WORLDWIDE
DOLLARVEST
FUND, INC.
FUND LOGO
Annual Report
November 30, 1995
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
<PAGE>
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Transfer Agent
The Bank of New York
101 Barclay Street
New York, NY 10286
NYSE Symbol
WDV
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.
<PAGE>
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. Statements and other
information herein are as dated and are subject to change.
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 up to 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. 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.
DEAR SHAREHOLDER
Investment Results
For the year ended November 30, 1995, total investment return of
Worldwide DollarVest Fund, Inc. was +15.35%, based on a change in
per share net asset value from $11.90 to $12.22, and assuming
reinvestment of $1.251 per share income dividends. During the same
period, the Fund earned $1.259 per share income dividends,
representing a net annualized yield of 10.30%, based on a month-end
per share net asset value of $12.22.
For the six-month period ended November 30, 1995, total investment
return of Worldwide DollarVest Fund, Inc. was +13.31%, based on a
change in per share net asset value from $11.43 to $12.22, and
assuming reinvestment of $0.660 per share income dividends.
<PAGE>
During the fourth quarter of 1995, the positive interest rate
environment and strong US dollar provided a strong support to
emerging markets debt. In December, the expectations of further
lower interest rates and the possibility of a balanced budget
agreement in the United States, along with improving credit
fundamentals of major Latin American countries, attracted investors
to emerging markets in search of higher yields. During the six
months ended November 30, 1995, we remained overweighted in the
Latin America region. This area has underperformed, and we believe
it could outperform the emerging markets index in the coming months.
As of November 30, 1995, Brazil, Argentina and Mexico were the
Fund's largest investment allocations. We also increased the Fund's
leverage to 22.7% of net assets by November 30, 1995.
Investment Environment
Mexico
In November, in an attempt to revive Mexico's ailing economy,
Mexican authorities eased money supply, which drew a massive
speculative attack on the peso. The peso weakened by 15%, prompting
authorities to increase interest rates and intervene in the currency
markets to stabilize the peso. While the peso was the dominant issue
in November, there were several positive developments in Mexico.
Mexico continues to post healthy trade surpluses. Exports in 1996
are expected to reach $100 billion, up from approximately $80
billion in 1995. Recent economic data, such as employment and
industrial production statistics, indicate that the economy has
begun to show signs of growth. Mexico continues to have good access
to global capital markets as evidenced by the recent Cetes-linked
Eurobond issue. This issue was increased from $500 million to $1.5
billion to satisfy investor demand. In total, Mexico was able to
raise approximately $5.5 billion in 1995 in the capital markets. The
Zedillo administration is trying to deepen economic and political
reforms and is doing a good job of executing its economic strategy,
in our opinion. While we will continue to monitor the banking system
and the corporate sector, we believe that Mexico will experience
accelerating economic growth in 1996.
Argentina
In Argentina, fears of a rift between President Menem and Finance
Minister Cavallo have subsided. Confidence is on the rise among
Argentines and is evidenced by positive price action in the local
bond and equity markets. Economic data released in November indicate
that the economy is starting to turn up. Industrial and auto
production are showing growth. Unemployment in Argentina is
dropping, and there is talk of credit growth. The tax amnesty
program, which was expected to generate $1 billion in potential
revenues, produced $4 billion and generated 276,000 new taxpayers.
Argentina has continued to tap global capital markets, successfully
raising $2.5 billion during the past four months. Foreign exchange
reserves grew to $18.5 billion by year-end 1995, the highest level
since the Mexican peso crisis. Both reserves and bank deposits,
which are leading indicators of domestic confidence, are higher than
levels prior to the Mexican peso crisis.
<PAGE>
Brazil
In Brazil, persistently high real interest rates have helped control
inflation and build international reserves by attracting foreign
investors. International reserves are approaching $50 billion. The
cost of maintaining these high real interest rates and the
sterilization of foreign exchange inflows has resulted in a build up
of internal debt. Management of the fiscal deficit, which
deteriorated during 1995, will be of critical importance in 1996.
Progress toward fiscal reform is essential for the continued success
of Brazil's economic stabilization plan. While a slowdown in the
economy and high real interest rates affected the credit quality of
banks' loan portfolios, the distress experienced by Banco Nacional
and Banco Economic were the result of inadequate capitalization and
mismanagement. The reform process is moving slowly but steadily
toward ratification. The Cardoso administration has won ratification
on every reform vote thus far and seems to be handling the situation
satisfactorily. The focus now will be on pushing the fiscal
stabilization fund, privatizations and other tax-related reforms
early next year.
