WORLDWIDE
DOLLARVEST
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
November 30, 1997
<PAGE>
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.
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>
Worldwide DollarVest Fund, Inc., November 30, 1997
DEAR SHAREHOLDER
Investment Results
For the year ended November 30, 1997, total investment return of Worldwide
DollarVest Fund, Inc. was +8.19%, based on a change in per share net asset value
from $18.01 to $15.67, and assuming reinvestment of $2.910 per share income
dividends and $0.445 per share capital gains distributions. During the same
period, the Fund earned $1.167 per share income dividends, representing a net
annualized yield of 7.45%, based on a month-end per share net asset value of
$15.67.
For the six-month period ended November 30, 1997, total investment return of
Worldwide DollarVest Fund, Inc. was +1.33%, based on a change in per share net
asset value from $16.04 to $15.67, and assuming reinvestment of $0.510 per share
income dividends.
Investment Environment
The Asian currency crisis is now full blown, with high risks for the financial
sector and other sectors of the Asian economies. Thailand, Indonesia and South
Korea have all had to seek assistance from the International Monetary Fund
(IMF). In addition, the slowdown in the Japanese economy continues. The
magnitude of the problems in the financial sector in Japan is large, and it is
uncertain what steps the country will take to deal with them. Despite receiving
substantial assistance from the IMF, both Thailand and Indonesia, which are
trying to defer painful economic measures, continue to suffer a crisis of
confidence. As a result, their currencies continue to deteriorate, reaching
unprecedented levels. The danger of these currency crises is the negative effect
on the capacity to service dollar debt of private sector corporate issues.
South Korea's $60 billion package, the largest IMF rescue effort in history, has
not been enough to dispel doubts about this country's ability to allow the
servicing of both its private and public debt. It is unclear whether the new
government will adhere to the conditions of the IMF's package to obtain full
disbursement, restore confidence and avoid default. Early indications show that
the country's president-elect is supportive of the IMF economic reforms.
The Asian crisis has impacted all the emerging markets in general, but Russia
and Brazil in particular. This impact was in response to the sell-off of Russian
and Brazilian securities to the market by troubled South Korean banks and partly
by these countries' structural imbalances. Russia's central bank responded
rapidly, raising interest rates significantly to new market-clearing levels.
This, coupled with the support of the World Bank and closeness to the IMF,
provided some stability to the Russian markets. Despite Standard & Poor's
Corporation's changing its rating outlook for Russia from stable to negative, we
believe the situation is being handled appropriately so far.
The situation in Brazil appears to be more complex. Brazil's large fiscal and
current account deficits are financed in part with a large stock of short-term
internal debt. In addition, Brazilian government agencies, private banks and
corporations have a heavy refinancing schedule of dollar short-term paper. The
uncertainties deriving from the Asian crisis initially caused Brazil to lose
about $10 billion in foreign reserves. The economic measures taken managed to
stem the massive outflows, but left the economy vulnerable and still subject to
"Asian contagion." While some achievements were obtained in Brazil's congress,
it is unclear whether these legislative efforts will continue to be fruitful in
1998, in view of the upcoming presidential elections. However, the fiscal
accounts are facing increasing pressure from the sharp slowdown in the economy
and high domestic interest rates. A lack in continuity in structural reforms in
the Brazilian congress in the following year would increase an already high
sensitivity of the country to the Asian situation.
Our view is that the implementation risk of the IMF packages in Asia is proving
to be very high, and we think more volatility is in store during the coming
months. The possibility of corporate debt default by one or more Asian countries
has become more likely, in our opinion. Should the situations in South Korea,
Indonesia, Thailand and Malaysia continue to deteriorate, the situation in Hong
Kong and Japan could get worse as well. Emerging markets securities are likely
to continue to be closely tied to events in Asia. In this global environment, it
is our opinion that Brazil will continue in a vulnerable position, and the risk
of devaluation will continue to linger and put pressure on the rest of Latin
American bond spreads.
