WORLDWIDE
DOLLARVEST
FUND, INC.
FUND LOGO
Annual Report
November 30, 1994
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.
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.
<PAGE>
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.
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.
<PAGE.
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, 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
<PAGE>
DEAR SHAREHOLDER
Since inception (February 4, 1994) through November 30, 1994, total
investment return of Worldwide DollarVest Fund, Inc. was -9.72%,
based on a change in per share net asset value from $14.18 to
$11.90, and assuming reinvestment of $0.856 per share income
dividends. During the same period, the Fund earned $0.966 per share
income dividends, representing a net annualized yield of 9.88%,
based on a month-end per share net asset value of $11.90.
As of November 30, 1994, our geographical asset allocation was as
follows: Argentina, 8.2% of net assets; Brazil, 33.2%; Costa Rica,
0.7%; Ecuador, 3.3%; Mexico, 21.2%; Panama, 0.7%; Philippines, 7.5%;
United States, 20.6%; and Venezuela, 13.9%.
Investment Environment
Mexico
The most dramatic developments in Mexico took place following the
close of the Fund's fiscal year. On December 20, 1994, Mexico
abruptly altered its exchange rate policy by allowing the peso to
devalue by 15% and surprised the financial community again on
December 21 by free-floating the peso. The consequence of these
actions was confusion, panic and a dramatic run on the peso, which
resulted in a 55% depreciation in the value of the peso by year-end.
Foreign investors in Mexico were surprised by the devaluation coming
so soon after the reaffirmation of the PACTO currency bands in
November, which was publicly supported by the new president of
Mexico. We believe that the decision was forced by speculative
pressure on the currency band in response to the escalating
Zapatista movement in Chiapas. In addition, it appears that the
Mexican leadership believes that both uncertainties concerning
capital outflows (impacted by rising interest rates in the United
States) and political developments in Chiapas would continue to
grow. The peso debacle has resulted in a critical evaluation of
Mexico, which has been the benchmark credit among emerging
nations. Investors are also reexamining the emerging markets sector
in the context of developments in Mexico. The whole sector will be
prone to price volatility during this period.
<PAGE>
The Mexican government has unveiled its new economic program to
combat this financial crisis. The first step is an $18 billion
revolving credit facility which Mexico hopes to finalize in the
near future from a consortium of lenders including the United
States, Canada, The Bank for International Settlements and a
group of commercial banks led by Citibank and J.P. Morgan. Second,
the Mexican government has stated it will tighten fiscal and
monetary policy. Development bank spending will be severely cut
back, from 4.4% of gross domestic product to 2.4% in 1995, and a
fiscal budget surplus of 0.5% is forecast. Additionally, a new PACTO
was signed which intends to control labor costs and prices by
restricting wage and price increases. Finally, a more aggressive
privatization program is on schedule for 1995, which includes
increased foreign ownership of banks and intends to raise between
$12 billion--$14 billion. The idea is to get through this crisis
with the new credit lines and greatly reduce the current account
deficit to much more manageable levels while controlling inflation.
The plan looks encouraging on paper but much will depend on the
execution of this plan.
As for the impact of these developments on our market, the first and
most important factor in the short term will be redemptions in the
mutual fund sector. If redemptions exceed the expectations of fund
managers, mutual funds will be forced into additional liquidations
which could accelerate price action and eventually lead to further
redemptions. Second, distress in the banking system may lead to bank
failures or defaults (or both), which would precipitate a credit
crisis. A credit crisis could also be precipitated by Eurobond
defaults in the Mexican private sector. In the event of a credit
crisis, the market would be faced with an inordinate supply of
Eurobonds which would hit dealer inventory and force dealers to
short Brady bonds as a hedge. Some of this is already going on but
it could escalate if the market were faced with a credit crisis. In
the long run, investors will have to evaluate Mexico and other
emerging countries for their resilience to bounce back from such
setbacks and continue on their path to economic growth.
Our view on Mexico is one of guarded optimism. We believe 1995 will
be very difficult and the government's ambitious economic targets
will be hard to meet. The government is also predicting mild
economic growth, which is optimistic, in our view. We believe
the consequences of the devaluation will cause a slowdown in
the economy in 1995 with the result being zero to negative eco-
nomic growth. We believe the first half of 1995 will be character-
ized by higher inflation, higher interest rates and volatility
in the peso.
