WORLDWIDE
DOLLARVEST
FUND, INC.
FUND LOGO
Semi-Annual Report
May 31, 1995
The Fund is leveraged to provide shareholders with a potentially
higher rate of return. However, leveraging may exaggerate changes in
the net asset value of the Fund's shares and in the yield on the
Fund's portfolio.
Investing in emerging market securities involves a number of risk
factors and special considerations, including restrictions on
foreign investments and on repatriation of capital invested in
emerging markets, currency fluctuations, and potential price
volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available
information about the issuers of securities, and such issuers may
not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those to which US companies
are subject. Therefore, the Fund is designed as a long-term
investment for investors capable of assuming the risks of investing
in emerging markets. The Fund should be considered as a vehicle for
diversification and not as a complete investment program. Please
refer to the prospectus for details.
This report, including the financial information herein, is
transmitted to the shareholders of Worldwide DollarVest Fund, Inc.
for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance.
Worldwide DollarVest
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
WORLDWIDE DOLLARVEST FUND, INC.
The Benefits and
Risks of
Leveraging
The Fund is authorized to utilize leverage in an amount between 20%
and 33 1/3% of the Fund's total assets (including the amount
obtained from the leverage).
The concept of leveraging is based on the premise that the cost of
assets to be obtained from leverage will be based on short-term
interest rates, which normally will be lower than the return earned
by the Fund on its longer-term portfolio investments. Since the
total assets of the Fund (including the assets obtained from
leverage) will be invested in the higher-yielding portfolio
investments, the Fund's Common Stock shareholders are the
beneficiaries of the incremental yield. Should the differential
between the underlying interest rates narrow, the incremental yield
"pick up" will be reduced. Furthermore, if long-term interest rates
rise, the Common Stock net asset value will reflect the full decline
in the entire portfolio holdings therefrom since the assets obtained
from leverage do not fluctuate.
Leverage creates risks for holders of Common Stock including the
likelihood of greater net asset value and market price volatility.
In addition, there is the risk that fluctuations in interest rates
on borrowings (or in the dividend rates on any Preferred Stock, if
the Fund were to issue Preferred Stock) may reduce the Common
Stock's yield and negatively impact its market price. If the income
derived from securities purchased with assets received from leverage
exceeds the cost of leverage, the Fund's net income will be greater
than if leverage had not been used. Conversely, if the income from
the securities purchased is not sufficient to cover the cost of
leverage, the Fund's net income will be less than if leverage had
not been used, and therefore the amount available for distribution
to Common Stock shareholders will be reduced. In this case, the Fund
may nevertheless decide to maintain its leveraged position in order
to avoid capital losses on securities purchased with leverage.
However, the Fund will not generally utilize leverage if it
anticipates that its leveraged capital structure would result in a
lower rate of return for its Common Stock than would be obtained if
the Common Stock were unleveraged for any significant amount of
time.
Officers and
Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Edward D. Zinbarg, Director
Terry K. Glenn, Executive Vice President
N. John Hewitt, Senior Vice President
Joseph T. Monagle, Senior Vice President
Donald C. Burke, Vice President
Vincent T. Lathbury III, Vice President
Paolo H. Valle, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
One Wall Street
New York, New York 10286
Transfer Agent
The Bank of New York
101 Barclay Street
New York, New York 10286
NYSE Symbol
WDV
DEAR SHAREHOLDER
Investment Results
For the six-month period ended May 31, 1995, total investment return
of Worldwide DollarVest Fund, Inc. was +1.80%, based on a change in
per share net asset value from $11.90 to $11.43, and assuming
reinvestment of $0.591 per share income dividends. During the same
period, the Fund earned $0.591 per share income dividends,
representing a net annualized yield of 10.38%, based on a month-end
per share net asset value of $11.43.
During the second quarter of 1995, the market for emerging market
debt experienced a good recovery initiated by the implementation of
a credible economic plan in Mexico, and by the unveiling of a large
financing package to support the Convertibility Plan in Argentina.