Portfolio Strategy
We continued to maintain a cautious market view. As a result, we shifted assets
out of the high-risk countries which showed poor risk/reward characteristics
into countries with improving fundamentals and adequate potential return levels
for their level of risk. In this light, in the six-month period ended November
30, 1997, we increased the Fund's allocation to Mexico (from 11% of net assets
to 21% of net assets), Argentina (from 4% to 13%), Russia (from 0% to 8%) and
Venezuela (from 14% to 20%). The focus was on adding good-quality, short-term
and medium-term (one year - five years in maturity) assets in these countries.
We reduced the Fund's only Asian position, which was in the Philippines, from an
already low 6% of net assets to 2% of net assets. We also eliminated our
exposure to Poland. During the six months ended November 30, 1997, the Fund was
not leveraged.
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,
/s/ Arthur Zeikel
Arthur Zeikel
President
/s/ Paolo Valle
Paolo Valle
Senior Vice President and
Portfolio Manager
January 15, 1998
2 & 3
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
PROXY RESULTS
During the six-month period ended November 30, 1997, Worldwide DollarVest Fund,
Inc. shareholders voted on the following proposals. The proposals were approved
at a shareholders' meeting on July 10, 1997. The description of each proposal
and number of shares voted are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Donald Cecil 6,174,595 119,741
Edward H. Meyer 6,170,887 123,449
Charles C. Reilly 6,184,866 109,470
Richard R. West 6,177,465 116,871
Arthur Zeikel 6,173,954 120,382
Edward D. Zinbarg 6,177,365 116,971
- ---------------------------------------------------------------------------------------------------
<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. 6,105,698 61,494 127,144
- ---------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Percent
Interest Maturity Value of Net
COUNTRY Industry Face Amount Eurobonds Rate Date (Note 1a) Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina Industrial US$ 3,000,000 Acindar Industria Argentina de Aceros S.A. 11.656% 11/12/1998 $ 2,966,910 3.0%
1,000,000 Banco Hipotecario Nacional 8.00 6/04/1999 980,000 1.0
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in Argentina (Cost--$4,118,750) 3,946,910 4.0
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil Communications 500,000 Comtel Brasileira Ltd.++ 10.75 9/26/2004 476,085 0.5
-------------------------------------------------------------------------------------------------------------------------
Financial Services 1,000,000 Petroleo Brasileiro S.A.--Petrobras 7.25 2/06/1998 997,400 1.0
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in Brazil (Cost--$1,535,500) 1,473,485 1.5
- ------------------------------------------------------------------------------------------------------------------------------------
Mexico Banking 2,500,000 Banco Nacional S.A. 8.00 4/14/2000 2,448,323 2.4
-------------------------------------------------------------------------------------------------------------------------
Broadcasting & 5,000,000 Grupo Televisa, S.A. de C.V. 11.375 5/15/2003 5,450,000 5.4
Publishing
-------------------------------------------------------------------------------------------------------------------------
Cement 4,000,000 Cemex S.A. 10.75 7/15/2000 4,151,280 4.1
-------------------------------------------------------------------------------------------------------------------------
Industrial 1,000,000 AXA, S.A. de C.V. 8.50 10/01/1998 997,500 1.0
5,000,000 Grupo Industrial Durango, S.A. de C.V. 12.625 8/01/2003 5,537,500 5.5
--------- -----
6,535,000 6.5
-------------------------------------------------------------------------------------------------------------------------
Tourism 1,000,000 Grupo Situr, S.A. de C.V., guaranteed by
Grupo Sidek S.A.+ 8.75 9/14/1998 100,000 0.1
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in Mexico (Cost--$19,896,563) 18,684,603 18.5
- ------------------------------------------------------------------------------------------------------------------------------------
Philippine Telecommunications 2,000,000 Philippine Long Distance Telephone Co. 8.35 3/06/2017 1,660,000 1.7
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in the Philippines (Cost--$1,992,480) 1,660,000 1.7
- ------------------------------------------------------------------------------------------------------------------------------------
Russia Financial Services 4,500,000 Unexim International Finance BV 9.875 8/01/2000 3,784,500 3.8
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in Russia (Cost--$4,534,750) 3,784,500 3.8
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela Financial Services 760,000 Vencemos Finance Investment Ltd. 8.625 11/19/1998 756,200 0.7
-------------------------------------------------------------------------------------------------------------------------
