
enthusiasm. When that enthusiasm fades, there is no one to support those
stocks.
We prefer to think in terms of whether there is a natural buyer for the
entire company at a price greater than the current market price of the shares.
Ben Graham taught us to think of shares of stock as fractional interests in a
business. He further taught us to buy those "fractional interests" at a
discount to the value of the entire business, or what he called intrinsic
value. The discount from intrinsic value he called his "margin of safety," We
have difficulty determining the intrinsic value of technology companies or
internet stocks, and do not buy into the emergence of a "new paradigm" for
valuing businesses. If we cannot get our margin of safety from the hard assets
of a business, we make appraisals of on-going businesses, compare them to
similar businesses that have been acquired in the past, and finally compare
each business to the price of its stock. We also look for businesses we can
understand, where we do not believe that some new invention could knock them
out overnight. Again, this makes technology a tough call for us. Warren
Buffett has succeeded nicely without owning technology stocks, and so have we.
We also tend to avoid companies that are leveraged; i.e., owing too much
money relative to their assets or earning power. When you borrow money, you
get in bed with a partner whose goals may ultimately differ from yours, or
whose view of the future may change, forcing you to do things you might not
otherwise do, or even go bankrupt. Liquidity means freedom to pursue your
business plan and think long term. It also provides downside protection to the
investor. Some pretty good businesses have gone into Chapter 11 because they
did not have the financial resources to hold out until conditions improved.
However, even with all this downside protection, we can still be hit by
unfavorable event surprises. Even GEICO, which probably has the safest
drivers, as a group, of all the automobile insurers, cannot avoid some
accidents. Just as GEICO avoids most, but not all, accidents by insuring lots
of drivers, we avoid most, but not all, investment "crackups" through
diversification. Generally, we do not invest more than 3% of our assets in any
one stock so that in the event something negative arises that we did not
foresee, the impact on our portfolio is not so great because we have enough
other assets working for us to restore our net worth. At Tweedy, Browne, we
like diversification, not only because it reduces risk, but because it also
increases the probability, through the law of large numbers, that our
investment philosophy will work. In any portfolio, all stocks do not rise or
fall equally in any given period. Returns are often concentrated in a few
issues which outperform the rest of the portfolio. That is exactly what
happened this past year to the S&P 500. Nearly all the gains were concentrated
in a handful of stocks. The same happens in any actively managed portfolio.
Diversification also provides protection against the very human tendency,
shared by many investment analysts and portfolio managers, to over estimate
one's own abilities. Behavioral psychologists call this the "overconfidence
factor." Numerous studies have demonstrated man's consistent tendency to
overestimate his abilities. More than 90% of all Swedish drivers in one survey
rated their driving ability above average. A similar survey of trial lawyers
found 68% believed they would win their case at trial. Most money managers
believe the investment decisions they make will add value over an index
despite the fact that the S&P 500 Index beats 80% to 90% of the managers. We
have all heard stories about investors who bet most of their money on a "sure
thing" and lost. Diversification can be very forgiving.
Kenneth Fisher illustrated the investment advantages of diversification in
an article in FORBES magazine in 1996 entitled Why the Rich Get (Relatively)
Poorer. When the first Forbes 400 list was compiled, it took about $100
million to make the cut. Fifteen years later, it took $415 million, a rate of
compounding of about 10%. Theoretically, this should have been relatively easy
to accomplish, as the S&P 500 compounded at a rate of 15.6% over the same
period. However, even allowing for deaths, precious few of the original 400
remained on the list. The reason, as Fisher sees it, is that most big wealth
is made in concentrated investments. If these investments are not performing
well, there are not other assets with "positive surprises" to offset the
investments that have turned cold. Mathematicians refer to the tendency of a
relatively few winners to dominate the investment returns of a portfolio
comprised of many issues as "skewness," which we discussed above relative to
the S&P 500. Fisher found that the lack of diversification of the super rich,
and thus the lack of its companion advantage, skewness, resulted in the
concentrated investors of the Forbes 400 list having relatively poor
investment returns. (While few among us will shed tears for these hapless
souls, we should thank them for providing us more common folk with an
important lesson.)
Most wealth in this country was made through concentrated investments.
Just look at Bill Gates and his fellow Microsoft founders. Warren Buffett may
be more of an exception. Although his wealth is concentrated in Berkshire
Hathaway, Berky (as it is fondly called) is itself rather diversified. It has
also been a real wealth builder, perhaps creating one of the largest
millionaires' clubs in the country. However, even Warren Buffett has made
mistakes, such as his purchase in 1986 of World Book Encyclopedia. This is a
classic example of how competing technologies can erode and even destroy a
company. In 1986, World Book Encyclopedias sold for $650 to $850 a set. The
acknowledged leader in the industry, Encyclopedia Britannica, sold for $1600
per set. In 1992, Microsoft decided to enter the encyclopedia business and
came out with the CD version of Funk and Wagnalls, a second-tier encyclopedia
that had been reduced to selling through supermarkets. Microsoft sold its
version for $49.95. At that price, consumers were willing to settle for a
lesser encyclopedia, and sales of World Book and Britannica went into a
tailspin. However, the impact on Berkshire Hathaway was barely noticed because
the success of other investments, such as GEICO Insurance, The Washington Post
Company and Coca-Cola, more than made up for the loss of value at World Book.
Berky's returns were skewed with greater success than most other companies.
In a hypothetical example of skewness, let us assume that an investor buys
$100 of each of three stocks and holds them for 20 years. Stock A is a real
winner and compounds at 20% per year. Stock B does OK at 10% compounded per
year. Stock C goes belly-up, producing a total loss. The following table shows
the "performance" of the portfolio:
- --------------------------------------------------------------------------------
VALUE OF INVESTMENT
20-YEAR INITIAL AT END OF
STOCK INVESTMENT RETURN INVESTMENT 20-YEAR PERIOD
- --------------------------------------------------------------------------------
A 20% gain per year $100 $3,833.76
- --------------------------------------------------------------------------------
B 10% gain per year 100 672.75
- --------------------------------------------------------------------------------
C 100% loss 100 0.00
- --------------------------------------------------------------------------------
Total $300 $4,506.51
- --------------------------------------------------------------------------------
Despite the total loss on one-third of the portfolio, the success of the
winner far outweighed this loss. By owning many stocks, not just a few, a
diversified portfolio will tend to own some winners that, through skewness,
can greatly offset the effect of losers and enhance overall portfolio returns.
Berkshire Hathaway has further enhanced shareholder value through tax
efficient long-term ownership of its investments. We are continually amazed at
the very high average portfolio turnover* rates of mutual funds, which leads
us to conclude that the average fund manager does not take into consideration
the effect of taxes on investment returns for tax paying individuals. At
Tweedy, Browne, we are highly conscious of the effect of taxes on after-tax
returns. For us the most stressful day of the year is not when the stock
market tumbles a few hundred points, but April 15. We almost consider it a
national day of mourning. In the tables below, we show the effect of various
portfolio turnover rates on a theoretical investment of $1 million that
compounds at 15% and 20% over a 20-year period, assuming capital gains tax
rates of 20% at the Federal level and 7% (after the Federal deduction) at the
State and local level, or a 27% total capital gains tax rate.
- ------------
* "Turnover" is the percentage of a portfolio that is sold and then
reinvested within the measuring period. For example, a portfolio worth $100
million, in which $85 million worth of stocks are sold and the proceeds are
reinvested in other stocks within the measuring period, has 85% turnover.
- --------------------------------------------------------------------------------
$1,000,000 INITIAL INVESTMENT COMPOUNDED AT A 15% AND 20%
PRE-TAX ANNUAL RATE OF RETURN OVER A 20-YEAR PERIOD,
ASSUMING A 27% TAX RATE ON ALL REALIZED GAINS
- --------------------------------------------------------------------------------
PRE-TAX VALUE OF $1,000,000 AFTER-TAX
RATE OF ANNUAL INITIAL INVESTMENT AT RATE OF
RETURN TURNOVER THE END OF 20 YEARS RETURN
- --------------------------------------------------------------------------------
15% --0-- $16,366,500 15.0%
- --------------------------------------------------------------------------------
15 3% 14,780,800 14.4
- --------------------------------------------------------------------------------
15 10 12,386,300 13.4
- --------------------------------------------------------------------------------
15 30 9,694,000 12.0
- --------------------------------------------------------------------------------
15 85 8,136,600 11.1
- --------------------------------------------------------------------------------
15 100 7,990,800 11.0
- --------------------------------------------------------------------------------
20 --0-- 38,337,600 20.0
- --------------------------------------------------------------------------------
20 3 34,211,200 19.3
- --------------------------------------------------------------------------------
20 10 27,808,500 18.1
- --------------------------------------------------------------------------------
20 30 20,250,200 16.2
- --------------------------------------------------------------------------------
20 85 15,695,500 14.8
- --------------------------------------------------------------------------------
20 100 15,264,800 14.6
- --------------------------------------------------------------------------------
We have, over the years, invested larger portions of our portfolios in "double
dip" stocks, as Warren Buffett has called them, whose underlying value tends
to grow at above-average rates, which consequently raises our sell targets in
tandem for these securities. The effect has been a declining portfolio
turnover rate for the assets we manage. Based on certain data we found in
Morningstar, an excellent resource for information on mutual funds, for the
year ended June 30, 1999, the average portfolio turnover rate for 1,984
"growth" funds in our study was 124%. The average for 1,911 value funds over
the same period was 97%*. Over the same period, the portfolio turnover rate
for our American Value Fund was 16% and for our Global Value Fund was 23%. The
American Value Fund had a lower turnover rate than 92% of the funds in our
sample of 4,463 actively managed funds; the Global Value Fund was lower than
88% of the funds in the sample. What is even more amazing to us is that nearly
32% of the mutual funds in the sample have turnover rates greater than 100%,
which means that investors in those funds would not even be getting the
benefit of long-term capital gains tax treatment on their profits if the
turnover affected all stocks in the portfolio equally.
- ----------
* The growth, value, and actively managed fund samples contained in our study
consisted of funds with the following characteristics: (i) the growth fund
sample included all equity funds from the Morningstar database that were
characterized by a growth equity style and excluded funds that had more than
10% of assets invested in fixed income securities, (ii) the value fund
sample included all equity funds from the Morningstar database that were
characterized by a value equity style and excluded funds that had more than
10% of assets invested in fixed income securities, and (iii) the actively
managed fund sample included all equity funds from the Morningstar database
and excluded funds, characterized as index funds, funds with a 0% turnover
ratio, and funds that had more than 10% of assets invested in fixed income
securities. Morningstar does not calculate turnover ratios and culls the
figures directly from the financial highlights of each fund's annual report.
Portfolio turnover is of no consequence to tax exempt investors such as
retirement plans and charitable institutions. However, most investment money
is taxable. While tax exempt investors should not care about turnover, there
is no evidence to suggest that all this buying and selling improves pre-tax
results. On the contrary, there is circumstantial evidence that the opposite
is true. Lots of buying and selling, in addition to increasing tax costs
because high-bracket taxpayers "share" anywhere from 20% to 50% of realized
capital gains with Uncle Sam and the States, also increases commission costs
and "market impact cost," which is the effect that large orders to purchase or
sell blocks of stock can have on transaction prices.
Why do money managers engage in so much buying and selling? The industry
tends to attract energetic, intelligent, well-educated and self-confident
individuals who are generally highly paid. It appears that it is very
difficult for individuals with these characteristics to do very little, even
though the empirical data on investment performance, both pre-tax and after-
tax, suggests that the best course and the most rational decision would be to
sit tight and do very little. But they do not. Charles Munger, Warren
Buffett's partner, has described this irrational and often lemming-like
behavior of people in business as the "Institutional Imperative." Even though
it may not make sense at certain times for bank loan officers to make new
loans, or for a chief executive officer to acquire another company, or a fund
manager to buy and sell stocks with such frequency, it is ingrained in human
beings to be busy and active, to "take charge" and be "in control."
You can observe similar behavior on the part of drivers who weave in and
out of lanes on the turnpike. In the investment business, behavioral
psychologists have called this ingrained tendency to weave in and out of
stocks the "illusion of control." Why would investment management firms want
to pay high salaries to people who appear to be doing very little and who do
not appear to have much control over what they are doing? Investment
management firms, in general, must believe lots of activity is productive
because they willingly pay for it, and high compensation ensures that they
will get it. Everyone involved must believe it all makes sense. The illusion
of control is shared. The words of Blaise Pascal come to mind: "All men's
miseries come from their inability to sit quiet and alone."
The only thing an investment manager really controls is investment
strategy or philosophy and its implementation. Investment returns are
dependent on what someone else is willing to pay for the stocks you own, and
over that we have no control. However, what is measured will be managed. So
long as the industry applauds activity, believes it is beneficial, and so long
as money managers are measured by pre-tax returns, that will be their focus.
We cannot ever recall reading an article about an acclaimed hedge fund or
mutual fund manager that described the taxable short and long-term gain
portions of their investment returns.