Additionally, the following positive factors enabled the market to
gain ground during May and early June: the election of President
Menem for a second term in Argentina; positive momentum on
constitutional reforms for Brazil's Cardoso administration; and a
seemingly stronger President Zedillo working through Mexico's
problems. However, these gains lagged the gains in the US bond
market primarily because of investor concerns regarding the region;
specifically, the impact of Mexico's deep recession on its fragile
banking system. Concerns are also focused on the ability of the
Brazilian administration to reverse the trade deficit without
endangering the Real Plan, and the timing of the most significant
constitutional reforms--the social security and tax reforms. Other
areas of investor unease include the impact of Argentina's economic
slowdown on the government's accounts and banking system, and the
combined impact of these factors on the Convertibility Plan. While
we share these misgivings, we are optimistic about the ability of
the various administrations to successfully address these issues and
we believe that the region will emerge stronger than expected.
It seems we have a positive interest rate environment in the United
States as a result of a slowdown in the US economy and contained
inflation. Lower yields in the United States will attract investors
to emerging markets in search of higher yields, in our view.
Investment Environment
Mexico
Mexico has been relatively calm during the past weeks. It seems the
Zedillo administration is handling the financial situation well. The
peso, after strengthening dramatically in April, stabilized at
approximately six pesos per dollar. Inflation for May was 4.1%, down
from 8.0% for April. The administration predicts that inflation will
continue to decline in upcoming months. The trade picture is
starting to build up with a revised surplus of $800 million for
April. Mexico's strategy is to capitalize on the weak peso by
focusing on trade and tourism. The economy continues to experience a
rocky period with borrowers facing high interest rates and lenders
experiencing high levels of non-performing assets. We believe this
situation will improve as inflation declines over the next six
months. Mexico has also started returning to the capital markets.
Nafinsa and Bancomext, two government agencies, raised about $300
million by issuing six-month paper, and a larger issue is expected
soon. This is a very positive development for Mexico. However, one
risk remains in the minds of investors: the impact of this current
recession on the health of the banking system. In our view, the
Mexican government has made it known, both verbally and through
recent action, that it stands behind the banking system. The
creation of a safety net and the engineering of bank mergers show
that the government intends to support the banking system. We
believe that we cannot use past crises to predict the impact of
this recession. Mexico is structurally a much different economy
and should bounce back from this recession faster than widely
anticipated, in our view.
Argentina
In Argentina, Menem was re-elected in the first round for a second
presidential term. Deposits started flowing back into the banking
system with an increase of $2 billion in the weeks following the
elections. The Argentine economy is currently faced with a tight
credit situation caused mostly by the reluctance of the banking
system to advance credit to the private sector. The economy is very
sluggish and predictions of a recession abound. Tax revenues are
behind plan by 7% for the month of May, raising questions about
Argentina's ability to meet the International Monetary Fund's (IMF)
fiscal targets. While the postponement of certain wage distributions
scheduled for June combined with fiscal surpluses established in the
first quarter will enable Argentina to comply with the IMF targets
for the second quarter, it is highly probable that Argentina will be
unable to meet IMF fiscal targets for 1995. We do not consider this
a problem because we believe that the IMF will waive these targets.
We also believe the more important issue is whether Argentina can
navigate through 1995 without seeking additional financing. The
fiscal situation will be critically dependent on the magnitude of
the economic slowdown as well as the administration's ability to
control spending.
Brazil
During the past weeks, both political and economic momentum shifted
in favor of the Cardoso administration. The Economic Reform package
advanced through the congress impressively, and the senate is
expected to endorse the package handily. This is a clear signal that
the Cardoso administration has the political clout to execute its
agenda and that the congress, which historically has been prone to
gridlock, is ready to legislate broadbased reform. Inflation remains
under control and declining. During May, Brazil posted a balance of
payments surplus of $2.4 billion, reversing a four-month deficit
trend. Consumption seems controlled and the Real Plan is working.