<PAGE>
The first quarter of 1995 will be crucial as the Mexican government
must work to rebuild a level of confidence which will restore order
to the markets. The government has made important steps in the right
direction and we believe they will ultimately succeed in stabilizing
the situation. However, it is critical for the Mexican government to
continue to expand on their recently announced rescue and return a
level of stability to the markets.
We believe the crisis in Mexico is one of confidence, not one of
solvency. The new economic plan is workable but will require more
finesse on the part of the Mexican administration than they have
demonstrated during the past weeks. They will have to keep the
peso in check, support the banking system, enforce the PACTO and
restore confidence quickly. Mexico is a well reformed economy which
is capable of managing this crisis.
Argentina
Our view on Argentina is that it is closely linked to the situation
in Mexico and will be hostage to the crisis in Mexico. While
Argentina has a higher level of foreign exchange reserves as
compared to Mexico and has a much smaller pool of "hot money" to
contend with, it is facing a confidence crisis very similar to
Mexico. There is concern over the budget deficit, the ability of the
country to finance its current account deficit, the liquidity crisis
among the smaller wholesale banks, high domestic interest rates and
the convertibility law which pegs the Argentine peso at parity with
the US dollar. Argentina will have to put together a comprehensive
plan to deal with the concerns of the marketplace and restore
confidence. We believe that such a plan is in the works and that the
current administration, which is well regarded by the investment
community, is capable of dealing with the situation. Like Mexico,
Argentina is a fundamentally sound and reformed economy.
Brazil
Our view on Brazil is positive. While Brazil has yet to implement
the economic reforms which are in place in Argentina and Mexico, the
current administration in Brazil is firmly determined to carry out
these reforms. The real plan is working successfully to lower
inflation with December inflation coming in lower than expected.
Brazil has more resources, both financial and natural, than its
peers in dealing with the current situation. Brazil has $42 billion-
- -$43 billion in foreign exchange reserves, a large chest of national
assets that can be privatized and an administration with a mandate
for change.
Venezuela
Our view on Venezuela is neutral and unchanged from our view of six
months ago. The market is still awaiting the implementation of the
economic stabilization plan outlined in mid-1994. In the meantime,
Venezue-la's ability to service external debt is unimpaired.
Venezuela has a unique status as an oil-rich country. It produces
the third largest amount of oil in the world and is one of the most
important suppliers of oil to the United States.
<PAGE>
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 semi-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
January 16, 1995
PER SHARE INFORMATION (unaudited)
<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 --
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
<PAGE>
<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 Face Amount Issue Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Argentina Bonds $ 2,000,000 Banco de Galicia y Buenos Aires
S.A.--Yankee (2) 9.00 % 11/01/2003 $ 1,572,500 2.1%
4,000,000 Banco Del Rio de la Plata S.A.--
Yankee (2) 8.75 12/15/2003 3,100,000 4.1
2,000,000 Republic of Argentina--Global (1) 8.375 12/20/2003 1,542,500 2.0
Total Investments in Argentina
(Cost--$7,549,025) 6,215,000 8.2
Brazil Eurobonds 3,000,000 Brazil Exit Bonds (1) 6.00 9/15/2013 1,537,500 2.0
5,000,000 Brazil Exit Bonds (1) 6.688 4/15/2006 3,493,750 4.6
490,000 Brazil IDU (1) 6.063 1/01/2001 413,438 0.5
1,000,000 ++Celulose Nipo-Brasileira S.A.