The growth of e-trading in recent times does not serve to restrain money
managers. John C. Bogle, founder and senior chairman of Vanguard Group, calls
this phenomenon "The Wall Street Casino." Individuals are sitting at their
computers day-trading stocks that they hear about in Internet chat rooms where
there is no control over the quality or accuracy of information they are
receiving. Many have no idea what the companies whose shares they are trading
even do. And the e-brokers obviously encourage this behavior with
advertisements that could often be called deceptive at best. As Mr. Bogle said
in THE NEW YORK TIMES, "The sad fact is that investors today, by incurring all
of these costs, are acting directly counter to their own best interests. In
the long run, the best way to capture as much of the stock market's return as
is possible is to buy and hold and minimize the costs of investing." Hyper-
activity is not confined to individual stocks, but has also spread to mutual
funds, which some individuals trade as frequently as they trade Internet
stocks. This has become a problem for some funds, which have taken steps to
exclude such investors by imposing redemption fees on shareholders of less
than a specified duration. So far, this has not been a problem for the Tweedy,
Browne Funds, and we have no intention of instituting redemption fees at this
time. We prefer to think that if our investors read what we say, they will
invest with us because they share our long-term view of the process.
------------------ o ------------------
Following are the stock price-to-book value and stock price-to-earnings
characteristics as of September 30, 1999 of the portions of the Tweedy, Browne
Funds that are currently held on the basis of those characteristics:
- --------------------------------------------------------------------------------
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
PRICE/BOOK VALUE 0.79 Based on 20.76% Cheaper than 92% of the 7,474 stocks
of portfolio in the Bloomberg database with market
assets capitalizations above $100 million in
those countries where the Global
Value Fund has investments
- --------------------------------------------------------------------------------
PRICE/EARNINGS 13.00x Based on 46.55% Cheaper than 77% of the 7,474 stocks
of portfolio in the Bloomberg database with market
assets capitalizations above $100 million in
those countries where the Global
Value Fund has investments
================================================================================
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
PRICE/BOOK VALUE 0.75 Based on 19.46% Cheaper than 92% of the 3,609 stocks
of portfolio in the Bloomberg database with market
assets capitalizations above $100 million
that are based in the United States
- --------------------------------------------------------------------------------
PRICE/EARNINGS 11.40x Based on 49.00% Cheaper than 84% of the 3,609 stocks
of portfolio in the Bloomberg database with market
assets capitalizations above $100 million
that are based in the United States
================================================================================
In both Funds, the balance of our assets is either invested in cash
awaiting stock investment, or in securities that trade at a higher price-to-
book value or price-to-earnings ratio because they have risen above our buy
range, or because they are better businesses that deserve to trade at
fundamentally higher ratios. The latter category comprises stocks that,
although at higher fundamental price-to-book and price-to-earnings ratios, are
still at a discount to their intrinsic value in our estimation. In many
situations, we have been drawn to investment ideas because of the added value
confirmation of significant insider buying. Although not a fool-proof
indication of value, it is a "leading indicator" that a company's profits may
be improving. Just as we hope our investors take comfort in our personal
financial commitment to the investments we make on your behalf, we take
comfort in the personal investment commitment the officers and directors of
the companies we own make to them. As of September 30, 1999, the current
Managing Directors, retired principals and their families, as well as
employees of Tweedy, Browne, have more than $43.1 million invested in the
Global Value Fund and $31.6 million invested in the American Value Fund.
YEAR 2000 OUTLOOK
As you have probably read in the media, the securities industry seems to
be well prepared for the millenium. Industry regulators and trade
organizations have mounted a coordinated effort to head off serious problems
that could adversely affect the financial markets. So far, the securities
industry seems to be on target with its testing and preparations for the Year
2000. Here at Tweedy, Browne, we are on target with our project plan and we
believe our internal systems are Y2K compliant. In addition, we continue to
monitor our critical vendors and receive periodic updates from them as to
their preparedness. Although we do not feel there is anything amiss so far and
industry-wide testing has not unearthed any substantial problems, we cannot
provide any guarantees that all systems affecting the Funds will be free of
operational difficulties. Notwithstanding the predictions from the U.S.
securities regulators that it will be business as usual on January 3, 2000, we
have developed a contingency plan to help us minimize any adverse consequences
to our or our critical vendors' respective business processes in the event of
a temporary disruption.
We recently moved our offices and our new address is 350 Park Avenue, New
York, New York 10022. While we are not buyers of technology stocks, we are
buyers of technology. With the transfer of information to electronic
databases, we decided to move to new quarters that we could wire for the next
ten years rather than risk the disruption of rewiring our old offices. After a
few glitches, such as transferring telephone lines, we are now fully
functioning. We hope that none of our shareholders were inconvenienced.
Sincerely,
TWEEDY, BROWNE COMPANY LLC
Christopher H. Browne
William H. Browne
John D. Spears
Thomas H. Shrager
Robert Q. Wyckoff, Jr.
Managing Directors
October 19, 1999
<PAGE>
FOOTNOTES TO TABLE ON PAGE 2
(1) MSCI EAFE US $ is an unmanaged capitalization-weighted index of companies
representing the stock markets of Europe, Australasia and the Far East.
MSCI EAFE Hedged consists of the results of the MSCI EAFE Index hedged
100% back into U.S. Dollars and accounts for interest rate differentials
in forward currency exchange rates. Results for both indexes are inclusive
of dividends and net of foreign withholding taxes.
(2) Morningstar World Stock Funds Average consists of the average returns of
all mutual funds in the Morningstar Universe that invest throughout the
world while maintaining a percentage of assets (normally 25%-50%) in the
U.S.
(3) Morningstar Foreign Stock Funds Average consists of the average returns of
all mutual funds in the Morningstar Universe that invest primarily in
equity securities of issuers located outside the U.S.
(4) S&P 500 is an unmanaged capitalization-weighted 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.
(5) S&P Mid-Cap 400 is an unmanaged capitalization-weighted index, which
assumes reinvestment of dividends and is generally considered
representative of the mid-range sector of the U.S. stock market.
(6) Russell 2000 is an unmanaged capitalization-weighted index, which assumes
reinvestment of dividends for most periods, that is comprised of the
smallest 2000 companies in the Russell 3000 Index and is generally
considered representative of U.S. small capitalization stocks.
(7) Morningstar Mid-Cap Value Funds Average consists of the average returns of
all mutual funds in the Morningstar Universe classified as value funds
with median portfolio market capitalizations greater than or equal to $1
billion but less than or equal to $5 billion.
(8) Morningstar Domestic Stock Funds Average consists of the average returns
of all domestic equity mutual funds in the Morningstar Universe.
(9) Inception dates for the Global Value Fund and the American Value Fund were
June 15, 1993 and December 8, 1993, respectively. Index information is
available at month end only; therefore the closest month end to inception
date of each Fund, May 31, 1993 and November 30, 1993, respectively, was
used except for the Morningstar Domestic Stock Funds Average where the
closest date with data available was December 31, 1993.
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited) [Graphic Omitted]
MARKET
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCKS--92.2%
BELGIUM--0.1%
2,726 Spadel SA ................................. $ 3,307,305
3,252 Uco Textiles SA ........................... 380,703
--------------
3,688,008
--------------
CANADA--0.7%
72,400 Canadian Western Bank ..................... 876,740
260,700 Melcor Developments Ltd. .................. 3,148,122
1,391,000 National Bank of Canada, Toronto .......... 16,560,650
258,600 Shirmax Fashions Ltd.+ .................... 369,454
785,883 Westfield Minerals Ltd.+ .................. 986,430
--------------
21,941,396
--------------
DENMARK--0.3%
25,000 Hojgaard Holding A/S, Series A ............ 504,660
53,250 Hojgaard Holding A/S, Series B ............ 1,044,432
11,390 Nordvestbank .............................. 1,071,344
114,800 Unidanmark A/S, Series A .................. 7,773,970
--------------
10,394,406
--------------
FINLAND--2.3%
568,027 Huhtamaki Group, Class I .................. 17,954,322
6,200 Huhtamaki Group, Class K .................. 204,483
1,320,800 Kesko Oyj ................................. 15,883,971
286,463 Kone Corporation, Class B ................. 37,712,196
--------------
71,754,972
--------------
FRANCE--2.4%
185,919 Banque Nationale de Paris ................. 14,829,927
28,459 Bongrain SA ............................... 10,906,524
5,229 Christian Dior SA ......................... 851,439
35,044 Compagnie Fives-Lille ..................... 3,173,853
57,700 Compagnie Lebon SA ........................ 2,886,139
35,155 Financiere Marc de Lacharriere SA ......... 4,283,869
33,404 GFI Industries SA ......................... 813,744
5,229 LVMH Moet Hennessey ....................... 1,566,537
21,145 Mecelec SA ................................ 173,277
18,699 Precia+ ................................... 252,735
69,000 PSA Peugeot Citroen ....................... 13,820,135
994,617 Rhodia SA+ ................................ 21,276,271
9,340 Signaux Girod ............................. 248,005
19,893 Sylea SA .................................. 1,125,245
--------------
76,207,700
--------------
GERMANY--3.1%
52,550 Altana AG ................................. 3,775,027
61,660 Kaufring AG ............................... 1,082,757
1,800 Krones AG ................................. 52,680
61,140 Lindner Holding KGaA ...................... 1,431,501
1,643,942 Merck KGaA ................................ 59,485,210
527,115 Moebel Walther AG ......................... 6,872,030
37,085 Sinn Leffers AG ........................... 5,841,220
15,018 Springer (Axel) Verlag AG, Class A ........ 17,101,707
--------------
95,642,132
--------------
HONG KONG--4.3%
15,811,309 Asean Resources Holdings Ltd.+ ............ 1,831,921
27,889,452 CDL Hotels International Ltd. ............. 9,514,418
24,644,000 Fountain Set Holdings ..................... 3,172,543
1,004,000 Grand Hotel Holdings Ltd. ................. 146,052
4,602,000 Harbour Ring International Holdings ....... 201,429
5,404,000 Jardine International Motor Holdings Ltd. . 2,626,205
13,622,500 Jardine Strategic Holdings Ltd. ........... 27,789,900
47,724,000 South China Morning Post (Holdings) Ltd. .. 31,947,476
38,014,000 Swire Pacific Ltd., Class B ............... 27,894,257
9,034,500 Wing Hang Bank Ltd. ....................... 30,239,447
--------------
135,363,648
--------------
IRELAND--1.4%
2,733,087 Crean (James) PLC ......................... 1,236,192
7,252,955 Independent News & Media PLC .............. 38,208,833
2,733,087 OakHill Group PLC+ ........................ 1,396,170
1,105,000 Unidare PLC ............................... 2,440,192
--------------
43,281,387
--------------
ITALY--2.6%
741,850 Banco di Sardegna Risp .................... 14,392,835
472,500 Bassetti SPA .............................. 2,816,005
1,530,230 Burgo (Cartiere) SPA ...................... 12,051,248
1,156,450 Cristalleria Artistica .................... 3,692,255
276,925 IMI SPA ................................... 3,595,552
469,862 Industrie Zignago ......................... 4,225,427
1,150,500 Maffei SPA ................................ 1,493,792
237,000 Marangoni SPA ............................. 802,083
1,782,500 Mondadori (Arnoldo) Editore SPA ........... 31,111,215
8,072,735 Montefibre SPA ............................ 5,713,286
381,000 Vincenzo Zucchi SPA ....................... 2,732,930
--------------
82,626,628
--------------
JAPAN--22.5%
220,000 Agro-Kanesho Company Ltd. ................. 2,265,599
446,080 Aiful Corporation ......................... 75,797,894
625,000 Amatsuji Steel Ball Manufacturing Company . 5,939,007
14,500 Belluna Company Ltd. ...................... 488,695
53,000 CCI Corporation ........................... 419,276
101,000 Charle Company ............................ 1,153,583
555,500 Chiyoda Company ........................... 4,160,464
774,040 Chofu Seisakusho Company .................. 14,746,725
77,208 Coca-Cola West Japan Company, Ltd. ........ 3,541,817
147,500 Cosel Company Ltd. ........................ 4,073,632
270,000 Credia Company Ltd. ....................... 9,554,838
351,000 Daido Metal Company ....................... 1,189,552
1,379,000 Danto Corporation ......................... 6,545,457
526,000 Denkyosha ................................. 2,491,747
189,000 Denyo Company Ltd. ........................ 1,371,296