The next major move by the Cardoso administration is to announce a
new wage policy in late June or early July. A wage policy that is
geared at deindexation will prove to be bullish for the market.
Another issue is the status of the next round of constitutional
reform. An inordinate delay in the presentation of the next reform
package, either social security or tax reforms, would cause concern.
Philippines
In June, the rating agencies upgraded the foreign debt of the
Philippines by one notch (Standard & Poor's Corp. to BB and Moody's
Investors Service, Inc. to Ba2). The ratings upgrade was based on
three years of economic reform, good fiscal discipline and strong
economic growth. The economy continues to grow at a healthy pace
based on a good harvest and the resolution of bottlenecks in the
energy sector. A primary budget surplus of around 0.5% of gross
domestic product (GDP) is expected for 1995. The anticipated tax
reforms to be legislated later this year will further enhance the
fiscal situation. Inflation of 6.8% in May is showing signs of
accelerating and is likely to be fueled by anticipated reforms aimed
at liberalization of oil prices. Inflation growth has caused some
tension with the IMF, which is reluctant to review money supply
targets negotiated in the 1993 support package.
Morocco
Morocco is suffering through an extraordinary drought which has
adversely affected its economy. The harvest is 75% down from average
annual levels. This will result in zero GDP growth for 1995 compared
to 11% growth in 1994. The budget target is unlikely to be met as a
result of heavy spending on cereal imports. The government is
sticking to conservative policies to maintain economic fundamentals.
Tax increases are being implemented to maintain the budget deficit
at around 3% of GDP. Privatization is also continuing and has
encouraged a rise in foreign investment in the first quarter. The
political environment continues to be stable.
Venezuela
There were no significant political or economic developments in
Venezuela during the past six weeks. The price of oil seems in a
steady range and Venezuela's ability to service its Brady bonds
remains unimpaired. While the administration seems complacent, the
underlying economic fundamentals continue to erode. In the absence
of reforms, political and economic stability cannot be taken for
granted in 1996.
In Conclusion
We thank you for your investment in Worldwide DollarVest Fund, Inc.,
and we look forward to updating our outlook and strategy with you in
our next annual report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Portfolio Manager
(Vincent T. Lathbury III)
Vincent T. Lathbury III
Vice President and Portfolio Manager
July 7, 1995
PER SHARE INFORMATION
<TABLE>
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Capital
For the Period Income (Losses) (Losses) Income Gains
<S> <C> <C> <C> <C> <C>
February 4, 1994++ to May 31, 1994 $.33 $(.20) $(1.60) $.23 --
June 1, 1994 to August 31, 1994 .32 (.45) .31 .31 --
September 1, 1994 to November 30, 1994 .32 (.27) (.18) .32 --
December 1, 1994 to February 28, 1995 .28 (.35) (1.72) .30 --
March 1, 1995 to May 31, 1995 .31 (.54) 2.14 .29 --
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
February 4, 1994++ to May 31, 1994 $14.12 $11.78 $15.00 $11.125 1,240
June 1, 1994 to August 31, 1994 12.61 11.53 12.50 10.50 747
September 1, 1994 to November 30, 1994 12.43 11.63 12.00 10.00 721
December 1, 1994 to February 28, 1995 11.95 9.49 11.375 8.75 1,132
March 1, 1995 to May 31, 1995 11.72 8.36 11.00 7.875 1,281
<FN>
++Commencement of Operations.
*Calculations are based upon shares of Common Stock outstanding at
the end of the period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Eurobonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Argentina Banking $ 2,000,000 Banco de Galicia y Buenos Aires S.A.
