WORLDWIDE
DOLLARVEST
FUND,INC.
FUND LOGO
Annual Report
November 30, 1996
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.
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
Printed on post-consumer recycled paper
<PAGE>
WORLDWIDE DOLLARVEST FUND, INC.
The Benefits and
Risks of
Leveraging
The Fund is authorized to utilize leverage in an amount up to 331/3%
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.
<PAGE>
Important Tax
Information
(unaudited)
Of the net investment income distributions paid monthly by Worldwide
DollarVest Fund, Inc. during its fiscal year ended November 30,
1996,95.43% are attributable to income received by the Fund from
foreign sources. Additionally, there were no capital gain
distributions paid by the Fund during the year.
Please retain this information for your records.
DEAR SHAREHOLDER
Investment Results
For the year ended November 30, 1996, total investment return of
Worldwide DollarVest Fund, Inc. was +64.39%, based on a change in
per share net asset value from $12.22 to $18.01, and assuming
reinvestment of $1.470 per share income dividends. During the same
period, the Fund earned $1.474 per share income dividends,
representing a net annualized yield of 8.18%, based on a month-end
per share net asset value of $18.01.
For the six-month period ended November 30, 1996, total investment
return of Worldwide DollarVest Fund, Inc. was +32.92%, based on a
change in per share net asset value from $14.22 to $18.01, and
assuming reinvestment of $0.684 per share income dividends.
During 1996, global liquidity was the driving force behind lower
yields in the United States, continental Europe and Japan. Investors
in search of higher yields initiated or increased allocations to
emerging markets debt.
The higher yields and spreads of emerging markets debt over US
Treasury securities have attracted investors from a broad base
including global bond funds, US high-yield funds, pension funds,
insurance companies and equity funds. Unless default risk should
appear, these investors tend to be longer-term investors.
Additionally, the Latin American region and most Eastern European
countries are experiencing an improving trend in economic and
political fundamentals. Therefore, these markets are attracting the
highest levels of foreign direct investment and lending in history.
We expect this trend to continue and consequently believe some
countries may receive credit rating upgrades from Standard & Poor's
Corp. and Moody's Investors Service, Inc. in 1997.
<PAGE>
Finally, the countries that have Brady Bonds outstanding have
liability management plans in progress or in the process of
implementation. We expect the debt buy-back program initiated by
several of these countries to continue to provide a positive
technical support to the price of Brady Bonds.
Looking ahead, the global liquidity determined by the monetary
policy of the Group of Seven Industrialized Nations will be of
significance in setting the direction of spreads of emerging
markets debt. Nevertheless, this environment of moderate growth
in the United States with slow inflation is favorable for the
export-oriented economies of the Latin American region. As long
as fundamentals continue their improving trend, emerging markets
are likely to make progress attracting capital. In our view, the
principal current risk to emerging markets is a reversal of global
liquidity or a drastic decline in the US stock market.
Investment Environment
Mexico
The Mexican economic and investment outlook continued to improve in
the final months of 1996. Economic growth, the declining rate of
inflation and the relative strength of the peso have exceeded most
investors' expectations. The end of 1996 also marks a turning point
in Mexico's dramatic economic austerity program which has preoccupied
the nation and investors for the past two years. Mexico has
successfully refinanced its short-term debt, dramatically lowered
its current account deficit, instituted much-needed pension
reform and stabilized its financial system. The country is now
beginning to enjoy the fruits of this painful economic
restructuring. As 1997 begins, many observers expect the Mexican
economic recovery to accelerate and broaden, while inflation and
local interest rates continue to trend lower.
In 1997, Mexico will face the challenge of maintaining tight fiscal
and monetary policies during what promises to be a difficult
election year. In July, Mexico will hold congressional elections in
which the incumbent political party faces the possibility of losing
control for the first time in decades. Additionally, Mexico City
residents will elect their mayor for the first time. Despite these
challenges, it is hoped that the Zedillo administration will adhere
to the economic policies that have brought it such hard won success.
Argentina
As difficult as 1996 seemed, it proved to be a successful year for
Argentina. The recession was overcome as the country shifted into a
growth mode driven by exports and direct investment. The economic
program was consolidated and was not affected by the feared
departure of former Finance Minister Cavallo.