(CENIBRA) (3) 9.375 12/21/2003 919,580 1.2
1,000,000 ++Companhia Brasileira de Petroleo
Ipiranga (3) 8.625 2/25/2002 940,000 1.2
1,000,000 Klabin Fabricadora Papel (3) 10.00 12/20/2001 952,350 1.3
10,200,000 Republic of Brazil (1)* 8.00 4/15/2014 5,253,000 6.9
6,000,000 Republic of Brazil (1) 5.25 4/15/2009 3,915,000 5.1
12,500,000 Republic of Brazil (1) 6.75 4/15/2012 7,921,875 10.4
Total Investments in Brazil (Cost--
$23,755,819) 25,346,493 33.2
Costa Rica Brady 1,000,000 Banco Central Costa Rica (2) 6.25 5/21/2015 530,000 0.7
Bonds
Total Investments in Costa Rica (Cost
--$661,250) 530,000 0.7
<PAGE>
Ecuador Brady 3,000,000 Republic of Ecuador Discount (1) 10.00 12/15/2024 1,672,500 2.2
Bonds
Loan 1,500,000 Banco Central de Equador Consolidated
Agreement Agreement (18) 10.00 3/09/2024 858,600 1.1
Total Investments in Ecuador (Cost--
$2,781,250) 2,531,100 3.3
Mexico Bonds 1,500,000 Corporacion Industrial San Luis (3) 9.125 11/16/1998 1,428,900 1.9
1,000,000 ++Grupo Simec, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. (5) 8.875 12/15/1998 890,000 1.2
1,000,000 Grupo Situr, S.A. de C.V., guaranteed
by Grupo Sidek, S.A. (6) 8.75 9/14/1998 892,500 1.2
1,500,000 ++Nacional Financiera S.A. (17) 9.375 7/15/2002 1,406,250 1.8
3,000,000 Tolmex, S.A. de C.V. (15) 8.375 11/01/2003 2,570,940 3.4
Brady 10,000,000 United Mexican States Par `A' (1)* 6.25 12/31/2019 6,387,500 8.4
Bonds 4,000,000 United Mexican States Par `B' (1)* 6.25 12/31/2019 2,555,000 3.3
Total Investments in Mexico (Cost--
$18,897,276) 16,131,090 21.2
Panama Loan 1,000,000 Republic of Panama (18) 10.00 3/09/2024 538,750 0.7
Agreement
Total Investments in Panama (Cost--
$665,000) 538,750 0.7
Philippines Bonds 2,000,000 ++Philippine Long Distance Telephone
Co. (4) 10.625 6/02/2004 1,977,500 2.6
Brady 6,000,000 Philippine Par Bond `B' (2)* 5.25 12/01/2017 3,720,000 4.9
Bonds
Total Investments in the Philippines
(Cost--$5,869,700) 5,697,500 7.5
United Commercial 2,484,000 General Electric Capital Corp.
States Paper** (17) 5.70 12/01/1994 2,484,000 3.3
<PAGE>
High 1,000,000 ADT Operations Inc. (3) 9.25 8/01/2003 912,500 1.2
Yield 1,000,000 Fort Howard Corporation (13) 9.00 2/01/2006 842,500 1.1
Bonds 1,950,000 Fresh Del Monte Corp. (14) 10.00 5/01/2003 1,345,500 1.8
1,000,000 Gulf Canada Resources Ltd. (3) 9.25 1/15/2004 915,000 1.2
1,600,000 Nextel Communications Inc. (9) 4.56+++ 2/15/1999 596,000 0.8
1,000,000 Owens-Illinois, Inc. (11) 10.00 8/01/2002 957,500 1.3
925,000 Panamsat L.P. (9) 9.75 8/01/2000 897,250 1.2
1,500,000 Reliance Group Holdings, Inc. (17) 9.75 11/15/2003 1,282,500 1.7
1,000,000 Sequa Corp. (8) 9.375 12/15/2003 880,000 1.2
500,000 Sherritt Gordon Ltd. (10) 9.75 4/01/2003 480,000 0.6
1,242,000 Silgan Holdings Inc. (11) 9.473+++ 6/15/1996 1,049,490 1.4
1,000,000 Stone Container Corp. (13) 9.875 2/01/2001 912,500 1.2
500,000 Trump Plaza Funding, Inc. (12) 10.875 6/15/2001 342,500 0.4
1,000,000 Webb (Del E.) Corp. (15) 9.00 2/15/2006 760,000 1.0
1,000,000 Westpoint Stevens, Inc. (16) 9.375 12/15/2005 875,000 1.2
Total Investments in the United
States (Cost--$17,766,862) 15,532,240 20.6
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Face Amount Issue Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C> <C>
Venezuela Bonds $ 2,000,000 Bariven, S.A. (7) 10.625% 3/17/2002 $ 1,660,000 2.2%
Brady 5,000,000 Republic of Venezuela Par `A' (1) 6.75 3/31/2020 2,281,250 3.0
Bonds 10,000,000 Republic of Venezuela Par `A' (1) 7.00 3/31/2007 4,800,000 6.3
4,000,000 Republic of Venezuela Par `B' (1) 6.75 3/31/2020 1,825,000 2.4
Total Investments in Venezuela (Cost
--$14,218,755) 10,566,250 13.9
Total Investments (Cost--$92,164,937) 83,088,423 109.3
<CAPTION>
OPTIONS Strike Expiration
WRITTEN Issue Price Date
<S> <C> <S> <C> <S> <C> <C>
Currency 3,000,000 Mexican Par $ 66.000 Dec. 1994 (3,000) 0.0
Call 2,000,000 Mexican Par 66.000 Jan. 1995 (5,080) 0.0
Options 5,000,000 Venezuelan Par 51.063 Dec. 1994 (5,000) 0.0
Written ------------ ------
(13,080) 0.0
<PAGE>
Currency 3,000,000 Mexican Par 64.000 Dec. 1994 (13,500) 0.0
Put 2,000,000 Mexican Par 64.000 Jan. 1995 (21,600) (0.1)
Options ------------ ------
Written (35,100) (0.1)
Total Options Written (Premiums