--Yankee 9.00 % 11/01/2003 $ 1,460,000 2.0%
4,000,000 Banco del Rio de la Plata S.A.--
Yankee 8.75 12/15/2003 2,980,000 4.1
------------ ------
4,440,000 6.1
Sovereign 2,000,000 Republic of Argentina--Global 8.375 12/20/2003 1,525,000 2.1
Government
Obligations
Total Eurobonds in Argentina (Cost--$7,549,025) 5,965,000 8.2
Brazil Industrial 1,000,000 ++Celulose Nipo-Brasileira S.A.
(CENIBRA) 9.375 12/21/2003 910,000 1.2
1,000,000 ++Companhia Brasileira de Petroleo
Ipiranga 8.625 2/25/2002 955,000 1.3
1,000,000 Klabin Fabricadora Papel 10.00 12/20/2001 912,500 1.3
Total Eurobonds in Brazil (Cost--$3,000,367) 2,777,500 3.8
Mexico Banking 2,250,000 Banco Nacional 7.25 2/02/2004 1,530,000 2.1
Finance 1,500,000 ++Nacional Financiera S.A. 9.375 7/15/2002 1,143,750 1.6
Home 3,000,000 Tolmex, S.A. de C.V. 8.375 11/01/2003 2,070,000 2.8
Builders
Industrial 1,500,000 Corporacion Industrial San Luis 9.125 11/16/1998 1,140,000 1.5
Steel 1,000,000 ++Grupo Simec, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A. 8.875 12/15/1998 540,000 0.7
Tourism 1,000,000 Grupo Situr, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. 8.75 9/14/1998 480,000 0.7
Total Eurobonds in Mexico (Cost--$9,165,625) 6,903,750 9.4
Philippines Telecommuni- 2,000,000 ++Philippine Long Distance
cations Telephone Co. 10.625 6/02/2004 2,080,000 2.9
Total Eurobonds in the Philippines (Cost--$1,989,700) 2,080,000 2.9
South Sovereign 500,000 Republic of South Africa--Global 9.625 12/15/1999 512,500 0.7
Africa Government
Obligations
Total Eurobonds in South Africa (Cost--$498,425) 512,500 0.7
Venezuela Oil 2,000,000 Bariven, S.A. 10.625 3/17/2002 1,760,000 2.4
Total Eurobonds in Venezuela (Cost--$1,620,000) 1,760,000 2.4
Total Investments in Eurobonds (Cost--$23,823,142) 19,998,750 27.4
Brady Bonds
Argentina Sovereign 19,000,000 Republic of Argentina, Floating
Government Rate Bond* 7.312 3/31/2005 12,492,500 17.1
Obligations 500,000 Republic of Argentina Par 'L' 5.00 3/31/2023 250,000 0.3
Total Brady Bonds in Argentina (Cost--$11,840,000) 12,742,500 17.4
Brazil Sovereign 5,000,000 Brazil Exit Bonds 6.688 4/15/2006 3,000,000 4.1
Government 1,000,000 Brazil Exit Bonds 6.00 9/15/2013 490,000 0.7
Obligations 485,000 Brazil IDU 6.062 1/01/2001 390,425 0.5
7,500,000 Republic of Brazil* 6.75 4/15/2012 3,965,625 5.4
7,500,000 Republic of Brazil 6.75 4/15/2009 4,106,250 5.6
18,727,200 Republic of Brazil* 8.00 4/15/2014 9,457,236 13.0
Total Brady Bonds in Brazil (Cost--$21,189,607) 21,409,536 29.3
Costa Rica Banking 1,000,000 Banco Central Costa Rica 6.25 5/21/2015 470,000 0.6
Total Brady Bonds in Costa Rica (Cost--$661,250) 470,000 0.6
Ecuador Sovereign 3,000,000 Republic of Ecuador Discount 7.25 2/28/2025 1,552,500 2.2
Government 49,000 Republic of Ecuador PDI 7.25 2/28/2015 17,027 0.0
Obligations
Total Brady Bonds in Ecuador (Cost--$1,812,441) 1,569,527 2.2
Mexico Sovereign 12,000,000 United Mexican States Par 'A'* 6.25 12/31/2019 6,765,000 9.3
Government 2,500,000 United Mexican States Par 'B' 6.25 12/31/2019 1,409,375 1.9