Looking ahead, we foresee investments in export-oriented sectors
start to yield benefits, creating new job opportunities. Bank
deposits and international reserves, at US$52.96 billion and
US$20.23 billion, respectively, are at record highs since the
implementation of the convertibility program. Our main concern is
related to the political scenario as Argentines are expected to
renew 50% of the congress in November 1997.
<PAGE>
Brazil
Brazil ended 1996 with its major achievement being the reduction of
inflation to approximately 10%. Another positive fact is the
important shift in the composition of the capital accounts, as
growth in foreign direct investment replaces the decline in
portfolio and speculative investment.
Our main concerns continue to be related to the trade and fiscal
deficits. Regarding the former, it is worrisome that exports are
expected to grow no more than 3% year-on-year. We expect additional
measures to promote exports. With respect to the fiscal deficit, we
think that little lasting progress will be achieved without the
previous approval of the pending constitutional reforms, including
the social security tax and administrative reforms.
In the coming months, we expect the government to dedicate all of
its strength to the passage of the so-called re-election amendment
(which would allow the current President to run for a second term),
and we are hopeful that such an event will precede the passage of
the aforementioned constitutional reforms. We anticipate the re-
election amendment to clear both congressional houses by mid 1997,
consquently boosting investors' confidence.
Ecuador
During 1996, Ecuadorians elected Mr. Abdala Bucaram as their
president, to remain in office through the year 2000. After less
than six months in power, the Bucaram administration has started
discussions with multilateral organizations to introduce an economic
stabilization program in 1997. President Bucaram also appears
committed to introducing a convertibility plan similar to that of
Argentina, improving tax collections reducing subsidies and
reforming the financial system, labor market and Social Security
system to help balance the budget in 1997. Congressional support for
those reforms and tough fiscal discipline through 1997 are necessary
for the success of this ambitious program.
Venezuela
During 1996, Venezuela entered into a stand-by agreement with the
International Monetary Fund (IMF) and started an aggressive
privatization program, mostly in the telecommunications and banking
sectors. At the same time, the country has liberalized interest
rates, prices and currency markets. Higher international crude oil
prices helped the central government budget reach a surplus in 1996
and increase international reserves from US$10 billion at the
beginning of the IMF program to US$15 billion by December 1996.
Looking forward, the government of Venezuela has plans to privatize
the aluminum and steel industries, expecting to receive $2.5
billion. The government still faces the challenge of reducing
inflation from more than 100% in 1996 to an estimated 30% in 1997,
without sacrificing the growth in the already depressed non-oil
sector, and return positive real interest rates by mid 1997.
Structural reforms involving transfers to local governments and the
reduction of the government payroll are more difficult than those
reforms implemented in 1996. However, we believe the authorities
will remain committed to improving the participation of the private
sector in the economy.
<PAGE>
Russia
During 1996 Russia made significant progress in the fight against
inflation. President Yeltsin was re-elected and survived a quintuple
by-pass heart surgery. He is back in office and has stressed the
continuation of his economic program and reforms. The emphasis in
1997 will be on raising tax revenues and resolving the arrears with
public servants. The relationship of the government with the IMF
seems to be in good terms. With the congressional passage in
December of the 1997 budget, disbursements of the November and
December installments under the IMF program are expected in January.
Russia still faces significant challenges ahead such as the
resumption of GDP growth and reduction of social tensions and
corruption. The access to the international capital markets was
confirmed in 1996, with the successful issuance of a $1 billion
eurobond. More issues are expected in 1997 as well as the closing of
the foreign debt restructuring.
In Conclusion
We thank you for your investment in Worldwide DollarVest Fund, Inc.,
and we look forward to updating our outlook and strategy with you in
our next report to shareholders.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Paolo Valle)
Paolo Valle
Vice President and Portfolio Manager
January 13, 1997
<TABLE>
PROXY RESULTS
<CAPTION>
During the six-month period ended November 30, 1996, Worldwide
DollarVest Fund, Inc. shareholders voted on the following proposals.