Investment Outlook
In the next three months we expect US economic and monetary policy
to be supportive of the US bond market, the Federal Reserve Board to
permit further gradual easing of monetary policy, and the US dollar
to remain strong and possibly continue to strengthen. In addition,
we expect politicians in the United States to reach an agreement to
balance the budget; however, the ultimate impact of the agreement on
federal deficit reduction is yet to be analyzed. In Europe, the
economies are expected to continue slowing down and inflationary
pressures to remain very subdued.
While the global environment for bonds looks positive, it seems that
the US bond market has already discounted a more aggressive easing
by the Federal Reserve Board than may actually occur. Therefore,
lower yields will be much harder to reach in the absence of a severe
slowdown in the economy and with inflation dropping to 2% annually.
Consequently, during the next three months the risk is that
investors may be reassessing the US interest rate outlook.
In our view, the US bond market outlook is positive, but fairly
valued. We think that this is an ideal environment for emerging
markets and that investors will continue to be attracted to emerging
markets debt in search of higher yields if the perception of
improving credit fundamentals continues.
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.
<PAGE>
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Portfolio Manager
January 16, 1996
PROXY RESULTS
During the six-month period ended November 30, 1995, Worldwide
DollarVest Fund, Inc. shareholders voted on the following proposals.
The proposals were approved at a special shareholders' meeting on
June 23, 1995. The description of each proposal and number of shares
voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 6,088,780 231,507
Edward H. Meyer 6,088,700 231,587
Charles C. Reilly 6,091,898 228,389
Richard R. West 6,093,704 226,583
Arthur Zeikel 6,090,598 229,689
Edward D. Zinbarg 6,093,704 226,583
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the independent auditors of
the Fund to serve for the current fiscal year. 6,075,669 74,507 170,111
</TABLE>
<PAGE>
<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 $ 1,650,000 2.1%
4,000,000 Banco del Rio de la Plata
S.A.--Yankee 8.75 12/15/2003 3,340,000 4.3
----------- ------
4,990,000 6.4
Communications 1,000,000 Telecom Argentina STET--France
Telecom S.A. 12.00 11/15/2002 1,031,250 1.3
Total Eurobonds in Argentina
(Cost--$6,691,245) 6,021,250 7.7
Brazil Industrial 1,000,000 Celulose Nipo-Brasileira S.A.
(CENIBRA) 9.375 12/21/2003 963,750 1.2
1,000,000 ++Companhia Brasileira de
Petroleo Ipiranga 8.625 2/25/2002 961,250 1.2
1,000,000 Klabin Fabricadora Papel 10.00 12/20/2001 946,250 1.2
Total Eurobonds in Brazil
(Cost--$3,000,417) 2,871,250 3.6
Mexico Banking 5,750,000 Banco Nacional de Comercio
Exterior 7.25 2/02/2004 4,290,938 5.5
Finance 1,500,000 Nacional Financiera S.A 9.375 7/15/2002 1,260,000 1.6
Home Builders 3,000,000 Tolmex, S.A. de C.V. 8.375 11/01/2003 2,310,000 3.0
Industrial 1,500,000 Corporacion Industrial San Luis 9.125 11/16/1998 1,350,000 1.7
Steel 1,000,000 Grupo Simec, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A. 8.875 12/15/1998 561,250 0.7
Tourism 1,000,000 Grupo Situr, S.A. de C.V.,
guaranteed by Grupo Sidek, S.A. 8.75 9/14/1998 540,000 0.7
<PAGE>
Total Eurobonds in Mexico (Cost--
$11,947,500) 10,312,188 13.2
Venezuela Oil 2,000,000 Bariven, S.A. 10.625 3/17/2002 1,855,000 2.4