Total Eurobonds in Venezuela (Cost--$771,020) 756,200 0.7
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Eurobonds (Cost--32,849,063) 30,305,698 30.2
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Brady Bonds*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Argentina Sovereign Government 2,000,000 Republic of Argentina, Global Bonds 8.375 12/20/2003 1,900,000 1.9
Obligations 1,000,000 Republic of Argentina, Global Bonds 11.00 10/09/2006 1,060,000 1.1
7,000,000 Republic of Argentina, Global Bonds 9.75 9/19/2027 6,447,000 6.4
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Argentina (Cost--$9,153,180) 9,407,000 9.4
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil Sovereign Government 5,359,222 Republic of Brazil, C Bond (Bearer) 8.00 4/15/2014 3,999,319 4.0
Obligations
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Brazil (Cost--$4,510,377) 3,999,319 4.0
- ------------------------------------------------------------------------------------------------------------------------------------
Costa Rica Sovereign Government 1,000,000 Banco Central Costa Rica, Principal 'B' 6.25 5/21/2015 760,000 0.8
Obligations
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Costa Rica (Cost--$661,250) 760,000 0.8
- ------------------------------------------------------------------------------------------------------------------------------------
Ecuador Sovereign Government 3,499,392 Republic of Ecuador, PDI (Registered) 6.6875 2/27/2015 2,152,126 2.1
Obligations
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Ecuador (Cost--$2,203,607) 2,152,126 2.1
- ------------------------------------------------------------------------------------------------------------------------------------
Mexico Sovereign Government 1,000,000 Republic of Mexico, Par 'B' Bonds (Rights) 6.25 12/31/2019 810,000 0.8
Obligations 1,000,000 United Mexican States, Global Bonds 11.50 5/15/2026 1,157,500 1.2
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Mexico (Cost--$1,883,750) 1,967,500 2.0
- ------------------------------------------------------------------------------------------------------------------------------------
Russia Sovereign Government 5,000,000 Ministry Finance of Russia 10.00 6/26/2007 4,425,000 4.4
Obligations
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Russia (Cost--$4,312,500) 4,425,000 4.4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4 & 5
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Percent
Interest Maturity Value of Net
COUNTRY Industry Face Amount Brady Bonds* Rate Date (Note 1a) Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Venezuela Sovereign US$22,000,000 Republic of Venezuela, Global Bonds 9.25% 9/15/2027 $ 19,338,000 19.3%
Government
Obligations
-------------------------------------------------------------------------------------------------------------------------
Total Brady Bonds in Venezuela (Cost--$18,115,000) 19,338,000 19.3
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments in Brady Bonds (Cost--$40,839,664) 42,048,945 42.0
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Securities
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Certificates of 1,000,000 Banco Bradesco S.A. 7.06 12/17/1997 1,000,000 1.0
Deposit 3,000,000 Banco de Credito de Sao Paulo 6.75 5/26/1998 2,898,432 2.9
------------ -----
3,898,432 3.9
-------------------------------------------------------------------------------------------------------------------------
Commercial Paper** 2,000,000 Companhia de Saneamento Basico do Estado
de Sao Paulo 7.875 5/14/1998 1,929,106 1.9
-------------------------------------------------------------------------------------------------------------------------
US Government Agency 3,705,000 Federal Home Loan Banks 5.52 1/16/1998 3,678,867 3.7
Obligations** 8,000,000 Federal Home Loan Mortgage Corp. 5.47 12/01/1997 8,000,000 8.0
------------ -----
11,678,867 11.7
-------------------------------------------------------------------------------------------------------------------------
Total Investments in Short-Term Securities (Cost--$17,517,081) 17,506,405 17.5
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$91,205,808) 89,861,048 89.7
Short Sales (Proceeds--$2,596,500)*** (2,659,500) (2.7)
Other Assets Less Liabilities 12,972,092 13.0
------------ -----
Net Assets $100,173,640 100.0%
============ =====
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
** 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.
*** Short sales entered into as of November 30, 1997 were as
follows:
------------------------------------------------------------------
Value
Face Amount Issue (Note 1g)
------------------------------------------------------------------
US$3,000,000 Republic of Brazil, Global Bonds $(2,659,500)
------------------------------------------------------------------
Total--(Proceeds--$2,596,500) $(2,659,500)
===========
------------------------------------------------------------------
+ Non-income producing security.