Obligations
Total Brady Bonds in Mexico (Cost--$8,310,530) 8,174,375 11.2
Philippines Sovereign 5,500,000 Philippine Par Bond 'B' 5.75 12/01/2017 3,753,750 5.1
Government
Obligations
Total Brady Bonds in the Philippines (Cost--$3,585,000) 3,753,750 5.1
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Brady Bonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Poland Sovereign $ 5,000,000 Republic of Poland--Global 6.813% 10/27/2024 $ 3,594,000 4.9%
Government
Obligations
Total Brady Bonds in Poland (Cost--$3,462,500) 3,594,000 4.9
Venezuela Sovereign 7,000,000 Republic of Venezuela FLIRB 'A' 7.313 3/31/2007 3,447,500 4.7
Government 2,000,000 Republic of Venezuela Par 'A' 6.75 3/31/2020 1,000,000 1.4
Obligations
Total Brady Bonds in Venezuela (Cost--$6,155,216) 4,447,500 6.1
Total Investments in Brady Bonds (Cost--$57,016,544) 56,161,188 76.8
Loan Agreements
Morocco Sovereign 5,000,000 Morocco Consolidated Agreement 7.375 1/01/2019 3,050,000 4.2
Government
Obligations
Total Loan Agreements in Morocco (Cost--$3,708,750) 3,050,000 4.2
Panama Sovereign 1,000,000 Republic of Panama 10.00 3/09/2024 530,000 0.7
Government
Obligations
Total Loan Agreements in Panama (Cost--$665,000) 530,000 0.7
Russia Banking 9,000,000 Vnesheconom Bank 3.562 1/01/2024 2,553,750 3.5
Total Loan Agreements in Russia (Cost--$3,311,875) 2,553,750 3.5
Total Investments in Loan Agreements (Cost--$7,685,625) 6,133,750 8.4
Short-Term Investments
Mexico Certificates 3,200,000 Banco Promex 20.00 6/16/1995 3,173,785 4.3
of Deposit
Total Certificates of Deposit in Mexico (Cost--$3,173,785) 3,173,785 4.3
United Commercial 584,000 General Electric Capital Corp. 6.13 6/01/1995 584,000 0.8
States Paper**
Total Commercial Paper in the United States (Cost--$584,000) 584,000 0.8
Total Short-Term Investments (Cost--$3,757,785) 3,757,785 5.1
OPTIONS Strike Expiration
PURCHASED Issue Price Date
Call Options 2,089,816 Brazil C Bonds $ 53.25 June 1995 10,031 0.0
Purchased
Total Options Purchased (Cost--$22,988) 10,031 0.0
Total Investments (Cost--$92,306,084) 86,061,504 117.7
OPTIONS
WRITTEN
Call Options 2,089,586 Brazil C Bonds 53.25 August 1995 (17,761) 0.0
Written 2,000,000 Republic of Argentina 76.125 August 1995 (8,000) 0.0
Total Options Written (Premiums Received--$27,582) (25,761) 0.0
Total Investments, Net of Options Written (Cost--$92,278,502) 86,035,743 117.7
Liabilities in Excess of Other Assets (12,944,298) (17.7)
------------ ------
Net Assets $ 73,091,445 100.0%
============ ======
<FN>
*Security represents collateral in connection with reverse
repurchase agreements (Note 5).
**Commercial Paper is traded on a discount basis; the interest rates
shown are the discount rates paid at the time of purchase by the
Fund.
++Restricted securities as to resale. The value of the Fund's investment
in restricted securities was approximately $5,629,000, representing
7.7% of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Celulose Nipo-Brasileira S.A.