Total Eurobonds in Venezuela
(Cost--$1,620,000) 1,855,000 2.4
Total Investments in Eurobonds
(Cost--$23,259,162) 21,059,688 26.9
Brady Bonds***
Argentina Sovereign 12,000,000 Republic of Argentina, Floating
Government Rate Bond* 6.812 3/31/2005 7,785,000 10.0
Obligations 10,500,000 Republic of Argentina, Par 'L' 5.00 3/31/2023 5,473,125 7.0
Total Brady Bonds in Argentina
(Cost--$12,621,828) 13,258,125 17.0
Brazil Sovereign 17,509,932 Republic of Brazil, 'C' Bond* 8.00 4/15/2014 9,280,264 11.9
Government 7,500,000 Republic of Brazil, DCB Bond 6.875 4/15/2012 4,025,625 5.2
Obligations 5,000,000 Republic of Brazil, EI Bonds* 6.812 4/15/2006 3,300,000 4.2
1,000,000 Republic of Brazil, Exit Bonds 6.00 9/15/2013 527,500 0.7
475,000 Republic of Brazil, IDU 6.687 1/01/2001 403,156 0.5
7,500,000 Republic of Brazil, New Money
Bond 6.875 4/15/2009 4,425,000 5.7
Total Brady Bonds in Brazil
(Cost--$22,061,972) 21,961,545 28.2
Bulgaria Sovereign 5,000,000 Bulgaria IAB 6.75 7/28/2011 2,225,000 2.8
Government
Obligations
Total Brady Bonds in Bulgaria
(Cost--$2,181,250) 2,225,000 2.8
Costa Rica Banking 1,000,000 Banco Central Costa Rica 6.25 5/21/2015 495,000 0.6
Total Brady Bonds in
Costa Rica (Cost--$661,250) 495,000 0.6
<PAGE>
Ecuador Sovereign 8,000,000 Republic of Ecuador--Discount 6.812 2/28/2025 3,920,000 5.0
Government
Obligations
Total Brady Bonds in Ecuador
(Cost--$3,951,262) 3,920,000 5.0
Mexico Sovereign 9,000,000 United Mexican States, Par 'A' 6.25 12/31/2019 5,523,750 7.1
Government 18,000,000 United Mexican States, Par 'B'* 6.25 12/31/2019 11,047,500 14.1
Obligations 27,000,000 +++United Mexican States (Rights) -- -- 0 0.0
Total Brady Bonds in Mexico
(Cost--$15,637,146) 16,571,250 21.2
Poland Sovereign 5,000,000 Republic of Poland--Global* 6.875 10/27/2024 3,806,250 4.9
Government
Obligations
Total Brady Bonds in Poland
(Cost--$3,462,500) 3,806,250 4.9
</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>
Venezuela Sovereign $ 3,000,000 Republic of Venezuela 6.812% 12/18/2007 $ 1,380,000 1.8%
Government
Obligations
Total Brady Bonds in Venezuela
(Cost--$1,415,625) 1,380,000 1.8
Total Investments in Brady Bonds
(Cost--$61,992,833) 63,617,170 81.5
Loan Agreements
<PAGE>
Morocco Sovereign 5,000,000 Morocco Consolidated Agreement 6.593 1/01/2009 3,168,750 4.1
Government
Obligations
Total Loan Agreements in Morocco
(Cost--$3,708,750) 3,168,750 4.1
Panama Sovereign 1,000,000 Republic of Panama 10.00 3/09/2024 657,500 0.8
Government
Obligations
Total Loan Agreements in Panama
(Cost--$665,000) 657,500 0.8
Total Investments in Loan
Agreements (Cost--$4,373,750) 3,826,250 4.9
Short-Term Investments
Mexico Certificates 3,000,000 Banca Promex 13.50 2/13/1996 2,929,800 3.7
of Deposit
Total Certificates of Deposit
in Mexico (Cost--$2,919,497) 2,929,800 3.7
United Commercial 638,000 General Electric Capital Corp. 5.90 12/01/1995 638,000 0.8
States Paper**
Total Commercial Paper in the
United States (Cost--$638,000) 638,000 0.8
Total Short-Term Investments
(Cost--$3,557,497) 3,567,800 4.5
Total Investments (Cost--$93,183,242) 92,070,908 117.8
Liabilities in Excess of Other Assets (13,931,920) (17.8)
----------- ------
Net Assets $78,138,988 100.0%
=========== ======
<PAGE>
<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.
***Brady Bonds are securities which have been issued to refinance
commercial bank loans and other debt. They are created when
creditors tender eligible debt in exchange for new bonds.
+++Non-income producing security.