++ Restricted security as to resale. The value of the Fund's
investment in restricted securities was approximately $476,000,
representing 0.5% of net assets.
------------------------------------------------------------------
Acquisition Value
Issue Date Cost (Note 1a)
------------------------------------------------------------------
Comtel Brasileira Ltd.,
10.75% due 9/26/2004 2/28/1997 $535,000 $476,085
------------------------------------------------------------------
Total $535,000 $476,085
======== ========
------------------------------------------------------------------
See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of November 30, 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$91,205,808) (Note 1a) ............... $ 89,861,048
Cash.......................................................................... 2,035,920
Deposits on short sales (Note 1g) ............................................ 2,596,500
Receivables:
Securities sold ............................................................ $ 25,799,788
Interest ................................................................... 1,996,646 27,796,434
------------
Deferred organization expenses (Note 1e) ..................................... 5,762
Prepaid expenses and other assets ............................................ 2,687
------------
Total assets ................................................................. 122,298,351
------------
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities: Securities sold short, at market value (proceeds--$2,596,500) (Note 1g) ...... 2,659,500
Payables:
Securities purchased ....................................................... 19,193,589
Dividends to shareholders (Note 1f) ........................................ 125,802
Investment adviser (Note 2) ................................................ 45,487
Interest on short sales (Note 1g) .......................................... 13,500 19,378,378
------------
Accrued expenses and other liabilities ....................................... 86,833
------------
Total liabilities ............................................................ 22,124,711
------------
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets ................................................................... $100,173,640
============
- ----------------------------------------------------------------------------------------------------------------------------
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 ......................................... 3,179,608
Undistributed realized capital gains on investments--net ..................... 8,205,154
Unrealized depreciation on investments--net .................................. (1,407,759)
------------
Total--Equivalent to $15.67 per share based on 6,392,962 shares of
capital stock issued and outstanding (market price--$13.75) .................. $100,173,640
============
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
6 & 7
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended November 30, 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned ........ $ 10,303,824
(Note 1d):
- ---------------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees (Note 2) ............................... $ 697,512
Interest on reverse repurchase agreements ....................... 601,246
Interest on short sales ......................................... 154,644
Accounting services (Note 2) .................................... 51,467
Professional fees ............................................... 47,691
Printing and shareholder reports ................................ 40,575
Custodian fees .................................................. 32,452
Transfer agent fees ............................................. 32,382
Directors' fees and expenses .................................... 28,884
Listing fees .................................................... 16,170
Amortization of organization expenses (Note 1e) ................. 4,931
Other ........................................................... 6,182
---------
Total expenses .................................................. 1,714,136
-----------
Investment income--net .......................................... 8,589,688
-----------
- ---------------------------------------------------------------------------------------------------------------------
Realized & Realized gain on investments--net ............................... 8,410,89
Unrealized Gain Change in unrealized appreciation on investments--net ........... (10,513,250)
(Loss) on -----------
Investments--Net Net Increase in Net Assets Resulting from Operations ............ $ 6,487,330
(Notes 1b, 1d & 3): ===========
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended
November 30,
--------------------------------
Increase (Decrease) in Net Assets: 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations: Investment income--net .................................................. $ 8,589,688 $ 10,267,525
Realized gain on investments--net ....................................... 8,410,892 25,906,932
Change in unrealized appreciation/depreciation on investments--net ...... (10,513,250) 10,217,825
------------ ------------
Net increase in net assets resulting from operations .................... 6,487,330 46,392,282
------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income--net .................................................. (7,604,323) (9,397,828)
Distributions to Realized gain on investments--net ....................................... (13,842,809) --
Shareholders ------------ ------------
(Note 1f): Net decrease in net assets resulting from dividends
and distributions to shareholders ..................... (21,447,132) (9,397,828)
------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets: Total increase (decrease) in net assets ................................. (14,959,802) 36,994,454
Beginning of year ....................................................... 115,133,442 78,138,988
------------ ------------
End of year* ............................................................ $100,173,640 $115,133,442
============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
* Undistributed investment income--net (Note 1h) ........................ $ 3,179,608 $ 2,247,264