Received--$175,500) (48,180) (0.1)
Total Investments, Net of Options Written (Cost--$91,989,437) 83,040,243 109.2
Liabilities in Excess of Other Assets (6,987,931) (9.2)
------------ ------
Net Assets $ 76,052,312 100.0%
============ ======
<FN>
*Security represents collateral in connection with reverse repurchase
agreements (Note 5).
**Commercial Paper is traded on a discount basis; the interest rate shown
is the discount rate paid at the time of purchase by the Fund.
+++Represents the approximate yield to maturity.
Corresponding industry groups for securities (percent of net assets):
(1)Sovereign Government Obligations--57.1%
(2)Banking--11.8%
(3)Industrial--8.0%
(4)Telecommunications--2.6%
(5)Steel--1.2%
(6)Tourism--1.2%
(7)Oil--2.2%
(8)Capital Goods--1.2%
(9)Communications--2.0%
(10)Conglomerates--0.6%
(11)Containers--2.7%
(12)Hotels & Casinos-- 0.4%
(13)Paper--2.3%
(14)Food & Beverage--1.8%
(15)Home Builders--4.4%
(16)Textiles--1.2%
(17)Finance--6.8%
(18)Loan Agreement--1.8%
<PAGE>
++Restricted securities as to resale. The value of the Fund's investment
in restricted securities was approximately $6,133,000, representing
8.1% of net assets.
<CAPTION>
Acquisition Value
Issue Date(s) Cost (Note 1a)
<S> <C> <C> <C>
Celulose Nipo D Brasileira S.A.
(CENIBRA), 9.375% due 12/21/2003 2/10/94 $1,000,000 $ 919,580
Companhia Brasileira de Petroleo
Ipiranga, 8.625% due 2/25/2002 2/15/94 999,069 940,000
Grupo Simec, S.A. de C.V., guaran-
teed by Grupo Sidek, S.A., 8.875%
due 12/15/1998 5/31/94 942,500 890,000
Nacional Financiera, S.A.,
9.375% due 7/15/2002 3/02/94-3/25/94 1,535,000 1,406,250
Philippine Long Distance
Telephone Co.,10.625%
due 6/02/2004 5/24/94 1,989,700 1,977,500
Total $6,466,269 $6,133,330
========== ==========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$92,164,937) (Note 1a) $ 83,088,423
Cash 270
Receivables:
Securities sold $ 3,657,687
Interest 2,660,820
Investment adviser (Note 2) 48,018 6,366,525
------------
Deferred organization expense (Note 1g) 23,212
Prepaid expenses and other assets 2,066
------------
Total assets 89,480,496
------------
<PAGE>
Liabilities: Options written, at value (premiums received--$175,500)
(Notes 1a & 1c) 48,180
Payables:
Reverse repurchase agreements (Note 5) 8,760,765
Securities purchased 4,226,250
Dividends to shareholders (Note 1g) 249,591 13,236,606
------------
Accrued expenses and other liabilities 143,398
------------
Total liabilities 13,428,184
------------
Net Assets: Net assets $ 76,052,312
============
Net Assets Common Stock, $.10 par value, 200,000,000 shares authorized $ 639,296
Consist of: Paid-in capital in excess of par 89,557,739
Undistributed investment income--net 705,842
Accumulated realized capital losses on investments--net (Note 7) (5,901,371)
Unrealized depreciation on investments--net (8,949,194)
------------
Net assets--Equivalent to $11.90 per share based on 6,392,962
shares of capital stock outstanding (market price--$11.00) $ 76,052,312
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Period February 4, 1994++ to November 30, 1994
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 6,575,078
(Note 1f):
<PAGE>
Expenses: Investment advisory fees (Note 2) 418,324
Interest expense 280,680
Accounting services (Note 2) 54,282
Directors' fees and expenses 24,100
Professional fees 24,006
Custodian fees 21,712
Registration fees (Note 1g) 14,260
Transfer agent fees 13,761
Printing and shareholder reports 12,586
Amortization of organization expenses (Note 1g) 4,648
Pricing services 882
Other 6,318
------------
Total expenses before reimbursement 875,559
Reimbursement of expenses (Note 2) (466,342)
------------
Total expenses after reimbursement 409,217
------------
Investment income--net 6,165,861
Realized & Realized loss on investments--net (5,901,371)
Unrealized Loss on Unrealized depreciation on investments--net (8,949,194)
Investments ------------
(Notes 1f & 3): Net Decrease in Net Assets Resulting from Operations $ (8,684,704)
============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
February 4, 1994++
Increase (Decrease) in Net Assets: to Nov. 30, 1994
<S> <S> <C>
Operations: Investment income--net $ 6,165,861