++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately $961,000,
representing 1.2% of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <S> <C> <C>
Companhia Brasileira de Petroleo
Ipiranga, 8.625% due 2/25/2002 2/15/1994 $ 999,167 $ 961,250
Total $ 999,167 $ 961,250
=========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$93,183,242) (Note 1a) $ 92,070,908
Cash 258,328
Receivables:
Securities sold $ 9,657,163
Interest 1,951,578 11,608,741
------------
Deferred organization expenses (Note 1e) 15,624
Prepaid expenses and other assets 2,057
------------
Total assets 103,955,658
------------
Liabilities: Payables:
Reverse repurchase agreements (Note 5) 25,456,379
Dividends to shareholders (Note 1f) 216,458
Investment adviser (Note 2) 44,837 25,717,674
------------
Accrued expenses and other liabilities 98,996
------------
Total liabilities 25,816,670
------------
<PAGE>
Net Assets: Net assets $ 78,138,988
============
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 1,304,585
Accumulated realized capital losses on investments--net (Note 6) (12,250,298)
Unrealized depreciation on investments--net (1,112,334)
------------
Total--Equivalent to $12.22 per share based on 6,392,962 shares of
capital stock outstanding (market price--$11.25) $ 78,138,988
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended November 30, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 10,008,024
(Note 1d):
Expenses: Interest expense $ 696,537
Investment advisory fees (Note 2) 487,803
Accounting services (Note 2) 108,043
Printing and shareholder reports 56,144
Professional fees 36,450
Directors' fees and expenses 28,465
Custodian fees 28,403
Transfer agent fees 17,542
Listing fees 16,729
Amortization of organization expenses (Note 1e) 7,588
Pricing services 973
Other 4,297
------------
Total expenses 1,488,974
------------
Investment income--net 8,519,050
------------
<PAGE>
Realized & Realized loss on investments--net (6,272,891)
Unrealized Gain Change in unrealized depreciation on investments--net 7,836,860
(Loss) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 10,083,019
- --Net (Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the
Period
For the February 4,
Year Ended 1994++ to
Increase (Decrease) in Net Assets: Nov. 30, 1995 Nov. 30, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 8,519,050 $ 6,165,861
Realized loss on investments--net (6,272,891) (5,901,371)
Change in unrealized depreciation on investments--net 7,836,860 (8,949,194)
------------ ------------
Net increase (decrease) in net assets resulting from
operations 10,083,019 (8,684,704)
------------ ------------
Dividends to Investment income--net (7,996,343) (5,460,019)
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends
to shareholders (7,996,343) (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
------------ ------------
<PAGE>
Net Assets: Total increase in net assets 2,086,676 75,952,307
Beginning of period 76,052,312 100,005
------------ ------------
End of period* $ 78,138,988 $ 76,052,312
------------ ------------
<FN>
*Undistributed investment income--net (Note 1g) $ 1,304,585 $ 705,842
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Year Ended November 30, 1995
<S> <S> <C>
Cash Provided by Net increase in net assets resulting from operations $ 10,083,019
Operating Adjustments to reconcile net increase (decrease) in net assets
Activities: resulting from operations to net cash provided by operating
activities:
Decrease in receivables 757,260
Decrease in other assets 7,597
Increase in other liabilities 435
Realized and unrealized gain on investments--net (1,563,969)
Amortization of premium and discount (1,170,473)
------------
Net cash provided by operating activities 8,113,869
------------
Cash Used for Proceeds from sales of long-term investments 134,408,052
Investing Purchases of long-term investments (150,261,072)
Activities: Purchases of short-term investments (334,526,933)
Proceeds from sales and maturities of short-term investments 333,858,004
------------
Net cash used for investing activities (16,521,949)
------------
Cash Provided by Cash receipts from borrowings 91,057,665
Financing Cash payments on borrowings (74,362,051)
Activities: Dividends paid to shareholders (8,029,476)
------------
Net cash provided by financing activities 8,666,138
------------
<PAGE>
Cash: Net increase in cash 258,058
Cash at beginning of year 270
------------
Cash at end of year $ 258,328
============
Cash Flow Cash paid for interest $ 735,167
Information: ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. For the February 4,
Year Ended 1994++ to
Increase (Decrease) in Net Asset Value: Nov. 30, 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 1.33 .97
Realized and unrealized gain (loss) on investments--net .24 (2.39)
------------ ------------
Total from investment operations 1.57 (1.42)
------------ ------------
Less dividends from investment income--net (1.25) (.86)
------------ ------------
Net asset value, end of period $ 12.22 $ 11.90
============ ============
Market price per share, end of period $ 11.25 $ 11.00
============ ============
Total Investment Based on market price per share 14.88% (21.13%)+++
Return:** ============ ============
Based on net asset value per share 15.35% (9.71%)+++
============ ============
<PAGE>
Ratios to Expenses, net of reimbursement and excluding interest expense .97% .18%*
Average ============ ============
Net Assets: Expenses, net of reimbursement 1.83% .59%*
============ ============
Expenses 1.83% 1.26%*
============ ============
Investment income--net 10.48% 8.84%*
============ ============
Supplemental Net assets, end of period (in thousands) $ 78,139 $ 76,052
Data: ============ ============
Portfolio turnover 183.01% 68.31%
============ ============
<FN>
++Commencement of Operations.