The proposals were approved at the annual shareholders' meeting on
July 11, 1996. The description of each proposal and number of shares
voted are as follows:
<PAGE>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 6,087,985 156,676
Edward H. Meyer 6,087,660 157,001
Charles C. Reilly 6,088,135 156,526
Richard R. West 6,088,135 156,526
Arthur Zeikel 6,088,135 156,526
Edward D. Zinbarg 6,087,810 156,851
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the independent
auditors of the Fund to serve for the current fiscal year. 6,037,390 43,144 164,127
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Eurobonds Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <S> <C> <C>
Brazil Communications US$ 4,000,000 ++Comtel Brasileira Ltd. 10.75 % 9/26/2004 $ 4,134,000 3.6%
Total Eurobonds in Brazil
(Cost--$4,000,000) 4,134,000 3.6
Mexico Banking 4,300,000 Banco Nacional de Comercio
Exterior* 7.25 2/02/2004 3,762,500 3.3
Broadcast & 2,500,000 Grupo Televisa, S.A. de C.V. 11.375 5/15/2003 2,665,625 2.3
Publishing
Development Bank 1,500,000 Nacional Financiera S.A. 9.375 7/15/2002 1,498,125 1.3
Industrial 4,000,000 Grupo Industrial Durango, S.A. 12.625 8/01/2003 4,315,000 3.7
Tourism 1,000,000 Grupo Situr, S.A. de C.V.,
guaranteed by Grupo Sidek S.A. 8.75 9/14/1998 315,000 0.3
Transportation 2,500,000 Mexican Maritime Transportation
Mexicana, S.A. de C.V. 10.00 11/15/2006 2,500,000 2.2
Total Eurobonds in Mexico
(Cost--$15,094,375) 15,056,250 13.1
Total Investments in Eurobonds
(Cost--$19,094,375) 19,190,250 16.7
<PAGE>
Brady Bonds***
Argentina Sovereign 2,842,000 Republic of Argentina, Floating
Government Rate Bond* 6.625 3/31/2005 2,454,920 2.2
Obligations 4,000,000 Republic of Argentina, Global 11.00 10/09/2006 4,140,000 3.6
7,000,000 Republic of Argentina, Par 'L'* 5.25 3/31/2023 4,515,000 3.9
Total Brady Bonds in Argentina
(Cost--$9,930,099) 11,109,920 9.7
Brazil Sovereign 11,013,700 Republic of Brazil, C Bond
Government (Registered) 8.00 4/15/2014 8,040,001 7.0
Obligations 11,233,974 Republic of Brazil, C Bond
(Bearer)* 8.00 4/15/2014 8,200,801 7.1
Total Brady Bonds in Brazil
(Cost--$15,547,304) 16,240,802 14.1
Costa Rica Sovereign 1,000,000 Banco Central Costa Rica,
Government Principal 'B' 6.25 5/21/2015 755,000 0.7
Obligations
Total Brady Bonds in Costa Rica
(Cost--$661,250) 755,000 0.7
Croatia Sovereign 5,000,000 Government of Croatia 'A' 6.687 7/30/2010 4,706,250 4.1
Government
Obligations
Total Brady Bonds in Croatia
(Cost--$4,512,500) 4,706,250 4.1
Ecuador Sovereign 24,637,187 Republic of Ecuador, PDI
Government (Bearer)* 6.50 2/27/2015 14,843,905 12.9
Obligations 10,573,900 Republic of Ecuador, PDI
(Registered) 6.50 2/27/2015 6,370,775 5.5
Total Brady Bonds in Ecuador
(Cost--$17,579,049) 21,214,680 18.4
Mexico Sovereign 15,000,000 United Mexican States, Global
Government Bond* 11.50 5/15/2026 15,712,500 13.6
Obligations
Total Brady Bonds in Mexico
(Cost--$15,405,625) 15,712,500 13.6
Panama Sovereign 1,000,000 Republic of Panama, IRB 3.50 7/17/2014 682,500 0.6
Government 5,722,000 Republic of Panama, PDI* 6.75 7/17/2016 4,298,652 3.7
Obligations
<PAGE>
Total Brady Bonds in Panama
(Cost--$4,472,142) 4,981,152 4.3
Philippines Sovereign 4,000,000 ++Republic of the Philippines
Government (Registered) 8.75 10/07/2016 4,200,000 3.7
Obligations
Total Brady Bonds in the
Philippines (Cost--$4,053,500) 4,200,000 3.7
Poland Sovereign 5,000,000 Republic of Poland, Discount 6.50 10/27/2024 4,881,250 4.2
Government
Obligations
Total Brady Bonds in Poland
(Cost--$4,775,000) 4,881,250 4.2
Venezuela Sovereign 8,950,000 Republic of Venezuela, DCB* 6.625 12/18/2007 7,708,187 6.7
Government
Obligations
Total Brady Bonds in Venezuela
(Cost--$6,169,906) 7,708,187 6.7
Total Investments in Brady Bonds
(Cost--$83,106,375) 91,509,741 79.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Interest Maturity Value Percent of
COUNTRY Industry Face Amount Loan Agreements Rate Date (Note 1a) Net Assets
<S> <S> <C> <S> <C> <S> <C> <C>
Morocco Sovereign US$ 7,000,000 Morocco Consolidated Agreements 6.375% 1/01/2009 $ 5,635,000 4.9%
Government
Obligations
Total Loan Agreements in Morocco
(Cost--$5,091,250) 5,635,000 4.9
Russia Sovereign 20,000,000 Vnesheconombank Participation
Government Agreements 15,650,000 13.6
Obligations
Total Loan Agreements in Russia
(Cost--$15,587,500) 15,650,000 13.6
<PAGE>