1,511,000 Dowa Fire & Marine Insurance Company ...... 4,866,208
1,263,000 Fuji Coca-Cola Bottling Company ........... 21,283,528
618,000 Fuji Photo Film Ltd. ...................... 21,117,821
1,663,000 Fujisawa Pharmaceutical Company ........... 32,227,777
2,223,000 Fujitec Company Ltd. ...................... 29,760,708
627,000 Fukuda Denshi ............................. 14,087,909
86,000 Glory Ltd. ................................ 1,771,287
2,431,000 Hitachi Koki Company Ltd. ................. 9,058,072
585,000 Hitachi Medical Corporation ............... 8,045,359
48,000 Idec Izumi Corporation .................... 661,031
126,000 Inaba Denkisangyo Company Ltd. ............ 2,052,521
39,900 Kahma Company Ltd. ........................ 282,772
1,418,000 Kansai Paint Company Ltd. ................. 3,982,587
150,000 Kato Sangyo Company Ltd. .................. 1,095,352
318,000 Katsuragawa Electric Company .............. 1,786,266
30,000 Kawasumi Laboratories, Inc. ............... 467,631
1,591,000 Koito Manufacturing ....................... 8,653,944
241,000 Kokura Enterprise Company ................. 1,398,867
111,000 Kosaido Company, Ltd. ..................... 2,078,360
764,000 Mandom Corporation ........................ 27,894,959
159,000 Matsumoto Yushi-Seiyaku Company ........... 3,572,532
1,941,000 Matsushita Electric Industrial Company .... 41,158,686
371,000 Meito Sangyo Company ...................... 3,990,816
493,000 Morito .................................... 2,307,728
385,000 Nankai Plywood Company Ltd. ............... 2,162,618
342,000 Nippon Broadcasting System Inc. ........... 25,614,380
1,155,000 Nippon Cable System ....................... 16,219,632
1,060,000 Nippon Konpo Unyu Soko .................... 8,593,924
242,500 Nissin Company Ltd. ....................... 16,187,099
409,000 Nittetsu Mining ........................... 1,221,467
552,000 Nitto FC Company .......................... 2,945,654
10,200 Osaka Steel Company Ltd. .................. 55,195
867,000 Riken Vitamin ............................. 12,986,940
80,000 Rock Paint ................................ 681,552
452,000 Sangetsu Company Ltd. ..................... 9,690,399
232,000 Sanko Sangyo Company ...................... 2,302,298
689,960 Sanyo Shinpan Finance Company Ltd. ........ 44,505,214
213,000 Sasakura Engineering Company Ltd. ......... 1,451,706
760,600 Shikoku Coca-Cola Bottling ................ 10,681,084
462,000 Shingakukai ............................... 2,076,113
461,800 Shinki Company Ltd. ....................... 20,060,404
461,800 Shinki Company Ltd., New+ ................. 21,270,945
3,501,000 Shionogi & Company Ltd. ................... 28,646,482
452,000 SK Kaken Company Ltd. ..................... 8,632,495
712,000 Sonton Food Industry ...................... 7,065,674
73,000 Sotoh Company Ltd. ........................ 423,723
56,300 Sysmex Corporation ........................ 1,950,194
351,000 Tachi-S ................................... 2,513,832
183,000 Taisei Fire & Marine Insurance Company .... 402,612
21,700 Takano Company Ltd. ....................... 264,101
263,200 Takefuji Corporation ...................... 43,688,021
254,000 Teikoku Hormone Manufacturing Company ..... 1,949,913
269,000 TENMA Corporation ......................... 3,956,364
59,000 Tomita Electric Company Ltd. .............. 202,715
387,000 Torii Company Ltd. ........................ 1,793,428
1,073,000 Torishima Pump Manufacturing .............. 6,017,198
145,000 Toso Company Ltd. ......................... 556,570
524,000 Toyo Technical Company Ltd. ............... 3,963,788
890,500 Tsubaki Nakashima Company Ltd. ............ 12,071,750
232,100 Tsuchiya Home Company ..................... 869,166
793,000 U-Shin .................................... 3,801,114
356,000 Zojirushi ................................. 2,333,006
--------------
707,151,073
--------------
MALAYSIA--0.5%
610,000 Sapura Telecommunications Berhad .......... 266,474
5,928,000 Star Publications (Malaysia) .............. 13,728,000
1,833,000 Tractor Malaysia Holdings Berhad .......... 940,618
--------------
14,935,092
--------------
MEXICO--0.0% ++
86,000 Grupo Continental SA ...................... 103,953
--------------
NETHERLANDS--5.7%
868,758 Akzo NV Ord ............................... 36,983,021
7,250 Crown Van Gelder Gemeenschappelijk Bezit NV 102,235
747,858 European Vinyls Corporation International NV 5,571,354
1,844,388 Holdingmaatschappij de Telegraaf NV ....... 35,920,880
1,337,173 Koninklijke Bols Wessanen NV .............. 15,369,330
42,425 Koninklijke Grolsch NV .................... 970,742
73,302 Koninklijke Pakhoed NV+ ................... 2,040,004
57,423 Stork NV .................................. 1,194,748
393,425 Twentsche Kabel Holding ................... 11,430,578
739,643 Unilever NV CVA ........................... 50,063,690
1,328,705 Wegener Arcade NV ......................... 18,524,370
--------------
178,170,952
--------------
NEW ZEALAND--1.5%
16,785,509 Air New Zealand Ltd. ...................... 26,915,146
5,742,400 Carter Holt Harvey Ltd. ................... 6,920,698
3,388,000 Independent Newspaper Ltd. ................ 12,004,235
164,600 RadioWorks New Zealand Ltd. ............... 617,260
--------------
46,457,339
--------------
NORWAY--0.7%
262,800 SAS Norge ASA ............................. $ 2,561,668
1,895,300 Schibsted ASA ............................. 18,719,314
--------------
21,280,982
--------------
SINGAPORE--6.3%
6,265,500 Cycle & Carriage Ltd. ..................... 21,007,853
8,271,000 Fraser & Neave Ltd. ....................... 27,002,382
12,312,016 Overseas Union Bank Ltd. .................. 54,679,837
3,509,000 Robinson and Company Ord .................. 11,455,853
3,448,800 Singapore Press Holdings Ltd.+ ............ 54,369,365
767,000 Times Publishing Ltd. ..................... 1,380,600
3,765,000 United Overseas Bank Ltd. ................. 28,569,706
--------------
198,465,596
--------------
SOUTH AFRICA--1.2%
3,941,770 Sappi Ltd. ................................ 38,416,251
--------------
SPAIN--0.2%
189,588 Indo Internacional SA ..................... 1,341,764
80,898 Prim SA ................................... 878,176
376,152 Unipapel SA ............................... 3,803,037
--------------
6,022,977
--------------
SWEDEN--3.4%
149,885 BRIO AB, Class B+ ......................... 823,242
204,000 Lundbergforetagen AB, Class B ............. 2,838,521
2,049,100 Pharmacia & Upjohn Inc., Depository Shares . 101,792,225
138,400 VLT AB, Class B ........................... 1,503,430
--------------
106,957,418
--------------
SWITZERLAND--11.3%
33 Bank of International Settlements America . 199,948
35,328 Banque Cantonale Vaudoise ................. 10,934,913
4,283 Bobst SA, Bearer .......................... 5,288,534
250 Bobst SA, Registered ...................... 153,931
300 Bucher Holding AG, Bearer ................. 245,623
44,480 Compagnie Financiere Richemont AG ......... 89,948,905
4,315 Daetwyler Holding AG, Bearer .............. 5,974,306
85,175 Edipresse SA, Bearer ...................... 37,986,587
19,020 Forbo Holding AG .......................... 8,292,685
1,855 Golay Buchel Holding SA, Bearer ........... 1,580,510
10,780 Helvetia Patria Holding, Registered ....... 8,826,067
29,327 Loeb Holding AG ........................... 5,056,043
57,089 Nestle SA, Registered ..................... 107,163,003
17,027 Novartis AG, Registered ................... 25,229,383
50,900 Safra Republic Holdings SA ................ 2,913,799
45,175 SAirGroup, Registered ..................... 9,757,896
9,811 Sarna Kunsstoff Holding AG, Registered .... 10,514,351
21,161 SIG Schweizerishe ......................... 12,113,732
3,355 Vetropack Holding AG, Bearer .............. 381,884
19,135 Zehnder Holding, Bearer ................... 10,482,663
4,164 Zschokke Holding AG, Registered+ .......... 1,455,169
--------------
354,499,932
--------------
THAILAND--0.0%++
132,300 S & J Enterprises Public Company Ltd. ..... 102,161
--------------
UNITED KINGDOM--11.1%
2,006,739 Alumasc Group PLC ......................... 4,030,505
5,787,000 Arjo Wiggins Appleton PLC ................. 18,768,453
2,147,400 Bernard Matthews PLC ...................... 4,047,876
455,000 British Mohair Holdings PLC ............... 737,830
360,341 British Steel Ord ......................... 915,056
639,000 Burtonwood Brewery PLC .................... 1,814,674
11,431,603 Caradon PLC ............................... 28,700,254
3,979,658 Carclo Engineering Group PLC .............. 10,318,940
4,708,165 Courtaulds Textiles PLC ................... 10,890,223
7,369,666 Dowding & Mills PLC ....................... 5,641,694
1,408,668 Dyson (J&J) PLC, Class A, Non-voting ...... 1,634,958
4,544,753 Elementis PLC ............................. 7,631,664
173,269 Ellis & Everard PLC ....................... 636,113
1,933,000 European Motor Holdings PLC ............... 1,893,466
837,282 Folkes Group PLC .......................... 971,784
427,800 Glaxo Wellcome PLC, Units, Sponsored ADR .. 22,245,600
3,079,000 Glynwed International PLC ................. 11,392,477
1,098,479 Hardys & Hansons PLC ...................... 4,222,673
3,292,056 HSBC Holdings ............................. 37,721,176
515,000 Intercare Group PLC ....................... 737,624
4,090,818 Invensys PLC .............................. 19,934,743
350,000 Johnston Group PLC ........................ 2,088,742
4,545,154 McAlpine (Alfred) PLC ..................... 17,472,066
3,356,500 Mirror Group PLC .......................... 14,809,153
1,136,045 Molins PLC ................................ 2,337,837
3,027,122 Nycomed Amersham PLC ...................... 18,364,376
584,000 Partridge Fine Art Ord .................... 552,827
19,750,533 Pilkington PLC ............................ 33,165,592
1,947,500 Regal Hotel Group PLC ..................... 609,172
4,562,511 Rexam PLC ................................. 19,491,715
3,493,490 Sherwood Group PLC ........................ 1,135,888
277,100 SmithKline Beecham PLC, Units, ADR ........ 15,967,888
779,500 Swan Hill Group PLC ....................... 827,722
136,452 Thistle Hotels PLC ........................ 386,382
3,001,672 Time Products PLC ......................... 4,941,650
3,255,529 TT Group PLC .............................. 7,356,016
1,200,000 Union PLC ................................. 503,768
1,537,500 Wolverhampton & Dudley Breweries PLC ...... 14,301,195
37,500 Young & Company's Brewery PLC, Class A .... 509,324
--------------
349,709,096
--------------
UNITED STATES--10.6%
221,000 American Express Company .................. $ 29,752,125
75,700 American National Insurance Company ....... 5,090,825
333,097 Bank One Corporation ...................... 11,595,939
514,800 Chase Manhattan Corporation ............... 38,803,050
81,500 Coca-Cola Bottling Company ................ 4,571,641
348,300 Comerica Inc. ............................. 17,632,688
230,400 Federal Home Loan Mortgage Corporation .... 11,980,800
70,000 GATX Corporation .......................... 2,174,375
200,000 Harland (John H.) Company ................. 3,887,500
594,000 Hollinger International Inc. .............. 7,053,750
197,100 Household International Inc. .............. 7,908,638
704,000 MBIA Inc. ................................. 32,824,000
2,679,334 Panamerican Beverages Inc., Class A ....... 44,376,469
319,600 Philip Morris Companies Inc. .............. 10,926,325
460,000 PNC Bank Corporation ...................... 24,236,250
596,000 Popular Inc. .............................. 16,520,375
95,500 Standard Motor Products Inc. .............. 1,856,282
74,100 Syms Corporation+ ......................... 551,119
294,600 Transatlantic Holdings Inc. ............... 20,695,650
20,000 Tremont Corporation ....................... 477,500
551,000 UST Inc. .................................. 16,633,314
525,000 Wells Fargo & Company ..................... 20,803,127
--------------
330,351,742
--------------
TOTAL COMMON STOCKS
(COST $2,125,974,318) ..................... 2,893,524,841
--------------
PREFERRED STOCKS--1.1%
5,400 Krones AG ................................. 186,776
75,245 KSB AG .................................... 8,608,544
136,187 Moebel Walther AG ......................... 1,724,750
125,276 ProSieben Media AG ........................ 5,399,661
828,400 Unilever NV+ .............................. 4,434,572
165,135 Villeroy & Boch AG ........................ 15,992,785
--------------
TOTAL PREFERRED STOCKS
(COST $44,956,141) ........................ 36,347,088
--------------
COMMON STOCK WARRANTS--0.0%++
(COST $0)
83,343 Banque Nationale de Paris, Expires 7/15/02+ 691,843
--------------
CONVERTIBLE CORPORATE BOND--0.0%++
(COST $104,000)
JPY 9,000,000 Shikoku Coca-Cola Bottling, 2.400%
due 3/29/02 ............................... $ 103,047
--------------
COMMERCIAL PAPER--3.5%
(COST $110,000,000)
$110,000,000 General Electric Capital Corporation,
5.600% due 10/1/99 ........................ 110,000,000
--------------
U.S. TREASURY BILLS--0.4%
10,000,000 4.501%** due 1/6/00 ....................... 9,872,500
3,000,000 4.898%** due 7/20/00 ...................... 2,880,600
--------------
TOTAL U.S. TREASURY BILLS
(COST $12,770,492) ........................ 12,753,100
--------------
REPURCHASE AGREEMENT--3.1%
(COST $96,933,000)
96,933,000 Agreement with Warburg Dillon Read, 5.280%
dated 9/30/99, to be repurchased at
$96,947,217 on 10/1/99, collateralized by
$98,136,000, U.S. Treasury Notes, 6.125%
due 8/15/07 (market value $98,872,020) .... 96,933,000
--------------
TOTAL INVESTMENTS (COST $2,390,737,951*) .............. 100.3 % 3,150,352,919
OTHER ASSETS AND LIABILITIES (NET) .................... (0.3) (10,648,302)
----- -------------
NET ASSETS ............................................ 100.0 % $3,139,704,617
===== ==============
- ------------
* Aggregate cost for Federal tax purposes.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Amount represents less than 0.1% of net assets.