============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8 & 9
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended November 30, 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Provided by Net increase in net assets resulting from operations .......................... $ 6,487,330
Operating Activities: Adjustments to reconcile net increase (decrease) in net assets resulting
from operations to net cash provided by operating activities:
Decrease in receivables ..................................................... 185,177
Increase in other assets .................................................... (2,591,658)
Decrease in other liabilities ............................................... (543,828)
Realized and unrealized gain on investments--net ............................ 2,102,358
Amortization of premium and discount ........................................ (2,559,966)
--------------
Net cash provided by operating activities ..................................... 3,079,413
--------------
- ------------------------------------------------------------------------------------------------------------------------
Cash Provided by Proceeds from sales of long-term investments .................................. 715,704,237
Investing Activities: Purchases of long-term investments ............................................ (644,865,941)
Purchases of short-term investments ........................................... (4,225,312,925)
Proceeds from sales and maturities of short-term investments .................. 4,228,650,138
--------------
Net cash provided by investing activities ..................................... 74,175,509
--------------
- ------------------------------------------------------------------------------------------------------------------------
Cash Used for Cash receipts from borrowings ................................................. 154,262,034
Financing Activities: Cash payments on borrowings ................................................... (207,968,247)
Dividends and distributions paid to shareholders .............................. (21,512,789)
--------------
Net cash used for financing activities ........................................ (75,219,002)
--------------
- ------------------------------------------------------------------------------------------------------------------------
Cash: Net increase in cash .......................................................... 2,035,920
Cash at beginning of year ..................................................... --
--------------
Cash at end of year ........................................................... $ 2,035,920
==============
- ------------------------------------------------------------------------------------------------------------------------
Cash Flow Cash paid for interest ........................................................ $ 913,543
Information: ==============
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the
Period
The following per share data and ratios have been derived Feb. 4,
from information provided in the financial statements. For the Year Ended November 30, 1994+ to
------------------------------- Nov. 30,
Increase (Decrease) in Net Asset Value: 1997++ 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ............................. $ 18.01 $ 12.22 $ 11.90 $ 14.18
Operating ------- ------- ------- -------
Performance: Investment income--net ........................................... 1.34 1.61 1.33 .97
Realized and unrealized gain (loss) on investments--net .......... (.32) 5.65 .24 (2.39)
------- ------- ------- -------
Total from investment operations ................................. 1.02 7.26 1.57 (1.42)
------- ------- ------- -------
Less dividends and distributions:
Investment income--net ......................................... (1.19) (1.47) (1.25) (.86)
Realized gain on investments--net .............................. (2.17) -- -- --
------- ------- ------- -------
Total dividends and distributions ................................ (3.36) (1.47) (1.25) (.86)
------- ------- ------- -------
Net asset value, end of period ................................... $ 15.67 $ 18.01 $ 12.22 $ 11.90
======= ======= ======= =======
Market price per share, end of period ............................ $ 13.75 $ 14.75 $ 11.25 $ 11.00
======= ======= ======= =======
- -------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on market price per share .................................. 15.91% 45.94% 14.88% (21.13%)##
Return:** ======= ======= ======= =======
Based on net asset value per share ............................... 8.19% 64.05% 15.35% (9.71%)##
======= ======= ======= =======
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to Expenses, net of reimbursement and excluding interest expense .... .82% .80% .97% .18%*
Average ======= ======= ======= =======
Net Assets: Expenses, net of reimbursement ................................... 1.47% 2.10% 1.83% .59%*
======= ======= ======= =======
Expenses ......................................................... 1.47% 2.10% 1.83% 1.26%*
======= ======= ======= =======
Investment income--net ........................................... 7.39% 8.54% 10.48% 8.84%*
======= ======= ======= =======
- -------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ......................... $100,174 115,133 $ 78,139 $ 76,052
Data: ======= ======= ======= =======
Portfolio turnover ............................................... 578.05% 342.06% 183.01% 68.31%
======= ======= ======= =======
- -------------------------------------------------------------------------------------------------------------------------------
Leverage: Amount of borrowings outstanding, end of period (in thousands) ... -- 53,706 $ 25,456 $ 8,761
======= ======= ======= =======
Average amount of borrowings outstanding during the period
(in thousands) ................................................... $ 11,427 $ 26,812 $ 10,829 $ 9,853
======= ======= ======= =======
Average amount of borrowings per share during the period ......... $ 1.79 $ 4.19 $ 1.69 $ 1.54
======= ======= ======= =======
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Commencement of operations.