+++Aggregate total investment return.
*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.
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. 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.
<PAGE>
(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 future 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, which approximates market value,
unless the method no longer produces fair valuations. 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 its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of 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.
<PAGE>
* 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.
* 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.
<PAGE>
(g) Reclassification--Generally accepted accounting principles
require that certain components of net assets be reclassified to
reflect permanent differences between financial reporting and tax
purposes. Accordingly, current year's permanent book/tax differences
of $76,036 have been reclassified from accumulated net realized
capital losses to undistributed net investment income. These
reclassifications have no effect on net assets or net asset value
per share.
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 year ended November 30, 1995, Merrill Lynch Security
Pricing Service, an affiliate of Merrill Lynch, Pierce, Fenner and
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 year ended November 30, 1995 were $146,034,822 and
$140,407,528, respectively.
Net realized and unrealized gains (losses) as of November 30, 1995
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ (6,479,994) $ (1,122,637)
Short-term investments 9 10,303
Options written 230,082 --
Options purchased (22,988) --
------------ ------------
Total $ (6,272,891) $ (1,112,334)
============ ============
<PAGE>
Transactions in call options written for the year ended November 30,
1995 were as follows:
Par Premiums
Call Options Written Value Received
Outstanding call options written
at beginning of year $ 10,000,000 $ 108,000
Options written 9,089,586 87,582
Options expired (19,089,586) (195,582)
------------ ------------
Outstanding call options
written at end of year $ -- $ --
============ ============
Transactions in put options written for the year ended November 30,
1995 were as follows:
Par Premiums
Put Options Written Value Received
Outstanding put options written
at beginning of year $ 5,000,000 $ 67,500
Options written 2,000,000 48,000
Options exercised (4,000,000) (81,000)
Options expired (3,000,000) (34,500)
------------ ------------
Outstanding put options
written at end of year $ -- $ --
============ ============
As of November 30, 1995, net unrealized depreciation for Federal
income tax purposes aggregated $2,849,305, of which $2,880,680
related to appreciated securities and $5,729,985 related to
depreciated securities. At November 30, 1995, the aggregate cost of
investments for Federal income tax purposes was $94,920,213.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
par value $.10 per share. For the year ended November 30, 1995,
shares issued and outstanding remained constant at 6,392,962. At
November 30, 1995, total paid-in capital amounted to $90,197,035.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
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, a
segregated account will be established 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, 1995, the Fund had entered into reverse
repurchase agreements in the amount of $25,456,379. For the year
ended November 30, 1995, the maximum amount entered into was
$35,522,062, the average outstanding was $10,829,322 and the daily
weighted average interest rate was 6.23%.
6. Capital Loss Carryforward:
At November 30, 1995, the Fund had a capital loss carryforward of
approximately $10,590,000, of which $4,614,000 expires in 2002 and
$5,976,000 expires in 2003. This amount will be available to offset
like amounts of any future taxable gains.
7. Subsequent Events:
On December 1, 1995, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.118600 payable on December 18, 1995 to shareholders of record
as of December 11, 1995. In addition, on December 19, 1995, the
Fund's Board of Directors declared an ordinary income dividend to
Common Stock shareholders in the amount of $0.213150 payable on
January 12, 1996 to shareholders of record as of December 29, 1995.
<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, 1995, the related
statements of operations for the year then ended, changes in net
assets for the year then ended and the period February 4, 1994
(commencement of operations) to November 30, 1994, and cash flows
for the year then ended, and the financial highlights for the year
then ended and 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
audits.
<PAGE>
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and 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, 1995 by correspondence with the custodian. 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 audits provide
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, 1995, the results
of its operations, the changes in its net assets, its cash flows,
and the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 19, 1996
</AUDIT-REPORT>
PER SHARE INFORMATION (unaudited)
<TABLE>
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Net Unrealized Dividends /Distributions
Investment Realized 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 .32 (.54) 2.14 .29 --
June 1, 1995 to August 31, 1995 .38 (.05) .36 .34 --
September 1, 1995 to November 30, 1995 .35 (.04) .44 .32 --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter 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
June 1, 1995 to August 31, 1995 11.97 10.03 11.625 10.25 542
September 1, 1995 to November 30, 1995 12.24 11.29 11.75 10.625 645
<FN>
++Commencement of Operations.
*Calculations are based upon shares of Common Stock outstanding at
the end of each period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