Abbreviations:
ADR--American Depository Receipt
JPY--Japanese Yen
Ord--Ordinary Share
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
PERCENTAGE OF MARKET VALUE
SECTOR DIVERSIFICATION NET ASSETS (NOTE 1)
- ---------------------- ------------- ---------------
COMMON STOCKS:
Printing and Publishing .................... 11.0% $ 344,589,813
Financial Services ......................... 10.7 335,261,986
Banking .................................... 10.6 332,723,033
Food and Beverages ......................... 10.5 330,066,130
Pharmaceuticals ............................ 9.9 309,683,881
Manufacturing .............................. 3.9 123,065,710
Tobacco .................................... 3.4 106,582,219
Chemicals .................................. 3.1 97,267,993
Machinery .................................. 3.1 96,523,417
Forest Products ............................ 2.5 80,061,922
Consumer Non-Durables ...................... 2.5 77,958,649
Holdings ................................... 2.3 72,893,541
Autos ...................................... 2.2 70,135,870
Consumer Durables .......................... 2.0 62,276,507
Retail ..................................... 2.0 62,147,146
Engineering and Construction ............... 2.0 61,348,595
Transportation ............................. 1.5 47,828,634
Insurance .................................. 1.3 39,881,362
Building Materials ......................... 1.2 39,557,516
Glass Products ............................. 1.2 37,239,731
Electronics ................................ 1.0 29,869,625
Radio ...................................... 0.8 26,231,640
Textiles ................................... 0.7 22,659,299
Wholesale .................................. 0.6 19,431,524
Construction Materials ..................... 0.6 18,807,036
Leisure .................................... 0.4 11,680,695
Health Care ................................ 0.3 9,387,123
Real Estate ................................ 0.2 6,958,427
Mining and Metal Fabrication ............... 0.2 6,338,992
Medical Research and Supplies .............. 0.1 4,033,625
Other ...................................... 0.4 11,033,200
---- --------------
TOTAL COMMON STOCKS ........................ 92.2 2,893,524,841
---- --------------
PREFERRED STOCKS ........................... 1.1 36,347,088
COMMON STOCK WARRANTS ...................... 0.0++ 691,843
CONVERTIBLE CORPORATE BOND ................. 0.0++ 103,047
COMMERCIAL PAPER ........................... 3.5 110,000,000
U.S. TREASURY BILLS ........................ 0.4 12,753,100
REPURCHASE AGREEMENT ....................... 3.1 96,933,000
OTHER ASSETS AND LIABILITIES (NET) ......... (0.3) (10,648,302)
---- --------------
NET ASSETS ................................. 100.0% $3,139,704,617
===== ==============
- ----------
++ Amount represents less than 0.1% of net assets.
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Schedule of Forward Exchange Contracts
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- -------- --------
FORWARD EXCHANGE CONTRACTS TO BUY
1,500,000 Canadian Dollar ................ 12/23/99 $ 1,023,019
2,495,222 European Economic Union Euro ... 10/1/99 2,655,539
1,271,102 European Economic Union Euro ... 10/4/99 1,353,003
347,415 Great Britain Pound Sterling ... 10/4/99 571,951
1,505,503 Great Britain Pound Sterling ... 10/5/99 2,478,520
1,433,549 Hong Kong Dollar ............... 10/4/99 184,546
32,000,000 Hong Kong Dollar ............... 10/20/99 4,119,177
122,093,700 Japanese Yen ................... 10/1/99 1,143,039
2,750,490 Japanese Yen ................... 10/4/99 25,758
8,205,378 Japanese Yen ................... 10/5/99 76,856
7,517,384 New Zealand Dollar ............. 10/27/99 3,890,514
1,800,000 New Zealand Dollar ............. 11/5/99 931,853
7,530,023 Norwegian Krone ................ 10/4/99 972,162
17,318,651 Norwegian Krone ................ 10/5/99 2,235,901
21,966,000 South African Rand ............. 11/12/99 3,632,379
20,160,000 South African Rand ............. 3/29/00 3,262,204
37,000,000 Singapore Dollar ............... 10/20/99 21,792,745
84,808,900 Swedish Krona .................. 11/12/99 10,381,597
7,500,000 Swiss Franc .................... 10/27/99 5,008,396
---------------
TOTAL FORWARD EXCHANGE CONTRACTS TO BUY
(CONTRACT AMOUNT $65,908,800) ................... $ 65,739,159
===============
FORWARD EXCHANGE CONTRACTS TO SELL
153,971 Australian Dollar .............. 12/23/99 $ (100,724)
8,267,860 Canadian Dollar ................ 12/23/99 (5,638,783)
2,250,750 Canadian Dollar ................ 3/27/00 (1,538,050)
4,517,400 Canadian Dollar ................ 3/29/00 (3,087,078)
14,504,000 Canadian Dollar ................ 5/15/00 (9,919,476)
1,471,800 Canadian Dollar ................ 6/5/00 (1,006,937)
4,393,800 Canadian Dollar ................ 6/12/00 (3,006,386)
9,366,000 Danish Krona ................... 12/23/99 (1,349,997)
49,325,500 Danish Krona ................... 7/3/00 (7,186,501)
10,528,500 Danish Krona ................... 9/11/00 (1,539,773)
340,696 European Economic Union Euro ... 10/5/99 (362,680)
14,005,616 European Economic Union Euro ... 10/27/99 (14,937,618)
692,594 European Economic Union Euro ... 10/29/99 (738,810)
23,462,883 European Economic Union Euro ... 11/5/99 (25,043,535)
10,029,764 European Economic Union Euro ... 11/12/99 (10,711,863)
4,003,750 European Economic Union Euro ... 11/15/99 (4,277,131)
17,009,988 European Economic Union Euro ... 11/22/99 (18,182,330)
17,767,622 European Economic Union Euro ... 12/10/99 (19,021,387)
19,649,003 European Economic Union Euro ... 12/23/99 (21,058,856)
8,868,601 European Economic Union Euro ... 12/31/99 (9,511,164)
2,531,815 European Economic Union Euro ... 1/4/00 $ (2,716,034)
9,630,684 European Economic Union Euro ... 1/18/00 (10,341,801)
21,620,687 European Economic Union Euro ... 2/11/00 (23,257,056)
39,268,184 European Economic Union Euro ... 2/25/00 (42,282,511)
19,715,028 European Economic Union Euro ... 3/27/00 (21,275,431)
16,197,246 European Economic Union Euro ... 3/29/00 (17,481,642)
36,281,179 European Economic Union Euro ... 4/13/00 (39,197,556)
27,573,529 European Economic Union Euro ... 4/25/00 (29,813,907)
32,189,828 European Economic Union Euro ... 5/8/00 (34,835,566)
22,939,989 European Economic Union Euro ... 5/15/00 (24,837,087)
10,144,794 European Economic Union Euro ... 5/22/00 (10,988,890)
27,955,607 European Economic Union Euro ... 6/5/00 (30,309,970)
1,414,961 European Economic Union Euro ... 6/12/00 (1,534,843)
43,876,027 European Economic Union Euro ... 6/16/00 (47,606,101)
13,216,899 European Economic Union Euro ... 6/23/00 (14,347,215)
42,975,838 European Economic Union Euro ... 7/14/00 (46,716,461)
4,637,789 European Economic Union Euro ... 7/24/00 (5,044,819)
1,826,484 European Economic Union Euro ... 8/14/00 (1,989,559)
4,585,053 European Economic Union Euro ... 8/21/00 (4,996,745)
4,652,028 European Economic Union Euro ... 8/28/00 (5,072,090)
14,174,411 European Economic Union Euro ... 9/11/00 (15,468,671)
306,885 Great Britain Pound Sterling ... 10/1/99 (505,224)
17,925,430 Great Britain Pound Sterling ... 10/20/99 (29,511,434)
4,866,180 Great Britain Pound Sterling ... 11/5/99 (8,012,008)
4,276,637 Great Britain Pound Sterling ... 11/15/99 (7,042,043)
3,644,094 Great Britain Pound Sterling ... 11/22/99 (6,000,893)
5,442,671 Great Britain Pound Sterling ... 12/31/99 (8,965,977)
19,680,197 Great Britain Pound Sterling ... 2/11/00 (32,420,148)
12,503,126 Great Britain Pound Sterling ... 2/25/00 (20,597,009)
12,309,965 Great Britain Pound Sterling ... 3/13/00 (20,278,805)
12,174,337 Great Britain Pound Sterling ... 3/27/00 (20,055,378)
14,729,348 Great Britain Pound Sterling ... 3/29/00 (24,264,042)
6,225,100 Great Britain Pound Sterling ... 4/13/00 (10,252,669)
12,448,649 Great Britain Pound Sterling ... 4/25/00 (20,498,584)
6,159,153 Great Britain Pound Sterling ... 5/8/00 (10,140,591)
9,332,421 Great Britain Pound Sterling ... 6/12/00 (15,357,794)
12,484,940 Great Britain Pound Sterling ... 6/16/00 (20,544,579)
12,636,634 Great Britain Pound Sterling ... 7/3/00 (20,789,365)
4,474,845 Great Britain Pound Sterling ... 7/14/00 (7,360,757)
25,345,330 Great Britain Pound Sterling ... 7/24/00 (41,685,310)
3,083,470 Great Britain Pound Sterling ... 8/21/00 (5,069,421)
9,425,663 Great Britain Pound Sterling ... 8/28/00 (15,494,908)
2,288,896 Great Britain Pound Sterling ... 9/11/00 (3,762,009)
499 Hong Kong Dollar ............... 10/5/99 (64)
158,880,000 Hong Kong Dollar ............... 10/20/99 (20,451,712)
56,100,100 Hong Kong Dollar ............... 11/5/99 (7,220,439)
127,448,000 Hong Kong Dollar ............... 11/12/99 (16,401,583)
55,548,500 Hong Kong Dollar ............... 1/18/00 (7,139,982)
31,663,200 Hong Kong Dollar ............... 3/6/00 (4,065,124)
94,668,000 Hong Kong Dollar ............... 3/27/00 (12,147,886)
47,178,000 Hong Kong Dollar ............... 4/13/00 (6,050,279)
78,345,000 Hong Kong Dollar ............... 4/25/00 (10,041,803)
78,200,000 Hong Kong Dollar ............... 5/8/00 (10,019,593)
31,360,800 Hong Kong Dollar ............... 5/15/00 (4,017,172)
62,879,200 Hong Kong Dollar ............... 6/16/00 (8,045,207)
78,491,000 Hong Kong Dollar ............... 7/3/00 (10,036,506)
94,239,600 Hong Kong Dollar ............... 7/14/00 (12,045,447)
31,474,000 Hong Kong Dollar ............... 7/24/00 (4,021,461)
78,763,000 Hong Kong Dollar ............... 8/28/00 (10,050,843)
157,408,554 Japanese Yen ................... 10/1/99 (1,473,656)
71,706,301 Japanese Yen ................... 10/4/99 (671,534)
71,482,749 Japanese Yen ................... 10/5/99 (669,550)
2,235,400,000 Japanese Yen ................... 11/12/99 (21,070,808)
466,720,000 Japanese Yen ................... 11/15/99 (4,401,542)
2,919,000,000 Japanese Yen ................... 12/10/99 (27,645,991)
559,500,000 Japanese Yen ................... 12/24/99 (5,311,663)
329,130,000 Japanese Yen ................... 1/4/00 (3,130,238)
544,050,000 Japanese Yen ................... 2/16/00 (5,209,371)
1,275,010,000 Japanese Yen ................... 2/25/00 (12,225,658)
7,505,550,000 Japanese Yen ................... 3/6/00 (72,080,919)
2,684,405,000 Japanese Yen ................... 3/13/00 (25,808,372)
2,810,250,000 Japanese Yen ................... 3/29/00 (27,085,929)
8,651,625,000 Japanese Yen ................... 4/17/00 (83,644,140)
4,555,800,000 Japanese Yen ................... 4/25/00 (44,102,689)
5,568,360,000 Japanese Yen ................... 5/1/00 (53,957,172)
1,156,400,000 Japanese Yen ................... 5/15/00 (11,230,828)
1,761,450,000 Japanese Yen ................... 5/22/00 (17,126,321)
4,594,800,000 Japanese Yen ................... 6/5/00 (44,775,339)
4,037,950,000 Japanese Yen ................... 6/12/00 (39,393,234)
1,142,200,000 Japanese Yen ................... 6/16/00 (11,150,175)
5,763,750,000 Japanese Yen ................... 6/23/00 (56,329,026)
1,146,300,000 Japanese Yen ................... 7/3/00 (11,220,726)
8,038,800,000 Japanese Yen ................... 7/14/00 (78,827,498)
672,360,000 Japanese Yen ................... 7/24/00 (6,603,613)
652,380,000 Japanese Yen ................... 8/14/00 (6,428,840)
3,152,550,000 Japanese Yen ................... 8/21/00 (31,101,185)
2,843,628,000 Japanese Yen ................... 9/11/00 (28,147,090)
7,517,384 New Zealand Dollar ............. 10/27/99 (3,890,514)
6,753,497 New Zealand Dollar ............. 11/5/99 (3,496,258)
9,293,680 New Zealand Dollar ............. 11/12/99 (4,812,667)
28,790,787 New Zealand Dollar ............. 12/23/99 (14,933,893)
3,723,008 New Zealand Dollar ............. 3/13/00 (1,933,889)
12,025,902 New Zealand Dollar ............. 3/27/00 (6,248,140)
8,914,245 New Zealand Dollar ............. 5/8/00 (4,632,514)
12,151,804 New Zealand Dollar ............. 6/12/00 (6,316,141)
1,882,176 New Zealand Dollar ............. 7/3/00 (978,405)
9,421,519 New Zealand Dollar ............. 7/31/00 (4,898,265)
11,738,250 Norwegian Krone ................ 12/23/99 (1,515,102)
26,956,300 Norwegian Krone ................ 2/11/00 (3,479,245)
23,490,000 Norwegian Krone ................ 5/22/00 (3,032,648)
79,559,000 Norwegian Krone ................ 8/28/00 (10,276,784)
6,328,800 Norwegian Krone ................ 9/11/00 (817,564)
695,629 Singapore Dollar ............... 10/5/99 (409,281)
48,300,000 Singapore Dollar ............... 10/20/99 (28,448,367)
12,796,000 Singapore Dollar ............... 11/5/99 (7,546,615)
16,337,000 Singapore Dollar ............... 11/15/99 (9,644,483)
14,447,700 Singapore Dollar ............... 11/22/99 (8,535,033)
32,456,000 Singapore Dollar ............... 12/10/99 (19,207,531)
5,667,200 Singapore Dollar ............... 12/23/99 (3,358,152)
29,745,000 Singapore Dollar ............... 1/18/00 (17,659,683)
33,900,000 Singapore Dollar ............... 2/25/00 (20,177,644)
33,740,000 Singapore Dollar ............... 4/13/00 (20,145,713)
41,650,000 Singapore Dollar ............... 4/28/00 (24,892,339)
16,532,000 Singapore Dollar ............... 5/8/00 (9,886,699)
8,300,500 Singapore Dollar ............... 5/15/00 (4,966,183)
11,554,900 Singapore Dollar ............... 6/23/00 (6,930,360)
49,629,000 Singapore Dollar ............... 7/14/00 (29,805,804)
13,161,600 Singapore Dollar ............... 7/31/00 (7,912,970)