Realized loss on investments--net (5,901,371)
Unrealized depreciation on investments--net (8,949,194)
------------
Net decrease in net assets resulting from operations (8,684,704)
------------
Dividends to Less dividends from:
Shareholders Investment income--net (5,460,019)
(Note1h): ------------
Net decrease in net assets resulting from dividends to shareholders (5,460,019)
------------
<PAGE>
Capital Stock Net proceeds from issuance of Common Stock 89,774,995
Transactions Offering costs resulting from issuance of Common Stock (348,639)
(Notes 1g & 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 in net assets 75,952,307
Beginning of period 100,005
------------
End of period* $ 76,052,312
============
*Undistributed investment income--net $ 705,842
============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Period February 4, 1994++ to November 30, 1994
<S> <S> <C>
Cash Used for Net decrease in net assets resulting from operations $ (8,684,704)
Operating Adjustments to reconcile net increase (decrease) in net assets resulting
Activities: from operations to net cash used for operating activities:
Increase in receivables (2,708,838)
Decrease in other assets 393,222
Decrease in other liabilities (275,102)
Realized and unrealized loss on investments--net 14,850,565
Amortization of premium and discount (652,906)
------------
Net cash used for operating activities 2,922,237
------------
Cash Used for Proceeds from sales of long-term securities 45,908,626
Investing Purchases of long-term securities (140,643,352)
Activities: Purchases of short-term investments (618,684,548)
Proceeds from sales of short-term investments 616,749,935
------------
Net cash used for investing activities (96,669,339)
------------
Cash Provided by Cash receipts from issuance of Common Stock 89,426,356
Financing Cash receipts from borrowings--net 8,760,765
Activities: Dividends paid to shareholders (4,539,754)
------------
Net provided by financing activities 93,647,367
------------
<PAGE>
Cash: Net decrease in cash (99,735)
Cash at beginning of period 100,005
------------
Cash at end of period $ 270
============
Cash Flow Cash paid for interest $ 223,178
Information: ============
Non-Cash Financing Capital shares issued in reinvestment of dividends paid to shareholders $ 670,674
Activities: ============
<FN>
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. February 4, 1994++
Increase (Decrease) in Net Asset Value: to Nov. 30, 1994
<S> <S> <C>
Per Share Net asset value, beginning of period $ 14.18
Operating ------------
Performance: Investment income--net .97
Realized and unrealized loss on investments--net (2.39)
------------
Total from investment operations (1.42)
------------
Less dividends:
Investment income--net (.86)
------------
Net asset value, end of period $ 11.90
------------
Market price per share, end of period $ 11.00
============
Total Investment Based on market price per share (21.13%)+++
Return:** ============
Based on net asset value per share (9.72%)+++
============
Ratios to Expenses, net of reimbursement .59%*
Average ============
Net Assets: Expenses 1.26%*
============
Investment income--net 8.84%*
============
Supplemental Net assets, end of period (in thousands) $ 76,052
Data: ============
Portfolio turnover 68.31%
============
<PAGE>
<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. Prior to commencement of operations
on February 4, 1994, the Fund had no operations other than those
relating to organ-izational matters and the issue of 7,055 capital
shares of the Fund to Fund Asset Management, L.P. ("FAM") for
$100,005. 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 options or futures contracts are 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. Rights or warrants to acquire stock, or stock
acquired pursuant to the exercise of a right or warrant, may be
valued taking into account various factors such as original cost to
the Fund, earnings and net worth of the issuer, market prices for
securities of similar issuers, assessment of the issuer's future pros-
perity, liquidation value or third party transactions involving the
issuer's securities. 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.