Total Investments in Loan Agreements
(Cost--$20,678,750) 21,285,000 18.5
Short-Term Investments
United Commercial Paper** 7,499,000 General Electric Capital Corp. 5.70 12/02/1996 7,499,000 6.5
States
US Government & 12,000,000 Federal Home Loan Mortgage Corp. 5.25 12/05/1996 11,994,750 10.4
Agency Obligations**
Total Short-Term Investments
(Cost--$19,493,750) 19,493,750 16.9
Total Investments (Cost--$142,373,250) 151,478,741 131.6
Liabilities in Excess of Other Assets (36,345,299) (31.6)
------------ ------
Net Assets $115,133,442 100.0%
============ ======
<FN>
*All or a portion of the security represents collateral in
connection with reverse repurchase agreements (Note 5). Additional
collateral aggregating $14,543,182 is reflected in receivables for
securities sold.
**Commercial Paper and certain US Government & Agency Obligations
are 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. The risk associated with these
instruments is the amount of any uncollateralized principal or
interest payments since there is a high default rate of commercial
bank loans by countries issuing these securities.
++Restricted securities as to resale. The value of the Fund's
investment in restricted securities was $8,334,000 representing 7.2%
of net assets.
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <S> <C> <C>
Comtel Brasileira Ltd. 10.75% due
9/26/2004 9/18/1996 $4,000,000 $4,134,000
Republic of the Philippines
(Registered), 8.75% due 10/7/2016 11/14/1996 4,053,500 4,200,000
Total $8,053,500 $8,334,000
========== ==========
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of November 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$142,373,250) (Note 1a) $151,478,741
Receivables:
Securities sold $ 24,034,407
Interest 2,181,823 26,216,230
------------
Deferred organization expenses (Note 1e) 10,693
Prepaid expenses and other assets 2,598
------------
Total assets 177,708,262
------------
Liabilities: Payables:
Reverse repurchase agreements (Note 5) 53,706,213
Securities purchased 7,987,500
Dividends to shareholders (Note 1f) 191,459
Interest expense (Note 5) 171,153
Investment adviser (Note 2) 71,205 62,127,530
------------
Accrued expenses and other liabilities 447,290
------------
Total liabilities 62,574,820
------------
Net Assets: Net assets $115,133,442
Capital: ============
Common Stock, $.10 par value, 200,000,000 shares authorized $ 639,296
Paid-in capital in excess of par 89,557,341
Undistributed investment income--net 2,247,264
Undistributed realized capital gains on investments--net 13,584,050
Unrealized appreciation on investments--net 9,105,491
------------
Total--Equivalent to $18.01 per share based on 6,392,962 shares of
capital stock issued and outstanding (market price--$14.75) $115,133,442
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 12,795,138
(Note 1d):
Expenses: Interest expense $ 1,564,542
Investment advisory fees (Note 2) 719,377
Professional fees 71,160
Printing and shareholder reports 34,923
Custodian fees 30,813
Directors' fees and expenses 28,934
Accounting services (Note 2) 28,281
Transfer agent fees 23,374
Listing fees 16,420
Amortization of organization expenses (Note 1e) 4,931
Other 4,858
------------
Total expenses 2,527,613
------------
Investment income--net 10,267,525
------------
Realized & Realized gain on investments--net 25,906,932
Unrealized Change in unrealized appreciation/depreciation on
Gain on investments--net 10,217,825
Investments--Net ------------
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations $ 46,392,282
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
November 30,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 10,267,525 $ 8,519,050
Realized gain (loss) on investments--net 25,906,932 (6,272,891)
Change in unrealized appreciation/depreciation on
investments--net 10,217,825 7,836,860
------------ ------------
Net increase in net assets resulting from operations 46,392,282 10,083,019
------------ ------------
<PAGE>
Dividends to Less dividends from investment income--net (9,397,828) (7,996,343)
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends
to shareholders (9,397,828) (7,996,343)
------------ ------------
Net Assets: Total increase in net assets 36,994,454 2,086,676
Beginning of year 78,138,988 76,052,312
------------ ------------
End of year* $115,133,442 $ 78,138,988
============ ============