8,179,000 Singapore Dollar ............... 8/14/00 (4,921,687)
17,148,560 Singapore Dollar ............... 8/28/00 (10,328,186)
21,966,000 South African Rand ............. 11/12/99 (3,632,379)
20,160,000 South African Rand ............. 3/29/00 (3,262,204)
65,775,000 South African Rand ............. 4/28/00 (10,598,371)
51,332,000 South African Rand ............. 6/23/00 (8,205,528)
19,570,800 South African Rand ............. 7/14/00 (3,119,050)
98,017,500 South African Rand ............. 7/31/00 (15,583,261)
84,808,900 Swedish Krona .................. 11/12/99 (10,381,597)
24,066,900 Swedish Krona .................. 11/22/99 (2,948,256)
11,893,050 Swedish Krona .................. 12/23/99 (1,460,280)
38,448,500 Swedish Krona .................. 1/18/00 (4,727,760)
32,340,000 Swedish Krona .................. 3/29/00 (3,990,894)
81,385,000 Swedish Krona .................. 4/13/00 (10,048,898)
73,989,000 Swedish Krona .................. 4/28/00 (9,140,815)
24,981,000 Swedish Krona .................. 5/22/00 (3,088,995)
33,746,000 Swedish Krona .................. 6/5/00 (4,175,003)
24,927,600 Swedish Krona .................. 7/3/00 (3,087,229)
65,504,000 Swedish Krona .................. 7/24/00 (8,118,884)
40,856,000 Swedish Krona .................. 8/28/00 (5,070,498)
4,893,000 Swedish Krona .................. 9/11/00 (607,570)
125,769 Swiss Franc .................... 10/5/99 (83,750)
64,250,000 Swiss Franc .................... 10/27/99 (42,905,253)
22,207,100 Swiss Franc .................... 11/5/99 (14,845,638)
19,731,000 Swiss Franc .................... 11/12/99 (13,201,066)
18,706,800 Swiss Franc .................... 12/10/99 (12,556,486)
18,785,200 Swiss Franc .................... 12/31/99 (12,639,647)
10,496,000 Swiss Franc .................... 1/18/00 (7,076,467)
18,305,300 Swiss Franc .................... 3/6/00 (12,407,678)
18,292,300 Swiss Franc .................... 3/13/00 (12,408,504)
42,141,000 Swiss Franc .................... 3/27/00 (28,630,574)
35,362,500 Swiss Franc .................... 3/29/00 (24,030,358)
43,395,900 Swiss Franc .................... 4/25/00 (29,569,958)
29,128,000 Swiss Franc .................... 5/8/00 (19,873,847)
14,627,000 Swiss Franc .................... 6/5/00 (10,008,066)
8,863,200 Swiss Franc .................... 6/13/00 (6,069,241)
29,386,000 Swiss Franc .................... 6/16/00 (20,128,672)
19,301,100 Swiss Franc .................... 6/23/00 (13,230,057)
5,774,000 Swiss Franc .................... 8/21/00 (3,981,245)
8,475,330 Swiss Franc .................... 9/11/00 (5,856,082)
---------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $2,480,007,007) ................ $(2,516,309,010)
===============
<PAGE>
<TABLE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- -----------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
- -----------------------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
<S> <C> <C>
ASSETS
Investments, at value (Cost $2,390,737,951) (Note 1)
See accompanying schedule ....................... $3,150,352,919
Receivable for investment securities sold ........... 246,956,596
Receivable for Fund shares sold ..................... 34,011,054
Dividends and interest receivable ................... 10,348,969
--------------
TOTAL ASSETS .................................... 3,441,669,538
--------------
LIABILITIES
Payable for investment securities purchased ... $254,952,069
Net unrealized depreciation of forward exchange
contracts (Note 1) .......................... 36,471,644
Due to custodian .............................. 5,069,792
Payable for Fund shares redeemed .............. 2,444,233
Investment advisory fee payable (Note 2) ...... 2,028,627
Custodian fees payable (Note 2) ............... 349,982
Transfer agent fees payable (Note 2) .......... 54,174
Accrued expenses and other payables ........... 594,400
------------
TOTAL LIABILITIES ............................... 301,964,921
--------------
NET ASSETS .............................................. $3,139,704,617
==============
NET ASSETS CONSIST OF
Undistributed net investment income ................. $ 33,879,717
Accumulated net realized gain on securities, forward
exchange contracts and foreign currencies ......... 119,412,321
Net unrealized appreciation of securities, forward
exchange
contracts, foreign currencies and net other assets 723,208,681
Par value ........................................... 15,322
Paid-in capital in excess of par value .............. 2,263,188,576
--------------
TOTAL NET ASSETS ................................ $3,139,704,617
==============
NET ASSET VALUE, offering and redemption price per share
($3,139,704,617 / 153,222,557 shares of common stock
outstanding) ...................................... $20.49
======
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- ---------------------------------------------------------------------------------------------
Statement of Operations
- ---------------------------------------------------------------------------------------------
For the Six Months Ended September 30, 1999 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $4,963,071) $ 43,690,913
Interest (net of foreign withholding taxes of $92) .. 4,232,121
------------
TOTAL INVESTMENT INCOME ......................... 47,923,034
------------
EXPENSES
Investment advisory fee (Note 2) .............. $19,022,570
Custodian fees (Note 2) ....................... 686,392
Administration fee (Note 2) ................... 575,478
Transfer agent fees (Note 2) .................. 316,962
Legal and audit fees .......................... 83,248
Directors' fees and expenses (Note 2) ......... 39,712
Other ......................................... 357,531
-----------
TOTAL EXPENSES .................................. 21,081,893
------------
NET INVESTMENT INCOME ................................... 26,841,141
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3):
Net realized gain (loss) on:
Securities ........................................ 24,929,555
Forward exchange contracts ........................ (17,404,124)
Foreign currencies and net other assets ........... (29,173)
------------
Net realized gain on investments during the period .. 7,496,258
------------
Net change in unrealized appreciation (depreciation) of:
Securities ........................................ 351,045,789
Forward exchange contracts ........................ (34,519,208)
Foreign currencies and net other assets ........... 91,595
------------
Net unrealized appreciation of investments during the period 316,618,176
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ......... 324,114,434
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS .............................................. $350,955,575
============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED YEAR
9/30/99 ENDED
(UNAUDITED) 3/31/99
----------- -------
<S> <C> <C>
Net investment income ................................... $ 26,841,141 $ 31,526,397
Net realized gain on securities, forward exchange
contracts and currency transactions during the
period ................................................ 7,496,258 197,166,019
Net unrealized appreciation (depreciation) of
securities,
forward exchange contracts, foreign currencies and
net other assets during the period .................... 316,618,176 (176,604,854)
-------------- --------------
Net increase in net assets resulting from operations .... 350,955,575 52,087,562
DISTRIBUTIONS:
Dividends to shareholders from net investment
income .............................................. -- (51,902,775)
Distributions to shareholders from net realized
gain on
investments ......................................... -- (135,825,791)
Net increase in net assets from Fund share
transactions
(Note 4) .............................................. 199,175,071 197,274,233
-------------- --------------
Net increase in net assets .............................. 550,130,646 61,633,229
NET ASSETS
Beginning of period ..................................... 2,589,573,971 2,527,940,742
-------------- --------------
End of period (including undistributed net investment
income of $33,879,717 and $7,038,576, respectively) ... $3,139,704,617 $2,589,573,971
============== ==============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
TWEEDY, BROWNE GLOBAL VALUE FUND
- ---------------------------------------------------------------------------------------------------------------------
Financial Highlights
For a Fund share outstanding throughout each period.
<CAPTION>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
9/30/99 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 3/31/99 3/31/98 3/31/97 3/31/96(a) 3/31/95
----------- ------- ------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $18.08 $18.98 $15.46 $14.28 $11.52 $12.26
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (b) ......... 0.17 0.23 0.26 0.12 0.15 0.10
Net realized and unrealized gain
(loss) on investments ........... 2.24 0.24 4.62 2.18 2.81 (0.68)
------ ------ ------ ------ ------ ------
Total from investment
operations .................. 2.41 0.47 4.88 2.30 2.96 (0.58)
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from net investment
income ........................ -- (0.38) (0.79) (0.19) -- --
Dividends in excess of net
investment income ............. -- -- (0.08) (0.36) -- --
Distributions from net realized
gains ......................... -- (0.99) (0.49) (0.57) (0.05) (0.06)
Distributions in excess of
net realized gains ............ -- -- -- -- (0.15) (0.10)
------ ------ ------ ------ ------ ------
Total
distributions ..................... -- (1.37) (1.36) (0.12) (0.20) (0.16)
------ ------ ------ ------ ------ ------
Net asset value, end of period .... $20.49 $18.08 $18.98 $15.46 $14.28 $11.52
====== ====== ====== ====== ====== ======
Total return(c) ................... 13.33% 3.03% 33.09% 16.66% 25.88% (4.74)%
====== ====== ====== ====== ====== ======
Ratios/Supplemental Data:
Net assets, end of period (in
000's) .......................... $3,139,705 $2,589,574 $2,527,941 $1,441,210 $950,911 $655,035
Ratio of operating expenses to
average net assets(d) ........... 1.39%(e) 1.41% 1.42% 1.58% 1.60% 1.65%
Ratio of net investment income to
average net assets .............. 1.76%(e) 1.26% 1.05% 0.73% 1.15% 1.08%
Portfolio turnover rate ........... 5% 23% 16% 20% 17% 16%
- ------------
(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) Net investment income for a Fund share outstanding, before the waiver of fees by the administrator for the years
ended March 31, 1998 and 1997 were $0.26 and $0.11, respectively.
(c) Total return represents aggregate total return for the periods indicated.
(d) Annualized expense ratio before the waiver of fees by the administrator for the years ended March 31, 1998 and
1997 were 1.43% and 1.58%, respectively.
(e) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
TWEEDY, BROWNE GLOBAL VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Tweedy, Browne Global Value Fund (the "Fund") is a diversified series of
Tweedy, Browne Fund Inc. (the "Company"). The Company is an open-end
management investment company registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. The Company
was organized as a Maryland corporation on January 28, 1993. The Fund
commenced operations on June 15, 1993. The preparation of financial statements
in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
PORTFOLIO VALUATION Generally, the Fund's investments are valued at
market value or, in the absence of market value, by the Investment Adviser or,
at fair value as determined by or under the direction of the Company's Board
of Directors. Portfolio securities and other assets, listed on a U.S. national
securities exchange or through any system providing for same day publication
of actual prices (and not subject to restrictions against sale by the Fund on
such exchange or system) are valued at the last quoted sale price prior to the
close of regular trading. Portfolio securities and other assets listed on a
foreign exchange or through any system providing for same day publication of
actual prices are valued at the last quoted sale price available before the
time when assets are valued. Portfolio securities and other assets for which
there are no reported sales on the valuation date are valued at the mean
between the last asked price and the last bid price prior to the close of
regular trading. When the Investment Adviser determines that the last sale
price prior to valuation does not reflect current market value, the Investment
Adviser will determine the market value of those securities or assets in
accordance with industry practice and other factors considered relevant by the
Investment Adviser. All other securities and assets for which current market
quotations are not readily available and those securities which are not
readily marketable due to significant legal or contractual restrictions will
be valued by the Investment Adviser or at fair value as determined by or under
the direction of the Board of Directors. Debt securities with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value, or by reference to other factors (i.e. pricing services or
dealer quotations) by the Investment Adviser.