<PAGE>
(b) 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.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) assets or liabilities expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on operations is recorded from the date
the Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
<PAGE>
(d) 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 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 is less than or exceeds the premium paid or
received).
Written and purchased options are non-income producing investments.
(e) 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.
(f) 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.
(g) 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.
(h) 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 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 a 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. For the period February 4,
1994 to November 30, 1994, FAM earned fees of $418,324, all of which
was voluntarily waived. FAM also reimbursed the Fund $48,018 for
additional expenses.
<PAGE>
Accounting services are provided to the Fund by FAM at cost.
During the period May 25, 1994 to November 30, 1994, the Fund paid
Merrill Lynch Security Pricing Service, an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), $882 for 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 period ended November 30, 1994 were $144,869,602 and
$49,566,313, respectively.
Net realized and unrealized gains (losses) as of November 30, 1994
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ (5,959,015) $(9,076,514)
Short-term investments (2,729) --
Options written 60,373 127,320
------------ -----------
Total $ (5,901,371) $(8,949,194)
============ ===========
NOTES TO FINANCIAL STATEMENTS (concluded)
Transactions in call options written for the period February 4, 1994
to November 30, 1994 were as follows:
Premiums
Call Options Written Par Value Received
Outstanding call options written
at beginning of period -- --
Options written $ 17,036,000 $ 192,238
Options expired (7,036,000) (84,238)
------------ -----------
Outstanding call options written
at end of period $ 10,000,000 $ 108,000
============ ===========
Transactions in put options written for the period February 4, 1994
to November 30, 1994 were as follows:
<PAGE>
Premiums
Put Options Written Par Value Received
Outstanding put options written
at beginning of period -- --
Options written $ 35,000,000 $ 322,123
Options closed (25,000,000) (185,873)
Options exercised (5,000,000) (68,750)
------------ -----------
Outstanding put options written
at end of period $ 5,000,000 $ 67,500
============ ===========
As of November 30, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $8,955,569, of which $2,085,669
related to appreciated securities and $11,041,238 related to
depreciated securities. At November 30, 1994, the aggregate cost of
investments, including put options purchased, less premiums received
for options written, for Federal income tax purposes was
$91,995,812.
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 November 30, 1994,
shares issued and outstanding remained constant at 6,392,962. At
November 30, 1994, 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 November 30, 1994, the Fund had entered into reverse
repurchase agreements in the amount of $8,760,765. For the period
February 4, 1994 to November 30, 1994, the maximum amount entered
into was $13,056,580, the average outstanding was $9,852,978 and the
daily weighted average interest rate was 5.60%.
6. Subsequent Event:
On December 2, 1994, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.110345 payable on December 19, 1994, to shareholders of record
as of December 12, 1994.
<PAGE>
7. 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.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Worldwide DollarVest Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Worldwide
DollarVest Fund, Inc. as of November 30, 1994, the related
statements of operations, changes in net assets, and cash flows, and
the financial highlights for the period February 4, 1994
(commencement of operations) to November 30, 1994. These financial
statements and the financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion
on these financial statements and the financial highlights based on
our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at November
30, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Worldwide DollarVest Fund, Inc. as of November 30, 1994, the results
of its operations, the changes in its net assets, its cash flows,
and the financial highlights for the period February 4, 1994 to
November 30, 1994 in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 5, 1995
</AUDIT-REPORT>
<PAGE>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
Worldwide DollarVest Fund, Inc. during its taxable period ended
November 30, 1994 qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, there were no capital
gains distributed by the Fund during the period.
Please retain this information for your records.