<FN>
*Undistributed investment income--net (Note 1g) $ 2,247,264 $ 1,304,585
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the Year Ended November 30, 1996
<S> <S> <C>
Cash Provided by Net increase in net assets resulting from operations $ 46,392,282
Operating Adjustments to reconcile net increase (decrease) in net
Activities: assets resulting from operations to net cash used for
operating activities:
Increase in interest receivables (230,245)
Decrease in other assets 4,390
Increase in other liabilities 545,815
Realized and unrealized gain on investments--net (36,124,757)
Amortization of premium and discount (1,805,263)
------------
Net cash provided by operating activities 8,782,222
------------
Cash Used for Proceeds from sales of long-term investments 372,946,526
Investing Purchases of long-term investments (385,200,492)
Activities: Purchases of short-term investments (389,465,916)
Proceeds from sales and maturities of short-term investments 373,852,325
------------
Net cash used for investing activities (27,867,557)
------------
Cash Provided by Cash receipts from borrowings 247,474,514
Financing Cash payments on borrowings (219,224,680)
Activities: Dividends paid to shareholders (9,422,827)
------------
Net cash provided by financing activities 18,827,007
------------
<PAGE>
Cash: Net decrease in cash (258,328)
Cash at beginning of year 258,328
------------
Cash at end of year $ 0
============
Cash Flow Cash paid for interest $ 1,412,261
Information: ============
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. For the Year Ended Feb. 4, 1994++
November 30, to Nov. 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 12.22 $ 11.90 $ 14.18
Operating ------------ ------------ ------------
Performance: Investment income--net 1.61 1.33 .97
Realized and unrealized gain (loss) on
investments--net 5.65 .24 (2.39)
------------ ------------ ------------
Total from investment operations 7.26 1.57 (1.42)
------------ ------------ ------------
Less dividends from investment income--net (1.47) (1.25) (.86)
------------ ------------ ------------
Net asset value, end of period $ 18.01 $ 12.22 $ 11.90
============ ============ ============
Market price per share, end of period $ 14.75 $ 11.25 $ 11.00
============ ============ ============
Total Investment Based on market price per share 46.24% 14.88% (21.13%)+++
Return:** ============ ============ ============
Based on net asset value per share 64.39% 15.35% (9.71%)+++
============ ============ ============
Ratios to Expenses, net of reimbursement and excluding
Average interest expense .80% .97% .18%*
Net Assets: ============ ============ ============
Expenses, net of reimbursement 2.10% 1.83% .59%*
============ ============ ============
Expenses 2.10% 1.83% 1.26%*
============ ============ ============
Investment income--net 8.54% 10.48% 8.84%*
============ ============ ============
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 115,133 $ 78,139 $ 76,052
Data: ============ ============ ============
Portfolio turnover 342.06% 183.01% 68.31%
============ ============ ============
Leverage: Amount of borrowings (in thousands) $ 53,706 $ 25,456 $ 8,761
============ ============ ============
Average amount of borrowings outstanding
during the period (in thousands) $ 26,812 $ 10,829 $ 9,853
============ ============ ============
Average amount of borrowings per share
during the period $ 4.19 $ 1.69 $ 1.54
============ ============ ============
<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 which are traded
on stock exchanges are valued at the last sale price on the exchange
on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at
the last available bid price. Securities traded in the over-the-
counter market are valued at the last available bid price prior to
the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as
the primary market. Securities which are traded both in the over-the-
counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written are valued
at the last sale price in the case of exchange-traded options or, in
the case of options traded in the over-the-counter market, the last
asked price. Options purchased are valued at the last sale price in
the case of exchange-traded options or, in the case of options
traded in the over-the-counter market, the last bid price. Short-