(CENIBRA), 9.375% due 12/31/2003 2/10/1994 $1,000,000 $ 910,000
Companhia Brasileira de Petroleo
Ipiranga, 8.625% due 2/25/2002 2/15/1994 999,117 955,000
Grupo Simec, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A.,
8.875% due 12/15/1998 5/31/1994 942,500 540,000
Nacional Financiera S.A.,
9.375% due 7/15/2002 3/02/1994-3/25/1994 1,535,000 1,143,750
Philippine Long Distance
Telephone Co.,10.625%
due 6/02/2004 5/24/1994 1,989,700 2,080,000
Total $6,466,317 $5,628,750
========== ==========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of May 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$92,283,096) (Note 1a) $ 86,051,473
Options purchased, at value (Cost--$22,988) (Notes 1a & 1b) 10,031
Cash 11,478
Receivables:
Securities sold $ 6,389,196
Interest 2,004,208 8,393,404
------------
Deferred organization expenses (Note 1e) 23,212
Prepaid expenses and other assets 2,066
------------
Total assets 94,491,664
------------
Liabilities: Options written, at value (premiums received--$27,582)
(Notes 1a & 1b) 25,761
Payables:
Reverse repurchase agreements (Note 5) 16,770,680
Securities purchased 4,257,970
Dividends to shareholders (Note 1f) 198,421
Investment adviser (Note 2) 40,214 21,267,285
------------
Accrued expenses and other liabilities 107,173
------------
Total liabilities 21,400,219
------------
Net Assets: Net assets $ 73,091,445
============
Net Assets Common Stock, $.10 par value, 200,000,000 shares issued
Consist of: and outstanding $ 639,296
Paid-in capital in excess of par 89,557,739
Undistributed investment income--net 707,232
Accumulated realized capital losses on investments--net (Note 6) (11,570,063)
Unrealized depreciation on investments--net (6,242,759)
------------
Total--Equivalent to $11.43 per share based on 6,392,962
shares of capital stock outstanding (market price--$10.75) $ 73,091,445
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended May 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 4,361,111
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 220,450
Interest expense 215,055
Accounting services (Note 2) 40,298
Printing and shareholder reports 30,249
Professional fees 25,559
Custodian fees 12,831
Directors' fees and expenses 12,248
Transfer agent fees 10,806
Listing fees 7,573
Amortization of organization expenses (Note 1e) 2,534
Pricing services 524
Other 3,015
------------
Total expenses 581,142
------------
Investment income--net 3,779,969
------------
Realized & Realized loss on investments--net (5,668,692)
Unrealized Gain Change in unrealized depreciation on investments--net 2,706,435
(Loss) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 817,712
- --Net (Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the For the
Six Period
Months February 4,
Ended 1994++ to
Increase (Decrease) in Net Assets: May 31, 1995 Nov. 30, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 3,779,969 $ 6,165,861
Realized loss on investments--net (5,668,692) (5,901,371)
Change in unrealized depreciation on investments--net 2,706,435 (8,949,194)
------------ ------------
Net increase (decrease) in net assets resulting from operations 817,712 (8,684,704)
------------ ------------
Dividends to Investment income--net (3,778,579) (5,460,019)
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends to
shareholders (3,778,579) (5,460,019)
------------ ------------
Capital Stock Net proceeds from issuance of Common Stock -- 89,774,995
Transactions Offering costs resulting from the issuance of Common Stock -- (348,639)
(Notes 1e & 4): Value of shares issued to Common Stock shareholders in
reinvestment of dividends and distributions -- 670,674
------------ ------------
Net increase in net assets derived from capital stock
transactions -- 90,097,030
------------ ------------
Net Assets: Total increase (decrease) in net assets (2,960,867) 75,952,307
Beginning of period 76,052,312 100,005
------------ ------------
End of period* $ 73,091,445 $ 76,052,312
============ ============
<FN>
*Undistributed investment income--net $ 707,232 $ 705,842
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Six Months Ended May 31, 1995
<S> <S> <C>
Cash Provided by Net increase in net assets resulting from operations $ 817,712
Operating Adjustments to reconcile net increase (decrease) in net assets
Activities: resulting from operations to net cash provided by (used for)
operating activities:
Decrease in receivables 704,630
Increase in other liabilities 3,989
Realized and unrealized loss on investments--net 2,962,257