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
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, OTHER RELATED PARTY TRANSACTIONS AND
ADMINISTRATION FEE
The Company, on behalf of the Fund, has entered into an investment
advisory agreement (the "Advisory Agreement") with Tweedy, Browne Company LLC
("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 Investment Adviser not to exceed 75% of
the amount of the fee then accrued on the books of the Fund and unpaid.
The current members and retired general partners and their families, as
well as employees, of Tweedy, Browne, the Investment Adviser to the Fund, have
approximately $43.1 million of their own money invested in the Fund.
The Company, on behalf of the Fund, has entered into an administration
agreement (the "Administration Agreement") with First Data Investor Services
Group, Inc. (the "Administrator"), a wholly owned subsidiary of First Data
Corporation. Under the Administration Agreement, the Company pays the
Administrator an administrative fee and a fund accounting fee computed daily
and payable monthly at the following annual rates of the value of the average
daily net assets of the Fund:
FEES ON ASSETS
---------------------------------------
BETWEEN
$500 MILLION
UP TO 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%
- ------------------------------------------------------------------------------
Under the terms of the Administration Agreement, the Company will pay for
fund administration services a minimum fee of $40,000 per annum, not to be
aggregated with fees for fund accounting services. The Company will pay a
minimum monthly fee of $4,000 for fund accounting services for the Fund, not
to be aggregated with fees for fund administration services.
No officer, director or employee of Tweedy, Browne, the Administrator or
any parent or subsidiary of those corporations receives any compensation from
the Company for serving as a director or officer of the Company. The Fund pays
each director who is not an officer, director or employee of Tweedy, Browne,
the Administrator or any of their affiliates $8,000 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 Trust, serves as the Fund's custodian pursuant to a
custody agreement (the "Custody Agreement"). First Data Investor Services
Group, Inc. serves 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.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments, for the six months ended September 30, 1999,
aggregated $195,835,676 and $135,034,163, respectively.
At September 30, 1999, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$914,302,566 and the aggregate gross unrealized depreciation for all
securities, in which there was an excess of tax cost over value, was
$154,687,598.
4. CAPITAL STOCK
The Company is authorized to issue one billion shares of $0.0001 par value
capital stock, of which 600,000,000 of the unissued shares have been
designated as shares of the Fund. Changes in shares outstanding for the Fund
were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
SIX MONTHS ENDED 9/30/99 YEAR ENDED 3/31/99
----------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 52,074,642 $1,058,914,927 68,156,263 $1,217,805,048
Reinvested -- -- 10,128,684 170,060,040
Redeemed (42,088,435) (859,739,856) (68,246,032) (1,190,590,855)
- ------------------------------------------------------------------------------------------------------------
Net Increase 9,986,207 $ 199,175,071 10,038,915 $ 197,274,233
- ------------------------------------------------------------------------------------------------------------
</TABLE>
5. 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.
6. LINE OF CREDIT
The Company and Mellon Trust, N.A. (the "Bank") entered into a Line of
Credit Agreement (the "Agreement") which, as amended effective September 29,
1999, provides the Company, on behalf of the Fund and the Tweedy, Browne
American Value Fund, with a $100 million line of credit (the "Commitment")
primarily for temporary or emergency purposes, including the meeting of
redemption requests that might otherwise require the untimely disposition of
securities. As a temporary measure, the Commitment has been increased to $300
million for the period December 1, 1999 through January 31, 2000. The Fund may
borrow up to one-third of its net assets; provided, however, that the total
Commitment available to the Fund is reduced by any borrowings of the Tweedy,
Browne American Value Fund. Interest is payable at the Bank's money market
rate plus 0.75% on an annualized basis. Under the Agreement, the Company pays
a facility fee equal to 0.10% annually of the unutilized Commitment and,
during the period December 1, 1999 through January 31, 2000, a facility fee
equal to 0.11% annually of the unutilized increase in the Commitment. 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 period April 1, 1999 through September 30, 1999, the
Company did not borrow, on behalf of the Fund, under the Agreement.
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited) [Graphic Omitted]
MARKET
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCKS--DOMESTIC--77.2%
ADVERTISING--0.4%
$ 11,580 Grey Advertising Inc. ....................... $ 4,255,650
--------------
AUTOMOTIVE PARTS--1.9%
739,000 Dollar Thrifty Automotive Group Inc.+ ....... 15,288,063
138,800 Standard Motor Products Inc. ................ 2,697,925
115,300 Standard Products Company ................... 4,078,738
5,200 Woodward Governor Company ................... 129,838
--------------
22,194,564
--------------
BANKING--10.1%
45,300 BancFirst Corporation ....................... 1,436,859
252,898 Bank One Corporation ........................ 8,804,012
20,400 Cape Cod Bank & Trust Company ............... 317,475
541,814 Chase Manhattan Corporation ................. 40,839,230
112,650 Comerica Inc. ............................... 5,702,906
4,500 Community Financial Group--Bank of Nashville 66,516
20,400 First Mortgage Corporation+ ................. 80,325
627,295 Hibernia Corporation, Class A ............... 7,292,304
43,342 Mid-America Bancorp ......................... 1,048,335
246,700 PNC Bank Corporation ........................ 12,998,006
802,520 Popular Inc. ................................ 22,244,851
360,000 Wells Fargo & Company ....................... 14,265,000
--------------
115,095,819
--------------
BASIC INDUSTRIES--4.5%
298,600 ACX Technologies Inc.+ ...................... 2,836,700
219,200 Alamo Group Inc. ............................ 2,027,600
215,700 Gorman-Rupp Company ......................... 3,370,313
724,000 Rayonier Inc. ............................... 30,408,000
70,200 Sequa Corporation, Class A+ ................. 4,422,600
64,000 Tecumseh Products Company, Class A .......... 3,196,000
66,100 Tecumseh Products Company, Class B .......... 3,015,813
78,000 Tremont Corporation ......................... 1,862,250
--------------
51,139,276
--------------
BUSINESS AND COMMERCIAL SERVICES--2.1%
716,000 Harland (John H.) Company ................... 13,917,250
93,400 HUB Group Inc., Class A+ .................... 1,908,863
5,200 IIC Industries Inc.+ ........................ 55,413
143,100 Primark Corporation+ ........................ 4,069,406
198,000 Wallace Computer Services Inc. .............. 4,009,500
--------------
23,960,432
--------------
CHEMICALS--1.5%
307,000 International Specialty Products Inc.+ ...... 3,050,813
680,700 Lilly Industries Inc., Class A .............. 9,274,538
232,900 Oil-Dri Corporation of America .............. 3,391,606
77,500 Stepan Chemical Company ..................... 1,767,969
--------------
17,484,926
--------------
CONSUMER NON-DURABLES--6.0%
103,900 Bairnco Corporation ......................... 727,300
130,400 Coca-Cola Bottling Company .................. 7,314,625
347,500 M & F Worldwide Corporation+ ................ 2,780,000
869,470 Philip Morris Companies Inc. ................ 29,725,006
910,900 UST Inc. .................................... 27,497,794
57,200 Village Super Market Inc., Class A+ ......... 811,525
--------------
68,856,250
--------------
CONSUMER SERVICES--3.2%
249,500 Bell & Howell Company+ ...................... 9,153,531
512,900 Jones Intercable Inc., Class A+ ............. 27,712,628
--------------
36,866,159
--------------
ELECTRONIC EQUIPMENT--0.2%
115,000 Regal Beloit ................................ 2,386,250
--------------
ENGINEERING AND CONSTRUCTION--0.9%
107,300 Harding Lawson Associates Group Inc.+ ....... 841,634
150,500 Hovnanian Enterprises Inc., Class A+ ........ 1,166,375
22,900 Liberty Homes Inc., Class A ................. 152,428
10,000 Liberty Homes Inc., Class B ................. 83,125
51,300 M/I Schottenstein Homes Inc. ................ 846,450
884,500 Oakwood Homes Corporation ................... 3,980,250
28,837 Oriole Homes Corporation, Class B+ .......... 40,552
269,000 RDO Equipment Company, Class A+ ............. 1,782,125
158,000 Washington Homes Inc.+ ...................... 829,500
--------------
9,722,439
--------------
FINANCIAL SERVICES--17.6%
382,230 American Express Company .................... 51,457,714
980,300 Credit Acceptance Corporation+ .............. 5,835,848
789,380 Federal Home Loan Mortgage Corporation ...... 41,047,760
446,400 Federated Investors, Inc., Class B .......... 7,700,400
623,500 Household International Inc. ................ 25,017,938
41,600 Kent Financial Services Inc.+ ............... 161,200
30,000 Letchworth Independent Bancshares Corporation 601,875
858,700 MBIA Inc. ................................... 40,036,888
142,000 Morgan, (J.P.) & Company Inc. ............... 16,223,500
756,000 Phoenix Duff & Phelps Corporation ........... 6,331,500
109,030 ReliaStar Financial Corporation ............. 3,625,248
29,800 Value Line Inc. ............................. 1,041,138
39,004 Whitney Holding Corporation ................. 1,323,698
--------------
200,404,707
--------------
FOOD AND BEVERAGES--1.4%
950,050 Panamerican Beverages Inc., Class A ......... 15,735,203
--------------
FURNITURE--1.2%
29,900 Flexsteel Industries Inc. ................... $ 408,322
212,600 HON Industries Inc. ......................... 4,092,550
598,400 O' Sullivan Industries Holdings Inc.+ ....... 8,976,000
--------------
13,476,872
--------------
HEALTH CARE--2.0%
158,500 Angelica Corporation ........................ 1,822,750
33,412 Johnson & Johnson ........................... 3,069,728
1,555,000 Quorum Health Group, Inc.+ .................. 10,909,297
269,800 Sola International Inc. ..................... 4,181,900
155,500 Spacelabs Medical Inc.+ ..................... 2,342,219
10,666 Wyant Corporation+ .......................... 18,666
--------------
22,344,560
--------------
INSURANCE--8.7%
408,900 20th Century Industries ..................... 7,922,438
463,500 American Annuity Group Inc. ................. 10,023,188
77,400 American Indemnity Financial Corporation .... 77,400
165,125 American National Insurance Company ......... 11,104,656
16,520 Kansas City Life Insurance Company .......... 605,045
488,000 Leucadia National Corporation ............... 10,248,000
21,600 Merchants Group Inc. ........................ 491,400
424,300 MMI Companies Inc. .......................... 4,640,781
110,000 National Western Life Insurance Company, Class A+ 9,343,125
31,500 Navigators Group Inc.+ ...................... 429,188
16,500 RLI Corporation ............................. 544,500
288,000 SCPIE Holdings Inc. ......................... 9,072,000
486,000 Transatlantic Holdings Inc. ................. 34,141,500
--------------
98,643,221
--------------
INVESTMENT COMPANIES--0.2%
190,500 Ampal-American Israel Corporation, Class A+ . 1,238,250
10,000 PEC Israel Economic Corporation+ ............ 348,125
13,800 Pilgrim Capital Corporation+ ................ 392,438
--------------
1,978,813
--------------
METALS AND METAL PRODUCTS--2.1%
685,700 ASARCO Inc. ................................. 18,385,331
88,700 Lawson Products Inc. ........................ 1,918,138
11,900 Mestek Inc.+ ................................ 238,000
165,000 Schnitzer Steel Industries Inc. ............. 2,995,781
--------------
23,537,250
--------------
OIL AND GAS--0.3%
41,460 Matrix Service Company+ ..................... 165,840
175,200 Penn Virginia Corporation ................... 3,640,875
--------------
3,806,715
--------------
PRINTING AND PUBLISHING--0.7%
632,100 Hollinger International Inc. ................ $ 7,506,188
--------------
REAL ESTATE--1.8%
716,500 American Real Estate Partners L.P.+ ......... 6,224,594
596,700 Castle & Cooke Inc.+ ........................ 9,174,263
85,800 Echelon International Corporation Inc.+ ..... 2,128,913
108,000 Koger Equity Inc. ........................... 1,728,000
13,200 Mays (J.W.) Inc.+ ........................... 70,538
55,225 Ramco-Gershenson Properties Trust ........... 824,923
--------------
20,151,231
--------------
RESTAURANT CHAINS--4.2%
1,106,800 McDonald's Corporation ...................... 47,592,400
--------------
RETAIL--1.9%
217,000 Discount Auto Parts Inc.+ ................... 3,499,125
117,900 EZCORP Inc., Class A ........................ 615,291
54,500 Friedman's Inc., Class A .................... 476,875
90,100 Government Technology Services Inc.+ ........ 326,613
654,000 Jan Bell Marketing Inc.+ .................... 2,002,875
130,100 Swiss Army Brands Inc.+ ..................... 1,207,491
182,700 Syms Corporation+ ........................... 1,358,831
824,500 Value City Department Stores Inc.+ .......... 12,367,500
--------------
21,854,601
--------------
TELECOMMUNICATIONS--1.4%
93,600 Commonwealth Telephone Enterprises Inc.+ .... 4,115,475
280,800 RCN Corporation+ ............................ 11,477,700
--------------
15,593,175
--------------
TRANSPORTATION/TRANSPORTATION SERVICES--2.9%
650,400 GATX Corporation ............................ 20,203,050
53,100 KLLM Transport Services Inc.+ ............... 262,181
53,600 Maritrans Inc. .............................. 274,700
800,000 Wisconsin Central Transportation Corporation+ 10,925,000
34,900 XTRA Corporation+ ........................... 1,387,275
--------------
33,052,206
--------------
TOTAL COMMON STOCKS--DOMESTIC
(COST $738,263,627) ......................... 877,638,907