term securities are valued at amortized cost, which approximates
market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets
for which market value quotations are not available are valued at
their fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
(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 trans-
actions 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--Deferred organization expenses
are charged to expense on a straight-line basis over a five-year
period.
(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 and tax reporting.
Accordingly, current year's permanent book/tax differences of
$72,584 has been reclassified between undistributed net realized
capital gains and undistributed net investment income and of $398
has been reclassified between paid-in capital in excess of par and
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, plus the proceeds of any
outstanding borrowings used for leverage.
Accounting services are provided to the Fund by FAM at cost.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended November 30, 1996 were $393,187,992 and
$387,323,769, respectively.
Net realized and unrealized gains (losses) as of November 30, 1996
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 25,751,607 $ 9,105,491
Financial futures contracts (14,175) --
Options written 169,500 --
------------ ------------
Total $ 25,906,932 $ 9,105,491
============ ============
Transactions in options written for the year ended November 30, 1996
were as follows:
<PAGE>
Premiums
Call Options Written Par Value Received
Outstanding call options written
at beginning of year -- --
Options written $ 15,000,000 $ 215,500
Options exercised (9,000,000) (88,000)
Options expired (6,000,000) (127,500)
------------ ------------
Outstanding call options written
at end of year -- --
============ ============
Premiums
Put Options Written Par Value Received
Outstanding put options written
at beginning of year -- --
Options written $ 4,000,000 $ 42,000
Options expired (4,000,000) (42,000)
------------ ------------
Outstanding put options written
at end of year -- --
============ ============
As of November 30, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $8,829,192, of which $9,578,567
related to appreciated securities and $749,375 related to
depreciated securities. At November 30, 1996, the aggregate cost of
investments for Federal income tax purposes was $142,649,549.
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, 1996,
shares issued and outstanding remained constant at 6,392,962. At
November 30, 1996, 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.
As of November 30, 1996, the Fund had entered into reverse
repurchase agreements in the amount of $53,706,213. For the year
ended November 30, 1996, the maximum amount entered into was
$53,706,213, the average outstanding was approximately $26,812,000
and the daily weighted average interest rate was 5.84%.
<PAGE>
6. Subsequent Event:
On December 2, 1996, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.123930 per share payable on December 19, 1996 to shareholders
of record as of December 12, 1996. In addition, on December 20,
1996, the Fund's Board of Directors declared an ordinary income
dividend and a long-term capital gain distribution to Common Stock
shareholders in the amount of $1.855869 per share and $.445299 per
share, respectively, payable on January 10, 1997 to shareholders of
record December 31, 1996.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Worldwide DollarVest Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of Worldwide
DollarVest Fund, Inc. as of November 30, 1996, the related
statements of operations for the year then ended, changes in net
assets for each of the years in the two-year period then ended, and
cash flows for the year then ended, and the financial highlights for
each of the years in the two-year period 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.
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, 1996 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 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, 1996, 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.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
January 14, 1997
</AUDIT-REPORT>
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, Jr., 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