Amortization of premium and discount (247,185)
------------
Net cash provided by operating activities 4,241,403
------------
Cash Used for Proceeds from sales of long-term investments 37,731,761
Investing Purchases of long-term investments (45,041,396)
Activities: Purchases of short-term investments--net (167,503,378)
Proceeds from sales and maturities of short-term investments--net 166,402,652
------------
Net cash used for investing activities (8,410,361)
------------
Cash Provided Cash receipts from borrowings 8,009,915
by Financing Dividends paid to shareholders (3,829,749)
Activities: ------------
Net cash provided by financing activities 4,180,166
------------
Cash: Net increase in cash 11,208
Cash at beginning of period 270
------------
Cash at end of period $ 11,478
============
Cash Flow Cash paid for interest $ 215,055
Information: ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the For the
The following per share data and ratios have been derived Six Period
from information provided in the financial statements. Months February 4,
Ended 1994++ to
Increase (Decrease) in Net Asset Value: May 31, 1995 Nov. 30, 1994
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 11.90 $ 14.18
Operating ------------ ------------
Performance: Investment income--net .59 .97
Realized and unrealized loss on investments--net (.47) (2.39)
------------ ------------
Total from investment operations .12 (1.42)
------------ ------------
Less dividends from investment income--net (.59) (.86)
------------ ------------
Net asset value, end of period $ 11.43 $ 11.90
============ ============
Market price per share, end of period $ 10.75 $ 11.00
============ ============
Total Investment Based on market price per share 3.58%+++ (21.13%)+++
Return:** ============ ============
Based on net asset value per share 1.80%+++ (9.72%)+++
============ ============
Ratios to Expenses, net of reimbursement and excluding interest expense 1.11%* .18%*
Average ============ ============
Net Assets: Expenses, net of reimbursement 1.77%* .59%*
============ ============
Expenses 1.77%* 1.26%*
============ ============
Investment income--net 11.49%* 8.84%*
============ ============
Supplemental Net assets, end of period (in thousands) $ 73,091 $ 76,052
Data: ============ ============
Portfolio turnover 56.48% 68.31%
============ ============
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Worldwide DollarVest Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund determines and makes available for publication the net
asset value of its common stock on a weekly basis. The Fund's Common
Stock is listed on the New York Stock Exchange under the symbol WDV.
(a) Valuation of investments--Portfolio securities (other than short-
term obligations but including listed issues) may be valued on the
basis of prices furnished by one or more pricing services which
determine prices for normal, institutional-size trading units of
such securities using market information, transactions for
comparable securities and various relationships between securities
which are generally recognized by institutional traders. In certain
circumstances, portfolio securities are valued at the last sale
price on the exchange that is the primary market for such
securities, or the last quoted bid price for those securities for
which the over-the-counter market is the primary market or for
listed securities in which there were no sales during the day. The
value of interest rate swaps, caps and floors is determined in
accordance with a formula and then confirmed periodically by
obtaining a bank or dealer quotation. Positions in options or
futures contracts are valued at the last sale price on the market
where any such option or futures contract is principally traded, or
in the case of options traded in the over-the-counter market, the
last bid price (or average of the last bid prices) from one or more
dealers. Obligations with remaining maturities of sixty days or less
are valued at amortized cost unless the method no longer produces
fair valuations. Repurchase agreements are valued at cost plus
accrued interest. Securities for which there exist no price
quotations or valuations and all other assets are valued at fair
value as determined in good faith by or on behalf of the Board of
Directors of the Fund.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase hedging its portfolio
against adverse movements in the debt markets. Losses may arise due
to changes in the contract or if the counterparty does not perform
under the contract.