--------------
COMMON STOCKS--FOREIGN--19.8%
FINLAND--0.3%
18,300 Huhtamaki Group, Class I .................... 578,430
15,500 Kone Corporation, Class B ................... 2,040,539
--------------
2,618,969
--------------
FRANCE--0.0%++
900 Bongrain SA ................................. 344,913
--------------
HONG KONG--0.3%
1,226,080 CDL Hotels International Ltd. ............... 418,274
478,000 Jardine Strategic Holdings Ltd. ............. 975,120
1,506,000 South China Morning Post (Holdings) Ltd. .... 1,008,149
525,000 Swire Pacific Ltd., Class B ................. 385,239
182,000 Wing Hang Bank Ltd. ......................... 609,174
--------------
3,395,956
--------------
IRELAND--0.0%++
202,592 Crean (James) PLC ........................... 91,634
202,592 OakHill Group PLC+ .......................... 103,492
--------------
195,126
--------------
JAPAN--9.8%
56,000 Agro-Kanesho Company Ltd. ................... 576,698
93,600 Aiful Corporation ........................... 15,904,508
67,000 Amatsuji Steel Ball Manufacturing Company ... 636,662
33,000 CCI Corporation ............................. 261,059
89,000 Chiyoda Company ............................. 666,573
247,700 Chofu Seisakusho Company .................... 4,719,089
70,500 Credia Company Ltd. ......................... 2,494,874
131,000 Daido Metal Company ......................... 443,964
140,000 Danto Corporation ........................... 664,513
179,000 Denkyosha ................................... 847,952
61,000 Denyo Company Ltd. .......................... 442,588
93,000 Fuji Coca-Cola Bottling Company ............. 1,567,196
17,000 Fuji Photo Film Company Ltd. ................ 580,911
76,800 Fuji Photo Film Company Ltd., ADR ........... 2,640,000
326,000 Fujitec Company Ltd. ........................ 4,364,368
293,000 Fukuda Denshi ............................... 6,583,345
206,000 Hitachi Koki Company Ltd. ................... 767,570
78,000 Hitachi Medical Corporation ................. 1,072,715
109,000 Inaba Denkisangyo Company Ltd. .............. 1,775,593
16,000 Kansai Paint Company Ltd. ................... 44,938
112,000 Katsuragawa Electric Company ................ 629,125
130,000 Koito Manufacturing ......................... 707,110
132,000 Mandom Corporation .......................... 4,819,548
95,000 Matsumoto Yushi-Seiyaku Company ............. 2,134,532
19,000 Matsushita Electric Industrial Company ...... 402,893
44,000 Meito Sangyo Company ........................ 473,304
178,000 Morito ...................................... 833,216
58,000 Nankai Plywood Company Ltd. ................. 325,797
107,000 Nippon Cable System ......................... 1,502,598
118,000 Nippon Konpo Unyu Soko ...................... 956,682
48,300 Nissin Company Ltd. ......................... 3,224,070
52,000 Nitto FC Company ............................ 277,489
119,000 Riken Vitamin ............................... 1,782,521
19,000 Sangetsu Company Ltd. ....................... 407,340
31,000 Sanko Sangyo Company ........................ 307,634
130,600 Sanyo Shinpan Finance Company Ltd. .......... 8,424,229
63,800 Shikoku Coca-Cola Bottling .................. 895,941
54,000 Shinki Company Ltd. ......................... 2,345,738
54,000 Shinki Company Ltd., New+ ................... 2,487,291
192,000 Shinogi & Company Ltd. ...................... 1,571,014
73,000 SK Kaken Company Ltd. ....................... 1,394,186
220,000 Sonton Food Industry ........................ 2,183,214
186,000 Tachi-S ..................................... 1,332,115
103,700 Takefuji Corporation ........................ 17,212,947
141,000 Teikoku Hormone Manufacturing Company ....... 1,082,432
111,000 Tomita Electric Company Ltd. ................ 381,379
10,000 Torii Company Ltd. .......................... 46,342
162,000 Torishima Pump Manufacturing ................ 908,468
64,000 Toso Company Ltd. ........................... 245,658
78,000 Toyo Technical Company Ltd. ................. 590,029
188,000 Tsubaki Nakashima Company Ltd. .............. 2,548,556
220,800 Tsuchiya Home Company ....................... 826,850
214,000 U-Shin ...................................... 1,025,774
45,000 Zojirushi ................................... 294,902
--------------
111,636,040
--------------
MALAYSIA--0.1%
485,000 Star Publications (Malaysia) ................ 1,123,158
--------------
NETHERLANDS--1.6%
218,600 Akzo Nobel NV, Sponsored ADR ................ 9,338,319
21,000 European Vinyls Corporation International NV 156,445
36,500 Holdingmaatschappij de Telegraaf NV ......... 710,866
107,857 Unilever NV, ADR ............................ 7,347,758
--------------
17,553,388
--------------
SINGAPORE--0.3%
264,000 Fraser & Neave Ltd. ......................... 861,882
334,149 Overseas Union Bank Ltd. .................... 1,484,016
94,800 Robinson and Company Ord .................... 309,493
--------------
2,655,391
--------------
SPAIN--0.0%++
32,000 Unipapel SA ................................. 323,532
--------------
SWEDEN--3.5%
804,300 Pharmacia & Upjohn Inc., Depository Shares .. 39,954,852
--------------
SWITZERLAND--2.3%
3,650 Compagnie Financiere Richemont AG ........... 7,381,149
2,000 Edipresse SA, Bearer ........................ 891,965
184,000 Nestle SA, Registered, ADR .................. 17,269,520
10,666 Novartis AG, ADR ............................ 789,985
--------------
26,332,619
--------------
UNITED KINGDOM--1.6%
315,000 Caradon PLC ................................. 790,841
274,000 Carclo Engineering Group PLC ................ 710,460
445,000 Dowding & Mills PLC ......................... 340,660
61,145 Elementis PLC ............................... 102,675
163,670 Glaxo Wellcome PLC, Units, Sponsored ADR .... 8,510,840
142,000 Hardys & Hansons PLC ........................ 545,863
127,383 HSBC Holdings ............................... 1,459,585
818 Invensys PLC ................................ 3,985
189,385 McAlpine (Alfred) PLC ....................... 728,017
525,631 Pilkington PLC .............................. 882,653
93,333 Rexam PLC ................................... 398,731
63,800 SmithKline Beecham PLC, Units, ADR .......... 3,676,475
116,959 Thistle Hotels PLC .......................... 331,184
--------------
18,481,969
--------------
TOTAL COMMON STOCKS--FOREIGN
(COST $135,672,617) ......................... 224,615,913
--------------
FACE
VALUE
-----
COMMERCIAL PAPER--1.8%
(COST $20,000,000)
$20,000,000 General Electric Capital Corporation,
5.600% due 10/1/99........................... 20,000,000
--------------
U.S. TREASURY BILL--0.1%
(COST $988,427)
1,000,000 4.501%** due 1/6/00 ......................... 987,250
--------------
REPURCHASE AGREEMENT--1.2%
(COST $14,209,000)
14,209,000 Agreement with UBS Securities Inc., 5.280%
dated 9/30/99, to be repurchased at
$14,211,084 on 10/1/99, collateralized by
$14,622,000 U.S. Treasury Notes, 6.125% due
11/15/27 (market value $14,494,058) ......... 14,209,000
--------------
TOTAL INVESTMENTS (COST $909,133,671*) .............. 100.1% 1,137,451,070
OTHER ASSETS AND LIABILITIES (NET) .................. (0.1) (1,115,151)
---- ----------
NET ASSETS .......................................... 100.0% $1,136,335,919
===== ==============
- ------------
* Aggregate cost for Federal tax purposes.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Amount represents less than 0.1% of net assets.
Abbreviations:
ADR--American Depository Receipt
Ord--Ordinary Shares
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Schedule of Forward Exchange Contracts
- --------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
CONTRACT MARKET
VALUE VALUE
CONTRACTS DATE (NOTE 1)
--------- -------- --------
FORWARD EXCHANGE CONTRACTS TO BUY
1,299,206 European Economic Union Euro ... 11/5/99 $ 1,386,731
5,075,350 European Economic Union Euro ... 12/10/99 5,433,490
2,788,699 Great Britain Pound Sterling ... 12/23/99 4,593,686
168,735,000 Japanese Yen ................... 11/5/99 1,588,589
115,350,000 Japanese Yen ................... 12/10/99 1,092,485
928,333 New Zealand Dollar ............. 1/18/00 481,798
1,599,500 Singapore Dollar ............... 11/5/99 943,327
1,622,800 Singapore Dollar ............... 12/10/99 960,377
1,322,000 Singapore Dollar ............... 1/18/00 784,875
32,084,000 Swedish Krona .................. 12/10/99 3,935,620
5,700,000 Swedish Krona .................. 12/23/99 699,870
2,672,400 Swiss Franc .................... 12/10/99 1,793,785
8,050,800 Swiss Franc .................... 12/31/99 5,416,992
-------------
TOTAL FORWARD EXCHANGE CONTRACTS TO BUY
(CONTRACT AMOUNT $29,331,458) ................... $ 29,111,625
=============
FORWARD EXCHANGE CONTRACTS TO SELL
1,299,206 European Economic Union Euro ... 11/5/99 $ (1,386,731)
5,075,350 European Economic Union Euro ... 12/10/99 (5,433,490)
840,401 European Economic Union Euro ... 12/23/99 (900,701)
1,792,275 European Economic Union Euro ... 3/27/00 (1,934,130)
9,191,176 European Economic Union Euro ... 4/25/00 (9,937,969)
4,788,699 Great Britain Pound Sterling ... 12/23/99 (7,888,188)
968,230 Great Britain Pound Sterling ... 1/18/00 (1,595,012)
1,537,515 Great Britain Pound Sterling ... 2/11/00 (2,532,824)
1,240,156 Great Britain Pound Sterling ... 3/6/00 (2,042,970)
306,861 Great Britain Pound Sterling ... 3/29/00 (505,501)
631,832 Great Britain Pound Sterling ... 7/3/00 (1,039,468)
1,360,965 Great Britain Pound Sterling ... 9/11/00 (2,236,871)
7,935,500 Hong Kong Dollar ............... 1/18/00 (1,019,997)
5,160,675 Hong Kong Dollar ............... 2/11/00 (662,946)
3,946,500 Hong Kong Dollar ............... 3/29/00 (506,388)
7,832,200 Hong Kong Dollar ............... 4/25/00 (1,003,994)
1,966,550 Hong Kong Dollar ............... 9/11/00 (250,821)
5,684,252 Japanese Yen ................... 10/4/99 (53,233)
1,497,000 Japanese Yen ................... 10/5/99 (14,022)
168,735,000 Japanese Yen ................... 11/5/99 (1,588,589)
817,320,000 Japanese Yen ................... 12/10/99 (7,740,877)
559,500,000 Japanese Yen ................... 12/24/99 (5,311,663)
685,503,000 Japanese Yen ................... 2/11/00 (6,558,665)
692,820,000 Japanese Yen ................... 3/6/00 (6,653,623)
1,679,400,000 Japanese Yen ................... 3/27/00 (16,181,348)
337,230,000 Japanese Yen ................... 3/29/00 (3,250,311)
1,138,950,000 Japanese Yen ................... 4/25/00 (11,025,672)
2,238,708,000 Japanese Yen ................... 5/1/00 (21,692,986)
980,645,000 Japanese Yen ................... 6/12/00 (9,566,928)
342,660,000 Japanese Yen ................... 6/16/00 (3,345,053)
1,210,387,500 Japanese Yen ................... 6/23/00 (11,829,096)
784,420,000 Japanese Yen ................... 7/24/00 (7,704,215)
659,392,000 Japanese Yen ................... 9/11/00 (6,526,861)
928,333 New Zealand Dollar ............. 1/18/00 (481,798)
1,599,500 Singapore Dollar ............... 11/5/99 (943,327)
1,622,800 Singapore Dollar ............... 12/10/99 (960,377)
1,322,000 Singapore Dollar ............... 1/18/00 (784,875)
842,150 Singapore Dollar ............... 3/27/00 (502,293)
4,206,250 Singapore Dollar ............... 6/12/00 (2,521,058)
32,084,000 Swedish Krona .................. 12/10/99 (3,935,620)
13,875,225 Swedish Krona .................. 12/23/99 (1,703,659)
24,133,500 Swedish Krona .................. 1/4/00 (2,965,433)
15,379,400 Swedish Krona .................. 1/18/00 (1,891,104)
27,097,350 Swedish Krona .................. 2/11/00 (3,336,036)
20,212,500 Swedish Krona .................. 3/29/00 (2,494,309)
40,940,000 Swedish Krona .................. 7/24/00 (5,074,303)
16,342,400 Swedish Krona .................. 8/28/00 (2,028,199)
2,672,400 Swiss Franc .................... 12/10/99 (1,793,784)
8,050,800 Swiss Franc .................... 12/31/99 (5,416,991)
10,496,000 Swiss Franc .................... 1/18/00 (7,076,467)
8,150,400 Swiss Franc .................... 2/11/00 (5,509,774)
3,511,750 Swiss Franc .................... 3/27/00 (2,385,882)
2,121,750 Swiss Franc .................... 3/29/00 (1,441,822)
1,446,530 Swiss Franc .................... 4/25/00 (985,666)
-------------
TOTAL FORWARD EXCHANGE CONTRACTS TO SELL
(CONTRACT AMOUNT $207,767,159) .................. $(214,153,920)
=============
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
<TABLE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ----------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
- ----------------------------------------------------------------------------------------------
September 30, 1999 (Unaudited)
<S> <C> <C>
ASSETS
Investments, at value (Cost $909,133,671) (Note 1)
See accompanying schedule ....................... $1,137,451,070
Cash and foreign currency (Cost $787,032) ........... 787,022
Receivable for Fund shares sold ..................... 6,448,892
Dividends and interest receivable ................... 1,901,861
Receivable for investment securities sold ........... 67,230
--------------
TOTAL ASSETS .................................... 1,146,656,075
--------------
LIABILITIES
Net unrealized depreciation of forward exchange
contracts
(Note 1) .................................... $6,606,594
Payable for investment securities purchased ... 2,000,594
Investment advisory fee payable (Note 2) ...... 735,495
Payable for Fund shares redeemed .............. 628,745
Custodian fees payable (Note 2) ............... 39,126
Transfer agent fees payable (Note 2) .......... 29,626
Accrued expenses and other payables ........... 279,976
----------
TOTAL LIABILITIES ............................... 10,320,156
--------------
NET ASSETS .............................................. $1,136,335,919
==============
NET ASSETS CONSIST OF
Undistributed net investment income ................. $ 8,993,145
Accumulated net realized gain on securities, forward
exchange
contracts and foreign currencies .................. 48,245,529
Net unrealized appreciation on securities, forward
exchange
contracts, foreign currencies and net other assets 221,706,463
Par value ........................................... 4,874
Paid-in capital in excess of par value .............. 857,385,908
--------------
TOTAL NET ASSETS ................................ $1,136,335,919
==============
NET ASSET VALUE, offering and redemption price per share