++ Based on average shares outstanding.
## 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.
10 & 11
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
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.
(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-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.
o 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.
o 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.
o 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--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.
(g) Short sales--When the Fund engages in a short sale, an amount equal to the
proceeds 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 market value of the short sale. The Fund maintains a segregated
account of securities as collateral for the short sales. The Fund is exposed to
market risk based on the amount, if any, that the market value of the stock
exceeds the market value of the securities in the segregated account.
(h) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $53,021 have been reclassified between undistributed net
realized capital gains 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.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 1997 were $543,002,806 and $602,154,714, respectively.
Net realized and unrealized gains (losses) as of November 30, 1997 were as
follows:
- ------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Losses
- ------------------------------------------------------------------------
Long-term investments............... $8,699,982 $(1,334,083)
Short-term investments.............. (16,958) (10,676)
Short sales......................... (350,820) (63,000)
Financial futures contracts......... 78,688 --
---------- -----------
Total............................... $8,410,892 $(1,407,759)
========== ===========
- ------------------------------------------------------------------------
As of November 30, 1997, net unrealized depreciation for Federal income tax
purposes aggregated $1,416,605, of which $1,884,500 related to appreciated
securities and $3,301,105 related to depreciated securities. At November 30,
1997, the aggregate cost of investments for Federal income tax purposes was
$91,277,653.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, par value
$.10 per share. Shares issued and outstanding during the years ended November
30, 1997 and November 30, 1996 remained constant.
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,
1997, the Fund had no open reverse repurchase agreements. For the year ended
November 30, 1997, the maximum amount entered into was $53,706,214, the average
amount outstanding was approximately $11,427,000, and the daily weighted average
interest rate was 5.28%.
6. Subsequent Event:
On December 1, 1997, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.101927 per share
payable on December 18, 1997 to shareholders of record as of December 11, 1997.
In addition, on December 19, 1997, 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 $2.236500 per share and $.154152 per share,
respectively, payable on January 9, 1998 to shareholders of record as of
December 31, 1997.
12 & 13
<PAGE>
Worldwide DollarVest Fund, Inc., November 30, 1997
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, 1997, 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 three-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, 1997 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, 1997, 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 21, 1998
IMPORTANT TAX INFORMATION (unaudited)
Of the net investment income distributions paid monthly by Worldwide DollarVest
Fund, Inc. during its fiscal year ended November 30, 1997, 89.69% represents
income received by the Fund from foreign sources. Additionally, the Fund paid a
short-term capital gain distribution of $1.720021 per share and a long-term
capital gain distribution of $.445299 per share to shareholders of record on
December 31, 1996.
Please retain this information for your records.
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
Joseph T. Monagle Jr., Senior Vice President
Paolo H. Valle, Senior Vice President
Donald C. Burke, Vice President
Vincent T. Lathbury III, Vice President
Gerald M. Richard, Treasurer
Lawrence A. Rogers, Secretary
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
14 & 15
<PAGE>
The Fund is leveraged to provide shareholders with a potentially higher rate of
return. However, leveraging may exaggerate changes in the net asset value of the
Fund's shares and in the yield on the Fund's portfolio.
Investing in emerging market securities involves a number of risk factors and
special considerations, including restrictions on foreign investments and on
repatriation of capital invested in emerging markets, currency fluctuations, and
potential price volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available information about the
issuers of securities, and such issuers may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to those
to which US companies are subject. Therefore, the Fund is designed as a
long-term investment for investors capable of assuming the risks of investing in
emerging markets. The Fund should be considered as a vehicle for diversification
and not as a complete investment program. Please refer to the prospectus for
details.
This report, including the financial information herein, is transmitted to the
shareholders of Worldwide DollarVest Fund, Inc. for their information. It is not
a prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a representation of future
performance. Statements and other information herein are as dated and are
subject to change.
Worldwide DollarVest
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16971--11/97
[LOGO] Printed on post-consumer recycled paper