* Options--The Fund is authorized to purchase and write call and put
options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. 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 it was opened and the value at the time it
was closed.
NOTES TO FINANCIAL STATEMENTS (concluded)
* Interest rate transactions--The Fund is authorized to enter into
interest rate swaps and purchase or sell interest rate caps and
floors. In an interest rate swap, the Fund exchanges with another
party their respective commitments to pay or receive interest on a
specified notional principal amount. The purchase of an interest
rate cap (or floor) entitles the purchaser, to the extent that a
specified index exceeds (or falls below) a predetermined interest
rate, to receive payments of interest equal to the difference
between the index and the predetermined rate on a notional principal
amount from the party selling such interest rate cap (or floor).
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest and capital gains at
various rates.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified
cost basis.
(e) Deferred organization expenses and offering costs--Deferred
organization expenses are charged to expense on a straight-line
basis over a five-year period. Direct expenses relating to the
public offering of the capital stock were charged to capital at the
time of issuance.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distribution of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.60% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
During the six months ended May 31, 1995, Merrill Lynch Security
Pricing Service, an affiliate of Merrill Lynch, Pierce, Fenner &
Smith Inc. ("MLPF&S"), provided security price quotations to compute
the net asset value of the Fund.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, MLPF&S, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1995 were $45,050,697 and
$40,008,876, respectively.
Net realized and unrealized gains (losses) as of May 31, 1995 were
as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ (5,871,377) $ (6,231,623)
Short-term investments 185 --
Options written 202,500 1,821
Options purchased -- (12,957)
------------ ------------
Total $ (5,668,692) $ (6,242,759)
============ ============
Transactions in call options written for the six months ended May
31, 1995 were as follows:
Par Premiums
Call Options Written Value Received
Outstanding call options written
at beginning of period $ 10,000,000 $ 108,000
Options written 9,089,586 87,582
Options expired (15,000,000) (168,000)
------------ ------------
Outstanding call options written
at end of period $ 4,089,586 $ 27,582
============ ============
Transactions in put options written for the six months ended May 31,
1995 were as follows:
Par Premiums
Put Options Written Value Received
Outstanding put options written
at beginning of period $ 5,000,000 $ 67,500
Options expired (5,000,000) (67,500)
------------ ------------
Outstanding put options written
at end of period $ -- $ --
============ ============
As of May 31, 1995, net unrealized depreciation for Federal income
tax purposes aggregated $6,242,759, of which $2,643,701 related to
appreciated securities and $8,886,460 related to depreciated
securities. At May 31, 1995, the aggregate cost of investments,
including put options purchased, less premiums received for options
written, for Federal income tax purposes was $92,278,502.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
par value $.10 per share. For the period ended May 31, 1995 shares
issued and outstanding remained constant at 6,392,962. At May 31,
1995, total paid-in capital amounted to $90,197,035.
5. Reverse Repurchase Agreements:
Under a reverse repurchase agreement, the Fund sells securities and
agrees to repurchase them at a mutually agreed upon date and price.
At the time the Fund enters into a reverse repurchase agreement, it
may establish a segregated account with the custodian containing
cash, cash equivalents or liquid high grade debt securities having a
value at least equal to the repurchase price.
As of May 31, 1995, the Fund had entered into reverse repurchase
agreements in the amount of $16,770,680. For the six months ended
May 31, 1995, the maximum amount entered into was $16,770,680, the
average outstanding was $6,775,446 and the daily weighted average
interest rate was 6.51%.
6. Capital Loss Carryforward:
At November 30, 1994, the Fund had a capital loss carryforward of
approximately $4,614,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
7. Subsequent Event:
On June 21, 1995, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.110621 payable on June 30, 1995, to shareholders of record as of
June 23, 1995.