($1,136,335,919 / 48,741,728 shares of common stock
outstanding) ........................................... $23.31
======
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ---------------------------------------------------------------------------------------------
Statement of Operations
- ---------------------------------------------------------------------------------------------
For the Six Months Ended September 30, 1999 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $104,654) $ 15,632,254
Interest ............................................ 1,266,011
--------------
TOTAL INVESTMENT INCOME ......................... 16,898,265
--------------
EXPENSES
Investment advisory fee (Note 2) .............. $7,237,908
Administration fee (Note 2) ................... 225,239
Transfer agent fees (Note 2) .................. 167,493
Custodian fees (Note 2) ....................... 78,991
Legal and audit fees .......................... 50,137
Directors' fees and expenses (Note 2) ......... 16,152
Other ......................................... 158,574
----------
TOTAL EXPENSES .................................. 7,934,494
--------------
NET INVESTMENT INCOME ................................... 8,963,771
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(Notes 1 and 3)
Net realized gain (loss) on:
Securities ........................................ 27,092,421
Forward exchange contracts ........................ (1,190,519)
Foreign currencies and net other assets ........... (2,670)
--------------
Net realized gain on investments during the period .. 25,899,232
--------------
Net change in unrealized appreciation (depreciation) of:
Securities ........................................ 15,399,397
Forward exchange contracts ........................ (7,206,226)
Foreign currencies and net other assets ........... (10,017)
--------------
Net unrealized appreciation of investments during the period 8,183,154
--------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ......... 34,082,386
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ............................................ $ 43,046,157
==============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
9/30/99 ENDED
(UNAUDITED) 3/31/99
----------- -------
<S> <C> <C>
Net investment income ................................... $ 8,963,771 $ 5,940,977
Net realized gain on securities, forward exchange
contracts and currency transactions during the
period ................................................ 25,899,232 30,724,653
Net unrealized appreciation (depreciation) of
securities,
forward exchange contracts, foreign currencies and
net other assets during the period .................... 8,183,154 (54,465,179)
-------------- --------------
Net increase (decrease) in net assets resulting from
operations ............................................ 43,046,157 (17,799,549)
DISTRIBUTIONS:
Dividends to shareholders from net investment
income .............................................. -- (7,030,923)
Distributions to shareholders from net realized
gain on
investments ......................................... -- (12,518,672)
Net increase in net assets from Fund share
transactions
(Note 4) .............................................. 15,075,271 104,325,915
-------------- --------------
Net increase in net assets .............................. 58,121,428 66,976,771
NET ASSETS
Beginning of period ..................................... 1,078,214,491 1,011,237,720
-------------- --------------
End of period (including undistributed net investment
income of $8,993,145 and $29,374, respectively) ....... $1,136,335,919 $1,078,214,491
============== ==============
SEE NOTES TO FINANCIAL STATEMENT
</TABLE>
<PAGE>
<TABLE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------
For a Fund share outstanding throughout each period.
<CAPTION>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
9/30/99 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 3/31/99 3/31/98 3/31/97 3/31/96(a) 3/31/95(a)
----------- ------- ------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period .......................... $22.40 $23.04 $16.22 $14.29 $10.71 $ 9.71
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (b) ......... 0.18 0.12 0.11 0.13 0.15 0.13
Net realized and unrealized gain
(loss) on investments ........... 0.73 (0.37) 7.31 2.39 3.56 0.93
------ ------ ------ ------ ------ ------
Total from investment
operations .................. 0.91 (0.25) 7.42 2.52 3.71 1.06
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from net investment
income ........................ -- (0.14) (0.17) (0.17) (0.11) (0.06)
Distributions from net realized
gains ......................... -- (0.25) (0.43) (0.42) (0.02) --
------ ------ ------ ------ ------ ------
Total distributions ..................... -- (0.39) (0.60) (0.59) (0.13) (0.06)
------ ------ ------ ------ ------ ------
Net asset value, end
of period ......................... $23.31 $22.40 $23.04 $16.22 $14.29 $10.71
====== ====== ====== ====== ====== ======
Total return(c) ................... 4.06% (1.09)% 46.14% 17.75% 34.70% 11.02%
====== ====== ====== ====== ====== ======
Ratios/Supplemental Data:
Net assets, end of period
(in 000's) ...................... $1,136,336 $1,078,214 $1,011,238 $342,467 $201,599 $58,856
Ratio of operating expenses to
average net assets(d) ........... 1.37%(e) 1.39% 1.39% 1.39% 1.39% 1.74%
Ratio of net investment income
to average net assets .......... 1.55%(e) 0.55% 0.69% 0.92% 1.13% 1.25%
Portfolio turnover rate ........... 7% 16% 6% 16% 9% 4%
- ------------
(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) Net investment income 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, 1999, 1998, 1997, 1996 and 1995 were $0.12, $0.11,
$0.12 and $0.11, respectively.
(c) Total return represents aggregate total return for the periods indicated.
(d) Annualized expense ratios before the waiver of fees by the investment adviser and/or administrator and/or
custodian for the years ended March 31, 1999, 1998, 1997, 1996 and 1995 were 1.40%, 1.41%, 1.52%, 1.61% and 1.94%,
respectively.
(e) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
TWEEDY, BROWNE AMERICAN VALUE FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Tweedy, Browne American Value Fund (the "Fund") is a diversified series of
Tweedy, Browne Fund Inc. (the "Company"). The Company is an open-end
management investment company registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. The Company
was organized as a Maryland corporation on January 28, 1993. The Fund
commenced operations on December 8, 1993. The preparation of financial
statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements.
PORTFOLIO VALUATION Generally, the Fund's investments are valued at
market value or, in the absence of market value, by the Investment Adviser or,
at fair value as determined by or under the direction of the Company's Board
of Directors. Portfolio securities and other assets, listed on a U.S. national
securities exchange or through any system providing for same day publication
of actual prices (and not subject to restrictions against sale by the Fund on
such exchange or system) are valued at the last quoted sale price prior to the
close of regular trading. Portfolio securities and other assets listed on a
foreign exchange or through any system providing for same day publication of
actual prices are valued at the last quoted sale price available before the
time when assets are valued. Portfolio securities and other assets for which
there are no reported sales on the valuation date are valued at the mean
between the last asked price and the last bid price prior to the close of
regular trading. When the Investment Adviser determines that the last sale
price prior to valuation does not reflect current market value, the Investment
Adviser will determine the market value of those securities or assets in
accordance with industry practice and other factors considered relevant by the
Investment Adviser. All other securities and assets for which current market
quotations are not readily available and those securities which are not
readily marketable due to significant legal or contractual restrictions will
be valued by the Investment Adviser or at fair value as determined by or under
the direction of the Board of Directors. Debt securities with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value, or by reference to other factors (i.e. pricing services or
dealer quotations) by the Investment Adviser.
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
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, OTHER RELATED PARTY TRANSACTIONS AND
ADMINISTRATION FEE
The Company, on behalf of the Fund, has entered into an investment
advisory agreement (the "Advisory Agreement") with Tweedy, Browne Company LLC
("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 Investment Adviser not to exceed 75% of
the amount of the fee then accrued on the books of the Fund and unpaid. From
time to time, Tweedy, Browne may voluntarily waive a portion of its fee
otherwise payable to it. For the six months ended September 30, 1999, Tweedy,
Browne did not waive any fees.
The current members and retired general partners and their families, as
well as employees, of Tweedy, Browne, the Investment Adviser to the Fund, have
approximately $31.6 million of their own money invested in the Fund.
The Company, on behalf of the Fund, has entered into an administration
agreement (the "Administration Agreement") with First Data Investor Services
Group, Inc. (the "Administrator"), a wholly owned subsidiary of First Data
Corporation. Under the Administration Agreement, the Company pays the
Administrator an administrative fee and a fund accounting fee computed daily
and payable monthly at the following annual rates of the value of the average
daily net assets of the Fund:
<TABLE>
<CAPTION>
FEES ON ASSETS
-------------------------------------------------------
BETWEEN
$500 MILLION
UP TO AND EXCEEDING
$500 MILLION $1 BILLION $1 BILLION
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Administration Fees 0.06% 0.04% 0.02%
- --------------------------------------------------------------------------------------------------------
UP TO EXCEEDING
$100 MILLION $100 MILLION
- --------------------------------------------------------------------------------------------------------
Accounting Fees 0.03% 0.01%
- --------------------------------------------------------------------------------------------------------
</TABLE>
Under the terms of the Administration Agreement, the Company will pay for
fund administration services a minimum fee of $40,000 per annum, not to be
aggregated with fees for fund accounting services. The Company will pay for a
minimum monthly fee of $3,000 for fund accounting services for the Fund, not
to be aggregated with fees for fund administration services.
No officer, director or employee of Tweedy, Browne, the Administrator or
any parent or subsidiary of those corporations receives any compensation from
the Company for serving as a director or officer of the Company. The Fund pays
each director who is not an officer, director or employee of Tweedy, Browne,
the Administrator or any of their affiliates $8,000 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 Trust, serves as the Fund's custodian pursuant to a
custody agreement (the "Custody Agreement"). From time to time, Boston Safe
may voluntarily waive a portion of its fee otherwise payable to it. For the
six months ended September 30, 1999, Boston Safe did not waive any custody
fees. First Data Investor Services Group, Inc. serves 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.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments, for the six months ended September 30, 1999,
aggregated $114,404,744 and $73,017,207, respectively.
At September 30, 1999, the aggregate gross unrealized appreciation for all
securities, in which there was an excess of value over tax cost, was
$293,297,126 and the aggregate gross unrealized depreciation for all
securities, in which there was an excess of tax cost over value, was
$64,979,727.
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:
<TABLE>
<CAPTION>
------------------------------------------------------------------------
SIX MONTHS ENDED 9/30/99 YEAR ENDED 3/31/99
------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 9,184,032 $221,045,065 24,992,421 $560,483,799
Reinvested -- -- 771,582 17,467,680
Redeemed (8,578,362) (205,969,794) (21,518,449) (473,625,564)
- -----------------------------------------------------------------------------------------------------------
Net Increase 605,670 $ 15,075,271 4,245,554 $ 104,325,915
- -----------------------------------------------------------------------------------------------------------
</TABLE>
5. LINE OF CREDIT
The Company and Mellon Trust, N.A. (the "Bank") entered into a Line of
Credit Agreement (the "Agreement") which, as amended effective September 29,
1999, provides the Company, on behalf of the Fund and the Tweedy, Browne
Global Value Fund, with a $100 million line of credit (the "Commitment")
primarily for temporary or emergency purposes, including the meeting of
redemption requests that might otherwise require the untimely disposition of
securities. As a temporary measure, the Commitment has been increased to $300
million for the period December 1, 1999 through January 31, 2000. The Fund may
borrow up to one-third of its net assets; provided, however, that the total
Commitment available to the Fund is $100 million which amount may be reduced
by borrowings of the Tweedy, Browne Global Value Fund. Interest is payable at
the Bank's money market rate plus 0.75% on an annualized basis. Under the
Agreement, the Company pays a facility fee equal to 0.10% annually of the
unutilized Commitment and, during the period December 1, 1999 through January
31, 2000, a facility fee equal to 0.11% annually of the unutilized increase in
the Commitment. 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 period April 1, 1999 through September 30,
1999, the Company did not borrow, on behalf of the Fund, under the Agreement.
<PAGE>
4
TWEEDY, BROWNE FUND INC.
350 Park Avenue, NY, NY 10022
800-432-4789
